Comments for Banks Sell Some REOs in Bulk below Market Prices
Nemo says:
Sales rates picking up. Bottom is in.
Nemo Thu Mar 19 16:21:51 2009 CDT #
dUCKdUCKgOOSE says:
Maybe some places are reaching a bottom, but the economy lost 2.5 MILLION jobs in just 4 months, and about 600k+ per month. That's a lot of defaults and foreclosures in the future...
Parent Post
dUCKdUCKgOOSE Fri Mar 20 08:28:28 2009 CDT #
Basel Too says:
the banks are selling to their vulture friends, after all, it's OPM. =-O
Basel Too Thu Mar 19 16:24:25 2009 CDT #
Tikal says:
So thats where all our phantom inventory went!
Tikal Thu Mar 19 16:25:04 2009 CDT #
Sexy Derivative says:
Doesn't this force mbs write downs?
Sexy Derivative Thu Mar 19 16:25:21 2009 CDT #
energyecon says:
This gem reposted from end of last thread:
Goldman to detail AIG trading relationship Friday
By Greg Morcroft, MarketWatch
(MarketWatch) -- Goldman Sachs said it would hold a conference call with reporters on Friday to, "answer questions from journalists, and clarify certain misperceptions in the press regarding Goldman Sachs' trading relationship with American International Group."
Members of the public can listen to the call via webcast, the company said in a press release.
http://www.marketwatch.com/news/story/goldman-detail-aig-trading-relationship/story.aspx?guid=%7B83E134BA%2DA983%2D451F%2DB6A7%2DFF4D005EEECF%7D&siteid=yhoof
energyecon Thu Mar 19 16:26:08 2009 CDT #
Counterpointer says:
Wow, looks like they're profitable.
C
Counterpointer Thu Mar 19 16:26:14 2009 CDT #
Nemo says:
Hey CR --
In the story above, Citigroup left $100,000 on the table with just this one property.
But they did not unload just the one property; the unloaded an entire basket. The question is, how is the basket doing?
If you own 10 stocks and liquidate them all and one of them doubles, does that mean you made a mistake?
Without knowing what happened to the entire bundle, I am not sure you can draw any real conclusions. Certainly not infer a trend.
Nemo Thu Mar 19 16:27:33 2009 CDT #
Sippn says:
Yea, its real nice as they have both damaged their share holders as well as the property owners in the neighborhood that they rejected the higher priced offers.
Who is really responsible for screwing up the equity and holdings here?
Sippn Thu Mar 19 16:28:29 2009 CDT #
Kung Fu Panda says:
Well, if you are a first time homebuyer, you should make even more lowball offers. How does the investment fund that is the seller disguise that they are a bulk buyer or the fact that they bought the place at the steep markdown?
Doesn't the sale show up at the recorder's office just like every other one?
Kung Fu Panda Thu Mar 19 16:30:01 2009 CDT #
Feckless Ness says:
So if I got a fat bonus on Wall Street, I could buy a bundle of REOs at 25 cents on the dollar, flip them, give the IRS its 90% claw-back tax on my bonus, and keep the difference.
Nice work if you can get it.
Feckless Ness Thu Mar 19 16:32:24 2009 CDT #
Kung Fu Panda says:
Heh...from the linked article:
"CR Capital was the firm that flipped the Temecula foreclosure property, an investment group based in Tucson, Ariz. Calls to CR Capital were not immediately returned."
???
Kung Fu Panda Thu Mar 19 16:32:29 2009 CDT #
reptillian says:
REOs are legitimate comps.
Someday people will realize that simple fact.
reptillian Thu Mar 19 16:33:00 2009 CDT #
mr_clueless says:
There may be more to this. Maybe the taxpayer foots the bill once the home is foreclosed on vs a short sale where the bank may have to foot the bill for the loss...
Just thinking...too lazy to actually do research of that is really the case.
Also, there may be scams here too with banks selling properties at below market prices to friends and family of bankers while having the taxpayer foot the loss...
mr_clueless Thu Mar 19 16:33:30 2009 CDT #
wcm says:
absolutely .. collect on mortgage insurance once the asset is foreclosed, thanks to zillions of public $$ poured into the mortgage insurers etc, and then sell to insiders at depressed prices for handsome kickbacks ..
Parent Post
wcm Thu Mar 19 21:46:40 2009 CDT #
MsAnnaNOLA says:
Basil Too
You took the words right out of my mouth. They are selling them to their friends to flip.
Raping the taxpayer in the process as we pay through the butt to prop up these zombie banks.
MsAnnaNOLA Thu Mar 19 16:33:32 2009 CDT #
Wisdom Speaker says:
Folks, don't forget that thanks to all the bailouts, it's YOUR money that Citigroup is leaving on the table when they sell REOs at submarket prices. And don't forget the infinite possibilities for sleaze in terms of people making the decisions about which ones to unload, at what price, and to whom! Are there any checks and balances ANYWHERE in this system?
Wisdom Speaker Thu Mar 19 16:36:28 2009 CDT #
fresno dan says:
They were idiots when they made the loans...they are idiots when they foreclose on the loan. As the gubermint now has an affirmative action program for idiots, we will be a loan (intended) time coming out of this mess
fresno dan Thu Mar 19 16:37:22 2009 CDT #
JimPortlandOR says:
Remember when the saying was 'just as responsible and thrifty as a banker'?
Do these bulk sales to 'investors' make any sense whatsoever? It would be interesting to know what connections the 'investors' have to banking figures that are making these decisions. This smells of kickbacks.
JimPortlandOR Thu Mar 19 16:37:57 2009 CDT #
Kung Fu Panda says:
Also from NC Times:
"ESCONDIDO ---- Seeking to gain public support in its fight with the City Council over proposed compensation cuts, the labor union representing Escondido police officers mailed a provocative flier this past weekend claiming that "gang members outnumber police officers by almost 6 to 1."
The glossy four-page mailer, which was sent to 17,000 Escondido homes and paid for by the Escondido Police Officers Association, says recent increases in crime and gang activity make it crucial for residents to protest the proposed compensation cuts at this Wednesday's council meeting"
Kung Fu Panda Thu Mar 19 16:38:32 2009 CDT #
Lawyerliz says:
Yep, the sale shows up in the public records and you are supposed to pay doc stamps on the amount of consideration (what you paid) so you can figure out what was paid.
That 100 k could have paid for 2 clerks for a year. The 2 clerks could have saved the bank loads of money if they were only given some authority, but then the bank would have to hire people and you can only lose money (right?) by hiring and paying those useless drone employees, AND they would have to feel free to make decisions, and you certainly can't have lower level employees making decisions to lose money, even if it's less money.
And the 2 reo sales I handled last week to actual people who intended to live there were hell on earth because nobody could make a decision.
This is as much about psychology and social status as it is about money. Maybe more.
Lawyerliz Thu Mar 19 16:39:17 2009 CDT #
Anonymous says:
KFP, yeah I've seen a few of these on Zillow. People buying really cheap then listing for 100k or more above what they bought it for less than a month later.
Anonymous Thu Mar 19 16:39:25 2009 CDT #
The Sum of All Banking Evil says:
Wow. It's like there are scams within scams with ever greater scams. It makes me sad and I'm feeling very left out.
Anybody have an extra scam they can lend me?
The Sum of All Banking Evil Thu Mar 19 16:39:36 2009 CDT #
Basel Too says:
Seeking to gain public support in its fight with the City Council over proposed compensation cuts, the labor union representing Escondido police officers
the vallejo decision from earlier this week is resonating loud and clear...
Basel Too Thu Mar 19 16:40:50 2009 CDT #
ATM card and $19 in the bank says:
I usually have a hair-trigger outrage-o-meter, but in this case, I pretty much just want to get in on one of these flipper funds. How can I do that? Anyone else interested?
ATM card and $19 in the bank Thu Mar 19 16:41:00 2009 CDT #
pdx-chris says:
I'm in contract on a wells REO, that I plan for a rental. It was on market for 4 months, several price reductions, last one to 115k. I offered 78, they countered at 100, I said no, they came back at 85. Done deal. Btw, the last tax assessment showed 90k in land value!
With 25% down I'm locked in at 5% mortgage.
It will be cash flow positive at below current market rental prices. Sounds great right?
Well it took 8 months of intense research and this was the first property I even bothered offering on. And, with 25% down it still takes a lot of cash to do many deals.
