Morgan Stanley predicts foreclosed homeowners will pay $72B in rent annually « HousingWire
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.
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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.
Saturday, October 29, 2011
Top US foreclosure law firm threw Halloween party where staff dressed as homeless, foreclosed-upon Americans - Boing Boing
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.
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Thanks to Mystery Reader for this link. I guess you can tell a lot about people by what they think is hilarious.
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.
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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
Why a Mortgage Cramdown Bill Is Still the Best Bet to Save the Economy | Truthout
Why a Mortgage Cramdown Bill Is Still the Best Bet to Save the Economy | Truthout
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.
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See below--this policy would allow BK judges to reduce the principal on mortages in Chapter 13 proceedings.
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.
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See below--this policy would allow BK judges to reduce the principal on mortages in Chapter 13 proceedings.
It's Time for Debt Forgiveness, American-Style | The Nation
It's Time for Debt Forgiveness, American-Style | The Nation
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.
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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.
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.
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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.
If you thought HOAs were bad now, just wait - Friday, Oct. 28, 2011 | 2 a.m. - Las Vegas Sun
If you thought HOAs were bad now, just wait - Friday, Oct. 28, 2011 | 2 a.m. - Las Vegas Sun
“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.”
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“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.”
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Thursday, October 27, 2011
Americans Staying Put More Than At Any Time Since WWII: Census
Americans Staying Put More Than At Any Time Since WWII: Census
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.
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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.
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.
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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
A 53% Surge in Poverty Rate Is Reshaping Suburbs - NYTimes.com
A 53% Surge in Poverty Rate Is Reshaping Suburbs - NYTimes.com
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.
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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.
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.
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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
Oklahoma City homeowners association president arrested after argument
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.
According to a police report, Simpson, the president of a homeowners association, got into an argument with another member of the association's board, Bivian Cox, 79, inside Simpson's home.
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.
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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
Capitol Alert: Report: Cal HFA foreclosing on borrowers current on loans
Capitol Alert: Report: Cal HFA foreclosing on borrowers current on loans
Thanks to Fred Pilot for sending me the strangest link I have seen in years.
Thanks to Fred Pilot for sending me the strangest link I have seen in years.
Saturday, October 22, 2011
Could cougar be lurking near the Chicago Bears’ lair? - Lake County News-Sun
Could cougar be lurking near the Chicago Bears’ lair? - Lake County News-Sun
LAKE FOREST— There’s a lion stalking the fields not far from the home of the Chicago Bears, neighbors say.
At least three residents in Lake Forest have reported seeing what they think was a cougar or a mountain lion, in the last two weeks, said Phil Duncan, property manager for Conway Farms Homeowners Association, which is across the road from the Bears practice facility.
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This is turning into wild animal day.
LAKE FOREST— There’s a lion stalking the fields not far from the home of the Chicago Bears, neighbors say.
At least three residents in Lake Forest have reported seeing what they think was a cougar or a mountain lion, in the last two weeks, said Phil Duncan, property manager for Conway Farms Homeowners Association, which is across the road from the Bears practice facility.
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This is turning into wild animal day.
Real Estate | New rule a major condo headache | Seattle Times Newspaper
Real Estate | New rule a major condo headache | Seattle Times Newspaper
FHA says the rule changes it has adopted, which focus on project budgets, insurance and financial reserves, have been prudent and are designed to avert losses from delinquencies and foreclosures. But the agency confirms that thousands of condo projects have failed to obtain or apply for required recertifications under the new rules.
Out of approximately 25,000 condo projects nationwide with expiration dates for FHA eligibility between last December and Sept. 30 of this year, only 2,100 — just 8.4 percent — have been approved or recertified by the agency, according to Lemar Wooley, an agency spokesman.
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These rules force condo associations to collect assessments aggressively and fund reserves, among other things. There are many signs pointing to the same conclusion: many condo associations are in significant financial distress.
FHA says the rule changes it has adopted, which focus on project budgets, insurance and financial reserves, have been prudent and are designed to avert losses from delinquencies and foreclosures. But the agency confirms that thousands of condo projects have failed to obtain or apply for required recertifications under the new rules.
Out of approximately 25,000 condo projects nationwide with expiration dates for FHA eligibility between last December and Sept. 30 of this year, only 2,100 — just 8.4 percent — have been approved or recertified by the agency, according to Lemar Wooley, an agency spokesman.
