patrick.net

Austinhousingbubble says

In other related news:
SEC Cuts Wall Street Some Slack On Derivatives Rules
http://www.huffingtonpost.com/2011/06/10/sec-derivates-wall-street_n_874877.html

I'm loosing more faith in our government every day. I'm not sure it can go any lower at this point.

ChrisLA says

I’m loosing more faith in our government every day. I’m not sure it can go any lower at this point.

You still have some faith in our govt?

The only faith I have in our govt. is that they will say anything to get re-elected and do anything to enrich themselves.

FunTime says

I’ll try to help you through what I’m thinking. You can call it bullshit. I don’t think you’re much of a thinker, but maybe you just don’t see my angle. See if this helps.

Yes, correct, I'm not a thinker. I guess nobody here is a thinker but you since nobody is buying your horseshit projections of the prison-like circumstance this person is choosing to be in. Stop paying mortgage after extracting several hundreds of thousands of dollars, stay in house, enjoy 5 years of free living... obviously these poor victims deserve our sympathy. Thank you for clarifying it. Your imagination is unparalleled.

mdovell says

It creates moral hazard to assuming that businesses will just be bailed out. Now instead of less risk they are more apt to take MORE risk.

How'd that work out for Countrywide? Or WaMu? Or IndyMac? Or Lehman Brothers? Will they be taking on more risk next time?

...My point is that in a war, you have to do what is best for you and yours.

Not comfortable with the idea that people who sucked money out of their upside-down money pits are comparable to combatants at war... I can just see the memorial at the National Mall now; one long granite counter top stretching as far as the eye can see, with all their names etched beneath the words Uti Possidetis.

America’s home values are down the gutter primarily due to the ponsi scheme(s) that Banks orchestrated. The great majority of people that purchased at the height of the market, did so by following the, then, rules only to have the building crumble down on them due to the “criminal” activity of the banks.

If you mean the banks helped engineer the bubble with the help of the FED and the ratings agencies then YES, I agree; and like I said before, YES, this makes them more culpable. But here's the thing: you didn't have to be a genius or even possess a preternatural olfactory sense for horseshit to avoid walking into their trap. Likewise, no one forced anyone to treat their homes like a bottomless ATM machine.

To clarify there’s no “apologist sentiment” at least not on my thread. I merely say that Facing the new reality, and what brought it down, people the likes of Lynn have to make a choice. Given her options I say she is making the right one.

We'll just agree that your criterion and mine could not be more vastly dissimilar when it comes to what constitutes righteousness. Someone on here recently lamented in a comment how they wish they'd gotten on the gravy train while it was still hot. That shit depresses me just as much as the takers from CNN the article. Maybe more.

but the bigger question here is why do you focus on calling her a deadbeat parasite instead of asking yourself why o why hasn’the bank foreclosed on her?

This has to do with the 2009 FASB decision to suspend mark-to-market accounting for banks -- a whole 'nother thread. What I regard as the bigger question here is why disgust for one larcenist entity should mitigate disgust for the other?

There were actually some buyers during the bubble who were GENUINELY outrageously FUCKED. I'm referring to outright victims of fraud, including forged and unauthorized alterations to their paperwork, falsified documents and the subsequent clusterfucks like MERS, etc. THESE are the buyers worthy of your defense who get lost in the shuffle along with the worst jerks like the ones in the article.

"How’d that work out for Countrywide? Or WaMu? Or IndyMac? Or Lehman Brothers? Will they be taking on more risk next time?"

No but obviously they didn't employ enough people to be considered too big to fail. Countrywide had one office in my town with maybe a handful of people working there. Donut shops employ more here. Wa Mu ? Never really saw it here in the northeast. Indymac? again not really in the northeast. The bubble didn't really pop much here. Boston hardly has gone down. NYC isn't doing that bad.

mdovell says

“How’d that work out for Countrywide? Or WaMu? Or IndyMac? Or Lehman Brothers? Will they be taking on more risk next time?”
No but obviously they didn’t employ enough people to be considered too big to fail. Countrywide had one office in my town with maybe a handful of people working there. Donut shops employ more here. Wa Mu ? Never really saw it here in the northeast. Indymac? again not really in the northeast. The bubble didn’t really pop much here. Boston hardly has gone down. NYC isn’t doing that bad.