Parent Post
pdx-chris Thu Mar 19 16:59:16 2009 CDT #
Tom Stone says:
Try Randal Collen (707) 544-0700,he is doing something similar.
Parent Post
Tom Stone Thu Mar 19 17:48:25 2009 CDT #
Wisdom Speaker says:
New paradigm, folks: Wherever you see "$" or "dollar", replace it with "bankers' promises" (because after all, in our credit-based and financially-unstable world, that's all the dollar is), and then ask yourself how you feel about what you're reading... :'(
Wisdom Speaker Thu Mar 19 16:41:33 2009 CDT #
mr_clueless says:
I have been looking for a home for a long time and have looked at foreclosures as well. I have not come across even a single property that I considered too good to miss.
The bankers are definitely selling the good deals to their friends. The sleaze will never end.
There are only three ways to deal with this:
- Find some scam that you can participate in.
- Complete step off the treadmill, give up regular life and head into the wildnerness.
- Standby and watch as you get poorer by the minute while still working your butt off.
mr_clueless Thu Mar 19 16:43:19 2009 CDT #
Lawyerliz says:
Off to Merritt Island, fellow Calculated Riskians.
Actually, i read about this possibility a long time ago, possibly in the Irvine Housing Blog.
Lawyerliz Thu Mar 19 16:44:44 2009 CDT #
Kung Fu Panda says:
Thanks, LL, and I agree with your thoughts completely. At the executive level, companies will step over huge sums based on some status-based decision but deny line workers paltry pay increases.
Kung Fu Panda Thu Mar 19 16:44:55 2009 CDT #
John Stark says:
Last October I dropped in on a local foreclosure sale and watched a guy buy a house for one dollar more than the mortgage owed. The guy told me he had been calling the bank, offering a $50,000 premium above the outstanding mortgage, but couldn't get anybody at the bank to say yes or no to his offer.
John Stark Thu Mar 19 16:45:44 2009 CDT #
The Sum of All Banking Evil says:
If a person lives in a scamming nation but does not scam, is that person not considered culturally 'abnormal'? Thus, in a culture of scammers, could the non-scammer not be classified as 'insane'?
The Sum of All Banking Evil Thu Mar 19 16:45:56 2009 CDT #
Nemo says:
(From previous thread. And very OT.)
Byzantine_Ruins --
A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies.
OK, what does that even mean? We enter into a contract where I agree to let you live in my basement and you agree to pay me, on the 1st of each month, 1000... er... um... what? "Basketos"? "Basketchmarks"? "Baskenminbis"? What are those, exactly?
Nemo Thu Mar 19 16:46:49 2009 CDT #
Anonymous says:
Is this an example of "tunneling"?
Anonymous Thu Mar 19 16:48:05 2009 CDT #
Fist Shaker says:
Finally, the last leg down in housing!
*shakes fist*
Fist Shaker Thu Mar 19 16:50:02 2009 CDT #
Solar Path says:
Why are they selling the properties on the cheap?
Probably because they are part of some bigger package which is marked on the books at cents on a dollar.
So by dumping the houses, their balance sheet improves.
Solar Path Thu Mar 19 16:50:17 2009 CDT #
Kung Fu Panda says:
One more bit from the Escondido article:
"Guerrero, the union president, said city officials left the union no choice.
"City staff is trying to ram this 'takeaway' contract down our throats, so we had to go to the voters," he said...Diaz and Flores also complained that gang members pictured in the mailer were from MS-13, a notoriously violent gang based in Los Angeles. Guerrero acknowledged that fact, contending that the use of local gang members would have "emboldened" them."
Amazing...doesn't exactly inspire confidence in the law enforcement department there.
Kung Fu Panda Thu Mar 19 16:50:33 2009 CDT #
ATM card and $19 in the bank says:
"Basketos"? "Basketchmarks"? "Baskenminbis"? What are those, exactly?
Nemo:
Basco da Gamas. ;)
ATM card and $19 in the bank Thu Mar 19 16:51:23 2009 CDT #
Peasant Darkness says:
Sounds like a way for the bailed out people at citigroup to share the wealth with their buds.
Peasant Darkness Thu Mar 19 16:56:10 2009 CDT #
GreaterFool says:
Wow. The cynicism of these threads is just incredible. The "bankers selling to cohorts" angle makes so much sense. I wonder if this falls under Krugman's definition of "looting."
Another angle, if these funds pay that far under market value for the homes, they have a heck of a lot of room to negotiate. This phenomenon could easily accelerate the decline in house prices.
GreaterFool Thu Mar 19 16:57:49 2009 CDT #
Kung Fu Panda says:
And finally, from the same NC Times:
"TEMECULA ---- Temecula Valley Bank's relatively low capital ratios "raise substantial doubt about its ability to continue as a going concern," Crowe Horwath LLP wrote in the independent audit that accompanied Temecula Valley Bancorp's annual filing to securities regulators on Tuesday.
The audit was based on the bank's finances as of Dec. 31, CEO Frank Basirico said Wednesday. The bank has since tightened its lending and seen an increase in deposits, Basirico said.
According to regulators' data, bad loans and foreclosed real estate accounted for more of the bank's assets than at any other locally based bank except for Discovery Bank, of San Marcos. Both are under restrictions imposed on them by the Federal Deposit Insurance Corp."
Where's the flaming FDIC? And the NC Times is like reading Dante's Inferno...it's going to be one long, hot summer in Southern California.
Kung Fu Panda Thu Mar 19 16:59:18 2009 CDT #
linkster says:
Fashion News: Toughen Up
linkster Thu Mar 19 16:59:25 2009 CDT #
TakeDaMoneyAndRun says:
The local foreclosure realtors around here really don't do much of a job. They only have one picture and guess at room sizes.
If you make an offer the bank wants another offer from you. There are some good deals and some are taking low offers.
If this isn't bad enough I recently read where the govmn't will loan money to companies, sell the loans at a discount and then reimburse them for any loss?
Where is the risk? Where is the capitalism?? :'(
TakeDaMoneyAndRun Thu Mar 19 17:01:14 2009 CDT #
cd says:
ATM,
I'll bite on the cr reo home investment club, llc it in nevada, write off all our spare time and make money on the resale...15k gets you in...
Kung fu-I replied to your comment on last page and have thought of way to game China mfg market easily...
flooring issue on prev.thread..right now dealers are really looking at ways to avoid it...we have software that allows them to have virtual inventory, thus buy on order possibility via the web...dealers are in debt up to eyeballs too...why get inventory that won't move...they have to mark it down every mos according to kbb or blackbook, so when you walk on the lot ask to see 90 day on lot inventory etc for best deal....
cd Thu Mar 19 17:01:46 2009 CDT #
Money Man says:
That was NOT Citi's MONEY....IT WAS THE TAXPAYERS MONEY! >:o
Money Man Thu Mar 19 17:02:43 2009 CDT #
Lucifer\'s Inverted Hammer says:
This may be a scam, or it may be legitimately to the banks' advantage. If a vulture fund is willing to buy say, 50 foreclosures at a percentage discount off of comparative sales values (Which would likely be an a far larger percentage discount off of what is actually owed on the note), it may be easier for the banks to do that than try and individually sell 50 REOs.
While lawyerliz makes a good point about the opportunity cost of the discount being a potential push (That money could have gone to pay for clerks/realtors to handle the sales and hopefully get the market price), it does seem like the banks get the benefit of unloading bulk in short order.
In my mind, though, even if this is a scam that benefits the vulture funds and lets banks write-off bigger losses (which are actually realized, so it's not like they are exactly cashing in) I don't see anything really wrong with this, in the overall sense.
The vulture funds have leeway in selling price, as they picked up the property for a discount to current market rate. They can lower prices and still make a profit even if prices continue to slide, and have every incentive to make a sale, as they get no profits otherwise. As opposed to the banks, who have been recalcitrant in selling the foreclosures because of the loss they will have to take, which postpones the inevitable on their books.
This process speeds up the bank losses to work them out of the system, and also speeds up the price discovery and sale of the foreclosed homes, getting them back into circulation to people who can actually afford to live in them. And it doesn't necessarily have to be all profit for the vulture funds, as many of these foreclosures need at least some work, even if it is cosmetic, which if the vulture funds do it would certainly help to sell the properties faster.
