1 Yes.  We.  Can...

um, Haz.

2 Barney Frank will demand more Affiirmative Action Lending.

3 I'm taking a wild guess here that a lot of the delinquencies are probably people who had their mortgages adjusted during 2009 as part of Obama's big mortgage-readjustment push.

That kind of stuff only works if the person is capable and willing to pay off their mortgage even under the new terms.  If these people lost their jobs for a long period of time or are underwater on their property values, they may see this as cutting their losses even if they lose their equity.

4 If housing starts are up, it's because the financing was approved literally years ago. Any lender who puts money into development in this economy should be de-chartered and shut down. Also, interesting that the "silver lining" in that piece was that delinquencies didn't accelerate during the quarter. Oh, that's comforting. So what about all the damn bad loans sitting on the books of Fraudie, Phoney, Zombiebank and all the rest? What happens when extend-and-pretend ends? Don't forget about CRE; it's about to circle the drain, too. Even worse, in about two-three years, there is a metric assload of commercial debt that needs to be refied. The caps rates will go through the roof, valuations will drop like a stone. Oh, this movie is just getting started...

5 We saved the economy!

6

When you've finally burned through cashing in a 401K and life insurance policies, sold the second/third car, canceled all the magazine subscriptions, etc trying to hang on hoping for a recovery and a job, this is what happens next.

Posted by: Purple Avenger at 10:45 AM   Actually, for a lot of folks, this is what happens first.  Plenty of people realize that paying on their house is a total waste of money if they aren't certain of their ability to keep it.  Most will be able to take their other assets and move on, having lost only their home equity.  I know at least one person with a very good job who lives in what was recently a very overpriced area.  Paying on his house and the outrageous property taxes is now just a way of flushing cash down the toilet.  He has the means to pay, but may default anyway.   I do NOT condone this, by the way.  A person should pay his debts.  But this is the reality of economic self interest in these horrible times.

7 I'm taking a wild guess here that a lot of the delinquencies are probably people who had their mortgages adjusted during 2009 as part of Obama's big mortgage-readjustment push.

Very few of those restructurings actually happened.  That's one of Obama's least publicized epic fails.  Many lenders felt they'd do better in foreclosure so there was little motivation for them to restructure.

8 i am a former property/casualty insurance agent.  the word "burn" used in this article is a little scary.  just sayin.

9 Let's not be Negative Nellys here - the Veep says that the taxpayers got their money's worth from the shamstimulus act.

10 But, I kid you not,  Joe Biden just said we got our monies worth with the Stimulus.

11

Yeah P.A. Fox had their good looking redheaded buisness babe on yesterday talking about this.

I kept waiting for her to say the basic problem is that the idiots in Washington refused to let the market fix itself and let it go ahead and take the pain.  She never did say that and it appeared she was trying to blame the banks.

Could it be that she is a Dem and pushing their talking points?

12 i had a young friend who was a paid direct marketer for these obama mortgage readjustments.  he was also former real estate agent & current law student.  he said it was for dumb suckers.  and the dumb suckers would be stuck 3 mos. down the road rather than today.

13 Damn, lost by under a minute.

14 Very few of those restructurings actually happened. Even worse, restructuring is a fool's errand. When a homeowner is 90 days or more in arrears, the cure rate is vanishingly small. You aren't helping people resolve their debt problems when you extend-and-pretend; you are keeping a bargain-priced property out of the hands of someone who wants it and can actually pay something for it.

15 BTW; she said that one of the large contributers to this spike was the lenders holding onto the rolloever hoping the price would go up before they went ahead and called for takeover of the bad loan. i.e. before they called the loan bad. Now they were being forced to call the loans.

16 3&7 - True, taken as a percentage, there weren't that many restructs - but the number we don't have is how many of those restructs are in this new figure.  One guess I've heard is that over 50% of the restructured loans are now circling the proverbial drain...

17 10

He obviously talked to Chuck.

18 Hope.  Change.  Foreclosure!

19 Predatory lending to the economically disadvantaged caused this.  These banks unfairly saddled poor people with loans they had no hope of repaying. 

What we need now is for banks to lend money to those who need it most - the economically disadvantaged.

That our dipshit of a president can make these two statements and not be slapped around with his own words really pisses me off.  Why doesn't this socialist motherfucker come right out and say he wants to nationalize confiscate all housing and distribute it "fairly."  That way everybody gets a house!  Hooray!  I don't be havin' to put gas in my car; I don't be havin' to pay my mortgage - I took care of Him, now he gonna take care of me!

That dumb broad in Florida will finally be living the dream.

And by the way, Comrade Purple Avenger, your home will make a nice dacha for his pet ballerina.

20 Many lenders felt they'd do better in foreclosure so there was little motivation for them to restructure.

Posted by: Purple Avenger at February 17, 2010 10:56 AM (lvCi

Isn't that what this video about One West Bank was about?  

http://tinyurl.com/ygmr4yz

21 The lenders have gone back to the lending standards of the 1950's.  They want 25% or more down, an almost impossible credit rating and a steady job for at least three years before they will even consider a mortgage application.  Problem is, before this little economic problem, people went into contract and thought they were going to get a mortgage with nothing down or 5%.  There are going to be a lot of problems with people who don't have the 25% losing their deposits and suing.  No one thought about this at all.  It seems no one thought about regular Americans at all.

22 Home ownership rates are a 10 year low.  That's good news.

The average home price is still well above where it should be.  They have to come down more.

What also needs to feel pain are the people that pay $1.99 for an avocado at a big box grocer when the small produce market across the street has avocados for $.49.

23 I think Dr Amy might be looking to restructure her mortgage, any takers???

24 I can haz cheaper Euro?

25 You know what else is funny?

Watching Mike Holmes from Holmes on Homes go to the lower 9th ward in New Orleans to rebuild a lost home and then attend local community meetings where residents bitch about government failing to mow lawns OVER building roads.

I don't know if the people are ready to start learning again.  Unicorn King is making them think big government can mow their fucking lawn.

26 When a homeowner is 90 days or more in arrears, the cure rate is vanishingly small.

Yea, I've seen data suggesting its in the low single digit percentages.  Even the traditionally used historical cure rate percentages are worthless now too.  It used to be that a month behind was curable in the vast majority of cases, not so much now.  I think even the initial one month slippages are eventually turning into defaults at something like a 30% rate now, where it used to be single digits.

27 Who marks the anniversary of something most people have not seen work for them in their lives?

28

Just wait till the other shoe drops.....

The Commercial Mortgage Market

It isn't going to be pretty. I live in Phoenix, and sometimes it can seem like a ghost town, open space everywhere.

29

as a professor of really smart progressive stuff, i think these homeless harbor racial hatreds... why else would these so-called people be homeless except for the delight of saying something hurtful abour our dear leader... our dear finger wagger-in-chief has done all he can to prop up bankrupt companies that give donations to his cause and still these people persist in their pitiful displays of homelessness... WE progressives and our dear leader poured over 700 billion dollars - that we talk about- in these green bankers and invisible car companies,and what do we hear, " some family of 4 is homeless and starving" along with about 20 million others....blah,blah,blah...

if these homeless are having problems ,get a govt job or open a bank or a car company...  WE progressives can't be responsible for the 20 million or so who have fallen and won't get up...we have papers to write and making sure we don't have fuel to burn and banging freshman and stuff...

ARE THERE NO ORPHANGES NO SOCIAL WORKERS TO TAKE CARE OF THESE RIFF RAFF...

sorry social workers are busy at break and will be available after lunch, about 3pm...WE won gia dammit and now we want to relax with a freshman in our laps

 

30 but, the government can mow their lawn...once every 4 years or so, after the dead hobos have been cleared.

