Friday Flashback: “Seattle isn’t like other cities.”

Time for another Friday Flashback! Today’s flashback comes at you from February 2007, as the Seattle Times declared 2007 to be “The year of the condo in downtown Seattle(emphasis mine).

David Thyer[Condo developer David] Thyer insists that Seattle isn’t like other cities, where developers are struggling with an oversupply of new condos. There’s a demand for condos in downtown Seattle, he says, drawing a contrast with the speculative buying frenzy that has led to a boom-bust scenario elsewhere in the country.

On Friday, political and business leaders met over breakfast at the Westin Hotel for an annual review of downtown Seattle. Real-estate economist Matthew Gardner shared Thyer’s optimism, telling an audience of about 700 that demand for new places to live downtown will remain “very positive.”

In Miami and Las Vegas, developers have had to drop their prices after condos outnumbered buyers.

That’s not happening in Seattle, said Dean Jones, president of Realogics, a local condo-marketing firm. Jones said developers in Seattle have learned from the mistakes made in Miami and Las Vegas.

The article goes on to mention a few examples of how Seattle’s condo market is so super-special and different. Let’s see how each of them have turned out…

Olive 8: David Thyer’s development completed in mid-2009, about nine months later than this article said it was scheduled to be finished. After pre-selling nearly every unit, many buyers walked away from their deposits. The developer recently had to resort to an auction to sell the remaining 32 units on the lower floors.

‘1’ Hotel and Residences: Dug a giant hole at 2nd and Pine, which sat empty for over a year. Hole was eventually filled in and paved over, and the fabulous ‘1’ Hotel and Residences is currently a $6/hr parking lot.

Escala: Famously raised prices in early 2008, as the marketers insisted that potential buyers waiting for price drops were “reading the local market wrong.” Held the line through 2009, but were finally smacked with a clue-by-four in 2010 and decided to join the rest of us in reality, announcing price cuts of 20 to 50 percent across the board.

It sure is lucky that Seattle developers avoided the problem of a big oversupply of condos!

What did I have to say about this nonsense back in February 2007 when it was printed? Let’s find out:

So, a bunch of condo developers, condo marketers, and real estate agents all say that “it’s different here.” What a shock. And what evidence, pray tell, do they have to support that assertion? Estimates, intentions, efforts, and (I’m just guessing on this one) a sprinkle of pixie dust.

Of course, I wasn’t alone in calling “BS” on this one. Even my condo-loving buddy Matt Goyer wasn’t buying it:

I think we need an article that looks at the demand side of the equation instead of focusing on supply. Just who are these people who can afford $600+/square foot? Are there really that many suburbanities moving downtown? Is there a big influx of hires coming into Google/Amazon/Microsoft? At what point do they get priced out of the market?

I too am skeptical there is a sustainable market for one bedrooms at $500k+.

As it turns out, the pixie dust ran out, and Matt’s skepticism was well-founded.

The purpose of our Friday Flashback series is to remind people why it’s never a good idea to base your home purchase decisions on the word of someone with a vested financial interest in selling as many homes as possible for as much as possible, no matter what. If you’ve got a good example of local home salespeople or other industry shills on record making fools of themselves in the years before the bubble burst, shoot me an email.

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.

59 comments:

  1. 1
    Poetrywater says:

    Something from CNN about Seattle… Rent vs. buy
    http://money.cnn.com/2010/10/08/real_estate/rent_vs_buy/

  2. 2
    HappyRenter says:

    By Poetrywater @ 1:

    Something from CNN about Seattle… Rent vs. buy
    http://money.cnn.com/2010/10/08/real_estate/rent_vs_buy/

    At the very end of the article:

    “The biggest thing to think about is if you plan to stay in your home for 7 to 10 years,” he said. “If you’re only going to stay there two years it’s definitely better to rent in some of these cities, but if you’re planning to stay there for a while, it’s still a good market to buy even in the renter cities.”