As someone who has been biding his time trying to save money for an appropriate downpayment on an AFFORDABLE house, I could care less if some vulture fund got a sweet deal on the property because their golf buddy is a bank president. If they want to take as-is foreclosures away from hardly serious bank sellers and make them livable and presentable and put them on the market with the will to actually sell, then I am all for it.
Lucifer\'s Inverted Hammer Thu Mar 19 17:05:06 2009 CDT #
Pavel says:
"Off to Merritt Island, fellow Calculated Riskians. "
Is that where people are compensated according to their merit?
Pavel Thu Mar 19 17:05:35 2009 CDT #
Dave says:
I'd be looking hard for private kickbacks to the people at the banks. I can't believe that they would leave *that* much on the table...
Dave Thu Mar 19 17:06:21 2009 CDT #
cd says:
damn 4 color newsletter mailer 17K @ 75cent including postage..cost out the door around 46c with ncoa, labels etc...nice 5k net profit from police...note to self..
rethink direct mail again....
cd Thu Mar 19 17:07:16 2009 CDT #
Werner says:
Nemo says:
Byzantine_Ruins --
A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies.
OK, what does that even mean? ...
~~~~~~~~~~~~~~~~~~~~~~~~
Well, here you'll get a bit more info about it :
http://jessescrossroadscafe.blogspot.com/2009/03/decline-of-dollar-as-worlds-reserve.html
see especially the parts :
"U.N. panel says world should ditch dollar" and (very important !) :
"China backs talks on dollar as reserve"
where the Chineese aparently "envisage the International Monetary Fund's Special Drawing Rights (SDRs)" !
Needless to say that the EU will support such or a simmilar a move !!
P.S. that tiny comment window really really sucks. No preview either ! Bäh .
Werner Thu Mar 19 17:08:33 2009 CDT #
Anonymous says:
this kind of opportunistic crap sucks because this would not be happening if the american taxpayer was not the backstop for all of the bad paper out there. this makes me sick. my country is dying and all some people can think of is their freekin quick profits....i hope they burn in hell for this crap.
Anonymous Thu Mar 19 17:09:18 2009 CDT #
Anonymous says:
Well, duh. Nobody said the banks were going to suddenly stop being stupid and wasteful.
Anonymous Thu Mar 19 17:09:58 2009 CDT #
Guest says:
So the bank lacks resources to properly price and sell this property. Generally this is the case with every homeowner. THATS WHAT REAL ESTATE AGENTS ARE FOR. (yes, agents are generally lying scoundrels, but probably goes double for the investors who bought this stuff)
Why can't they just give their agents simple rules: Price it at a recent comp, then deduct 5% every two weeks until it sells? How is this so hard that they have to do a bulk sale (which itself is complex) which loses them at least 100k?
Guest Thu Mar 19 17:11:04 2009 CDT #
all is bust says:
my name speaks volumes
all is bust Thu Mar 19 17:11:30 2009 CDT #
nameless says:
I must confess: I have posted here with so many aliases that I don't remember them all. I have advocated so many points of view
that it makes my head spin. I am dizzy. I must stop now. Sorry, if the post volume goes down.
nameless Thu Mar 19 17:16:05 2009 CDT #
Pavel says:
"this makes me sick. my country is dying and all some people can think of is their freekin quick profits..."
It's called the Tragedy of the Commons.
Pavel Thu Mar 19 17:17:30 2009 CDT #
Anonymous says:
also, there is now a large liquidity premium on real estate in Temecula
Anonymous Thu Mar 19 17:17:43 2009 CDT #
Lucifer\'s Inverted Hammer says:
Guest says:
Today, 6:11:04 PM
“So the bank lacks resources to properly price and sell this property. Generally this is the case with every homeowner. THATS WHAT REAL ESTATE AGENTS ARE FOR. (yes, agents are generally lying scoundrels, but probably goes double for the investors who bought this stuff)
Why can't they just give their agents simple rules: Price it at a recent comp, then deduct 5% every two weeks until it sells? How is this so hard that they have to do a bulk sale (which itself is complex) which loses them at least 100k?
The most likely reason? Time = Money. Someone has to contract the real estate agent for every foreclosure. It will then take varying amounts of time for the realtor to sell the foreclosures, weeks for some, months for others. When they do sell, the realtor has to get paid 6% for each one. For each house sale, someone at the bank (likely more than one person) will have to fill out paperwork.
In this case, the bank is effectively paying money to save time, the value of which is not necessarily certain. That time might be only worth 10%, or it might be more, especially if each of the houses is dropping 5% every two weeks like you have suggested. I can see any number of reasons why the bank would see it worth its while to simply unload in bulk, even at a hefty discount.
Lucifer\'s Inverted Hammer Thu Mar 19 17:18:12 2009 CDT #
Bob Dobbs says:
"If this isn't bad enough I recently read where the govmn't will loan money to companies, sell the loans at a discount and then reimburse them for any loss?
Where is the risk? Where is the capitalism?? Cry"
Don't you know? Capitalism is about jiggering the system and buying enough legislators that the _other_ guy takes all the risks. At least once you make it to the top.
The wealthy elite don't believe in capitalism; they believe in anything that flows maximum money their way with minimum effort. If there were a way to make feudalism pay big , they'd be on it.
Bob Dobbs Thu Mar 19 17:22:43 2009 CDT #
Bob Dobbs says:
I'm not surprised that servicers are refusing good deals and selling in foreclosure instead. Getting the good deal involves getting manpower, maybe bucking the workflow, and for what -- a little more profit for the company, and probably no credit for it. And maybe pissing off a couple of co-workers along the way.
Much safer to do the minimum. That's all they're incented to do.
Bob Dobbs Thu Mar 19 17:24:36 2009 CDT #
Charles Kiting says:
CR, you're right on the money. Contrast this with the GSE's where they can wait and wait and wait - the banks are getting regulated much more closely than the GSE's.
Charles Kiting Thu Mar 19 17:25:34 2009 CDT #
Charles Kiting says:
And the 2 reo sales I handled last week to actual people who intended to live there were hell on earth because nobody could make a decision.
Another great post! Happening all over.
Charles Kiting Thu Mar 19 17:28:21 2009 CDT #
REOgreg says:
I sell REO property for banks and asset management companies in the San Francisco Bay Area. New assignemnts have been way down since about labor day last year. There is a huge shadow inventory of homes that have been foreclosed on but not assigned for sale. And, there is a much larger number of properties whose foreclosures have been delayed.
I'm hearing rumors that this logjam is finally starting to come undone...like within the last couple of days.
Anybody else heard anything?
REOgreg Thu Mar 19 17:31:19 2009 CDT #
CRbot says:
The Latest from Ritholz:
End of Book Open Thread
CRbot Thu Mar 19 17:31:24 2009 CDT #
Comrade Kristina says:
I'm trying to do an FHA refi right now, I'll let you all know how it turns out. Liz, would love for you to look at this mortgage that a lending outfit sent me. My loan is for 130K originally, I owe 129K now and when they sent me the docs they listed the amount lent as 176K. No money back to me, which left me wondering, where is the other 47K going? Unreal.
Comrade Kristina Thu Mar 19 17:32:21 2009 CDT #
nameless says:
Ask them where the 47K is going.
I swear, I am outa here.
Parent Post
nameless Thu Mar 19 17:44:51 2009 CDT #
EvilHenryPaulson says:
Kristina, my 2¢
A loan for a $176k property with 26% down is marked differently than a $130k loan for a $130k property
Probably illegal whatever was done, at least from an IRS perspective. The incentive would be the mortgage broker got a bigger fee
Parent Post
EvilHenryPaulson Thu Mar 19 17:53:24 2009 CDT #
nameless says:
I swear, I am outa here.
And I quit drinking and smoking, too.
nameless Thu Mar 19 17:37:55 2009 CDT #
Barley says:
So, the ones under water will now begin to smell blood. they will walk away, get a deal on another and all is well on Main Street Finance.
Kinda wonder if this is "deflation" fear. If it going to be worth less tomorrow why not dump it now.
Barley Thu Mar 19 17:38:08 2009 CDT #
nameless says:
Face it. Capitalism has died.
Scamsterism is the new paradigm.
