Monday Open Thread (2011-02-14)

Here is your open thread for Monday February 14th, 2011. 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!

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

43 comments:

  1. 1
    bob says:

    Seattle RE made the nytimes. http://www.msnbc.msn.com/id/41569256/ns/business-the_new_york_times

    It has been a long, painful slide. At the peak, a downturn in real estate in Seattle was nearly unthinkable. In September 2006, after prices started falling in many parts of the country but were still increasing here, The Seattle Times noted that the last time prices in the city dropped on a quarterly basis was during the severe recession of 1982.

    Two local economists were quoted all but guaranteeing that Seattle was immune “if history is any indication.” A risk index from PMI Mortgage Insurance gave the odds of Seattle prices dropping at a negligible 11 percent.

  2. 2
    Blurtman says:

    RE: bob @ 1 – Absolute nonsense and terrible “reporting.” I moved here in late 2004 and it was clear the area was in a housing bubble. Anyone who looked at annual price increases versus income increases (or lack thereof) knew this was a bubble. It is amazing how folks can re-write history to make things sound more fantastic.

  3. 3
    Pegasus says:

    Lawyer held in contempt over ‘fraud’ in foreclosure filing

    A day after federal mortgage giant Fannie Mae fired the prominent law firm of Ben-Ezra & Katz, a Miami judge found the firm’s founding partner, Marc Ben-Ezra, in contempt of court for filing “sham” foreclosure documents and “wasting the court’s time.”

    On Thursday, Fannie Mae cited document “execution issues” as the reason it terminated the law firm.

    Ben-Ezra & Katz becomes the second south Florida law firm making a mass exodus from the foreclosure business.

    The Plantation law firm of David J. Stern began dumping thousands of its Fannie Mae cases late last year after evidence of robo-signing and other faulty documents became known.

    “It’s a huge can of worms that is being opened up because of changes in law firms,” said James Bonfiglio, a Boynton Beach attorney who represents homeowners. “This is the way it’s going to go and it’s going to be a huge mess for the next couple of years.”

    Miami-Dade Circuit Judge Maxine Cohen Lando expressed her displeasure Friday in a case that involved a property in Homestead with a $265,134 foreclosure judgment issued in July.

    Lando said the so-called original note and original mortgage were filed months after the bank said those documents were lost.

    “That in itself is a fraud upon the court,” Lando wrote in an order to show cause as to why she should not hold Ben-Ezra & Katz attorneys in contempt.

    But, she added, the action “pales in comparison” to the fact that the mortgage and note are to a different property in Lehigh Acres, and that the documents are improperly signed and notarized. Lando said her verbal contempt finding on Friday would be followed by a written order.

    Although Marc Ben-Ezra, 44, was not the direct attorney handling the case, the homeowner’s attorney Maria Mussari said the judge ordered the owner or head of the firm to appear. Ben-Ezra has no disciplinary history with the Florida Bar .

    The judge dismissed the foreclosure case and banned the lender from refiling it.

    http://www.palmbeachpost.com/money/foreclosures/1248825.html

  4. 4
    LA Relo says:

    Just saw that article.

    Blurtman, it may have been clear to you, but I don’t think many here agreed. In many ways they still don’t.

    Yet.

  5. 5

    RE: Pegasus @ 3 – I note you didn’t quote the part of the article about how the servicers are having a hard time finding decent attorneys down in Florida with the ouster of two mills. The banks/servicers, by focusing on low cost have let the quality firms shrivel and die, and now they’re sort of stuck with no where to go. Banks are truly stupid and short sighted.

    I’m not sure the Seattle area will see that sort of issue. I’m fairly familiar with two of the major firms here that handle that sort of work, and while my information is dated, they both seemed to do decent quality work at the time I left practice. But maybe with five years of pressure from the banks that has changed?

  6. 6
    Pegasus says:

    By Kary L. Krismer @ 5:

    RE: Pegasus @ 3 – I note you didn’t quote the part of the article about how the servicers are having a hard time finding decent attorneys down in Florida with the ouster of two mills. The banks/servicers, by focusing on low cost have let the quality firms shrivel and die, and now they’re sort of stuck with no where to go. Banks are truly stupid and short sighted.

    I’m not sure the Seattle area will see that sort of issue. I’m fairly familiar with two of the major firms here that handle that sort of work, and while my information is dated, they both seemed to do decent quality work at the time I left practice. But maybe with five years of pressure from the banks that has changed?