31 @ 9 and 10,

From your link:

He argued that money invested in both private and public-sector initiatives has saved as many as 2 million jobs, and said, "I don't think they realize it." Biden said the program, now a year old, was designed to be implemented in two stages, saying "we've only been halfway through the act."

Christina Romer, who heads the White House Council of Economic Advisers, said in a separate interview that one component of the stimulus program had worked especially well. "State fiscal relief really has kept hundreds of thousands of teachers and firefighters and first responders on the job," she said.

Yes, it worked!  We shoveled billions of your dollars into the gaping maw of the unions and other shiftless layabouts that elected us in the first place!  So when I say, "It worked," what I meant was "Fuck you."

32

What also needs to feel pain are the people that pay $1.99 for an avocado at a big box grocer when the small produce market across the street has avocados for $.49.

That's really only an option unless you live in California. In, say, Indiana, it's out-of-state produce or nothing between October and April/May.

33 These banks unfairly saddled poor people with loans they had no hope of repaying. Okay, that's true. But the reason this madness happened is because Fraudie and Phoney bought EVERYTHING the banks underwrote. When normal underwriting standards were too stringent, they created the subprime category, then the Alt-A category, low-doc, no-doc, etc., etc. This all goes back to the GSEs. They are the ones who backstopped all the horrible mortgages. The local lenders had no incentive to care. Putting aside CRA extortion and all that, the banks really had no horse in the race as they knew the loans could be offloaded as soon as the ink was dry. And they were. This is exactly what happened with the dot-com IPOs. Institutional investors bought them up and immediately unloaded them to retail investors without a clue. The bankers made money. And why would they care who owned the stocks? Like everything else involving money, the greater fool theory is again shown to be imperishable.

34 Don't forget, our five year birthday is coming up. Surprise!

35 Comrade Purple Avenger, your home will make a nice dacha for his pet ballerina.

When the shit started going weird 2008, I threw everything I could muster at the time into paying off the mortgage on this crib.  They may come and take it, but it won't be without a few thousand rounds being expended ;->

36 I think part of the problem is that people assume the "American Dream" means "owning a house". It doesn't. The American Dream is self-sufficiency. Owning property (as opposed to renting) is a big part of that, but if you have to take out a bad loan to get there, doesn't that defeat the purpose?

37 Very few of those restructurings actually happened.  That's one of Obama's least publicized epic fails.  Many lenders felt they'd do better in foreclosure so there was little motivation for them to restructure.

This fact could have dire consequences, too.  If, as some analysts believe, a second round of resets on adjustable mortgages is in store for 2010, markets will tank again, and there's not enough money for TARP II.  The restructures were supposed to head the 2010 reset off, but haven't done so.

38

Don't forget the new IRS people have brand new shotguns.

It looks like the IRS is getting into the Hobo hunting game

39 I think we need to get Dr. Amy on this problem ASAP.. She is a big believer Obama, in getting thing done, has acquired a fair amount of persuasive skills, and can really drive a point home when she has to. sometimes a simple" I am Dr. Amy" works.

40 Purple Avenger wrote, "Wouldn't surprise me if Federal tax receipts for FY 2009 crater."

They already have. via Newsbusters a week ago.

http://newsbusters.org/blogs/tom-blumer/
2010/02/09/
federal-receipts-are-dropping-fast-admin-cbo-can-sharpen-their-pencils

  “Collections for the first four months of fiscal 2010 have been absolutely dismal compared to fiscal 2009”

ItÂ’s down 12% when the Congressional Budget Office predicted a 7.5% increase. Overestimating income by 20% is failure.

  “Whatever you want to call the ongoing fall in receipts (IÂ’m leaning towards “starvation by so-called stimulus“), it should be news, and it virtually isnÂ’t.

  Oh, and I almost forgot to tell readers that this yearÂ’s receipts through four months are down about 20% from the first four months of fiscal 2008, during the supposedly economically awful administration of Bush 43.“

41 ... an occasional gun fight, pipe bomb, or booster seat will only make her believe in Obama more...

42 16 jess i've heard that as well i've been begging for a restructure, they won't do a thing for you if you have money left over once you pay your bills at the end of the month......so once again...let's reward the incompetent and punish the producers

43

I have a question. Does anyone here have an ARM? If so can I punch you and then ask you what you were thinking?

Honeslty. It didn't occur to you that it was going to go up at an almost exponential level? Did you think you were going to be dead in 5 years and weren't worried about paying it off.

Someone needs to explain to me the short term thinking of so many in this country. You wanted a home so badly that you were willing to risk losing it and going bankrupt after 5 years of living in it. Did you think you would win the lottery at some point before the 5 years were up?

 

44 No mortgages unless you've been at the same job for three years? So even with the down payment, I'm fucked 'cause I got laid off?

This is what I get for saving up a down payment like a responsible adult instead of getting a unicorn loan. Sigh.

45 "How Can Obama Be Taking A Stimulus Victory Lap, When We Don't Even Know Where The Money Went?"
"One year later, we see plainly that the stimulus was not a well-thought out plan. It hasn’t revived our economy; instead the debt -ridden package will prove to be a drag on our economy. It hasn’t put us on the path to a better future; instead it’s unfairly mortgaged our children’s future and stolen opportunities from them. It hasn’t strengthened us; instead it endangers our freedom and security by making us even more beholden to foreign lenders. The legacy of the stimulus isn’t jobs or economic growth – it’s more dangerous debt."

46

16 jess

i've heard that as well
i've been begging for a restructure, they won't do a thing for you if you have money left over once you pay your bills at the end of the month......so once again...let's reward the incompetent and punish the producers

Hey that's a great idea! Let me put a directive together that will solve our problems using those concepts.

47

Someone needs to explain to me the short term thinking of so many in this country. You wanted a home so badly that you were willing to risk losing it and going bankrupt after 5 years of living in it. Did you think you would win the lottery at some point before the 5 years were up?

Short answer: Yes.

48 I got free avocados last year.  My neighbor has a big avocado tree in his back yard.  My Key Limes might be getting big enough to set a few fruit this year...they were decimated when idiot Jeb Bush went on a rampage cutting down all the citrus in neighborhoods to supposedly control citrus canker, but a couple grew back from some roots that weren't dug out.

49 Open maps.google.com

Navigate to your area or, if you're rural, to the nearest city or suburban area.

At the top right of the map area, there are buttons for "Traffic", "More...", "Map", "Satellite", and "Terrain".

In the "More..." drop-down menu, you can check a box to see Real Estate.

In the left-hand pane, you can change the Listing Type to show only Foreclosures.  If the dots look sparse, zoom in because there are probably more.

Most of the dots shown when only "Foreclosure" is checked are only indications that notices have been filed to go to auction eventually.

We're nowhere near the bottom of housing prices.

50 I think part of the problem is that people assume the "American Dream" means "owning a house".

I think the part of the problem is we refer to people with less than full equity in a house as "homeowners."  When did that happen?

51

@33

My understadning is that not only did Freddie & Fannie buy all the Toxic Mortgages but the extension of the CRA and ACORN bascially demanded it.

It is not really my area of expertise, so it can get a little confusing, but I find it hard to believe that banks would screw themselves with poor decisions without some help.

