Well, mortgage defaults have reached an all time high

The Mortgage Bankers Association reported Thursday that the number of loans past due or in foreclosure jumped to 7.9 percent, from 7.3 percent at the end of September and 6.1 percent in December 2006. Before the third quarter, the rate had never risen past 7 percent since the survey began in 1979.

Recently the NYT published an article about the backlash against aid for people in foreclosures.



I have to admit they present some compelling arguments.

Seattle, which has nowhere near the kind of foreclosure problem other cities have, began a modest program last month offering loans of up to $5,000 to help a few dozen homeowners avoid losing their homes.Not only are people in Seattle relatively prosperous, but they have a reputation for being nice, too. Yet no sooner had Mayor Greg Nickels announced the program than opposition surfaced.
“Just can’t agree with using taxpayer dollars to bail out private homeowners, no matter how the mayor tries to justify it,” read a complaint posted on the “Soundoff” section of The Seattle Post-Intelligencer’s Web site.

Ryan Ellis, the tax policy director for Americans for Tax Reform, a conservative antitax group, said his group opposed efforts by the Bush administration to nudge banks and lenders into restructuring some loans, much less direct government loans to homeowners facing foreclosure.
“You can call it community reinvestment, neighborhood protection, whatever you want,” Mr. Ellis said, “but if you’re taking away the downside risk of a loan, you’re bailing them out.”

I understand why all these municipalities are handing out aid because foreclosures are just all around bad for a community since abandoned houses lower property values and it also makes municipalities vulnerable to forces like crime and especially corporate America. I believe that you will see the destinies of towns taken over by other parties because they have the cash to do as they please.

But I think foreclosure aid is a complete utter waste of time and money. These homeowners don’t want to be saved. They have done the math and even if they keep their homes, there is no way in hell in their lifetimes they will able to recoup the same level of equity they did in the past 5 years. Even if they are offered workouts by their lenders, there is no incentive to take them because the house is going to be worth less money than what they are paying for.

Of course lenders are freaking out because the last thing they want to deal with is become landlords. Usually what happens is that the distressed property community jumps in takes those properties from the lenders for a very low price but from the amount of inventory that is piling up it appears there are not alot of takers.

I conclude it is due to the following reasons.

1.The investors are waiting for the market to really bottom out, to the point that
the lenders are so exasperated that they just toss the keys over to them.
2.There is no money to invest or at least investors do not want to touch anything
related to real estate.
3.It’s all garbage. Whatever is out there right now is not worth buying
4.The process of distressed property investment is to be able to get something cheap
and to sell it off for a profit to another party. In this current environment it is
very difficult to find those parties.

Barry of the Big Picture had this to say.

Thursday, March 06, 2008 | 10:30 AM

The hallucinogenic spin-meisters over at the National Association of Realtors are once again, misstating what their own data indicates:

Flat Existing-Home Sales Likely Before Gradual Recovery
The volume of existing-home sales is expected to hold steady through late spring, with a gradual recovery during the second half of the year as the mortgage situation improves in high-cost areas, according to the latest forecast by the National Association of Realtors. Lawrence Yun, NAR chief economist, said many buyers have been waiting for higher mortgage loan limits. “The higher loan limits for both FHA and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions,” he said. “Therefore, a notable rise in home sales can be anticipated in the second half of the year."
This statement reflects a combination of wishful thinking and factual misstatements. Let's review the specifics.


First, the Pending Home Sales Index fell 19.6% from year ago levels. This is hardly a "flat" number, as described by their PR release. This is significant, as the NAR itself notes in the footnotes to their The Pending Home Sales Index:
"There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons."

Hence, the data that matters most is not the change from December to January, filled as it is with seasonal anomalies, but rather, the January 2007 to January 2008 comparison. That showed almost a fifth lower than the prior year's index.
When we consider the rest of the data that's out there, its apparent that stabilization is not the correct word:

We are near stabilization in the housing market as we are near to landing astronauts on Mars. It will happen eventually but not for a very long time.

Pain don't hurt

Besides Donnie Darko, two other moments of brilliance in Patrick Swayze's career.

Patrick Swayze - Chippendale
Uploaded by tressage

Patrick Swayze and Chris Farley



Road House

We are all praying for you buddy.

GREENLIGHT: Grand Central is rolling

Grand Central is now operational. You may proceed to your commuter destinations. I did a quick walk through and saw a NY1 journalist/Camera man running around doing interviews. It is still packed but moving.

