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Bill Lee wins minor league game at age 63
http://sports.yahoo.com/mlb/news?slug=sh-billleewins090510
Love him or hate him he is entertaining.........
Sep 5, 7:21
Refreshing perspective was always a key element in Bill Lee’s repertoire. Call it odd, bizarre, hilarious, and thoroughly invigorating. So, of course, Lee had a unique approach Sunday when he pitched the first 5 1/3 innings for an independent league team in Massachusetts and held the opposing team to two runs to earn the victory.
At age 63.
“I lift wood and make bats for a living,” he told reporters. “This is fun for me. It doesn’t take anything out of you to pitch.”
Yes, the “Spaceman” was otherworldly. Lee, who in his day job makes bats for David Ortiz(notes), among other major leaguers, is thought to be the oldest pitcher to appear in a professional game, let alone win one.
Satchel Paige was 59 when he pitched three innings for the Kansas City Athletics in 1965. Another longtime Negro Leagues player, the legendary Buck O’Neal, batted twice in the Northern League All-Star Game in 2006 at age 94. He swung at one pitch and walked in both at-bats. Earlier that year, Jim Eriotes, 83, led off the game for the Sioux Falls Canaries and struck out. He did foul off a pitch.
Like those appearances, this had the distinct whiff of a gimmick. That is, until Lee took the mound for the Brockton Rox and exhibited superior command, holding the Worcester Tornadoes to five hits. He struck out one and walked one.
“Everything was where I wanted it to be,” he said.
Lee, who pitched in the major leagues from 1969 to 1982 and for many years starred for the Boston Red Sox, originally planned to appear at a fundraiser the Brockton club was holding to combat autism. One thing led to another and Brockton pitching coach Ed Nottle – who has known Lee for years – asked the left-hander if he’d be game.
“Hell, yeah, I’ll do it,” Lee replied.
His first pitch was an eephus, a slow blooper that the batter banged up the middle for a single. Was that all he had? The 6,126 in attendance had to wonder.
Then Lee got down to business. He got out of the first without giving up a run. Nick Salotti homered to lead off the second, but Lee allowed only three hits and a run the rest of the way. Perhaps after giving up the homer, he reminded himself of one his most famous quotes: “I think about the cosmic snowball theory. A few million years from now the sun will burn out and lose its gravitational pull. The earth will turn into a giant snowball and be hurled through space. When that happens it won’t matter if I get this guy out.”
Ah, perspective.
Meanwhile, spectators were amazed.
“He’s getting the ball over,” Brockton team official Hoffman Wolff said in the third inning. “He looks like a legitimate hurler out there.”
The Rox scored four runs in the bottom of the fifth, helping to ensure that Lee would be the pitcher of record in the 7-3 victory. The performance was reminiscent of the last time he took the mound in a game anybody cared about, the 2008 Midnight Sun Game in Fairbanks, Alaska. Lee pitched into the seventh inning and got the win, avenging the loss he took in the 1967 Midnight Sun Game when he was 21 and hadn’t even reached the big leagues yet.
Lee has been pitching for more than 50 years, a feat that might even trump his never-ending string of wacky quotes and outlandish behavior (Upon being called up to the Red Sox for the first time in 1969, Lee took a look at the Green Monster and said, “Do they leave it there during games?”). He is a regular in men’s leagues in Vermont, where he lives with his wife, Diana, and has traveled extensively as an unorthodox ambassador for the game, visiting Cuba, China and Russia.
“I don’t want to get to cocky because there’s always some kid out there with an aluminum bat who’s gonna hit one back at my head, or at my nose like General Patton,” he said two years ago after the game in Alaska. “Then I’ll be dead, but that’s not a bad way to go.”
He had only one regret after winning Sunday, although like most of what he says, the comment was tongue-in-cheek. “I got pulled before I could use all of my pitches today. I was hoping to be able to break out my Juan Marichal screwball,” he said.
Afterward, Lee repaired to nearby Mulligan’s bar for a four-hour session of autographs, storytelling and beer drinking. It was a legendary day by a pitcher-performer who constantly outdoes himself. Actor Woody Harrelson owns the movie rights to the Bill Lee story. On Sunday, Lee provided more material for the screenplay.
Computer Trading Dominates All Financial Markets -- "Investment" Obsolete
By The Curmudgeon
Sept. 4, 2010
High-frequency-trading (HFT), quote stuffing, derivatives and the "carry-trade" are now dominating global stock (and other financial) markets. The big trading firms don't even remember the old boring ways of buying and selling stocks. In fact, the revered specialist system on the NY Stock Exchange is gone- replaced by computers trading with one another. It has been said that 60- 70% of NYSE volume comes from HFT. And you wonder why even short term trends don't persist?
HFT Explained: HFT computers apparently use algorithms to fade the short term reaction of professional traders. When the news is bad and the market is down, the HFT computers kick in and buy at the same time, squeezing the shorts who had sold earlier. One computer can enter 10,000-20,000 orders in one second. It overwhelms those who are on the other side of the trades.
Illustration of HFT based on fast keyword search: News feeds, such as Dow Jones, Bloomberg and Reuters are input directly into HFT computers. The algorithms recognize keywords, such as "big upside earnings surprise for xyz" or "xyz misses estimate by 3 cents per share." That triggers the computer program to place up to 10,000 individual orders in 1 second. Multiply that by a number of different computers from different HFT firms, and you can see the potentially huge influx of orders, literally in a few milliseconds.
A specific HFT example: On Aug. 4, Priceline announced earnings that were much better than expected. The stock soared over $50 per share in a matter of seconds. Obviously, human beings wouldn't want to pay $50 per share more only 1 second after an earnings announcement. And they can't place the orders that quickly. But computers trading with other computers can do it.
There are other algorithms used by HFT firms- all of them proprietary. If you look at the websites for financial jobs, you will see many ads for computer programmers and mathematicians to work in HFT operations.
"Quote stuffing" is a newer method of the HFTs. Here is a report from a trader:
"...a war between HFT ‘bots’ and their firms. It is bot vs. bot as HFT computers battle each other for short-term profits. The newest technique, and one that may have caused the May Flash Crash, is called quote stuffing."
Quote stuffing first came to light in a report by Nanex, one of the leading market trading analytics firms, in a report about the Flash Crash. In this report, Nanex presented irrefutable evidence of quote stuffing by HFT algorithms in tens of stocks in which thousands of canceled quotes would reappear each second with regularity right around the time of the May "Flash Crash." It is ILLEGAL to indicate a quote without a trade intent, but according to Nanex, it was happening at an alarming rate.
Worse, Nanex concluded that this type of quote stuffing is in fact manipulative and can end up "pushing bid/offer range up to 10% HIGHER without even one trade ever having occurred." This is blatant upside market manipulation, and to make matters worse, the SEC has looked the other way (even though reports blame quote stuffing for the Flash Crash in May).
The exchanges and regulators won't officially address the potentially illegal situation in order to avoid scaring investors away, and they don't want the exchanges to lose this lucrative business. Here is a new article that highlights the dangers:
http://www.dailyfinance.com/story/investing/another-suspect-in-the-flash-crash-quote-stuffing/19619124/
Implications and Conclusions:
Has anyone noticed that all the market rallies, however sharp, are on very low volume? And that the volume on the NYSE far exceeds that of the NASDAQ- the reverse of the last 12 years? That is because the public and conventional institutions are either out of the market or sitting on their hands. It's also likely that computers trading with other computers get better execution (tighter bid-ask spreads) on the NYSE vs. NASDAQ and that individual NYSE stocks have larger share floats and trading volumes.
The computers are dominating trading, without human intervention. And the algorithms used or so short term in nature, that they blow out the quants who have intermediate term trading models.
HFT and other computerized trading is why all the fundamentals--discussed endlessly by the financial media are now irrelevant. Take technical trading systems based on trend following (price/volume), support/resistance, breakouts/breakdowns, moving averages, stochastics, etc don't count anymore either. Each time the S & P 500 has a good rally it is smashed down and each time it breaks down it rallies back to the last resistance (in this case 1100 - the last rally failure) and sometimes exceeds it by one or two percent. But that doesn't change the direction of the market, which is back and forth with a downward bias.
But the worst part of all this computerized trading is that the SEC and other government regulators are turning a blind eye to it. They seem to be oblivious to HFT, quote stuffing (see Thurs Sept 2 WSJ lead article+), and other front running computerized schemes. They refuse to investigate on the terms that all these HFTs are providing needed liquidity to the market, and there has been no formal request by the exchanges to investigate this matter. This may now change as reports are swirling that Quote Stuffing caused the May Flash Crash.
+The WSJ reported, "The Securities and Exchange Commission has begun looking into whether the practice is putting some investors at a disadvantage by distorting stock prices, according to people familiar with the matter. The SEC is looking at what role, if any, quote stuffing played in the May 6 "flash crash," when the Dow Jones Industrial Average collapsed 700 points in minutes, the people say."
http://online.wsj.com/article/SB10001424052748703882304575465990082237642.html
In the meantime, here is a message for all those long and short term traders: Caveat emptor!
The Curmudgeon
Curmudgeon is a retired investment professional. He has been involved in financial markets since 1968 (yes, he cut his teeth on the 1968-1974 bear market), became an SEC Registered Investment Advisor in 1995, and received the Chartered Financial Analyst designation from AIMR (now CFA Institute) in 1996. He managed hedged equity and alternative (non-correlated) investment accounts for clients from 1992-2005.
Housing Woes Bring New Cry: Let Market Fall
By DAVID STREITFELD
Published: September 5, 2010
The unexpectedly deep plunge in home sales this summer is likely to force the Obama administration to choose between future homeowners and current ones, a predicament officials had been eager to avoid.
