Saturday, October 23, 2010

Residential mortgage market meltdown: the Halloween sequel

The first part of this story involved lenders issuing mortgages without adequate underwriting, producing a lot of non-performing loans. When those loans were packaged and sold as securities, financial markets realized that lots of paper bags filled with excrement were ablaze on their doorstep. That largely prompted the financial market meltdown in 2008 from which the economy is still struggling to recover.

Just in time for Halloween comes the sequel in this financial horror story. As this New York Times article points out, the devil is in trying to unwind these bad debts and repossess the underlying properties. No easy feat considering that those stinky sacks of crap passed through a lot of hands, making it very difficult to sort out the individual notes in each bag.

Update 10/29: American Public Media's Marketplace radio program did a segment on today's show on the difficulty matching the notes in these troubled mortgage backed securities to the actual properties securing them, effectively rendering these securities worthless "zombie bonds" and setting the stage for litigation brought by understandably unhappy investors. Check out Marketplace's story here accompanied by lots of Halloween screams and howls.

Psychologist defines the HOA Syndrome caused by oppressive HOAs � HOA Constitutional Government

Psychologist defines the HOA Syndrome caused by oppressive HOAs � HOA Constitutional Government
Sounds like a pandemic. But is it contagious? I also see that some Florida HOA attorney is making fun of this situation. George Staropoli wants to have him keelhauled or at least disbarred for insensitivity, but I think making attempted jokes with no punch line is a worse offense.

The big picture, though, is grim for the condo sector, in Florida and elsewhere. The association lawyer-lobbyist crowd is getting desperate because on one hand they have to fight off state legislators and on the other hand they are watching condo developments melt down all around them. So far most of the demands for state regulation have been based mainly on abuse of power and incompetence by boards and their hired guns. Soon the issue in state legislatures--and maybe even federal agencies--may be what to do about the economic collapse of condo associations and HOAs.

Who knows? Soon some of these attorneys may have to find a specialty where they actually have to go up against other lawyers, instead of beating up on unrepresented homeowners.

Friday, October 22, 2010

NC may examine powers of HOAs next year

Candidates would consider limiting powers of homeowner associations

A local lawmaker and state senate candidate say they want to look at issues involving homeowners associations during the next General Assembly session, which begins Jan. 26.

“I suspect we will be looking into that because we’ve got some homeowners associations that are completely out of control,” said Rep. Danny McComas, R-New Hanover. “I do feel that finding a means to control some of these HOAs is going to be necessary.”
This is a wasted endeavor at best and a cynical political ploy at worst.

If legislators and candidates truly believe that non condo HOAs have the power of municipalities without checks and balances on their powers, they should deprivatize them and take them out of state nonprofit corporations codes and instead bring them under government codes.

Tuesday, October 19, 2010

HOA developers cut long term deals with Internet service providers at inmates' expense

Living in Privatopia could mean paying for telecommunications services provided by your HOA, even if you choose another provider as this item explains.

The problem is developers sign long term contracts with a single Internet Service Provider instead of putting in open access fiber owned by the HOA. Good for the developer prince but not the HOA serfs. An open access fiber to the premises infrastructure would give residents a true choice of ISPs since any number could choose to offer services to the residents.

HOA takes issue with homeowner's landscaping

HOA takes issue with homeowner's landscaping

FOX 35 asked the HOA president, Bill Herring what was wrong with O'Connor's landscaping. "Look at all the dead stuff, dead vines dead limbs in the trees," said Bill Herring. "We didn't find any of that," said FOX 35 Reporter Holly Bristow. "Well you ain't looking very well," said Herring who then said to contact the HOA attorney. The HOA's attorney has not yet returned our call. According to Mo O'Connor, the HOA attorney wants to go to formal mediation with her. She says she's already done informal mediation with the HOA . Mo O'Connor says since state statute protects her Florida friendly lawn, she's not changing it.
Yet another episode of ambulance chasing, HOA style. Film at 11.

Monday, October 18, 2010

Payments average 18 months past due on Palm Beach County's foreclosed homes

Payments average 18 months past due on Palm Beach County's foreclosed homes

And that county has almost 46, 000 homes in foreclosure. How's that for a recovery? Let's just give these policies some time to work, OK people?

Seriously--the cyclical aspect of this recession ended a year ago according to all the experts. What we have now is something else, and I've shifted over to the camp that says the policies of this administration may be preventing the employment situation from improving and holding the housing market back. At this point there won't be a cyclical recovery at all. Something has to change in Washington. We may have divided government starting in January, and that will produce either compromise (maybe a good thing) or gridlock (probably disastrous). A great deal may depend on personalities. Just getting that gavel out of Nancy Pelosi's hand would make a big difference.

Sunday, October 17, 2010

Buyers of foreclosed homes may face big problems

Buyers of foreclosed homes may face big problems:
"“Anyone who’s purchased a foreclosed property in the last three years should really be concerned,” says George Babcock, a Providence lawyer who represents homeowners who have been foreclosed on."
This is why banks are freezing the foreclosure process. If the mortgagee uses sketchy practices to to prove they have the right to foreclose, then sells it to a new owner, that new owner may not really have title to the property. Lawyers being the opportunistic types they are, you can then have an interesting situation. What if the former owner (the original mortgagor) shows up and claims the house? Title insurance should protect the new owner, but this is yet another permutation in the unfolding weirdness of the post-crash housing market.