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These rules force condo associations to collect assessments aggressively and fund reserves, among other things. There are many signs pointing to the same conclusion: many condo associations are in significant financial distress.
Gwyneth Williams's family sues homeowners' association after she's eaten by alligator | Mail Online
Gwyneth Williams's family sues homeowners' association after she's eaten by alligator | Mail Online
The family of an 83-year-old woman have sued a homeowners' association after she was killed by an alligator while swimming in a lagoon. Gwyneth Williams had been house-sitting for her daughter-in-law at their home in the swampy Savannah-area coastal development known as the Landings, Georgia. The pensioner had been walking near the subdivision's golf course in the evening when she was attacked by an 8ft alligator, which bit off both her hands and her right foot...The case at Georgia Supreme Court will hinge on whether the homeowners' association should be shielded from the lawsuit under a doctrine known as 'animals ferae naturae.'
Read more: http://www.dailymail.co.uk/news/article-2051296/Gwyneth-Williamss-family-sues-homeowners-association-shes-eaten-alligator.html#ixzz1bWzej8lR
Read more: http://www.dailymail.co.uk/news/article-2051296/Gwyneth-Williamss-family-sues-homeowners-association-shes-eaten-alligator.html#ixzz1bWzVWFp0
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Thanks to Fred Pilot for this link.
The family of an 83-year-old woman have sued a homeowners' association after she was killed by an alligator while swimming in a lagoon. Gwyneth Williams had been house-sitting for her daughter-in-law at their home in the swampy Savannah-area coastal development known as the Landings, Georgia. The pensioner had been walking near the subdivision's golf course in the evening when she was attacked by an 8ft alligator, which bit off both her hands and her right foot...The case at Georgia Supreme Court will hinge on whether the homeowners' association should be shielded from the lawsuit under a doctrine known as 'animals ferae naturae.'
Read more: http://www.dailymail.co.uk/news/article-2051296/Gwyneth-Williamss-family-sues-homeowners-association-shes-eaten-alligator.html#ixzz1bWzej8lR
Read more: http://www.dailymail.co.uk/news/article-2051296/Gwyneth-Williamss-family-sues-homeowners-association-shes-eaten-alligator.html#ixzz1bWzVWFp0
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Thanks to Fred Pilot for this link.
Thursday, October 20, 2011
California reportedly subpoenas BofA over toxic securities - latimes.com
California reportedly subpoenas BofA over toxic securities - latimes.com
Investigators with the state attorney general's office have subpoenaed Bank of America Corp. in connection with the sale and marketing of troubled mortgage-backed securities to California investors, according to a person familiar with the probe.
The state is trying to determine whether the bank and its Countrywide Financial subsidiary sold investments backed by risky mortgages to institutional and private investors in California under false pretenses, according to the person, who was not authorized to speak publicly and requested confidentiality.
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Gee...how could anybody suspect such a thing?
Investigators with the state attorney general's office have subpoenaed Bank of America Corp. in connection with the sale and marketing of troubled mortgage-backed securities to California investors, according to a person familiar with the probe.
The state is trying to determine whether the bank and its Countrywide Financial subsidiary sold investments backed by risky mortgages to institutional and private investors in California under false pretenses, according to the person, who was not authorized to speak publicly and requested confidentiality.
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Gee...how could anybody suspect such a thing?
UPDATE 2-US states near foreclosure deal with banks | Reuters
UPDATE 2-US states near foreclosure deal with banks | Reuters
Under the proposed terms of the settlement -- which could total $25 billion -- banks would get a broader relief from potential state civil lawsuits in exchange for refinancing underwater loans, those mortgages where borrowers owe more than their homes are worth, the sources said.
The deal could provide some relief to the battered U.S. housing market and clear up some uncertainty about banks' legal exposure that has been a drag on their shares.
Banks have been holding out on a multi-billion-dollar settlement because they wanted broader legal protection than state attorneys general were prepared to offer.
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Is anybody but me sick and tired of all the solicitude about these predatory banks and their precious stock prices? They plunged this economy into a depression. When are some of these bank CEOs going to be frog-marched down the steps and into a police car?
