tag:blogger.com,1999:blog-20146831356417824812024-03-07T22:24:33.971-06:00Second City Bubblestuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.comBlogger106125tag:blogger.com,1999:blog-2014683135641782481.post-46289826549651967432008-12-02T12:23:00.002-06:002008-12-02T13:12:01.604-06:00Watch This Video<a href="http://www.kcet.org/socal/2008/09/foreclosure-alley.html">Foreclosure Alley, CA</a><br /><br /><blockquote><br />Correspondent Lisa Ling <br /><br />September 23, 2008 11:02 PM <br /><br />For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state - home to a major housing boom. But now the Inland Empire is pretty much the poster child for the foreclosure crisis. In the newer developments, house after house sits vacant - either up for auction, for sale by a bank or going for what’s called a “short sale” which is when the owner owes more than the house is worth.<br /></blockquote><br /><br />Coming to a subdivision near you?stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com6tag:blogger.com,1999:blog-2014683135641782481.post-55650728753089210082008-10-18T09:52:00.003-06:002008-10-18T09:54:21.693-06:00Geee, No Crap!<a href="http://www.chicagotribune.com/business/chi-sat_spire1018oct18,0,7369971.story">Spire pay dispute spurs doubt</a><br /><br /><blockquote><br /><br />Spire pay dispute spurs doubt<br /><br />Calatrava among consultants filing millions in liens against developer<br /><br />By Mary Ellen Podmolik and Blair Kamin | Chicago Tribune reporters<br /> <br />October 18, 2008 <br /><br />The Chicago Spire's penthouse may be sold but there is growing doubt whether the project will rise out of the hole that's been created at 400 N. Lake Shore Drive.<br /><br />Consultants on the project are starting to line up seeking payment for their work on the development, designed to become the tallest skyscraper in the United States and one of the tallest in the world. The most well-known of the consultants, architect Santiago Calatrava, filed a lien on Oct. 8 through his Lente Festina Ltd., seeking more than $11.3 million in payment from Spire developer Shelbourne Development Group Inc.<br /><br />Separately, Chicago-based architectural design firm Perkins+Will Inc. filed a lien against Shelbourne for almost $4.85 million in payment. The two liens were filed with the Cook County recorder of deeds.<br /><br />The liens suggest the project's financing, as well as its feasibility, is shaky.<br /></blockquote><br /><br />Who wuda thunk it??stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com1tag:blogger.com,1999:blog-2014683135641782481.post-82244222080859024622008-08-04T13:36:00.002-06:002008-08-04T13:42:09.058-06:00Not Getting ItBoy, they just don't get it do they?<br /><br /><br /><a href="http://www.chicagotribune.com/business/chi-re-fannie-unsold-home-0803aug03,0,2646891.story">Fannie faces glut of unsold homes</a><br /><br /><blockquote><br />Mortgage giants own 44 percent of foreclosed homes<br /><br />By Bob Ivry and Sharon L. Lynch | Bloomberg News <br /><br />August 3, 2008 <br /><br />Fannie Mae, the largest U.S. mortgage finance company, couldn't find a buyer who would pay $6,900 for the three-bedroom house at 1916 Prospect St. in Flint, Mich. So broker Raymond Megie, who is handling the foreclosure sale, advised cutting the price to $5,000. He still couldn't sell it.<br /><br />"There's oversupply," Megie said.<br /><br />As home prices decline, unsold properties are a problem for creditors like Fannie Mae because taxes, insurance and repairs drain their cash. Fannie Mae acquired twice as many homes through foreclosure as it sold in the first quarter, regulatory filings show, and late payments on its home loans—a harbinger of foreclosures—almost doubled in the past year.<br /><br />...<br /><br />Fannie Mae's goal in selling its properties is to get the highest possible price, even if it means hanging on to them longer, said Gabrielle Harrison, a vice president at the company.<br /><br />"We want to treat that home as if it was your own, or as if you were living next door to it," Harrison said. "You wouldn't want that home to bring down your property value."<br /></blockquote><br /><br />They obviously don't understand that by holding the price, the inventories will only continue to grow!<br /><br />Ugh.stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com5tag:blogger.com,1999:blog-2014683135641782481.post-43191687635997833782008-06-11T11:56:00.003-06:002008-06-11T12:03:14.085-06:00AWESOME!<br><br />HAHAHAHAHAHAHAHAHAH<br /><br /><a href="http://online.wsj.com/article/SB121314811278463077.html">Some Buy a New Home to Bail on the Old</a><br /><br /><blockquote><br />Fannie Plans Rules <br />To Avoid Practice <br />Described as Fraud<br />By NICK TIMIRAOS<br />June 11, 2008; Page A3<br /><br />Next month, Michelle Augustine plans to walk away from her four-bedroom house in a Sacramento, Calif., subdivision and let the property fall into foreclosure. But before doing so, she hopes to lock in the purchase of another home nearby.<br /><br />...<br /><br />In markets hit hardest by falling home prices and rising foreclosures, lenders and brokers are discovering a new phenomenon: the "buy and bail," in which borrowers with good credit buy a new home -- often at a much lower price -- then bail out of the "upside down" mortgage on their first home.