Now It's the Big Banks That Are Getting Foreclosed On - CNBC
"These associations have been hit hard by the housing crisis, as many delinquent borrowers stopped paying their monthly HOA dues. In some cases, HOA’s, which do have the authority in many states, managed to foreclose on properties even before the banks, by using the back dues as liens. Now the homeowner associations are taking it one step further. They are going after the banks, claiming that several of the largest lenders are not paying monthly HOA/condo fees on homes they’ve repossessed and now hold as bank-owned properties (Real Estate Owned, or commonly called REO’s)."
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Apparently the reporter just learned that HOAs are foreclosing on banks that don't pay their assessments. This isn't new, but the article has some good detail. Thanks to Shu Bartholomew for the link.
Saturday, July 21, 2012
Giving the green finger: Gardener who carved bush into rude gesture ordered to remove it | Mail Online
Giving the green finger: Gardener who carved bush into rude gesture ordered to remove it | Mail Online
"A gardener who carved a giant bush into a hand displaying a rude gesture has been ordered to remove it after being accused of committing a public order offence.
Richard Jackson has displayed the offending topiary, which shows the middle-finger sign, in his garden for the last eight years.
The 53-year-old has now been told by the council to alter it after a neighbour complained, but he has refused to comply."
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Thursday, July 19, 2012
Baltimore and the Libor scandal: 'We can't leave any money on the table' | Business | guardian.co.uk
Baltimore and the Libor scandal: 'We can't leave any money on the table' | Business | guardian.co.uk
"Baltimore is lead plaintiff in a class action lawsuit that alleges that banks including Barclays, Bank of America, HSBC, JP Morgan and UBS conspired to fix a set of key interest rates – the London Interbank Offered Rate, or Libor – costing the city millions in the process. So far, the Libor scandal has played out mostly under the radar in the US. But now it is gaining traction in Washington, and Baltimore's suit is putting a human face on a scandal legal experts predict could end up being the most costly of the credit crisis.
Firefighters, services for the elderly, school programmes – all these and more are being cut as a direct result of the actions of colluding bankers, Rawlings-Blake claims."
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Good thing we have the British press to tell us about the biggest banking scandal in the history of money. You have to hunt through the business section to find a word about it in US papers. No wonder people have stopped reading them. But at least we know all about Tom Cruise's divorce.
If you want to read more, check out Matt Taibbi on this, via Max Keiser.
"Baltimore is lead plaintiff in a class action lawsuit that alleges that banks including Barclays, Bank of America, HSBC, JP Morgan and UBS conspired to fix a set of key interest rates – the London Interbank Offered Rate, or Libor – costing the city millions in the process. So far, the Libor scandal has played out mostly under the radar in the US. But now it is gaining traction in Washington, and Baltimore's suit is putting a human face on a scandal legal experts predict could end up being the most costly of the credit crisis.
Firefighters, services for the elderly, school programmes – all these and more are being cut as a direct result of the actions of colluding bankers, Rawlings-Blake claims."
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Good thing we have the British press to tell us about the biggest banking scandal in the history of money. You have to hunt through the business section to find a word about it in US papers. No wonder people have stopped reading them. But at least we know all about Tom Cruise's divorce.
If you want to read more, check out Matt Taibbi on this, via Max Keiser.
Tuesday, July 17, 2012
Marc Realty Residential sues to force several Columbia Gardens condo owners to sell - Residential News - Crain's Chicago Business
Marc Realty Residential sues to force several Columbia Gardens condo owners to sell - Residential News - Crain's Chicago Business
"A venture led by Marc Realty Residential LLC is trying to compel the owners of three condos in the Columbia Gardens building to sell their units to the venture, which took over 31 units in the project at 1615-25 W. Columbia Ave. from its developer last year. The building's condo association, which is controlled by the Marc venture, has sued the holdouts, citing language in the association's governing documents and state law that allow it to force them to sell if a supermajority of owners approve the sale of the entire building. The case highlights the problem facing many distressed-property investors that try to buy failed condo projects at a discount and then rent out the unsold units. Owning a rental building with some condos mixed in can be complicated, and many investors avoid such “fractured” projects entirely. Others look for ways to buy out existing condo owners after buying a big chunk of unsold units from the project's lender or developer. Marc tried that, but the three owners wouldn't go along, according to the lawsuit, filed last week in Cook County Circuit Court. The association argues that they must sell because the owners of 81.5 percent of the building's units voted to sell all the condos last year. Under the association's rules, it has the authority to sell the entire building if two-thirds of the property's units vote to approve the transaction, according to the complaint."
