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We Are Left With Home Flippers Stuck With Their Inventory

A report from Curbed Los Angeles in California. “CoreLogic analyst Anrew LePage suggests the slower rate of price growth may have a lot to do with the fact that home values are entering uncharted territory. Many buyers, says LePage, may be waiting for a drop in prices before purchasing; others may simply be priced out of the market. If would-be home shoppers are choosing not to buy, that could explain underwhelming sale numbers in the last year. Across all of Southern California, home sales have dipped on a yearly basis in each of the last 10 months.”

“LePage says such a lull is to be expected: ‘Sixteen years ago, a few years before the last cycle’s peak, the market might have experienced a similar slowdown had it not been for the widespread availability of very risky home financing that let buyers stretch to their financial max.'”

From Forbes. “In the real estate game, there’s no shortage of wannabe Warren Buffetts and Sam Zells who get their start flipping houses for a quick return on investment. According to Attom Data Solutions, 7.2 % of all U.S. home sales during Q1 2019 were flipped homes, the highest rate in nearly a decade. But it’s a cottage industry ripe for mortgage fraud that only gets exposed when an investment goes south, legal experts say.”

“Miami real estate attorney Josh Migdal said rising housing prices is making it harder for average Americans to buy homes and properties are staying on the market longer than anticipated. In some cases, home flippers can’t make mortgage payments and banks initiate the foreclosure process, which is when instances of fraud come to light, Migdal adds.”

“‘Home flippers are in a tough spot,’ Migdal said. ‘Their strategy of buying a house, putting some work into it and then quickly selling it for a return only works when there is an an appropriate supply and demand level.'”

“In South Florida, an oversupply of homes for sale has priced out most buyers out of the market, Migdal said. ‘We are left with home flippers stuck with their inventory,’ Migdal said. ‘The mortgage fraud comes into play when some of these individuals don’t tell banks that they are actually home flippers.'”

“Migdal said some home flippers represent themselves as the typical home buyer and falsely claim they intend to live in the property. ‘This is called occupancy misrepresentation,’ Migdal said. ‘These are impossible for a bank to detect until the home flipper winds up in foreclosure. I expect fraud will bubble to the surface between now and 2020 as the housing market declines and home flippers begin to flop.'”

“Paul Levin, a California-based lawyer specializing in mortgage fraud cases, said it could take years for banks to uncover mortgage fraud by home flippers. In some cases, home flippers use straw buyers to purchase the property and obtain a bank loan, Levin said. ‘If you make a loan on day one and then it defaults six months later, there is a long procedure that winds itself through the courts,’ Levin said. ‘It is only in the latter stages of the process, that the fraud is detected.'”

“Levin’s job is to pursue legal remedies against other parties involved in a fraudulent home sale involving flippers. ‘It could be closing agents and other loan originators that broker and sell loans to securitized pools or larger institutions,’ Levin said. ‘It could also be sellers and developers that pay kickbacks to buyers.'”

“During the last housing boom before the 2008 real estate crash, Florida home flippers committing fraud were buying condominiums. Today, they are buying single family homes, Levin said. ‘Home flipping fraud is always a constant,’ he said. ‘But lenders don’t go after the bad actors. They have a business model that accepts some losses.'”

The Jersey Journal in New Jersey. “A Jersey City man has been indicted on more federal charges accusing him of running a $30 million mortgage fraud scheme involving properties in Jersey City and elsewhere in New Jersey, U.S. Attorney Craig Carpenito announced Wednesday. On Tuesday, Anthony Garvin, 49, of Jersey City, was charged in a superseding indictment with one count of bank fraud conspiracy and five counts of bank fraud. He was indicted on one count of bank fraud conspiracy and one count of bank fraud on Jan. 11, 2019, Carpenito said.”

“Garvin was initially indicted only on the the conspiracy charge on Nov. 17, 2017. He was arrested along with Christopher Goodson of Newark. Garvin and co-conspirators allegedly used fraudulent documents to purchase properties in mortgage default and then used more fraudulent documents to secure multiple loans for the resale of individual properties to ‘straw buyers’ and then pocketed the money that was provided by financial institutions, officials said.”

“From January 2011 through November 2017, Garvin and others engineered fraudulent short sale ‘flips’ of various New Jersey properties and also fraudulently obtained numerous home equity lines of credit, or ‘HELOC’ loans, using fraudulent documents and information, according to court documents.”

“The conspirators allegedly arranged simultaneous fraudulent transactions for individual properties. In the first transaction, which involved the sale by the current owner, the conspirators convinced the financial institution holding the mortgage to accept the sale of the property at a loss, usually to a buyer who was secretly a conspirator or an entity controlled by the conspiracy, according to court documents.”

“In the second transaction, the conspirators flipped the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using false loan applications, pay stubs, bank account statements and title reports provided by members of the conspiracy. The resale frequently closed for as high as double the price of the purchase, according to court documents.”

“Garvin and others allegedly rigged the short sale process at each step to maximize profits and keep the victim financial institutions in the dark. The conspirators used various phony documents and misrepresentations, including generating false pre-approval letters from a New Jersey corporation controlled by a conspirator and generating phony, backdated deeds, according to court documents.”

“To obtain HELOC loans, the conspirators allegedly submitted loan applications in the name of straw borrowers, who did not reside at the properties, and used fraudulent information – including false pay stubs and tax information – to make it appear the straw borrowers made more money than they really did. Conspirators often applied for multiple HELOC loans on the same property nearly contemporaneously, withholding from each lender the existence of other applications, according to court documents.”

“Conspirators then disbursed the funds received from financial institutions — which totaled millions of dollars — into various accounts they controlled to and split the profits.”