Over the last 18 months, the administration has rolled out just about every program it could think of to prop up the ailing housing market, using tax credits, mortgage modification programs, low interest rates, government-backed loans and other assistance intended to keep values up and delinquent borrowers out of foreclosure. The goal was to stabilize the market until a resurgent economy created new households that demanded places to live.
As the economy again sputters and potential buyers flee — July housing sales sank 26 percent from July 2009 — there is a growing sense of exhaustion with government intervention. Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash.
When prices are lower, these experts argue, buyers will pour in, creating the elusive stability the government has spent billions upon billions trying to achieve.
“Housing needs to go back to reasonable levels,” said Anthony B. Sanders, a professor of real estate finance at George Mason University. “If we keep trying to stimulate the market, that’s the definition of insanity.”
The further the market descends, however, the more miserable one group — important both politically and economically — will be: the tens of millions of homeowners who have already seen their home values drop an average of 30 percent.
The poorer these owners feel, the less likely they will indulge in the sort of consumer spending the economy needs to recover. If they see an identical house down the street going for half what they owe, the temptation to default might be irresistible. That could make the market’s current malaise seem minor.
Caught in the middle is an administration that gambled on a recovery that is not happening.
“The administration made a bet that a rising economy would solve the housing problem and now they are out of chips,” said Howard Glaser, a former Clinton administration housing official with close ties to policy makers in the administration. “They are deeply worried and don’t really know what to do.”
That was clear last week, when the secretary of housing and urban development, Shaun Donovan, appeared to side with current homeowners, telling CNN the administration would “go everywhere we can” to make sure the slumping market recovers.
Mr. Donovan even opened the door to another housing tax credit like the one that expired last spring, which paid first-time buyers as much as $8,000 and buyers who were moving up $6,500. The cost to taxpayers was in the neighborhood of $30 billion, much of which went to people who would have bought anyway.
Administration press officers quickly backpedaled from Mr. Donovan’s comment, saying a revived credit was either highly unlikely or flat-out impossible. Mr. Donovan declined to be interviewed for this article. In a statement, a White House spokeswoman responded to questions about possible new stimulus measures by pointing to those already in the works.
“In the weeks ahead, we will focus on successfully getting off the ground programs we have recently announced,” the spokeswoman, Amy Brundage, said.
Among those initiatives are $3 billion to keep the unemployed from losing their homes and a refinancing program that will try to cut the mortgage balances of owners who owe more than their property is worth. A previous program with similar goals had limited success.
If last year’s tax credit was supposed to be a bridge over a rough patch, it ended with a glimpse of the abyss. The average home now takes more than a year to sell. Add in the homes that are foreclosed but not yet for sale and the total is greater still.
Builders are in even worse shape. Sales of new homes are lower than in the depths of the recession of the early 1980s, when mortgage rates were double what they are now, unemployment was pervasive and the gloom was at least as thick.
The deteriorating circumstances have given a new voice to the “do nothing” chorus, whose members think the era of trying to buy stability while hoping the market will catch fire — called “extend and pretend” or “delay and pray” — has run its course.
“We have had enough artificial support and need to let the free market do its thing,” said the housing analyst Ivy Zelman.
Michael L. Moskowitz, president of Equity Now, a direct mortgage lender that operates in New York and seven other states, also advocates letting the market fall. “Prices are still artificially high,” he said. “The government is discriminating against the renters who are able to buy at $200,000 but can’t at $250,000.”
A small decline in home prices might not make too much of a difference to a slack economy. But an unchecked drop of 10 percent or more might prove entirely discouraging to the millions of owners just hanging on, especially those who bought in the last few years under the impression that a turnaround had already begun.
The government is on the hook for many of these mortgages, another reason policy makers have been aggressively seeking stability. What helped support the market last year could now cause it to crumble.
Since 2006, the Federal Housing Administration has insured millions of low down payment loans. During the first two years, officials concede, the credit quality of the borrowers was too low.
With little at stake and a queasy economy, buyers bailed: nearly 12 percent were delinquent after a year. Last fall, F.H.A. cash reserves fell below the Congressionally mandated minimum, and the agency had to shore up its finances.
Government-backed loans in 2009 went to buyers with higher credit scores. Yet the percentage of first-year defaults was still 5 percent, according to data from the research firm CoreLogic.
“These are at-risk buyers,” said Sam Khater, a CoreLogic economist. “They have very little equity, and that’s the largest predictor of default.”
This is the risk policy makers face. “If home prices begin to fall again with any serious velocity, borrowers may stay away in such numbers that the market never recovers,” said Mr. Glaser, a consultant whose clients include the National Association of Realtors.
Those sorts of worries have a few people from the world of finance suggesting that the administration should do much more, not less.
William H. Gross, managing director at Pimco, a giant manager of bond funds, has proposed the government refinance at lower rates millions of mortgages it owns or insures. Such a bold action, Mr. Gross said in a recent speech, would “provide a crucial stimulus of $50 to $60 billion in consumption,” as well as increase housing prices.
The idea has gained little traction. Instead, there is a sense that, even with much more modest notions, government intervention is not the answer. The National Association of Realtors, the driving force behind the credit last year, is not calling for a new round of stimulus.
Some members of the National Association of Home Builders say a new credit of $25,000 would raise demand but their chances of getting this through Congress are nonexistent.
“Our members are saying that if we can’t get a very large tax credit — one that really brings people off the bench — why use our political capital at all?” said David Crowe, the chief economist for the home builders.
That might give the Obama administration permission to take the risk of doing nothing.
db7, for years there have been stories of auto engines running on water, as Paul Harvey would say, "Now we know the rest of the story"...!!!
15 Signs The U.S. Housing Market Is Headed For Complete And Total Collapse
open link, go down to "click here to see the signs" and click on it, top left and you can see each chart with an explanation.
http://www.businessinsider.com/15-signs-that-the-us-housing-market-is-headed-for-complete-and-total-collapse-2010-8
Kudos to roguedolphin
BUDDIEE18, this from another board which I think sums it up quite well...........
"a little word about housing? It's ovepriced!
If you can't pay the mortgage with 40% of your net income, it's overpriced!
If the overhead and taxes run you into the ground and you have no money for groceries, car payments, insurance, etc, it's ovepriced!
If you can't buy it, rent it out, and break even at the very least, it's overpriced!
This is imbalance! The American exists for the rich, so the average Joe can contribute to the fund via huge interest payments over the length of any mortgage. In today's uncertain work climate, it's overpriced!
Real estate needs a real kick in the arse, down to proper affordable levels according to WAGES, not according to RATES and TERMS."
This one goes out to about 2015+
http://www.businessinsider.com/the-housing-chart-thats-worth-1000-words-2009-2
Existing Home Sales Plunge 27 Percent.
By: Mike Shedlock | Tue, Aug 24, 2010
Worse than Every Economist Forecast; Treasury Yields Hit New Lows
In yet another clean sweep, the third in a week or so, sales of existing homes dropped twice as much as expected, worse than every economist forecast, to a 15 year low. Inventory soared to 12.5 month, the highest since 1999. Treasury yields plunged with yield on the 10-year note falling as low as 2.50 and the 2-year note hitting a new all-time low at .47%.
Please consider Sales of U.S. Existing Homes Drop More Than Forecast
Sales of U.S. previously owned homes plunged 27 percent in July, twice as much as forecast, evidence foreclosures and limited job growth are depressing the market.
Purchases plummeted to a 3.83 million annual pace, the lowest in a decade on record keeping and worse than the most pessimistic forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed today in Washington. Demand for single-family houses dropped to a 15- year low and the number of homes on the market swelled.
A tax credit of up to $8,000 boosted sales earlier in the year, pulling forward demand and indicating additional advances will prove difficult. Mortgage rates at record lows have provided scant relief to the industry as unemployment hovers close to 10 percent, foreclosures hold near record-highs and the economy cools.
"This is a devastating reading on the U.S. housing market," said Derek Holt, an economist at Scotia Capital Inc. in Toronto. "There's such an inventory overhang, it shows there will be pressure on prices" in the months ahead.
The pace of existing home sales is the slowest since comparable records began in 1999. Purchases of single-family homes dropped to a 3.37 million annual rate, the lowest since May 1995.
Range of Forecasts
Economists projected sales would fall 13 percent from June's previously reported 5.37 million pace. The agents' group revised the June sales figure down to 5.26 million. Estimates in the Bloomberg survey of 74 economists ranged from 3.96 million to 5.3 million. Previously owned homes make up about 90 percent of the market.
The number of previously owned homes on the market rose 2.5 percent to 3.98 million. At the current sales pace, it would take 12.5 months to sell those houses, the highest since at least 1999 and compared with 8.9 months in June. The months' supply of single-family homes at 11.9 months was the highest since 1983, the NAR said.
Extend and Pretend
The only thing this administration knows how to do is extend and pretend. The latest gimmick offered on August 11, 2010 is HUD Offers Interest-Free Loans to Reduce Foreclosures.
The Obama administration will offer $1 billion in zero-interest loans to help homeowners who've lost income avoid foreclosure as part of $3 billion in additional aid targeting economically distressed areas.
The Department of Housing and Urban Development plans to make loans of as much as $50,000 for borrowers "in hard hit local areas" to make mortgage, tax and insurance payments for as long as two years, according to a statement released today. The Treasury Department will also provide as much as $2 billion in aid under an existing program for 17 states and the District of Columbia, according to the statement.
The initiatives will help "a broad group of struggling borrowers across the country and in doing so further contribute to the administration's efforts to stabilize housing markets and communities," Bill Apgar, HUD's senior adviser for mortgage finance, said in the statement.