I am very serious about bailing from this site.
nameless Thu Mar 19 17:39:57 2009 CDT #
bluefisher says:
the latest on the AIG bonus crap, Geithner takes the blame.
http://www.reuters.com/article/politicsNews/idUSTRE52I7JD20090319
bluefisher Thu Mar 19 17:42:03 2009 CDT #
nameless says:
Can't resist a parting shot: more REOs than the flippers and vultures can handle are coming. Be patient! Don't try to catch fallling knives.
nameless Thu Mar 19 17:42:42 2009 CDT #
EvilHenryPaulson says:
When does advertising begin for the 2010 midterm elections?
I'm observing an unnamed political group in the US that is deeply anti-bailout, and at the same time anti-AIG bonus tax. Sounds like a mess
EvilHenryPaulson Thu Mar 19 17:43:05 2009 CDT #
Bob Dobbs says:
"I sell REO property for banks and asset management companies in the San Francisco Bay Area. New assignemnts have been way down since about labor day last year. There is a huge shadow inventory of homes that have been foreclosed on but not assigned for sale. And, there is a much larger number of properties whose foreclosures have been delayed.
I'm hearing rumors that this logjam is finally starting to come undone...like within the last couple of days.
Anybody else heard anything?"
I live in Santa Cruz, and the situation seems as unreal as ever. They say "it's different here," and no one would say there were a lot of foreclosures. But I've seen the green swimming pools on aerial photographs.
Bob Dobbs Thu Mar 19 17:43:08 2009 CDT #
REOgreg says:
I hear "it's different here" all the time...SF, Orinda, Alamo, Los Gatos, etc.
The timing may be different, but nowhere is different...or immune.
In fact, sales in some high-end communities have dried up and 2-3 month inventories have become 2-5 years.
I live in a high-end area and the pain has really only begun.
Parent Post
REOgreg Thu Mar 19 18:11:21 2009 CDT #
dUCKdUCKgOOSE says:
You're so right...I see the top just starting to topple down in CA. The unemployment rate in CA is over 10%, probably not counting the millions of unemployed illegal aliens who helped the economy with their under-the-table cash earnings. Now that the illegal have walked and the jobs have dried up, the upper echelons of the CA economy are next (because THEY are the ones paying for the public services to the illegals).
Parent Post
dUCKdUCKgOOSE Fri Mar 20 08:32:03 2009 CDT #
Bob Dobbs says:
"Face it. Capitalism has died.
Scamsterism is the new paradigm.
I am very serious about bailing from this site."
Oh, come on. At the end of WWII, where would you rather have had a closed-circuit camera view: from Harry Truman's Oval Office, or Hitler's Fuehrerbunker? I know which one would have been more fun to watch. Get the popcorn and settle in. ;)
Bob Dobbs Thu Mar 19 17:46:37 2009 CDT #
nameless says:
Something happened in October.
A real estate attorney told me that October would be a good time to buy. He thought that a lot of foreclosures would come to market. But, they didn't. Has the REO inventory been building? Wouldn't a real estate atty. have some sense of what is going down, barring last minute shenanigans on the part of TPTB?
nameless Thu Mar 19 17:47:25 2009 CDT #
sockpuppet 328 says:
And what do real estate attorneys know.
Did you pay him/her?
I am reminded of "'tis but the breat of an unfeed lawyer."
Shakespeare: Othello.
Parent Post
sockpuppet 328 Thu Mar 19 17:50:38 2009 CDT #
Rob Dawg says:
Tanta, God rest her sainted soul did not accept this possibility. Phase III of induced dystopic moral hazard. The stewards of capital are seeing their contracts repudiated and see no reason to adhere to any sort of code.
Rob Dawg Thu Mar 19 17:47:39 2009 CDT #
goodrich4bk says:
I tried buying a bank repo in 1990, offering $600k cash. I gave the responsible loan officer an appraisal and property inspection report showing it was a very reasonable offer. Got no response. I finally bought another house.
A year later I met the buyer by chance. She didn't know I had offered to buy the house. She was telling me what a sweet deal she got: $450,000. Later, in another conversation, I asked her what she did. She said she worked for a bank. You got it, the bank that sold her the house!
goodrich4bk Thu Mar 19 17:48:54 2009 CDT #
EvilHenryPaulson says:
2 good O/T links
• http://www.youtube.com/watch?v=D2FX9rviEhw&eurl=http%3A%2F%2Fwww%2Eneatorama%2Ecom%2F&feature=player_embedded
LEDs + Sheep = Funny art
• http://danmeth.com/post/87573961/usa-sitcom-map-4-in-a-series-of-pop-cultural
US Sitcoms placed on a map. Sitcoms are the bread and butter of many film industries
EvilHenryPaulson Thu Mar 19 17:49:10 2009 CDT #
Deflationary Jane says:
This exact thing happened to a girlfriend of mine. She offered 75k on a property held by Saxon. Then the property sold a month later to a group at 58K. She was so disgusted she quit making offers all together. My adventures in lowballing have been similar - seeing them finally close to investors under what I offered.
That's why I've said screw it and signed a new lease on huge gorgeous place for less then .40 a sqft. Wake me up when these investment group members are all swinging from lamp posts by their necks. **grrrr and stuff**
Deflationary Jane Thu Mar 19 17:54:20 2009 CDT #
splat says:
Citi doesn't need to make good biz decisions anymore. They screw up lose a few billion here or there then the taxpayer will just make them whole.
“Can I haz bonus now pleeezzz?”
splat Thu Mar 19 17:54:26 2009 CDT #
Tom Stone says:
Yes,the banks in the north bay have started to let go of their REO's.
Tom Stone Thu Mar 19 17:55:27 2009 CDT #
REOgreg says:
By "let go" do you mean sell cheaper? Or are you seeing a flood of new assignments/listings?
Parent Post
REOgreg Thu Mar 19 18:13:40 2009 CDT #
Tom Stone says:
I am in Sonoma County and we are seeing the first bulk sales,low ball cash offers for short sales being accepted,and a few more listing to brokers this is on low to mid price properties.The high end is dead,and the asking price disparities in good areas are as much as $200k on what used to be $800k homes.I am seeing decent 3/2's in rohnert park selling for $170k-$200k and they were close too or at $600k.
Parent Post
Tom Stone Thu Mar 19 20:07:38 2009 CDT #
ATM card and $19 in the bank says:
cd,
From the NC Times article:
CR Capital was the firm that flipped the Temecula foreclosure property, an investment group based in Tucson, Ariz.
Still mulling the idea of LLCing in Nevada, putting up $15k etc still percolating... tried to do some due diligence on the investment co that flipped the Citi property and hit a dead end. Can't find CR Capital in the Arizona Sec'y of State online records (there's a C&R Capital) and don't see a link on Google.
Long story short: if this flipping story is a mutual backscratching program involving the bank and straw-purchasers, I don't think our LLC is going to get too far...
ATM card and $19 in the bank Thu Mar 19 17:55:52 2009 CDT #
sockpuppet 328 says:
Fair warning: I am serious about bailing.
And I have quit smoking and drinking.
There are only 7 smokes left in the pack and only half a litre of rum left!
sockpuppet 328 Thu Mar 19 17:57:35 2009 CDT #
Anonymous says:
A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar.
http://www.reuters.com/article/newsOne/idUSTRE52H2CY20090318
Damn good idea put a stake threw the heart of this empire once and for all.
Anonymous Thu Mar 19 17:57:44 2009 CDT #
EvilHenryPaulson says:
Resident Legal Eagles:
http://www.funnyordie.com/videos/11020ef505/are-you-a-lawyer-probably-not-from-themidnightshow#player
A comedy video for you
EvilHenryPaulson Thu Mar 19 17:59:20 2009 CDT #
bruiser says:
On the way up, we get "every house is different".
On the way down, we get bulk sales.
bruiser Thu Mar 19 17:59:41 2009 CDT #
Guest says:
This is a nothingburger. Regulators will order banks to cut prices on realty owned until it sells, and there is a timetable to dispose of these assets. I don't remember the trigger point but probably after a year or so the edict becomes "do whatever it takes".
Guest Thu Mar 19 18:00:38 2009 CDT #
Bob Dobbs says:
"Tom Stone says:
Today, 3:55:27 PM
“Yes,the banks in the north bay have started to let go of their REO's."
Tom, everywhere, or just in subprime areas like Solano?
Bob Dobbs Thu Mar 19 18:02:28 2009 CDT #
sockpuppet 328 says:
"On the way up, we get "every house is different".
On the way down, we get bulk sales."
Houses are now a commodity! Hoocoodanode?
sockpuppet 328 Thu Mar 19 18:03:57 2009 CDT #
Guest says:
Green shoots!