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This Post Has 178 Comments

      1. When the last bubble popped, I put in a bid on a 3 unit rental property in a beach community. It was a short sale and the last day of the short sale I had the high bid an hour before close of business. Minutes before bidding closed somebody offered a full price cash offer and the bank accepted it. The guy brought in his own appraisers and refused to pay the bank which would have had to foreclose on the property if the deal fell through. He offered the bank 150k less than his original offer which was 100k less than my offer but the bidding was closed. The bank took his offer and he flipped the property the day it closed for >100k more than he paid the bank. Turned out he was a Canadian who taught courses on how to screw banks on short sales. I could have retired on the income from that property.

        1. Nice illustration of what a regular honest Joe just looking for a deal on a place to live is up against.

        2. taught courses on how to screw banks on short sales

          Interesting observation of the stupidity of bankers.

        3. It’s going to be very difficult for mom and pop investors to compete with the huge amount of capital that these hedge funds have.

          1. Then watch out, Millenial FIRE yahoos. They’ve been listening to too much Dave Ramsey and they all want to get in on the passive income game. (The time to do that was 10 years ago, as Jingle male did.) There are seminars on flipping houses and then there are seminars on being a rental LL.

            I’m very glad I bought when I did, with a fixed rate and no HOA. HBB mocked me for it, but at least I’m a step closer to owning something outright, and I won’t be beholden to any of these yahoos. (Yeah, I’m beholden to gov via taxes but I’m not worried about that.)

          2. HBB mocked me for it

            Mostly for your assertions that rent would ALWAYS go up and the manic euphoria of how rich you were going to become through debt. Ignoring depreciation in your spreadsheet was something also.

            You’ll be fine, even if house prices drop to half of the dip you bought in. You’re young and can make up the difference.

          3. My assertion that rent always goes up is still true. Yes, Ben is posting rental price drops. But that is for new luxury stuff. Rents for Grade B (where I’ve always lived) are still rising or at least holding, because that’s where the demand is. I know, I’ve been following a couple rental complexes. As for the concessions, those only last for a year or two. All they do is make the second year rent spike more painful.

            DC burbs didn’t really re-inflate after 2012. It’s been 2.5% YOY, basically inflation. If I wanted to, I could sell my house tomorrow and with the proceeds likely buy YOUR house outright. But I like my job.

          4. I could sell my house tomorrow

            Yes of course, you, Jingle and Rio. Gambling profits aren’t real though until they are taken off the table. No doubt you’ve made payments in excess of what it would take to buy a house like mine.

            The real question is will this bubble deflate seriously or will there just be ever higher bounces to infinity.

          5. Oxide’s plan (a fully paid off house) isn’t the REIC plan – they want you to be moving often, first “up the property ladder” and then downsize. After all, no sales = no commission (:

            However, I strongly disagree that rents can’t go down. Rents, even more than house prices, should be relative income growth. So if there’s inflation/income growth, then, yes, I expect rents to go up.

            HOWEVER, if rents get out of hack (e.g. during the dot-bomb bubble, or now with the “everything bubble”), then when the bubble bursts, rents are going to go down to be back in line with income, and they’re going to correct a lot faster than housing prices. I saw this first hand after the dot-bomb bubble.

            Final comment: a lot of people base their projections on what they’ve seen, so say the last 20 or 30 years. Well, especially in Sillycon Valley, the last 20 or 30 years have been abnormal (and a lot of the Chinese immigrants have NEVER seen a housing crash, either here or in China).

      2. Had a nice farm raised organic pork chop with a freshly baked apple for dinner….so I did “eat up” last night.

    3. IIRC, Jingle Male knew we were at peak a year ago, and he was cashing out of his Sacramento properties to retire. Prices are dropping now, sure, but nothing has dropped to 2009-2010 prices, which is when JM bought.

      I think he’ll be ok.

      2. IIRC, Jingle Male knew we were at peak a year ago”

        yea I think I remember him saying that also ? Good for him.

        I wonder if he will stay in California or move on ?

        2. Wasn’t he looking at condos in San Diego? IMO that’s out of the frying pan and into the fire, but he knows his stuff.

        3. “…I wonder if he will stay in California or move on ?…”

          This summer we are going to be looking at the Nevada side of Lake Tahoe. Possibly along the Mt. Rose highway.

          We went to San Diego to look at condos two years ago. We did not find it to be attractive: traffic, homeless, high cost of living….we passed.

          Tahoe has cold weather, but we think the Eastern side of the Sierras could be nice, especially if we travel to the southern hemisphere in the winter.

      3. I am selling a house this month. The first buyer that saw it put in an offer. It’s been 30 days. She just texted me that she and her husband are having a problem with her loan.

        It’s always something.

        I did retire last year and am selling most of the houses I bought in 2008-10. Basically, we turned about $300,000 into 1,200,000 before taxes and depreciation recapture. That does not include cash flow of $24,000/year.

        Buying real estate in the bubble bust was the best investment of my lifetime.

        1. How much do you expect to recapture for depreciation? What will your total profit be? About a half-mil? Good going.

          1. Recapture of depreciation is a net loser for us.

            Example: $300,000 in improvements provides $10,000/year in depreciation. We’ve never been above the 25% marginal tax bracket (last dollar) and our effective rate has been 9-16%.

            This 10-years of depreciation ($100,000 paper loss) maybe saved us $15,000 in income tax. The recapture rate (upon a sale) is 25%, so we pay back the IRS $25,000. That is a terrible deal…..other than the fact the investment made a great profit.

        3. Good luck and hopes it not too wait… I got an uncle trying to sell 10 “investment” properties too. Soon….

    4. It’s Jingle Male, thank you. Jingle mail is an envelope with keys in it addressed to the lender.

      Are we there yet? Where?

      Are we at the level of mortgage fraud we saw in 2006? Not even close. Every downturn is different. We aren’t even in a downturn yet. The median home price is still riding on a national level. I would say 2 more years and we will be at about 20% of the level of 2006! Of course I have been saying the same thing since 2015….. LOL, just like many people on this blog.