<br /><br />Homeowners are able to pull off this gambit -- which some lenders and real-estate agents call mortgage fraud -- by taking advantage of mortgage-lending practices that allow them to buy a new primary residence before their existing residence has been sold. And with the lending industry in disarray as it tries to restructure millions of mortgages, some boast they are able to pull off the strategy with ease.<br /></blockquote><br /><br />Wow! DiTech was right: People ARE smart!!<br /><br>stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com5tag:blogger.com,1999:blog-2014683135641782481.post-66780652021031641572008-05-22T16:28:00.002-06:002008-05-22T16:52:27.032-06:00Shocking News!City zoning employees are dirty!<br /><br /><a href="http://www.chicagotribune.com/news/local/chi-federal-zoning-probe-webmay23,0,850028.story">U.S. charges 15 in city bribe-taking probe</a><br /><br /><blockquote><br />By Jeff Coen and Dan Mihalopoulos | Tribune reporters <br />4:35 PM CDT, May 22, 2008 <br /><br />Greedy city workers and bribe-paying developers have corrupted Chicago's zoning and buildings departments, federal and local authorities said Thursday as they announced criminal charges against 15 people in an undercover sting operation dubbed "Crooked Code."<br /><br />City Inspector General David Hoffman, who worked with federal investigators on the case, said corrupt developers were motivated by the desire to get things built cheaper and faster. Honest developers are unable to compete as a result, he said.<br /><br />"There can be no doubt that we're talking about systemic corruption," he said. "This is completely unacceptable in this great city."<br /></blockquote><br /><br />Daley's response was: "Whaa?"stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com6tag:blogger.com,1999:blog-2014683135641782481.post-51625058747871126042008-05-14T14:13:00.002-06:002008-05-14T14:26:07.153-06:00How Could This Happen?<a href="http://www.chicagotribune.com/classified/realestate/chi-wed-condos-chicago-may14,0,7300188.story">Record condo numbers to saturate downtown</a><br /><br /><blockquote><br />With sales slowing in weak economy, oversupply forecast<br />By Robert Manor | Tribune reporter <br />May 14, 2008 <br /><br />Nearly 6,000 condos, by far a record number, are expected to come on the market in downtown Chicago this year at a time when mortgages are tougher to get and sales have slowed dramatically, according to a report.<br /><br />That adds up to a big worry about the Loop-area market, which has seen explosive growth in recent years.<br /><br />"It's tremendously serious," said Steven Hovany, president of Strategy Planning Associates Inc., a planning and real estate consulting firm. "What you are going to see are buildings going into foreclosure."<br /><br />Hovany predicts developers will cancel downtown projects for several years to come, until the excess housing is absorbed.<br /></blockquote><br /><br />The developers won't even get the construction loans unless there is a large majority pre-con purchases.<br /><br /><blockquote><br />Sales of newly built downtown condominiums plummeted by about 83 percent during the first quarter, to 201 units from 1,207 units a year earlier, according to a report to be released Wednesday by Appraisal Research Counselors.<br /></blockquote><br /><br />Simple. Prices are too high. Lower the prices and the units will sell. Period.<br /><br /><blockquote><br />Mike Hart, regional manager of Hanley Wood Market Intelligence, said developers are inclined to sweeten their offers but not necessarily lower the sales price. He said that means more free amenities included in deals, "whether it's flooring or something in the kitchen or maybe a free washer and dryer."<br /></blockquote><br /><br />Well...so much for that idea. If they wait long enough, the cycle will return. But that might take 10-20 years. By then those condos STILL won't be worth it. <br /><br /><blockquote><br />Lev said demand can change block by block, and some units are easier to sell than others. For example, Lev said, entry-level homes, meaning those costing less than $300,000, can sell to some first-time buyers because they aren't burdened by having a home to sell, and mortgages are available for people with good credit.<br /><br />"It's the middle that is having a tougher time," Lev said. He defines middle-priced units as those costing somewhere between $400,000 and $800,000. He said those would-be buyers often have a home they must sell and cannot afford two mortgages for a protracted time.<br /></blockquote><br /><br />Again, repeat it until it sticks: Cheaper homes sell. Cheaper homes sell. Cheaper homes sell. Besides, who can afford 2 mortgages for ANY time?? Anyone up for a Bridge Loan? HAHAHAHAHstuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com2tag:blogger.com,1999:blog-2014683135641782481.post-27513905667412128082008-05-06T19:37:00.002-06:002008-05-06T19:40:17.800-06:00Heaven and Hell<a href="http://seekingalpha.com/article/75906-privately-insured-mortgages-up-housing-tracker">Privately-Insured Mortgages Up - Housing Tracker<br /></a><br /><br /><blockquote><br />Quotes of the Day<br /><br />“Capitalism without failure is like Christianity without hell.” and “Lenders and investors who were dumb enough to deal in subprime mortgages should not receive any special help.”