Weekend News Roundup

Wow, lots of stories in the local papers this weekend about the slow housing market. Too many to post separately, so here’s a roundup of the weekend news. Let me know if I missed anything.

Everett Herald: Snohomish County builders slash home prices

Mike Pattison just took his own advice and bought a new home in the Silver Lake area.

He bargained hard for a lower price and even convinced the builder to throw in furniture.

“I’m a believer in our message,” said Pattison, who works for the Master Builders Association of King and Snohomish Counties. “It’s a great time to buy.”

Todd Britsch also makes another appearance in this article to repeat his “double digit appreciation returning soon” prediction. Fun times.

The Olympian: Families fight bad economy: Local people downsize, rethink budgets and reduce spending

Lynette Avery and her family used to go out for dinner every Friday. They’d take turns choosing the place – Red Robin, a pizza parlor or a nother family-friendly spot.

But in May, they were forced to move out of their Bucoda home because they couldn’t afford their mortgage payment. The family settled into a Tumwater rental.

“It was devastating,” Avery said of losing her home.

While it’s certainly sad when people lose “their” homes, what is more sad to me is how many people allowed themselves to be brainwashed into thinking that jumping head-first into a dangerous loan in order to overpay for a house was more important than financial prudence and patience.

Seattle Times: Homebuilders in region hurting despite what you see

It’s hard to find physical evidence that homebuilders in the Puget Sound area are suffering through what may be the worst downturn since the 1970 Boeing bust.

Gun-shy buyers aren’t unique to the new-home market, and that’s the problem. As the mortgage industry has staggered, foreclosures have risen, and prices have dropped throughout the market. Buyers for all types of homes sit on the sidelines.

Cumulatively, all these factors are causing a major decline in new-home construction here because new-house buyers mostly are move-up buyers. If they can’t sell their present homes, they can’t move up.

Wasn’t it just a year or two ago, as the housing markets in Florida and SoCal were just starting to go bust, that we were assured that builders here had learned from the mistakes made in those markets, and would not be facing such a dramatic slowdown? I wonder what ever happened to that.

Seattle Times: Downtown slowdown: Seattle, Bellevue building projects take a hit

How many construction cranes did you count the last time you drove through downtown Seattle or downtown Bellevue? Ten? Twelve? More?

Count them while you can.

The credit crunch and related economic woes are drying up the development pipeline in the region’s two commercial hubs. More than two dozen projects are on hold, many because developers say they can’t borrow money to build.

“It’s a different world now,” says Seattle land-use economist Matthew Gardner. “The banks have shut their doors.”

Different, yes. Unforeseeable, not really. But unfortunately, gung-ho builders were only interested in listening to the rosy predictions of people like Mr. Gardner, and ended up setting themselves up for this.

Seattle Times: Prospective condo buyers in Seattle area sitting on the fence

Sometime around the end of the year, the first residents will move into Bellevue Towers, Bellevue’s tallest skyscrapers.

They may have plenty of elbow room for a while.

The twin, 42-story luxury condo towers are nearly finished. But just over one-third of the 539 units have been sold.

“We had hoped to be two-thirds sold by now,” Scott Eaton, a principal with developer Gerding Edlen, said recently. “It’s a different world.”

The financial crunch is squeezing builders of new for-sale housing of all types, including those big new condo towers rising toward the sky in downtown Seattle and downtown Bellevue. More than 2,300 condo units are under construction in the two city centers, according to figures compiled by principal Dean Jones of the condo-marketing firm Realogics. Almost all are scheduled for delivery within the next year.

So far fewer than half have been sold. In some projects barely one-quarter of the units are spoken for.

Note that this is only counting units in the “city centers.” Who knows how many more there are in the surrounding neighborhoods and towns. So either a large number of condos will be eventually converted to rentals, pumping up the rental supply, or there are going to be some crazy deals on condos in a couple of years. Either way, it looks like a win for affordable housing.

Update: One more from the Seattle Times this morning: Stalled projects, scarred neighborhoods

A crater-sized hole near Green Lake. A derelict corner in Lynnwood. A sorry shopping mall in Kirkland.

Retail development projects, slowed or stopped by a flailing economy, are revealing themselves as blights on neighborhood business districts.

You can add one in my neighborhood to that list, as the developer of the long-promised “Kenmore Village” is having trouble finding an anchor tenant and is putting off the project, waiting for the financial crisis to settle and the housing market to improve.  They could be waiting quite a while.