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Another example of forced sale in a seriously distressed condo project. This is the statute that Marc Realty is relying on:
(765 ILCS 605/15) (from Ch. 30, par. 315)
Sec. 15. Sale of property.
(a) Unless a greater percentage is provided for in the declaration or bylaws, and notwithstanding the provisions of Sections 13 and 14 hereof, a majority of the unit owners where the property contains 2 units, or not less than 66 2/3% where the property contains three units, and not less than 75% where the property contains 4 or more units may, by affirmative vote at a meeting of unit owners duly called for such purpose, elect to sell the property. Such action shall be binding upon all unit owners, and it shall thereupon become the duty of every unit owner to execute and deliver such instruments and to perform all acts as in manner and form may be necessary to effect such sale, provided, however, that any unit owner who did not vote in favor of such action and who has filed written objection thereto with the manager or board of managers within 20 days after the date of the meeting at which such sale was approved shall be entitled to receive from the proceeds of such sale an amount equivalent to the value of his interest, as determined by a fair appraisal, less the amount of any unpaid assessments or charges due and owing from such unit owner.
(b) If there is a disagreement as to the value of the interest of a unit owner who did not vote in favor of the sale of the property, that unit owner shall have a right to designate an expert in appraisal or property valuation to represent him, in which case, the prospective purchaser of the property shall designate an expert in appraisal or property valuation to represent him, and both of these experts shall mutually designate a third expert in appraisal or property valuation. The 3 experts shall constitute a panel to determine by vote of at least 2 of the members of the panel, the value of that unit owner's interest in the property.
(Source: P.A. 86-1156.)
"A venture led by Marc Realty Residential LLC is trying to compel the owners of three condos in the Columbia Gardens building to sell their units to the venture, which took over 31 units in the project at 1615-25 W. Columbia Ave. from its developer last year. The building's condo association, which is controlled by the Marc venture, has sued the holdouts, citing language in the association's governing documents and state law that allow it to force them to sell if a supermajority of owners approve the sale of the entire building. The case highlights the problem facing many distressed-property investors that try to buy failed condo projects at a discount and then rent out the unsold units. Owning a rental building with some condos mixed in can be complicated, and many investors avoid such “fractured” projects entirely. Others look for ways to buy out existing condo owners after buying a big chunk of unsold units from the project's lender or developer. Marc tried that, but the three owners wouldn't go along, according to the lawsuit, filed last week in Cook County Circuit Court. The association argues that they must sell because the owners of 81.5 percent of the building's units voted to sell all the condos last year. Under the association's rules, it has the authority to sell the entire building if two-thirds of the property's units vote to approve the transaction, according to the complaint."
--------------------------------
Another example of forced sale in a seriously distressed condo project. This is the statute that Marc Realty is relying on:
(765 ILCS 605/15) (from Ch. 30, par. 315)
Sec. 15. Sale of property.
(a) Unless a greater percentage is provided for in the declaration or bylaws, and notwithstanding the provisions of Sections 13 and 14 hereof, a majority of the unit owners where the property contains 2 units, or not less than 66 2/3% where the property contains three units, and not less than 75% where the property contains 4 or more units may, by affirmative vote at a meeting of unit owners duly called for such purpose, elect to sell the property. Such action shall be binding upon all unit owners, and it shall thereupon become the duty of every unit owner to execute and deliver such instruments and to perform all acts as in manner and form may be necessary to effect such sale, provided, however, that any unit owner who did not vote in favor of such action and who has filed written objection thereto with the manager or board of managers within 20 days after the date of the meeting at which such sale was approved shall be entitled to receive from the proceeds of such sale an amount equivalent to the value of his interest, as determined by a fair appraisal, less the amount of any unpaid assessments or charges due and owing from such unit owner.