– Berkshire Hathaway Chairman and CEO Warren Buffett. (Financial Post, May 6th) <br /></blockquote><br /><br />Misc. financial news.stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com1tag:blogger.com,1999:blog-2014683135641782481.post-71401540029775130172008-04-20T09:51:00.009-06:002008-04-22T21:25:33.469-06:00HOA and Assessment Fee Problems</br><br />Many places like Florida and Arizona are having difficulties with Home Owner Associations. It seems that when people foreclose, they are not paying their assessment fees! These fees do not just go away. Someone has to pay. And as usual, the responsible people are the ones.<br /><br /><a href="http://www.heraldtribune.com/article/20080418/REALESTATE/804180677/1537">Foreclosures cause woes for property associations</a><br /><blockquote><br />STAFF REPORT <br />Published Friday, April 18, 2008 at 4:30 a.m.<br /><br />Florida's growing foreclosure problems are wreaking havoc with the budgets of homeowner, condominium and community associations, according to a new survey by an industry trade group.<br /><br />Two-thirds of associations polled by Community Association Leadership Lobby (CALL) said they would have to raise fees this year to compensate for the losses.<br /><br />More than 60 percent of the nearly 500 associations surveyed said that banks and mortgage lenders holding title to foreclosed homes or units are not paying regular fees or other assessments.<br /></blockquote><br /><br />and<br /><br /><a href="http://www.azcentral.com/news/articles/2008/04/03/20080403hoas0403.html">Foreclosures force HOAs to cut corners on upkeep</a><br /><blockquote><br />Homeowners associations strapped by unpaid assessments related to the foreclosure-ridden real-estate market are mustering volunteer work crews, cutting maintenance jobs and scrimping on landscaping to save money.<br /><br />Phoenix, Chandler and Avondale are among Valley cities fielding calls for help from HOAs that previously turned only to their own boards of directors and management companies. <br /><br />"We are in new territory and need to find creative ways to work with everyone, whether that's stepping in with volunteerism or offering some training," said Annie Alvarado, deputy director of Phoenix Neighborhood Services.<br /><br />Municipalities are trying to figure out what, if anything, they can do to help cash-strapped neighborhoods navigate the legal and financial difficulties that plague distressed properties.<br /></blockquote><br /><br />Anyone that still thinks Chicago is different is delusional. The coveted Near North Zip Code of 60610 is an eye opener. Look at the building at 345 N. LaSalle. There are 15 condo units in pre-foreclosure, 1 going to auction in May, and 9 that are bank owned. 33 W Ontario Buildings has 11 in pre-foreclosure, 1 auction that has past, and 25 that are bank owned. I am sure that some of these assessments are getting paid, but the ones that are not are adding to burden of the stretched owners that are still surviving. Only time will tell. Expect some bleeding heart Chicago politician will try to pass a bill to make taxpayers front these people.stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com9tag:blogger.com,1999:blog-2014683135641782481.post-39408279349363482982008-04-15T22:11:00.004-06:002008-04-20T09:51:10.772-06:00HELOCs go Bye ByeIt seems that home equity lines and lines of credit are disappearing. Here is what is being reported:<br /><br /><A href="http://www.americanchronicle.com/articles/57378">When HEL Freezes Over -- Who's out in the cold with the HELOC freeze?</a><br /><br /><blockquote><br /><br />Banks spent the last decade trying to persuade everyone who came through their doors to take out a home equity loan (HEL) or a line of credit (LOC). Now they've changed their minds. Sort of.<br /><br />Financial institutions are still marketing these products, but they've also started freezing accounts of current customers. <br /><br />Countrywide suspended 122,000 accounts.<br /><br />USAA pulled or reduced 15,000. <br /><br />Chase, National City, Washington Mutual and Suntrust have mailed out HELOC Freezes <br /><br />And the pending freezes list includes Bank of America and CitiGroup.<br /><br />I haven't read of any lenders calling the loans due. What they are doing is tightening their lending practices. Loans that were already approved and in place, with the home as collateral, are riskier now that home values have fallen almost everywhere.<br /><br />Who´s in trouble? Anyone who has an outstanding HELOC, or is trying to get one, whose outstanding mortgage loans would then exceed 80% of their equity. Let´s look at an example. The Browns bought a $300,000 home. Between their down payment and the monthly payments they´ve made, their loan is now only $200,000. They took out a $50,000 Home Equity Line of Credit last year to provide some major maintenance to the structure.<br /></blockquote><br /><br />and<br /><br /><a href="http://www.wfmj.com/Global/story.asp?S=7997950">Banks Closing Doors to Home Equity Loans<br /></a><br /><br /><blockquote><br />When bankers use such catchphrases as "liquidity crisis" and "tightened lending standards," what they really mean is that it's tougher to get a loan. That's certainly true for home-equity lending. Until recently, borrowing against soaring home values was almost as easy as getting a new credit card. Now, prospective borrowers find it more difficult to meet lenders' increasingly stringent requirements.