Under the proposed terms of the settlement -- which could total $25 billion -- banks would get a broader relief from potential state civil lawsuits in exchange for refinancing underwater loans, those mortgages where borrowers owe more than their homes are worth, the sources said.
The deal could provide some relief to the battered U.S. housing market and clear up some uncertainty about banks' legal exposure that has been a drag on their shares.
Banks have been holding out on a multi-billion-dollar settlement because they wanted broader legal protection than state attorneys general were prepared to offer.
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Is anybody but me sick and tired of all the solicitude about these predatory banks and their precious stock prices? They plunged this economy into a depression. When are some of these bank CEOs going to be frog-marched down the steps and into a police car?
Wednesday, October 19, 2011
The Volokh Conspiracy » A Real Live Violation of the Third Amendment
The Volokh Conspiracy » A Real Live Violation of the Third Amendment
The libertarian law profs at The Volokh Conspiracy have a story about the US military violating the Third Amendment (no quartering of troops in homes) during World War Two. Thanks to Mystery Reader for the link.
The libertarian law profs at The Volokh Conspiracy have a story about the US military violating the Third Amendment (no quartering of troops in homes) during World War Two. Thanks to Mystery Reader for the link.
Tuesday, October 18, 2011
Romney’s Foreclosure Plan: Faster Foreclosures | FDL News Desk
Romney’s Foreclosure Plan: Faster Foreclosures | FDL News Desk
Saith Lord Romney: "ROMNEY: Are there things that you can do to encourage housing. One is, don’t try and stop the foreclosure process. Let it run its course and hit the bottom, allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up. The Obama Administration has slow-walked the foreclosure processes that have long existed, and as a result we still have a foreclosure overhang."
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Note that Lord Romney has not a word to say about the people who bought and live in those homes with their spouses and children. He is concerned about the Important People. That would be the "investors." This guy has zero compassion. People keep joking about him being animatronic, and I'm starting to wonder about that myself.
Saith Lord Romney: "ROMNEY: Are there things that you can do to encourage housing. One is, don’t try and stop the foreclosure process. Let it run its course and hit the bottom, allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up. The Obama Administration has slow-walked the foreclosure processes that have long existed, and as a result we still have a foreclosure overhang."
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Note that Lord Romney has not a word to say about the people who bought and live in those homes with their spouses and children. He is concerned about the Important People. That would be the "investors." This guy has zero compassion. People keep joking about him being animatronic, and I'm starting to wonder about that myself.
House Prices and Birth Rates: The Impact of the Real Estate Market on the Decision to Have a Baby
House Prices and Birth Rates: The Impact of the Real Estate Market on the Decision to Have a Baby
Our estimates suggest that a 10 percent increase in house prices would lead to a 4 percent increase in births among home owners, and a roughly one percent decrease among non-owners. The net effect of house price changes on birth rates varies across demographic groups based on rates of home ownership. Our paper provides evidence that homeowners use some of their increased housing wealth, coming from increases in local area house prices, to fund their childbearing goals. More generally, the finding of a “home equity effect” demonstrates empirically that imperfect credit markets affect fertility timing.
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So then when the prices fall do people put their kids up for adoption?
Our estimates suggest that a 10 percent increase in house prices would lead to a 4 percent increase in births among home owners, and a roughly one percent decrease among non-owners. The net effect of house price changes on birth rates varies across demographic groups based on rates of home ownership. Our paper provides evidence that homeowners use some of their increased housing wealth, coming from increases in local area house prices, to fund their childbearing goals. More generally, the finding of a “home equity effect” demonstrates empirically that imperfect credit markets affect fertility timing.
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So then when the prices fall do people put their kids up for adoption?
Monday, October 17, 2011
Chicago's Great Migration: Blacks Leaving Historic Neighborhoods For Less Windy Cities
Chicago's Great Migration: Blacks Leaving Historic Neighborhoods For Less Windy Cities
Chicago has lost about 181,000 African Americans over the past decade, a drop of 17 percent. Many have fled to the Chicago suburbs. But to a greater extent, who is leaving and where they're going is difficult to determine, according to demographers. But Brookings Institute reports that these new migrants tend to be financially stable and more educated. Many are students, professionals or retirees.