(b) If there is a disagreement as to the value of the interest of a unit owner who did not vote in favor of the sale of the property, that unit owner shall have a right to designate an expert in appraisal or property valuation to represent him, in which case, the prospective purchaser of the property shall designate an expert in appraisal or property valuation to represent him, and both of these experts shall mutually designate a third expert in appraisal or property valuation. The 3 experts shall constitute a panel to determine by vote of at least 2 of the members of the panel, the value of that unit owner's interest in the property.
(Source: P.A. 86-1156.)
San Francisco Courthouse Strike Exposes Strain In City's Judicial System (PHOTOS)
San Francisco Courthouse Strike Exposes Strain In City's Judicial System (PHOTOS)
A strike at San Francisco Superior Court on Monday halted much of the city court's business as workers walked off the job demanding a resumption of labor negotiations that have been stalled since February.
Chants of "Rise up, shut it down, San Francisco's a union town," echoed off the walls of the Civic Center as hundreds of striking court workers, clad in purple Service Employees International Union T-shirts, carried signs slamming court officials for a slew of furlough days and five consecutive years without cost-of-living pay increases.
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Even the most basic functions of government are under major financial strain in California.
A strike at San Francisco Superior Court on Monday halted much of the city court's business as workers walked off the job demanding a resumption of labor negotiations that have been stalled since February.
Chants of "Rise up, shut it down, San Francisco's a union town," echoed off the walls of the Civic Center as hundreds of striking court workers, clad in purple Service Employees International Union T-shirts, carried signs slamming court officials for a slew of furlough days and five consecutive years without cost-of-living pay increases.
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Even the most basic functions of government are under major financial strain in California.
Monday, July 16, 2012
Bankruptcy choices highlight fiscal pain of cities nationwide - latimes.com
Bankruptcy choices highlight fiscal pain of cities nationwide - latimes.com
"It does not look pretty. It's not going to look pretty over the next three or four years," said Michael Pagano, dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago. "It's a long-term structural problem, and cities need to think of new ways to collect resources to fuel their services, or they are only going to be in worse trouble."
Like hundreds of other cities around the country, Stockton, San Bernardino and Vallejo share a number of fundamental problems that drove their finances into the ground. Blue-collar cities with aging infrastructure, they have relatively poor populations. And they're saddled with ballooning pension and healthcare obligations for civic employees and retirees.
Then came the recession, and with it foreclosures, crashing property values and the disappearance of retailers that were vital to sales-tax revenue. Cities that had been scraping by suddenly found their bank accounts depleted and their budgets in a death spiral.
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My colleague Mike Pagano has it right. Cities that have already tried every trick they know, including using CIDs, are becoming insolvent. Finding new sources of revenue will not be an easy task.
"It does not look pretty. It's not going to look pretty over the next three or four years," said Michael Pagano, dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago. "It's a long-term structural problem, and cities need to think of new ways to collect resources to fuel their services, or they are only going to be in worse trouble."
Like hundreds of other cities around the country, Stockton, San Bernardino and Vallejo share a number of fundamental problems that drove their finances into the ground. Blue-collar cities with aging infrastructure, they have relatively poor populations. And they're saddled with ballooning pension and healthcare obligations for civic employees and retirees.
Then came the recession, and with it foreclosures, crashing property values and the disappearance of retailers that were vital to sales-tax revenue. Cities that had been scraping by suddenly found their bank accounts depleted and their budgets in a death spiral.
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My colleague Mike Pagano has it right. Cities that have already tried every trick they know, including using CIDs, are becoming insolvent. Finding new sources of revenue will not be an easy task.
Sunday, July 15, 2012
Calif. cities eye plan to seize mortgages | AccessNorthGa
Calif. cities eye plan to seize mortgages | AccessNorthGa
Another story on the contemplated cramdown by condemnation scheme in Southern California's Inland (non) Empire.
Another story on the contemplated cramdown by condemnation scheme in Southern California's Inland (non) Empire.
Wells Fargo to pay $175 million to settle lending bias allegations - latimes.com
Wells Fargo to pay $175 million to settle lending bias allegations - latimes.com
Wells Fargo & Co.'s settlement of allegations that it overcharged minorities for home loans and wrongly steered them into subprime mortgages requires the bank to pay $125 million in damages, including about $10 million to African Americans and Latinos in the Los Angeles area.