52 I admit that this is sort of tangential to this thread but since I am Canadian ( but not the 'usual' type), I have never understood why American mortgage holders are allowed to 'walk-away' from their obligations when those obligations become onerous and/or unsustainable.
In Canada you CANNOT escape from your mortgage. You can run but you cannot hide. You default and the bank seizes the property for eventual resale, you remain on the hook for any shortfall that the bank suffers on the transaction. It seems to me that the US deliberately encourages irrespsonsible consumer behavior by allowing 'walk-aways'. But I stand to be corrected by those who know more about this than I, so any details of the process that anyone can provide would be most welcome.

53 Posted by: Ben at February 17, 2010 11:18 AM (wuv1c)

In the early 80's the people who chose ARM's did much better than the schmoes who took the 13 and 14% mortgages.  The ARM's stayed around 8%.
If you know what you are doing, even a balloon mortgage can work.  But, you really have to know what you are doing.

54 #45 Obama can take a victory lap because the title of his next program will start with the word "victory" ...also Dr. Amy said he could say that, as long as he gave her a few extra booster seats, out the the left over stimulus money.

55

I'm still of the opinion that the CRA is at the root of most of this bad news. While it's admirable to want people to own a home, there's a right way and a wrong way to accomplish that goal.

We're witnessing the results of the wrong way. Good and hard.

When will politicians realize that all the average American needs is a good, stable job? And when will they start to act on that realization? The current crop of Marxists in Washington haven't a clue as to how our economy works nor how wealth is created in a free market. They think they can impose all manner of stifling rules and regulations and there will be no negative consequences.

56

I have a question. Does anyone here have an ARM? If so can I punch you and then ask you what you were thinking? 

Posted by: Ben at February 17, 2010 11:18 AM (wuv1c)

A lot of those ARMs were taken on by speculators who thought they could flip the house in a couple years.  I imagine a lot of those folks took a serious bath...  But I agree - anyone who financed his house that way was a dunce.  This will no doubt be a valuable learning experience for such folk.  On the up side, from what I hear it's nearly impossible to get an ARM these days, at least for a home mortgage.  Maybe the banks are wising up a little...

57 I have a question. Does anyone here have an ARM? If so can I punch you and then ask you what you were thinking?

Here in FL, the flippers were using ARM's a lot.  It was all good...until it went bad.

58 I paying good money for souls, so there's always that people.

59 In my area the property taxes have continued to spike. The homes are not worth what some people paid for them, plus the taxes make it ever sillier to keep paying the mortgage. There is no reward in paying the bill, versus waiting and seeing what they do to you if you don't pay.

60 Posted by: HeatherRadish at February 17, 2010 11:18 AM (mR7mk)
I'm talking about my area of the country.  Things might be different in your area of the country.  Don't get discouraged you are doing the right thing.

61

It seems to me that the US deliberately encourages irrespsonsible consumer behavior by allowing 'walk-aways'. But I stand to be corrected by those who know more about this than I, so any details of the process that anyone can provide would be most welcome.

Legally speaking you can not "walk away" here either. You are still legally responsible for the diference between what the bak gets for your house and what you owe.

Most of the time though the bank doesn't go after the individual because the legal fees eat up any potential restoration.

62 Unexpectedly! 

63 Open maps.google.com Navigate to your area... In the left-hand pane, you can change the Listing Type to show only Foreclosures. Holy freaking shit. In Canada you CANNOT escape from your mortgage. You can run but you cannot hide. In Clownifornia, your first mortgage is "no recourse." So you can borrow like a drunken bureaucrat, buy ten times the house you can afford, bail on the payments and the bank can't touch you, apart from the house itself. That's how we do it in CA, not by halves. We go full retard.

64 These banks unfairly saddled poor people with loans they had no hope of repaying. 

What we need now is for banks to lend money to those who need it most - the economically disadvantaged.

This^^^  Obama's problem in a nutshell. 

It should be a RNC talking point, said just this way.

65 There is no reward in paying the bill, versus waiting and seeing what they do to you if you don't pay.

Palm Beach county is very quick on the trigger with a tax delinquency these days.  Your shit will be scheduled for auction within about 3 months of blowing the deadline.

66 Posted by: Dougf at February 17, 2010 11:21 AM (8JckG)

The other day on our local news channel they actually had a financial planner on who was encouraging people to walk away from their mortgages.  This wasn't cable, this was the local news.  Was a little shocked.  Sure, Jim Cramer said this two years ago and the world came down on him and now this broad was on the news matter o factly saying that you should walk away.  She basically said that when you declare bankruptcy and walk away that you only have a penalty of 7 years and a bad credit rating.  She said if your mortgage was taking up too much of your income you would be better off renting and putting the money you would have paid in mortgage to better use.  It occurred to me that she must be thinking that the mortgage deduction wouldn't matter to these people.

67 While it's admirable to want people to own a home. . .

Not really.  How many people do you know who are too irresponsible to maintain a home without even considering the financial questions?

I know many.  I live near quite a few, and I live in an upper-middle class area.

Home ownership rates are too high.

68 If you want to learn a lot more about the economy and bad bank loans, go to Captain Capitalism's weblog.

  http://captaincapitalism.blogspot.com


You'll need to search around a bit, but just browsing is pretty informative.

He also has a book out with his insider view as a bank loan employee. Behind the Housing Crash: Confessions from an Insider

An excerpt here:
Scum Sucking Parasite Called Aramis

69 Here in FL, the flippers were using ARM's a lot.  It was all good...until it went bad.

Same here on the northern Gulf Coast.  Only a lot of the speculators were retired Snowbirds.  A lot of them lost their nest eggs.

70

This problem WILL get bigger people.  That is because the government has tried to articicially keep prices up and that can only last for so long before it caves in.  What I am saying here is that in many areas such as CA and FL we STILL have a housing bubble, even after the 25% loss.

When all of this stuff was blowing up a year ago I researched the area I used to live in in Castro Valley, CA.  This was a middle class neigborhood filled with row houses originally built in the 50s. These houses originally sold for between 10K and 15K then.  When I looked, even after the bubble had burst and prices dropped they were STILL selling for $550/sq ft. (about 750K average)

People 550/sq ft is unsustainable even in a good economy!  Rich people are the only ones who can afford that and they are not going to buy 1950s vintage track houses on postage stamp size lots.

71

Someone needs to explain to me the short term thinking of so many in this country. You wanted a home so badly that you were willing to risk losing it and going bankrupt after 5 years of living in it. Did you think you would win the lottery at some point before the 5 years were up?

There were several assumptions that led to this:

1. Your home value would appreciate so quickly that you could sell the house and pocket the cash before the rate increased.

2. The interest rate wouldn't change that much so it wouldn't be a problem.

3. You could afford a house out of your realistic price range because the interest rates were so low.

There was also the fact that Fannie and Freddie were the backstop on so many risky mortgages that the lenders had no worries. Those loans would never have been made without the taxpayer safety net.

It's funny that when we bought our first house I said to the lender, "Why would I want an ARM when there's a decent chance the rate will go up when it's due? I would rather take a slightly higher rate, lock it in, and buy a less expensive house that I know I will be able to pay for." Silly me for being practical.

72 Obama's spin: These banks unfairly saddled poor people with loans they had no hope of repaying. What we need now is for banks to lend money to those who need it most - the economically disadvantaged. Translation: Banks lent to people who don't make enough to pay the loan but wanted to borrow anyway. The solution is to take money from people who earn money, give it to the deadbeats who then give it to the banks. What could go wrong?