Fool's Offering vs. Free Rent
Anyone going $50,000 deeper in debt to "save" their existing underwater home is a complete fool. On the other hand, anyone who takes the cash as an offer for free rent with a plan to declare bankruptcy and walk-away later just may be thinking clearly.
Thus, it is likely that the fool in this case is the Obama administration. The only thing this stupid program will do is waste taxpayer money while pushing foreclosures into the future.
Meanwhile the number of negative surprises continues unabated.
Recent Surprises
*
58 out of 58 Economists Overoptimistic on Philly Fed Manufacturing Estimate; Median Forecast +7 Actual Result -7.7, a "Veritable Disaster"
*
Weekly Unemployment Claims Hit 500,000, Exceed Every Economist's Estimate; No Lasting Improvement for 9 Months
Recession Never Ended
As I said in 3rd Quarter GDP Likely Negative, Recession Never Ended ...
While some people still think the odds of a double dip recession are close to zero, ironically, the only reason they may be right is if the first dip never ended.
Amazingly, economists are still clinging to estimates of 2.5% and up.
So expect to discover the vast majority of economists will be surprised at the forthcoming downward revisions, even after we point these things out well in advance and repeat them.
The ECRI is still touting the "flattening" of the Weekly Leading Indicators (WLI) at -10. With the collapse in treasury yields, a print of -500,000 on weekly claims, and a god-awful Philly Fed report, let's watch the next few weeks. I suspect this "flattening" period will soon be over.
Fooled By Stimulus
Nearly every economist has been Fooled by Stimulus even though the structural problems still remain.
It's time to face the facts: There never was a "recovery" by any rational measure. The alleged recovery was nothing more than inventory replenishment fueled by massive and unsustainable government spending waste with additional trillions of taxpayer dollars handed out in bank bailouts.
The plunge in existing home sales shows exactly what happens when free money handouts stop.
MERS COURT CASES
http://www.law.com/jsp/article.jsp?id=1202435636327&Defective_Paperwork_Strips_Mortgage_Holder_of_Foreclosure_Rights
MERS COURT CASES
SUPREME COURT OF KANSAS BLASTS MERS' ALLEGED RIGHT TO ASSIGN ... Sep 17, 2009 ... In the case, which is styled Landmark National Bank v. Kesler, Supreme Court of Kansas No. 98489 (Opinion released August 28, 2009), MERS ...
http://foreclosuredefensenationwide.com/?p=159 - Cached
Mar 3, 2010 ... MERS v. Nebraska Dept of Banking and Finance – MERS is not a ... Important Court Cases. FourWinds10.com - Delivering Truth Around the World ...
http://www.fourwinds10.com/siterun_data/government/judicial_and_courts/news.php?q=12676513... - Cached
MERS - Wikipedia, the free encyclopedia
Homeowners have argued in court that their homes could not be foreclosed because MERS deeds of trust were unlawful.[5] In other cases, state appellate ...
http://en.wikipedia.org/wiki/MERS - Cached
Law.com - Federal Judge Rejects Homeowners' Lawsuit Against Major ...
Aug 1, 2007 ... In unrelated cases, the 3rd District Court of Appeal in Miami reinstated a MERS foreclosure action in March, and the 2nd District Court of ...
http://www.law.com/jsp/article.jsp?id=1185883306599 - Cached
MERS Loan Registry Raises Legal Questions « Foreclosure Fraud ...
Apr 25, 2010 ... MERS also points to a 2009 federal case in Utah that affirmed its authority to ... Court Ordered Discovery – I Found the Fraud by WAMU's ...
http://4closurefraud.org/2010/04/25/mers-loan-registry-raises-legal-questions/ - Cached
The Trouble With MERS : Foreclosure Assistance – Foreclosure ...
Sep 24, 2009 ... In the case of MERS, the Note and the Deed of Trust are held by separate entities. This can pose a unique problem dependent upon the court. ...
http://iamfacingforeclosure.com/blog/2009/09/24/the-trouble-with-mers/ - Cached
98489 -- Landmark National Bank v. Kesler -- Leben -- Kansas Court ...
Sep 12, 2008 ... As the mortgage suggests may be done when "necessary to comply with law or custom," courts elsewhere have found that MERS may in some cases ...
http://www.kscourts.org/Cases-and-Opinions/opinions/ctapp/2008/20080912/98489.htm - Cached
Mortgage Orb: Content / From The Orb / MERS Cases: The Good, The ...
Jan 22, 2010 ... The first recent noteworthy judicial decision favoring MERS is the case of Ramos v. MERS. There, the Federal District Court of Nevada ...
http://www.mortgageorb.com/e107_plugins/content/content_lt.php?content.5128 - Cached
Waking up to discover the mortgage market was a giant criminal ...
Sep 22, 2009 ... A landmark ruling in a recent Kansas Supreme Court case may have given ... the Kansas Supreme Court held that a nominee company called MERS ...
http://trueslant.com/matttaibbi/2009/09/22/landmark-decision-massive-relief-for-homeowners... - Cached
mers Articles // Foreclosure Combatant / National Loan Audits Blog
MERS v. LISA MARIE CHONG. UNITED STATES DISTRICT COURT DISTRICT OF NEVADA Dist. Ct. Case No. 2:09-CV-00661-KJD-LRL Bankr. Ct. Case No. ...
http://www.blogcatalog.com/blogs/foreclosure-combatant-national-loan-audits/all/explore/me... - Cached
The Anti-MERS Mortgage Manifesto | Matt Weidner Blog
Feb 28, 2010 ... MERS “won” that case…the Second DCA found that they could proceed ... “won” the case, neither MERS nor lenders cite that case or want courts ...
http://mattweidnerlaw.com/blog/2010/02/the-anti-mers-mortgage-manifesto/ - Cached
NY Bankruptcy Court Wipes out MERS-Registered Mortgage; New Trend ...
Oct 27, 2009 ... As MERS handled mortgage assignments, the link between the the .... The SDNY bankruptcy court says no, and I have won a similar case in my ...
http://firedoglake.com/2009/10/27/ny-bankruptcy-court-wipes-out-mers-registered-mortgage-n... - Cached
MERS - Foreclosures
The MERS Legal Primer provides a sampling of cases that address the ... ensure that pleadings on behalf of MERS in bankruptcy court properly describe MERS. ...
http://www.mersinc.org/Foreclosures/index.aspx - Cached
Ohio Federal Court Opinions and Orders in Mortgage Foreclosure ...
If the loans in the cases had been registered on the MERS ... In two Florida appellate court decisions rendered this year, Mortgage Electronic Registration ...
http://www.mersinc.org/files/filedownload.aspx?id=454&table=ProductFile - Cached
Fair Game - The Mortgage Machine Backfires - NYTimes.com
Sep 26, 2009 ... As cases filed by MERS grew, lawyers representing troubled borrowers ... The court also said that even though MERS was named as mortgagee on ...
http://www.nytimes.com/2009/09/27/business/27gret.html
Vermont Trial Court continues the attacks on MERS in Mortgage Elec ...
Dec 9, 2009 ... In the case MERS v. Johnston (Rutland County Superior Court case no. 420-6-09 Rdcv) another Court has held that MERS doesn't have standing ...
http://dcwintonlaw.com/bankruptcy/vermont-trial-court-continues-the-attacks-on-mers-in-mor...
Mortgage Servicing Fraud
Kansas Supreme Court Knocks Out MERS. » Nevada BK Court Knocks Out MERS ... Dozens of Cases Rolling in from Bankruptcy and Civil Courts Reversing ...
http://www.msfraud.org/ - Cached
Web of Debt - LANDMARK DECISION PROMISES MASSIVE RELIEF FOR ...
Sep 19, 2009 ... http://www.webofdebt.com/articles/mers.php. A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed ...
http://www.webofdebt.com/articles/mers.php - Cached
REALLY Need Help: My home Foreclosure hearing is tomorrow ...
this covers MERS! a COURT CASE. Submitted by dugger62 on Wed, 05/12/2010 - 22:25 . Black's Law Dictionary defines a nominee as "[a] person designated to act ...
http://www.dailypaul.com/node/115088 - Cached
New MERS Standing Case Splits Note and Mortgage: Bellistri v Ocwen ...
Apr 20, 2010 ... We know that MERS is NOT named on the note. This appellate case from Missouri, ..... Quote the court case above. Tell the court if they have ...
http://livinglies.wordpress.com/2010/04/20/new-mers-case-bellistri-v-ocwen-loan-servicing-... - Cached
RECENT OHIO FORECLOSURE CASES: LENDERS BEWARE By Stephen R ...
App. 2d, 2007). While the Court remanded the case to determine whether MERS had possession of the note, the Court found that MERS is a ...
http://www.abanet.org/rppt/publications/ereport/2007/6/OhioForeclosureCases.pdf - Cached
MERS Case law summmary - Troy Virginia Law Firm- The Law Office of ...
Jan 25, 2010 ... According to the district court, MERS was not an actual beneficiary of the mortgage agreements in the case. Id. at 3 (noting that “MERS ...
http://www.centralvalaw.com/Publications/Articles/MERS%20Case%20law%20summmary.aspx - Cached
MERS' Standing to Foreclose Upheld in Rhode Island State Court ...
In so ruling, the Court “specifically [held] that MERS, in the case at bar, has standing to and may foreclose the mortgage granted to it by the Plaintiffs ...
http://www.psh.com/content665 - Cached
*************Glenn Russell, Esq. Attorney :: MERS
Dec 3, 2009 ... Kesler denied MERS standing to foreclose.However the Superior Court Judge noted that this was a case of first impression in the state and ...
http://www.foreclosuresinmass.com/MERS.php - Cached
Who Is MERS?