The settlement, announced Thursday by theU.S. Justice Department, also requires the San Francisco company, by far the nation's largest home lender, to provide $50 million in down-payment assistance to residents of areas where the alleged discrimination had a significant effect.
Those regions include the San Francisco Bay Area and the Inland Empire but not Los Angeles County, where Wells Fargo already has provided an assistance plan for buyers.
The $175-million total is the second-largest fair-lending settlement by the civil rights arm of the Justice Department. The largest, reached in December, requiresBank of America Corp.to pay $335 million to settle claims against Countrywide Financial Corp., the aggressive Calabasas lender it acquired in 2008.
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And on it goes.
Wells Fargo & Co.'s settlement of allegations that it overcharged minorities for home loans and wrongly steered them into subprime mortgages requires the bank to pay $125 million in damages, including about $10 million to African Americans and Latinos in the Los Angeles area.
The settlement, announced Thursday by theU.S. Justice Department, also requires the San Francisco company, by far the nation's largest home lender, to provide $50 million in down-payment assistance to residents of areas where the alleged discrimination had a significant effect.
Those regions include the San Francisco Bay Area and the Inland Empire but not Los Angeles County, where Wells Fargo already has provided an assistance plan for buyers.
The $175-million total is the second-largest fair-lending settlement by the civil rights arm of the Justice Department. The largest, reached in December, requiresBank of America Corp.to pay $335 million to settle claims against Countrywide Financial Corp., the aggressive Calabasas lender it acquired in 2008.
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And on it goes.
Analysis: In the U.S. housing market, recovery or Lost Decade? - Yahoo! News
Analysis: In the U.S. housing market, recovery or Lost Decade? - Yahoo! News
And the answer is: Lost Decade. This is a detailed analysis of the situation. And here is one big factor: banks are preventing people from buying homes by the simple expedient of not making loans except to near-zero-risk borrowers, and the federal government is letting them run the show:
"In nearly every city, it now costs less to own than to rent.
But many would-be homeowners cannot buy. Lenders have virtually locked them out of the market by denying them mortgages, according to statistics from the Federal Housing Administration and a recent Morgan Stanley research report.
In May, consumers able to close on a mortgage had, on average, a near-perfect credit score. They could afford a 19 percent down payment on their new home. And they were still on track to spend no more 24 percent of their income on their new house, according to the Ellie Mae Origination Insight Report.
"Most of the population can't meet current mortgage underwriting standards," says trade publication Inside Mortgage Finance founder Guy Cecala. "They're getting eliminated before they even get to the door."
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Thanks to Fred Pilot for this thoroughly depressing link.
And the answer is: Lost Decade. This is a detailed analysis of the situation. And here is one big factor: banks are preventing people from buying homes by the simple expedient of not making loans except to near-zero-risk borrowers, and the federal government is letting them run the show:
"In nearly every city, it now costs less to own than to rent.
But many would-be homeowners cannot buy. Lenders have virtually locked them out of the market by denying them mortgages, according to statistics from the Federal Housing Administration and a recent Morgan Stanley research report.
In May, consumers able to close on a mortgage had, on average, a near-perfect credit score. They could afford a 19 percent down payment on their new home. And they were still on track to spend no more 24 percent of their income on their new house, according to the Ellie Mae Origination Insight Report.
"Most of the population can't meet current mortgage underwriting standards," says trade publication Inside Mortgage Finance founder Guy Cecala. "They're getting eliminated before they even get to the door."
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Thanks to Fred Pilot for this thoroughly depressing link.
Saturday, July 14, 2012
Tenants face losing water if owners don't pony up for bill | Local & Regional | KATU.com - Portland News, Sports, Traffic Weather and Breaking News - Portland, Oregon
Tenants face losing water if owners don't pony up for bill | Local & Regional | KATU.com - Portland News, Sports, Traffic Weather and Breaking News - Portland, Oregon: Many people rent the town homes and pay their share of the water to landlords. Ultimately the bill is supposed to be paid by the homeowners association.
The owner of Leanette’s unit says she is paying her bills, but some other owners aren’t.
HOA members will not disclose who the deadbeat landlords are.
“I feel very disappointed about the situation happening over here,” said resident Jesus Amaro. “Some of us are paying our water bills and some are not.”
