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Realtors Have Cautioned That Information On Delinquency Can Prompt An Overreaction

A report from the Winston-Salem Journal in North Carolina. “The Winston-Salem metropolitan statistical area experienced a sharp year-over-year increase in foreclosure filings during May, according to Attom Data Solutions. The five-county region had 187 filings, up 16.9% from a year ago and up 25.5% from April.”

“Officials with the Winston-Salem Regional Association of Realtors have cautioned that information on delinquency and/or underwater loans can affect the real-estate market by undermining consumer confidence, causing some hesitation in buying or trying to sell a house now, and prompting an overreaction.”

The Detroit Free Press in Michigan. “Michele McCoy always thought she and her siblings would inherit the house she grew up in on Decatur Street on Detroit’s west side. Her father, a Detroit Police officer, and her mother, a schoolteacher, bought the three-bedroom bungalow in the late 1960s after moving here from Wheeling, West Virginia.”

“But that changed after a visit nearly 20 years ago from a door-to-door representative of a reverse mortgage lender. The house on Decatur now is one of 1,884 reverse mortgage foreclosures in Detroit between 2013 and 2017. No other city in the country has seen more in that span, according to a USA Today analysis of 1.3 million loan records and hundreds of foreclosure cases.”

“McCoy’s parents, William and Virginia Creighton, took out an $84,000 reverse mortgage in 2000 on the home for repairs. The house needed a roof, pipe work in the basement and a furnace, McCoy said. The Creightons fell behind on their property taxes and lost the house to foreclosure in 2016. Fannie Mae sold the property the next year to Paramount Consortium, a Warren-based company, for $4,500 — an amount so paltry that McCoy said she wouldn’t share with her parents.”

“They are now both in their 90s and live in an apartment in Westland. Looking back, McCoy said she doesn’t think her father fully understood the reverse mortgage. ‘He was just confused,’ she said.”

The Asbury Park Press in new Jersey. “Ocean County has some of the nation’s highest levels of foreclosures from reverse mortgages its residents took out during the housing bubble in the 2000s, a USA TODAY NETWORK analysis has found. The foreclosures are dampening home values long after the Great Recession ended. And it has left many of the residents’ heirs with little, if any, inheritance.”

“‘We just said, ‘You can have it back,’ said Eric Rothenberg, whose mother-in-law in Toms River took out a reverse mortgage in 2006 and died three years later owing far more than the home was worth. ‘We’re not looking to get money out of it.'”

“Reverse mortgages allow residents age 62 and older to borrow money from the equity in their home. The loan doesn’t need to be paid back as long as they live there and continue to pay taxes and insurance. The loan balance, however, increases over time because of interest and fees. It eventually needs to be repaid — either by the borrower after they move or their heirs. And if it falls into foreclosure, it can depress home values in the neighborhood.”

“Rothenberg’s mother-in-law, Victoria McNeil, bought her home in Toms River in 2004 for $280,000. Her reverse mortgage lender foreclosed in 2013. The townhouse’s new owners bought it that year for $160,000, according to property records.”

“The county’s high rate of foreclosures on reverse mortgages can depress prices in the rest of the neighborhood. And it’s a sign seniors don’t have the income to keep up with the cost of living, said James Carroll, a professor of business administration at Georgian Court University in Lakewood.”

“‘When you go to a reverse mortgage, you’ve paid off (most of) your house, and you’ve got to go back to the well to get the money out,’ Carroll said.”

The Richmond Times-Dispatch in Virginia. “Three creditors of Live Well Financial are trying to force the former Chesterfield County-based mortgage lender and servicer into involuntary bankruptcy protection. Flagstar Bank, Mirae Asset Securities Inc. and Industrial and Commercial Bank of China Financial Services LLC claim that Live Well, which abruptly ceased operations in early May, owes them a total of more than $130 million.”

“A bankruptcy judge will determine the outcome. ‘Given the debtor’s recent mass layoff, there are serious questions regarding the management and control of the debtor, its ability to protect and preserve assets (including any potential causes of action that may exist as a result of Live Well’s activities), and liquidate in a manner that will maximize value for its creditors and other stakeholders,’ the filing said.”

