Saturday, October 29, 2011
The millions of homeowners facing default on their mortgages will likely become renters once their home is foreclosed. Investment bank Morgan Stanley (MS: 19.31 -0.52%) crunched the numbers and said the boost to the multifamily segment, that arm of commercial real estate that includes apartment buildings, will most likely see a multibillion-dollar boost from the looming migration.
Oliver Chang, a housing and securitized products analyst at Morgan Stanley, the lead author of a report released this week, detailed the migration of ownership to rentals. He expects a drop in the U.S. homeownership rate to 60% in the coming years from 69% at its peak.
That's why the only construction sector showing an increase in activity is "multifamily residential." It isn't condos. It's apartment buildings. The building industry expects these folks who lost their homes in foreclosure to join the ranks of renters...permanently. And with the horrible job market and the crushing burden of student loans, many young people will find it impossible to get financially established and buy anything for many years, if ever.
Top US foreclosure law firm threw Halloween party where staff dressed as homeless, foreclosed-upon Americans - Boing Boing
On Friday, the law firm of Steven J. Baum threw a Halloween party. The firm, which is located near Buffalo, is what is commonly referred to as a “foreclosure mill” firm, meaning it represents banks and mortgage servicers as they attempt to foreclose on homeowners and evict them from their homes. Steven J. Baum is, in fact, the largest such firm in New York; it represents virtually all the giant mortgage lenders, including Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.
Thanks to Mystery Reader for this link. I guess you can tell a lot about people by what they think is hilarious.
Friday, October 28, 2011
With the mortgage meltdown showing no signs of abating, it is the time to set the record straight on the best plan we have had for reviving the housing market: the 2009 bankruptcy reform bill known as the cram-down bill. That controversial piece of legislation would have given bankruptcy judges the authority to write down mortgages on a primary residence to the current fair-market price of the property. In addition, cram-downs would have enabled bankruptcy judges to monitor and stop some of the widespread robo-signing abuses—where banks have been using fraudulent documents to foreclose on homeowners.
See below--this policy would allow BK judges to reduce the principal on mortages in Chapter 13 proceedings.
Write down the principal they owe on their mortgage to match the current market value of their home, so they will no longer be underwater. Refinance the loan with a reduced interest rate, so the monthly payment is at a level that the struggling homeowner can handle. This keeps families in their homes, with a renewed stake in the future. It gives homeowners incentive to keep up their payments, because once again they have some equity and the opportunity to accumulate much more.
I think Greider is right. If this doesn't happen, it won't be just owners who suffer. Local governments and CIDs will be under increasing financial stress. There may be another 10 million foreclosures before all this is over, and when people think they are going to be foreclosed on they stop paying property taxes and HOA/condo fees.
“Stuff falls apart. It’s inevitable. And I know we’re not prepared for it.”
That’s Evan McKenzie, lawyer and political scientist at the University of Illinois at Chicago and the foremost expert on HOAs. He wrote the book on them, aptly titled, “Privatopia.”
Thursday, October 27, 2011
Americans are staying put more than at any time since World War II, as the housing bust and unemployment keep young adults at home and thwart older Americans' plans for a beachfront or lakeside retirement.
Add to that the fact that moving doesn't make a whole lot of sense if you can't sell your house and can't get a new job.
Wednesday, October 26, 2011
PARMA HEIGHTS, Ohio — The poor population in America’s suburbs — long a symbol of a stable and prosperous American middle class — rose by more than half after 2000, forcing suburban communities across the country to re-evaluate their identities and how they serve their populations.
Remember the same stories from the 2001-02 recession? And the 1991-92 recession? Periodically the New York Times discovers that there are poor people in suburbia.
Tuesday, October 25, 2011
A 73-year-old man was arrested on multiple complaints including assault with a dangerous weapon after he and a neighbor got into a dispute about their homeowners association, Oklahoma City police said Monday.
A.B. Simpson was arrested on complaints of assault and battery, assault with a dangerous weapon and pointing a firearm after the altercation Thursday.
Cox told police Simpson pulled a silver revolver on him and hit him several times. Cox had minor injuries, including a cut on his right hand.
A few weeks back, a Philippine HOA prez who made a point of letting one of his unhappy constituents know he packed an AK-47 was mentioned on this blog. "And you thought your HOA president was bad?" the good perfessor asked rhetorically. In at least one HOA, it could indeed be worse if this account is accurate.
Monday, October 24, 2011
Thanks to Fred Pilot for sending me the strangest link I have seen in years.