Breaking News: Building Collapse Grand Central Shutdown

A building collapsed in East Harlem causing all service to be suspended from in and out Grand Central. For further details go to Curbed.

After hearing what happened, I walked through Grand Central and it has become the impromptu staging area for stranded commuters. People are standing around with their cell phones trying to make other arrangements, some are staring at the train schedule screens. At the information booth area there is a MTA employee stoically answering the same questions over and over again. Service has been suspended and we do not know when it will start up again.

More later.

And you give me a paine Elaine

Actually she doesn’t. I’m just making a reference to the Stella Pevsner book.




Elaine Clayman is considered to be one of the big guns of not only of Brown Harris Stevens but also of her profession. From what I can recall, at one point she was part of a select group that had listings worth the GNP of a small country. As a titan of the industry, she does not just bring home the bacon; she brings the whole f**king IHOP. Among the benefits of her success is a rumored ranch in Latin America and a powerful presence where even the powers that be of Brown Harris walk very softly around her.

She also has her own group, which is not surprisingly called the Elaine Clayman group and includes her daughter, the rather attractive Justine. Ms. Clayman’s is so big that she even has her own marketing team.

Brown Harris Stevens is considered to one of the premiere white shoe firms. One of their biggest deals was the Rupert Murdoch purchase of his apartment at 834 5th. Brown Harris Stevens prides itself on this image of respectability and prestige. Anything that denotes otherwise isn’t just frowned upon. It is given a pair cement shoes and tossed into the east river.
At one point they enforced a policy prohibiting craigslist which obviously they have changed.
And it was rumored at one point to have been one of the parties that were approached to purchase Citi-Habitats before they were sold off to Corcoran. Allegedly Brown Harris Stevens outright refused to consider it due to the, how should I put it, the difference in broker culture.

Which is the reason why I was completely baffled when Curbed published the Clayman Group ad proclaiming

Chelsea Penthouse Foreclosure Sale.

If you go to the ad now, they have completely changed it removing any mention of the word foreclosure and in fact the entire ad has been changed in a more positive tone.

How this came to light, I do not know. Someone like Elaine Claymn and Brown Harris Stevens would never allow themselves to be associated with the word foreclosure. Distressed maybe or motivated seller but not foreclosure.

Why did this occur? There are two possibilities.

1.Somebody f**ked up.
2.The Manhattan market is more f**ked than we are led to believe

The Grunt is going to go for door number 2. When it comes to marketing, there are fubars, I know this from my personal experience. But there are checks and balances in place to prevent that type of douchebaggery.

From the Curbed comments, it appears this listing has been on the market longer than Britney Spears has been without panties. And it might not be the only one to join the ranks of the foreclosed.

Wall Street is getting its ass kicked in on a daily basis, the economy is getting pummeled and PODUS is in denial about a recession which is the same thing his Dad almost 20 years ago. That being said, it is not a matter if but when Manhattan will fall in line with the nation’s housing market.

Great Restaurant in downtown New Bern

While my wife and I have eaten lunch many times at Fred and Claires restaurant in downtown New Bern last night was the first time we have eaten dinner there. Wow, we were impressed. Last night around 7 pm we decided to go downtown and eat and were heading for the Chelsea. With a 45 wait to be seated we were to hungry and tired to hang around so we drove around the corner to Craven Street and stopped at Fred and Claires. Upon entering we were greeted by the owners, Martin and Jan, who seated us and watched to see we were taken care of. The service was great, the background music was soft and romantic, and the meal was fabulous. A truely fine dining experience. We have decided that this will be out bi weekly dining out place. Try it out for lunch or dinner.

The answer to the Sub Prime Crisis

You too can be your very own loan shark.

A family member turned me on to this site called Prosper.com which I think is a brilliant idea but an indication of the state of our nation. Here's the link that describes the entire process.

In a nut shell it is basically people to people lending. The site acts as the middle man and takes a cut of each transaction. It is definitely a brilliant idea and my impression that this site is on the up and up is this.

What if I have poor credit?
Prosper isn't the best place for people with bad credit. You may want to try to improve your credit score over the next few months and then apply for a loan on Prosper. If you need help with credit repair, please click here.

They are looking for qualified borrowers which is cool. What I am concerned about is that there will operations that will not be as ethical and I can see operations of this nature popping up in the near future.

Credit is dead. The housing meltdown was primarily due to cheap money based on credit. And as lending standards have tightened up, people are now looking for others sources of funds.

The banking industry should also watch this industry very, very closely. You can already get an mortgage online and if this type of lending becomes more popular, then it is going to get really hairy for the lending industry.