“‘Consequently, Flagstar and the petitioning creditors have filed the involuntary petitions in order to initiate a court-supervised, orderly liquidation process that will preserve the debtor’s assets, protect value and, ultimately, provide for the distribution of such assets and value to parties entitled to them,’ the filing said.”

“It is unclear what developments took place that forced Live Well Financial to shut down on May 3 and lay off its 103 employees, who worked at the company’s corporate offices in the Boulders office complex in Chesterfield.”

“‘Due to sudden and unexpected developments in the markets for certain financial assets the company uses as collateral for certain credit facilities that provide this liquidity, these lenders have reduced significantly the amount of liquidity they make available to the company,’ Live Well Financial said in a letter to Virginia employment officials when it said it was ceasing operations.”

This Post Has 82 Comments
  1. ‘Live Well, which abruptly ceased operations in early May, owes them a total of more than $130 million’

    Recent reports have said that this industry wasn’t making money.

    Two words: flying cars. Are we there yet?

  2. ‘Officials with the Winston-Salem Regional Association of Realtors have cautioned that information on delinquency and/or underwater loans can affect the real-estate market by undermining consumer confidence, causing some hesitation in buying or trying to sell a house now, and prompting an overreaction’

    I read a lot of articles. This is probably the only paper in the US that doesn’t sugar-coat foreclosure numbers.

    1. If there were any remaining sense of decency left in the world, reverse mortgages would be outlawed.

      Yeah, I know.

      1. More likely they become mandatory to boost consumer spending I am only slightly joking.

        1. It’s not really a joke. Certain Dem candidates are discussing a “wealth tax” — now just for the super rich, but the income tax initially only applied to the very wealthy. If you tax wealth, you are basically creating an incentive to consume. We can’t have greedy people sitting on their equity, can we?

        2. Take the one thing you have left, late in life, that has any tangible value, because you planned poorly for your retirement, and put it in hock for a loan you have no hope in Hell of ever paying back.

          Living the dream.

          1. Take the one thing you have left, late in life, that has any tangible value, because you planned poorly for your retirement, and put it in hock for a loan you have no hope in Hell of ever paying back.

            It’s difficult to turn kids into debt slaves if their parents have anything left to give them. Problem solved. Eventually they will own it all. The question is what happens after that?

    2. CNBC had an economist on yesterday throwing shade on shadow banking in the mortgage business. Needless to say Diana O’Lick was visibly agitated and proceeded to prevaricate about how solid all lending is nowadays.

      1. Well note CNBC (and 99.9% of the MSM) didn’t report on this mortgage outfit going under. Same with the 2,000 shack Kuwaiti ponzi scheme or the half a billion $ apartment ponzi scheme.

        The REIC is a real living breathing thing that never sleeps. And they would sell out their grandmothers for just one more week of commissions.

      2. Diana O’Lick:

        “Let’s focus in on the loans. The loans they are making… the non-bank lenders, are largely backed by Fannie, Freddie, FHA, therefore they have to follow all of the guidelines as Fannie, Freddie, and FHA do for all the other banks. They are not any more risky loans (sic). The vast majority of these loans are 30 year fixed and they currently have the lowest delinquency rates that we have seen in years. So, yes, if there is a turn in the economy, that could hurt some borrowers but it’s not like these loans are any more risky than the loans that are being offered by the big banks…”

        So you mean loans where the borrower puts next to nothing down, has his income maxed out by debt service and buys at bubble highs are not any more risky if a shadow bank does it? Ok, got it. Thanks Diana.

        https://www.cnbc.com/video/2019/06/14/heres-how-the-rise-of-non-bank-lending-is-impacting-housing.html

        1. ‘the non-bank lenders, are largely backed by Fannie, Freddie, FHA, therefore they have to follow all of the guidelines as Fannie, Freddie, and FHA do for all the other banks’

          This is just not true. The reason the non-banks have taken the lions share of the market is because they aren’t banks and don’t have to follow bank lending rules.