The owner of Leanette’s unit says she is paying her bills, but some other owners aren’t.
HOA members will not disclose who the deadbeat landlords are.
“I feel very disappointed about the situation happening over here,” said resident Jesus Amaro. “Some of us are paying our water bills and some are not.”
Keller homeowners say they've been shut out of association despite new state law | Arlingt...
Keller homeowners say they've been shut out of association despite new state law | Arlingt...: KELLER -- The Hidden Lakes Homeowners Association "fired" most of its volunteers without warning and is barring residents from board meetings after the developer began taking an active role on the board, some residents say.
Those residents also complain that the developer is using HOA money to pay for landscaping services from a developer-owned company instead of seeking bids and that it is using association money to make repairs that are the developer's responsibility.
And that may all be legal despite a new state law reining in homeowners associations.
Those residents also complain that the developer is using HOA money to pay for landscaping services from a developer-owned company instead of seeking bids and that it is using association money to make repairs that are the developer's responsibility.
And that may all be legal despite a new state law reining in homeowners associations.
Don't buy investor-government scheme - SFGate
Don't buy investor-government scheme - SFGate: Mortgage Resolution Partners brass argue that the power of eminent domain is well established, as long as local governments can point to a solid public use - in this case, preventing foreclosures.
Cornell law Professor Robert Hockett agrees. In the infamous 2005 Kelo decision, the U.S. Supreme Court ruled that local governments could seize private property for other private entities if there is a public purpose. In that case, New London, Conn., took the waterfront home of Susette Kelo as part of a redevelopment project anchored around Pfizer Inc.
Dana Berliner, an attorney for the Institute of Justice, which represented Kelo, said she believes the California Supreme Court would overturn any law allowing governments to seize mortgages because "it's a scheme by one group of securities investors to steal a bunch of money from another group of securities investors."
But what if Berliner is wrong?
"In California, there'll be very little that (governments) can't do," she said. "It would mean that eminent domain can be used to take from one group of people and give to another group of people to make a profit."
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This novel use of eminent domain (previously blogged here by the perfessor and myself) will certainly generate litigation testing its limits as well as legislation to bar it if ultimately employed. From a practical standpoint, it's far from clear local governments using their powers of condemnation to cram down overmortaged properties will really solve their fiscal woes. They have no control over the price of real estate and continued real estate deflation could undermine any perceived benefit.
There's a cynical adage that states, "privatize the gains, socialize the losses." This tactic is the epitome of that.
Cornell law Professor Robert Hockett agrees. In the infamous 2005 Kelo decision, the U.S. Supreme Court ruled that local governments could seize private property for other private entities if there is a public purpose. In that case, New London, Conn., took the waterfront home of Susette Kelo as part of a redevelopment project anchored around Pfizer Inc.
Dana Berliner, an attorney for the Institute of Justice, which represented Kelo, said she believes the California Supreme Court would overturn any law allowing governments to seize mortgages because "it's a scheme by one group of securities investors to steal a bunch of money from another group of securities investors."
But what if Berliner is wrong?
"In California, there'll be very little that (governments) can't do," she said. "It would mean that eminent domain can be used to take from one group of people and give to another group of people to make a profit."
-----------
This novel use of eminent domain (previously blogged here by the perfessor and myself) will certainly generate litigation testing its limits as well as legislation to bar it if ultimately employed. From a practical standpoint, it's far from clear local governments using their powers of condemnation to cram down overmortaged properties will really solve their fiscal woes. They have no control over the price of real estate and continued real estate deflation could undermine any perceived benefit.
There's a cynical adage that states, "privatize the gains, socialize the losses." This tactic is the epitome of that.
Friday, July 13, 2012
Tyler Berding: Ponzi Scheme?
Ponzi Scheme?
"So how is this similar to the plight of community associations? Simple. The developer of a project creates a reserve program based on the false assumption that most components of a building have an infinite service life and will never need repair or replacement. The early owners (investors) pay into the venture (community association budget) at lower than necessary assessment rates. That not only attracts buyers to the initial sales offering but also, in turn attracts future buyers. Eventually the investors who are the owners when the underfunding is discovered are stuck with not only their share of the bill, but also the shares of all of the prior owners who underpaid their assessments for so many years and then sold off their interests. Not exactly a “Ponzi” scheme, but close."
