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Overleveraged Mortgagers Might Be Facing A Hint Or Even A Significant Sense Of Buyer’s Remorse

A report from ABC 7 in Illinois. “In Evanston, there are only 40 single family homes for sale right now; not even a one month supply of inventory. Upwards of two dozen hopeful buyers at a time have been seen in lines forming at open houses. ‘It was the same thing,’ said Allie Payne of Compass Realty Evanston, comparing it to the market in 2008. ‘The house is going for 20% over list and people taking it as is with no appraisal, contingency, you know, closing whenever the seller wants to close, just bending over backwards to get a deal.'”

“But unlike the market that led to economic disaster 13 years ago, Payne said this market is stable. ‘You have to have an agent that Is networking with other agents, that is looking at things that are not on the market yet so that you have a leg up or else you are going to be eaten live,’ she said.”

From DS News. “There’s a solid chance that any recent homebuyer paid more than the asking price, due to supply shortages and increased competition. Those who didn’t take all of the prudent measures—including taking the time to boost credit in order to lock in the best possible rates, something the experts at WalletHub, which just conducted a study on overleveraged mortgagers, have suggested—might be facing a hint or even a significant sense of buyer’s remorse.”

“In its report, WalletHub decided which cities are home to the most overleveraged mortgage debtors by comparing the median mortgage balances against the median income and median home value in more than 2,500 cities. Willis, TX tops WalletHub’s list with a 168% mortgage debt-to-house value ratio and 555% mortgage debt-to-income ratio, which led to a high ‘WalletHub Home Overleverage Score’ of 66.57. Right behind Willis is Dumfries, Virginia, followed by Bell Gardens, California, Ewa Beach, Hawaii, and, rounding out the top five, McKees Rocks, Pennsylvania.”

From Market Watch. “Millions of homeowners have been excluded from federal protections providing pandemic-related mortgage-payment relief. Jacarae Fairbanks, 44, is a single mother of three in Puyallup, Wash., whose home was sold in a foreclosure last fall. She’d fallen behind on her non–federally backed mortgage before the pandemic began and was facing foreclosure in 2019 before securing a loan modification that required 12 months of trial payments.”

“Fairbanks made five payments under the new agreement but fell behind again in early 2020, according to court filings. After the pandemic struck, she lost her job as an accounting assistant and contacted her mortgage servicer, FCI Lender Services, to ask for relief, according to Fairbanks and her lawyer, David Smith. But the investor that owned the mortgage wouldn’t allow a forbearance.”

“For now, Fairbanks and her family remain in the house while she fights in court to salvage her home, arguing that a bankruptcy filing she made in the days after the foreclosure auction should have halted the transfer of the title to the new owner pending a court review. A judge in U.S. Bankruptcy Court for the Western District of Washington ruled in Fairbanks’s favor in January. An appeal is pending.”

“‘I was just trying to have the American dream, like anybody else,’ Fairbanks says. ‘I did it by myself, just to show my kids a better life. And who would have ever known we’d be dealing with COVID-19?’ She has no family with whom she can move in, she says, and ‘I don’t have anybody I can call and say, ‘Can me and my kids come stay with you?’ How can I look at my kids and say, ‘We’ve got to move out’?”

The Los Angeles Times on Nevada. “DeMarcus Cousins just sold his 20,000-square-foot Sin City showplace for $7.5 million, or half a million shy of what he was asking for it last year. Cousins paid $6.5 million for the vaguely Mediterranean mansion four years ago. The estate reached its peak value a year before the 2008 market crash, selling for $12 million in 2007, records show.”

The New York Post. “Disgraced music mogul and entrepreneur Russell Simmons is finally in contract to sell his Financial District penthouse — nine years after it first went on the market. The palatial pad at 114 Liberty St. was last asking $5.5 million — more than half off its original asking price of $11 million back in 2012.”

From Page Six on New York. “Hamptons regulars are stunned after Wall Streeter Heath Freeman bought the beloved East Hampton Point resort for less than $20 million. The resort had originally been put up for sale around 15 years ago for $50 million by the late Ben Krupinski, a popular Hamptons home builder who died in a plane crash in 2018. The sale price was more recently slashed to $27 million.”