          1. And they don’t have any losses upon default – they are simply selling a product. They get paid on the front end, so no longer their problem.

        2. Don’t be too hard on Diana. Like all Real Journalists, her job is to influence, not to inform.

          “Everything is Awesome – Buy Moar Stawks!”

  3. “… information on delinquency and/or underwater loans can affect the real-estate market by undermining consumer confidence, causing some hesitation in buying or trying to sell a house now, and prompting an overreaction.”

    But of course, these same bastards were not saying that bogus information on housing “shortage” could cause a frenzy in buying and prompting an overreaction.

    1. I’m not surprised you believe this horseshit reporting. Did you know Vancouver sprung back to life in the fall of 2016! Yeah, only to continue to crater for three more years. And you’ll see this REIC crap month after month. Toronto, NYC, Miami Beach, Hong Kong, London, Dubai or Sydney, it’s all just about to turn around! Remember when redfin said Seattle is coming back! And then more crater.

      All bubbles pop. There is no soft landing after a mania.

      1. “All bubbles pop. There is no soft landing after a mania.”

        No, but just like a stock market can stay irrational longer than an investor can stay solvent a mania can continue much longer than anyone thinks possible particularly with intervention. I took advantage of a $8000 tax credit in 2010 since I believed correctly that Obama would do anything necessary to keep the mania going. I would have rather bought even in much cheaper flyover country after the bubble had fully deflated but I could see that was not going to be allowed to happen. Canada has insane housing prices far worse than even the US but government intervention can keep a bubble going, however it just means when the bubble does really pop it is more likely to take the government and the entire economy down with it. But the economics driving present housing policy is based on Keynes and his comment that in the long run we will all be dead. Personally, I think he would be appalled at how his theories are being used or misused but AOC is promoting Keynes on steroids and that kind of policy certainly would keep a housing bubble going. Ben, you and I do not disagree on the ultimate result, we only differ on timing.

        1. An example: I’ve mentioned the Australian press went on a full court press after their recent election. “Oh joy, we’re saved!” they all repeated. What had changed? A first time buyer plan the new government promised. And a tiny rate cut. But if you dig through the reports you’ll find cratering prices. Foreclosures, speculators walking away from lots en masse, etc.

          So what we’ve seen is a bald faced lie, by virtually all of the Australian media. They do it all the time. Who calls them out on it?

          I’m going to have a post on Canada later today. What about the money laundering? Did that just vanish, fix itself? The Chinese gangsters, the casinos laundering suitcases of dirty cash? I realize these media have to sell ads, but what they are engaging in is despicable.

          1. I kind of feel that these governments hope that inflation can catch up and cushion some of the declines in housing prices. Isn’t that the name of the game when it comes to government debt? Inflation reduces its burden in real terms. It seems like generating enough inflation to prevent a decline in housing nominal terms has been the name of the game since 2008.

          2. Here is an opinion that the bald faced lying serves a societal interest, it is about China but the premise could apply to the U.S. or Canada, the masses are just better off if they do not know the truth is essentially the logic. With the globalists controlling the central banks and the MSM media, the bubble can go on until everything is about to explode like a nuclear weapon, the PTB have their homes in New Zealand for that eventuality, the masses will have no clue until they have flown to New Zealand just before the house of cards collapses:
            https://www.bloomberg.com/opinion/articles/2019-06-13/china-s-underestimates-its-bad-loan-problem-for-a-good-reason

        2. “Government intervention can keep the bubble going…”

          The irony is lost on Dan, as the gov intervention in China is precisely what is going to not keep the bubble going 🙂

    1. China had a plan that Trump has destroyed. The plan included multinationals which would not have been on board without Bush and Obama’s blessings. China would build a car industry both for rising domestic demand due to rising incomes and rising vehicle exports. China’s economy would also produce the steel and aluminum for those vehicles. The ghost cities were constructed to house those workers. The multinationals like GM financed part of the joint ventures and debt was used backed by the Chinese government. Trump comes along imposes tariffs and makes it clear he will protect US production. Now the Chinese incomes are not rising so domestic demand is dropping , the steel and aluminum cannot be dumped on the US and GM will not be allowed to import Chinese vehicles. The ghost cities have no use. It is a Trump checkmate. Like Patton said after beating The Germans, Rommel I read your book.