    Hard to say what goes on here in Washington. We do know that the names of robosigners and falsified docs show up here as well but don’t get as much exposure since we are mainly non-judicial foreclosures and thus mainly the borrowers are not represented by attorneys looking out for their interests and exposing the phony docs. Here in Washington their interests are supposedly looked out for by the trustees. Obviously that isn’t reality when you track the trustees and the other businesses they own that conflict with fair representation for borrowers.

    I linked the entire article but I was more interested in the exposure of FRAUD. The servicers knew they were hiring crooks and they brought this upon themselves. Low costs have little to do with perpetrating massive frauds upon the court. Fannie has known for years they were hiring crooks and only dropped them to save face when the public exposure grew to be massive.

  7. 7

    RE: Pegasus @ 6 – As OEM has noted, many of the same issues are simply not present in Washington. The trustee’s have more limited duties than what a party suing in court would have. My comment was more that the two firms I’m familiar with don’t seem to take a lot of shortcuts–or at least didn’t 5 years ago.

  8. 8
    Pegasus says:

    By Kary L. Krismer @ 7:

    RE: Pegasus @ 6 – As OEM has noted, many of the same issues are simply not present in Washington. The trustee’s have more limited duties than what a party suing in court would have. My comment was more that the two firms I’m familiar with don’t seem to take a lot of shortcuts–or at least didn’t 5 years ago.

    Actually in a non-judicial state the supposed role of the trustee in protecting the borrower is greater than judicial states because the borrower is not protected by a court system to oversee the process and supposedly enforce fairness(haha). Unfortunately the borrowers have been hung out to dry by using the same fake paperwork for standing, etc. that is used to perpetrate frauds in judicial states court foreclosures.

  9. 9

    RE: bob @ 1

    The NYT is a Pathetic New Source IMO

    They’re run by the Chamber of Commerce for uncontrolled growth, there is no other viable opinion in their minds.

  10. 10
    Dawn Glover says:

    RE: Blurtman @ 2 – I disagree strongly – my family were part of the last wave of professional relocations in late 2007..the real estate cheerleaders were still going strong. I was taken around with a real estate professional that thought that I would buy an $800 plus thousand dollar house by the end of the week…because everyone was doing it…I went back to the hotel and told my husband that these people must be out of their minds…moved into a high end rental house and was constantly engaged in real estate talk, if I stated my true opinion, the reaction was toxic..so NO people on a mass scale did not get it until they could no longer ignore the facts.

  11. 11
    pfft says:

    By softwarengineer @ 9:

    RE: bob @ 1

    The NYT is a Pathetic New Source IMO

    They’re run by the Chamber of Commerce for uncontrolled growth, there is no other viable opinion in their minds.

    so you are one of those peak oil people?

  12. 12
    Cheap South says:

    RE: Pegasus @ 3

    Fraud in Florida?? Inconceivable!!!!

  13. 13

    RE: pfft @ 11

    I thought you were a Democrat for the environment Pfft? I was wrong, perhaps possibly you’re a Demosomething or another, not al all old fashion liberal for environmental restraints, but fits in PC anyway?

  14. 14
    pfft says:

    By softwarengineer @ 13:

    RE: pfft @ 11

    I thought you were a Democrat for the environment Pfft? I was wrong, perhaps possibly you’re a Demosomething or another, not al all old fashion liberal for environmental restraints, but fits in PC anyway?

    what?

  15. 15

    RE: pfft @ 14

    Exactly My Opinion…LOL

  16. 16
    pfft says:

    the NYT is no friend of the chamber. I guess you don’t read the NYT?

  17. 17

    RE: pfft @ 16

    Yes I Read It, But Very Sparingly

    Not a friend of the Chamber of Commerce? LOL Pfft, the Chamber of Commerce and the Democrat Leadership Platform [Republican too BTW] and the NYT are hand locked for uncontrolled population growth in America. If you disagree with them, you’re a hater…LOL

  18. 18
    Blake says:

    RE: softwarengineer @ 17
    Yah… the NYTimes was a key cheerleader in the financial deregulation of the late 90s and early 00s, lockstep with Sen. Schumer and Dodd and the other Dems who were the BFF of the Wall Street banks and the Chamber of Commerce. They all had blood on their hands and that’s why they continue to cover up the causes of this mess.

    And you read Thomas Friedman’s crazed orthodoxy about globalism and the “golden straightjacket” and the Lexus and the Olive Tree…!? He thinks the Lexus and Toyota/Japan’s success was an example of the free market? Toyota lost $ for 30 years and was highly protected and subsidized… Read Ha-Joon Chang’s great book “Bad Samaritans.” It’s very funny, esp when he mocks Friedman’s writings and knowledge of history.
    http://www.amazon.com/Bad-Samaritans-Secret-History-Capitalism/dp/1596913991
    (Btw: Chang is a Prof at Cambridge….)

