“In an effort to halt what one official called ‘an investment world version of a run on the bank,’ state officials froze withdrawals Thursday from a $27 billion investment fund that local governments drained by almost half during the past two weeks.” (bold type by me for emphasis)
“‘It is certainly unprecedented, and there is a nervousness out there that we’ve never seen before,’ Broward County Commissioner John Rodstrom said.”
This is nuts. What say you King County? Did I not read a few weeks ago about some of the investments King Co. made were possibly suspect and tied to mortgage securities?
The mortgage securities problems are reaching out and touching everyone. What happens to government municipalities that go broke? What happens to these municipalities when those folks (and there are many) in suspect loans that have no “escrow reserve acct.” do not pay property taxes. Traditional mortgages have “escrow accounts” which are in place to pay property taxes.
The Mortgage Queen Spider has evidently spun her web much more broadly and intricately than anticipated—many more objects are getting caught. Perhaps the Mortgage Queen Spider likes warmer climates, thus sparing Seattle and vicinity. Time will tell us, I suppose.
Update: This is exactly what I’m talking about regarding property taxes.
“Treasurer’s offices all over the country are bracing for the day when lenders stop paying the taxes on many properties in the worst hit neighborhoods.”
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16 responses so far ↓
1
Buceri
// Nov 30, 2007 at 1:04 pm
A co-worker has been hired by a bank just for the next 2 weekends to show houses to bidders. 60 houses going from foreclosure straight to auction. No point in wasting their time listing them. This is for the Tampa area.
2
steve-o
// Nov 30, 2007 at 1:23 pm
From a Billings Gazette article:
“The subprime investment jitters have hit Yellowstone County government. On Tuesday, Yellowstone County Commissioners asked the Montana Board of Investments to return nearly $72 million of its investment funds because of the potential exposure to risky loans and other concerns.”
“Yellowstone County Finance Director Scott Turner said he just got nervous and so did the commissioners. ‘All three agreed to redirect the money to the bank for now until we get a better comfort level with what’s going on,’ Turner said”.
“In addition to the subprime risks, Turner said he could no longer get a quote on the daily yield or the investment returns on county funds.”
http://www.billingsgazette.net/articles/2007/11/28/news/local/18-countyfunds.txt
3
softwarengineer
// Nov 30, 2007 at 1:25 pm
NOT TO WORRY SEATTLE
The local Seattle subprime mortgage mess will clear up under the new banking negotiations called the “Hope Now Alliance” and the Bush Administration.
The Catch:
Example mortgage interest freezing will only occur on ARMs suddenly going from 7.5% [a low teaser rate...lol] to like 11% and here’s the part that will really get you rolling on the ground laughing [if you're looking at Seattle sized mortgage payments] , its divided in groups that can afford to pay the restructuring and those that can’t.
Sounds like a Jumbo loan at 3.9% [a real teaser rate] going up to like 7-8% are excluded. By the way, in Seattle jumping to even 7-8% will totally destroy our local fragile market. Yes, Nostradarnus, even a rocket scientist can figure that one out.
They should rename it the “Hopeless Alliance”; as the key welfare recipients are Wells Fargo, WAMU and Citi; with Bush wildly waving his hands around in the background.
See the proof:
http://www.rgemonitor.com/blog/roubini/229674/
4
steve-o
// Nov 30, 2007 at 1:25 pm
How do I paste in a web link without creating 2feet of blank space in my post?
5
S-Crow
// Nov 30, 2007 at 1:36 pm
Software-
Excellent. Now I’ll just wait to qualify for the New Hope Alliance program and keep my interest rate frozen for several more years. No need to refinance. The government will do if for me!
6
Thaxter
// Nov 30, 2007 at 1:38 pm
Can you give any more information than that you have heard King County may have toxic mortgage elements in its pension fund? I have a friend who works for KC, and if this is true, I’d like to warn her to look into it.
7
S-Crow
// Nov 30, 2007 at 1:49 pm
Thaxter-
This is straight from King County website, but I’ll try to dig up other sources I read about them starting to watch their exposure.
http://www.metrokc.gov/finance/news/CommercialPaper.aspx
8
Buceri
// Nov 30, 2007 at 1:51 pm
What happens if you already lost your house? Do you get it back?
9
Pondscum
// Nov 30, 2007 at 2:00 pm
King County is mentioned in the Bloomberg article about the Florida panic:
The Florida pool, which was the largest of its kind in the U.S. at $27 billion before the recent spate of withdrawals, has invested $2 billion in SIVs and other subprime-tainted debt, state records show. Connecticut, Maine, Montana and King County, Washington, are among other governments holding similar investments, in smaller quantities.
http://tinyurl.com/yw62ee
10
biliruben
// Nov 30, 2007 at 3:36 pm
Pondscum!?! Not THEE pondscum?
Does Smallworld mean anything to you?
11
Pondscum
// Nov 30, 2007 at 4:01 pm
Might be a different Pondscum although I haven’t met any others recently…. Smallworld?
12
biliruben
// Nov 30, 2007 at 4:12 pm
You must not be him. It was company that ran a stock market style roto baseball game. It used to be great fun. Sporting News bought them out and started charging for it. Alas.
13
Jonny
// Nov 30, 2007 at 4:29 pm
“Connecticut, Maine, Montana and King County, Washington, are among other governments holding similar investments, in smaller quantities.”
God, I could swear I’ve heard of this “King County” somewhere…
14
TJ_98370
// Nov 30, 2007 at 4:52 pm
King County Investment Pool fund invested $53.5 million into an SIV called Mainsail II
.
see forums
15
Mark L
// Dec 1, 2007 at 9:53 am
Hope Now Alliance just means that there would be more deadbeats in the neighborhood where I eventually do buy a home. They are the ones who won’t maintain their home or yard - they can’t afford it. It will be like renting next to Section 8’s - only now it is long term proposition.
16
old timer
// Dec 1, 2007 at 12:57 pm
@ Mark L
You should ‘be kind’ toward the section 8’s.
Many have no cultural history of property stewardship.
A nomadic existence in a world of sub-par rentals and the neighborhoods they are located in have given little guidance in the ways of the landed gentry.
Your role as a neighbor should be that of a patient mentor, giving them instruction in the approved methodology for dealing with dead automobiles, cigarette butts, and assorted junk food wrappers.
The rules of proper deportment should also be exemplified by mowing the grass, keeping the audio devices to a sonic bubble of 10 feet, and having no parties of more than 6 attendees that last beyond midnight.
In time, these section 8’s could become true members of the propertied class if their period of residence and instruction could last long enough for the course to be completed.
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