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Tyler Berding shows how the reasons for recent municipal bankruptcy filings are structurally similar to the financial time bomb that is built into many community associations--a must-read. Thanks to Fred Pilot for the link.
"So how is this similar to the plight of community associations? Simple. The developer of a project creates a reserve program based on the false assumption that most components of a building have an infinite service life and will never need repair or replacement. The early owners (investors) pay into the venture (community association budget) at lower than necessary assessment rates. That not only attracts buyers to the initial sales offering but also, in turn attracts future buyers. Eventually the investors who are the owners when the underfunding is discovered are stuck with not only their share of the bill, but also the shares of all of the prior owners who underpaid their assessments for so many years and then sold off their interests. Not exactly a “Ponzi” scheme, but close."
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Tyler Berding shows how the reasons for recent municipal bankruptcy filings are structurally similar to the financial time bomb that is built into many community associations--a must-read. Thanks to Fred Pilot for the link.
California City Under Investigation Drained Reserve Funds - Bloomberg
California City Under Investigation Drained Reserve Funds - Bloomberg
Law enforcement officials are investigating possible crimes in San Bernardino’s city government, which almost drained special funds to prop up its budget.
The near-bankrupt state of the community of 209,000 east of Los Angeles came to light when a new finance director discovered that previous officials shifted money for workers-compensation and liability insurance to the general fund, said Andrea Travis- Miller, interim city manager.
“The city has relied on a whole variety of one-time measures to balance its budget,” Travis-Miller, who began her job in May, said yesterday. “There have been transfers to the general fund with the expectation that they would be repaid. That became difficult.”
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San Bernardino's fiscal crisis is looking more and more like a case of mismanagement occurring in hard economic times in which they lost property tax revenues and also face a huge pension obligation. Thanks to Fred Pilot for the link.
Law enforcement officials are investigating possible crimes in San Bernardino’s city government, which almost drained special funds to prop up its budget.
The near-bankrupt state of the community of 209,000 east of Los Angeles came to light when a new finance director discovered that previous officials shifted money for workers-compensation and liability insurance to the general fund, said Andrea Travis- Miller, interim city manager.
“The city has relied on a whole variety of one-time measures to balance its budget,” Travis-Miller, who began her job in May, said yesterday. “There have been transfers to the general fund with the expectation that they would be repaid. That became difficult.”
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San Bernardino's fiscal crisis is looking more and more like a case of mismanagement occurring in hard economic times in which they lost property tax revenues and also face a huge pension obligation. Thanks to Fred Pilot for the link.
Smoking Banned Inside Santa Monica Residences | NBC Southern California
Smoking Banned Inside Santa Monica Residences | NBC Southern California
"Smoking is already banned at beaches, parks, restaurants and near buildings in Santa Monica, but Tuesday night the city council sought to expand that prohibition and voted 4-2 to ban smoking for all new tenants of apartments and condos inside their residences – with one exception.
“It also requires existing residents to designate their units as smoking or non smoking and from then on it will be prohibited to smoke in a non smoking unit,” said Adam Radinksy, head of the Consumer Protection Unit in Santa Monica."
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With condo buildings and apartment buildings going non-smoking, it seems that the People's Republic of Santa Monica has pretty much banned smoking. I guess if you can afford a single-family home in Santa Monica you can post a sign and smoke your head off, but that's a pretty ritzy real estate market.
"Smoking is already banned at beaches, parks, restaurants and near buildings in Santa Monica, but Tuesday night the city council sought to expand that prohibition and voted 4-2 to ban smoking for all new tenants of apartments and condos inside their residences – with one exception.
“It also requires existing residents to designate their units as smoking or non smoking and from then on it will be prohibited to smoke in a non smoking unit,” said Adam Radinksy, head of the Consumer Protection Unit in Santa Monica."
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With condo buildings and apartment buildings going non-smoking, it seems that the People's Republic of Santa Monica has pretty much banned smoking. I guess if you can afford a single-family home in Santa Monica you can post a sign and smoke your head off, but that's a pretty ritzy real estate market.