73  I have never understood why American mortgage holders are allowed to 'walk-away' from their obligations when those obligations become onerous and/or unsustainable.
Posted by: Dougf at February 17, 2010 11:21 AM (8JckG)   In past decades, and for a long long time, the banks still came out ahead most of the time, simply because property values continued to appreciate and few people defaulted.  You'd pay on your house for X years, and if you lost the house the bank sold it and recovered what you owed and more.  It worked out well, in part, because a person didn't have to feel like he was signing away his soul/first-born to buy a home.  Thus it stimulated home buying which further propped up values overall. 
The current situation is pretty exceptional, historically speaking.    Encouraging home ownership among those who can afford it is a good thing.  You don't want to live in a neighborhood comprised chiefly of renters.  They have no stake and are 1 step away from being nomads who can pull up stakes at the first sign of trouble.  You want people tied to their communities in a real financial way in order to motivate responsible behavior.  However, when you treat housing as just one more redistributionist scheme, and give it away to folks who don't have to work for it or can't afford it, you wreck great destruction.

74 It's not the ARMs that are the big disaster.  Rates are still low, ARMs are still amortized, and every one I've ever heard of has a limit to how much the rate can move in a year.

The problem is in the interest-only and minimum payment loans.  These products are crazy.

75 In NH everything is put into your property taxes...school, town, county state costs. You pay nothing for services if you don't own property, so lots of poor people or renters, can vote to spend money you don't have, and you get the bill. it is a lot like DC that way.

76 I'm not positive, but I'm pretty sure banks hate to foreclose because then they become liable for the property taxes, etc.

Apparently this happened a lot in Detroit. Properties that have been abandoned for years with no mortgage payments, but the banks are afraid to foreclose and take the hit on their books. Actually achieved negative real estate value in places.

77 I admit that this is sort of tangential to this thread but since I am Canadian ( but not the 'usual' type)... You mean a back-bacon- and cruller-eating, Molson-drinking socialist with no tan who hates Montreal, England and the United States?

78 I have an ARM. Worked in the mortgage business for 10+ yrs, so I knew what I was getting into. The reason was that the family was supposed to have moved in 3-4 years. Life happened, and we stayed a little longer. The house is on the market. If it doesn't sell soon, it's going to get rented. But I did the math, and higher rates aren't going to kill my payment, so I'm not worried. For people who are 85% sure they're selling their primary residence in x years, ARMs can be good. For the idiots who tried to flip homes w/ ARMs, you get what you deserve. Risk/reward bitches.

79 I don't have all the facts, but it seems to me that the economy is acting stupidly.

80 I agree Vic, we have not yet "reset" the real estate bubble.

81 Agree with Vic, housing in Clownifornia is still completely unrealistically priced. Hell, we have people making $60K per year living in apartments... with roommates, to just help cover the rent. Metro areas in CA are basket cases.

82 Speaking of the CRAs (v.1 and v.2), I keep reading these analysis columns from various respected people saying that the real problem for the financial meltdown was with Wall Street, with their complicated derivative schemes (which I admit are breath taking in their complexity). But, here is my take on it. I know some of these Wall St. types. Masters in accounting from Dartmouth, etc. Advanced degrees from every Ivy League University you can name. These guys had a problem handed to them with the CRAs. All of sudden, they had to find a way to cope with a Law that they knew damn well went counter to every thing they had ever learned about finance, that you can't lend to money to people who can't pay it back and stay in business. They knew it couldn't work, all they could do was take the Risk and spread it out as far as possible, which would only delay the inevitable as long as possible. Without the CRAs, no derivatives, no sub prime mortgages. Am I right here?

83 I agree Vic, we have not yet "reset" the real estate bubble.

Boy have I got a "reset" button for you!

84 Looking Glass - those are the numbers that matter, not the U3 and U6. Not a model, not estimating discouraged workers, etc. Real payroll filings.

85 every one I've ever heard of has a limit to how much the rate can move in a year.

However, you can be certain it will ratchet up by whatever the contract maximum allows even if interest rates remain constant or even declines.  A guy I worked with years ago at IBM had that happen.  The higher interest rates of the late 80's started to decline some, yet his ARM kept going up.

86 @82 CRA played a part, but a huge impetus for the lending was the balls-out "we'll buy any paper you got" approach from the GSEs, Fannie and Freddie. If those two entities had to operate like normal private enterprises, they would never have produced such a huge market for crappy paper.

87

49

I just did what you said..... holy shit are there a LOT of foreclosures in Pittsburgh.

88

Posted by: rawmuse at February 17, 2010 11:39 AM (Kguno)

The problem was initiated with CRA, but F&F really made it possible for the collapse to occur by providing the dumping ground for all the bad loans. They then sold the bad loans to investment houses who "insured" the bad loans through the "derivatives" which were developed by AIG.  IOW, they weren't so much derivatives as they were insurance policies.

 

Both CRA and F&F were products of the Democrats, which is why I say that they TOTALLY own this mess.

89 You pay nothing for services if you don't own property

They pay for it.  Landlords call that a "rent increase". 

90 85 purple avenger that is because the index the rate is tied to is determined 45 days before the flip so while rates may be declining....the rate used could still be from a month where it actually increased.....it's not real time

91 Also don't forget that the ratings agencies actually have a sort of "government oligopoly," and receive an imprimatur from the SEC. So the ratings agencies which fucked up so cataclysmically could all say "hey, we're operating under SEC regulations, we're golden."

92 Foreclosure is quiet, just like incest.  People don't talk about it, it just happens, it is very sad to watch.  A friend of mine just said that when the Bush tax cuts end a lot more people who make about $250,000 will begin being foreclosed on too.  He says that if they take away the mortgage deduction things will get even worse.  So he is expecting huge problems with foreclosure rates increasing in high end real estate when they drop the bush tax cuts.  This was upsetting to hear, hope BO is smart enough to let the tax cuts continue.

93 F&F really made it possible for the collapse to occur by providing the dumping ground for all the bad loans. They then sold the bad loans to investment houses And to lay blame at the feet of gubmint, where it usually belongs, let us point out: The investment houses were happy to buy up any F&F paper because... it was government-guaranteed.

94

I think the "rating agencies" were bambuzzeled by F&F when they put together those packages where they mixed the good loans with the bad loans. If I am not mistaken that was done by our old friend and scrunt, Jamie Georlich(sp?).

 

95 @86, good point. Everything I know about money is self taught, or by reading books like "Rich Dad, Poor Dad". But, I hang with some heavy hitters in the money biz. I play dominos with them and such. We talk. These guys saw all of this poop coming back in 2005. One guy I know, he is pretty rich. He owned a house in the Boston area, sold it for a couple million. Moved back to CA. and rented a huge place in Hillsboro. This was back in 2005, when everything was go-go-go. I thought he was crazy at the time. We all did. I asked him about it. He said "You have no idea what is coming up" He even told me to sell my place at the time. I wish I had listened to him, frankly.

96 Jim Cramer did the same thing. Sold his house and went to cash. Heard he recently bought a place in NYC, cash. Those were the smart ones.

97

A friend of mine just said that when the Bush tax cuts end a lot more people who make about $250,000 will begin being foreclosed on too.  He says that if they take away the mortgage deduction things will get even worse.

This is because, in general, American began living on the "edge" near the end of the 60s.  They spend like there will be no tommorow and live paycheck to paycheck with no buffer.

I used to laugh at that old commercial with the guy showing off all his stuff and asking the question "how can I afford all this?  I'm in debt up to my eyeballs". 

That is more chickens coming home to roost right now.

98

On the bright side, it looks like the commercial real estate market is on track to crater in March.  So we won't have any of those evil capitalist bastards offering people work like they used to.