  3. 3
    Buy My House, Idiot Renters! says:

    Speaking of flashbacks, we are coming up on the third anniversary of Mack McCoy’s greatest posting on the now moribund Seattle PI real estate blog. Quoth Mac:

    “The people on this board have extensive experience in the real estate world, and while there may be differences of opinion among them, the fact is that their opinions deserve to carry more weight than those of the amateurs who blog as a hobby.”

    “There are other sites and blogs, some staffed by experts, some by amateurs. If you think that the amateurs have somehow discovered the secrets that the Real Estate Cartel has been trying to keep from you, let me suggest to you that perhaps we’re just letting them think that those are the important secrets.”

    He even included a rap, which included deathless verses like this:

    “Think all the hobbyist
    Need to get ’emselves a life
    Know they ain’t experts
    But they preachin’ like dey right

    Life ain’t like a college playground
    Can’t be passin’ reefer ’round
    Go on talkin’ bout da Man
    And you ain’t even got a plan
    Ain’t got no dollas in yer pocket
    Us pros been makin’ cheese like Wisconsin”

    In the comments. Mack said this about being quoted on the Seattle Bubble blog:

    “Oh, please. Making it onto a site where a buncha kids livin’ on their mama’s sofas blather about stuff they’ve only read about hardly qualifies as an “initiation.”

    Another comment:

    “To tell you the truth, I didn’t even know about the blubblebogs before I got here. I’m really not interested in them very much, but when I went over and saw just ridiculous nonsense being posted irresponsibly – sign, go ahead, quote Mack as calling you unwashed and ignernt – I just wanted to speak my mind on the subject.

    Which isn’t, as it turns out, that there is or is not a bubble and that it is or is not ready to burst. It’s that the future is uncertain, and that the advice of experts is more valuable than the advice of amateurs.”

    Listen to the experts! Ignore the amateurs! Good advice in 2007!

  4. 4
    Dirty_Renter says:

    ‘clue-by-4’…hahaha

    +1 to ‘buy my house, idiot renter’, not only were they experts…they were talking their book.
    Run Forrest Run.

  5. 5
    wreckingbull says:

    +1 to this Friday Flashback in general – Gardner and McCoy both mentioned. Well done.

  6. 6
    Lake Hills Renter says:

    Oh man, I forgot about Mac. That’s for the hilarious reminder. He and his ilk (anyone remember JD from Preview?) are one of the main reasons that real estate agents in general rank just below used car salesmen on my respect meter. Really gotta look for the diamonds in the ruff there.

  7. 7
    Notorious ART says:

    HAHAHA…Is Mack still alive? I remember him making an occasional cameo appearance on SB. Where is he now? Mack, sure drank the RE coolaid alright and was arrogant about it, too. Don’t listen to anyone else but the “experts”. Just a few things “expert”….If RE kept going up who was going to afford it when wages had been stagnant for so long? Wall st was eventually going to run out of ways to finance the entire mess. At some point the credit drys up, the bill is due, and the pool of greater fools can no longer take on more leverage….

    Tim, you should do a special Flash Back Friday for Mack…..

  8. 8
    The Tim says:

    By Notorious ART @ 7:

    Tim, you should do a special Flash Back Friday for Mack…..

    Now that is a good idea. The only problem would be keeping it from becoming a novel.

    Hadn’t seen you around here in a while. I guess bumping into some random dude on the bus made you want to stop by again? :^)

  9. 9
    hinten says:

    Do you remember the time when lenders and banks all but lied to consumers to get them to buy homes and sign up for loans that were riddled with errors, inconsistencies, and lies?
    Yea, that was fun.

    “Unfortunately, consumers are often not able to use the available information to their advantage,” researchers wrote. “In many cases, they do not understand financial transactions, or lack confidence about financial issues. Consumers are also likely to underestimate the risks associated with mortgage loans, despite the information they receive from the lender.”