      1. No wonder Trump is so hated. Most likely many deals in the making were toast after Trump came in.

  4. ‘In a country where citizens resort to crowdfunding to pay for their medical bills and politicians can’t agree on the right kind of health care system, a pair of doctors decided that enough was enough.’

    “We both started despising what was going on financially with the patients, cause when you look at the bankruptcy statistics — medical bankruptcies for patients now — it’s egregious,” Dr. Steven Lantier told Yahoo Finance (video above). “The average American cannot afford health care today, so we believe the system is broken.”

    ‘Lantier and Dr. Keith Smith, both anesthesiologists, partnered up in 1997 to establish the Surgery Center of Oklahoma. Their organization does not accept insurance and instead promotes price transparency, which involves listing prices of various operations on its website.’

    ‘“The argument that there’s this spiraling cost of health care — we don’t buy that,” he said. “We think that there are spiraling charges, almost all of which are the result of mandates from government and the extent to which the crony opportunists have taken advantage of that.”

    ‘Generally, the two charge patients the flat rate of a surgical procedure with an additional 10-15% margin for profit, bypassing additional costs that come from the involvement of hospitals and insurance companies.’

    ‘The mainstream in health care is completely unplugged’

    ‘Health care spending has increased nearly 6-fold on a per capita basis over the last 40 years when adjusted for inflation, according to the Peterson-Kaiser Health System Tracker, going from about $1,800 In 1970 to about $10,740 in 2017.’

    ‘According to a recent Kaiser Family Foundation (KFF)/LA Times survey, “40% of those with employer coverage report problems paying medical bills or difficulty affording their premiums, deductibles, cost sharing, or an unexpected bill in the past year. Half (51%) say they or someone in their family have skipped or postponed needed care or medication or relied on home remedies instead of seeking care because of the cost.”

    ‘The Surgery Center of Oklahoma is part of the Phia Group, a health care provider that is trying to avoid the issue of exorbitant health care spending.’

    “Different hospitals and providers charge different amounts for the same service,” Ron E. Peck, senior vice president and general counsel for the Phia Group, told Yahoo Finance. “And even the same provider charges different amounts for the same service, depending on who the payer is, the plan, the insurance, whatever. And that’s before the discount is applied.”

    So, Peck continued, “a lot of payers, they’ve become kind of savvy to this, and they’re less focused on who is in network and who is out of network, and now they’re starting focus more on what that initial charge amount is. Just because I’m getting a discount doesn’t mean I’m getting the best price. If this one facility is going to charge $500 without a discount, that’s better than this facility that charges $1000 and gives me a 30% discount. I still save money with the $500.”

    ‘Lantier described what he and Smith do as “very disruptive” to the health care industry. “The insurance companies would like for us to be out of this business,” Lantier said. “The hospitals would like for us to be out of this business. There have been several things they’ve done in the past trying to make it very uncomfortable for us to continue what we do.”

    Lantier added that “we’re working in a very corrupt environment where the big hospital systems and the insurance carriers, essentially, work as a cartel attempting to keep prices high and actually not giving any thought to quality, as they actually make more money when mistakes are made.”

    ‘The disaster … is the handiwork of Uncle Sam’

    ‘Smith blamed the federal government for the nation’s healthcare woes. “The reason the system is broken is that anything the government gets their hands on doesn’t work,” Smith said. “The disaster of the U.S. health care system is the handiwork of Uncle Sam.”

    ‘In order to alleviate the issues over health care costs, some politicians have proposed their own solutions. One proposal is “Medicare for all,” notably supported by presidential candidate Sen. Bernie Sanders (I-VT).’