<br /></blockquote>stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com1tag:blogger.com,1999:blog-2014683135641782481.post-6073784584873648262008-04-14T17:12:00.002-06:002008-04-14T17:21:52.214-06:00Big TroubleThe housing market is officially in BIG TROUBLE. The top tier law firms are scaling back hiring of new associates! Who will buy $600,000 2 bed condos now?!<br /><br /><a href="http://online.wsj.com/article/SB120812870657811461.html?mod=hpp_us_whats_news">Law Firms Curtail Associate Programs As Economy Slows</a><br /><br /><blockquote><br />By ASHBY JONES<br />April 14, 2008; Page B1<br /><br />For associates at law firms, how quickly things have changed.<br /><br />This time last year, salaried lawyers at many of nation's largest firms had just scored a pay bump, as business was blazing and firms were scrambling to keep talent. Now, due largely to a slowdown in work relating to mortgages, real estate, mergers and private equity, some firms are taking such measures as rescinding offers to incoming associates and summer associates, asking first-year lawyers to start several months later and shortening their summer programs to save money.<br /></blockquote><br /><br />I can hear Lincoln Pk and River North screaming right now.stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com2tag:blogger.com,1999:blog-2014683135641782481.post-81344634410537601122008-03-29T13:50:00.003-06:002008-04-06T10:42:18.335-06:00No Way, Jose!<a href="http://rasmussenreports.com/public_content/business/general_business/most_americans_oppose_federal_bailout_for_homeowners">Most Americans Oppose Federal Bailout for Homeowners</a><br /><br />I most definitely agree.<br /><br /><blockquote><br /><br />Fifty-three percent (53%) of Americans say that the federal government should not help out homeowners who borrowed more than they could afford. A Rasmussen Reports national telephone survey found that 29% disagreed and believed that federal action is appropriate. Seventeen percent (17%) are not sure. <br /><br />There is even stronger opposition to federal help for banks that made bad loans. By a 4-to-1 margin (61% to 15%) Americans reject that approach to resolving the current mortgage crisis. <br /></blockquote><br /><br />My hard earned tax dollars should not be going to save idiots from themselves. Anyone who did not see this train wreck coming is a fool. Those who actually stopped in front of the train thinking that they would be immune to physics need to be taught a lesson. Any kind of bailout would tell fools and idiots that its OK to make bad moves because the whole country will drop what they are doing to dig them out of the mess that they made. Guess what will happen? Those same people will do the same stupid things all over again.<br /><br />No. No way.<br /></br>stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com0tag:blogger.com,1999:blog-2014683135641782481.post-19686068083804504392008-03-28T22:43:00.002-06:002008-03-28T22:46:49.234-06:00Wishing Price</br><br /><a href="http://www.nytimes.com/2008/03/26/business/26leonhardt.html?_r=2&ref=todayspaper&oref=slogin&oref=slogin">Be It Ever So Illogical: Homeowners Who Won’t Cut the Price</a><br /><br />Falling on deaf ears.<br /><br /><blockquote><br />In the wake of the biggest housing boom on record, it’s understandably hard to accept a new reality. Robert Glinert, a real estate agent in the Los Angeles area, said he has recently been saying no to almost half the sellers who have asked him to represent them. Their initial asking price is just too unrealistic. <br /><br />“People say, ‘I don’t care about the market — my home is still worth what I paid for it in 2006,’ ” Mr. Glinert told me. “And I say, ‘To you. Only to you.’ ” <br /></blockquote><br /><br />Some one needs to inform the Greedy Sellers that down payments are required now.stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com1tag:blogger.com,1999:blog-2014683135641782481.post-65693841311766836942008-03-13T23:23:00.003-06:002008-03-13T23:37:57.878-06:00** BREAKING **I just got an email from a friend of mine that is very explosive for the housing market. As of March 14, 2008:<br /><br /><blockquote><br />FHLMC recently announced that they would no longer purchase loans with LTV/TLTV/HTLTV's greater than 97%. This announcement affects all FHLMC products except Home Possible and Barrier Buster LPMI. Any FHLMC product that previously had maximum LTV or TLTV or HTLTV of greater than 97%, is now reduced to a maximum of 97%.<br /></blockquote><br /><br />This means that Freddie Mac will no longer accept Zero Down loans. Buyers will have to muster up 3% or more to qualify for a home loan. So to get a $500,000 loan the buyer must pony up at least $15,000 <em>cash</em>. <br /><br />I would say that this will put a damper on the market even more. Sellers will have to realize the higher their asking price the higher out of pocket cash the buyers will need. Some houses simply will not sell.<br /><br>stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com1tag:blogger.com,1999:blog-2014683135641782481.post-91176816026969905062008-03-07T13:56:00.005-06:002008-03-10T00:02:42.280-06:00That's No Deal</br><br /><a href="http://finance.yahoo.com/real-estate/article/104558/Buying-in-a-Rocky-Housing-Market;_ylt=AlUlpDQN5tnGHjkWELLI5We7YWsA">Buying in a Rocky Housing Market</a><br /><br /><blockquote><br />by Aleksandra Todorova<br />Tuesday, March 4, 2008<br /><br />Indifferent to the bleak real estate headlines, 26-year-old Michael Klauer and his fiancée recently bought a two-bedroom condo in the desirable Lake View neighborhood in Chicago. They weren't in a rush to buy, but when an opportunity presented itself only a month after they started looking, they jumped on it.