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Here is your open thread for the mid-week on January 2nd, 2013. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
NOTICE: If you have comments to make about politics or economics that do not somehow directly relate to Seattle-area real estate, they may be posted in the current Politics & Economics Open Thread. If you post such comments here, they will be moved there.
One phenomenon (danger?) that I see on blogs like Denninger’s and Mish’s is that folks check their minds at the door, and seem to prefer to be led around by these bloggers. Yes, the sheeple need to be led.
Here is a simple example – folks pissing and moaning about how we are saddling their grandchildren with debt. Do these same whiners ever complain that we are saddling corporations with the same debt? Nope. Runs counter to the meme. Baaaaa. Baaaaa.
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Great news for short sellers!! The principal residence exemption to the general rule regarding cancellation of debt income tax liability has been extended to 2014. Hooray!! See the WaLaw Blog for more info.
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By Craig Blackmon @ 2:
Good comment Craig. First useful information I’ve seen here in ages.
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RE: Craig Blackmon @ 2 – Probably great news for short sellers, at least temporarily. Right now people are getting offers on short sales, so the only question should be how long it would take the bank to approve the sale. At this point if the sale is going to be approved by the bank, it should close this year. At some point not too many months out though, we’ll have the same problem as last year of not knowing when the short sale will close, and if it’s next year, what the law will be next year. I hope Congress dealt with that problem, but I really doubt that they did.
Probably also good news for people getting Ray’s “cramdown” deals, particularly under the National Mortgage Debt Relief Act. With that type of deal timing would typically be only slightly uncertain (assuming that they actually ask you if you want relief–sometimes they don’t ask!)
For people going through foreclosure there’s much less certainty. First, surprisingly the law is not clear how Washington state non-judicial foreclosures get reported on your income tax return. Some (most??) practitioners take the position the debt is non-recourse under the IRS rules, even though it only became non-recourse with the foreclosure. Second, the timing issue will pop up almost immediately because even if you stopped making payments today, there’s no guarantee that you’d be foreclosed this year! And again, we don’t know what the law will be next year.
Given that there is also the insolvency exception to recognizing this type of income, I’m a bit surprised this made it through. I suspect it was lobbying by the various state attorney generals more than anything, because it does impact their National Mortgage Settlement.
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RE: Kary L. Krismer @ 4 –
Yes Kary
The impact on Credit Ratings [even Freddie/Fannie lax approvals] knocking you out of the real estate game [for like up to 7 years] is convoluted as all get-out. I read a lot of lenders won’t do a mortgage forgiveness contract unless you’re late on a payment [which can stretch to 6 payments before they administer your case] and if you’re late it makes your credit rating fall even worse than just a short sale or foreclosure.
If you don’t mind being a mandatory rentor the next decade, the credit rating plummet is mitigated….albeit in Wash State your auto insurance can go way up as your credit score falls….for federal employees a short sale can mean being fired from your job.
http://www.theshortsaleguide.com/forum/topics/restrictions-on-some-federal-employees
Get a good real estate attorney before you jump in the short sale pool….I’m sure Kary can recommend a good one.
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Chrisite demands unfunded $60 billion handout. A big government fan when it suits him. Oh, the hyporcrisy.
Christie lambasts House Republicans over Sandy bill: ‘Shame on Congress’
Republican New Jersey governor singles out ‘failure’ of John Boehner after Speaker delays vote on hurricane Sandy aid
http://www.guardian.co.uk/world/2013/jan/02/chris-christie-republicans-sandy-relief
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By softwarengineer @ 5:
I don’t think that’s entirely correct. Just being two months late isn’t going to be worse than a short sale or foreclosure. It’s how long you’re late.
Thus, if you have a short sale that takes 8 months to get an offer, and 6 months to get an answer from the bank(s), that would be worse than having a short sale that took 2 weeks to get an offer and 1 month to get an answer. Unfortunately you don’t always know those time lines going in.
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RE: Blurtman @ 6 – I don’t think that’s entirely fair. Disaster recovery is one of the areas where the Federal government has a legitimate role. It’s sort of acting as an insurer, spreading risk between the states.
On the other hand, I can see why that spending wasn’t dealt with when spending cuts weren’t part of the agreement. Christie should understand that too.