  19. 19
    Blake says:

    RE: pfft @ 16
    re: “the NYT is no friend of the chamber. I guess you don’t read the NYT?”

    … I laughed my a** off a few weeks ago when I heard an NPR reporter said this:
    “While centrist Democratic groups like the Chamber of Commerce support Obama’s appointment of (former Chamber lobbyist and banker) William Daley as his new Chief of Staff”
    !!!??

    …the limosine liberals at NPR and the NY Times. pft!

  20. 20
    Scotsman says:

    Andrew Sullivan, formerly Obama fan numero uno:

    “To all those under 30 who worked so hard to get this man elected, know this: he just screwed you over. He thinks you’re fools. Either the US will go into default because of Obama’s cowardice, or you will be paying far far more for far far less because this president has no courage when it counts. He let you down. On the critical issue of America’s fiscal crisis, he represents no hope and no change.”

    “$26.3 trillion in new debt — repeat, new debt — alone over the next decade. Says Jake Tapper, summing things up in a single harrowing line, “At no point in the president’s 10-year projection would the U.S. government spend less than it’s taking in.”

    We are so fu@k*d. But we knew we would be.

    “The games will continue until the checks bounce”

  21. 21
    pfft says:

    By softwarengineer @ 17:

    RE: pfft @ 16

    Yes I Read It, But Very Sparingly

    Not a friend of the Chamber of Commerce? LOL Pfft, the Chamber of Commerce and the Democrat Leadership Platform [Republican too BTW] and the NYT are hand locked for uncontrolled population growth in America. If you disagree with them, you’re a hater…LOL

    okkkkkkkkkkkkkkk.

  22. 22
    pfft says:

    By Blake @ 18:

    RE: softwarengineer @ 17
    Yah… the NYTimes was a key cheerleader in the financial deregulation of the late 90s and early 00s, lockstep with Sen. Schumer and Dodd and the other Dems who were the BFF of the Wall Street banks and the Chamber of Commerce.

    you are going to need evidence. to say that the democrats are friends with the chamber is just nuts.

  23. 23
    pfft says:

    By Scotsman @ 20:

    Andrew Sullivan, formerly Obama fan numero uno:

    “To all those under 30 who worked so hard to get this man elected, know this: he just screwed you over. He thinks youâ��re fools. Either the US will go into default because of Obamaâ��s cowardice, or you will be paying far far more for far far less because this president has no courage when it counts. He let you down. On the critical issue of Americaâ��s fiscal crisis, he represents no hope and no change.”

    “$26.3 trillion in new debt â�� repeat, new debt â�� alone over the next decade. Says Jake Tapper, summing things up in a single harrowing line, â��At no point in the presidentâ��s 10-year projection would the U.S. government spend less than itâ��s taking in.â��

    We are so fu@k*d. But we knew we would be.

    “The games will continue until the checks bounce”

    the US can just cut spending and raise taxes. for most of the next ten years the budget deficit will be under 4% of gdp.

    http://www.offthechartsblog.org/the-obama-budget-and-the-deficit/

    andrew sullivan is not obama’s biggest fan. isn’t he just a less talented and less annoying than that other guy who’s name I can’t think of?

    please provide a link for the deficit being $26 trillion over the next ten years. $2.6 trillion a year? what?

  24. 24
    Blake says:

    RE: pfft @ 22
    Re: “you are going to need evidence. to say that the democrats are friends with the chamber is just nuts.”

    Sure… So the current President is a “Democrat” and his new Chief of Staff:
    “co-chaired a Chamber of Commerce committee on financial (de)regulation. The “Commission on the Regulation of Capital Markets in the 21st Century” eventually became the Chamber’s Center for Capital Markets Competitiveness, which played a prominent role in attacking derivatives regulation and consumer protections last year…. Daley also signed on to a March 2009 Chamber of Commerce manifesto on “Restoring Confidence in US Capital Markets,” the Chamber’s opening PR move in the financial reform debate.”

  25. 25
    Blake says:

    RE: pfft @ 23
    Yah, the “4% of gdp” deficit won’t happen anytime soon… it’s at 10% now and I can’t see it dropping below 6% (the levels Reagan hit in ’83-’86) until 2014 or so… But the $26 trillion is wrong as well… It’ll probably be “only” $15-20 trillion the next 10 years! ;-)

    … what’s the geometric mean between pft and Scotsman??