<br /><br />The apartment, listed at $519,000, was theirs for only $480,000 — an initial offer they didn't back down from, even though they knew the seller had bought the place 10 months earlier for $512,000. Factoring in the broker's fee and sales taxes, the seller lost more than $44,000 on that deal, according to the couple's realtor, Jay Michael, owner of the Estate Property Group in Chicago.<br /></blockquote><br /><br />WOW! What a steal. $480,000 for a 2 bed room apartment?! Lucky there was no bidding war...<br /><br /><blockquote><br />And even though the condo's value may drop further, the couple wasn't concerned since they plan to live in the place for at least three to five years. "It was a good time to buy," he notes. "Prices are on the down low, and it's something I could sit on for a while."<br /></blockquote><br /><br />I hope they can because they will not see $480,001 or more five years from now. Are they not aware this bubble was a historic event, none the likes of man has seen before? Chances are no person alive will see price growth of this magnitude in their lives again. <br /><br /><blockquote><br />Stay away from foreclosures<br /><br />Foreclosures are touted as great deals (especially by services that sell foreclosure listings). In some areas, real estate agents have even started taking potential buyers on "foreclosure tours."<br /><br />In reality, however, buying a foreclosed property — or even one in a neighborhood plagued by foreclosures — is risky. "A heavy concentration of foreclosures indicates that there's some sort of economic problem in the region that will keep your home value from at least remaining stable," says Miller. "Or that there was some speculation and there may still be some air left to come out of that market."<br /></blockquote><br /><br />The author should look at ReatyTrac.com's map function. After reviewing the Chicagoland area tell me what neighborhood DOES NOT have forclosures? I'll clue her in: None.<br /></br>stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com0tag:blogger.com,1999:blog-2014683135641782481.post-4157358291080667572008-03-03T22:52:00.005-06:002008-03-07T13:56:21.083-06:00Don't Forget Chicago, Mr, Stein!</br><br /><a href="http://finance.yahoo.com/expert/article/yourlife/69320;_ylt=Ai7m64M2Goq6LraiNB.CLay7YWsA">Ben Stein How Not to Ruin Your Life</a><br /><br /><blockquote><br />The High and the Low<br /><br />First, as I see it (and I'm often mistaken), the real estate market still has some serious falling to do. I base this on the fact that real estate in some of the most overpriced markets -- like Manhattan and the west side of Los Angeles -- have yet to fall dramatically.<br /><br />I, your humble servant, have been looking for a condo here in L.A. for my son, and I've been floored by how high the asking prices are for these dwellings. Yes, they've fallen, but they're still far higher than they were four or even five years ago.<br /><br />Keeping asking prices high may make sellers feel good, but it won't sell their homes. Consider this: On one hand, brokers tell me that prices haven't fallen much, and that they think that's a good sign. On the other hand, they complain that sales volume is way down.<br /><br />Both Sides Now<br /><br />Well, friends, the former has a lot to do with the latter. Volume isn't going to pick up until prices fall to accommodate the fact that we're in the midst of a real estate collapse. And buyers aren't going to step up to the plate in large numbers until it's clear that prices have fallen to reflect the new realities of the real estate market.<br /><br />This means that if you're a seller, don't count on selling unless you have a price that makes sense in early 2008. Prices that made sense in early 2006 just aren't going to fly.<br /><br />If you're a buyer, my advice is to still try to buy the house of your dreams, because they come along so rarely. But try to drive the hardest bargain you can; sellers should be very flexible. I would even say that if a seller isn't flexible, wait for a better mood to strike him or her.<br /><br />Again, the real estate collapse has a long way to run yet, and it'll end when sellers get realistic. That could take four years, and maybe longer. But if you need to sell, there's no shame in asking a sensible price.<br /></blockquote><br /><br />Very sensible article. However, LA and NY are not the only expensive cities in the country.stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com0tag:blogger.com,1999:blog-2014683135641782481.post-6479344199406612042008-02-23T13:05:00.008-06:002008-02-26T00:24:09.716-06:00So What Could Possibly Go Wrong?</br><br /><a href="http://www.washingtonpost.com/wp-dyn/content/article/2008/02/20/AR2008022002270.html">Wall Street Bank Run</a><br /><br /><blockquote><br />By David Ignatius<br />Thursday, February 21, 2008; Page A15 <br /><br />It doesn't look like an old-fashioned bank run because it involves the biggest financial institutions trading paper assets so complicated that even top executives don't fully understand the transactions. But that's what it is -- a spreading fear among financial institutions that their brethren can't be trusted to honor their obligations. <br /><br />...