That bastion of American journalism, The Fresno Bee reports: The number of Fresno-area properties headed into foreclosure climbed 24% in June, as the moribund real estate market showed no signs of perking up....
"We're not seeing any recovery," said Ken Neufeld, a veteran real estate agent at London Properties.
Since January, an average of about 350 houses have been sold each month.
That compares with 735 transactions in June 2005, when the market was at its peak.
Town motto: "Fresono, three hours from everything."
32 comments:
first murst purst perp walk
curst!
What's worse is another set of ARM's are getting ready to adjust again. More goodtimes a brewing!
Mortgage meltdown triggers lawsuits
Homeowners, shareholders, banks and insurance companies are suing lenders after loan bubble pops
http://www.contracostatimes.com/business/ci_6366115
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I'm not sure how I feel about this. Part of me says, let the buyer beware. The other says, protect the consumer. I'm conflicted.
Also I just found out some of my retirement is put in funds that have 16% of their investments in to Mortgage companies. I'm reallocating, but it begs the question, who should be blamed, and who should pay?
Re: Fresno... couple years ago (early 2003), I had to take a business trip out there to visit a manufacturing plant.
Up until that point, I was under the impression that Fresno was a major California city on par with Oakland, SF, whatever. Driving around in my rental car, I was genuinely surprised to find that the city was practically a dusty shanty-town.
BTW, is that a picture of Two Buck Chuck™...? :-)
The jokes are great.
Fresno: Oxnard of the dessert.
All the charm of Oakland with none of the economy.
And no, the picture is top-of-the line Fresno raisin wine while houses burn in the background.
With everyone either suing or being sued the lawyers are going to do very well in all this.
I think a lot of the blame for this should fall on the Realtors, appraisers and mortgage brokers but it looks like they may be getting away with it.
Here is a novel idea, how about if each home sale came with a piece of paper something like the energy ratings on new appliances. It would include things like afford ability ratios, price to rent ratios and historical values for these.
(From the previous thread)
Foreclosure News
From some industry sources...
*****
California, the largest state, had the greatest number of foreclosures in June with 38,801, or one foreclosure for every 315 households.
About 58 percent of the properties in foreclosure are tied to subprime loans, according to a RealtyTrac spokesperson.
*****
~Mark
The company I work for just sold it's subprime interests not too long ago because of these fears. I'm just wondering how much risk we still have for loans sold during that period.
(From the previous thread)
SouthernBread @ 12:40PM:
”…there are threats of class-action suits against mortgage providers for issueing subprime loans and predatory lending practices.”
And you know what? More than a few of those consumers have a case! Over the past six months I must have reviewed at least 75 loans with VERY questionable origination practices. For one thing too many of the folks in trouble now, couldn’t afford the property to begin with!
It’s sad, really, the American dream of homeownership turned into a nightmare because lenders got overzealous. Plenty of “blame” to go around, though, but I do believe those class-actions will bring out the misdeeds of many lenders.
Look for new and tighter lending regs as a result of everything related to this bubble, not just lending practices.
~Mark
ha38349, why should re agent be held accountable? i'm not trying to pass blame but i wonder why. my job as a real estate agent is not to review your finances and make financial decisions for your. your lender or mortgage broker will assist you with your financing needs. if an individual is approved for x amount and they tell me to find them a house worth x amount, how am i contributing? sure i tell them that the crazy appreciation over the past few years is absolutely insane and there is no guarantee that it will continue. but people still wish to purchase. am i to say i will not assist them with their deal, since i know the re market will make a correction? remember, i don't know when that correction will come and how big it will be. i wish i did know when the market is going to bottom out, but i don't.
if you're talking about an agent doing numerous deals with one individual, that is a different story, but a big percentage of agents do not have a big set of clients.
as you can see i am an agent, but i do not do any loans and will not double-side a transaction. i wish to represent my client to the fullest.
Mark,
That's a very good point. I asked the question a while back but never got much of a response. Is it even possible to get regs? Here come the black helicoptors...
There is a lot of political dollars that generate from the banks and brokers. They keep argueing that basic laws of commerce will force them to tighten regulations. In other words, if they make subprime loans, their business will suffer, so self-regulation is the key.
I'm not sure I buy it really.
Of course, I feel this is part of the problem; http://repupil.com/posts/32
Realtors and brokers having side deals and whose only profit motive is to secure a loan without regard to their client's ability to repay. It would seem as if the Realtor's code of conduct should cover their client's best interest in paying back the note.
sorry I should clarify, I'm not advocating an agent should have to understand their client's ability to pay, it would just seem if they knew that a house or a note would not suit their client, they should advise them as much.
Sadly, there seemse to be no effective self-policing of the lenders that I can see.
Rob - you disappoint me.