In this present case, MERS was created in the boardrooms of the most powerful ... MERS, it is now widely acknowledged by the courts, has no legal right to ...
http://www.chinkinthearmor.net/Who_Is_MERS_.html - Cached
The Home Equity Theft Reporter Cases & Articles: Testimony Of MERS ...
Testimony Of MERS CEO, Senior VP Available Online ... All links to court cases from this site are to the non-copyrightable text portion of the case. ...
http://homeequitytheft-cases-articles.blogspot.com/2010/05/testimony-of-mers-ceo-senior-vp... - Cached
Loan registry raises legal questions: MERS « DinSFLA Stop ...
Apr 25, 2010 ... MERS also points to a 2009 federal case in Utah that affirmed its ... In September, the Kansas Supreme Court ruling took a dim view of the ...
http://stopforeclosurefraud.com/2010/04/25/loan-registry-raises-legal-questions-mers/ - Cached
Statehouse Live: Kansas court ruling in foreclosure case getting ...
Sep 24, 2009 ... While the case applies only to Kansas, folks who defend ... But the state Supreme Court ruled unanimously that MERS was not legally the ...
http://www2.ljworld.com/news/2009/sep/24/statehouse-live-parkinson-owns-kpers-error/?kansa... - Cached
Landmark National Bank v. Kesler---MERS has no standing to sue.
Just in case anyone wants to know: The CEO of MERS is R.K. Arnold. He has been deposed and parts of his deposition are now also being used in court cases. ...
http://www.collectorsexposed.com/forum2/index.php?topic=401.0;wap2 - Cached
Calculated Risk: MERS v. Kansas
Oct 4, 2009 ... If the mortgage document says that, most courts will enforce it. There are other cases discussing MERS, some of which provide more general ...
http://www.calculatedriskblog.com/2009/10/mers-v-kansas.html - Cached
Nevada MERS Cases Illustrate Standing Requirements for Agents ...
The Nevada Bankruptcy Court roundly rejected MERS' assertions of standing and ruled against it in In re Mitchell, which was designated the lead case for the ...
http://www.abiworld.org/committees/newsletters/litigation/vol7num1/mers.html - Cached
Problems with MERS and Some Recent Wounding of the Company
Jan 28, 2010 ... There have been a number of recent court cases that have also effectively challenged the legal rights that MERS claims it has. ...
http://www.foreclosurefish.com/blog/index.php?id=972 - Cached
DD 9/06/05 MERS stubs its toe trying to foreclose as owner's rep ...
Sep 16, 2005 ... In each case, MERS was listed as a plaintiff or co-plaintiff seeking to collect on a note via mortgage foreclosure. In the end, the court ...
http://dirt.umkc.edu/SEP2005/DD_09-16-05.htm - Cached
Massachusetts Land Court Reaffirms Controversial Ibanez Ruling ...
Oct 14, 2009 ... Oftentimes, as in the Ibanez case, lenders will sell bundles of loan and record .... A recent ARK Supreme Court has said MERS can't be the ...
http://www.massrealestatelawblog.com/massachusetts-land-court-reaffirms-controversial-iban... - Cached
Trouble With MERS
In the case of MERS, the Note and the Deed of Trust are held by separate entities. This can pose a unique problem dependent upon the court. ...
http://www.loanfraudinvestigations.com/mers - Cached
Who OWNS Foreclosed U.S. Properties?, Part II: the role of MERS ...
Oct 26, 2009 ... Mr. Nielson makes a great point and the courts are beginning to wake up to the fact that MERS has no standing in foreclosure cases. ...
http://seekingalpha.com/instablog/407380-jeff-nielson/33036-who-owns-foreclosed-u-s-proper... - Cached
Do You Hear That? It's the Sound of MERS on Life Support ...
MERS Finally Takes a Hit Thanks to the Kansas Supreme Court In case you haven't heard, a Kansas Supreme Court has ruled that MERS has no standing to ...
http://www.foreclosureindustry.com/2010/01/do-you-hear-that-it%E2%80%99s-the-sound-of-mers... - Cached
Homeowners' Rebellion - Could 62 Million
Homes Be Foreclosure-Proof?
A committed movement to tear off the predatory mask called
MERS could yet turn the tide for struggling homeowners
By Ellen Brown
From Yes! Magazine
8-18-10
Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.
Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles-and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere "nominee"-an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff's legal ability to foreclose.
That means hordes of victims of predatory lending could end up owning their homes free and clear-while the financial industry could end up skewered on its own sword.
California Precedent
The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E-11. The court held thatMERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:
Since no evidence of MERS' ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another.Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.
In support, the judge cited In Re Vargas (California Bankruptcy Court); Landmark v. Kesler (Kansas Supreme Court); LaSalle Bank v. Lamy (a New York case); and In Re Foreclosure Cases (the "Boyko" decision from Ohio Federal Court). (For more on these earlier cases, see here, here and here.) The court concluded:
Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.
The broad impact the case could have on California foreclosures is suggested by attorney Jeff Barnes, who writes:
This opinion . . . serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO [temporary restraining order] against a Trustee's Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.
While not binding on courts in other jurisdictions, the ruling could serve as persuasive precedent there as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because the opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue.
What Could This Mean for Homeowners?
Earlier cases focused on the inability of MERS to produce a promissory note or assignment establishing that it was entitled to relief, but most courts have considered this a mere procedural defect and continue to look the other way on MERS' technical lack of standing to sue. The more recent cases, however, are looking at something more serious. If MERS is not the title holder of properties held in its name, the chain of title has been broken, and no one may have standing to sue. In MERS v. Nebraska Department of Banking and Finance, MERS insisted that it had no actionable interest in title, and the court agreed.
An August 2010 article in Mother Jones titled "Fannie and Freddie's Foreclosure Barons" exposes a widespread practice of "foreclosure mills" in backdating assignments after foreclosures have been filed. Not only is this perjury, a prosecutable offense, but if MERS was never the title holder, there is nothing to assign. The defaulting homeowners could wind up with free and clear title.
In Jacksonville, Florida, legal aid attorney April Charney has been using the missing-note argument ever since she first identified that weakness in the lenders' case in 2004. Five years later, she says, some of the homeowners she's helped are still in their homes. According to a Huffington Post article titled "'Produce the Note' Movement Helps Stall Foreclosures":
Because of the missing ownership documentation, Charney is now starting to file quiet title actions, hoping to get her homeowner clients full title to their homes (a quiet title action 'quiets' all other claims). Charney says she's helped thousands of homeowners delay or prevent foreclosure, and trained thousands of lawyers across the country on how to protect homeowners and battle in court.
Criminal Charges?
Other suits go beyond merely challenging title to alleging criminal activity. On July 26, 2010, a class action was filed in Florida seeking relief against MERS and an associated legal firm for racketeering and mail fraud. It alleges that the defendants used "the artifice of MERS to sabotage the judicial process to the detriment of borrowers;" that "to perpetuate the scheme, MERS was and is used in a way so that the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments;" that the scheme depended on "the MERS artifice and the ability to generate any necessary 'assignment' which flowed from it;" and that "by engaging in a pattern of racketeering activity, specifically 'mail or wire fraud,' the Defendants . . . participated in a criminal enterprise affecting interstate commerce."
Local governments deprived of filing fees may also be getting into the act, at least through representatives suing on their behalf. Qui tam actions allow for a private party or "whistle blower" to bring suit on behalf of the government for a past or present fraud on it. In State of California ex rel. Barrett R. Bates, filed May 10, 2010, the plaintiff qui tam sued on behalf of a long list of local governments in California against MERS and a number of lenders, including Bank of America, JPMorgan Chase and Wells Fargo, for "wrongfully bypass[ing] the counties' recording requirements; divest[ing] the borrowers of the right to know who owned the promissory note . . .; and record[ing] false documents to initiate and pursue non-judicial foreclosures, and to otherwise decrease or avoid payment of fees to the Counties and the Cities where the real estate is located." The complaint notes that "MERS claims to have 'saved' at least $2.4 billion dollars in recording costs," meaning it has helped avoid billions of dollars in fees otherwise accruing to local governments. The plaintiff sues for treble damages for all recording fees not paid during the past ten years, and for civil penalties of between $5,000 and $10,000 for each unpaid or underpaid recording fee and each false document recorded during that period, potentially a hefty sum. Similar suits have been filed by the same plaintiff qui tam in Nevada and Tennessee.
By Their Own Sword: MERS' Role in the Financial Crisis
MERS is, according to its website, "an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans." Or as Karl Denninger puts it, "MERS' own website claims that it exists for the purpose of circumventing assignments and documenting ownership!"
MERS was developed in the early 1990s by a number of financial entities, including Bank of America, Countrywide, Fannie Mae, and Freddie Mac, allegedly to allow consumers to pay less for mortgage loans. That did not actually happen, but what MERS did allow was the securitization and shuffling around of mortgages behind a veil of anonymity. The result was not only to cheat local governments out of their recording fees but to defeat the purpose of the recording laws, which was to guarantee purchasers clean title. Worse, MERS facilitated an explosion of predatory lending in which lenders could not be held to account because they could not be identified, either by the preyed-upon borrowers or by the investors seduced into buying bundles of worthless mortgages. As alleged in a Nevada class action called Lopez vs. Executive Trustee Services, et al.:
Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans. Before MERS, the actual beneficiary of every Deed of Trust on every parcel in the United States and the State of Nevada could be readily ascertained by merely reviewing the public records at the local recorder's office where documents reflecting any ownership interest in real property are kept....