I also heard the Four Seasons luxury resort in the DFW area is going out.  Well, I heard it on Fox radio, but I haven't verified it. 

99 There's a January article at www.doctorhousingbubble.com on the shadow inventory of housing... Looks like many REOs are still off the market because banks don't want to make the losses "official." I think we all know what this means for future housing prices.

100 curious @92
hope BO is smart enough

Yeah, those are words you never want to base your plans on.

101 However, you can be certain it will ratchet up by whatever the contract maximum allows even if interest rates remain constant or even declines.

I know that ARMs are not locked-in past there lock-in period.  What I am saying is that the interest-only and minimum payment loans are the ones that will drive the catastrophe.

When an ARM adjusts, it makes a modest difference in the monthly note due.

When an interest-only or minimum payment loan hits its limit, the monthly note can increase by several multiples.  For many people with these products, it may as well be a balloon payment come due.

102 CRA was not really a problem until Janet Reno started using it as a hammer to hit banks with. Justice held up banker mergers until CRA requirements were satisfied--which basically meant Jesse & Al got their's. Once converted into a weapon, CRA became a foe to be caged, rather than defeated. The elegant, win-win solution was to dump all the CRA paper on F&F. This also involved storefront mortgage "finders" that helped morons fill out paperwork and lie about their income. ACORN and its affiliates operated many of these finder operations and collected fees for "origination." Yes, the Mediacrats own this problem. It's a damn shame Bush had to go on about "ownership society" so much. I'm terribly sympathetic to the idea, but in practice it's simply a failure and one the Republicans didn't need to be involved with.

103

This was upsetting to hear, hope BO is smart enough to let the tax cuts continue.

He won't because he's all about "fairness". In other words, it isn't fair that lower income people should lose their houses while people making over $250,000 can keep theirs, so the latter group should get out the lube because they're going to get it good and hard. Whether it makes economic sense is immaterial because the government is being run by people who live in a fantasy world.

104 This is just anecdotal but I have some first time buyer friends trying to get mortgages.  They are good risks in the new banking parameters.  Seriously, they are having trouble getting mortgages.  One lender said they might, might give the mortgage if they would agree to put 50% down.  They went to the "bank of mom and dad" and walked away empty handed so that lender is off the list. lol   But, more and more I am hearing the young blame the "baby boomers" for selfishly taking what they wanted and forgetting about them.  I don't see this but where is this whisper coming from?

105 I'm not positive, but I'm pretty sure banks hate to foreclose because then they become liable for the property taxes, etc.

Yep.  I know four banks in the Midwest that share the same clients.  The clients claim they have millions of dollars in personal wealth.  They really have nothing.  They have banks that float them near unlimited cash on OVERDRAWN accounts.

The clients are knee deep in the Vegas desert real estate quicksand.

The FDIC has to know these banks are fucked.  They're already on the watch list.  Some of the clients are divorcing their wives and trying to refinance in their ex-wife's name.

Good banks should be beating down the doors at regional fed branches about this.  These zombie banks aren't even trying to collect on their loans to these deadbeats.  Their clients still have country club memberships, multiple vacation props, a garage full of nazi sleighs, and personal cash flow that affords them $100 a night dinners.

It's a good thing that "Fight Club" was just a novel.

106 You'll love the way we squeeze you!

107 There's more than one weird story in my building. One place was up for short sale... for $120,000 less than she paid for it. Sweet Jeebus in a cracker barrel. There was another place in the building where the owner had bought years ago, for the low 200s. Went up on short sale... for mid 300s. Therefore the owner must have owed over the asking price, yes? So the owner must have used the place like an ATM. Incredible.

108 Well, now is the time to buy your corning ware.  They are going to have major sales, they missed earnings.

109 Looks like many REOs are still off the market because banks don't want to make the losses "official."

The foreclosure pipeline is more than full because it is customary not to kick people out of their homes in the winter.

Meanwhile, shadow REO properties are either depreciating or costing a fortune in upkeep.

I am betting that banks will awaken this spring to the fact that the market has much more falling left in it.

110 "108 There's more than one weird story in my building. One place was up for short sale... for $120,000 less than she paid for it. Sweet Jeebus in a cracker barrel. There was another place in the building where the owner had bought years ago, for the low 200s. Went up on short sale... for mid 300s. Therefore the owner must have owed over the asking price, yes? So the owner must have used the place like an ATM. Incredible.

Posted by: George Orwell at February 17, 2010 11:59 AM (AZGON)"

Think of the mind set.  It was very common for WS people and the like to refinance every single year and use the money that came out in the market to make money.

111 Looks like many REOs are still off the market because banks don't want to make the losses "official."

They really don't want to pull the trigger and take the loss.   Not pulling the trigger allows them to keep those properties nominally on the books as investment assets rather than liabilities/losses.

If they started pulling the trigger big time, the govt would force them to up their reserves when those supposed assets suddenly disappeared.

Right now, its a huge rotting edifice, where everyone involved knows it rotted and ready to collapse, but they keep putting on fresh paint hoping the termites will just go away or the collapse won't happen on their watch.

I don't think this is a bullet Obama and the banks will dodge.  Three years is a long time.

112 Look all you delinquent MF'ers -- pay my savior Obama the money you f*&#ing owe him!...FEAR MY F&*#ING WRATH!!!

113

99,

Yep. It (the 4 Seasons Las Colinas - nice place, BTW) is the top price listing on the Feb. Foreclosure listing service.

 

114 Do you guys remember the report a couple of months back on I think CNBC where the banks were bulldozing the foreclosed homes?

115

There were several assumptions that led to this:

1. Your home value would appreciate so quickly that you could sell the house and pocket the cash before the rate increased.

 

I don;t understand this.

I bought a home in september. I probably paid 10,000 in closing costs. If I sell it i will have to pay about 10,000 more in closing costs. In what real estate market will my house appreciate at least $20,000(to cover my expenses) in five years?

116 It's a damn shame Bush had to go on about "ownership society" so much. I'm terribly sympathetic to the idea, but in practice it's simply a failure and one the Republicans didn't need to be involved with.

I've never been sympathetic to this stupid idea.  But I am happy that Bush pushed the ownership society.  Now we know that it's wrong, and the next time Jesse, Al, or some other community agitator comes calling, there is now ample basis for a "FYNQ, we know what that gets us" response.

117 The Chris Dodd/Bwarney Fwank bubble was extraordinary. I paid $281,000 for my house in 1997. The smaller house next door sold for $920,000 in 2006. The guy that bought it said that it was really the same because he sold his last house for $500,000 and had only paid $150,000. Now that the bubble has burst, I get to pay taxes on a house they say is worth $650,000. It was supposed to be all on paper but I think somehow it was an effort to raise taxes.

118 115  I thought that was mainly in the rust belt? 

119 Not pulling the trigger allows them to keep those properties nominally on the books as investment assets rather than liabilities/losses. That was my general impression. Somehow I don't think this will end with a spectacular collapse... I'm afraid it will just linger and slowly correct, over many years, meanwhile dragging down the whole economy. One more influence to bring about a "lost decade" like Japan. More like two decades, in fact.

120 In what real estate market will my house appreciate at least $20,000(to cover my expenses) in five years?

The market we had from 1999 to 2007.

121 Posted by: Ben at February 17, 2010 12:03 PM (wuv1c)

Ben there would be no closing costs, no out of pocket expenses.  Everything was rolled into the loans.  If they bought another couple of houses they were better off than just paying the mortgage and keeping the money in there, don't forget the real estate market was happily chugging along.  If they used the money in the market, they made money on money that would just be sitting there. 