That's kind of a myopic view there--if it's not in my town, then it must not be very big.

How about I ask this a different way. You think that companies will purposely take on inordinate risk because they think the government will bail them out? If so, which companies?

tatupu70 says

You think that companies will purposely take on inordinate risk because they think the government will bail them out?

Is that a trick question?

klarek says

tatupu70 says

You think that companies will purposely take on inordinate risk because they think the government will bail them out?

Is that a trick question?

Nope. Just consider what really happened with the bailouts. The money was in the form of loans or preferred shares convertible to equity. There really wasn't a free lunch-the owners of the companies that took the money lost big.

I'll agree that it would have been better if they could have simply gone bankrupt as a result of their poor understanding of risk/reward. But I guarantee you that none of the banks/financial institutions wants to repeat their mistake.

FunTime says

House Buyer: I’m so happy to have finally realized the dream of buying a home. Society supports me. My friends support me. My family supports me. I’ve told every one that I bought this house, I’ve had a housewarming party. Whoohooo!!!
House Buyer: Oh shit, my house situation is fucked! What am I going to do? I was making payments thinking I was making an investment, but now it’s not an investment and now I can’t even make the payments. Boy this sure got complicated and confusing. This is now almost as confusing as buying the place.
House Buyer: I give up! I’m just going to stop making payments. And I seem to have found a loophole in the legal system that pretty much makes it okay. Is it really okay? I”m not that sure. If doesn’t feel okay, because this wasn’t my original plan. Changing plans is stressful and confusing.
House Buyer: All that societal support I had for owning my house is only there now if I keep what I’m doing a secret. This is an uncomfortable situation.

You're right. That's exactly like being in prison.

Nomograph says

The problem isn’t the government, the problem is YOU. You are NOT a victim, you are a volunteer. Turn off the god damn AM talk radio and do something about your life if it’s so crappy.

Is it possible for you to actually comment on the issues being discussed, instead of giving us the Susan Powter routine every time you post? The irony of your signature is stunning to me.

As much as we joke about the joys of having no mortgage, no one that's squatting wants to be doing it. They don't cheer that their credit is ruined and that everyone looks down upon them, or would if they found out. They don't want to wake up every morning knowing that this could be the day they take the house from them.

That said, I don't hate the squatter. The system is what needs fixed.

PockyClipsNow says

and much better to squat in a McMansion

You'd stil have to pay the bloated utility bills and proterty taxes, wouldn't you?

StoutFiles says

As much as we joke about the joys of having no mortgage, no one that’s squatting wants to be doing it.

Since they're all doing it out of choice, I'd have to fundamentally disagree with your asinine assertion.

klarek says

Since they’re all doing it out of choice, I’d have to fundamentally disagree with your asinine assertion.

Then why did they wait? Why did they ever make a payment? I think you're missing the intent of the people in the article. They planned to make payments and made payments until they ran into a financial situation where they THEN decided to squat.

I agree there were other ways they could deal with the situation, if that's what you're saying.

Living in this foreclosure limbo is "Hell," Lynn said. "I feel like I'm locked in a box. I work for a financial organization and if this came out, it could cost me my job."

tatupu70 says

My biggest problem is that we didn’t break up the “too big to fail” banks and reinstate Glass Steagall. There are too many people spewing the CRA nonsense, keeping us from making the needed changes.

Yeah, I'd agree with that. Anyone who looks at actual hard stats knows the CRA had nothing to do with it. It's an ideological argument, not a logical one.

Schizlor says

You’re right. That’s exactly like being in prison.

You wrote that, not me.

Several people in this discussion seem unable to think about more than two possibilities, or two categories. Please add some nuance to your thinking.

FunTime says

I think you’re missing the intent of the people in the article. They planned to make payments and made payments until they ran into a financial situation where they THEN decided to squat.

The intention of Lynn was to consume and speculate. Let me pull $365K+ out of my house to pay for lavish things and also put money into my sure-to-fail business. Hard to argue it wasn't a smart financial decision. So far she has pulled out almost half a mill by equity loans and squatting and pissed it away, and the number keeps increasing.