    What’s even funnier that it is all coming back to bite them.

    “The foreclosure documentation failures at some of the nation’s biggest banks is a kind of karmic justice. ”

    http://www.marketwatch.com/story/foreclosures-gone-wild-2010-10-08?siteid=nwtam

  10. 10

    By Notorious ART @ 7:

    HAHAHA…Is Mack still alive? I remember him making an occasional cameo appearance on SB. Where is he now? Mack, sure drank the RE coolaid alright and was arrogant about it, too. Don’t listen to anyone else but the “experts”. Just a few things “expert”….If RE kept going up who was going to afford it when wages had been stagnant for so long? Wall st was eventually going to run out of ways to finance the entire mess. At some point the credit drys up, the bill is due, and the pool of greater fools can no longer take on more leverage….

    Tim, you should do a special Flash Back Friday for Mack…..

    Gotta say one thing about Mac McCoy: He’s colorful. What I don’t like about many real estate agents is their conformity to the real estate uniform. You know, their picture is on the real estate fliers, a picture of a guy in a fancy suit and a haircut it looks like he paid 125 dollars for. You see the guy in person weaving on I-5 in his BMW while talking on the phone.
    Mac may tow the line on preaching the philosophy, but not on looks or manner. He’s obnoxious and abrasive rather than the fakey smiley “nice” typical agent. He doesn’t have a 125 dollar haircut. In his case, it’s more like ” What’s a haircut?”

  11. 11

    RE: Ira Sacharoff @ 10 – No one has ever accused me of having a $125 haircut. ;-)

  12. 12
    wreckingbull says:

    RE: Ira Sacharoff @ 10 – That’s true. I have to admit he had an almost endearing quality, sort of like a court jester. I actually miss him. Hmm…. I wonder why he does not stop by anymore….

  13. 13
    whatup says:

    Would you please do a post on this topic:
    http://seattletimes.nwsource.com/html/businesstechnology/2013108318_apusforeclosuremess.html
    What do you think is the real implication of banks halting forecosures.
    Will this help the current housing market?
    Thanks.

  14. 14
    Notorious ART says:

    RE: The Tim @ 8

    Yeah, that was me. I wasn’t sure if you remembered me since it had been a while. My wife and I ride the 522/312. I visit SB daily. Haven’t posted much, but when I saw the Mack quotes, I couldn’t resist. Now that I think about it, I kinda miss Mack, he was entertaining after all. I could always count on Mack for a few laughs….Whatever happen to Big Lar(Larry from S-PI RE blog)? Big Lar, needs a Flash back Friday, too.

  15. 15
    David Losh says:

    I’m one of the people who thought down town condos were, or were going to be a good investment. I was shocked to see Olive 8. A friend of mine worked there and it was a hot mess of way over priced BS. Sorry, this isn’t New York, Paris, London, or even San Fransico, but it had a chance to be.

  16. 16
    Tim says:

    Seems like a lot of folks think the foreclosure thing is another dagger for home prices. While I hope that is the case as I’d like to see this thing just get shaken out, it seems to me that this could push those buyers into the general market. Who knows though. How many non-investors are purchasing foreclosures?

  17. 17

    By Tim @ 16:

    How many non-investors are purchasing foreclosures?

    Relatively few if you’re talking about buying at the trustee sale. If you’re talking REO, probably quite a few. I think REO makes a lot more sense for most buyers who want to live in the property, and short sales make more sense for investors (although REOs can be good for them too).

  18. 18
    Notorious ART says:

    RE: whatup @ 13

    No, it’s just delaying the inevitable…

  19. 19
    Lurker says:

    RE: Notorious ART @ 18

    I agree. Depending on how badly this foreclosure thing gets, I think we’re seeing stable housing gains get pushed further and further away.

  20. 20

    By Kary L. Krismer @ 17:

    By Tim @ 16:

    How many non-investors are purchasing foreclosures?