Wednesday, July 11, 2012
Joe Nocera: Use eminent domain to take underwater mortgages
Housing’s Last Chance? - NYTimes.com
"It is well documented that underwater mortgages have a high likelihood of defaulting — and, eventually, being foreclosed on. It has also been clear for some time that the best way to keep troubled homeowners in their homes is by reducing the principal on their mortgages, thus lowering their debt burden and more closely aligning their mortgage with the actual value of the home. Which is why Greg Devereaux, the county’s chief executive officer, found himself listening intently when the folks from Mortgage Resolution Partners came knocking on his door. They had spent the previous year kicking around an intriguing idea: have localities buy underwater mortgages using their power of eminent domain — and then write the homeowner a new, reduced mortgage. It’s principal reduction using a stick instead of a carrot."
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This is a fascinating idea. More here.
"It is well documented that underwater mortgages have a high likelihood of defaulting — and, eventually, being foreclosed on. It has also been clear for some time that the best way to keep troubled homeowners in their homes is by reducing the principal on their mortgages, thus lowering their debt burden and more closely aligning their mortgage with the actual value of the home. Which is why Greg Devereaux, the county’s chief executive officer, found himself listening intently when the folks from Mortgage Resolution Partners came knocking on his door. They had spent the previous year kicking around an intriguing idea: have localities buy underwater mortgages using their power of eminent domain — and then write the homeowner a new, reduced mortgage. It’s principal reduction using a stick instead of a carrot."
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This is a fascinating idea. More here.
San Bernardino seeks bankruptcy protection - latimes.com
San Bernardino seeks bankruptcy protection - latimes.com
San Bernardino on Tuesday became the third California city in less than a month to seek bankruptcy protection, with officials saying the financial situation had become so dire that it could not cover payroll through the summer.
The unexpected vote came at the suggestion of the interim city manager, who said the city faces a $46-million deficit and depleted coffers...The city joins two others in California — Stockton and Mammoth Lakes — that have turned to bankruptcy in recent weeks to cope with their financial problems, albeit for different reasons."
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San Bernardino has a population of over 200,000. The situation there is complicated because there are several different contributing factors to their financial plight, including a drop in property tax revenue, pension costs, bad development decisions, etc.
San Bernardino on Tuesday became the third California city in less than a month to seek bankruptcy protection, with officials saying the financial situation had become so dire that it could not cover payroll through the summer.
The unexpected vote came at the suggestion of the interim city manager, who said the city faces a $46-million deficit and depleted coffers...The city joins two others in California — Stockton and Mammoth Lakes — that have turned to bankruptcy in recent weeks to cope with their financial problems, albeit for different reasons."
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San Bernardino has a population of over 200,000. The situation there is complicated because there are several different contributing factors to their financial plight, including a drop in property tax revenue, pension costs, bad development decisions, etc.
Herp Derp YouTube Comments | Tanner's Website
Herp Derp YouTube Comments | Tanner's Website
This is a YouTube extension that converts all comments to "herp derp."
This is a YouTube extension that converts all comments to "herp derp."
Tuesday, July 10, 2012
Excite News - Report: Some lose homes over as little as $400
Excite News - Report: Some lose homes over as little as $400
WASHINGTON (AP) - The elderly and other vulnerable homeowners are losing their homes because they owe as little as a few hundred dollars in back taxes, according to a report from a consumer group.
Outdated state laws allow big banks and other investors to reap windfall profits by buying the houses for a pittance and reselling them, the National Consumer Law Center said in a report being released Tuesday.
Local governments can seize and sell a home if the owner falls behind on property taxes and fees. The process helps governments make ends meet at a time when low property values and the weak economy are squeezing tax revenue.
But tax debts as small as $400 can cause people to lose their homes because of arcane laws and misinformation among consumers, says John Rao, the report's author and an attorney with NCLC.
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For those of us who know about condo/hoa foreclosure practices, this sort of thing is old news. The new part is that now tax farmers are doing it.
WASHINGTON (AP) - The elderly and other vulnerable homeowners are losing their homes because they owe as little as a few hundred dollars in back taxes, according to a report from a consumer group.
Outdated state laws allow big banks and other investors to reap windfall profits by buying the houses for a pittance and reselling them, the National Consumer Law Center said in a report being released Tuesday.