Hold the lines says

but the bigger question here is why do you focus on calling her a deadbeat parasite instead of asking yourself why o why hasn’the bank foreclosed on her? 5 years? really? Damn, that is a long time - isn’t it?

I sure would like a real answer to that as well. It's just easier for some to pick an easy blame target.

Maybe the bank hasnt foreclosed because they dont want to right down the loss on books.

So its win - win for everyone!

klarek says

StoutFiles says

As much as we joke about the joys of having no mortgage, no one that’s squatting wants to be doing it.

Since they’re all doing it out of choice, I’d have to fundamentally disagree with your asinine assertion.

Are you saying you'd want to be so underwater you can't afford your house? That your credit would be shot? You think they WANT this? Nobody would want that.

They don't have a real choice, people aren't going to do the "noble" thing and leave. There's no reward for doing so, and no penalty for staying. They're living there because no one's kicking them out. I blame them for a lot of dumb decisions to get to that situation, but once there, I don't blame them for staying.

FunTime says

Schizlor says

You’re right. That’s exactly like being in prison.

You wrote that, not me.

Um no. You wrote it up above.

FunTime says

Schizlor says
You’re right. That’s exactly like being in prison.
You wrote that, not me.

You sure about that?

FunTime says

klarek says
They’re living FOR FREE.
So are people in jail. Sounds like hell to me.

klarek says

Um no. You wrote it up above.

It's funny that in 2011 people still think they can backtrack on statements and claim they never said that, when the evidence is still plastered all over the very page they are publishing their denial on...

StoutFiles says

Are you saying you’d want to be so underwater you can’t afford your house?

Being underwater doesn't change the affordability. Do you know what underwater means?

http://en.wikipedia.org/wiki/Negative_equity

StoutFiles says

They don’t have a real choice, people aren’t going to do the “noble” thing and leave. There’s no reward for doing so, and no penalty for staying. They’re living there because no one’s kicking them out. I blame them for a lot of dumb decisions to get to that situation, but once there, I don’t blame them for staying.

I didn't say I blame them for staying. I think it's actually kind of smart. Now track my comments backwards when I was saying that they have it good, that this is a good option, and it's NOT like being in jail, and they OUGHT NOT deserve an ounce of our sympathy.

Schizlor says

You sure about that?

I'm differing with you adding the word "exactly."

Schizlor says

It’s funny that in 2011 people still think they can backtrack on statements and claim they never said that, when the evidence is still plastered all over the very page they are publishing their denial on…

The difficulty with which humans make observations is not funny and I also struggle with this skill.

corntrollio says

The intention of Lynn was to consume and speculate. Let me pull $365K+ out of my house to pay for lavish things and also put money into my sure-to-fail business.

I agree, but I don't envy her position nor do I think she was sure her business was to fail. People take risks and I don't agree with some of those risks, but I also don't think they're in a desirable state when their risks fail. I'm incredulous reading articles like the one which is the subject of these comments.

Schizlor says

klarek says

Um no. You wrote it up above.

It’s funny that in 2011 people still think they can backtrack on statements and claim they never said that, when the evidence is still plastered all over the very page they are publishing their denial on…

It is also funny that in 2011 people can completely mischaracterize another's writings and think they can get away with it when the original statement is plastered on the very page that they are publishing their mischaracterization on.

Schizlor says

You’re right. That’s exactly like being in prison.

I write carefully, but I was obviously not clear here. I'll just tell you what I was trying to write.

I responded to klarek's,"They're living FOR FREE" with "So are people in jail."

Note that I did not write a simile comparing the people in the article to people in jail. I was trying to observe that people in jail have living "FOR FREE" in common with the people in the article and trying to establish that there might be other conditions of a person's happiness.

I then wrote a simile, "Sounds like hell." First note that a simile is not meant as an exact representation or exact comparison. It is written to provide some connection or comparison, even if not absolute. By writing this, I meant that the people in the article seem to be in an unenviable position. I took klarek to be writing that the people in the article are in an enviable position.