    Relatively few if you’re talking about buying at the trustee sale. If you’re talking REO, probably quite a few. I think REO makes a lot more sense for most buyers who want to live in the property, and short sales make more sense for investors (although REOs can be good for them too).

    I agree. Non investors who buy a house at the trustee sale either have to have cash or the willingness to deal with a hard money lender. Not all hard money lenders are named Vito.
    Plus you don’t get to go into them beforehand.
    Short sales generally don’t attract non investors because they can take almost forever, at the very least a few months. People who are looking to buy a house because they’re essentially looking for a place to live just don’t have the time to wait around for a lender to approve the deal.
    Bank owned homes, REOs, have the advantage of being able to close relatively quickly. The problem with them is that many of them aren’t real pretty. Sometimes you have to use a little imagination to visualize what they might become. There are some nicely fixed up REOs, but that’s more the exception than the rule.

  21. 21
    Everett_Tom says:

    RE: Notorious ART @ 14 – Re:Larry – I think I saw him comment that someone “stalked” him. (e.g. looked up all the publicly available info on him and then sent it to him), and it freaked him out. He stopped posting on the SREP blog after that.

  22. 22
    deejayoh says:

    Another nomination

    Is Seattle Bubble Proof?

  23. 23
    deejayoh says:

    By deejayoh @ 22:

    Another nomination

    Is Seattle Bubble Proof?

    Especially when compared to her last post…

    Why King County Home Prices Will Go Down

  24. 24
    Buy My House, Idiot Renters! says:

    Actually, my other choice for Greatest Seattle Real Estate Bubble Writing Hit is later in the month, having been penned in October, 2006. Any guesses?

  25. 25
    Notorious ART says:

    I got another great nomination and I know The Tim will like it as well….Seattle’s own local celebrity RE agent Kendra “Bubbles are for bathtubs” Todd.

    Kendra wrote in her book (page 214): In my experience, some markets (Las Vegas, Phoenix, and South Florida) are bubble-proof; they might slow down but they won’t slide. They’re simply too desirable and demand is too high

    simply too desirable….Oh really? You know Las Vegas with it’s diversified economy, it would never happen in Las Vegas

  26. 26
    Buy My House, Idiot Renters! says:

    RE: deejayoh @ 22

    That was a great one – Ardell actually identified March, 2007 as the date that we were all going to be Priced Out Forever, as rich Easterners, Chinese, and Venusians flooded into the Seattle real estate market. Good times, good times…

  27. 27
    S-Crow says:

    With B of A halting foreclosures temporarily and as I read they have some 420,000 units in some stage of foreclosure, Mrs. S-crow just did a rough napkin calculation. With a very rough $10-20K owed in arrears on each foreclosure, we are talking about $8 Billion in lost revenue (just payments). And with that, I’m turning off the escrow office lights and heading home.

  28. 28
    The Tim says:

    By Notorious ART @ 25:

    I got another great nomination and I know The Tim will like it as well….Seattle’s own local celebrity RE agent Kendra “Bubbles are for bathtubs” Todd.

    Hey, I’ll give you one guess at who is currently trying to sell the cheapest SFH in Ballard. With two photos. One of which is pointed at the ground in the back yard.

    Previous sale for $380,000 just a few months before Kendra penned her famous “bubbles are for bathtubs” article. Current asking price $209,900. 45% off in Bathtub. I mean Ballard.

  29. 29
    The Tim says:

    A bunch more awesome Kendra Todd listings:

    2360 S Ash St Tacoma, WA 98405 – 31% off the 2005 sale
    10113 Myers Wy S Seattle, WA 98168 – 43% off the 2005 sale
    19802 Mero Rd SE Snohomish, WA 98290 – 52% off the 2007 asking price (on-market since May ’07!)
    14449 26th Ave S SeaTac, WA 98168 – 33% off the 2006 sale
    16102 NE 15th St Bellevue, WA 98008 – 5% off the 2002 sale

    …I could go on (she has 21 active listings), but I won’t.