After MERS, . . . the servicing rights were transferred after the origination of the loan to an entity so large that communication with the servicer became difficult if not impossible .... The servicer was interested in only one thing - making a profit from the foreclosure of the borrower's residence - so that the entire predatory cycle of fraudulent origination, resale, and securitization of yet another predatory loan could occur again. This is the legacy of MERS, and the entire scheme was predicated upon the fraudulent designation of MERS as the 'beneficiary' under millions of deeds of trust in Nevada and other states.
Axing the Bankers' Money Tree
If courts overwhelmed with foreclosures decide to take up the cause, the result could be millions of struggling homeowners with the banks off their backs, and millions of homes no longer on the books of some too-big-to-fail banks. Without those assets, the banks could again be looking at bankruptcy. As was pointed out in a San Francisco Chroniclearticle by attorney Sean Olender following the October 2007 Boyko [pdf] decision:
The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.
. . . The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail . . . .
Nationalization of these giant banks might be the next logical step-a step that some commentators said should have been taken in the first place. When the banking system of Sweden collapsed following a housing bubble in the 1990s, nationalization of the banks worked out very well for that country.
The Swedish banks were largely privatized again when they got back on their feet, but it might be a good idea to keep some banks as publicly-owned entities, on the model of the Commonwealth Bank of Australia. For most of the 20th century it served as a "people's bank," making low interest loans to consumers and businesses through branches all over the country.
With the strengthened position of Wall Street following the 2008 bailout and the tepid 2010 banking reform bill, the U.S. is far from nationalizing its mega-banks now. But a committed homeowner movement to tear off the predatory mask called MERS could yet turn the tide. While courts are not likely to let 62 million homeowners off scot free, the defect in title created by MERS could give them significant new leverage at the bargaining table.
Ellen Brown wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Ellen developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of eleven books, she shows how the Federal Reserve and "the money trust" have usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.
I sure miss those muscle cars of any make. eom
What do women really want?
Young King Arthur was ambushed and imprisoned by the monarch of a neighboring kingdom. The monarch could have killed him but was moved by Arthur's youth and ideals. So, the monarch offered him his freedom, as long as he could answer a very difficult question. Arthur would have a year to figure out the answer and, if after a year, he still had no answer, he would be put to death.
The question?...What do women really want? Such a question would perplex even the most knowledgeable man, and to young Arthur, it seemed an impossible query. But, since it was better than death, he accepted the monarch's proposition to have an answer by year's end.
He returned to his kingdom and began to poll everyone: the princess, the priests, the wise men and even the court jester. He spoke with everyone, but no one could give him a satisfactory answer.
Many people advised him to consult the old witch, for only she would have the answer.
But the price would be high; as the witch was famous throughout the kingdom for the exorbitant prices she charged.
The last day of the year arrived and Arthur had no choice but to talk to the witch. She agreed to answer the question, but he would have to agree to her price first.
The old witch wanted to marry Sir Lancelot, the most noble of the Knights of the Round Table and Arthur's closest friend!
Young Arthur was horrified. She was hunchbacked and hideous, had only one tooth, smelled like sewage, made obscene noises, etc. He had never encountered such a repugnant creature in all his life.
He refused to force his friend to marry her and endure such a terrible burden; but Lancelot, learning of the proposal, spoke with Arthur. He said nothing was too big of a sacrifice compared to Arthur's life and the preservation of the Round Table.
Hence, a wedding was proclaimed and the witch answered Arthur's question thus:
"What a woman really wants", she answered...."is to be in charge of her own life."
Everyone in the kingdom instantly knew that the witch had uttered a great truth and that Arthur's life would be spared.
And so it was; the neighboring monarch granted Arthur his freedom and Lancelot and the witch had a wonderful wedding.
The honeymoon hour approached and Lancelot, steeling himself for a horrific experience, entered the bedroom. But, what a sight awaited him. The most beautiful woman he had ever seen lay before him on the bed. The astounded Lancelot asked what had happened
The beauty replied that since he had been so kind to her when she appeared as a witch, she would henceforth, be her horrible deformed self only half the time and the beautiful maiden the other half.
Which would he prefer? Beautiful during the day....or night?
Lancelot pondered the predicament. During the day, a beautiful woman to show off to his friends, but at night, in the privacy of his castle, an old witch? Or, would he prefer having a hideous witch during the day, but by night, a beautiful woman for him to enjoy wondrous intimate moments?
What would YOU do?
What Lancelot chose is below.
Noble Lancelot said that he would allow HER to make the choice herself.
Upon hearing this, she announced that she would be beautiful all the time because he had respected her enough to let her be in charge of her own life.
Now....what is the moral to this story?
The moral is.....
If you don't let a woman have her own way....
Things are going to get ugly!
Ok Vino, you left yourself wide open,
Bad mistake...!!
"Got married in 1981, and sold it. Bad mistake."
Would you care to clarify which was the "bad mistake"
And don't forget your wife may be peering over your shoulder!!
Vino lets pray that your not looking at the undercarriage.
mokew:
several more years on the right........
mokew, try this
http://www.flickr.com/photos/26464862@N00/4611759942/
Mr. Allen Swift ( Springfield , MA.) received this 1928 Rolls-Royce Picadilly P1 Roadster from his father, brand new - as a graduation gift in 1928. He drove it up until his death last year.....at the age of 102 !!!
He was the oldest living owner of a car from new. Just thought you'd like to see it. He donated it to a Springfield museum after his death. It has 170,000 miles on it, still runs like a Swiss watch, dead silent at any speed and is in perfect cosmetic condition. (82 years) ...That's approximately 2000 miles per year...
Pic here.........
http://www.calguns.net/calgunforum/showthread.php?t=325610
A hidden world, growing beyond control
http://projects.washingtonpost.com/top-secret-america/articles/a-hidden-world-growing-beyond-control/?g=0
Vino, Great Granny and her love for a Comet,
http://news.yahoo.com/video/milwakee-wisn-18667753/woman-shows-off-car-nearly-half-a-century-old-20858533
Vino:
Cameron Berwick, La. mock-up of damaged well and pics of the cap that hopefully will be installed very soon,
you can see all the pictures at
http://docs.google.com/present/view?id=dgjvgrpb_146czm7b794
Vino, I agree, I think the real concern is the casing down hole. It is imperative to be able handle and process the full flow at the surface with out building up pressure in the well.
I know they have been preparing a new connection, larger pipe and a floating system(?) for quick disconnect, they have done two trial runs at removing the bolts at the flange, and done so with no difficulty.
It now appears they will be changing it here within a few days..
July 2, 2010, 2:21 p.m
LOS ANGELES (MarketWatch) -- A new cap that BP PLC plans to fit over the gushing Macondo well in the Gulf of Mexico has a shot at completely containing the oil and natural gas that have been spewing out for weeks, Coast Guard Adm. Thad Allen said Friday.
In a briefing with reporters, Allen said the new cap -- which BP hopes to have in place by July 15 -- would be bolted to the riser pipe and fitted with a rubber seal. The new cap could capture up to 80,000 barrels of oil a day, believed to be more than the entire output of the riser, Allen said.
Meanwhile, BP appears to be ahead of schedule in drilling a relief well that would act as the permanent solution for the renegade pipe, but Allen pointed out that officials are sticking with the company's original projection of finishing the operation by early August.
mokew, vino, db7
mokew,
The oil drum has some great info. on the blow out well, the link below should take you to a post on May 29 when BP was trying top kill with junk shot etc..
There are some very bright posters (retired oil men, geologist and so on) from all around the world that contribute to the site. Great explanations of why some solutions are not doable, pressure, damage to pipe, etc.
There have been many suggestions that have gone through the oil drum to BP and been considered.
http://www.theoildrum.com/node?page=14
The post that db7 shared,
was from a poster at the oil drum, dougr on June 13, 2010, and although well written much of it was based on assumption and not fact. It (the post)did find it's way to main stream media and created great concern, but after being picked apart by experts the facts did not support what was written.
Vino, you should post your idea at he oil drum, I'm sure it would find it's way to BP or a Gov. agency, hey BP is buying Kevin Costner's oil extracting machines. I think BP also has a link for ideas.
http://abcnews.go.com/GMA/bp-excited-kevin-costners-oil-cleanup-machine-purchases/story?id=10916445
Here is a good link for all the ROV live feeds in one place
http://spillcam.110mb.com/
lentinman:
especially when viewed back to 06,
http://stockcharts.com/h-sc/ui?s=$LUMBER&p=W&st=2006-01-01&en=1913-06-27&id=p73305441565
IMO the housing market and recent spurt in construction both new and remodeling is do to hyped hope, the economy is not getting better.
Being that I am in construction(40+ yrs.) I would relish being wrong, but for the life of me, I cannot find anything solid to build a good scenario on.
The old adage applies "follow the money"
Cash traders indicated that retail dealers and wholesalers aren't completely ready to buy lumber for inventory just yet, but current prices make it worthwhile to run some "what-if" bids by the sellers.
Chicago Mercantile Exchange lumber futures Thursday bounced up from Wednesday's contract lows as investors came in to repurchase previously sold speculative contracts at a profit.
Nearby July settled up $4.10 at $182 for a 2.3% gain. September was $5.80, or 3.1%, higher at $192.80, while November was $3.50, or 1.82%, higher at $195.60.
Traders said the market had become very oversold technically and attractive to buyers.
Cash markets continued to struggle, but there is a little more inquiry about pricing, and a market analyst said this may be what made investors with short positions nervous and sent them into the market to rebuy and lock in their profits.
Cash traders indicated that retail dealers and wholesalers aren't completely ready to buy lumber for inventory just yet, but current prices make it worthwhile to run some "what-if" bids by the sellers.
Further gains could be seen on Friday, but the way the market couldn't hold earlier gains made some wonder if Thursday's action wasn't just a one-day affair.