      1. “Are we at the level of mortgage fraud we saw in 2006? Not even close.”

        That’s where you are wrong. We have surpassed the frauds of yeter-years. It’s called the “gobmit backed loans.”

        20 trillions of debt added to the economy, can you honestly say we are NOT in worse situation?

  2. ‘We are left with home flippers stuck with their inventory,’ Migdal said. ‘The mortgage fraud comes into play when some of these individuals don’t tell banks that they are actually home flippers.’”

    Die, speculator scum.

    2. Don’t the banks run their social? Notice that the guy has 6 or 7 other mortgages? Wouldn’t that be a clue? Not exactly Sherlock Holmes level of deduction.

      1. “Don’t the banks run their social?”

        I believe the big three credit bureaus adjusted their ranking algorithms, which not only increased access to credit to ethnic minorities, the LGBTQ community and non-technical women, but also lowered their barriers to government employment, which had been raised significantly after the financial crisis.

    1. Which is too bad. I do think that home renovators do a service to neighborhoods by rehabbing zombie homes into something pleasant to look at and live in. The problem is when it costs more to reno a house than the house/land is worth. That’s why a lot of the Midwest and Rustbelt are fallin apart. Not worth the upkeep.

      2. https://www.google.com/maps/place/1113+W+Ann+Arbor+Trail,+Plymouth,+MI+48170/@42.3703628,-83.4730551,3a,75y,190.67h,90t/data=!3m6!1e1!3m4!1s8y4jz5Li4bDFnkkA1DUmqQ!2e0!7i16384!8i8192!4m5!3m4!1s0x8824acd227ea205f:0x72143778d1a4d0f0!8m2!3d42.3702382!4d-83.4730867

        There was no zombie home on this land. It was a well maintained, century-old historic property that was demolished by a greedy builder for a pair of overpriced generic McModerns.

        Driven by an outraged community, the city had to pass an ordinance to run them out and stop any more of this senseless destruction of the city’s unique character.

  4. ‘Garvin and co-conspirators allegedly used fraudulent documents to purchase properties in mortgage default and then used more fraudulent documents to secure multiple loans for the resale of individual properties to ‘straw buyers’ and then pocketed the money’

    ‘From January 2011 through November 2017, Garvin and others engineered fraudulent short sale ‘flips’ of various New Jersey properties and also fraudulently obtained numerous home equity lines of credit, or ‘HELOC’ loans’

    But, tight lending? Senator Running Deer!!

    1. “Conspirators often applied for multiple HELOC loans on the same property nearly contemporaneously, withholding from each lender the existence of other applications, according to court documents”

      I would say, “What! You can do that?”

      I’ve done a lot of loans. They always pull credit during the beginning of the process and again just before going to underwriting. Why would these multiple lenders not see the hard inquiries and ask where the originated from? I suppose you could just say “I was loan shopping before I settled on your lovely institution.”. These guys are definitely thieves.

      Fauxahontis is on it!

  5. ‘Home flippers are in a tough spot…Their strategy of buying a house, putting some work into it and then quickly selling it for a return only works when there is an an appropriate supply and demand level’

    I had a title once that read if you have flipping you have a bubble. I still believe that. If there was so much real profit in this activity why wouldn’t Sam Zell do it? It only “works” when you have a REIC-engineered greater fool scheme.

    1. It seems like a lot of this flipping stuff would go away if we had 20% down payments, no?

      2. “if you have flipping you have a bubble”

        We have a lot of flipping everywhere in the economy, from used cars to designer handbags and trendy baby shoes (see “retail arbitrage”). It’s a form of scavenging for the developed world and wouldn’t happen without easily available credit, established venues/mechanisms for selling flipped goods, and a distorted economy that incentivizes flipping over productive work. All of which says the bubble is in nearly everything.

        1. We have a lot of flipping everywhere in the economy, from used cars to designer handbags and trendy baby shoe

          The manager we hired to run our complex’s wife has an entire store on Poshmark. She basically scours thrift stores, eBay, online sites, and finds trendy items she deems underpriced. She will then post them on her boutique and make a mark-up. It’s kind of a side hustle. She was excited about it for a couple of weeks, but it turns out that it doesn’t pay much more than being an Uber driver. But when you have a small child and you are staying home, lots of these side gigs are appealing. Hence the allure of so many multi-level marketing companies promising financial freedom.

          1. There’s a great youtube video from Vice about the whole LulaRoe scam. I finally understood about MLM.

          2. There’s a great youtube video from Vice about the whole LulaRoe scam. I finally understood about MLM.

            I highly recommend the podcast “The Dream”. It is so incredibly good and it basically encapsulates the entire scammish economy that permeates much of US culture.

            John Oliver’s segment on MLMs is pretty amazing too.

  6. ‘Sixteen years ago, a few years before the last cycle’s peak, the market might have experienced a similar slowdown had it not been for the widespread availability of very risky home financing that let buyers stretch to their financial max’

    This article starts off saying prices have never been higher.

    Click!

    1. I can’t see how anyone can make a short term profit at this stage of the cycle, unless they’re getting in really low on foreclosures that don’t need significant rehabilitation.

      It makes perfect sense that Diana is screeching today about buying homes to rent being the new hot thing for investors. But then all of those houses would have to compete against all of the overbuilding in multi-family rental housing.

      1. I can’t see how anyone can make a short term profit at this stage of the cycle

        What’s the old saying about when the shoeshine boy is giving you stock tips? When everyone is getting into the game, it’s already time to get out.

    2. Exported from Canada & U$A … due to Labor Cost$ & Environmental Degradation$

      I$n’t that $well of u$!