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Bill Gross, the so-called bond king who oversees nearly $2 trillion at his firm Pimco, predicts unemployment may actually reverse course and rise next year. This bleak economic outlook will make for weak fixed income and stock returns and cause gold to go higher, Gross said.
The simple proclamation came as many do these days, via Twitter, on Sunday morning.
“2013 Fearless Forecasts: 1) Stocks & bonds return less than 5%. 2)Unemployment stays at 7.5% or higher 3) Gold goes up…,” Gross wrote on the Pimco Twitter page.
Gross’s call for high unemployment fits Pimco’s “New Normal” thesis, which posits high unemployment, slow growth and orderly deleveraging for developed countries over the long term. Economists predict that a report on Friday will show the U.S. unemployment rate remained unchanged at 7.7 percent in December.The rate was at 8.5 percent a year ago.
While Gross’s economic predictions have been accurate, his market predictions have been off. Last year, the money manager’s January letter to investors recommended holding high-rated credit, municipals, Treasury Inflation-Protected Securities, and higher-yielding equities like utilities.
http://finance.yahoo.com/news/heres-pimcos-bill-gross-sees-051830940.html
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http://www.nytimes.com/2012/12/31/business/settlement-expected-with-banks-over-home-loans.html
“Banking regulators are close to a $10 billion settlement with 14 banks that would end the government’s efforts to hold lenders responsible for foreclosure abuses like faulty paperwork and excessive fees that may have led to evictions, according to people with knowledge of the discussions.”
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I just came across a listing that sold last year, where the marketing remarks commented about the great school district the house was located in. The agent only remarks noted that it was a 55+ community, and that no children under 18 could live at the house full time.
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RE: Blurtman @ 9 –
Irrespective: Ya Coulda Made a Killing in the Stock Market This Year
Longterm CDs Longterm Bonds US Stocks Foreign Stocks Foreign Stocks
Dec 0.12% (0.13%) 0.91% 2.69% 4.02%
YTD 1.47% 4.29% 16.07% 18.57% 18.62%
Last 12 mo 1.47% 4.29% 16.07% 18.57% 18.62%
SWE is smiling….its been a good year in stocks for him
I did hear most of the small individual stock investors are “shell shocked” from 2008 to get back in….I don’t blame them BTW….
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Mortgage rates went up .125 today on release of the December Fed meeting.
That combined with lie inventory I feel will lead to a frenzy on th Eastside.
Not warranted but that is my WAG
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By Howard @ 13:
Apparently I can spell while posting from the phone, but I let it choose the wrong words.
Rates went up, inventory is at record lows, the fiscal cliff was averted (well for a couple of weeks anyways). The market at least where we were looking was silly in the fall… Only going to get worse.
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So anyone who has the guilty pleasure of following Karl Denninger’s website has seen Karl, and fellow kooky gun nuts, make an argument of equivalency between semi-automatic weapons and knives and even gasoline. The argument goes something like this – Even if you ban firearms, psychos can use knives or cans of gasoline to wreak havoc. And frankly, the more I read Denninger, the more I can convinced that he is either a moronic blowhard, or someone who is wisely courting this base.
And then we have this, which certainly says it all:
“First of all, it tells criminals who doesn’t have a gun,” he said. “It gives a burglar or it gives a thief a map.”
So knives aren’t quite the same, then, eh?
http://www.huffingtonpost.com/huff-wires/20130103/us-gun-permit-database/?utm_hp_ref=politics&ir=politics
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By Blurtman @ 9:
This is my read as baseline, allowing for variation for the QEs we’ve been seeing. Are we at QE5 yet?
Fel Temp Reparatio.
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By ChrisM @ 10:
Wow, great that the big banks made it through without consequences!
Happy days are here again!
Fel Temp Reparatio.
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By ricklind @ 17:
I love how they call it “faulty” paperwork. They get a secretary to pose as a vice president and sign her name 100,000 times all over the country. They sell the same mortgage to multiple bond instruments. If that’s merely faulty then we all should be allowed to commit fraud 10 times per day with a get out of jail free card.
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RE: Blurtman @ 15 – The two largest mass killings in this country did not involve guns.
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RE: Macro Investor @ 18 – Was the secretary part of the bank, or part of the entity the bank hired to process the foreclosure? From what I’ve seen, banks do very little in the processing of anything pertaining to deeds of trust. They don’t even collect payments!
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