I enjoy the discourse, people, even though you are willing to label what I write as "bullshit" or otherwise. I hope you will see that I thoughtfully considered the article and the comments.

"That’s kind of a myopic view there–if it’s not in my town, then it must not be very big."

Not really because fair amounts of companies have entered here. Those companies you mentioned were not really national in the sense that they operated everywhere. Now if you turn on TV you might think that but reality is different. On TV there's plenty of national commercials but it doesn't mean that . For example Sonic doesn't operate that much in the northeast...heck Walmart didn't even show up here until '95.

"How about I ask this a different way. You think that companies will purposely take on inordinate risk because they think the government will bail them out? If so, which companies?"

Probably all the banks giving that they received funds and haven't increased lending. While it makes sense not to lend for items that are going down in value (houses) it still doesn't make sense. I know a women who has a state job making $40/hr..pretty good pay given everything. She couldn't get a car loan. She could probably put 10%-15% down on the spot. She had to go to another state to find a place to finance it.

This isn't just me saying this. Across the pond in the UK this was just reported
http://www.ft.com/cms/s/0/fdeb2bb2-91e2-11e0-b8c1-00144feab49a.html

Now keep in mind that RBS operates their Citizens Bank in the USA.

Right now banks don't know what to do. They have money...they lent money out like crazy and created a bubble now it's said to be too low. When people don't know where to put their money they put it in a bank. If a bank doesn't know where to put money..uh oh

mdovell says

Not really because fair amounts of companies have entered here

That's my point. Just because it's not in your town doesn't mean it's not big.

mdovell says

Probably all the banks giving that they received funds and haven’t increased lending.

mdovell says

Right now banks don’t know what to do. They have money…they lent money out like crazy and created a bubble now it’s said to be too low. When people don’t know where to put their money they put it in a bank. If a bank doesn’t know where to put money..uh oh

OK--I don't think you understand my question, my point, or what's going on now. Banks have lots of bad loans and are struggling just to meet their margin requirements. They continue to write off bad loans and "mark to market" the value of the foreclosed houses. They LOST huge when the bubble collapsed. The government gave them loans to help them avoid bankruptcy.

So let me ask this a 3rd way for you: If you owned a company--would you purposely make a bunch of bad loans, losing lots of money, just so the government could loan you some money so you wouldn't go bankrupt? Does that sound like a winning play to you?

FunTime says

Note that I did not write a simile comparing the people in the article to people in jail. I was trying to observe that people in jail have living “FOR FREE” in common with the people in the article and trying to establish that there might be other conditions of a person’s happiness.

Your point was absurd. Nobody chooses to go to jail. People are choosing to live in the house which they purchased (inferring that they liked the house to begin with), yet not paying their monthly mortgage. They are choosing to live for free. Operative word again: CHOICE.

I then wrote a simile, “Sounds like hell.” First note that a simile is not meant as an exact representation or exact comparison. It is written to provide some connection or comparison, even if not absolute. By writing this, I meant that the people in the article seem to be in an unenviable position. I took klarek to be writing that the people in the article are in an enviable position.

How's their position unenviable? People pay more in housing than they do for anything else, even their income taxes. To have a reprieve on this large cost of living - let alone for FIVE YEARS - is nothing short of a massive cash flow increase. Most people have to live with their parents or substantially below their means to save that kind of money. These people continue to live at or above their means while not paying for their own shelter. It's an unbelievable opportunity for building one's own safety net of savings, or just blowing the money on bullshit like a deadbeat who is in this situation typically would. That's not hell, that's a benefit that any responsible person will never see.

klarek says

How’s their position unenviable?

I'm just trying to understand what was written which includes this point which I quoted once before in these comments, but it wasn't clear I was quoting the article.

"Living in this foreclosure limbo is “Hell,” Lynn said. “I feel like I’m locked in a box. I work for a financial organization and if this came out, it could cost me my job.”

So it was that "locked in a box" comment that seemed to connect your comment of "Living FOR FREE" with a jail-like experience.

I'm not now, nor was I ever trying to say the experience related in the article is exactly, or a lot, like living in jail. I'm just saying it has jail-like aspects. Some of those aspects are psychological.