From Mansion Global on Florida. “Shaquille O’Neal’s mammoth Florida estate has returned to the market with a facelift, a new brokerage and a $16.5 million price tag. Back in January, and after three years on the market, it looked as though the 15-time NBA All-Star had scored a buyer for the supersized spread in Windermere, but a sale failed to materialize after the contract fell through. Mr. O’Neal, 49, has owned the 12-bedroom home for close to two decades, having bought it in 1993 for $3.95 million, records with PropertyShark show. In mid-2018, he listed the home for the first time for $28 million, almost double the home’s current asking price.”

The Real Deal on Florida. “A Swiss banker’s sentence was cut for his role in an alleged $1 billion international money laundering scheme that illegally funneled money into South Florida real estate. Matthias Krull was a key figure in a sophisticated scheme in which Venezuelan officials and wealthy elite siphoned money out of the country’s state oil company, PDVSA, and into assets in Europe and the United States, according to federal prosecutors.”

“Some of the money allegedly went to buy luxury properties in Wellington, Coral Gables’ Cocoplum neighborhood and in Sunny Isles Beach, including at the condominium Porsche Design Tower. Krull was initially sentenced in 2018 to 10 years in prison for his role in the money laundering operation. U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida reduced his sentence to three-and-a-half years in September, due to Krull’s cooperation with the federal government, according to an order that was unsealed on Tuesday. Krull is expected to begin his sentence in July.”

“Separately, a former national treasurer of Venezuela, Alejandro Andrade, was sentenced to 10 years in prison in 2018 for receiving over $1 billion worth of bribes from his co-conspirator, Venezuelan TV mogul Gorrín, according to the U.S. Department of Justice. As part of Andrade’s guilty plea, he agreed to forfeit his assets, which included 17 champion show horses and five real estate properties in Palm Beach County.”

From LA Magazine in California. “For an hour on a crisp January morning, I traverse sidewalks that feel about 30 percent as crowded as they did a year ago. The economic wreckage unleashed by COVID is inescapable, if also oddly random, the blocks a patchwork of closed businesses and those that persevere. Virtually every downtown economic engine has been shut down.”

“The situation has sparked existential dread from even some of downtown’s most ardent boosters. ‘It fuckin’ sucks—but it’s getting better,’ says Hal Bastian, executive vice president of the real estate brokerage firm Major Properties, who for more than a quarter century has lured businesses to downtown.”

From Arlington Now. “The condo market began to turn last summer and got progressively worse through November/December but has improved slightly and stabilized a bit since December. First, let’s take a zoomed-out look at the Arlington and D.C. metro markets. We are still experiencing a rush out of condos (see first chart, New Listings), with the D.C. metro and Arlington both recording record-highs in total condos listed for sale in January and February. The reasons for this range from people seeking more space/yard to investors unable to find tenants.”

From Popville on Washington DC. “Real Estate Fresh Finds is a weekly selection of newly-listed properties in the District. Petworth end-unit 4 BR/3.5 BA row home with a recent massive $150k price reduction. Your REO/Bank-Owned Property of the Week is a fairly spacious 1 BR unit in McLean Gardens/Cleveland Park on the first floor with its own ground level walkout.”

This Post Has 67 Comments
  1. ‘How can I look at my kids and say, ‘We’ve got to move out’?

    Better get some boxes.

  2. ‘bought the beloved East Hampton Point resort for less than $20 million. The resort had originally been put up for sale around 15 years ago for $50 million…The sale price was more recently slashed to $27 million’

    Hamptons are red hotcakes UHS says.

  3. ‘We are still experiencing a rush out of condos (see first chart, New Listings), with the D.C. metro and Arlington both recording record-highs in total condos listed for sale’

    Yes, but the airboxes are supposedly selling in a month or so. These people are a lion.