Dow Jones Newswires published a mill-level price for SPF 2x4s at $180 to $185, unchanged from Wednesday.
As of 15:13 EDT, the July/September spread had traded 81 times in the Globex market in a range from $7.40 to $10.40, premium September, with the last at $10.30 bid.
The September/November spread had traded 115 times in the Globex market from $5.20 to $6.70, premium November, with the last at $6.
dick, I agree, but
Fannie Mae may be doing those that walk away a favor by banning them for seven years, home prices may be lower! or at least more stable.
personally I think it is more lip service than something that will actually be done.
Fannie Mae to penalize homeowners who walk away
AP Business Writer / June 23, 2010
WASHINGTON—Government-sponsored mortgage purchaser Fannie Mae is trying to encourage distressed homeowners to find alternatives to foreclosure by banning those who walk away from getting new loans for seven years.
Troubled borrowers who do not try in good faith to work out a deal, but have the capacity to pay, are targeted by the policy announced Wednesday.
"Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting," said Terence Edwards, executive vice president for credit portfolio management.
A strategic default occurs when a homeowner stops making payments on a mortgage despite being able to do so. It has become increasingly common in communities where housing values fell sharply and homeowners are "underwater," or owe more than their houses are worth.
Fannie Mae said that in locations where the law allows, it also plans to take legal action to recoup outstanding mortgage debt from borrowers who strategically default. The company plans to instruct its servicers to monitor delinquent loans facing foreclosure and recommend cases to pursue for such judgments.
A spokesman for fellow government-backed mortgage buyer Freddie Mac said its current policy requires at least a five-year wait. Freddie Mac will "take a close look" at the new Fannie policy, said spokesman Brad German. "We'll consider it in light of current market conditions in order to manage our risk as effectively as possible."
Fannie and Freddie were created by Congress to buy mortgages from lenders and package them into bonds that are resold to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion. That's about half of all mortgages.
The wave of foreclosures affecting Fannie and Freddie loans has caused a major problem for the U.S. government, which effectively guarantees the loans. The government seized control of Freddie and Fannie in September 2008. The two companies have already siphoned $111 billion from taxpayers to stay afloat, and that number is expected to hit $188 billion by fall 2011.
In announcing the new policy, Fannie Mae said homeowners who make a good faith effort to resolve their situation with their mortgage services, and those who have extenuating circumstances, will be eligible for new loans in a shorter time period. The company did not detail how long the wait might be.
Fannie Mae shares fell 1 cent to close at 41 cents. Fannie Mae shares finished unchanged at 48 cents. Both companies plan to delist their shares from the New York Stock Exchange because they don't meet listing requirements that they remain above $1 per share.
Half of all modified mortgages redefault within a year
Wednesday June 23, 2010, 3:44 pm
More than half of all homeowners with modified mortgages fell at least two months behind in their payments a year after the adjustment was made, according to a federal report released Wednesday.
However, the data also shows that modifications made in 2009, which emphasized reduced monthly payments, may perform better.
Only 40.7% of loans modified in the second quarter last year were delinquent after nine months, compared to 51.6% of those adjusted at the end of 2008, according to the report, published by the Office of Thrift Supervision and Comptroller of the Currency.
The quarterly report covers 64% of all mortgages outstanding in the United States -- some 34 million loans totaling nearly $6 trillion in principal balances. It offers one of the most comprehensive looks at the state of mortgages in America.
And modifications made under President Obama's foreclosure prevention program, known as HAMP, also had lower redefault rates than non-government modifications. Some 7.7% of HAMP modifications were delinquent after three months, compared with 11.3% of all modifications.
Under the HAMP program, borrowers' monthly payments are reduced to no more than 31% of their pre-tax income. Borrowers also receive incentives for making timely mortgage payments.
Interest rate reductions were the most common method that servicers used to reduce monthly payments in the first quarter, implementing them in 85.9% of all modifications. Term extensions were used in 46.8% of modifications, while principal reduction was utilized only 1.9% of the time.
Many experts say that servicers must do more principal reduction if they want to halt the foreclosure tidal wave. Homeowners are more likely to walk away if they owe much more than the home is worth, a situation about 1 in 4 borrowers find themselves in.
The report also found that delinquency rates dropped for both mortgage made to credit-worthy and to subprime borrowers. The number of newly initiated and completed foreclosures, however, increased by nearly 19% each.
Short sales increased by 9.2% for the quarter, but 120.4% for the year.
Still, servicers are working with borrowers to help them stay in their homes, the report found. There were 1.7 times as many modifications and payment plans initiated in the first quarter as new foreclosures.
New Home Sales Miss by Most Since at Least 1998; Lowest Reading Ever
Wednesday, June 23, 2010 at 10:05AM
After the March and April readings of new home sales beat expectations by the first and fifth most since 1998, respectively, the May reading came in as the worst versus expectations. As shown below, today's reading of 300,000 came in 110,000 lower than the estimate of 410,000. This 26.83% difference blows away all prior misses.
The next worst reading came in December 2009 at -18.86%. The reading of 300,000 was also the worst on record since 1963! Today's number shatters any argument that the end of the new home buyer credit wouldn't have much of an impact on sales.
charts here........
http://www.bespokeinvest.com/thinkbig/2010/6/23/new-home-sales-miss-by-most-since-at-least-1998-lowest-readi.html
House Prices Still Have Another 10%-20% To Fall, Says Gary Shilling
Posted Jun 16, 2010 11:30am
A year ago, house prices finally stopped collapsing after two years of brutal declines. Over the following few quarters, moreover, they actually rose. This led many observers to conclude that the housing bottom had been reached and that we were headed for a v-shaped bounce.
Not Gary Shilling.
Gary Shilling, head of economic research firm A. Gary Shilling & Co., thinks house prices still have another 10%-20% to fall. Just as bad, Gary thinks this fall will happen over the next three years, meaning that house prices won't bottom until 2013. Most people think prices have already bottomed, or will bottom later this year or next.
Why is Gary so bearish?
Supply versus demand.
Basically, Gary says, we still have way too many houses relative to the number of people who want to buy them. Consumers are under pressure, overloaded with debts and struggling to find work, and the mass-hallucination that investing in housing was a "sure thing" is now a distant memory. These days, many would-be home buyers are moving in with relatives or downsizing or dumping second homes. And the supply-demand balance is so out of whack, in Gary's view, that even super-low interest rates won't keep prices afloat.
Overall mortgage application volume falls 12.2 pct
June 9, 2010
Volume of purchase mortgage applications drops to 13-year low, refinance activity also down
(AP) -- The number of customers applying for a mortgage to purchase a property fell to the lowest level in 13 years last week, a sign the housing market is struggling without government incentives.
Purchase volume declined 5.7 percent and is at its lowest point since February 1997, the Mortgage Bankers Association said Wednesday.
Overall mortgage application volume, which includes loans for purchases and refinancings, dropped by 12.2 percent during the week ending June 4, compared with the previous week. Refinance volume tumbled 14.3 percent.
"Purchase applications are now 35 percent below their level of four weeks ago, as homebuyers have not yet returned to the market following the expiration of the homebuyer tax credit at the end of April," said Michael Fratantoni, MBA's vice president of research and economics.
New buyers were offered a credit worth up to $8,000, while current owners who bought and moved into another home could get one for up to $6,500. To receive them, buyers had to have a signed offer by April 30 and must close by the end of June.
The trade group said customers looking to refinance homes accounted for 72.2 percent of all applications, compared with 73.8 percent the previous week. This marks the first decline in refinance share in five weeks.
Interest rates have hovered near historical lows for the past month and many homeowners have already refinanced recently. Others can't qualify because they owe more than their homes are worth, lack job security or have tarnished credit, Fratantoni said.
The average interest rate on a 30-year, fixed-rate mortgage fell to 4.81 percent last week from 4.83 percent a week earlier.
The average rate for a 15-year, fixed-rate mortgage -- which is often more popular for refinancing a mortgage -- rose to 4.26 percent from 4.24 percent.
The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers more than 50 percent of all residential retail mortgage origination's each week.
off topic: Patty,
how are the twins and family doing?
I think a couple of posters here are from Ohio, hope all is well.
Ohio – At least 17 people have been hospitalized in northwest Ohio with injuries from storms that swept through the Midwest overnight, and two adults and two children are in critical condition.
http://news.yahoo.com/s/ap/20100606/ap_on_re_us/us_midwest_storms
Market bounce tomorrow on this,
Europe leaders agree on emergency loan plan
May 9, 2010, 8:33 p.m. EDT
WASHINGTON (MarketWatch) -- European finance ministers agreed late Sunday on a package of loan guarantees worth as much as 500 billion euros ($670 billion) designed to keep the Greek debt crisis from spreading to other vulnerable countries, Spanish Finance Minister Elena Salgado announced. The agreement came after a full day of closed-door meetings in Brussels. The finance ministers held a joint press conference shortly after the opening of Asian markets to discuss the program. The package was designed to ease market fears that Greece, Portugal or Spain will have to restructure their debt, a move that would have hit European banks particularly hard. The International Monetary Fund will also contribute to the plan.
Home Foreclosures Approach Peak Range
U.S. news
Luke Mullins, On Friday March 12, 2010, 11:35 am EST
Although the U.S. housing market witnessed its smallest annual increase in foreclosure activity in four years last month, distressed-property tallies are expected to remain in an elevated range for some time. Foreclosure filings were reported on more than 308,000 American homes in February, RealtyTrac said Thursday. That's a 2 percent decline from January but a 6 percent increase from a year earlier. All told, February represents the 12th consecutive month with more than 300,000 foreclosure filings.