I get your point about "choice." I think we'd probably agree that the subject of the article probably isn't that aware of this freedom and is probably squandering the opportunity.

not sure if you can compare jail like cell to the deadbeats living at expense to taxpayers (bailouts) while shopping in Nordstrom on weekdays.

I'm not sure how prevalent this type of behavior in other parts of the country, out here thats what I see. "minorities" who live in foreclosed homes out shopping in most expensive stores that I don't dare to set my foot in.

FunTime says

So it was that “locked in a box” comment that seemed to connect your comment of “Living FOR FREE” with a jail-like experience.

That's her comment: a sympathy-seeking, poor-me, one-sided portrayal of someone who milked hundreds of thousands of dollars out of their home, then played victim to someone willing to tell only their side. That doesn't make it the official narrative, and your continued projection of this person as a victim, or somebody who is "stuck", is getting tiresome.

FunTime says

I’m not now, nor was I ever trying to say the experience related in the article is exactly, or a lot, like living in jail. I’m just saying it has jail-like aspects. Some of those aspects are psychological.

The only jail-like aspect is that she's not paying. That is it. It would be like if my company offered catered lunches every day. "They give free food in jail too" would be just as outrageously a distorted and irrelevant comparison to make as what you did.

FunTime says

I get your point about “choice.” I think we’d probably agree that the subject of the article probably isn’t that aware of this freedom and is probably squandering the opportunity.

No, I don't agree with that. In fact, that's just plain dumb. You think the subject doesn't know that they're allowed to move out? Based on what exactly? Read the article, they are FIGHTING eviction. Nobody wants them to stay in the house except for them, and they've already scammed a half million dollars from the bank from equity withdrawals and non-paid mortgage payments. You have to be one crack-smoking fool to believe they are stuck, victims, or unaware of what they are doing.

klarek says

Being underwater doesn’t change the affordability. Do you know what underwater means?

If I was suddenly 2 million underwater I could never afford to pay off that debt. Not saying they don't deserve in almost all cases, but it does suck.

klarek says

it’s NOT like being in jail, and they OUGHT NOT deserve an ounce of our sympathy.

Nothing but jail is like jail, but people like to exaggerate. Let's just say it's not a fun situation for them, and as we both seem to agree, it's a situation they deserve to be in. As for them getting to stay in their house or the banks getting bailed out for their greedy decisions, that needs fixed.

StoutFiles says

If I was suddenly 2 million underwater I could never afford to pay off that debt.

You mean sell for a profit? You insinuated up above that being underwater makes one incapable of not affording their house.

StoutFiles says

Not saying they don’t deserve in almost all cases, but it does suck.

I never said being underwater doesn't suck. However if you suck out a half million in equity, have no intention of ever repaying that debt, and manage to save thousands per month by delaying your eviction for a period of time exceeding a typical lease agreement, your situation does not "suck". A person to cry victim in this case says everything about what a greedy piece of shit they are.

StoutFiles says

Let’s just say it’s not a fun situation for them, and as we both seem to agree, it’s a situation they deserve to be in.

Define "fun situation". I don't think it's fun paying my rent. I don't think it's fun to pay a mortgage either. This subject is doing neither of those things, and liquidated an assload of equity beforehand. I fail to see how unenviable this deadbeat's position is.

klarek says

The only jail-like aspect is that she’s not paying. That is it. It would be like if my company offered catered lunches every day. “They give free food in jail too” would be just as outrageously a distorted and irrelevant comparison to make as what you did.

Yeah, I'm not trying to make a definitive statement, I was just exploring the idea that people with a seemingly positive finanicial situation, like someone who doesn't have a house payment, might have other aspects of their life that are not enviable and even the free living might be something that actually eats away at their thoughts, because they have some conciousness for the irresponsibility of their actions. Maybe not, too, as you seem to be saying.

Although, I'll add that you won't have to look long for people who compare their jobs to jail. I'm not saying I agree, I'm just saying you will find that person. I find it interesting.

You find my comments dumb, so I'll spare you reading any more of them. Thanks for responding anyway.