  4. ‘Upwards of two dozen hopeful buyers at a time have been seen in lines forming at open houses. ‘It was the same thing,’ said Allie Payne of Compass Realty Evanston, comparing it to the market in 2008. ‘The house is going for 20% over list and people taking it as is with no appraisal, contingency, you know, closing whenever the seller wants to close, just bending over backwards to get a deal’

    I could post dozens of articles like this every day. I don’t because it’s what we can expect frankly. The REIC is in the business of selling BS. In a way I don’t blame them, it’s hucksterism like used car sales, or time shares. But it is housing. One might think an industry where people are borrowing vast sums to gamble might be a bit more circumspect. But I don’t think they really care.

    ‘I was just trying to have the American dream, like anybody else,’ Fairbanks says. ‘I did it by myself, just to show my kids a better life’

    Yeah, it was cheaper than renting. The media never, ever asks UHS about who shoehorned these FBs into a loan.

    1. Evanston Il is paying reparations from mary Jane tax. Up to 25 million dollars which as I understand are good for real estate only. Northwestern University apartments are not renting well at this time. Just an fyi.

      1. I lived in a couple of slumlord apartments just off campus in the late 70s while I attended college there. The poverty gradient as you headed west of the posh campus was pretty steep back then, though perhaps not as extreme as at the University of Chicago, a few miles to the south.

        1. Evanston has become tony. West of the campus has become a little nicer with less crime.. The area around Howard Ave. S of Cavalry Cemetery is rough. Outside of U of Chgo area is boomin’ – high crime. Don’t visit unless taking Lake Shore. What’d you pay for schooling at Norwestern U if you don’t mind my asking? I always get a kick out of the price.

        2. Nice! I worked at a place in Evanston in 79-80. Used to do lunch down on the lakefront (which consisted mostly of smoking weed ;-). There was a thin crust of “nice” places by downtown, but the rest of the town was solidly middle class with about a 20% slice of what was politely called “strivers”.

          1. Completely different now. Still some working class, but high flyers who want the lake, house and Purple Line to Downtown which has non-stop express to DePaul in the mornings and Downtown. Little rough around Evanston Township HS. Definitely rough on Howard Ave area even though most of the bars for underage drinking are gone.
            Downtown Evanston has posh bars, restaurants, clothing shops, etc.. But they pay taxes like you would not believe. Very left and BLM all over most of the neighborhoods. New high rises for people who enjoy working 60 – 90 hours weekly. Dated a woman who lived in a nice three bedroom, attorney who worked 7 days a week 10 hour days.
            Much has changed.

    2. “…‘I did it by myself, just to show my kids a better life’…”

      Spending a large fraction of the rest of your life servicing obscene amounts of debt doesn’t particularly seem like a good life plan.

      1. The MSM glossed right over the fact that she had been foreclosed on pre-pandemic and was already on a probation. (I’m surprised they even revealed that.) I can see why they didn’t grant a forbearance.

    3. But unlike the market that led to economic disaster 13 years ago, Payne said this market is stable….

      Just what I suspected, it’s different this time! I knew it!

  5. There he is, Miss America
    There he is, your ideal
    The dreams of a million boys
    Who are more than pretty
    May come true in Atlantic City
    Oh he may turn out to be
    The queen of femininity

    First transgender titleholder crowned Miss Silver State USA


    LAS VEGAS (FOX5) — It’s a first for one major local beauty pageant: a transgender person is now the reigning titleholder.

    Kataluna Enriquez won Miss Silver State USA, the biggest preliminary competition for the Miss Nevada USA pageant.

    1. JFK put a man on the moon.

      Obama and Biden put men in little girls bathrooms.

      This is the “fundamental transformation” you were promised.

  6. And on the subject of fundamental transformation, Reason Magazine — The Dream of the ’90s Died in Portland (3/22/2021):

    “Once an up-and-coming city, Portland was destroyed from within by radical activism and political ineptitude.” That’s just the article sub-title, it’s a long and well written piece too comprehensive to summarize with brief excerpts.

    1. I patiently waiting to see Dr. Rachel Levine on the Sports Illustrated cover wearing a leopard print banana sling.

  7. Any thoughts on what will happen to Treasury yields or mortgage rates when the Fed eventually rolls back its yield suppression measures? Could there be a reverse effect on stonk and housing prices from what we saw over the past year?