    2. Pending home sales down annually for 17th straight month
      Inman.com-1 hour ago
      PHS is an indicator of housing activity that measures contract activity based on … Inman Connect Las Vegas — featuring 250+ experts from across the industry

  9. Buffet said that you only know who is swimming naked when the tide goes out. Looking at various data, you can see the slow downward progression is occurring. Increasing incidents of mortgage fraud is another clue.

    Supposedly lending safeguards were put in place, but cleaver fraudsters find simple work around. A lot of falsified income has been investigated by Fannie. Now we are seeing falsified occupancy. For each revealed, think about how many are occurring. This really is just like 05 to 06 period.

    As I have said ad nauseum, if monthly YOY figures are declining, think of what the actual MOM declines have to be. There was an actual bump up in April, and i saw that locally. However this could be the real estate equivalent of the dead cat bounce common to securities. Saw the same in 06 once prices dipped slightly. Seems new home figures have once again commenced downward trajectory in May. Too bad for me since my business is predicated on new home construction, but that is the reality.

    Even the press is beginning to report. This real estate thing is a train. It accelerates and decelerates slowly but its momentum, once established, tends to continue. Would anticipate increases in failures of smaller lending institutions. Will be interesting study for my son who is entering college in fall as an economics major. He will see lots of current case studies in real time, I believe.

  11. But,… but ,..but… I am supposed to get a great return on my new HELOC secured investments!!

    Yours truly,
    The Greater Fool.

  12. ‘Today, they are buying single family homes, Levin said. ‘Home flipping fraud is always a constant,’ he said. ‘But lenders don’t go after the bad actors. They have a business model that accepts some losses’

    One more layer of deception.

    1. So what happens if you turn a blind eye to fraud? You get a lot more of it. And why would a lender do such things? If they had no skin in the game and were stuffing their pockets with money at the same time.

      May 25, 2018

      “In his corner of American finance, where hard selling meets hard luck, Angelo Christian is a star. Each time Christian sells a home loan, the company he works for, American Financial Network Inc., takes as much as 5 percent. Many of Christian’s customers have no savings, poor credit, or low income—sometimes all three. Some are like Joseph Taylor, a corrections officer who saw Christian’s roadside billboard touting zero-down mortgages. Taylor had recently filed for bankruptcy because of his $25,000 in credit card debt. But he just bought his first home for $120,000 with a zero-down loan from Christian’s company. Monthly debt payments now eat up half his take-home pay. ‘If he can help me, he can help anyone,’ Taylor says. ‘My credit history was just horrible.’”

      “Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program. It’s a sweet deal: He gets his nearly risk-free commission. Taylor puts no money down. If things go south, the government ultimately bears the risk. Many borrowers ‘are living paycheck to paycheck and, if they lose their jobs, they go into default immediately,’ says John Burns, a housing consultant.”

      http://thehousingbubbleblog.com/?p=10443

      1. As a noted real estate economist once said, “every closing is a crime scene”

        He’s right.

      2. Lender$ motto: “Whatever$ you can do, we can$ do better!”The

        True.Believer$, one & all!

        ERC’s offering is expected to capitalize on Freddie Mac’$ recent entry into the contiguou$, single-family rental market.

        “As the Number 3 Freddie Mac lender in 2018, we are very excited about Freddie Mac’s entering the single family build-for-rent space,” said Keaton Merrell, Managing Director, Capital Markets at Walker & Dunlop. “Freddie Mac for the first time is applying its attractive multifamily underwriting to the build-for-rent communities. This will actively open up financing options for buyers in the build-to-rent space.”

        ERC Homebuilder$ Offer$ First Opportunity for Wide Range of Investor$ To Ride Build-To-Rent Wave

        Busine$$ Wire| June 26, 2019

        During the foreclosure cri$is$ nearly a decade ago, inve$tors plowed into the housing market, buying million$ of distre$$ed home$ and turning some of them into lucrative rental$. Now they have a new strategy: Buy new.I

        This week, ERC Homebuilders is launching a “soft” IPO, hoping to raise $100 million to build more than 1,000 rental homes across Florida.
        Lp
        The build-to-rent business is growing fast, with several companies, including big names, dipping into it. Toll Brothers recently announced a $60 million investment in a joint venture with BB Living, a build-to-rent company based in Phoenix.

        REAL E$TATE
        Build-to-rent hou$ing market explode$ as investor$ ru$h in

        PUBLISHED WED, JUN 26 2019 | Diana Olick

  13. Can someone explain this?

    ““In South Florida, an oversupply of homes for sale has priced out most buyers out of the market, Migdal said.”

    Wouldn’t an oversupply *drop* the price?

    My only theory is that these flip homes were real POSs that needed $40-50K of fix-up. In that case, flippers are forced to sit on them, hoping to get a fat premium for their Minimalist Millenial Gray reno.

    (Easy cosmetic flips dried in up ~2013. Now we’re talking roofs, siding, systems, full kitchen…$$$)

    Yesterday someone posted an article about a company that is planning to build entire blocks of rental SFH. It should be interesting in a couple years when those houses are completed and these flippers finally capitulate on price. Can new rentals — with a 5% rent increase/YOY — compete with this oversupply of homes?

        1. Circumstantial evidence: “like when you find a trout in yer milk” H.D Thoreau

          ” … but common sense is even used as an ideological cudgel by conservatives in which so-called coastal elites lack common sense and, as a result, are out of touch with “real Americans” who apparently have an abundance of common sense. But, if we use our elected representatives as examples (though I can’t vouch for how representative they actually are), I think it’s safe to say that unsound judgment, that is, the absence of common sense, doesn’t discriminate based on political ideology. “

    2. Wouldn’t an oversupply *drop* the price?

      Simple, the sellers “aren’t gonna give it away”! It’s their special kingdom, god forbid they lower the price to get it sold.