Guest Thu Mar 19 18:07:10 2009 CDT #
OCDan says:
Well, it wasn't as if we didn't know this was coming.
A year or two ago several of you predicted that banksters would take care of their cronies one way or the other with the better homes.
The more I learn from you guys and elsewhere, the more I hate this system.
can I just haz a house that I can afford on 1 income. I am not looking to mkae any money, just a fixed living cost.
As to the poster who said we have three options in this system.
I think there is a fourth.
Just work some kickback job and pull everything else out. You can still stay within the civilization, esp. if you have a family, just get as low as you can go with regards to the radar.
Stop spending needlessly. Give to charities that you know are on the up and up. Volunteer.
Remember, in this type of system, your time, family, friends, and morals/beliefs are much more valuable than keeping the system going.
Do as little as possible, while still maintaining a life.
Consumption is so overrated as are overpriced McCracker Jack Faux Chatauxs.
Wait out the banksters! Time is on our side. There is no need to take on debts in order to consumer!
OCDan Thu Mar 19 18:07:24 2009 CDT #
sockpuppet 329 says:
"Houses are now a commodity! Hoocoodanode?"
With only 1/4 litre of rum and only 3 smokes left,
I must say that the housing market is illiquid.
Who would speculate in that sort of market?
sockpuppet 329 Thu Mar 19 18:08:09 2009 CDT #
Panic Seller says:
TALF fails?
19:00 19Mar09 RTRS-NEW YORK FED SAYS $4.7 BLN OF TALF LOANS REQUESTED, OUT OF $200 BLN ON OFFER
19:00 19Mar09 RTRS-NEW YORK FED: $1.9 BLN IN AUTO TALF LOANS, $2.8 BLN IN CREDIT CARD LOANS REQUESTED
19:02 19Mar09 RTRS-NY FED SAYS NO TALF DEMAND FOR STUDENT, SMALL BUSINESS LOANS
Panic Seller Thu Mar 19 18:08:26 2009 CDT #
OCDan says:
Sockppuppet, why does the rum always run out?
OCDan Thu Mar 19 18:08:59 2009 CDT #
Black Star Ranch says:
....a gal here bought 2.5 acres with an old double-wide and improvements (2-sheds, well, elect, septic) for $35K from a bank - it was full of hassle but finally a done deal. She moved out of the Las Vegas jungle - gangs, shootings, drug deals, graffiti, drunks, and empty houses.
Black Star Ranch Thu Mar 19 18:09:20 2009 CDT #
dUCKdUCKgOOSE says:
She moved out of Illegal Alien Nation.
Parent Post
dUCKdUCKgOOSE Fri Mar 20 08:26:13 2009 CDT #
Rufus the Doofus says:
I'm not sure whether this is an issue in the current case, but this looks to me like a serious problem with securitization in general. And we are told the whole recovery plan is based on getting securitization "working" again.
Rufus the Doofus Thu Mar 19 18:09:40 2009 CDT #
Comrade Kristina says:
It still doesn't make sense EHP. Needless to say I took a pass. So tired of scammers...being bombarded with calls to help me do loan modifications and my own mortgage company even tried to scam me...You would think they would have learned some kind of lesson by now...but nope, still at it. We have decent credit and a good payment history but they insist on playing these games.
Comrade Kristina Thu Mar 19 18:13:47 2009 CDT #
Kung Fu Panda says:
WSJ from January:
Chinese Drywall Cited in Building Woes
"Home home builders already struggling in Florida's dismal housing market are facing another headache: The Chinese-made drywall they used is causing unpleasant odors and possibly leading to electric problems in dozens of homes constructed during the housing boom...Lennar, the nation's second-largest builder by volume, has tested air quality in at least 50 houses and has relocated several homeowners in order to rip out and replace the drywall, a costly process. It is trying to find less-intrusive ways to fix the problem. Lennar is continuing tests in a dozen of its Florida developments and has shared results with the state health department....Typically, builders use domestically produced drywall, which is made mainly from the mineral gypsum. But in 2006 -- amid the housing boom and the scramble for construction material along the Gulf Coast for reconstruction after Hurricane Katrina -- suppliers began importing drywall from China.
Much of the problematic drywall, which is also known as wallboard or plasterboard, was manufactured in China."
They sell us crap...we give them IOU's...why not call it a wash and call it good :-P
Kung Fu Panda Thu Mar 19 18:14:34 2009 CDT #
bruiser says:
Chinese goods are inferior. Hoocoodanode?
Parent Post
bruiser Thu Mar 19 18:21:31 2009 CDT #
scone says:
Whether this is a bulk sale or not, it reeks of kickbacks. RICO indictments, stat!
scone Thu Mar 19 18:14:40 2009 CDT #
Cinco-X says:
Another vote!
Parent Post
Cinco-X Fri Mar 20 08:45:32 2009 CDT #
blert says:
In a falling market the wise man gets out early.
Who can say that the bulk sale was a loser?
Somewhere in there lie the dogs.
blert Thu Mar 19 18:16:10 2009 CDT #
evelyn woods graduate says:
Napa County had 88 sales in Feb 09...63% had been foreclosed on in the prior 12 mos.
Sonoma County had 360 sales in Feb 09...57%
Solano County had 557 sales in Feb 09...69%
http://www.dqnews.com/Articles/2009/News/California/Bay-Area/RRBay090319.aspx
evelyn woods graduate Thu Mar 19 18:19:07 2009 CDT #
ghostfacedinvestah says:
The problem for the banks is the servicing groups and the REO groups don't communicate very well, and often the people servicing the loans are not very well trained and/or empowered to make decisions.
Thus, situations where a short sale is denied by a servicing employee (who would need to escalate the request 5 layers higher up the chain) but the REO manager sells for 70% of the short sale offer because he/she is empowered to sell properties.
ghostfacedinvestah Thu Mar 19 18:19:42 2009 CDT #
cd says:
I live in a high-end area and the pain has really only begun.
appropriate thread music
http://www.youtube.com/watch?v=__VQX2Xn7tI
atm..I'll talk to some friends in banking..
cd Thu Mar 19 18:21:03 2009 CDT #
Bob Dobbs says:
"WSJ from January:
Chinese Drywall Cited in Building Woes
"Home home builders already struggling in Florida's dismal housing market are facing another headache: The Chinese-made drywall they used is causing unpleasant odors and possibly leading to electric problems in dozens of homes constructed during the housing boom"
For my own self, I would personally think twice about buying a tract home built between 2002 and 2008 in a bubble area. I'm sure the quality of construction and materials would be "interesting."
Bob Dobbs Thu Mar 19 18:22:16 2009 CDT #
DannyHSDad says:
Homes built during the bubble are suspicious.
In Austin,TX, the housing bubble during dotcon boom was pretty crazy and then few years after the warranty expired we've heard from friends who bought during 98-01 that had serious problems (like the outside chimney fall apart after a strong (but not tornado) wind). We bought a house at the end of boom in early 2002 so we didn't have any major problem but even with our house the AC pipping wasn't installed correctly and made a lot of noise in the room next to the outdoor heat exchanger unit. (Builder fixed it for free.)
Austin didn't get on the bubble 02-06 so when we sold in Nov'05 we lost more than the 6% commission. By then I was reading bubble blogs and was reading what was happening in SoCal et al. in disbelief. My wife didn't really get it until we moved to the OC in 07 and started look for a house to buy in spring '08. We bought in Dec'08 in central OC knowing we will lose money (only because we homeschool and our sons are teens -- if they were younger or we sent them to school, we'd still be "bitter renters").
Parent Post
DannyHSDad Thu Mar 19 19:06:22 2009 CDT #
ATM card and $19 in the bank says:
"RICO indictments, stat!"
And there goes the needle on my outrage-o-meter. I love RICO -- the perp walks, the asset freezes, the potential for treble damages. I welcome a future where the prudent bankster sports a pocket watch so the inevitable handcuffs won't scuff his Patek Philippe.
ATM card and $19 in the bank Thu Mar 19 18:22:23 2009 CDT #
Cinco-X says:
Someone's finally starting to listen!
Parent Post
Cinco-X Fri Mar 20 08:38:56 2009 CDT #
nameless says:
It's been a real rodeo.
Thank you, all, for the good times.
I am off in search of a government loan.