    1. Bonds
      Treasury yields are flat as Powell hints at one day removing support
      Published Thu, Mar 25 2021 5:53 AM EDT
      Updated Thu, Mar 25 2021 10:20 AM EDT
      Vicky McKeever

      U.S. Treasury yields were flat on Thursday morning after Federal Reserve Chair Jerome Powell signaled that the central bank would eventually roll back on its support programs.

      The yield on the benchmark 10-year Treasury note fell to 1.598% at around 10:30 a.m. ET. The yield on the 30-year Treasury bond dipped to 2.31%. Yields move inversely to prices.

    2. The Financial Times
      Asset allocation
      Markets brace for large shift from stocks to bonds in fund shake-up
      Quarter-end rebalancing at asset management firms to reverberate across global markets
      Global bonds have slumped of late, led by a fall in prices in the US Treasury market
      Joshua Oliver yesterday

      Billions of dollars are set to flow from stocks to bonds around the end of March as big investors move money to rebalance their portfolios, analysts say.

      The large fall in bond prices and a rally in stocks in the first three months of the year have thrown many investors’ typical portfolio mix of 60 per cent equities and 40 per cent bonds out of whack.

      To get back in line around the end of the financial quarter, pension funds, insurers and other large investment groups will need to load up on bonds. That could tap the brakes on a market shift that has defined the opening months of 2021.

      1. “60 per cent equities and 40 per cent bonds”

        40% FZIPX
        40% FZROX
        20% FTBFX

        Those specific ratios in purchases since the beginning of this year, as an unscientific experiment to see how they comparatively perform.

        And additional purchases of BRKB and GLD as a “store of value” as neither pay dividends or bond interest.

        I have zero debt, it’s a nice feeling.

          1. “Just shut up and BTFD u FKNG idiot.”

            What excellent investing advice!

            How do I register myself for a Robinhood account?

  8. “The economic wreckage unleashed by COVID is inescapable…”

    I hear this a lot and I always interrupt them. Not COVID. COVID restrictions. Covid has done very limited harm, and disproportionately to the elderly and sick. Government restrictions created as a kneejerk reaction to Covid fears have wrought almost all of the damage.

    Please remind your friends and neighbors!

    1. People in Denver will be wearing masks while driving alone for the rest of their lives, because The Science™

      1. What are they going to do when Denver bans non electric cars? Ride the bus and wear 10 masks?

        1. Riding the bus is only for black and brown poors.

          The mask virtue signalers (I saw one near Alameda and Broadway yesterday) will ride scooters as they roll to and from the microbrewery with sh*tty $10 pints and the cafe serving $15 ramen entrees.

          None of these people work real jobs that require commuting, and they most certainly never work any kind of job that involves tools or transporting jobsite materials.

          And if they do buy an overpriced Tesla, I will be happy to do custom install of their charger, and hand them an invoice with an additional $1000 Green New Steal administrative fee.

          Everybody wins.

          1. Riding the bus is only for black and brown poors.

            When I interviewed for jobs downtown a few years ago, I asked if the company had a parking subsidy. I was told that they all ride the bus.

          2. and the cafe serving $15 ramen entrees

            We have one of those nearby. They charge $12 for one. I tried it once It’s not Top Ramen. It was OK, but I’d rather get a burger at Good Times or Wendy’s.

  9. Don’t forget the central bank money deluge when considering government impacts of the covid…

  10. I know you guys are interested in hearing about my wife’s sister-in-law in-laws. So I finally found out the “less than one penny” stocks they brought. Probably it was DPLS or Dark Pulse. It’s 0.0081 or down 22% today but looking back 6 months, it is still up 10,400%. How can this be possible? Where is the SEC?

      1. Who says I’m HODLing stonks now?

        (to be fair, I do have a few bucks in some equity funds. When they get too big I take profits and knock ’em back down.)

  11. San Francisco Chronicle
    SF has nearly 16 million square feet of vacant office
    space …
    So, why not turn empty office spaces into housing? The injection of new residents could help revitalize deserted commercial districts and boost foot traffic as …
    20 hours ago

    Is that a lot?

