Weekly Twitter Digest (Link Roundup) for 2012-09-29

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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.

19 comments:

  1. 1

    If it’s not a public place, why do they think they can protest there?

  2. 2

    Harney’s piece this week starts with a rather odd beginning.

    With 30-year mortgage rates hitting new lows and recent borrowers’ payment performance the best by far in decades, you’d think that banks and other lenders might be loosening up on their hyper-strict underwriting standards.

    http://seattletimes.com/html/moneymatters/2019258649_hreharney30xml.html

    I’m not sure why you would expect low standards to go with low rates. That one makes no sense. If your lending money at low rates you’re going to want high standards.

    And even the second part, about recent borrowers’ performance doesn’t make sense. With low rates you don’t have much margin for error. Fewer defaults in the pool of mortgages will result in a net loss on the entire pool. That’s what you need to make a profit, not something you would avoid.

  3. 3
    Pegasus says:

    Anyone find any media coverage on the foreclosure disruption for Northwest trustees or is it bad for business for their big advertisers to publicize it?

  4. 4

    RE: Pegasus @ 3 – If I had to guess, the protesters probably didn’t think in advance to “alert the media.”

  5. 5
    Pegasus says:

    RE: Kary L. Krismer @ 4 – RT @jillayne: “Police have been called. News crews are here”.

  6. 6
    Pegasus says:

    RE: Kary L. Krismer @ 2 – His article is just howling from a member of the real estate pack for the banks to grease the way for more real estate commissions to flow by lowering standards. He is whining about credit quality and money down requirements. He is arguing for everything to return to the ways that got us into the mess. Using the low interest rates as an argument is idiotic. Lower rates mean that someone can borrow more money with the same income than they could when mortgage rates were at 6 percent. More money loaned/same income = more leverage/more risk. With Tim’s projected affordability of a 56,000 dollar income to buy a 378,000 house now I think we have plenty of risk already. If anything the standards should be tightened but they won’t be….

  7. 7

    By Pegasus @ 6:

    RE: Kary L. Krismer @ 2 -If anything the standards should be tightened but they won’t be….

    I think the first part of that is what I was saying. If you’re loaning money at lower rates, you want higher standards.

    To explain it a different way, if you’re loaning money at 12% interest, you will still earn some profit (ignoring cost of funds) with a higher level of default than you would with interest rates at 4%. That explains why credit card companies could offer credit to high risk individuals–they charged over 20%, and could still make money with relatively high levels of default.

  8. 8

    By Pegasus @ 5:

    RE: Kary L. Krismer @ 4 – RT @jillayne: “Police have been called. News crews are here”.

    If the protest was entirely over the “public place” argument (I don’t know), maybe the press considered that a stupid argument. But hey, if the protesters thought that argument had merit, they should have tested it by walking around naked. ;-)

  9. 9
    wreckingbull says:

    The Stricker home is interesting.

    Another home I’d love to tour is this one:

    http://tacomavintagehomes.com/2011/06/whats-with-that-house-the-rust-mansion-on-north-i-street/

    The photos don’t really do it justice.

  10. 10

    The protesters had an agenda: To disrupt the auction and it worked. They marched in chanting and used whistles so loud nobody could hear anything. They had a list of complaints against Routh Crabtree and Olson, the law firm that owns the building and Northwest Trustee Services, the evil banksters, etc., etc. One person told a story about trying to get help avoiding foreclosure and was unsuccessful, and lost her home. Their “public place” argument goes like this: Auctions are suppose to be held in a public place and all the other auctions in Wa State are held at the county courthouse. In King County there’s an auction in Seattle at the courthouse and also in Bellevue at Northwest Trustee Services, which is a privately owned building. There is no parking allowed on site because all the other tenants complained that their cutomers couldn’t find parking on Friday mornings so everyone who attends the auctions is required to park offsite at a parking lot just east of the King Co Animal Shelter along Eastgate Way, and then we take a shuttle bus from the parking lot to the NW Trustee Svcs location. It’s not that difficult to comply w/the parking rules. I usually take groups of students using the carpool/offsite parking system once a month. It’s a 5 minute drive if we miss all the lights. So in a way, the protesters have a point. Looking at it from another angle, when I go to the Seattle courthouse or Pierce County courthouse, I have to park a couple blocks away….still accessible. The police allowed the protesters to continue their protests…but on the sidewalk away from the auction. There was a camera crew from KING 5 news. I think everyone was tipped off bc the KING 5 gal came with the protesters and there were LOTS of ppl from Routh Crabtree/NWTrustee with us hanging out that morning for no apparent reason. I support their right to protest and am glad we live in a country where we can protest.

  11. 11

    By Jill Schlicke @ 10:

    Their “public place” argument goes like this: Auctions are suppose to be held in a public place and all the other auctions in Wa State are held at the county courthouse. In King County there’s an auction in Seattle at the courthouse and also in Bellevue at Northwest Trustee Services, which is a privately owned building. . . . So in a way, the protesters have a point. Looking at it from another angle, when I go to the Seattle courthouse or Pierce County courthouse, I have to park a couple blocks away….still accessible. . . . I support their right to protest and am glad we live in a country where we can protest.

    I wasn’t trying to suggest that they didn’t have a right to protest, only that their protesting in the area strongly suggests that it is a public place. Some public places are privately owned.