    ‘Through Sanders’ Medicare for All, Americans would receive universal health coverage — although it would require at least $3 trillion a year in new government revenue.’

    ‘Even then, Smith doesn’t see a government response as the right answer. “Medical service delivery is such an important part of our lives that it shouldn’t be trusted to systems that we know are failed,” Smith said. “It certainly shouldn’t be entrusted to the most corrupt invention of mankind, and that’s government. The only way, really, to ethically and rationally render medical services with high quality and a reasonable price is the free market system.”

    ‘At the end of the day, when it comes to this version of direct primary care, Smith argued that “it really is a lesson into how capitalism — for all the bruises that name and reputation has received — is truly the only ethical way to deliver services, particularly medical services.”

    https://finance.yahoo.com/news/direct-primary-care-surgery-prices-162659294.html

    1. There’s a reason the socialists just want to keep talking about who’s gonna pay. It diverts attention away from their abject failure to control costs and their aim to take over more sectors of the economy.

      1. A couple of comments:

        1) Yes, surgical centers are far less costly than hospitals and should be the go-to location for surgeries that can be planned (e.g. orthopedic surgeries). This is true in almost all areas of the US, not just this one case. Hospitals have huge associated costs just for being hospitals. This is why you get pricey tylenol, bandaids, and IV fluids because it’s an attempt to pass along some of the institutional costs to the direct patient care. Hospitals and hospital care are just plain expensive. And by the way, they are closing all across rural america and sucking the lifeblood out of these rural locations.
        2) There is a great variability in cost throughout the US. A lot of the high cost in a certain area is tied to the high cost of living (e.g. housing) in those areas. There is a reason why it is easy to start at $90k as an RN in parts of CA. Compare that with RN salary of about $40K in Mississippi.
        3) Most people aren’t going to be able to afford the discounted rate of $16k out-of-pocket for a hip arthroplasty. This is why health insurance is needed for most people. Just like auto insurance, you pay out of pocket for the oil changes/tire rotations/brake replacements, but have insurance for the large, unplanned, and potentially financially catastrophic events. Whether this insurance is best in the private or public domain is up for debate. I think government runs this part best and you can have a separate private system for those that want Cadillac coverage (Singapore model).
        3) I am skeptical that the free market can solve health care completely. I’d love to see a country that actually does it, but I see no real-life example at a country level. But it doesn’t mean that we shouldn’t try to apply market forces. Almost all legislation that has tried to mandate hospitals/providers putting the true cost of procedures online or in a bill format that is comparison has been circumvented by the system or simply not worked. (For a good reason why this hasn’t pushed costs down, see “A Failed Cure for Health Care Costs” in Slate).
        4) A lot these efforts are just shifting costs and cherry picking and pushing the costliest patients to the government system.
        5) Some good practical ideas right now would be to allow Americans to loosen regs and allow Americans to get more prescription drugs from overseas. Also, allowing cross-state medical procedures in lower cost areas or even promoting medical tourism abroad where costs are lower. My best friend just got back from Germany for life-changing back surgery at a fraction of the cost in a country that has universal care.
        5) The two docs in the story who started this are Anesthesiologists. Average salary for anesthesiologist in US is $357k. A major part of the reason healthcare costs in the US are higher is because MDs are paid about 3x what they are in western Europe. A big chunk of primary care will need to be shifted to nurse practionners and physician assistants if we want to bend the cost curve.

        1. You make a lot of good points in my opinion. The fundamental issue with health care is that, in order for the market to control costs, you have to be willing to walk away, which is difficult to do when you are having a health care issue. You also have to be willing to deny health care to someone who can’t pay, which is something that our society is uncomfortable with. Turning a child with strep throat or a broken arm away because his or her parents can’t afford health care isn’t going to happen. A gunshot victim is going to get emergency surgery even if he is a gangbanging career criminal. If taxpayers are going to pick up the tab for these people regardless of the cost, then the government will have to have a role in setting costs.