  30. 30
    wreckingbull says:

    OK, since we are still on the subject, Greg Swann must be considered too, although not a local guy.

    http://www.bloodhoundrealty.com/BloodhoundBlog/?p=114

    One reason he claimed, in 2006, that Phoenix would not crash into a smoldering pile of dung?

    “A significant number of active and retired professional athletes maintain homes here…”

    EDIT: Wow, it gets even better. Here is reason #15:

    “We build thousands more new homes every year. “

  31. 31

    By S-Crow @ 27:

    With B of A halting foreclosures temporarily and as I read they have some 420,000 units in some stage of foreclosure, Mrs. S-crow just did a rough napkin calculation. With a very rough $10-20K owed in arrears on each foreclosure, we are talking about $8 Billion in lost revenue (just payments). And with that, I’m turning off the escrow office lights and heading home.

    The delinquency is money that may have never been recovered even if they’d held a sale tomorrow. A better estimate would be perhaps .5% per month of the total principal balance for the duration of the delay.

    BTW, it was December 11, 2008 that BoA announced the layoff of 35,000 employees. At the time I was saying they shouldn’t be allowed to do that because they weren’t getting the job done processing short sales. Well here is something else those employees could have been doing.

  32. 32
    ARDELL says:

    RE: deejayoh @ 22

    I’m OK with that one, deejayoh. I still have a hard time finding a decent house for clients priced at $300,000 or less…and I doubt even Seattle Bubble readers would disagree with that. Even a crappy towhome near Green Lake is hard to find for $300,000 or less.

    I did find a few bank-owneds just over $300,000 for my clients back in 2009…but less than $300,000 for anything decent is still hard to come by in the areas I work…and even some I don’t work on a regular basis. Spent some time in Renton recently, which is a little less pricey than my normal areas…no big bargains at $300,000 or less there in a decent school ranking as to Elementary School.

    King County…$300,000 or less…single family home was the topic of that post. I think the premise still holds today. Not seeing a whole lot of under $300,000 places worth buying. Renting still beats that price range pretty much hands down.

  33. 33
    uwp says:

    Ahh Deejayoh. Ardell’s post from ’06 brings back memories.

    Look at all the Bubble Superstars that make appearances…
    seattleeric
    The Tim
    Lake hills Renter
    Eleua
    synthetic

    It’s like a walk down memory lane. All saved in glorious internet-ink.

    It’s too bad Mack doesn’t google his name as often as Ardell. Mack, come back to us!!!!

  34. 34

    RE: uwp @ 33 – Eleua wrote in that thread: “BTW, your [Ardell’s] prediction of the sub-300K house being a thing of the past is a pretty bold prediction. More bold than my prediction of homes losing 2/3 to 4/5 of their value over the next 4 years.”

    I’ve given Eleua a lot of credit in the past for predicting why things would turn south, but he obviously missed the extent! That is, unless something really serious happens in the next 30 days. At least he realized it was a “bold” prediction.

    It turns out I even posted in that thread, but not directly pertaining to Ardell’s predictions.

  35. 35
    wreckingbull says:

    RE: uwp @ 33 – Let’s not forget “Finance Guru”. A true ladies’ man who knew that a First Hill condo was the secret to success with the chickadees. Meshugy too.

    Tim, it would fun to do a little walk-down-memory-lane post with some of the more notable personalities, good, bad, and ugly, from the blog.

  36. 36
    wreckingbull says:

    RE: Kary L. Krismer @ 34 – Eleua usually qualified that as worst-case, not average. I recall this since we were once discussing downtown Tacoma condos being a good candidate to hit that sort of deflationary figure. I’d say he was more accurate than you give him credit.

  37. 37
    Jillayne says:

    whatup asks (comment 13) if the foreclosure fiasco will help/hurt the local housing market.