With a post about Fresno I expected a pic from the slightly hilarious Carol Burnett mini-series of the same name spoofing the wine industry families.
And I just peeked below. Jiminy Christmas. What happened to the people who would happily take a few minutes to discuss the length of the Argentinian Duck's dong?
Sac RE Agent brings up a very good point. As an agent myself, I agree. I am not a CFP, nor do I play one on tv. Who am I to give out financial advice? If a client comes to me and says "find me a house that costs x" then that's what I do. If the loan originators say it's ok, who am I to blame? I agree that there are some shady deals out there ie multiple purchases, etc where the agents are in on it but for the most part, the agents just went for the ride.
@Sac RE Agent
ha38349, why should re agent be held accountable?
The SEC has held brokers to a standard, and licensed them. This is because brokers (including RE) have inside information on the transaction that can put them in conflict with their client. Imagine someone has contract with me as a RE broker to help with the location and purchase of a house. I now know how much he can afford, wants to spend and the type of house. I may even be able to figure out what he would pay for any specific house. I can then insert myself or a friend as a middle 'flipper' in the transaction, pushing the price of the house near what the person is willing to pay. This is using my knowledge of my client to the betterment of myself but the detriment of my client. (NOTE: Many of the flippers were RE agents). Technically, doing the above is against the 'codes' of a RE agent.. but not really against the law(I would need to double check).
In addition, RE agents have an unfair advantage in flipping. They don't have as much transaction fees (3% instead of 6%.. possibly less than 3% depending upon circumstances). This unbalances the market.
Finally, many RE agents were acting like financial advisors.. pushing people to buy.. and if they would have a problem.. well they can sell at a profit anyway. The RE agent stands to gain if the transaction goes through. This puts a conflict with the RE agents responsibilities and a conflict against the client. If a securities broker tries this, they will lose their license.. most cases permanently.
There is minimal enforcement against RE agents that act against their clients best interests. There is also very little the law can do unless there is clear intent to defraud. It is 'self policed'.
NOTE: A house purchase is probably the biggest single purchase, highest dollar amount that someone will do during their lifetime. It shouldn't be so loosely regulated as to be 'self policed'.
As for affordability, that goes to the mortgage broker, loan officials. They need to make sure that they are originating a loan that can be repaid. As it happened, the middle man in the loan chain was washing their hands of responsibility.
I disappoint myself. I couldn't find a decent picture from the series, not even a vidcap. Besides, isn't the title good enough? These grapes taste like fresno! Spiiit, thhpt.
LossMitPro,
I agree your job will range in scope to include a larger client base. I am concerned that when people who have no experience losing money, like banks, get the bottom line they'll cut of their nose to spite themselves and begrudge you your paycheck.
@Tony Soprano
I agree that there are some shady deals out there ie multiple purchases, etc where the agents are in on it but for the most part, the agents just went for the ride.
This is where the problem is. If they acted as blind brokers, there is no problem. 'Going for the ride' is a different problem. Suggesting to the client that they could do an under the table cash-back to afford is a different problem. Falsifying comps or encouraging inflation of comps by encouraging cash back is again a whole different issue.
No, no, no... Fresno's city motto isn't that.
For a while it was, "Fresno. Smile when you say that."
Then there was the PSA of "Don't shake the baby."
And then "Beware the sparkle!" (of the irrigation ditches.
Fresno does have its bad points; every city does. But it's a fine little city and it dose have its finer points. Less than 2 hours from three national parks, for one. "Rush Hour" only lasting, well, an hour. Or less. I like it here.
When I wrote my comment I was thinking about who gets a percentage based on the final sale price. Realtors (being paid a percentage) have a vested interest in seeing the sale close at the highest price possible. Obviously this works in the sellers favor, but what about the buyer? Who is making sure that the buyer does not overpay for a piece of property? But I agree that the Realtor is not responsible for making sure that the buyer can afford the property. But they should have an obligation to make sure that the buyer understands the value they are getting for the price they are paying.
Rob Dawg @ 1:33 PM:
”…they'll cut of their nose to spite themselves and begrudge you your paycheck.”
Actually (and I hear ya, so what I’m about to say are all good things) I rarely get paid by lenders for individual consumer settlements, unless there are unusual issues involved. If I take on a bulk assignment from a lender, then my roles is reversed and lenders generally pay upfront.
~Mark
lossmit,
Please disregard if this is private or whatnot, but does your company solicit the lender or does the lender solicit your company?
your lender or mortgage broker will assist you with your financing needs.
++++++++++++++
Bu!! S#\H!T on the above statement, are you for real?????
Your industry is to blame as well.
No one should have to be told 'buyer beware' with regard to Government Licensed and Regulated Fields, Like yours and Mortgages, and Title Companies etc.