Let the good times roll.
nameless Thu Mar 19 18:22:24 2009 CDT #
bearly says:
SPG puking out 15mm fresh shares, aAH on the day before options expiry. ~10% dilution. Should be fun to watch. Those $30 puts set to get goosed 100000%.
http://finance.yahoo.com/news/C-O-R-R-E-C-T-I-prnews-14695807.html
bearly Thu Mar 19 18:24:29 2009 CDT #
debtinator says:
I mistaked: turned up vol on CNBC.
They're defending the bonuses.
debtinator Thu Mar 19 18:27:06 2009 CDT #
Anonymous says:
The Real AIG Scandal
It's not the bonuses. It's that AIG's counterparties are getting paid back in full.
By Eliot Spitzer
Posted Tuesday, March 17, 2009, at 10:41 AM
Everybody is rushing to condemn AIG's bonuses, but this simple scandal is obscuring the real disgrace at the insurance giant: Why are AIG's counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars? ...
http://www.slate.com/id/2213942/
Anonymous Thu Mar 19 18:29:09 2009 CDT #
lama says:
I guess it's ok if Citi leaves money on the table because they'll get it back in bailout money, which apparently involves alot less planning and work.
lama Thu Mar 19 18:32:01 2009 CDT #
Black Star Ranch says:
Geeze, cd......at least give a "Upcoming Carpenter's Song Warning......
Black Star Ranch Thu Mar 19 18:33:28 2009 CDT #
mark says:
KICKBACKS
mark Thu Mar 19 18:37:24 2009 CDT #
EvilHenryPaulson says:
Anything more ever come out regarding Goldman Sachs lending money to partners who had invested in their elite funds and then had margin calls on accounts that held significant chunks of GS stock?
How could that conflict of interest be made legal in the eyes of the SEC?
EvilHenryPaulson Thu Mar 19 18:41:33 2009 CDT #
lama says:
The SEC had a hiring freeze at least up until December 08 and at that point had a case backload of years. That, unfortunately is the answer to almost any "where's the SEC" questions.
Parent Post
lama Thu Mar 19 18:45:16 2009 CDT #
EvilHenryPaulson says:
lama,
well I'm confident that the whole thing was made legal, I'm just curious as to how
I guess they can introduce new compensation whenever/however they want, but they can't then count it on their book of loans without there being primary conflicts of interest. I don't see GS facilitating the loan through a 3rd party either
I assume the loans would be made to increase the collateral held in one account, to prevent a margin call on the other which holds GS shares. I don't know, but I guess that would be legal enough.
you're absolutely right on the backlog though. It's what happens when you appoint an anti-regulator to regulate (by all accounts)
Just a few months ago the top priority was the Mark Cuban insider trading bit, which according to official correspondence was a personal vendetta over funding the video "Loose Change"
Kindergarteners should not be allowed to hold public office!
Parent Post
EvilHenryPaulson Thu Mar 19 19:08:30 2009 CDT #
lama says:
Pardon my reading skills. That's the US's business standards for you. Fulfill the letter of the law while violating the spirit of the law. It happens with FASB pronouncements all the time. They're written so specifically that they create ways to manipulate. The IFRS regs are written alot less prescriptively and place more burden on businesses to take responsibility for any misleading information. Most accountants I speak with think we'll be in the wild west as result, but;
we already are and shifting burden to use personal ethics and judgement might help.
Parent Post
lama Thu Mar 19 19:51:47 2009 CDT #
cd says:
BSR- =-X
my sincere apologies but someone had to do it....2 questions for you...quails-what do you feed them?
Dble wide purchase you mentioned upstream- was it trashed? I have some friends in that industry who can get repo's for pennies on the dollar..I'm wondering if this might be a good opportunity to buy that kind of property, remove old dblwde and set nearly new dblwde at a still attractive price to people in that market, while making a couple dollars..
these guys were doing it in the 80's-90's during down market...
cd Thu Mar 19 18:44:00 2009 CDT #
Mike in Long Island says:
"SPG puking out 15mm fresh shares, aAH on the day before options expiry. ~10% dilution. Should be fun to watch. Those $30 puts set to get goosed 100000%.
http://finance.yahoo.com/news/C-O-R-R-E-C-T-I-prnews-14695807.html
And I didn't pull the trigger on SRS yesterday or today! Doh! Can't complain rode that puppy from 54 to 99. Want to jump back on but actions like yesterdays Fed announcement make it tough...
Mike in Long Island Thu Mar 19 18:47:56 2009 CDT #
Mortgage Insider says:
As to your Redwood City example there may have been a second mortgage from a different lender. In such a case, lenders won't bother with a short sale since the second gets wiped out in foreclosure. Of course, they could probably do better in short sale by striking a deal with the second lien holder, but this is as much a human capital issue as a money issue.
Mortgage Insider Thu Mar 19 18:50:19 2009 CDT #
Dirk van Dijk says:
Made this offer earlier today, but there tends to be a different crew on in the evenings. If anyone wants a capy of my strategy report, shoot me an e-mail at dhvd_2004@yahoo.com. I'll put you on the list so you also get it in the future and also some of the posts I put up on Zacks.com. My way of saying thanks to everyone here.
Dirk van Dijk Thu Mar 19 18:56:21 2009 CDT #
Broker says:
The banks should follow FHA's exemple.
List price:$1,000
.............
We are offering $500 bonus to selling broker and $2,500 cash back at closing to buyer.
This is not a joke!
Broker Thu Mar 19 19:00:34 2009 CDT #
Barley says:
Hi Mike
Everytime I see "bookrunning" and a WS firm I chuckle.
Barley Thu Mar 19 19:00:43 2009 CDT #
KR says:
I heard a story today from a friend, who in turn has friends, a couple in California working for a car manufacturer. Both husband and wife employed, they are afraid one of them is going to be transferred, and it will cause a family BK, because they are so far underwater in their home. Strange isn't it - two gainfully employed 20's something people who will go BK over a forced relocation. Unheard of to date.
KR Thu Mar 19 19:06:00 2009 CDT #
Some Investor Guy says:
Back in the Resolution Trust Corp days, people who actually got houses or office buildings had complaints that went like this. "Make an offer in January for $100. They said they needed an appraisal. The appraisal from their guy came back in March for $82. They said offer us $82. We offered $82. They didn't respond for a few more months. Then, we get an unexplained letter that says "we accept your offer for $65, please arrange for closing within 30 days".
It was typically due to weird rules and a big backlog of work.
Some Investor Guy Thu Mar 19 19:12:52 2009 CDT #
RockyR says:
Can I give just one big WHO CARES? on this one? Perhaps we are all just exhausted, but am I the only who feels like yesterday's announcement by the Fed was a "throw in the towel", "none of this other crap really matters any more" moment? Or, am I just young and naive to the mysterious ways of the world and of the Fed?
RockyR Thu Mar 19 19:13:25 2009 CDT #
KR says:
DannyHSDad, as an ex-builder with 20 years of it under the belt, i can make the observation that homes today are increasingly complex. Much more a system of parts than ever before. (i stopped building in '90s), hence more prone to home owner warranty calls. In general, skilled trade quality diminished during the last decade, because of the under-qualified labour picking up the tools. I would feel safer renovating a 30 year old home, built with lumber that was not glued together.
KR Thu Mar 19 19:15:28 2009 CDT #
GYSC says:
Don't worry about the money left on the table in bulk sales, they will make it up on volume!
GYSC Thu Mar 19 19:15:34 2009 CDT #
triplec says:
I thought everyone knew this... I have been following this forum http://www.biggerpockets.com/forums/ and it seemed these young ex-mortgage brokers who were claiming they were making tons of money at flipping was a scam. Maybe not. Again the sleezy real estate crowd is getting rich twice off my taxdollars while I sit in a 900 sq ft house in the midwest. There really is no reason left to choose the moral high ground anymore. There are no winners left in doing the right thing.. There is no meaning left in the saying "what comes around goes around". This is how I used to justify doing the right thing instead of having 8 to 17 children. Now I watch a mother on welfare move into a 1/2 million home. I don't know folks.. This country just lost another moral responsible citizen here. Its time for me to get my share...
triplec Thu Mar 19 19:16:28 2009 CDT #
Black Star Ranch says:
"quails-what do you feed them? "
.......they eat chicken feed (egglayer stuff from Wu-Mart)
"was it trashed?"