122 In what real estate market will my house appreciate at least $20,000(to cover my expenses) in five years?

Dood.  Grow dope in the attic.  One or two good crops bail you out.

123 ...and in related news:
Obama says stimulus bill saved troubled economyObama hails one-year results of economic stimulus bill, acknowledges many still hurtingvia AP

124

I thought that was mainly in the rust belt? 

Noipe, there was a story on Fox showing them bulldoze and entire neighborhood in S. California.

125

Obama even delighted in recounting a section of his State of the Union address last month in which he talked of the tax cuts from the stimulus plan and watched Republican lawmakers fail to applaud the idea.

"They were all kind of squirming in their seats ... It was interesting to watch," Obama said.

And Obama made sure to commend himself and his own team for taking action.

Obama made repeated references to how well, in his view, his government has done with the stimulus.

Barry is an immature, self absorbed, narcissistic ass. But you knew that already

126 Yes. Yes. Yes.

ford, and Vic and everyone else who says this isn't over yet have it exactly right.

The collapse of real estate values has just begun. Tune into the chart shown at this link.....

http://tinyurl.com/6p4c3d

We're pretty much done with the damage due to the Sub-Prime mortgages (and we each know what that has done to our home values). It is the upcoming wave of Option ARM and Alt-A mortgage resets which will take those values further down.

And California? You're our "Greece" here, remember? Sixty percent of the nation's Option ARMs are for California mortgages. This is gonna hurt.

Of course, at the end of the year, when home prices have not recovered, Zero will claim that he is having to deal with "unprecedented" or "unexpected" or some other "un-fill-in-the-blank" problems, but take a look back at the date on that link: The players have known about this for some time now.

127 119 115  I thought that was mainly in the rust belt? 

Posted by: Naan at February 17, 2010 12:04 PM (j5MTj)

Naan -- They've been doing it in the inner-city of CLE, unfortunately they've been extremely slow-moving in their process.

128 It's not like Arnold is coming back for another term.  He should just fire all the union people and balance the damned budget before he brings down the rest of the country.  Read a disturbing article today about how quietly Oregon is moving in the direction of CA.

129 Not pulling the trigger allows them to keep those properties nominally on the books as investment assets rather than liabilities/losses. Dry wit, yes? Here is how insane the real estate market was in Southern Clownifornia, around 2002, well before the peak of the lunacy... my wife bought her condo, and in one freaking month, her mortgage person said she could borrow against $25K in appreciation. In one month. It was around that time I knew I would never put money into SoCal metro real estate, not for a long, long time. That was when I read a LA Times article about housing prices in SoCal, and it mentioned what was then a new wrinkle. People had to bid on houses without a home inspection contingency, otherwise the bids would be rejected. Plain lunacy.

130 Im sure NPR will be speaking to Chris Dodd, and Barney Frank ANY minute now.  Any.  minute. now.

Unless they decide to go with "Going green while spanking it" on 'All thing considered.

131 130 Oops, I quoted the wrong thing. I meant to respond to Ben. Sorry, me stupid this morning.

132 California, I get it, we are in big trouble here. Sanity would indicate that we declare bankruptcy. That would be the only way to renegotiate all of these pensions, which are a big part of the problem. Sanity is in pretty short supply here, unfortunately.

133 I am hoping that once Charlie Gasparino gets to Fox that he will pull Santelli and Faber and Joe on Squawk box and Ratigan at MSNBC and kudlow with him.  I hope he experience the same freedom Beck talked about so that Gasparino can unload everything he has been dying to say on CNBC but was told he could not say.  Am assuming he was told he could nto say it cause he has done Batchelor's radio show and said some things that would make your hair stand on edge.

134 You need a good lecturin'

135 for what it's worth: a big problem hitting the fan are the balloon mortgages and deferred principle arms coming due, both creative financing instruments offered in the bubble 4-5 year ago. right on time!

136 #123 Southern Utah...hot still.

137 #123 Austin Texas

138 133 California, I get it, we are in big trouble here. Sanity would indicate that we declare bankruptcy. That would be the only way to renegotiate all of these pensions, which are a big part of the problem.

Sanity is in pretty short supply here, unfortunately.

Posted by: rawmuse at February 17, 2010 12:13 PM (Kguno)

WHEW!...For a minute I thought you said Botox!

139 Can a state declare bankruptcy? I don't think so. But I can't see the endgame. IOUs? Probably continental plate-sized amounts of federal bailout fiat money. I just don't know. Tax receipts are going to evaporate in CA. Is Sacramento a city of sleepwalkers?

140 People had to bid on houses without a home inspection contingency, otherwise the bids would be rejected. Plain lunacy.

Heh.  That's happening around here now (Fairfax County, Virginia) on AS-IS REOs getting dumped at well below market.  I expect this to become the norm with the amount of snow damage a lot of these unoccupied places have taken in the last couple of months.

I've been to a couple of these listings, and the stained carpets in every room made me think that there are a lot of bad pet owners around here.  My wife figured out that it was the guard dogs left in these unoccupied places leaving the stains.

141 People had to bid on houses without a home inspection contingency

What's wrong with that? I couldn't scrap all the pipes and wiring the day of the closing otherwise.

142 #123 Montana...after the revoltion.

143 Curious - is Gasparino moving to FOX?  FNC or FBN?

144 When Jim Cramer is on at noon you know there is trouble brewing.  And he's interviewing "austan (sic) goolsby"....the chiron operator at CNBC needs to learn phonics, they can't spell and they don't check their spelling.

145 Dylan Ratigan is dead to me. Well, he looks dead, anyway. That cat has seriously gone downhill.

146 Hm, they didn't say "unexpectedly"

147 "144 Curious - is Gasparino moving to FOX?  FNC or FBN?

Posted by: Tami at February 17, 2010 12:16 PM (o1wpy)"

FBN, Cavuto is quietly poaching all the good ones but I've always loved Cavuto.

148

128  CLE?  Cleveland

I'd be all for bulldozing alot of innercities, as long as the people who turned them into the hellholes didn't then move to the country and ruin that area as well.

149 "146 Dylan Ratigan is dead to me. Well, he looks dead, anyway.

That cat has seriously gone downhill.

Posted by: George Orwell at February 17, 2010 12:17 PM (AZGON)"

I don't know how he ended up on MSNBC, probably contractual stuff.  But, when he was on Bloomberg, he was "the man".

150 Big on Cavuto here, as well. Dylan is the biggest sell out , and close at a new light year timmed passage from Con to flaming full on Obie... his wife must be ready to pull a Dr Amy on him. Can you imagine waking up next to a new flaming lib?

151 Now we know that it's wrong... Look, I think in theory it's a great idea that people who own property will take better care of it than those who rent, invest in the neighborhood, etc., etc. I believe that is still valid and a good principle. But when you say we know that it's wrong, you mean we conservatives and linear thinkers know that it's wrong. As for the Mediacrats, Barney Frank, Jesse, Al and Zero and all the other clowns in Washington...they still think global warming exists, okay? Never assume that anything is proven to an idiot. I would have thought it was self-evident that DDT saves lives and does nothing to bird's eggs, but apparently not.

152 Ratigan, the Money Honey and Cavuto are all competing for what a million viewers at the 4 pm time slot.

153 Let FBN take Gasparino and Kudlow, but leave Ratigan behind. And bury Steve Liesman, along with the CNBC brain-dead female eye candy. There is something about Erin Burnett that just demands a baseball bat.