<br /><br />The public, fortunately, doesn't understand how bad the situation is. If it did, we might have a real panic on our hands. And there would be more pressure for bad policies -- ones that try to freeze the damage, rather than letting prices fall to levels where buyers will return and the markets will clear. Hillary Clinton's proposed moratorium on home foreclosures, in that respect, is one of the truly bad ideas of our time. It would make the situation worse by increasing even more the illiquidity and inflexibility of the housing market.<br /><br />...<br /><br />These markets are now so complicated that most of us can't begin to understand the details. So I asked the chief financial officer of a leading concern to walk me through what has been happening. The problem, he said, is that financial institutions are required to "mark to market" their tradable assets (which is a fancy term for setting a value) even when there isn't a functioning market. In many cases dealers can do little more than guess at the value -- and other investors down the line know it. <br /></blockquote><br /><br />Read the remainder via the link. It is very good. But he does not go far enough. It almost reads like his editor cut the story half way through. He does not come full circle on the "mark to market" concept. That will have to happen for housing prices also, not just stocks and derivatives. <br /></br>stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com2tag:blogger.com,1999:blog-2014683135641782481.post-74656065467081154882008-02-21T11:01:00.005-06:002008-02-21T11:37:06.862-06:00This About Sums It Up"What is going on with the market?" <br /><br />Which market? Housing? Stocks? Bonds? Why are things going south, and why does it seem like nothing is helping? It all seems to be unraveling.<br /><br />MSNMoney has a good summary:<br /><br /><blockquote><br /><a href="http://articles.moneycentral.msn.com/Investing/SuperModels/WhyWallStreetRescuesAreFailing.aspx">Why Wall Street rescues are failing</a><br /><br />The financial system has become dependent on debt and the transfer of risk via convoluted debt instruments, creating a mess that will require hundreds of billions of dollars and global cooperation to fix.<br /><br />By Jon Markman<br /><br />Since the wheels started coming off the stock market last summer, investors have looked to at least seven white knights to end the distress with a bold stroke. <br /><br />Yet each, including Federal Reserve Chairman Ben Bernanke and U.S. superinvestor Warren Buffett, has failed to lift investors' spirits for more than a couple of weeks, ultimately leaving stocks to tumble ever lower. Why?<br /><br />The fundamental problem in the world economy is that it grew over the past two decades to be incredibly reliant on optimistic risk takers' willingness to accept increasingly complex IOUs from companies, banks and government institutions as investments instead of real assets. Now we are seeing the same movie play back in reverse, as massive investor losses in debts once believed to be safe have led to falling confidence, rising pessimism and extreme risk avoidance.<br /><br />...<br /><br />Where will that money come from? The answer is nowhere, at least not very quickly. And that is why the markets are in danger of asphyxiation. It's also why the economy is threatened: For despite the lower cost of money, it's hard for businesses to get loans for expansion because banks need to keep as many dollars as possible on their balance sheets to meet reserve requirements.<br /></blockquote><br /><br />Notice there is not too much housing talk in the article. Alittle lead up with the subprime mess. But he left out the impending Alt-A and other possible problems. Only time will tell.<br /></br>stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com0tag:blogger.com,1999:blog-2014683135641782481.post-39085946207413434102008-02-19T16:56:00.005-06:002008-02-19T17:02:21.592-06:00Can You Believe These People??<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJc3A4Kp3V_Sr6zozitPgOB_nm_cTEHa7Tjek5YMe0OnBRu87_JS-IIdFyVrS_dI7eCijaSL8KFIL9Fkm66TmnowrzFk3n7kaqy10AK2LtQlOG5N1x2jS0XprYjPXq_cEmev8fYLFC3cdK/s1600-h/Stick'em%2520Up.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJc3A4Kp3V_Sr6zozitPgOB_nm_cTEHa7Tjek5YMe0OnBRu87_JS-IIdFyVrS_dI7eCijaSL8KFIL9Fkm66TmnowrzFk3n7kaqy10AK2LtQlOG5N1x2jS0XprYjPXq_cEmev8fYLFC3cdK/s320/Stick'em%2520Up.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5168829203011997794" /></a><br /></br><br /><a href="http://www.chicagotribune.com/news/local/chi-transfertax_19feb19,1,7951937.story">City transfer tax may expand to cover incomplete real estate deals</a><br /><blockquote><br /><br />Unfinished real estate deals on city's radar<br /><br />By Gary Washburn | Tribune reporter <br /><br />February 19, 2008<br /> <br />The city's real estate transfer tax is a proven cash cow, but the Daley administration -- ever on the lookout for ways to generate revenue -- is considering ways to make Bossy produce more milk.<br /><br />Revenue Department officials want to increase the number of people who pay the tax and to require others to come up with cash more quickly. The under-the-radar action comes as all Chicago property purchasers brace for a 40 percent increase in the transfer tax the City Council recently approved as part of a Chicago Transit Authority rescue package.<br /><br />...