(Debra Smith, Everett Herald, 10.26.2008)
(Diane Huber, The Olympian, 10.26.2008)
(Elizabeth Rhodes & Stuart Eskenazi, Seattle Times, 10.26.2008)
(Eric Pryne, Seattle Times, 10.26.2008)
(Eric Pryne, Seattle Times, 10.26.2008)
(Stuart Eskenazi, Seattle Times, 10.27.2008)

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

44 comments:

  1. 1
    deejayoh says:

    The term “sitting on the fence” implies that people are wavering about buying those condos. I don’t think people are wavering at all.

    The only people that are “on the fence” are probably those that have a deposit down on a condo. Everyone else is pretty firmly planted on the other side of the fence from buying.

    Getting people “on to the fence” would be a victory for developers at this point.

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  2. 2
    Lurker says:

    Speaking of condo buyers sitting on the fence, I wonder how The Escala is doing with that plan to raise prices in an attempt to get buyers off the fence?

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  3. 3
    Ben says:

    I think that price raises that you see now are marketting fluff – some developers really believe that you can create the exuberance again by pretending that prices are still going up.

    I reckon that their tune will change when they get real offers backed by banks that reflect the more accurate price that the property can command.

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  4. 4

    GOOD TAKE BEN

    Tim’s blog have been documenting the idiocy of alleged “price increases” in the Seattle area for years now….i.e., when you take a 1920 “money pit” in Seattle and pour your retirement’s savings into it to get a -5% or even a +5% return on your investment, that’s no investment…..its comparable to money lost in the stock market today and just like today’s stock market, no buyers anyway.

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  5. 5
    Thomas B. says:

    From MarketWatch: “New-home sales perk up on gains in the West”

    I wonder if this is just a shell game where builders sell inventory to a shell corporation.

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  6. 6
    The Tim says:

    Here’s a different take on the same September new home data from Calculated Risk: September New Home Sales: Lowest September Since 1981

    And here’s another post with a long-term graph of new home sales by year: New Home Sales: Annual and Through September

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  7. 7
    EconE says:

    I wonder if those people with deposits will actually close on their condos…especially the soon to be “investors”. If they have been doing their homework and can see how much of a bath the current “investors” are now taking, (I’m not just talking about carrying costs) perhaps they’ll realize that walking away from their deposit from the get-go would have been less costly.

    I certainly can’t say that I know any buyers “on the fence” The few renters I know downtown laugh hysterically about the prices that the sellers and builders think they’ll get, and have absolutely no intentions of buying…even with the stupid “teaser discounts” (paid closing costs/Scooter etc) or “fear of loss” (buy now before we raise prices) tactics that the builders throw out there

    I also know of some condo owners that are trying to sell.

    What do those owners I know want to do?

    Rent.

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  8. 8
    DrShort says:

    I rent in the 5th and Madison condo building completed last year. Sales have come to a halt and they’re now renting out the unsold units on craigslist.

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  9. 9
    mukoh says:

    Thomas B.
    No. Shell games wouldn’t work. Since you have to pay excise as well as taxes. Another tin foil hat huh.
    Lots of builders slashed prices 10%-20% allowed by banks to get rid of a ton of units in September, since the prices on finished lots has gone down to where it is sensible to buy.

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  10. 10
    anony says:

    I walked by Escala on Saturday and it seemed they were hard at work building, even on the weekend. I don’t know what’s up with that. Is it possible to find out how many units they are selling?

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  11. 11
    Thomas B. says:

    mukoh @9

    What is cheaper, losing an additional 20% in value on a property or paying taxes? And prices are still not sensible. As I’ve said several times before, prices in the Seattle area were ridiculous back in 2005.

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  12. 12
    Angie says:

    While it’s certainly sad when people lose “their” homes, what is more sad to me is how many people allowed themselves to be brainwashed into thinking that jumping head-first into a dangerous loan in order to overpay for a house was more important than financial prudence and patience.

    Tim, you may want to consider reining in the snide remarks (“their” homes) when your comments could be read with respect to specific peoples’ stories of upheaval and loss. Makes you look like you’re kicking them when they’re down, and that doesn’t reflect well on you.