....yes, it WAS trashed. When you have even a POS trailer (single or dbl-wide) still hooked up on the property here, you save BIG BUCKS on impact fees. (automatic $4K+)
"remove old dblwde and set nearly new dblwde at a still attractive price to people in that market, while making a couple dollars.."
.....the new dblwides you can get for 60-cents on the dollar (flooring repos throughout the state), the land is dirt-cheap if you get it with well, septic & elect, and old trlr (because of impact fee rebates). The problems come with never meeting loan appraisals. The Mrs. never has any luck with them unless the new owner has 20% cash down or owns the property outright. This seems to be the case with manufactured AND stick-built homes = so many short-sales that have blown out the comps.
Black Star Ranch Thu Mar 19 19:19:12 2009 CDT #
RockyR says:
I just got an email from David Weekly informing me that they are going be auctioning some model homes in the area. I don't guess they're feeling the housing bottom, yet.
RockyR Thu Mar 19 19:20:20 2009 CDT #
1 currency [yogi] says:
Too big to succeed.
Real Estate is local.
Bulk discounts.
Banks lend $; real estate speculators flip properties.
1 currency [yogi] Thu Mar 19 19:20:43 2009 CDT #
scone says:
Reuters: NY pension advisers charged in kickback scheme
http://www.reuters.com/article/domesticNews/idUSTRE52I82R20090319
scone Thu Mar 19 19:23:42 2009 CDT #
Comrade De Chaos says:
http://www.portfolio.com/business-news/portfolio/2009/03/18/Exxon-vs-the-Obama-Administration?page=1#page=1
There is a Nice article on "deep" corporate vision, Mr O vs Exxon Mobile
rofl 8-)
Comrade De Chaos Thu Mar 19 19:24:37 2009 CDT #
GYSC says:
Scrolling through CR's blogroll, you may want to check out Econobrowser on quantitative easing. The author seems orgasmic about it, and warns "Don't fight the FED". Sadly I think his opinion is the same as most of the heads at the FED/Treasury. If it has never worked before, Iguess it might this time.
http://www.econbrowser.com/archives/2009/03/quantitative_ea_1.html
GYSC Thu Mar 19 19:25:31 2009 CDT #
triplec says:
Here is the forum where all the bulk deals are advertised. These guys converse as if it is no big deal to get bulk deals for pennies.. These guys are just stealing our tax dollars and bailout money. We should be taxing these guys 90 percent. Now that the FHA will give back investment loans on 10 homes instead of 4 starting a month ago even the average joe can buy bulk and flip in a month..
http://www.biggerpockets.com/forums/97-bulk-reo-discussion-and-reo-dealmaking-forum
triplec Thu Mar 19 19:27:28 2009 CDT #
Black Star Ranch says:
....this place is like the old west. One newspaper publisher who also owns three brothels has just been convicted of bribery, The Town Board is getting a little nervous about all the people carrying loaded firearms into the Town Board meetings - last one ended up in a near riot (no MSM). Seems we have most of the deputies on-duty at the board meeting to keep the peace. Wu-Mart sells out of most ammo within 10-minutes of arriving. Things are starting to get interesting around here. Our town motto really is: "Welcome To The New Old West"
Black Star Ranch Thu Mar 19 19:29:28 2009 CDT #
Comrade De Chaos says:
by the way there are some good signs: M&A deals are on the rise, the latest was Sun Micro. I don't know about the general market (there might be more pain in there, especially FINANCIALS) but when it comes to tech and to a higher degree Bio, we might be kicking around the bottom :)
Comrade De Chaos Thu Mar 19 19:32:18 2009 CDT #
Comrade De Chaos says:
p.s. I wouldn't be surprise for S & P kicking around 650 again :)
Comrade De Chaos Thu Mar 19 19:35:13 2009 CDT #
nova says:
BSR,
Just curious. What are they carrying?
nova Thu Mar 19 19:35:39 2009 CDT #
Anonymous says:
March 19 (Bloomberg) -- Citigroup Inc. plans to spend about $10 million on new offices for Chief Executive Officer Vikram 8-) Pandit and his lieutenants :-D, after the U.S. government injected $45 billion of cash into the bank.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a6s3AjDJAs_Y&refer=home
Anonymous Thu Mar 19 19:37:26 2009 CDT #
Comrade Byzantine_Ruins says:
Werner says:
Today, 6:08:33 PM
"U.N. panel says world should ditch dollar" and (very important !) :
"China backs talks on dollar as reserve"
where the Chineese aparently "envisage the International Monetary Fund's Special Drawing Rights (SDRs)" !
Needless to say that the EU will support such or a simmilar a move !!
Wake me up when they get around to doing something.
Comrade Byzantine_Ruins Thu Mar 19 19:39:46 2009 CDT #
Comrade Byzantine_Ruins says:
Not to be rude, but let me give you a hint -- who built and staffed the fine international institutions that got you to this awesome state of affairs? Pretty much the same people trying to find the way out, huh? Do you like walking in circles, Werner?
Parent Post
Comrade Byzantine_Ruins Thu Mar 19 19:45:25 2009 CDT #
Lucifer says:
CBZ is right, you cannot solve problems at the same levels they were created.
Parent Post
Lucifer Thu Mar 19 19:47:12 2009 CDT #
Counterpointer says:
Byz - we did, we still do, and we will ensure that no such initiative ever makes it out of an expert committee. That's the way the system is designed, functionalist, separated, like independent armed camps connected by exposed trenches.
There is no way on dog's green earth that the UN can compell a new currency. That's because we circumscribed its powers. And rightly so.
C
Parent Post
Counterpointer Thu Mar 19 19:51:03 2009 CDT #
Midwestern guy says:
Where is mp, and where is Conjure?
And what time is it, fer godsakes?
Parent Post
Midwestern guy Thu Mar 19 19:52:01 2009 CDT #
Anonymous says:
on CNN tonight (i hate CNN) they had images of pitchforks and torches in relation to AIG outrage --
Anonymous Thu Mar 19 19:40:18 2009 CDT #
petshop boys music made me a gay slut says:
we go out to eat to see if others are still eating out and because there is no wait anymore.
petshop boys music made me a gay slut Thu Mar 19 19:40:33 2009 CDT #
Black Star Ranch says:
.....we have 3-community groups of western period types that carry the real 6-shooter stuff, the old ladies conceal carry every meeting (some are checked for permits going in), the old guys like me usually 9-mil or even .45s, the younger guys carry stuff I don't recognize - usually half concealed carry. A lot of retired military here strong into 2nd Amendment views.
Black Star Ranch Thu Mar 19 19:41:59 2009 CDT #
graingod says:
Blackstar: looking for a nice H K p7, see one holler at me.
Parent Post
graingod Thu Mar 19 21:52:12 2009 CDT #
GYSC says:
Gotta love the brits, they always tell it like it is:
"Privately, something close to desperation is starting to develop inside government. After watching the slide in bank shares on Friday, one cabinet minister did not altogether joke when he said: "The banks are fucked, we're fucked, the country's fucked."
Ouchie!
http://www.guardian.co.uk/politics/2009/jan/19/economy-banking :-$
GYSC Thu Mar 19 19:42:08 2009 CDT #
Cinco-X says:
But they always keep that stiff upper lip-
Parent Post
Cinco-X Fri Mar 20 08:43:22 2009 CDT #
John Reeder says:
I can say from experience that this isn't as simple as the bank not doing its diligence in disposing of the property.
One reason you would discount for a cash deal is that you have to sell a home two or three times before it actually closes. Financing is not easy to get right now, so you're sitting around hoping that the Buyer qualifies for financing while the home is in escrow. So it makes sense in the one case that the bank took a cash offer.
It's a timing thing. If you look at the market and decide it's going lower, sometimes you're better off unloading as much as possible, as soon as possible.
This is the alternative to holding out for price and chasing the market down.
John Reeder Thu Mar 19 19:42:18 2009 CDT #
Counterpointer says:
Anony - wahay! Pitchfork and torches goes viral.
WE HAVE WON!
Well, won the meme at least.
C
Counterpointer Thu Mar 19 19:43:58 2009 CDT #
nova says:
Thanks BSR. How many of the six shooter types just migrated from Jersey?
nova Thu Mar 19 19:46:02 2009 CDT #
Comrade De Chaos says:
if the world ditches the $ it does not mean we will have to pay our existing obligations in any other currency. (UNless our gov will be dumb enough to renegotiate)
All of the exporters around the world will be screwed, because the devaluation of $ will tilt trade balance in our advantage. Most of the world corporations, majority of which are US run/based don;t give a damn when they produce as long as cost is competitive and level of bureaucracy is acceptable.