    From the Seattle Times story: “The bank said it would take a few weeks to tackle the problem. It did not say how many foreclosure cases would be affected but estimated the figure would be in the tens of thousands.”

    It sounds like BOA is going to have to be working really, really fast to be finished in just a few weeks. More sloppy work?

    Well the affected foreclosures are in the judicial states, however, they’re supposedly halting foreclosures in all states to appease the politicians. BOA is the largest lender/servicer so we should be able to see how this will effect WA State in the notice of trustee sale and trustee deed reports Tim posts each month.

    From a macro view, any foreclosure moratorium just kicks the can down the road. Even if the paperwork is messed up, if the homeowner isn’t paying the mortgage, the house will eventually be taken back or sold at auction.

  38. 38
    Drone says:

    RE: wreckingbull @ 35 – Meshugy! Oh, I miss that guy.

  39. 39
    Lake Hills Renter says:

    We’ve had our share of perma-bulls, but they never seem to stay around long — Meshugy, Finance Guru, RentersAreLosers. And of course, the condescending agents — Mack, Larry, JD. I’m sure there’s others I’ve forgotten. Ah, the memories.

  40. 40
    The Tim says:

    RE: Lake Hills Renter @ 39 – To be fair, I basically banned RAL for being a giant jerk.

  41. 41
    wreckingbull says:

    RE: Lake Hills Renter @ 39 – I think that those agents could learn a thing or two from the agents that stuck around and kept a reasonable stance. Yes, Kary, I am even talking about you. (as a reasonable one)

  42. 42
    Pegasus says:

    RE: Jillayne @ 37 – You right about kicking the can down the road. Any time you delay what everyone knows will hit the market you end up getting a lower price in most cases. There are people trying to put a positive spin on this but that won’t fly. The bad loans need to be cleansed. This was all avoidable like the financial crisis was. This is what happens when you don’t remove the crooks…they keep stealing. Your dreaming if you think this is just a few weeks. You have ten years of falsified docs into the system. Many of these docs have no original anymore. How do you clean up tens years in a few weeks? In the past few years the foreclosure mills have forged and fabricated most docs. When you sign a document every ninety seconds how do you unwind the forgeries without spending hours on every case to clean it up if it is at all possible. Almost every bank in the country will be shutdown in the next few weeks on foreclosing. About the only thing that might get started are new foreclosures that have no forged docs that have never been into foreclosure. The banks are lying if they say only a few weeks…we are talking years to cleanse the system. The worst thing the banks can do is to continue to lie and restart the foreclosures with bad docs again. Too many attorneys and homeowners are now alerted to examine their foreclosure docs for fraud. Oh and the reason they initially stopped in the judicial foreclosure states was because they were caught perpetrating massive fraud upon the courts and there are lots of hungry attorneys that knew it. The sad thing is those bad docs exist in all states including this one. Now they are being forced to stop in non-judicial states. Hopefully Washington will join in trying to clean up the fraud.

  43. 43

    By wreckingbull @ 36:

    RE: Kary L. Krismer @ 34 – Eleua usually qualified that as worst-case, not average. I recall this since we were once discussing downtown Tacoma condos being a good candidate to hit that sort of deflationary figure. I’d say he was more accurate than you give him credit.

    I wouldn’t want to judge what he predicted there because he was clearly referencing something he said somewhere else. And again, he did say that was “bold” which to me means he did see it as being toward the extreme end.

    I mainly brought it up because it was almost exactly 4 years ago today and he was referencing a 4 year prediction. We don’t often get to see predictions from the past.

  44. 44
    Lake Hills Renter says:

    By The Tim @ 40:

    To be fair, I basically banned RAL for being a giant jerk.