The slight monthly decrease is linked to two key factors, says Rick Sharga of RealtyTrac. First, Uncle Sam's sweeping housing rescue initiative--known as the Home Affordable Modification Program--has worked to slow the pace at which troubled mortgages go into foreclosure, as lenders try to determine if borrowers qualify for government assistance. In addition, the snowstorms that hammered the East Coast last month appear to have hogtied the process further. States like New Jersey, New York, Pennsylvania, and Delaware--all of which were pummeled by the winter storms--saw foreclosure filings drop 20 to 40 percent from the previous month. "Our field team that collects [data] reported back that clerks' offices and courthouses were closed for a number of days over the course of the month," Sharga says.
[Check out Obama's Loan Modification Plan: 7 Things You Need to Know.]
Still, a number of forces are working to push foreclosures higher from here. The sluggish labor market isn't expected to turn around anytime soon. Economics firm IHS Global Insight projects the national unemployment rate--which now stands at an uncomfortably high 9.7 percent--to decrease only slightly, to 9.6 percent, by the end of the year. The rickety employment environment increases the likelihood that homeowners will lose the income stream they need to pay the mortgage. Meanwhile, many homeowners who have enrolled in Uncle Sam's housing rescue will eventually fall behind on their mortgage payments again, says Celia Chen of Moody's Economy.com. "As those loans fall out of the HAMP program, we will see a greater number of foreclosures," she says. At the same time, many homeowners with exotic mortgages are expected to face sharply higher payments in the coming months as lower initial rates expire. Many of these mortgage holders may find themselves unable to afford the new payments.
But Pat Newport of IHS Global Insight believes that the issue of negative equity--or owing more on your mortgage than your property is worth--will play the decisive role in the future of the foreclosure crisis. About 1 in every 4 homeowners has negative equity. That's scary news for the housing market because borrowers in this predicament are more likely to simply walk away from their homes. "There are 5 million homes that are over 25 percent underwater," Newport says. "If a lot of those people start walking away from their homes, we are going to see another wave [of home foreclosures]."
[See Strategic Defaults and the Foreclosure Crisis.]
But Mike Larson of Weiss Research argues that while foreclosures may move modestly higher from February's levels, the figures are likely to remain in the current range. "Have we 100 percent for sure seen the absolute high point for foreclosures?" Larson says. "I don't know if we are there yet, but I think that we are probably leveling off at around what will likely be the peak." He points to recent stabilization in employment, home prices, and the overall economy to support his position.
For his part, Sharga agrees that foreclosures will flatten out at their current, elevated levels. He expects foreclosures to begin posting annual decreases in late 2011. "We are banking on economic recovery, which means job creation and people will be able to afford their homes," he says.
OT; humor....Little Johnny Strikes Again
The teacher asked the class to use the word 'fascinate' in a sentence.
Molly put up her hand and said, 'My family went to my granddad's farm, and we all saw his pet sheep It was fascinating.'
The teacher said, 'That was good, but I wanted you to use the word 'fascinate, not fascinating'.
Sally raised her hand. She said, 'My family went to see Rock City and I was 'fascinated.' The teacher said, 'Well, that was good Sally, but I wanted you to use the word 'fascinate.'
Little Johnny raised his hand. The teacher hesitated because she had been burned by Little Johnny before.
She finally decided there was no way he could damage the word 'fascinate', so she called on him.
Johnny said, 'My aunt Gina has a sweater with ten buttons, but her teats are so big she can only fasten eight.'
The teacher sat down and cried.
Program Will Pay Homeowners to Sell at a Loss
"Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it."
by David Streitfeld
Monday, March 8, 2010
In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.
This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration's most aggressive attempts to grapple with a problem that has defied solutions.
More than five million households are behind on their mortgages and risk foreclosure. The government's $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.
For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy's tentative recovery -- the last thing it wants in an election year.
Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.
"We want to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender," said Seth Wheeler, a Treasury senior adviser.
The problem is highlighted by a routine case in Phoenix. Chris Paul, a real estate agent, has a house he is trying to sell on behalf of its owner, who owes $150,000. Mr. Paul has an offer for $48,000, but the bank holding the mortgage says it wants at least $90,000. The frustrated owner is now contemplating foreclosure.
To bring the various parties to the table -- the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property -- the government intends to spread its cash around.
Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in "relocation assistance."
Should the incentives prove successful, the short sales program could have multiple benefits. For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure.
For the borrowers, there is the likelihood of suffering less damage to credit ratings. And as part of the transaction, they will get the lender's assurance that they will not later be sued for an unpaid mortgage balance.
For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. By some estimates, as many as half of all foreclosed properties are ransacked by either the former owners or vandals, which depresses the value of the property further and pulls down the value of neighboring homes.
If short sales are about to have their moment, it has been a long time coming. At the beginning of the foreclosure crisis, lenders shunned short sales. They were not equipped to deal with the labor-intensive process and were suspicious of it.
The lenders' thinking, said the economist Thomas Lawler, went like this: "I lend someone $200,000 to buy a house. Then he says, 'Look, I have someone willing to pay $150,000 for it; otherwise I think I'm going to default.' Do I really believe the borrower can't pay it back? And is $150,000 a reasonable offer for the property?"
Short sales are "tailor-made for fraud," said Mr. Lawler, a former executive at the mortgage finance company Fannie Mae.
Last year, short sales started to increase, although they remain relatively uncommon. Fannie Mae said preforeclosure deals on loans in its portfolio more than tripled in 2009, to 36,968. But real estate agents say many lenders still seem to disapprove of short sales.
Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.
Mr. Paul, the Phoenix agent, was skeptical. "In a perfect world, this would work," he said. "But because estimates of value are inherently subjective, it won't. The banks don't want to sell at a discount."
There are myriad other potential conflicts over short sales that may not be solved by the program, which was announced on Nov. 30 but whose details are still being fine-tuned. Many would-be short sellers have second and even third mortgages on their houses. Banks that own these loans are in a position to block any sale unless they get a piece of the deal.
"You have one loan, it's no sweat to get a short sale," said Howard Chase, a Miami Beach agent who says he does around 20 short sales a month. "But the second mortgage often is the obstacle."
Major lenders seem to be taking a cautious approach to the new initiative. In many cases, big banks do not actually own the mortgages; they simply administer them and collect payments. J. K. Huey, a Wells Fargo vice president, said a short sale, like a loan modification, would have to meet the requirements of the investor who owns the loan.
"This is not an opportunity for the customer to just walk away," Ms. Huey said. "If someone doesn't come to us saying, 'I've done everything I can, I used all my savings, I borrowed money and, by the way, I'm losing my job and moving to another city, and have all the documentation,' we're not going to do a short sale."
But even if lenders want to treat short sales as a last resort for desperate borrowers, in reality the standards seem to be looser.
Sree Reddy, a lawyer and commercial real estate investor who lives in Miami Beach, bought a one-bedroom condominium in 2005, spent about $30,000 on improvements and ended up owing $540,000. Three years later, the value had fallen by 40 percent.
Mr. Reddy wanted to get out from under his crushing monthly payments. He lost a lot of money in the crash but was not in default. Nevertheless, his bank let him sell the place for $360,000 last summer.
"A short sale provides peace of mind," said Mr. Reddy, 32. "If you're in foreclosure, you don't know when they're ultimately going to take the place away from you."
Mr. Reddy still lives in the apartment complex where he bought that condo, but is now a renter paying about half of his old mortgage payment. Another benefit, he said: "The place I'm in now is nicer and a little bigger."
http://finance.yahoo.com/real-estate/article/109009/program-will-pay-homeowners-to-sell-at-a-loss?mod=realestate-sell&sec=topStories&pos=3&asset=&ccode=
U.S. Economy: New-Home Sales Decline to Record Low
Feb. 24 (Bloomberg) -- Sales of new homes in the U.S. unexpectedly fell in January to the lowest level on record, a sign that an extension of a government tax credit may not be enough to rekindle demand.
Purchases declined 11 percent to an annual pace of 309,000, below the lowest forecast in a Bloomberg News survey of economists, figures from the Commerce Department showed today in Washington. The median sales price dropped 2.4 percent from January 2009 and the supply of unsold homes increased.
The report underscores Federal Reserve Chairman Ben S. Bernanke’s comments today that the economy is in a “nascent” recovery still in need of low interest rates. Homebuilders face competition from foreclosed properties that have driven down prices at the same time companies are reluctant to create jobs.
“The foreclosure flow is robbing demand from the new-homes market, and that process seems to be strengthening,” said Julia Coronado, a senior economist at BNP Paribas in New York. “The new-homes market just can’t get off the floor. If new homes suffer, construction suffers and jobs suffer.”
Sales were projected to climb to a 354,000 annual pace from an originally reported 342,000 rate in December, according to the median estimate in a Bloomberg survey of 72 economists. Forecasts ranged from 325,000 to 386,000.
Stocks advanced after Bernanke repeated in Congressional testimony that borrowing costs can remain low for an “extended period.” The Standard & Poor’s 500 Index gained 1 percent to 1,105.24 at 4:28 p.m. in New York.
Three Regions Drop
Three of the four U.S. regions showed declines in new-home sales last month, led by a 35 percent plunge in the Northeast. Purchases fell 12 percent in the West and 9.5 percent in the South. They rose 2.1 percent in the Midwest.
The median price of a new home in the U.S. decreased to $203,500 in January, the lowest since December 2003, from $208,600 in the same month last year.
The supply of homes at the current sales rate increased to 9.1 months’ worth, the highest since May 2009.
Housing, the industry that spawned the sub-prime mortgage meltdown and triggered the worst recession in seven decades, appeared to be recovering in 2009 after a three-year decline.
Purchases of new homes have declined from an all-time high of 1.39 million reached in July 2005. They have declined 6.1 percent from January 2009.