      1. Dessication of demand and dissapearance of buyers would explain both rising inventories and falling prices.

      1. Clown? … What does that make this Rep?

        Ass+ Clown?

        Your Marine Corps
        Marine veteran Congressman Duncan Hunter used campaign cash for extramarital affairs, federal prosecutors allege
        By: Michael R. Blood, The Associated Press   2 days ago

        Marine veteran and U.S. Rep. Duncan Hunter, R-Calif., illegally used campaign funds to finance romantic flings with lobbyists and congressional aides, spending thousands of dollars on meals, cocktails and vacations, federal prosecutors say.

        Details about the married Republican congressman’s alleged affairs were outlined in a government court filing late Monday connected to charges that Hunter and his wife misspent more than $200,000 in campaign money on trips and personal expenses.

        Margaret Hunter pleaded guilty this month to one corruption count and agreed to testify against her husband.

        The congressman has said he is the target of politically motivated prosecutors. His lawyer, Gregory Vega, didn’t immediately respond to a message seeking comment about the new court filing.

        1. “…used campaign cash for extramarital affairs…”

          I was wondering why his wife turned on him.

          1. “I was wondering why his wife turned on him.”

            Seems like she should be happy that he wasn’t taking money out of the household budget?

          2. she should be happy

            Isn’t “happy wife, happy life” the first tenet of marriage? Depending on what the wife wanted in the marriage, it could have been a win-win situation.

  19. I heard back from Social Security this week about my wife who passed away in December in regard to any benefits my youngest daughter who is 22 and working her way through college or my oldest daughter who at 27 has 2 young kids might be eligible for.

    Well, after paying into the system for over 35 working years and including the employer match what I guess at well over $100k the benefit to my 2 daughters, 2 granddaughters and myself will be $255.00

    Let me write that out

    Two-Hundred and Fifty-Five Dollars

    They keep the rest.

    Yeah we need more Socialism

    https://www.youtube.com/watch?v=UMdkcTmPS2U

    1. SS is at least half responsible for the disaster we’re in. Shut that mofo down and watch the economy improve.

    2. I would think they are your survivor’s benefits. Your *retirement* benefits are different (that you apply for when you are at least 62 years of age).

      1. “. Your *retirement* benefits are different (that you apply for when you are at least 62 years of age).”

        The way they explained it, I get my benefits because I earned and paid in more but they keep my wife’s. You get the higher of the 2 but not both.

        1. the higher of the 2 but not both.

          As a widower you may be able to get half her benefits at age 60. Not sure if you can later switch over to your own full benefits at your full retirement age. Might be worth looking into.

          Something I didn’t expect but my handicapped adult daughter who is on disability got a big raise when I retired and started collecting SS.

          1. “Something I didn’t expect but my handicapped adult daughter who is on disability got a big raise when I retired and started collecting SS.”

            Good for her!

            It may be stupid but the more stories I hear about people who deserve it and get it the better I feel about the whole thing so thank you for posting that,

    3. My sincerest condolences, Jeff. Your story still brings tears to my eyes. I think that you, but not your daughters, may be entitled to more. I received a comparable amount when my mother passed away three years ago at 65 and single.

      1. I believe that is the burial benefit.

        My Ex, who didn’t work much, now collects a big check each month because she was married to a worker back in the day.

        1. My husband based on his experience and the experiences of his two of three close buddies (third buddy very likely to join the club and get screwed over the most): “There’s no such thing as a good divorce. Just shades of bad.”

        2. Yes that is the burial amount. I do not think the number had changed very much since the inception of the program

          2. The amount was capped in 1954. It started out as a temporary program to give someone who had insufficient quarters to qualify for benefits to their survivors some benefit to the survivors. It was meant to go away but never fully did.

        3. My Ex, who didn’t work much, now collects a big check each month because she was married to a worker back in the day.

          Mine will too eventually. But she’s older than me so I’m kind of curious if she can do it when she hits 62/65/67 or if she has to wait until I do. But anyway, I was stressed that it was going to reduce mine. But it turns out that really is one freebie from the govt…she gets some of mine and I get all of mine too. Which I’m honestly grateful for because I don’t have to reduce my standard of living in retirement any more than I already have for her AND I don’t have to bear any responsibility for her choices when money gets tight. I’m the best thing that ever happened to her and I’m OK with that…just glad I don’t have to deal with it every day any more.

    4. Actually, it could bee wor$er:

      My Irish Mom gone @ age 43 (x6 kid$, + miscarriages + still born) worked @ “side job$” every week since leaving the Catholic orphanage @ 17

      My middle sister @ age 56, pancreatic cancer, worked every week since age 18

      My lil’ sister @ age 51, organ complications for drug abuse & abusive husbands & boyfriends. Worked low.income, mostly full-time, since age 18

      X3 taxpayer$$$ = $0 $ocial $ecurity collection$ for them.

      * ( my father got a small amount for my younger brother, knot sure of amount, maybee $98 ’till he was 18)

        1. Thank you Hwy50

          It certainly appears that you and your family gas had more than their fair share of pain.

          1. Well, the flip $ide of the family “life.become$.us” coin is that my oldest Sister & Brother are millionaire$, minus (-) their parents, grandparents, & x2 siblings …

            (They combined / leveraged a high education + hard.work + good decision$ + lasting 1$t marriages = financial $ucesse$)

            Truly hope you’re able to find a good path forward from such a loss as you’ve had to bear.

      1. “So, you consider SS Socialism Jeff ??”

        Yes, I do.

        Are Social Security Benefits a Form of Socialism?