154

When Jim Cramer is on at noon you know there is trouble brewing.  And he's interviewing "austan (sic) goolsby"....the chiron operator at CNBC needs to learn phonics, they can't spell and they don't check their spelling.

 

It's Chyron. sorry, i couldn't resist

155 Green shoots! Green shoots everywhere! (and racists!)

156 Posted by: ford at February 17, 2010 12:20 PM (Ki7fm)

Don't think Ratigan is married but, if he is, his wife can ask Mrs. Scarborough how it feels and how to deal with it. (am Mika too, lol)

157

141,

MikeO, they (the stains) aren't just from guard dogs...  There are some massive (10,000+ sq/ft) REO properties (Fairfax Farms area, if anyone's interested) that get constant visits from the local gendarmes to evict unlawful tenants....

158 149

128  CLE?  Cleveland

I'd be all for bulldozing alot of innercities, as long as the people who turned them into the hellholes didn't then move to the country and ruin that area as well.

Posted by: Naan at February 17, 2010 12:18 PM (j5MTj)

They already have...moved into the farmland, developed it and built McMansions...which is part of the next bubble.

159

I'm trying desperately to keep my home. I paid $115 about 8 years ago and could only sell it for about $75 now. I still owe about $98. Been unemployed for well over a year but living on mil retirement, GI Bill, and student loans to pay for school. Jobs are still pretty bleak here in Michigan. If I don't find one by August, I'll have to go to Florida to save my house. My sibs and I own a small landscape company down there but I'm trying not to bump one of the employees. If I have to, I will. It just seems to be some seriously twisted logic that I will have to go to Florida to save my home in Michigan.

160 Maybe we can get ACORN to put us up for the rest of Obama's term?

161 Posted by: Ben at February 17, 2010 12:21 PM (wuv1c)

That's ok.  I appreciate the correction, I learned something.

162 I'd be all for bulldozing alot of innercities, as long as the people who turned them into the hellholes didn't then move to the country and ruin that area as well.

Ever hear of HUD Section 8 Vouchers? 

 

163

The problem is the American citizen no longer has the moral virtue to take responsibility for his actions. Its always somebody else's fault. Did you take out a loan with terms you really couldn't afford? Its the predatory lenders fault. Did you have a good time taking expensive vacations every year? The insurance company charges too much for health insurance. Did you spend an ungodly amount of money on your "man cave"?  Where's my job that's owed to me?

The Republic cannot survive if its people aren't virtuous.

164

Posted by: Ben at February 17, 2010 12:21 PM (wuv1c)

That's ok.  I appreciate the correction, I learned something.

Yeah, i learned about it a few months ago. I used to call it the crawler or ticker.

165 If the state can't declare bankruptcy, then the only way out is to inflate (or deflate) the dollar to the point where your $100k California pension will buy you a lifestyle akin to that of your average shut in senior citizen. Currency, that is the very thing that it is designed to do. I remember when I first appreciated the difference between "currency" and "money". Yes, there is a distinction.

166

141 cont'd:

PA, said "tenants" have already taken everything not nailed down, so you'll really have to scrounge for valuables.  Might get a spool full of Cat 5 cable, though...

167 Ever hear of HUD Section 8 Vouchers? Otherwise known as "exporting misery."

168 Posted by: rawmuse at February 17, 2010 12:25 PM (Kguno)

I have a really really good friend who is a currency trader.  You have to be a certain type to do this and you can't do it for years and years, or you'll burn out.  The only other time I saw that look was my guy friends in college who played "WOW" all semester and didn't go to a single class.

169

Can a state declare bankruptcy?

No State has ever declared bankruptcy but cities and other countries have.  Recall Orange County CA declared bankruptcy a few years ago (ch 9).

I would presume that if the local gov can do it so can the State.

170

I'm trying desperately to keep my home. I paid $115 about 8 years ago and could only sell it for about $75 now. I still owe about $98. Been unemployed for well over a year but living on mil retirement, GI Bill, and student loans to pay for school. Jobs are still pretty bleak here in Michigan. If I don't find one by August, I'll have to go to Florida to save my house. My sibs and I own a small landscape company down there but I'm trying not to bump one of the employees. If I have to, I will. It just seems to be some seriously twisted logic that I will have to go to Florida to save my home in Michigan.

I'm sorry for your situation, but Michigan is a total loss. We should sell it to canada at this point. When the bailouts stop coming, what is left of the auto industry will collapse and send Michigan into an even deeper depression.

i can't imagine homes holding their value in michigan. There is nothing on the horizon that would lead me to believe there will be an economic turn around in michigan any time in the near or long term.

 

171 Viv, ARnold has to get a set and start saying to the unions "either take what we are willing to give or "you're out".  (said in heidi klum voice.)

172

Ever hear of HUD Section 8 Vouchers?  

 Posted by: MikeO at February 17, 2010 12:24 PM (lBmZl)

Section 8 is another one of those feel good Dem programs designed to keep you in poverty. I had a girlfriend in Arizona back in the 80's who was on Section 8. I talked her into going to school to eventually get a better job. For Section 8 you have to requalify quarterly. When they learned of her student loan, they cut her money back to almost nothing and I had to help her for the next few months. Needless to say, she decided to drop out of school soon after. 

 

173

#140 Can a state declare bankruptcy?

My preliminary investigation (totally not a lawyer, financial guy, or know anything about bankruptcy) leads me to think the answer is yes.  I base that on the fact that bankruptcy courts are at the federal level of the judicial system, so presumably a state government can petition for bankruptcy.  I'll stop there because as I said, I haven't any expertise in any of the fields involved.  But it's a very interesting question that we may see answered before too long.

174 But when you say we know that it's wrong, you mean we conservatives and linear thinkers know that it's wrong.

My point is that *I* know that it's wrong.  That forms the foundation for an unyielding argument against appeasing these cocksuckers in the face of whatever race guilting they try.

This is just like how the historical examples set by Stalin, Hitler, Mao, Pol Pot, and both Kims of North Korea inform the self-imposed limits to my behavior if the slide ever starts.

175

I'd be all for bulldozing alot of innercities, as long as the people who turned them into the hellholes didn't then move to the country and ruin that area as well.

LOL, you need to read John Ringo's latest book, "Live Free or Die".  I will not write spoilers but this issue comes up bigtime.

176 Section 8?  Sure have, our town was trying to be the capitol of section 8 for not only our county but for the city that borders it.  We had a grassroots uprising when they wanted to build yet another appartment bldg. when occopancy was below 70% for the others in the area.  This was in '03-'04.  I'll bet their pretty full now though.

177 MikeO, the female financial planner on the local news said that people do not view their mortgages as merely a contract and that they should and they should worry about themselves.  If you recall she was big on the "walk away from your mortgage" scenario.

178 Well, I gotta run. But before I do, here is the thing that has been on my mind lately. It is easy to write off those who took needless risks, or were foolish. If they lost it all, they rolled the dice, hard to feel sorry for them. We are now in a time where the average person, who did everything right, who saved for rainy days, who did not take needless risks, are being ruined. Terra incognito, folks. Here be monsters...

179 If you go to the banks implode website and read the archives you will understand the whole thing better.

180 I don't have to pay my mortgage, you fucking racist fuckity-fucks, I'm DR. AMY BISHOP!

181 AND WHERE ARE MY FUCKING PANCAKES?!?!?!?

182 MikeO, the female financial planner on the local news said that people do not view their mortgages as merely a contract and that they should and they should worry about themselves.  If you recall she was big on the "walk away from your mortgage" scenario.