    (Lest the readership forget, The Tim enjoys the luxury of not having to pay for the roof over his head as he is a caretaker for someone else’s property. I think it’s appalling that he gets so snotty about other peoples’ housing choices, especially when they end badly, because he has minimal experience with the real-life tradeoffs and choices that, you know, 99.999% of the rest of us have to make.)

    Anyhow, Tim, I was impressed when you offered “sorry you lost your job” comments when writing about the recent layoffs at Redfin and Zillow. It did seem a bit pro forma, but lord knows those two companies have been raked over the coals on these pages enough times and I was glad you did it.

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  13. 13
    mukoh says:

    Thomas. How is swapping a property to a shell going to affect the underlying assets value? It is still going to drop.;

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  14. 14
    The Tim says:

    Angie, I put “their” in quotes because when someone is living in a home in which they have little to no equity, it really isn’t “theirs” at all, it is the bank’s. I would argue that until you have completely paid off your mortgage, the house still belongs to the bank. At the very least, I don’t think someone can really claim a house is “theirs” until they’ve got over 50% equity. It’s not a snide remark, it’s a point of fact.

    And secondly, I really don’t understand why you continue to be so hung up on my present living arrangement. You act as if I’ve never had to deal with “real life.” Just because I am currently caretaking does not mean that I’ve never had to deal with paying rent.

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  15. 15
    Angie says:

    At the very least, I don’t think someone can really claim a house is “theirs” until they’ve got over 50% equity. It’s not a snide remark, it’s a point of fact.

    Dang. You ought to go over to the King County Courthouse and explain to them how it works, or something, because all those legal records seem to indicate that this house we’re living in belongs to us, even though we’re a long way from paying it off….

    And secondly, I really don’t understand why you continue to be so hung up on my present living arrangement. You act as if I’ve never had to deal with “real life.” Just because I am currently caretaking does not mean that I’ve never had to deal with paying rent.

    I just remember how shocked I was to learn that you were living on another person’s largesse, when you were so high and mighy about other peoples’ choices. Since you’re being so unkind again, it seemed like a decent time to bring it up, just in case the folks who have tuned in lately had missed that point.

    What irritates me is that it’s easy to pontificate about being “patient” and “prudent” when you’re relieved of an expense that typically consumes ~25% of people’s budgets. Most people don’t have that luxury and try to make the best of the available options. I’m sure you and I could recite the arguments chapter and verse about all the bad moves on the side of borrowers and all the bad moves on the side of the lenders and all the bad moves on the side of the RE industry that contributed. Yadda yadda.

    Fact is that no matter who’s at fault in the system, for the vast majority of people buying a house is a big deal and having it fall apart *is* devastating. The lady in that comment from the Olympian is telling her story, and your followup makes you look like a jerk. I’m just saying.

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  16. 16
    The Tim says:

    And obviously you’re free to hold that opinion if you so desire.

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  17. 17
    b says:

    Angie –

    Do you also feel sad for people who buy Escalades and have them repo’d because they can’t afford them? The DMV also lists them as the “owner” of that as well… I would feel badly if they were kicked out of a rental and living on the streets. Kicked out of a home they could not afford, which likely gave them 3-9 months of free rent during foreclosure, to have to *GASP* rent a home in Tumwater does not make me sad at all.

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  18. 18
    TJ_98370 says:

    Angie-

    Another perspective is that the overall economy is in a crisis, which affects me personally and I am pissed about it, partly because of the willingness of hundreds of thousands of short-sighted opportunists who jumped onto the fantasy escalator of “real estate always appreciates”. As a frugal person, who has no debt, and who lives well within my means, I have little sympathy for home-debtors who may be facing foreclosure because they bought more than what they could afford. Did anyone hold a gun to their head when they signed the contract? A few years ago, the MSM was calling these people economically “sophisticated”. Apparently living paycheck to paycheck, teetering on the verge of bankruptcy are credentials of economic sophistication these days.
    .

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  19. 19

    For much of the recent past, buying a house was a reasonable and prudent thing to do, with mortgage payments at or just slightly higher than rents…It had to be scary for people who wanted to buy a house when they saw prices skyrocketing and felt that if prices continued to rise, they’d never be able to buy, and that’s what was being preached to them. some of us who didn’t buy at the peak were smart, and some of us were just lucky.
    Maybe it’s the liberal in me, but even though I don’t have any compassion for the Wall Street firms going belly up, I have great compassion for people losing their homes, even if they were victims of brainwashing and didn’t have all the resources or wherewithall to have made a wiser decision.