        BY AMY FONTINELLE
        Updated May 6, 2019

        Nevertheless, because the American government plays such a dominant role in the U.S. Social Security system – deciding how much and when employees and employers pay into the system, how much individuals receive in benefits when they get them, and preventing almost everyone from opting out – it seems fair to call the Social Security program a form of socialism. The program requires workers and their employers, along with self-employed individuals, to pay into the system throughout their working years. The government controls the money they contribute, and decides when and how much they get back after – and if – they reach retirement age.

        https://www.investopedia.com/articles/retirement/122916/are-social-security-benefits-form-socialism.asp

      2. Dave do you not consider SS socialism? Money is extracted in the form of taxes for a state run retirement program which has no obligation to pay out anything and which can and is amended by Congress from time to time.

        You could call it a ponzi scheme because the definition fits but it is also socialist due to the fact that it is entirely a state run program. SS claims origin via Otto Von Bismark and is based on principles of Social Insurance or compulsory participation in a supposed retirement benefit program with a shite ROI if theft can be deemed an investment.

      3. “So, you consider SS Socialism Jeff ??”

        Chances are that we’d be living like Charlton Heston in the “Omega Man” without that safety-net program. Most of my California friends who didn’t acquire an education or trade skill ended-up on SSDI-MediCal by their late forties or early fifties, their body worn-out from grunt-labor without medical benefits.

        1. “ended-up on SSDI-MediCal by their late forties or early fifties, their body worn-out from grunt-labor without medical benefits.”

          I’m glad it was there for them. On the other hand there was a neighbor of mine in the first house I rented in 2005 after selling, he was on SSDI. It used to kinda piss me off when I would drag my beat @ss home and see him out in the street playing catch with his kids, or working on his boat, or on a ladder putting Christmas lights up, or riding his bike etc. Pissed the neighbors off too. Of course he was obviously not the only one. When you have people giving out other people’s money these things are going to happen.

          A Disability Epidemic Among a Railroad’s Retirees

          By WALT BOGDANICH
          SEPT. 20, 2008

          To understand what it’s like to work on the railroad — the Long Island Rail Road — a good place to start is the Sunken Meadow golf course, a rolling stretch of state-owned land on Long Island Sound.

          During the workweek, it is not uncommon to find retired L.I.R.R. employees, sometimes dozens of them, golfing there. A few even walk the course. Yet this is not your typical retiree outing.

          These golfers are considered disabled. At an age when most people still work, they get a pension and tens of thousands of dollars in annual disability payments — a sum roughly equal to the base salary of their old jobs. Even the golf is free, courtesy of New York State taxpayers.

          Virtually every career employee — as many as 97 percent in one recent year — applies for and gets disability payments soon after retirement, a computer analysis of federal records by The New York Times has found. Since 2000, those records show, about a quarter of a billion dollars in federal disability money has gone to former L.I.R.R. employees, including about 2,000 who retired during that time.

          https://www.nytimes.com/2008/09/21/nyregion/21lirr.html

      4. I feel like the term socialism gets thrown around a lot, yet means very different things to different people. I myself was getting quite confused by it. So a couple months ago I looked for the most succinct and widely accepted definition. I think it’s something like this (from Webster’s).

        socialism: any of various economic and political theories advocating collective or governmental OWNERSHIP and administration of the means of production and distribution of goods.

        So by this definition, neither the US nor Europe is really socialist (maybe, maybe, some of the Scandinavian countries). Obama was not, it would seem, a socialist.

        Instead, the west is a collection of welfare states based on redistribution:

        redistribution: the distribution of something in a different way, typically to achieve greater social equality.

        Where the something is money.

        We can debate having more or less redistribution. We can say we like or dislike or love or fear socialism. But we don’t “have socialism.” Social security does not equal socialism.

        I apologize for being pedantic. I really was confused by all of this.

        P.S. — I totally agree social security is a Ponzi scheme.

        1. “Social security does not equal socialism.”

          Call it what you want, to me…

          “it seems fair to call the Social Security program a form of socialism. The program requires workers and their employers, along with self-employed individuals, to pay into the system throughout their working years. The government controls the money they contribute, and decides when and how much they get back after – and if – they reach retirement age.”

          https://www.investopedia.com/articles/retirement/122916/are-social-security-benefits-form-socialism.asp

        2. really socialist

          Webster’s definition is irrelevant. It is the name adopted by a long line of lying, thieving and killing Little Caesars.

        4. Good post. Most people, but not everyone, grasp that social security isn’t socialism any more than public education or free health care for vets is socialism.

      1. Maybe they breed children they can’t afford, pay monthly subscriptions for cable / satellite TeeVee, drive a newer and more expensive car than they really need, eat overpriced restaurant food, and just spend money unnecessarily in other ways.

        I do none of the above.

        And I’ll add to that, maybe they’ve lived through a divorce (or two, or more). That’s never happening to me in this lifetime…

    2. So how long have RINOs been saying that Trump had been hurting himself with his tweets? How long has the MSM been doing the same thing? They could not convince him to stop since he knew directly communicating with the public helped him now they want to straight out censor him. So what else are they lying to us about?

      1. Google’s week isn’t going so well:
        Monday – Google senior exec Jen Gennai caught on hidden cam
        Tuesday – Google doc shows @benshapiro, @jordanbpeterson & @prageru labeled “Nazis” (https://twitter.com/RepDanCrenshaw/status/1144057944599871490)
        Wednesday – Google doc appears to show election interference in Ireland abortion referendum
        Thursday – Google doc shows coordination of protest through internal “Resist@Google.com” group

        1. With the current discourse over free speech and incitement to violence, I’m reminded of a seminar, entitled “An Anatomy of a Political Trial,” that I took in law school based on the 1969-70 trial of the Chicago Eight (or Seven). Does that ring bells for anyone?

          1. Not familiar with that one, but by voting for Bernie Sanders in the Colorado primary (open to unaffiliated voters next year) I’m doing my small part to help turn the Milwaukee 2020 convention into Chicago 1968.

            Coming attractions include encores of the Days of Rage 1969 and the Weather Underground bombings of the 1970s.