          1. The fundamental issue with health care is that, in order for the market to control costs, you have to be willing to walk away, which is difficult to do when you are having a health care issue.

            I do agree with this. I make this point often with regards to housing, which is a basic need. The equation is buy vs. rent without a very good “none of the above option”.

            Rosenthal makes this point well to in her book.

            Economic Rules of the Dysfunctional Medical Marketplace

            1. More treatment is always better. Default to the most expensive option.
            2. A lifetime of treatment is preferable to a cure.
            3. Amenities and marketing matter more than good care.
            4. As technologies age, prices can rise rather than fall.
            5. There is no free choice. Patients are stuck. And they’re stuck buying American.
            6. More competitors vying for business doesn’t mean better prices; it can drive prices up, not down.
            7. Economies of scale don’t translate to lower prices. With their market power, big providers can simply demand more.
            8. There is no such thing as a fixed price for a procedure or test. And the uninsured pay the highest prices of all.
            9. There are no standards for billing. There’s money to be made in billing for anything and everything.
            10. Prices will rise to whatever the market will bear.

    2. Ben Jones I will be voting for Bernie Sanders in the CO primary in March. As an unaffiliated voter, in 2020 I can choose which party’s primary to vote in. My reason for this is to deny Biden a coronation (a la Hillary) and to help create division within the Democrat Party.

      If I can successfully register to vote in Florida for the general election (by registering to vote at a family member’s address there) then I will vote for Donald Trump in Florida via absentee ballot.

      My vote for Trump in CO wouldn’t count for anything, I’m living behind enemy lines here…

        1. Warren is a fraud. Harris is a fraud. Mayor Pete is a meme, not a real candidate. Beto is a nothing burger.

          The only one I like is Tim Ryan who represents Northeast Ohio (dads of friends I grew up with worked at the GM Lordstown plant in his district) but he is too unknown nationally and IMO would be a better gubernatorial candidate to push out crusty old Mike DeWine in 2022.

          Sanders could effectively destroy the Democrat Party, this is why I will be voting for him in the Colorado primary (he did win in 2016).

          1. Sanders could effectively destroy the Democrat Party

            I hadn’t considered that. AFAIK (feedback welcome!), an unaffiliated voter in CA can’t vote in a presidential primary.

      1. Same here in New Mexico. Lol. I would like to do the same but I would have to change from an independent to Democrat on my voter registration.

        1. I was denied a vote in the 2016 caucus, even though I was registered as a Republican at the time:

          https://www.denverpost.com/2015/08/25/colorado-republicans-cancel-presidential-vote-at-2016-caucus/

          This state, specifically Denver and the metro Front Range, is in terminal decline, which will be accelerated by the Permanent Democrat Supermajority in the state house, senate, governorship.

          If I move to Eagle County in a few years, I may never drive back east through the tunnel to the Front Range again…

          1. I’m hoping Colorado’s red counties will vote to break away from the Bolsheviks in Denver. What we have now is straight-up taxation without representation, or more accurately, a state government that is actively hostile to those who have to pay the bills for its collectivist agenda and whims.

    3. “The reason the system is broken is that anything the government gets their hands on doesn’t work,” Smith said. “The disaster of the U.S. health care system is the handiwork of Uncle Sam.”

      Yet progressives and socialists assure us the solution to all of America’s ills is more government intervention and involvement, despite all evidence to the contrary.

      The stupid, it burns.

    4. ‘Smith blamed the federal government for the nation’s healthcare woes. “The reason the system is broken is that anything the government gets their hands on doesn’t work,” Smith said. “The disaster of the U.S. health care system is the handiwork of Uncle Sam.”

      “Medical service delivery is such an important part of our lives that it shouldn’t be trusted to systems that we know are failed,” Smith said. “It certainly shouldn’t be entrusted to the most corrupt invention of mankind, and that’s government. The only way, really, to ethically and rationally render medical services with high quality and a reasonable price is the free market system.”