    I don’t think the WA Supreme Court has ever addressed the issue of what is a public place in the context of the deed of trust statute. But the statute also refers to a public auction, so I think at long as the public is allowed to bid, it would be okay. Also, I believe other statutes use the term public place, such as perhaps the one restricting the places where people can smoke.

  12. 12
    Pegasus says:

    RE: Jill Schlicke @ 10 – I think protesting that Routh Crabtree/NWTrustee may be getting special treatment and may be in violation of the rules and law concerning foreclosure locations is a good thing. But then again since it is really all about the money and, let’s face it, these guys have really been raking in the fees since the foreclosure crisis struck they deserve the special treatments and are apparently allowed to operate with all kinds of conflicts of interests?

  13. 13

    RE: Pegasus @ 12 – Blame the legislature for what deed of trust trustees can and cannot do. They’ve amended the deed of trust statute twice in probably the last 5 years to deal with the relationship of the trustee to the debtor. It wouldn’t be that tough to remove some of the most obvious conflicts, such as preventing the bank’s attorney from acting as trustee. But they don’t change the law to prevent that.

    Although as a practical matter, if you get 100+ trustee’s sales as a trustee from a given bank, how independent are you really going to be? Deed of trust trustee might be a good use of panels, like they set up with appraisers.

    BTW, as a bankruptcy attorney I dealt with the Routh Crabtree firm dozens of times, and never had a problem with them.

  14. 14
    Pegasus says:

    RE: Kary L. Krismer @ 13 – “Blame the legislature for what deed of trust trustees can and cannot do.” That’s why I mentioned it was all about the money. The legislature operates under the gravitational pull of the almighty dollar and rarely do they escape it’s pull.

    BTW your vote of confidence for the law firm involved is to be expected from a fellow member of the brotherhood. Judging by the amount of bar violations reported by fellow attorneys in this state or should I say lack of complaints it appears to be part of the secret code of the brotherhood. Do you have a secret handshake or sign?

  15. 15

    By Pegasus @ 14:

    BTW your vote of confidence for the law firm involved is to be expected from a fellow member of the brotherhood. Judging by the amount of bar violations reported by fellow attorneys in this state or should I say lack of complaints it appears to be part of the secret code of the brotherhood. Do you have a secret handshake or sign?

    I was actually thinking of other attorneys that I would not have such an opinion of when I wrote that. I filed a bar complaint against one of them, but the bar association didn’t do anything.

  16. 16
    Howard says:

    By Jill Schlicke @ 10:

    There is no parking allowed on site because all the other tenants complained that their cutomers couldn’t find parking on Friday mornings so everyone who attends the auctions is required to park offsite at a parking lot just east of the King Co Animal Shelter along Eastgate Way, and then we take a shuttle bus from the parking lot to the NW Trustee Svcs location. It’s not that difficult to comply w/the parking rules. I usually take groups of students using the carpool/offsite parking system once a month. It’s a 5 minute drive if we miss all the lights. So in a way, the protesters have a point. Looking at it from another angle, when I go to the Seattle courthouse or Pierce County courthouse, I have to park a couple blocks away….still accessible. .

    Just curious as I want to learn more about the trustee sales..

    What sort of class are you teaching that brings them to a trustee sale. I did watch your videos on youtube as well as plan on attending a few auctions. I want to learn the current state of affairs before I might dive in..

  17. 17

    Howard,

    Once a month or so I am hired by someone to teach a class called “Foreclosure Field Trip.” The class is marketed to Realtors who receive 4 continuing ed clock hour credit. Just about each time, someone else also comes. Typically the non-real estate broker is an investor who wants to learn more. Sometimes they come with a Realtor, sometimes they come alone. Next class is scheduled for Oct 26th in Bellevue.

    http://ceforward.com/products-page/

  18. 18
    Ross Jordan says:

    By Kary L. Krismer @ 7:

    By Pegasus @ 6:

    RE: Kary L. Krismer @ 2 -If anything the standards should be tightened but they won’t be….

    I think the first part of that is what I was saying. If you’re loaning money at lower rates, you want higher standards.

    To explain it a different way, if you’re loaning money at 12% interest, you will still earn some profit (ignoring cost of funds) with a higher level of default than you would with interest rates at 4%. That explains why credit card companies could offer credit to high risk individuals–they charged over 20%, and could still make money with relatively high levels of default.

    Your entire argument assumes a rational free market system. It’s not. Banks don’t hold the notes they write; rather they sell the notes to freddie/fannie (who in turn sell them to the federal reserve). Banks must insure the borrowers meet the freddie/fannie established lending criteria, and once satisfied they don’t need to care how a loan performs. Profit is made when the note is sold to the GSE.

  19. 19

    RE: Ross Jordan @ 18 – The existence of Fannie and Freddie isn’t what disrupts the analysis. It’s the government entities not selling all the packaged loans to private parties that disrupts the analysis.

    But this is a discussion of what Harney was saying in his article. I’d have to go back and look, but I don’t think he was taking Fannie and Freddie into account in saying what he said. If he was he would have said something like:

    With government entities buying up most loans, you’d think that banks and other lenders might be loosening up on their hyper-strict underwriting standards.

    Instead he was focusing on how low rates should affect standards.

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