            When Trump is reelected next year, despite the avalanche of censorship happening now, expect the Democrat Party to become destructive and violent.

            I’m only in my early 40s but the degeneracy and cultural rot in this country is the worst I’ve seen in my life.

            Secession / Balkanization may be the only way out now…

          2. Not familiar with that one

            The defendants in that trial were arrested protesting the 1968 Democratic National Convention in Chicago. Let me see if I can find the titles of the books from my course.

          3. titles

            David Farber, Chicago ’68
            Larry Sloman, Steal This Dream: Abbie Hoffman and the Countercultural Revolution in America

          4. Also a gift from that professor, an authority on constitutional law in both the United States and Israel:
            Anthony Lewis, Make No Law: The Sullivan Case and the First Amendment

        2. @benshapiro… labeled “Nazis”

          A practicing Jew labeled a Nazi. That’s kind of ironic.

        3. Nothing’s gonna happen.

          We will still let google get away with their false user counts, bot clicks and don’t forget selling your privacy.

          1. Nothing’s gonna happen.

            While I understand the pessimism, I disagree. The flood gates have opened. Evidence leaked by insiders is far more swift and visible to the masses than discovery through the courts.

  24. sounds like its starting to feel like 2007 again … a slip just before the big fall. Still some areas like Phoenix still continue to do well re: RE thanks in large part to many moving here from CA due its high cost of living and other Leftist-politics induced woes. Unfortunately, quite a few of these CA “transplants” are bringing their Leftist political ideology with them to AZ.

    1. Because they’re not leaving CA due to politics, they’re leaving CA due to high house prices. They would stay in CA if the house prices were not so high, which means they brought their politics to their new stomping grounds, and they will use them accordingly.

  26. The Financial Times
    Global property
    Why buyers are turning away from luxury property
    From Vancouver to Sydney, high-end apartments are lying empty despite prices being slashed
    © FT montage/Getty
    Judith Evans, Property Correspondent yesterday

    Viewed from Bangalore, the purchase of a newly built three-bedroom apartment in London for more than £1.4m seemed like a safe investment bet.

    The top-floor three-bedroom home under construction in Keybridge House south of the Thames boasted views of the City of London and the Shard skyscraper. As Shonu Bhandari considered the purchase two years ago, agents told him he could expect the value to rise 15 per cent before the property had even been finished. The Indian entrepreneur, who runs a medical products company, happily signed up to buy.

    But his purchase soured quickly. When Bhandari approached a mortgage lender, it valued the property not at 15 per cent more than he had agreed to pay — but at 20 per cent less. With completion of the building looming, he signed over the property to a new buyer in March this year for £1.2m, losing more than £200,000 of his deposit.
    …

  28. Can’t help but feel a touch of sadness for all the upper middle class white coastal liberals, who just wanted to extract a few more hundred thousand out of this aging boom cycle. My thoughts and prayers are with them 🙁

    1. They are mostly too liberal to believe in God but in the end whether you believe or not only impacts your fate not God’s existence. But while your post is probably sarcasm, it would be good to pray for people who have made money and politics their Gods.

  29. Something interesting going on that is being ignored by even the majority of the business press. US production declined by 300000 barrels a day in just three weeks. Prior to fracking unless there was a hurricane etc such a decline would take years. This is due to the high rate of decline of fracked Wells. I said a few weeks ago as the number of Wells actually fracked declined we would see a loss of production but the rapidity of the decline even amazes me. Of course, higher prices will cause more drinking and subsequently more fracked wells, however as of last week the overall drilling was still declining as was the number of Wells drilled but not immediately fracked. When the 737 max goes back into production and oil drilling and fracking pick up it is going to boost gdp, they are a drag right now. That is ok Trump wants to go into the election strong

  31. Up until a few weeks ago the Baoshang Bank’s prospects seemed bright enough.

    According to Baoshing’s most recent regulatory filing, the smallish lender based in Inner-Mongolia, made a $600 million profit in 2017.

    It had assets of around $90 billion, non-performing loans were modest — under 2 per cent — and its capital buffers would fit comfortably with the global demands of a Tier1 bank.

    Then it collapsed.

    https://www.abc.net.au/news/2019-06-28/baoshang-bank-collapse-hits-lending-threatens-chinese-economy/11252022

    1. From the article:

      “By investigating non-resident ownership, Gordon’s study sought in part to address the issue of “satellite families”, who live in Vancouver but whose primary breadwinner earns abroad.”

      It seems like there are lots of satellite families. In my view, this is just another reason to raise property taxes on foreign residents, or at least selectively on properties where the owner doesn’t file a local tax return.

  34. ‘Capitalism…is no longer the progressive force described by Marx’; the free market era ‘has been followed by a new one in which production is concentrated in vast syndicates and trusts which aim at monopoly control’. Giant multinational technology companies ‘freeze out other competition to forestall independent technological innovation’. Financial control ‘has passed from the industrialists themselves to a handful of banking conglomerates – the creation of a banking oligarch”
    Imperialism: The Highest Stage of Capitalism
    Lenin

  35. Ben Carson: Our affordable-housing policy is failing. We need a new approach.
    Washington Post
    Ben Carson
    27 June 2019

    “For far too long, federal policy has focused solely on helping people through increasing spending on rental assistance. As a doctor, I can tell you: These are the symptoms of a patient who needs a different prescription — one that focuses on the reason housing costs are increasing.”

    “Fortunately, President Trump signed an executive order this week that correctly diagnoses the source of America’s affordable-housing condition and issues a new prescription: This is a matter of supply and demand, and we have to increase the supply of affordable homes by changing the cost side of the equation.”

    1. According to Dr. Carson, the problem with affordability is the state, local, and federal regulations that create the cost increase. Do you agree that we just need to build more?