I understand this.  I know this is a big problem.  I know people who think like this.

The biggest part of this problem is that it has radicalized me in the space of the last sixteen months.  I hate and distrust anyone I meet until I have reason not to.  I don't even think of them as people anymore.

I've lived well within my means my entire life, and I am now footing the bill for others' profligacy.  I stay within the law partly because it's what I've always done, but it's now mostly because I have too much to lose not to. . . at the moment.

183 There is nothing on the horizon that would lead me to believe there will be an economic turn around in michigan any time in the near or long term.

An underground economy of sorts will likely develop.  It won't look anything like it does today though.  Lots of indoor dope farming, micro-manufacturing operations in garages, artist colonies, and people who can work remotely without having to commute every day. 

It wouldn't be too hard for a guy like me to buy some dirt cheap rural joint in MI and maintain a Florida PO box "suite" for residency/tax purposes.  If I was inclined towards cold climates, which I'm not, there's lots of cribs that can be had for nothing in MI, and NY and the local tax burden on a $10,000 place can never get that bad.

184

When I bought my 3 bedroom, 1 bathroom crackerbox 10 years ago, the idiot bank person handling my purchase told me that I was "qualified" for $200,000 on an ARM and why was I only purchasing a house for $70,000 (which at that time I thought the $70,000 price was highway robbery).  I politely informed him that that was all the house I could afford on a fixed rate mortgage.  He actually tried to persuade me to change it to an ARM and I, rather less politely, told him to stuff it and, if he wasn't going to give me a fixed rate loan, I would look elsewhere.  Took about 10 minutes for that to sink in and he wrote the loan for a fixed rate.  Now, there are at least two houses in foreclosure on my street alone and, thanks to Google Maps, I found out there are 29 foreclosures in my housing development. 

God help us all, I think it is barely the beginning.  Hunker down and fasten your seat belts, I believe it's going to be a very bumpy ride. 

185 MikeO, they (the stains) aren't just from guard dogs...  There are some massive (10,000+ sq/ft) REO properties (Fairfax Farms area, if anyone's interested) that get constant visits from the local gendarmes to evict unlawful tenants....

No kidding?

We looked at some properties out that way because it's so close to the NRA building, but the traffic there is horrendous and it's too far from my wife's office.  The prices on the more modest homes of that area are still too high in my opinion. 

The House of Delegates just passed House Bill 854.  If it gets to McDonnell's desk and he signs it, there might be a low-risk business opportunity here. . .

186

Posted by: Purple Avenger at February 17, 2010 12:43 PM (lvCi

I'm already in the underground economy somewhat. I've been a maintenance technician for many years and have turned those abilities into a somehwhat paying job. I've done a lot of household repairs for people around here but there just isn't enough work to keep it going full time.

Come August, we may be neighbors, so to speak. I'll probably be in Brevard County. 

187

Thank God for Joe "Zobo" Biden.  We were at "then brink" and he pulled us back with his Smooth SHERIFFING.  

188

186 - No kidding.  FCP busted a hobo ring (seriously) living in one unfinished (heck - never will be finished) property w/a working still in an outbuilding - distressingly less than 1,000 yards from my place, within sight of the NRA building...

189

Well, there's always the gypsy wagon and the yurt for my family and me...I'd prefer to not be called a hobo however...something more romantic perhaps?

This could work according to plan for us...wait it out, and then when the town is a deserted wasteland we step in and become tribal chieftains...I think I could still carry off a chain mail dress if need be; who runs Bartertown?

190 Hardly news, but Slow Joe gets backup from the Buffoon in Chief.

191 "Suburban homeless: Rising tide of women, families"

192

CA and MI will not be straightened out until the communists who run the legislatures in both States are voted out of office and replaced with fiscal conservatives with balls.

I pray that WHEN they do go bankrupt that we have fiscal conservatives in Washington controlling things so that they are allowed to fail so that the healing process can start.

I am not overly optomistic.

193

Not even A-list celebraties are impervious to the topsy-turvy real estate market. According to CNN Money and the San Francisco Cronicle, Scarlett Johansson bought a stunning Spanish style villa in Hollywood Hills in 2007 for $7 million, threw down even more cash to remodel it to her exacting specifications—and now itÂ’s being listed by Sotheby's for over $2 million less than what she paid. WeÂ’ve got snapshots and more details here.

I'm sure that it's all George Bush's fault. And knowing what a braindead lefty Obama loving twat she is I'm sure that what she thinks.

194 Quit bitching.   Zobo Joe and the Muzztard are mopping up Booooooooooosh's mess.

195 "...According to CNN Money and the San Francisco Cronicle, Scarlett Johansson bought a stunning Spanish style villa in Hollywood Hills in 2007 for $7 million, threw down even more cash to remodel it to her exacting specifications—and now itÂ’s being listed by Sotheby's for over $2 million less than what she paid....."

Yabut, its Scarlett Johansson we're talking about here.

OK. If you're going insist on being precise, we're talking about Scarlett and her girls.

196 Sarah2053...
"...a fixed rate loan...."

Yep. I've said for some time now that if you can't afford a house on a 30-year fixed rate loan, then you can't afford the house. We'll all be better off when everyone--the lenders and the lendees--understand this.

197

Azlibertarian, Barney Frank and Chris Dodd wanted dead beats to get loans.

You got a problem with that?

198

In other news:

The Treasury Department said Wednesday that the deficit for January totaled $42.63 billion. That left the total of red ink so far this budget year at $430.69 billion, 8.8 percent higher than last year when the deficit soared to an unprecedented level of $1.42 trillion.

199 Gus
"...Barney Frank and Chris Dodd wanted dead beats to get loans.

You got a problem with that?"

If a bank wants to lend to someone they believe to be a "dead beat", then the bank can set an appropriate interest rate to reflect the risk they're taking. If and when that loan fails, then the bank gets a house on their books instead of a monthly interest payment on their lent capital. If the bank was stupid enough to do this too often, then the bank fails.

My problem with what went on is that the Frank/Dodd approach removed the possibility of failure here (and let's also be charitable: The R's were hoping that CRA-influenced increased home-ownership numbers would turn a D constituency into a R constituency. They're equally complicit, IMO.). The banks knew that Fannie, and therefore the fed.gov, were backing them up. There was no downside, so why not loan to a dead beat?

Eliminating the real possibility of the failure of either the risky loan or the bank who lent in a hap-hazard manner only encouraged more risky behaviors (MBSs, CDSs, etc.). The risk of failure plays an important role...it keeps everyone honest.

In a nutshell, I believe that when a loan fails, both parties to the transaction ought to feel the pain.

200 2 Barney Frank will demand more Affiirmative Action Lending.

The horrible thing is that is true.  He will, you just know it.

201 118  Now that the bubble has burst, I get to pay taxes on a house they say is worth $650,000. It was supposed to be all on paper but I think somehow it was an effort to raise taxes.

The only people living in California now if Prop 13 didn't exist would be illegal aliens.  I paid $335k for my house in 1997 and the house (exact same design, with a few upgrades) right next door to me sold for $1.4mil two years ago.  If I had to pay SFs grotesque property taxes (which are already about equal to my mortgage payments) on a supposed value of my house in excess of $1mil I'd have sold and moved to Texas years ago.  I'm sure my boss would have been very sympathetic if I'd gone to her and said "Hey, my property taxes went up $13,100 last year.  Can I have a raise equal to that?"
People in other places who have to pay based on appraised values are getting so badly cornholed even I feel their pain.