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  20. 20
    Matthew says:

    I have a hard time feeling sorry for people like my ex-gf’s landlord who rents out 4 out of the 5 bedrooms of his Phinney Ridge house, pulls out a massive HELOC and decides to spend it all traveling the world, driving a new Audi, all the while being unemployed.

    His HELOC just got yanked by the bank (his Bali trip cut short) and I’m thinking that its just a matter of time before one of two things happens:

    1. He enters foreclosure
    2. He actually has to get a job

    Reality is a mofo. Stories like this are a dime a dozen. If you have good credit, put a substantial amount of cash down on your house, got a fixed rate mortgage, and plan on staying in your home for a long time, WTF do you have to worry about?

    If you took out an adjustable rate mortgage, or bought a house that you couldn’t afford, then guess what??? Your screwed. It’s not the end of the world, move out of your house and rent for a while. A readjustment of priorities is going to be good for some people.

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  21. 21
    EconE says:

    Do you have compassion for the ones that are losing their homes because they bought an extra condo to flip Ira?

    I don’t.

    Case by case basis as far as I am concerned.

    Eating out every Friday can add up to $300 pretty quickly for a family…even at Red Robin and Pizza Parlors. My parents never took me out to eat every week. I still don’t eat out that often.

    If $300 a month is the difference between sinking and swimming when it comes to “owning” a home…as it was in the article…you shouldn’t own a home.

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  22. 22
    patient says:

    Creds to The Tim for not bending over to readers who don’t like his posts or views.

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  23. 23
    Alan says:

    Angie is a real sweetheart. Her sympathy towards people who can’t afford housing has been lacking in the past:

    Popular options when one can’t leave or make more money include: commuting long distances to one’s job from an affordable area; living in crowded conditions and splitting the cost of housing with other people; getting government assistance to pay for housing; and giving up housing altogether and sleeping in one’s car, or out in the open.

    So is that really what you think about people who can’t afford a home in this area? Or is it only the ones who can’t afford it but purchased anyway that you have sympathy for?

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  24. 24
    what goes up must come down says:

    Angie did you buy the next rental yet — the one that will make you rich?

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  25. 25

    No, I don’t have compassion for flippers, but there were actually a lot of people who qualified for conventional fixed mortgages who were conned into subprime loans. These folks I feel bad for. Some lenders and agents are very convincing con men.

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  26. 26
    buyStocks says:

    Geez people, have some sympathy here. While I agree Angie’s a bit of a rude extremist on her view of The Tim, there are going to be hard-working sensible people whom have put 20% down on their home losing their jobs, foreclosing, and losing everything. Times are bad, but on a good note, stock future are way up overnight, so at least this will give some people a day or two of happiness.

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  27. 27
    LeftOverpricedSeattle says:

    If you couldn’t afford the home on ONE income, you shouldn’t have been buying it.

    The problem is that so many people want new cars, nice homes, toys, etc. and work two jobs to afford them that when one of them loses a job involuntarily it all falls apart.

    When I lived in Seattle, only one of us worked and we bought the home we could best afford with ONE salary.

    People signed on the dotted line without thinking it through. Pay for your mistakes and learn from them.

    I don’t have any sympathy, sorry!

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  28. 28
    The Tim says:

    I just would like to point out that I never said I don’t have any sympathy for people that are losing “their” homes. I just said that A) it wasn’t really “their” home to begin with and B) it’s sad, but not as sad to me as the fact that they set themselves up for that situation in the first place.

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  29. 29
    EconE says:

    At least the stories up here (for the most part) try to garnish sympathy for people that only had one home unlike down in California where they try to use the victim card for people who gambled with an extra house in Vegas.

    Besides…if it was “their” home…they wouldn’t be losing it.

    If you are so “lollypopping” dumb that you get swindled on your loan then perhaps you should not only NOT own a house, but you should have to reapply for whatever job you are supposedly smart enough to have.

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  30. 30
    Angie says:

    Ira nails it at #19. I encourage you all to heap your scorn on the condo flippers and the guy Matthew talks about in #20. Generally people with famiiles who were trying to get on the elevator before being PRICED OUT FOREVER!!! were just trying to make the best of the available options.

    FWIW, I still sincerely doubt Seattle will see the day when the average Joe will be “priced in”, i.e., median income be able to afford median house. The post Alan linked to was part of a conversation about what people do when those conditions aren’t met. This would have been apparent had he even minimal reading comprehension skills.