<br /><br />Under one proposal now in draft form, City Hall would require the transfer tax to be paid even when the buyer forfeits the down payment, which sometimes happens when a buyer backs out of a deal. Under a second proposal, the requirement to pony up would be triggered immediately when there is an installment agreement--a contract in which the buyer pays the seller over a period of months but does not receive title to the property until the last payment is made.<br /></blockquote><br /><br />So.......they want to tax us on a transaction that did not happen?? ARE OUT OF THEIR FREAKIN MINDS?!?!?! Lord help us. <br /></br>stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com2tag:blogger.com,1999:blog-2014683135641782481.post-30268940890050776422008-02-11T15:27:00.001-06:002008-02-14T23:37:24.028-06:00Helllllo???<div><br /><br /><a href="http://biz.yahoo.com/cnnm/080207/020708_homeowners_views.html?.v=10&.pf=real-estate">Home prices in the state of denial</a><br /><br /><br /><blockquote><br /><br />Thursday February 7, 5:58 pm ET<br /><br />By Chris Isidore, CNNMoney.com senior writer<br /><br />Despite numerous reports showing home values in historic decline, more than three out of four homeowners believe their own home has not lost value in the past year, according to an online survey.<br /><br />The survey was conducted by Harris Interactive for Zillow.com, a Web site that gives estimated home values.<br /><br />The survey of 1,619 homeowners found 36% believe their home has increased in value, and another 41% believe their value has stayed the same. Only 23% believe their home has lost value.<br /><br />"This survey reveals that despite the data to the contrary, people either aren't paying attention to their housing market or are in denial about their own home's value," said Stan Humphries, Zillow.com vice president of data & analytics.<br /><br /></blockquote><br /><br />"Maybe <em>your</em> house, but not mine!"<br /><br />Ok pal.</div>stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com3tag:blogger.com,1999:blog-2014683135641782481.post-75574553102473295692008-02-08T20:49:00.001-06:002008-02-09T13:38:42.747-06:00**MAYOR DALEY ADMITS CHICAGO PRICES ARE B.S.**Flash! Daley just destroyed Chicago housing market!<br /><br /><a href="http://www.suntimes.com/news/metro/783222,property020708.article">Daley proposes overhaul of property tax system</a><br /><br /><blockquote><br /><br />CITY HALL Mayor says assessments skewed by fraud<br /><br />February 8, 2008<br />BY FRAN SPIELMAN City Hall Reporter/fspielman@suntimes.com<br /><br />Three months after pushing through the largest property tax increase in Chicago history, Mayor Daley tried Thursday to get back on the good side of homeowners.<br /><br />The mayor unveiled a five-part plan to reform a property tax assessment system that, he has long complained, is so unfair and unpredictable, it needs to be “blown up.”<br /><br />...<br /><br /><span style="color:#ffcc66;"><em><strong>“If you look at the whole mortgage foreclosure crisis, much of it is fraudulent appraisals. You’ve loaned money. It was worth $200,000. Now, the home is worth $500,000 and the banks can get their money back. … Fraud is skewing the comparables” used to make assessments, Daley said.<br /></strong></em></span></blockquote><br /><br />HOLY F-! This crazy wack just said that houses that claim to be worth $500,000 are really only worth $200,000!! That is it. Game Over.stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com6tag:blogger.com,1999:blog-2014683135641782481.post-53067334220252883062008-02-07T00:00:00.003-06:002008-02-14T23:36:31.828-06:00CNN Foreclosure Ranking<a href="http://money.cnn.com/real_estate/zip_code_foreclosures/">#89</a><br /><br />Chicago's very own West Pullman neighborhood tips in at #89 of the top zip codes that have the most foreclosures. Congrats!stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com0tag:blogger.com,1999:blog-2014683135641782481.post-27499127109526643812008-02-06T23:51:00.002-06:002008-02-14T23:34:40.537-06:00$200,000</br><br /><a href="http://searchchicago.suntimes.com/homes/777354,What200000buys05.article">How far will $200,000 go?</a> <br /><br /><blockquote><br /><br />Depends on where you look <br /><br />February 15, 2008<br /><br />BY KAY SEVERINSEN SearchChicago - Homes editor<br /><br />If you think you can afford a $200,000 property, you’ll have lots to choose from. That price range, which we set at between $190,000 and $210,000, garnered 1,841 listings on SearchChicago, more than appeared in any of the $100,000, $300,000 and $400,000 ranges. <br /><br /></blockquote><br /><br />Chicago has a lot to offer. Lot's of food, booze, museums and high taxes. What it lacks is good public schools, solid roads, snow and ice removal and safe neighborhoods. If you want all of that, live in the burbs. You can always visit the retsurants, bars and extras. <br /></br>stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com1tag:blogger.com,1999:blog-2014683135641782481.post-14185075811115040712008-02-06T23:40:00.001-06:002008-02-13T18:55:14.417-06:00They Would Eat Their YoungChicago politicains are just simply unbelieveable. Just when the RE market is heading into it's toughest the spring selling season, they pull this stunt.<br /><br /><a href="http://www.suntimes.com/news/metro/779855,020607transfer.article">Chicago OKs real estate tax hike</a><br /><br /><blockquote><br />February 6, 2008<br /><br />BY FRAN SPIELMAN City Hall Reporter<br /><br />Chicago aldermen held their noses today and held up their end of the deal that staved off massive CTA fare hikes and service cuts. But not before giving senior citizen homebuyers a reprieve.