    That log of his posts is classic! Thanks for posting that — made my day. =)

  45. 45

    RE: Jillayne @ 37 – I suspect the process will involve more of an audit type situation, where they look at samples and not the entire population. And probably what they’re looking at is more the procedures of those doing the work. I suspect there will be some entities that process these things for banks that will soon be laying off people, and others which will be struggling to meet new case loads.

    As I’ve said before, most the information is computer generated. It wouldn’t make much sense to look at that, as opposed to procedures.

    Oh, and most of the focus might be on Countrywide transactions, although that might also be the bulk of their foreclosures.

  46. 46
    Choc DOnut says:

    Escala 2012-2013 – 20% haircut on sales 09-10….

  47. 47
    Pegasus says:

    RE: Jillayne @ 37 – So that you don’t get influenced by persons who have been clueless and remain clueless about the magnitude and the far reaching effect of banks not doing what they promised I suggest you read the following articles:

    http://globaleconomicanalysis.blogspot.com/2010/10/40-state-attorneys-general-to.html

    http://market-ticker.org/akcs-www?post=168629

    Auditing a small percent would be the type of approach that you can expect the crooks to TRY to sell the public on. Unfortunately it does not clean up the fraud which is estimated from seventy-five percent to over ninety percent of all documents in the past few years. No one with a brain will allow the banks to even go down that road of deception. There are many other ramifications that just will not allow that to happen with all the public exposure on the frauds. There are many consequences of these frauds that are potentially huge in financial impact.

  48. 48
    David Losh says:

    RE: Kary L. Krismer @ 45

    Bank of America has a loan of mine they took over from Country Wide. We were happily going along making our payments then got a bill from Bank Of America for $4000, and something.

    Long story short, our payments got crossed. Now our $691 payment is over $800 per month.

    You can’t fight the bank, I’ve tried.

  49. 49
    Jillayne says:

    Hi Pegasus,

    It was BOA quoted as saying it would only take them a few weeks, definitely not me! :) I suspect that if BOA claims it will only take them a few weeks, then they’re not really going through all the documents. Either way, if the homeowner isn’t making payments, eventually the foreclosures will commence….eventually. Thanks for the links. I’ll take a look now.

  50. 50
    Jillayne says:

    As of this day, Wells Fargo is standing by their foreclosure procedures. Maybe we see what happens when the tide goes out….who stands by their work and who doesn’t.

    So what happens here locally? Well maybe non-judicial foreclosure states like Washington actually start INCREASING their foreclosures. If the paperwork process is easier non-judicially, then maybe loan servicers will turn their attention to the non-judicial states and ramp up activity here.

    Pegasus let me run the nothingburger defense article by some peeps that I know. What he’s writing about sounds like something Eleua would predict. We need to shine the bat light up into the sky and call Eleua foward to speak.

  51. 51

    By Jillayne @ 49:

    Hi Pegasus,

    It was BOA quoted as saying it would only take them a few weeks, definitely not me! :)

    The reference is to me. Pagasus doesn’t even know what fraud is, and so we’ve been arguing about it.

  52. 52
    Pegasus says:

    RE: Jillayne @ 50 – Wells has been in denial of their bad docs for foreclosure for a long time. I have seen enough of their trash posted by attorneys or disgruntled home owners to figure out they are lying. It is just a matter of time. California AG has asked Wells to stop yesterday. Most of the majors have been doing the same thing. This is not about “sloppy paperwork” in many cases. Its about creating fictitious documents, lying, back dating, counterfeiting assignments that never occurred, signing authorities having their signature forged by coworkers, etc.
    Your speculation that we may see increasing foreclosures here I think is flawed. The industry it appears thought that they could do that in the non-judicial states. They figured they had to stop perpetrating frauds upon the courts since they got exposed but it was still OK to perpetrate the fraud upon the homeowners with the same bad paperwork that they were using on the courts. Fannie Mae is pulling back sales that they think were improperly foreclosed. Title companies are backing away from issuing titles on foreclosed homes.Many non-judicial states have responded to protect their citizens. In this state where about 30,000 foreclosures are now happening each year, lots of homeowners are now claiming their paperwork is flawed. Will our business-orientated AG do something finally? Or will some enterprising law firm take action to protect those 30,000. I bet we will find out in the next two weeks.