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For decades, African-Americans were moving out of the rural South and into northern and western cities. Now there is a reverse migration of middle-class African-Americans to southern cities and suburbs, with the Atlanta area being especially popular. If this continues it will change the politics of all the the metro areas involved, on both ends.
Chicago has lost about 181,000 African Americans over the past decade, a drop of 17 percent. Many have fled to the Chicago suburbs. But to a greater extent, who is leaving and where they're going is difficult to determine, according to demographers. But Brookings Institute reports that these new migrants tend to be financially stable and more educated. Many are students, professionals or retirees.
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For decades, African-Americans were moving out of the rural South and into northern and western cities. Now there is a reverse migration of middle-class African-Americans to southern cities and suburbs, with the Atlanta area being especially popular. If this continues it will change the politics of all the the metro areas involved, on both ends.
Woman taps 'Occupy' protest to avoid foreclosure - US news - Life - msnbc.com
Woman taps 'Occupy' protest to avoid foreclosure - US news - Life - msnbc.com
“(The bank) kept saying we can’t do anything. Your case is closed,” said Gudiel. “Our stand was, ‘No, we’re not leaving. This is our home. We worked hard for it and we’re just not going to leave.’”
But instead of the anticipated confrontation, there was a dramatic reversal of fortune. Fanny Mae canceled the eviction notice and offered the Gudiels a loan modification that could enable them keep their home.
Why? Fannie Mae and loan servicer OneWest won’t discuss the case. But nonprofit advocates say a series of bold protests — with reinforcements from the “Occupy Wall Street” movement — and a spate of media interest put Rose in the limelight and forced the banks to back down.
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Interesting development, isn't it? There is so much blatant illegality going on with bank foreclosures and the phony "mortage rescue" solicitations that concerted political action is probably the most effective course of action. Few people can afford lawyers to force these institutions to obey the law.
“(The bank) kept saying we can’t do anything. Your case is closed,” said Gudiel. “Our stand was, ‘No, we’re not leaving. This is our home. We worked hard for it and we’re just not going to leave.’”
But instead of the anticipated confrontation, there was a dramatic reversal of fortune. Fanny Mae canceled the eviction notice and offered the Gudiels a loan modification that could enable them keep their home.
Why? Fannie Mae and loan servicer OneWest won’t discuss the case. But nonprofit advocates say a series of bold protests — with reinforcements from the “Occupy Wall Street” movement — and a spate of media interest put Rose in the limelight and forced the banks to back down.
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Interesting development, isn't it? There is so much blatant illegality going on with bank foreclosures and the phony "mortage rescue" solicitations that concerted political action is probably the most effective course of action. Few people can afford lawyers to force these institutions to obey the law.
How California Was Diminished by 1978 Tax Revolt - Bloomberg
How California Was Diminished by 1978 Tax Revolt - Bloomberg
California voters approved Proposition 13 to rein in property taxes that had doubled in 10 years. More than three decades later, that rebellion has mortgaged the state’s future, saddling it with the nation’s highest debt and lowest credit rating.
The measure led to reductions that dropped per-student school spending from seventh to 29th nationally, prompted cities to pursue sprawling retail development to compensate for lost revenue, and pushed the state into budget gridlock, including a $705 million revenue shortfall announced Oct. 10, by requiring two-thirds approval for any tax increase.
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In 1978, conservatives told us that Proposition 13 would be the greatest thing that ever happened to California. Now the state's public institutions are disintegrating and maybe even Republicans will eventually come to understand how important public schools, colleges, parks, streets, highways, and other systems are to the functioning of an economy.
Thanks to Fred Pilot for the link.
California voters approved Proposition 13 to rein in property taxes that had doubled in 10 years. More than three decades later, that rebellion has mortgaged the state’s future, saddling it with the nation’s highest debt and lowest credit rating.
The measure led to reductions that dropped per-student school spending from seventh to 29th nationally, prompted cities to pursue sprawling retail development to compensate for lost revenue, and pushed the state into budget gridlock, including a $705 million revenue shortfall announced Oct. 10, by requiring two-thirds approval for any tax increase.
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In 1978, conservatives told us that Proposition 13 would be the greatest thing that ever happened to California. Now the state's public institutions are disintegrating and maybe even Republicans will eventually come to understand how important public schools, colleges, parks, streets, highways, and other systems are to the functioning of an economy.
Thanks to Fred Pilot for the link.
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