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  31. 31
    TJ_98370 says:

    I do have sympathy for those who have encountered circumstances beyond their control which resulted in financial hardship. However, that does not include those who willingly “speculated” on the belief that real estate would continue to appreciate, of which I believe was the mind-set of the majority of those in trouble today. I know for a fact that alot of buyers knew that they were pushing it when they bought that overpriced house with an interest-only ARM, but what the hey! They could always sell at a profit in a couple of years, right? Well, they bet wrong and I very much resent what this type of behavior has cost / will cost the overall economy and the taxpayers.
    .

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  32. 32
    Alan says:

    Angie, I just figured that if you are going to choose to interpret other’s comments as “snide” and “kickuing others when they are down” then turn about is fair play.

    I’ll try to be less subtle when communicating with you in the future.

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  33. 33
    deejayoh says:

    FWIW, I still sincerely doubt Seattle will see the day when the average Joe will be “priced in”, i.e., median income be able to afford median house

    That has never happened in the past and doing the math suggesting that it will ever happen is naive.

    Home ownership % in King county is 59.8%. Seattle is closer to 50%. So 40 to 50% of people whose income is included in the “median” income are not home owners. So do you think those left out make more or less than the median? If you answered “less” you are probably right.

    Find me the median income of a homeowner and then do that math. II will bet it is significantly higher than the overall median for the county.

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  34. 34
    EconE says:

    Perhaps Tim should have a post where we can all discuss who we have sympathy for.

    I myself have sympathy for anyone who loses their home due to extenuating circumstances such as illness, job loss, divorce etc. These are all unforeseen events. A rate reset leading to an increased mortgage payment is not.

    Yes, I agree with Ira that some people were steered unsuspectingly into these loans but it is hard for me to allow everybody to play the “stupid” card.

    I know an immigrant family in Los Angeles that bought a house in the “barrio” (yes…a very bad part of L.A.) near the peak for a little over 400k. They have added a bedroom and bathroom to the original 2/1 so that they could rent out 2 bedrooms in order to make their mortgage payment. They are barely making ends meet yet continue to make their payments even though comparable houses are going for 150k. I currently have more sympathy for this couple, that I feel is throwing good money after bad, than I would if they were to just give up and move to a rental (comparable to the house they are already in) for 1/3 of their monthly outlay. This would allow them to eat more than beans and rice with little left over to provide anything more than the bare necessities for their children. They realize that they are basically screwed, but still make the payment. They already work far more than “full time” so getting another job isn’t an option.

    They’d actually be better off losing their house.

    As I stated before…case by case basis IMHO.

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  35. 35
    TJ_98370 says:

    EconE –

    Do you think your Los Angeles acquaitances are / were being exploited in some manner, like maybe taken advantage of because of language / cultural translation difficulties?

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  36. 36
    David Losh says:

    Yes, absolutely, every one was.

    You all talk as though the buyer should have known that they were over paying. The lender has the responsibility for the money they lend.
    Yes these people should walk away, form an LLC with a straw buyer, and have that buyer sign a quit claim at closing then buy another place for less.
    Yes these people have every right to con, swindle, lie to, and cheat the lender at every oportunity. The lender is a thief.
    The entire economic melt down lies at the feet of greedy lenders who are hoping for more free money which every one seems happy to give them.
    You buy stocks, that’s free money, you put money into IRAs, that’s free money, you buy insurance, open bank accounts, buy with credit, pay utility bills. All of those activities give these crooks more free money to lend so they can get more free money. Then when they don’t want to lend we give them tax dollars.
    The price of Real Estate was determined by how much money a lender would lend. A buyer can’t buy unless the lender agrees. So it’s not what the buyer will pay that determines the price, it’s how much the lender will lend.
    That’s the system.
    So today you are all saying it’s the buyer, or the government, or some other entity, no, it’s the lenders. It’s the lender’s agents who are asking for 20% of your hard earned, earned dollars to make them feel better about the swindle.
    The people who deal in credit are the crooks. That should be clear by now.
    If there is blame, it’s the people who manipulate the credit markets. That’s what needs to stop. We will live better without it.