  26. 26
    Scotsman says:

    Wow- a $2B CA plan to “rescue” home debtors! Where is WA’s plan?

    http://lansner.ocregister.com/2011/02/14/calif-starts-2-billion-homeowner-rescue-plan/99434/#comments

    Specifically, the programs provide:

    •Mortgage assistance of up to $3,000 per month for unemployed homeowners who are in imminent danger of defaulting on their home loans.
    •Funds to help homeowners who have fallen behind on their mortgage payments due to a temporary change in a household circumstance. The program will provide up to $15,000 per household to reinstate mortgages to prevent foreclosures.
    •Money to reduce the principal owed on a mortgage for a home where the low or moderate income homeowner is facing a serious financial hardship and owes significantly more than the home is worth

  27. 27

    RE: Scotsman @ 26

    Where’s CA’s and WA’s Money to Pay for Their Alleged Great Society Plans?

    I know, they milk the rest of us in excessive income taxes, property taxes, food taxes, gas taxes, taxes on taxes ,etc, etc….until we’re all unemployed because no one has any money anymore except the government handout agencies….LOL

  28. 28
    pdmseatac says:

    By Blake @ 18:

    RE: softwarengineer @ 17
    Yah… the NYTimes was a key cheerleader in the financial deregulation of the late 90s and early 00s, lockstep with Sen. Schumer and Dodd and the other Dems who were the BFF of the Wall Street banks and the Chamber of Commerce. They all had blood on their hands and that’s why they continue to cover up the causes of this mess.

    Your version of history is interesting but not very accurate. The “Financial Services Modernization Act of 1999” is also known as the “Graham, Leach, Bliley bill” after it’s chief sponsors, all of whom were Republicans. While the bill passed in the Senate, only one Democrat voted for it. In the House of Representatives it did pass on a much more bipartisan basis. The Republicans would have pushed for an override if Clinton had vetoed the bill, and the Democrats cravenly gave in to the threat. The override might have failed but then the Republicans would have used it in the next campaign to accuse the Democrats of “using excessive regulation to stifle financial innovation”. So through cowardice the president and enough Democrats in the House went along with the majority and passed the now-controversial Graham Leach Bliley bill. And it’s a sure thing lots of money was handed out by the banks to everyone involved.

  29. 29
    Blurtman says:

    RE: pdmseatac @ 28 – Let’s not forget the NY Times absolutely criminal reporting on the Iraq War. Judith Miller and her inflammatory lies about Saddam’s mobile chemical weapon labs. You may recall during the mind control lead up to the war and during the invasion, credible reports describing CIA agents placed on staff at CNN.

  30. 30
    hoary says:

    Fellow crystal-ball gazers,

    From the NYT thread, I’ve noticed many of you saw the housing bubble from a mile away. What is the current consesus for the turnaround in housing in the Seattle area? 7-10 years?

    Please offer some explanation of your forecast. Thank you!

  31. 31

    Paying Like $1400/mo Rent in the Seattle Area

    And working an average $30-35K/yr job?

    Perhaps you need to stop renting and buy a BIG 4 bdrm home for MUCH less than your Seattle area rent, albeit a caveat, you’d better make sure there’s a $30-35K job waiting for you at the new state you’re moving to too:

    http://realestate.yahoo.com/promo/4-bedrooms-for-the-price-of-4-wheels.html

    The Michigan home looks nice and HUGE from the outside and for $34.5K makes our $500K Seattle homes look subpar and inadequate, IMO…LOL

  32. 32
    D. in Ballard says:

    Some have said that inflation will drive home prices up, but how can people afford more expensive homes when they are paying more for goods and services? NY Times has a write-up on inflation of the basic necessities.

    http://www.nytimes.com/2011/02/15/business/15prices.html?_r=1&hp=&pagewanted=all

  33. 33
    The Tim says:

    Kary will love this from Phoenix: Local experts dispute Zillow’s housing stats

    Most recently one national source, Zillow.com, pegged the number of mortgages underwater in the Phoenix metro area at a stunning 70 percent.

    The story was among the most read and e-mailed on our website.

    But how accurate are these reports?

    Local researchers aren’t impressed, particularly when it comes to Zillow’s numbers.
    Michael Orr, the author of the Cromford Report and a frequent speaker at local housing presentations, was especially scathing.

    “Zillow’s reputation for accuracy is as about as good as Lindsay Lohan’s reputation as a role model for good behavior,” Orr said.

    Heh.

  34. 34

    RE: D. in Ballard @ 32

    LOL Ballard

    The NYT’s news story referenced asserted that the moot point necessities like “food and gas” aren’t too important, they only make up about a quarter of our expenditures. Reminds me of saying the pay cut is moot point, it’s only a quarter of your take home, or other similar Chamber of Commerce logic, like including food and gas into the CPI makes it rise from 1-2% today to 5-10% in reality, just a moot point…..