      Oh, oh, pick me! pick me!
      Timeless classics; true yesterday, today, and tomorrow…

      “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand” – Milton Friedman, Nobel Laureate Economist

      “Everything a government touches, turns to crap.” – Ringo Star

      “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’ ”– Ronald Reagan – 40th president of US (1911 – 2004)

  5. “It is unclear what developments took place that forced Live Well Financial to shut down on May 3 and lay off its 103 employees, who worked at the company’s corporate offices in the Boulders office complex in Chesterfield.”

    I’m going to venture a quest that these “developments” were related to the ongoing and intensifying schlonging being meted out to the fools who bought into an unsustainable housing bubble.

      1. So Live Well borrowed a lot of money, and used it to sell a boatload of reverse mortgages, and now do not have sufficient cash flow from them to pay back their lenders, because the folks who took out the reverse mortgages used the money they got elsewhere and did not pay anything back, so the homes are now going to be foreclosed on and seized, but darn it the properties are now going to start dropping in value?

          1. “‘Due to sudden and unexpected developments in the markets for certain financial assets the company uses as collateral for certain credit facilities that provide this liquidity, these lenders have reduced significantly the amount of liquidity they make available to the company,’ wrote Paula Foster, Live Well’s VP, controller and human resource director.

            ‘This reduction in credit availability combined with challenging conditions in the markets for mortgage loans, which were conditions outside of the company’s control, along with related regulatory issues, have resulted in the company having insufficient available cash to continue operations,’ Foster continued.

            ‘Despite the company’s exercise of commercially reasonable business judgment, it could not reasonably foresee these circumstances and therefore was unable to provide 60 or more days notice of the closing and related layoffs,’ Foster added.”

            https://www.housingwire.com/articles/49028-live-well-financials-abrupt-closing-leads-to-host-of-problems

  6. Here it’s the middle of June already, and I have yet to see the promised green shoots of Spring the REIC touts and shills assured us would be in full bloom by now.

    1. Listings are increasing and closings decreasing here, suggesting to me that we’re exiting the spring sales peak now.

  7. One: “It seems like generating enough inflation to prevent a decline in housing nominal terms has been the name of the game since 2008.”

    Exactly, I have been saying that for some time. I think the only thing that the PTB “learned” from 2008 is to intervene earlier and more aggressively to prevent a bubble from popping. The PTB learned that it is not as easy to re-inflate a bubble as they thought in the Fall of 2008. They did not intervene early when the stock market started to crash. I think that is because Sarah Palin a non-globalist was a vice president candidate so they really wanted Obama to win. McCain was leading in the polls after the selection until the stock market crashed because the PPT seem to disappear. McCain knew after his loss that the rug had been pulled out underneath him for his failure to put a globalist approved candidate on his ticket. He blamed her and his family not inviting her to his funeral is proof of that fact. I remember Howard Dean after the election and he basically said that he expected the normal V shaped recovery since the deeper the recession normally the sharper the recovery. He was drooling about all the money the government would have to spend as the bank loans were paid back. The masters of the Universe did not see eight years of little to no growth.

    1. AbqDan, curious to hear what your take is on the Japanese oil tankers being attacked.

      1. I think Iran did do it. It had motive and opportunity. The economic pressure the US is asserting on it, is killing its economy. It can export very little oil and unlike last time it is not getting a $100 a barrel

  8. “The Creightons fell behind on their property taxes and lost the house to foreclosure in 2016. Fannie Mae sold the property the next year to Paramount Consortium, a Warren-based company, for $4,500 — an amount so paltry that McCoy said she wouldn’t share with her parents.”

    — There is so much to process in those two sentences…

    1) Fannie Mae is buying/backing reverse mortgages? What?

    2) The lender foreclosed because the old folks didn’t pay property taxes. Well guess what the city would have done the same thing, so I’m not real sure this a clear sign of foreclosure Armageddon. Or am I missing something?

    3) This couple got $84,000 in 2000 for a house that sold for $4,500 in 2016? Plus the quit paying property taxes? Why should we be sorry for them — that is a genius-level move.

    4) The daughter couldn’t just buy the house she loved so much at auction for $4,500?