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  37. 37
    anony says:

    I for one do feel bad for those who were “stupid” in buying a home in the last few years. Almost every “expert” was saying buying the biggest place you could find was the wise financial decision. Everyone’s friends who had bought were inviting them over to the granite filled house and bragging about the equity that was so much more than you could ever get in a 401K in the same amount of time. It was your best chance at a decent retirement! Those”stupid” people were quickly being priced out. You could sign a piece of paper and get the exact house you wanted with assurances of untold wealth and the current common wisdom that it was the responsible thing to do. It would have been very easy to bite, and I almost did.

    There is that selfish bastard side of me that says they should lose the home and it should go to me at reduced price for my discipline in waiting and saving. After all, who deserves it more, the one who overextended themselves and is now at risk of losing the home as a result, or the renter who scrimped and saved and went without the home for all those years waiting until they were in a firm financial position to buy it?

    I’ll admit I think I deserve the house more (remember I’m a selfish bastard), but I still feel sympathy for those who were screwed by the price runup and the fact that they bought into the frenzy.

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  38. 38
    Jillayne says:

    I feel bad for the victims of fraud. This goes beyond predatory lending to flat-out fraud that the homebuyer or refinancing homeowner had no knowledge of until it was too late. For example, mis-using the government dislcosure forms or not giving them out at all, or doing a pure bait-and-switch. Sometimes these folks were told that they were getting a fixed rate loan only to find out later that it was an ARM. This is only one of many examples I could show you. I have the case files. It’s horrifying.

    When a client asks us to explain their loan docs and flat-out lying occurs within a business relationship, I feel bad for those folks. I’ve talked with some of them and they do feel extremely stupid. Their intuition told them something was up, but they dismissed it and “trusted’ their LO. Perhaps, personally, I sympathize too much with the victim. I see this and admit it.

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  39. 39
    EconE says:

    TJ…

    I honestly can’t say if they were “exploited” or not as I wasn’t there for the transaction. I’d be willing to bet that cultural exploitation in some areas of So Cal was almost “the norm”. I think they just wanted part of the “American Dream” and were naive.

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  40. 40
    patient says:

    To add on to this turned sympathy post I feel bad for the kids in families facing foreclosure. Not only are they innocent and will have to leave what probably was trumpeted to them as “their” rooms with their choices of this and that, worse they most likely have had to endure a lengthy time of their parents distress with likely fights and general unhappiness. That sucks but should the borrowers be bailed out with mine and your money? Hell no.

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  41. 41
    buyStocks says:

    Lets try not to get overly sentimental here… (I’m waiting for somebody to sympathize for the pets that are also innocently enduring the stresses of foreclosure)

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  42. 42
    David Losh says:

    No, sorry, this is a swindle. Lenders had full control of the market place. They made billions of dollars, if not trillions. They are sitting on what has been discribed as “mountains” of cash.
    You were not smart, they were not stupid, every one was swindled. You rent a house from whom? Another investor? A Land Lord? How smart is that?
    Some one saw a chance to buy a home, somthing they have been told since childhood is the right, responsible thing to do. How stupid was that?
    The lenders were passing out free money and you didn’t take it.
    No the lenders need to pay.
    The lenders created this problem, the lenders made the money, they should pay. There again you don’t want the lenders to pay. You want the lenders to keep that “mountain” of cash so your IRA will look solid.
    Lenders need to pay. Home owners should keep the properties they bought refinanced, or are in possesion of. They should not pay any more than fair market value with a great, generous, repayment plan.
    You should be able to buy a house, if you choose, for no money down at great, generous terms. Lenders lend money on assets, have them do that, nothing more.
    Problem solved.
    We are spoiled by the money for nothing notion. Lenders should lend on business, equipment, credit, at fair interest, and assets. Lenders should not be the main business the global economy depends on for profits.
    It’s a long progression of economic bumbling, but we should not all pay high prices for everything we buy so lenders can have a better bottom line.

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  43. 43
    patient says:

    David I agree. The lenders didn’t secure their money with sufficient colleteral. Colleteral that they had full control over, i.e home appraisal and downpayments. The borrower however did borrow money and spent it. They need to pay back the money to their best ability according to the rules and not whine about it. Part of the rules is that you have the option to foreclose if you can no longer pay. Use it without feeling guilty. The option was fully understood by the lender and it is not fraud or otherwise criminal as long as your home isn’t trashed or you were lying on the mortgage application.

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  44. 44
    The Dude Abides says:

    I’ve been reading this blog for several years and have never felt Tim was mean-spirited.

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