New-home purchases, which account for about 6 percent of the market, are considered a leading indicator because they are based on contract signings. Sales of previously owned homes, which make up the remainder, are compiled from closings and reflect contracts signed weeks or months earlier.
Rising Foreclosures
Rising foreclosures are the main threat to a sustained housing recovery. A record 3 million U.S. homes will be repossessed by lenders this year as unemployment and depressed home values leave borrowers unable to make their house payments or sell, according to a RealtyTrac Inc. forecast last month. Last year there were 2.82 million foreclosures, the most since the Irvine, California-based company began compiling data in 2005.
The lack of jobs is another hurdle. Consumer confidence in February fell to its lowest level since April 2009 and a gauge of current conditions declined to the lowest level in 27 years on concerns about the labor market and the economy, the Conference Board reported yesterday.
Bernanke told Congress today that there are “tentative” signs of stabilization in the labor market, including fewer job cuts, a rise in factory employment and stronger demand for temporary help.
Job Market ‘Weak’
“Notwithstanding these positive signs, the job market remains quite weak, with the unemployment rate near 10 percent and job openings scarce,” Bernanke said in testimony to the House Financial Services Committee.
Economists surveyed by Bloomberg at the beginning of this month forecast unemployment this year will average 9.8 percent, just a percentage point below the historic post-war peak of 10.8 percent reached in November 1982.
The end of Fed purchases of mortgage-backed securities, aimed at keeping borrowing costs low, represents another challenge for the housing industry. The program is scheduled to expire at the end of March.
“The housing market took several years to recover, following the downturn of the late 1980s and early 1990s,” Robert Toll, chief executive officer of Toll Brothers Inc., said in a statement today.
Toll Brothers, the largest U.S. luxury-home builder, said its first-quarter loss narrowed. The Horsham, Pennsylvania-based company’s new orders almost doubled in the three months ended Jan. 31 as the housing market showed signs of stabilizing.
SEC puts new curbs on short-selling
Wednesday February 24, 2010, 11:34 am
SEC puts new 'circuit breaker' curbs on short-selling in bid to buttress market stability
WASHINGTON (AP) -- Federal regulators have imposed new curbs on the practice of short-selling, hoping to prevent spiraling selling sprees in a stock that can stoke market turmoil.
A divided Securities and Exchange Commission voted 3-2 Wednesday to adopt new rules.
The rules put in a so-called circuit breaker for stock prices, restricting for the rest of a trading session and the next one any short-selling of a stock that has dropped 10 percent or more.
Short-sellers bet against a stock. They borrow a company's shares, sell them and then buy them when the stock falls and return them to the lender -- pocketing the difference in price.
Battling Back, Builders Work Fast, Cut Prices
REAL ESTATE FEBRUARY 3, 2010
LAS VEGAS—Home builders have lost half their share of the U.S. housing market in the past two years, largely because of competition from cheap foreclosed houses. In 2009 only 7.6% of the homes sold were newly constructed, down from the average of about 16% over the previous two decades.
But home builders are fighting back, cutting prices, promising to complete homes faster, and warning about the risks of buying foreclosed property.
Their efforts may be starting to pay off. On Tuesday, D.R. Horton Inc., the second-largest U.S. builder, swung to a surprise quarterly profit, its first since the sector crashed, aided by improving business and a tax benefit. Donald R. Horton, the builder's chairman, said conditions remain challenging but he's optimistic as Horton focuses on low-priced housing as well as controlling its costs.
"If you want to be competitive with foreclosures, you've got to drive your prices down," says Steven Hilton, chief executive of Meritage Homes Corp. In Maricopa, Ariz., a boom town near Phoenix hit hard by foreclosures. Meritage is offering three-bedroom houses for as little as $99,900, less than half the price of a typical new home there four years ago.
Meritage is generally holding prices below $250,000 now in Florida, Arizona and Texas, Mr. Hilton says, and they're below $325,000 in California.
Builders can afford to lower their prices now in part because land is much cheaper. They're also able to squeeze their suppliers and subcontractors harder. Housing starts are running at less than a third of the 2005 level, making suppliers and subcontractors eager for orders and willing to work for less.
One of Meritage's big national rivals, KB Home, is cutting costs partly by standardizing window sizes and floor plans rather than allowing endless local variations. "We build this same product line across the U.S. now," says Jim Widner, regional president.
Most of the homes that KB sells in Las Vegas now cost $150,000 to $170,000, he adds. During the housing boom, new-home prices were typically above $400,000.
Builders are also trying to complete homes faster for people who can't wait the typical four to six months required for a new home. A large share of today's buyers are first-timers who want to qualify for a federal tax credit that expires April 30.
Meritage says it will guarantee to complete homes in 99 days in some markets. That's possible, Mr. Hilton says, partly because only efficient subcontractors have survived the bust.
Special deals are also helping builders. Lancaster, Pa.-based Charter Homes & Neighborhoods offered 30-year mortgage rates in January that start at 2.87%, climb to 3.87% in year two, and then settle at 4.87%. In February, the starter rate increased to 2.99%, but it's still below current average mortgage rates of 5.10%. "People are definitely responding," says Rob Bowman, Charter's president.
In Las Vegas, Pardee Homes is using email blasts to tell potential home buyers about possible hazards of buying foreclosed homes. Banks are sometimes slow to respond to would-be buyers' offers, they warn, and former owners have often neglected or even trashed the houses. "Unapparent damage may include leaking water, rot, asbestos or rodent infestations," a Pardee email says.
Some buyers are also starting to suffer from "foreclosure fatigue," says Klif Andrews, Pardee's Las Vegas division president, as it gets more difficult to compete with cash-rich investors for foreclosed houses.
Still, in some cases the lure of real or imagined bargains remains strong. Jim and Penny Seawards used to buy a new home each time they moved. But in their most recent search, concluded in December, they looked only at recent-vintage foreclosed houses. "We felt we could get more house for the money," says Mr. Seawards, the sales director at a Cadillac dealer.
The couple bought a 3,600-square-foot house in Scottsdale, Ariz., for $425,000. They expect to spend $50,000 more on landscaping and other improvements, but their real estate agent, Jim Sexton of Russ Lyon Sotheby's International Realty, figures a similar newly built house would have cost at least $625,000.
Some home owners avoid new homes for other reasons. Lew Reich, an agent with Keller Williams Realty in Plano, Texas, says buyers are sticking closer to downtown Dallas and the city's established suburbs, eschewing lengthy commutes. They also worry that some home builders won't stay in business long enough to finish construction or honor their warranties.
Economists expect the foreclosure crisis to drag on for at least a few more years. So can home builders get back to their former pace of accounting for one of every six sales?
"I think we will get back there," says Bernard Markstein, an economist at the National Association of Home Builders, but, he says, it will take a few years. The NAHB forecasts that new home sales will jump 38% to 517,000 this year as the economy improves. But that would still be only about 9% of expected total home sales.
December home sales down nearly 17 percent
Home sales plunge nearly 17 percent in December after tax credit deadline extended
Monday January 25, 2010, 10:08 am
WASHINGTON (AP) -- Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, plunging far deeper than expected after lawmakers gave buyers extended time to use a tax credit.
The National Association of Realtors says sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million in December, from an unchanged pace of 6.54 million in November. Sales had been expected to fall by about 10 percent, according to economists surveyed by Thomson Reuters.
Buyers were no longer scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30, but Congress extended the deadline until April 30.
The median sales price was $178,300, up 1.5 percent from a year earlier and the first yearly gain since August 2007.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
WASHINGTON (AP) -- Last month's U.S. sales of previously occupied homes are expected to be down sharply from November after prospective buyers were granted more time to take advantage of a tax credit.
Buyers last month were no longer scrambling to qualify for a tax credit for first-time homeowners that was due to expire on Nov. 30. To give the market an added boost, lawmakers extended it until April 30. They also added a new credit of up to $6,500 for existing homeowners who move.
Economists polled by Thomson Reuters forecast that sales completed in December fell 9.8 percent to a seasonally adjusted annual rate of 5.9 million, from 6.54 million in November. The decline would reverse three straight months of increases.
The National Association of Realtors' report is scheduled for release Monday at 10 a.m. EST.
Earlier this month, the trade group said its index of sales contracts fell 16 percent from October to November, ending nine months of gains. Since it normally takes one to two months to complete a sale, that signals weak sales for December and January.
The big question hanging over the housing market this spring is whether the recovery will stumble after the government pulls back support. The Federal Reserve's $1.25 trillion program to push down mortgage rates is scheduled to expire at the end of March -- a month before the newly extended tax credit runs out.
Last year, first-time buyers were the main driver of the housing market, but their presence is on the decline, according to a survey of real estate agents released last week by research firm Campbell Communications.
They accounted for nearly 43 percent of purchases in December, the survey found, down from 47 percent in October.
"The majority of people who are going to use (the tax credit) have used it already," said Thomas Popik, who conducted the survey.
Many experts project home prices, which started to rise last summer, will fall again over the winter. That's because foreclosures make up a larger proportion of sales during the winter months, when fewer sellers choose to put their homes on the market.
Despite fears that home prices are starting to fall again, some analysts still believe the worst is over.
"We do not believe it is fair to consider this a double dip in the housing market," Michelle Meyer, an economist with Barclays Capital, wrote last week. "The recovery is still under way, but hitting some bumps in the road."
Prices fell 0.2 percent from October to November, according to a report released last Thursday by real estate data company First American CoreLogic. The company forecasts prices will hit bottom by spring and remain flat in most markets through the rest of the year.
"We see things wobbling around right now, and actually that's a good thing," said Mark Fleming, First American's chief economist. "It wasn't too long ago that all of the data was pointing to negative trends."