    1. So, is this the future of downtown areas and any large business campus in every metro? Will the homeless be “stored” in them, given their $1000 a month UBI so they can survive on fast food? Will they be given “the jab” and mysteriously die decades early?

  12. Speaking of overleveraged mortgagers, how is the CRE sector’s one-way trip to Craterton going these daze?

    1. The Financial Times
      Property sector
      JPMorgan and Goldman handed mall stakes after American Dream turns sour
      Lenders to New Jersey mega-project get a 49% holding of other big shopping centres in restructuring deal
      American Dream’s lenders will emerge with stakes in Minnesota’s Mall of America, above, and West Edmonton Mall in Canada
      Eric Platt in New York and Joe Rennison in London 3 hours ago

      JPMorgan Chase, Goldman Sachs and a group of real estate investors are set to take a stake in Mall of America, the largest shopping centre in the US, after its owner defaulted on another multibillion-dollar development in New Jersey.

      The banks were in the final stages of securing a minority interest in the Minnesota mall and have been in negotiations with its owner Triple Five Group, its lawyers and a consortium of other lenders, according to people involved in the deal.

      Triple Five put up 49 per cent stakes in the Mall of America and the West Edmonton Mall in Canada as collateral to secure a $1.2bn construction loan for its American Dream project in New Jersey in 2017.

      That $5bn project was a mammoth undertaking, billed as a tourist destination given its proximity to Midtown Manhattan, and boasted luxury department store tenants, a Nickelodeon theme park and indoor ski resort. But the first part of the mall opened just weeks before the coronavirus swept across the US. Several large tenants have backed out of the project, including Barney’s and Lord & Taylor, two department store chains that have since shut down entirely.

      JPMorgan was the largest lender on the American Dream construction loan, alongside Goldman, Barry Sternlicht’s Starwood Capital, real estate investor CIM Group, Soros Fund Management, asset manager Wafra and iStar, the property investment group run by Jay Sugarman.

      The restructuring had been complicated by the number of lenders involved but the deal could close as early as this week, two of the people added, although they cautioned it could still be delayed.

      Even after the equity in the two malls is passed to the lenders, thorny questions will remain. It was unclear if the lenders were keen to hold their stakes long-term and they might pursue efforts to sell their positions, one person added.

      The American Dream project has faced troubles since it was conceived more than 20 years ago. Construction began in 2003 when the Brooklyn Nets basketball team — then known as the New Jersey Nets — still played in New Jersey’s Meadowlands Arena. The development was known as Xanadu at the time. Its original developer, Mills Corp, ultimately dropped out, as did its successor Colony Capital.

      “It would have been much better if American Dream would have burned down or a hurricane had hit it, financially, because we would have been covered by insurance,” Kurt Hagen, a Triple Five executive, told a city council meeting earlier this month. “This pandemic that we didn’t see coming has not been covered and is the worst scenario imaginable.”

  13. 4 hours ago

    Photos show Biden, 78, relied on 14-point font prompt cards during his first press conference, including one with head shots of reporters he planned to call on:

    Biden also appeared to lose his train of thought several times, cutting himself off abruptly

    His remarks about ‘Jim Eagle’ in a confusing analogy to Jim Crow left many viewers puzzled

      1. Just waiting to see the seamless method the handlers use to swap Kamala for Joe in a few years (?). Can we start a list?

        1. Already calling it the Biden-Harris administration. I don’t think Biden will make it a year.

          1. I don’t think that the Dems will remove him, unless he becomes bedridden, and maybe not even then. He is a useful puppet.

            The GOP won’t seek his removal, because then Harris would ascend to the throne.

            That said, I do wonder if he’ll complete his term, as in he might die before then, so I think we’ll be getting Harris regime eventually. I won’t call it an administration, because it won’t be one.

          2. I don’t think either of them are in control.
            👍🏻 I think they’re being handled, each told different stories – whatever it takes to get them to do the Marxists’ cabal’s bidding. The ultimate useful idiots.

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