  53. 53
    cheapseats says:

    I would guess that these banks will coincidentally get their book keeping straight right after the elections.

  54. 54
    David Losh says:

    RE: Kary L. Krismer @ 51RE: Jillayne @ 49

    My Bank of America loan payment went from the $691 to $849, no explanation, and we have other disputes about the amount owed. They have been pretty considerate about working the loan through, and we just want to get it paid off.

    The loan I have serviced by Wells Fargo is a commercial loan on a residential property that gives me more wiggle room than any one would want. The investor just wants the payments, Wells Fargo just wants the fees. They with held two payments from the investor so they could collect fees that were not due them. I happen to have a copy of my complete loan documents, and they don’t. They have no idea what’s in my documents. They keep talking to me like they have a residential loan package. We fought for six months, before they admitted they have no idea, There we settled on a payment increase. That seems to be the standard operating procedure.

    In my case Wells Fargo can’t foreclose, but they keep talking like they can. We pay a premium to hold onto the property through thick, and thin. We are in thin times, that were more than expected.

    I’m just saying that Pegasus is on to something that never occurred to me, but it has started a new line of thinking.

  55. 55

    RE: David Losh @ 54 – The thing is, assuming your position is correct, they would not be able to foreclose if you contested it and proved your position. Of course, you’d need to be able to afford to contest it, but if you’re right I would think the attorney fee clause would kick in. It’s not like the banks can just say X and foreclose based on the facts being X. The owners do have the right to contest things, and in the judicial states that’s even easier than in the non-judicial states.

    BTW, you need to be able to do this anyway, because from what you describe this will be an issue at payoff. But that can be an issue on any loan where the payments were not made on time for the full term of the loan.

  56. 56
    Sniglet says:

    RE: Kary L. Krismer @ 34

    More bold than my prediction of homes losing 2/3 to 4/5 of their value over the next 4 years

    Eleua may have had his timing off, but I think his over-all prediction for a 4/5th drop in prices from peak is dead on. These deflationary periods can last a LONG time. Tokyo real-estate is reaching new lows 20 years after real-estate prices began falling. I suspect we won’t see a bottom in US (or Seattle prices) till 2016 or later.

    I still stand by long-held prediction that we will see at least an 80% drop in average Seattle real-estate prices (from peak 2007) before we hit bottom.

  57. 57
    David Losh says:

    RE: Kary L. Krismer @ 55

    For me the point is totally, and completely moot. I do intend to pay off the property. My first position loan was drafted as a portfolio loan. It’s held by an investment group in Conneticut. Why they chose Wells Fargo to service that loan makes sense, but it’s an unfortunate choice. The change from Country Wide to Bank of America was sloppy.

    I really don’t care because everything is negotiable. My question would be how either Bank of America, or Wells Fargo can calculate a pay off. It looks to me as though we are in a time of he said, she said.

    For either of them to prove a foreclosure is the same. They can claim whatever they want in a foreclosure. People will fight to keep a property, but I certainly wouldn’t. Why would any one who doesn’t have equity, or is losing equity by the day?

    I don’t think foreclosure is the hammer banks once thought it was.

  58. 58

    By David Losh @ 57:

    RE: Kary L. Krismer @ 55 – My question would be how either Bank of America, or Wells Fargo can calculate a pay off.

    I don’t remember the bank, but over 10 years ago I had a client’s bank take over three months to come up with a payoff. They issued multiple payoffs, and you couldn’t even tell how one was even similar to another. Fortunately it was a bankruptcy sale so it didn’t hold up the closing.

  59. 59
    nolaguy says:

    Greetings, all. It’s been a long time. Glad to see the discussions continue.

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