But that is the word when dealing with the REIC, your field included, "Buyer Beware", imo, of course.
I personally refer about 25% of my clients to a mortgage broker. Most of my buyers have already talked to a loan officer and say that they're happy. I don't believe it is my obligation to know every client's personal financial situation. I also know I (we) are not subject to the same criteria as financial planners, investment planners, etc.
As far as inside information on a house for sale, I would only know what the listing would tell me, outside of what's on the mls. The listing agent is not suppose to share any information that may put their client at more of a disadvantange. I'm sure some agents do share more than they should.
Yes I have help people buy more home than seems reasonable to me. Why would a young couple, mid 20's with no kids, need 2,500 square home? They don't need but they want it. They want to impress their friends, family and co-workers. And the loan programs are there. So you again explain about a possibility of unreasonable expectation of continued appreciation. They don't care. It has only been in the past year here in Sacramento, that buyers have come to their senses. Most that is, as there are still some Casey wannabes out shopping.
I'm sorry if commissions are too high for any of you. They are negotiable and I've got no problem helping a client out with part of mine. That being said, I do not offer it up and I do not advertise it either. I missed the chapter in the book that I must give it up without being asked first.
Is it a buyer beware market? I like to think so. But any person that blindly will spend $250K+ on a home without doing some research is potentially looking at being at a disadvantage.
I'm sorry FlyingMonkey, I meant to ask, what can a re agent do or reveal to show a client that there is nothing to worry about? What would be a satisfactory level of disclosure?
No apology necessary. BJ said it best above. All supposed
'professional ' parties are in a conflict of interest, commissions verses the best interest of the buyer/seller, the buyers are not protected, unless they pay for a lawyer.
Therefore the 6% commission her and 2 points there, etc. is too much, with this in mind and in my experience with purchasing 5 homes (to LIVE in, Not spec. homes)in the last 15 years.
I am NOT happy with the REIC industry as a whole.
And that is why we now have the SEC. It used to be that securities were done like RE. Then came the 1929 crash. Securities used to be able to be bought at 100%+ margin.. sound familiar? Something like no down RE purchases? There was conflict of interest and insider dealing (it was more the rule) prior to 1929.
Some of the stuff I am seeing in prices/loans/foreclosures remind me a lot of 1929.
Yes, BJ and the next 'crash' will be the USD, post Beijing 2008 Olympics. As Mort aka Edgar has said (and I agree), this event will be the tipping point.
Now we baton down and wait.
Are you all ready?
Can you even get ready for what is to come, post housing bubble pop?
Just piping in here that I have had very positive experiences from my buyers' agent and adequate from my mortgage loan officer,(her office staff were about as sharp as bowling balls, but she was good stuff)...so far.
Why are RE agents going to get their scrota hammered?
Because the agents are the most visible face of the industry, ain't they?
Bummer, that.
That doesn't mean that y'all ain't got any turds in your stewpot, but I think the "faces" of RE are the ones who are going to have to take the biggest bite of the shit biscuit.
My advice? Get discreet...ditch the big SUV's with the realtor logo across the back window, and go with the stodgy ole Buick sedans.
Tone down the yard signs...and for Christ's sake PLEASE stop clutter-fucking up the highways and byways with the damned placards.
Once a quarter, I wouldn't mind seeing chain gangs of realtors shuffling along a median strip picking up signs and other trash.
Give it a rest.
@ Sharkey,
Yep, RE agents are going to get their scrota hammered, publicly, like Casey and long with everyone else. Almost all of us. It is just gonna take a while for the flu to spread.
FMW
uugh this is perfect
reminds me of casey & nigel a few years down the line
cant figure out how to link it
its cartoon 7 of 19
david wright cartoons june archive
http://www.palmbeachpost.com/opinion/content/opinion/index.html
two hobos in front of a campfire, hobo holding a organic semivegan hotdog on a stick says
'you were a subprime lender! no kidding! I was a subprime borrower!"
https://www.tdnam.com/trpItemListing.aspx?&miid=7719233
OK just completed another 10% price chop!!!
casey sold his blog for $20K
hahha, maybe its one of those interest only notes with a ballon payment at the end of the term!
did you all see this on the Foreclosure Code website?
" Foreclosure Code Book: When, or if, it Will be Released
There has been a lot of speculation and drama this past week whether or not this book will be published, with, or without Casey. As of today, still no direct contact with Casey for going on five days.
With our company name and reputation, and my personal name and reputation, defamed all over the internet, as a result of being associated with Casey, with apparently many of the leaks coming from Casey himself, multiple breaches of contract, copyrighted material taken, plus, an enormous amount of wasted time, money, and energy, silence can be kept no more.
More to follow depending on how things turn out with Casey...
"
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