Local governments can seize and sell a home if the owner falls behind on property taxes and fees. The process helps governments make ends meet at a time when low property values and the weak economy are squeezing tax revenue.
But tax debts as small as $400 can cause people to lose their homes because of arcane laws and misinformation among consumers, says John Rao, the report's author and an attorney with NCLC.
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For those of us who know about condo/hoa foreclosure practices, this sort of thing is old news. The new part is that now tax farmers are doing it.
The Coasean Republic - Credit Slips
The Coasean Republic - Credit Slips
"At times I've joked to my classes about the possibility of a Coasean Republic, a state I call "Coase-istan" (or perhaps Kosistan), in which the entire world operates via private ordering. In Coase-istan, government does, well, nothing except put service provision out for private bids. Mail would be delivered only by private express companies like Fed-Ex. Prisons would be privately operated. Executions would be contracted out to the highest bidder. Food and drug safety would be policed solely by private litigation, which would, of course, all go to arbitration. Deposits would be privately insured, if at all. Taxes would be collected by tax farmers. The borders of the Coasean Republic would be protected by an army of mercenaries. Health care or transportation? Pay your own way. Want to buy a baby or enter a lifetime personal service contract? Go right ahead...Now, it turns out that the joke's on me. Sandy Springs, Georgia is well on its way to becoming the Coasean Republic. Well, let's hope that Tiebout competition works."
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This is blog post on Credit Slips from law professor Adam Levitin, who is one of the sharpest analysts out there. What he calls "The Coasean Republic," I call "privatopia." Ronald Coase invented the Coase Theorem, which is at the root of much libertarian thinking. The theorem supports the notion that government regulation of externalities is less efficient than private payments. Externalities are the costs of a transaction that are not born by the parties to the transaction, but instead are imposed on others. A hog farmer grows and sells hogs and we eat bacon. But anybody living near the hog farm has to deal with the air and water pollution. The way Coase looked at it, instead of the government enacting a zoning law that prohibits you and your neighbors from setting up backyard hog farms, you should be free to do that unless your neighbors care enough about it to pay you not to do it. So CC&Rs are better than zoning ordinances because they were individually negotiated by the neighbors to create the little private utopia that they enjoy so much, free from the meddlesome and inefficient interference of government. Get it? No? You disagree? Well--Coase got a Nobel Prize, and as Fred Pilot would say, "So there!"
"At times I've joked to my classes about the possibility of a Coasean Republic, a state I call "Coase-istan" (or perhaps Kosistan), in which the entire world operates via private ordering. In Coase-istan, government does, well, nothing except put service provision out for private bids. Mail would be delivered only by private express companies like Fed-Ex. Prisons would be privately operated. Executions would be contracted out to the highest bidder. Food and drug safety would be policed solely by private litigation, which would, of course, all go to arbitration. Deposits would be privately insured, if at all. Taxes would be collected by tax farmers. The borders of the Coasean Republic would be protected by an army of mercenaries. Health care or transportation? Pay your own way. Want to buy a baby or enter a lifetime personal service contract? Go right ahead...Now, it turns out that the joke's on me. Sandy Springs, Georgia is well on its way to becoming the Coasean Republic. Well, let's hope that Tiebout competition works."
----------------
This is blog post on Credit Slips from law professor Adam Levitin, who is one of the sharpest analysts out there. What he calls "The Coasean Republic," I call "privatopia." Ronald Coase invented the Coase Theorem, which is at the root of much libertarian thinking. The theorem supports the notion that government regulation of externalities is less efficient than private payments. Externalities are the costs of a transaction that are not born by the parties to the transaction, but instead are imposed on others. A hog farmer grows and sells hogs and we eat bacon. But anybody living near the hog farm has to deal with the air and water pollution. The way Coase looked at it, instead of the government enacting a zoning law that prohibits you and your neighbors from setting up backyard hog farms, you should be free to do that unless your neighbors care enough about it to pay you not to do it. So CC&Rs are better than zoning ordinances because they were individually negotiated by the neighbors to create the little private utopia that they enjoy so much, free from the meddlesome and inefficient interference of government. Get it? No? You disagree? Well--Coase got a Nobel Prize, and as Fred Pilot would say, "So there!"
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