  35. 35
    Blurtman says:

    RE: softwarengineer @ 31 – I lived in Michigan on a nice 2500 sq. ft. home on 10 acres, 20 miles north of Ann Arbor. Having moved there from California, I was ecstatic about the bang for the buck. On the other hand, you are living in Michigan. Even parts of Ann Arbor have unpaved roads, believe it or not.

  36. 36
    Scotsman says:

    Kary- comments? This looks like it will clear up any mers confusion, at least in AZ. Will other states follow?

    http://market-ticker.org/cgi-ticker/akcs-www?post=180038

  37. 37

    RE: Scotsman @ 36 – Other than giving the banks a safe-harbor, I’m not really sure what that accomplishes. It doesn’t seem to provide for any consumer protections at all, nor does it seem to deal with any perfection of security interest issues, note following security issues, etc. Presumably though that document filed would be prepared by MERS, so it would give a record of what their database shows prior to the foreclosure getting very far.

    But yes, this type of legislation–pro-MERS–is what many have been expecting.

  38. 38
    Ben says:

    RE: hoary @ 30 – That is the $64k question. It’s hard to put a time schedule on it. Spotting conditions for a bottom is a bit easier. Assuming no more blatant government meddling such as more tax incentives, prices will fall for at least the next couple years. Wanting to buy myself, I know I am not going to time it perfectly. I want to see mortgage rates higher than they are now as we are still near the bottom in rates (high rates = lower prices). The price to rent ratio needs to come back in line and general economic conditions need to start improving. There are a few other considerations, but I want to be convinced that I won’t be more than a tiny amount underwater after 2 or 3 years. A significant number of people are immobile due to being significantly underwater and can’t move to where the jobs are. Anyone buying today should be concerned about that possibility.

  39. 39
    Pegasus says:

    WOW! New York to Assure Legal Aid in Foreclosure Cases.. New York Times

    New York court officials outlined procedures Tuesday aimed at assuring that all homeowners facing foreclosure were represented by a lawyer, a significant shift that could give thousands of families a chance to strike a better deal with lenders.

    Criminal defendants are guaranteed a lawyer, but New York will be the first state to try to extend that pledge to foreclosures, which are civil matters. There are about 80,000 active foreclosure cases in New York courts.

    Under the procedures, which will be put in place in Queens and Orange Counties in the next few weeks and then across the entire state, any homeowner in foreclosure who does not have a lawyer will be supplied one by legal aid groups or other volunteer groups.

    New York has been successful in getting foreclosure defendants to show up at settlement meetings overseen by a judge and attended by the lender, but most are unassisted and have little idea how to proceed. The cases are overwhelming the courts.

    The state’s chief judge, Jonathan Lippman, said the current system was “such an uneven playing field.”

    more: http://www.nytimes.com/2011/02/16/business/16housing.html?hp

  40. 40
    Pegasus says:

    CoreLogic: NAR’s 2010 existing home sales are overstated by 15% to 20%

    During 2010 CoreLogic estimates home sales totaled 3.6 million, down 12%from 4.1 million in 2009. Sales remain extremely low relative to the last decade as sales last year were more than 50% below the level in 2005 and about 33% below the level in 2000. Although it’s been widely reported that the National Association of Realtors’s (NAR) existing home sales data fell only 5% to 4.9 million in 2010, down from 5.2 million in 2009 and flat relative to 2008, the CoreLogic data indicates otherwise.

    Historically, the CoreLogic existing sales data have covered about 85% to 90% of all NAR’s existing home sales data. However, in 2006 NAR’s sales data became elevated relative to the CoreLogic, MBA, HMDA and Census sales related data, and that trend has continued and become more pronounced through 2010. There are several reasons for the divergence, including benchmarking drift, more sales going through MLS systems due to consolidation and a lower share of for sale by owners (FSBO) home sales. Net, NAR’s existing home sales data are overstated by about 15% to 20.

    http://www.calculatedriskblog.com/2011/02/corelogic-nars-2010-existing-home-sales.html

  41. 41

    RE: Pegasus @ 39 – I like the idea, but I really wonder where they would possibly get the money to do that.

  42. 42
    SteveH says:

    RE: Scotsman @ 26 – How, as a renter, do I get me some of that?

  43. 43
    Pegasus says:

    By Kary L. Krismer @ 41:

    RE: Pegasus @ 39 – I like the idea, but I really wonder where they would possibly get the money to do that.

    Simple…Just have the FED print some more phony dollars and give it to New York. California is getting 2 BILLION from all US taxpayers to bailout some of their foreclosures. This judge is only asking for 100 million for this program….what a bargain!

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