It didn;t take them long to build capacity in China it won;t take them long to bring capacity back home. All we have to figure out is how to counter Chinese currency and labor manipulations.
There is an idea in Administration to add carbon footprint tariff to Chinese goods, all we need is someone having enough guts in government to bend the world trade rules, something the Chinese have been doing for the last 7 years,
p.s. Let the trade war begin :)
Comrade De Chaos Thu Mar 19 19:54:53 2009 CDT #
lama says:
It didn;t take them long to build capacity in China it won;t take them long to bring capacity back home.
That should read, "It didn't take us long to build capacity in China". Bringing it back home will involve many complications, not the least of which is still inflated RE values. Many of our manufacturing was in buildings that were paid for since the 1950s and it was still cheaper to move to China. I don't see an easy way to reverse that, but I hope it can be done.
Parent Post
lama Thu Mar 19 20:10:53 2009 CDT #
Uncle Billy, Mental Widget says:
"wahay! Pitchfork and torches goes viral."
They've been doing a "heads on sticks" campaign on local talk radio for a few months now.
Really the only way out of this for the long term is to raze our current electoral process and create something better. Platitudes about campaign finance ain't gunna do it. Are we going to wait until tribal warfare breaks out before we get up and do something about it?
Is all the rage that is being stoked around the country meant to bring us to the point where we beg for a strong leadership? Do we want our trains to arrive *that* punctually?
Uncle Billy, Mental Widget Thu Mar 19 20:01:08 2009 CDT #
nova says:
mp is in Idaho cornering the spud market.
nova Thu Mar 19 20:15:24 2009 CDT #
CRbot says:
New Thread: Travel Spending: Cliff Diving
http://www.calculatedriskblog.com/2009/03/travel-spending-cliff-diving.html ( 0 comments ...You could be FIRST! )
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CRbot Thu Mar 19 20:16:14 2009 CDT #
Comrade Kristina says:
LOL nova
The clocks all melted...Midnight was quite some time ago, we're just along for the ride now midwestern guy.
Comrade Kristina Thu Mar 19 20:24:10 2009 CDT #
RockyR says:
"LOL nova
The clocks all melted...Midnight was quite some time ago, we're just along for the ride now midwestern guy."
Still waiting on the bond market meltdown... :-(
Parent Post
RockyR Thu Mar 19 20:32:50 2009 CDT #
1 currency [yogi] says:
"Whether this is a bulk sale or not, it reeks of kickbacks. RICO indictments, stat!"
"Leverage", what Buffett does, is merely manipulation and arbitrage of monopoly power. Efficient markets, like perfectly planned economies, exist only in Econutopia.
1 currency [yogi] Thu Mar 19 20:24:23 2009 CDT #
KR says:
Comrade De Chaos 8:54:53 PM
p.s. Let the trade war begin
Comrade, the US is already in a trade war, they fired the first shots.
KR Thu Mar 19 20:50:21 2009 CDT #
Counterpointer says:
The Mercy Seat is waiting....
http://www.youtube.com/watch?v=n8CzFVm1Yio&feature=PlayList&p=563411987E73DAF2&playnext=1&playnext_from=PL&index=9
C
Counterpointer Thu Mar 19 21:01:04 2009 CDT #
Anonymous says:
I saw this quite a bit in the 80s and early 90s representing a lot of banks. Often the servicing group does not want to book a loss, and won't take a short sale (or cannot make a decision). The REO unit is a different cost center than the servicing group, and recovers what it can quickly. The Bank ends up taking the hit, but the fight was over which department booked it. Stupid corporate infighting, with bonuses based on department performance. Be careful what you ask for . . .
Anonymous Thu Mar 19 21:08:45 2009 CDT #
Counterpointer says:
More, Johnny says, and we agree:
http://www.youtube.com/watch?v=1e0EQlQXoEo&feature=PlayList&p=563411987E73DAF2&index=10&playnext=2&playnext_from=PL
Counterpointer Thu Mar 19 21:11:16 2009 CDT #
Counterpointer says:
Well, the world's forgotten boy says this:
http://www.youtube.com/watch?v=TKYALsp-sIg
Counterpointer Thu Mar 19 21:19:05 2009 CDT #
Anonymous says:
Our taxpaying dollars at work!
Anonymous Thu Mar 19 21:19:54 2009 CDT #
Anonymous says:
Oh, come on. At the end of WWII, where would you rather have had a closed-circuit camera view: from Harry Truman's Oval Office, or Hitler's Fuehrerbunker? I know which one would have been more fun to watch. Get the popcorn and settle in.
It is not fun to watch when you already how it is going to end. Hint: You are watching a horro movie.
Anonymous Thu Mar 19 21:23:53 2009 CDT #
BJ Feng says:
Don't forget not every home is the same. Some are really damaged inside, or have their plumbing stripped out. If you are operating 1000 miles away, it's hard to get a sense of how damaged each property is and what the local market conditions are. That's why it's impossible for these guys to get a handle on sales.
Strike that, I've recently seen a very good tactic that I think all REOs should do. List the homes at BELOW market prices. Before long, you have several people interested and bidding. That insures you'll get rid of the house AND receive fair maret prices. Nothing attracts attention more than a cheap property. That's why I recently saw a property listed in Detriot for $1! I called and there were already several offers, all for well above $1 :-D. The agent told me they were at or near market prices. Way to figure things out, attract bids and you'll wind up near market. List too high and the property will sit and sit.
BJ Feng Fri Mar 20 02:06:43 2009 CDT #
Anonymous says:
This may present some interesting issues down the line. Without being able to see these contracts, and realizing the relevant statutory/case law will change between jurisdictions, there may be some issue with the lender's' duty to mitigate and whether selling a house for 33% below market represents a commercially reasonable effort to mitigate.
Presumably Citigroup's attorneys have already looked at that. Strike that -- I know they have, but if I'm a down-and-out homeowner facing a deficiency judgment, I may try to tie that lender up in litigation to force them simply to drop recovery.
May be time to change the focus of my practice. :-P
Anonymous Fri Mar 20 03:49:15 2009 CDT #
JT says:
CR-
YOU ARE WRONG!!!!!
The median household incomes in the areas describe in that article can barely support the price the investor paid let alone the price that the investor sold it at.
Those properties will continue to decline in value through 2011.
Use the metrics you continuously site on your blog and tell me if those house are 'affordable' for the region they sold in.
Cheers!
JT Fri Mar 20 07:53:57 2009 CDT #
dUCKdUCKgOOSE says:
Affordable is <3x median household income. Anything near or over 3x median household income is not affordable. Most of CA is over 3x. They buys are at 1-2x. CA is getting hosed on property tax revenues.
Parent Post
dUCKdUCKgOOSE Fri Mar 20 08:34:28 2009 CDT #
Ella says:
Fine example of the TALENT (the best and brightest) those among us getting all the fat bonus checks fixing the mess they made and losing $100,000 per house in the process. I am so impressed that I think they should earn more bonus $$$$
Ella Fri Mar 20 08:41:09 2009 CDT #
gr8f8 says:
test
gr8f8 Fri Mar 20 09:26:31 2009 CDT #
Anonymous says:
"A reader sent me some info on a property in Redwood City that is typical. The lender turned down two short sale offers at close to $649,000, and then, after foreclosing on the property, the bank listed the property at $509,000. The property sold for $493,000 all cash, even though there were other offers above the list price."
Taking a slightly higher offer that is financed over an all cash offer that is close is a bad idea. The cash offer has a much higher likelihood of actually closing, and zero chance of foreclosing again (at least zero of foreclosing on the bank that sold it for cash!)
Locally, house prices are down minimally, but there is a lot of REO selling for far below comps due to the inability to finance the said houses. FHA loan? No way. Conventional loan with 20% down? not likely
Some of these locally are missing kitchens, baths, and bigger problems than that like mold, foundation problems, etc. They are difficult to finance at all, so have to go to cash buyers. The pool of people who can get financed with 3% down is much larger than those that can put down 20%, and the ones able to pay cash are very small, and usually very smart and won't overpay.
Anonymous Fri Mar 20 10:18:17 2009 CDT #
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