    It’s just not clear to me who the winners and losers are here, or what’s going on at all honestly. Other than our society is a complete mess at the moment.

    1. “The Creightons fell behind on their property taxes and lost the house to foreclosure in 2016.”

      Donk Creightorton?

    2. “It’s just not clear to me who the winners and losers are here, or what’s going on at all honestly.”

      For a complete explanation, along with an example that we – you and
      I working together – will joyfully generate, come visit me at my bank. Coffee is on me.

    3. @foo pretty sure the buyer would have to pay all the back taxes, etc., so I’m sure it cost them more than $4,500.

    4. I’m curious where the $84,000 went. The home repairs mentioned in the article don’t cost $84,000.

      Were there medical or other expenses not mentioned in the article? Or did the couple manage to somehow blow most of that money, whilst not paying the property tax?

  9. Checked Movoto to see market trends and they’ve moved where it can be found. Usually located under the MORE tab you now have to click n a property and scroll all the way to the end to find the info. They also now just have it as a button that says “see all trends” omitting the word market. I guess they realized showing increasing inventory and days on market plus falling per square ft prices isn’t a good model to attract business. Bet it makes the top of page when we go up again!

  10. Smart money is buying up all the entry level properties in my area of OC in a matter of hours. Millennials can’t afford to buy and boomers are starting to sell up to free cash and simplify things. Only the beginning.

    1. “Smart money is buying up all the entry level properties in my area of OC in a matter of hours.”

      To the contrary. That is the very definition of dumb money.

    2. “…Smart money is buying up all the entry level properties in my area of OC in a matter of hours….”

      Could we have a bit more meat on the bone?

      What specific area of the OC?

      Define entry level. Do you mean $1mm?

      In the OC areas I track (Irvine, Corona Del Mar) the “formerly thought they were the smart money” has been in price reduction mode for over 1 year now. Many listings are over 1 year old.

      1. This is why we can’t have nice things!

        In all seriousness, this is extremely unsafe. I want to be able to do this, but we’re just not there yet despite this guy sleeping for 30 minutes.

        The way to do this is to build dedicated lanes for self-driving vehicles only and tightly control the conditions and make speed limit below 30 mph. By the way, it looks like Ford and VW have announced a new tie-up to collaborate on electric vehicles and self-driving vehicles.

        1. From the comment section:

          “All he needs are tinted windows.”

          And:

          “What if he’s dead. Shows up at home, kids all excited to see him, they open the car door, and he flops out like a wet noodle onto the new pavement in their driveway. Their fathers corpse roasting in the sun, while the Tesla laughs maniacally.

          Then:

          “Pretty sure this will be in the next Black Mirror season…”

          1. I actually find it harder to stay awake when driving autopilot myself because there is so much less to do since you don’t really have to steer or accelerate or brake. The mind wanders a bit and so I make it a point not to drive even the slightest bit drowsy because the car doing almost everything for you will lull you into complacency.

        2. “Couldn’t believe it.. asleep in heavy Friday rush hour traffic in the Bay Area.”

          Hehe…the opening scene of Blade Runner 2049.

  11. Millennials are f*cked.

    Why Housing Policy Feels Like Generational Warfare:

    “In Los Angeles, it would take 43 years to save up for a down payment. In San Francisco, 40. In San Jose and San Diego, 31. In Seattle and Portland, 27 and 23, respectively. In the east, New York and Miami topped the list, requiring 36 years to save up that down payment. Only Detroit, at seven years, was under the national average from 1975.”

    https://www.theatlantic.com/technology/archive/2019/06/why-millennials-cant-afford-buy-house/591532/

    1. I would feel bad for them except they keep voting for the people that are doing it to them.

      1. So the pitch of Unison is basically, “Look how long it would take you to save up for a house! You can’t do it. Instead, co-invest with us and we can get you into a house [at bubble prices]!”

    2. “Only Detroit, at seven years, was under the national average from 1975.”

      Unless you’re shopping in Birmingham, in which case it’s 43.

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