      1. We don’t need to build. What we need to do is start spreading the jobs to dead cities in the Midwest, Rust Belt, Great Plains, rural areas. For the price of one tunnel into NYC you could probably fix up half an entire city. Move the companies out of Silly Valley and Denver and into Cincinnatti or Detroit or Macon or Rapid City or Lexington, Milwakuee, Buffalo, Rochester, the works. There are plenty of houses and unused infrastructure there. If the houses are decrepit, fine, there are companies that will build new pre-fab houses on the existing utility hookups. Just call up Mafia Blox, he knows all about it. Maybe the Chinese were onto something with those ghost cities.

        1. It strikes me that this is what the 2017 TCJA opportunity zones is loosely meant to accomplish in “spreading the economic wealth” outside of the urban centers. It will be interesting to see in 10 years if it worked at all.

        2. In principle that has merit, but good luck getting anyone to want to live around here during January and February, especially if they’re not native to the upper midwest.

          We had a week last January where it did not get about 10F.

    2. Sleepy Ben has it half right, which is more than you can say for his predecessors. The only thing Trump would need to do in order to restore affordable housing is to make good on his signature campaign promise of drastically reducing the flow of illegal immigration and deporting those already here. Reducing legal immigration and H1B visa allotments would help tremendously as well. When you tally up all the foreigners living in our country it’s a massive downward pressure on wages and upward pressure on rents and home prices. Yeah, it’s supply and demand, but Legacy Americans are not having enough children to increase demand by much – it’s the new immigrants creating all the “demand”. Trump is trying to have it both ways by building more housing to accommodate the insane levels of immigration instead of kicking them out. All that will do is further depress wages, increase the strain on social services, exacerbate traffic problems, and increase crime rates. No American wants to live in cities that resemble Mexico City, Manila, or Beijing.

  36. Random observation since Ben likes to poke at my current home town…

    So I found myself having to do a ‘go around the block u-turn’ today and went down a street I normally don’t. The houses on this street were all originally 1700 to 2200 sq/ft single story ranch type built in the 50’s. And sticking out like a neon sign was a recent tear-down that had been replaced by a 5100+ sq/ft caricature . The google street view doesn’t do justice to how visually out of place it was.

    https://www.google.com/maps/@47.5720086,-122.2255955,3a,75y,274.72h,78.37t/data=!3m6!1e1!3m4!1s8Cen3sHeVV4x7xbZJY1x1g!2e0!7i16384!8i8192?hl=en

    Not sure what my point is tonight…
    Probably won’t be posting much in the next week as I prepare, then expect to be offline for a couple weeks minimum and I recover from surgery. Can’t wait for all the insurance billing fun.. yippie…

    1. We have much the same thing happening here in 48009. The teardowns for the most part eventually change the character of the street to less homogeneous and more a mixture of uniqueness, but it can look really bizarre at times on the way there.

      Best of luck with the surgery…

      1. Chino – stay cool today. I hear it’s 90+ while a lot of people I know are having to put sand bags up along the St. Clair river.

      1. From the Zillow listing:

        “Have coffee at home or live like a Parisian and grab a croissant from Cannelle Patisserie, less than a mile away!”

        Well since you can get a croissant pretty easily, that probably justifies the $697k price tag. Worth it.

    2. If the house were stretched horizontally, it would look much better! As is, the roof pitches and swoop are too severe.

  38. LOL last night every one of the Democrat Party primary candidates on stage agreed with providing free health care to illegal immigrants.

    Note also on both nights the debate moderators asked zero questions about the national debt.

    “This sucker could go down” — George W. Bush

    1. Sometimes I find it helpful to distinguish between what I think should happen and what I think is likely to actually happen. As much as I hope and believe that interest rates will normalize, I think the national debt will force interest rates to be low almost indefinitely. Noah Smith from Bloomberg wrote about this yesterday:

      U.S. Is Heading to a Future of Zero Interest Rates Forever
      Bloomberg
      Noah Smith
      27 June 2019

      It’s the obvious way to avert national bankruptcy as the country keeps piling on debt.

      1. “…the national debt will force interest rates to be low almost indefinitely.”

        It’s a hopeless solution, as rock-bottom rates create moral hazard for piling ever more debt higher and deeper.

        Anything that cannot continue forever will stop.

        — Herbert Stein’s Law

    2. “Note also on both nights the debate moderators asked zero questions about the national debt.”

      No point in discussing sovereign-debt while we’re proxy-fighting six active conflicts in the middle-east. Besides, once “occasional-cortex” gets MMT in motion that debt will balloon to $50-trillion within a few years.

  39. ‘ John Whitnell, an analyst at sales research firm KEA Advisors, told TT he already sees problems. For example, he said asking prices over the past eight weeks for tractors with sleeper berths have declined precipitously. He also is raising a flag about longer-term trends. “What gets lost in saying year-over-year prices are up 6% are the price trends in each year,” Whitnell said. “Last year prices were rising. This year — not so.”

    ‘Tam said dealer-to-dealer sales are slowing the most quickly because dealers have insight into the market for new trucks, and the “broader dynamics” of the freight market. Tam said auctioneers are still working their way through Taylor & Martin Inc.’s auction of New England Motor Freight’s fleet of 1,550 tractors. Regional less-than-truckload carrier NEMF and 10 related entities declared bankruptcy in February. The trucks’ sales started in May, and will continue at 12 locations through July.’

    ‘In general, such business failures and bankruptcies can throw a lot of used trucks onto the market suddenly, affecting used truck prices, Tam noted. “(Business failures) are something everybody is watching,” he said.’

    https://www.ttnews.com/articles/used-class-8-prices-6-year-inventories-increase

  41. >>home values are entering uncharted territory.

    Uh. No. House PRICES have entered uncharted territory. The value is the same as it was years ago.

    1. Yes. And the good news is that the law of economic gravity will eventually, inevitably realign home prices with values.

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