<br /><br />Beginning April 1, Chicago homebuyers will be hit with a 40 percent increase in the city’s real estate transfer tax. Instead of paying $7.50 per $1,000 of sale price, they’ll pay $10.50.<br /></blockquote><br /><br />I will predict a spike in closing before April. However, the damage this will do to prices and comps will yet to be seen. Stay tuned!stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com0tag:blogger.com,1999:blog-2014683135641782481.post-61846577995536539392008-01-26T21:44:00.000-06:002008-02-06T23:39:19.355-06:00Hard News</br><br /><a href="http://www.chicagotribune.com/business/chi-sat_refi_0126jan26,1,6599643.story?ctrack=2&cset=true">While you weren't watching ...... mortgage rates were tumbling</a><br /><br /><blockquote><br />But joining the refi rush won't be so easy this time<br /><br />By Michael Oneal and Mary Umberger | TRIBUNE REPORTERS <br />January 26, 2008 <br /><br />With long-term mortgage rates sinking to their lowest level since March 2004, it looked like one of those golden opportunities to refinance the home or condo this week.<br /><br />But many who rushed out to their banker or mortgage broker discovered that it is much more difficult to borrow money than it was even a few months ago.<br /><br />The real estate crisis dragging down the rest of the U.S. economy has frozen the market for many borrowers. As prices fall and lenders wallow in a sea of losses, only those with gold-plated credit ratings and ample equity in their homes are sailing through the application process, mortgage bankers said.<br /><br />...<br /><br />"There's a widening gap between those people who can qualify for a mortgage and get great rates and those who can't," said Barton Pitts, president of Professional Mortgage Partners in Downers Grove. "It's a totally different world."<br /><br />...<br /><br />What's happened is that banks and mortgage lenders have not only clamped down on exotic, subprime loans they can't sell in the secondary market, but they also have tightened rules or raised the cost for medium quality and jumbo loans that make up a big part of the market. They have demanded more equity, tougher appraisals, and higher credit scores.<br /></blockquote><br /><br />Here it is. The coffin of the housing market is being hammered shut. Even here in the "it's different here" Chicago. With out getting a loan to match those crazy asking prices, the market will tumble. <br /><br />The "tougher appraisals" are the two harshest words in the whole article. What I in vision here is the new and improved appraiser will under cut the sellers outrageous asking price. The Greedy Seller won't budge on the asking price. The foolish buyer will tell the bank that they really need that house. The bank will agree, but the 30 year fixed loan will be for the appraisal. A bonus loan at a much higher rate will be given to make up for the difference. We shall see.<br /><br /><blockquote><br />Mostly gone are the once-popular "no doc" loans that required little or no proof of income or assets. And new requirements demand more equity as a percentage of home value in weak markets.<br /><br />...<br /><br />"What has gone away is you can't come in and lie to me," said Ken Perlmutter of Perl Mortgage in Chicago.<br /></blockquote><br /><br />As if the mortgage broker was the victim! The once "popular no doc loan" is fraud, pure and simple. Both side of that contract should the imprisoned and fined.stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com0tag:blogger.com,1999:blog-2014683135641782481.post-41741263822053667562008-01-26T17:17:00.000-06:002008-02-01T17:04:16.840-06:00Dirty is as Dirty Does<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmzzCxdMrjTyUajU3IkypK73jK9kzA-YObrzkVocnMC1sW5S7xbykLJyG9cOLYdj47xSg6gDnH_9T7cXO2QexZYG3kJVh6znwip_YVsCPdDxtumjlo3Vl9CN4Y9lmEIwaCBdmH6rP2BtMI/s1600-h/1660564709_809a09653d.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmzzCxdMrjTyUajU3IkypK73jK9kzA-YObrzkVocnMC1sW5S7xbykLJyG9cOLYdj47xSg6gDnH_9T7cXO2QexZYG3kJVh6znwip_YVsCPdDxtumjlo3Vl9CN4Y9lmEIwaCBdmH6rP2BtMI/s320/1660564709_809a09653d.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5162151165465269778" /></a><br /></br><br />No big surprise here: Chicago zoning procedure is corrupt. <br /><br /><a href="http://www.chicagotribune.com/video/?slug=chi-080125zoning-wn">Chicago Tribune Investigation (video)</a><br /><br />Poor, poor frmr. Ald Matlak. Of all the dirty Chicago pols, why is he singled out? I suspect he got his fair share for all the re-zoning favors he did for his business pals. <br /><br />But on the flip side where were the voices of dissent when those projects were elevating Lincoln Pk, Bucktown, Wicker Pk, and the eastern edge of Humboldt Pk to the highest home prices of all of Chicago? Also, imagine all the additional property taxes those developments brought the County! Remember, each condo unit's property taxes are assessed at its SALES PRICE. Many of the old buildings in those neighborhoods probably had very low assessed values. They should be happy to help.<br /><br />Well, I guess in the end Matlak should just be happy the Feds did not sneak in one night and try to shove a <a href="http://www.forensic-intelligence.org/corrupt/9607170261.html">Silver Shovel</a> up his..........................<br /></br>stuckinthecityhttp://www.blogger.com/profile/04103831140035179103noreply@blogger.com0