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Woodbridge Mortgage Fraudsters Sentenced
Saturday, December 18, 2010
Northern Virginia Weekend Bits Bucket 12/18-12/19, 2010
Posted by Harriet at 6:00 AM
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39 comments:
harriet
that place in FQ would be awesome for growing Marijuana.
Pat-
I was thinking the same thing, but that could be because I have recently been watching Weeds on Netflix.
man i so wanted to take those server farms at manassas and make them weed farms back in 2000 after the .com bust
I had business lunch at Maggiano's twice this week. It is located between Saks Fifth Ave and Neiman Marcus at the Tysons Galleria. Not only was the restaurant full and crowded, but finding a parking spot at the mall was very difficult. That it is so in such an upscale mall, in this time of national economic stagnation, is a clue to me that this area will continue to have plenty of high earners. And that matters in understanding how the housing market will behave over the next few years.
tedk-
The parking situation in Tysons Galleria has been a disaster as long as I can remember. This includes periods like the 90s where housing did mediocre, like 2000-2006 where is did great, like 2006-2008 where it did terribly... I could just as easily claim that the fact that the Morton's across form Tyson's stopped serving lunch a year ago means the economy is suffering. Also the huge office building in front of Tysons one took two years to find any tenants and is still only half full...
In reality I don't think either of our information is enough to make a clear picture. Yes we will continue to have wealthy people in this area and houses will continue to be significantly more expensive than most parts of the country, but prices could go up or down 20% and we would still have expensive housing...
housebuyer,
My own experience with the place is limited; I have been in NOVA only about 6+ years. But my memory is that Galleria wasn't as crowded in late 2008 or early 2009. Maybe it depends on the time of the day.
I agree that one needs hard, solid stats and cannot make conclusions based on these anecdotal points. Indeed, I have pooh-poohed such claims on this blog by others in the past. But I was impressed nonetheless.
File under Redundant headlines.
"Top Official at Real Estate Firm Arrested for Fraud"....
http://www.washingtonpost.com/wp-dyn/content/article/2010/12/18/AR2010121802824.html?hpid=newswell
tedk, I find that kind of info interesting. I live in rural Ar. and my UPS driver showed up in a U-haul truck. I'm teasing him about trashing his truck and he says.. we had to rent 4 extra u-hauls to meet our deliveries..now, this is a small county population wise about a third of PW County. Interesting doncha think. A small, rural county in Ar that puts that much demand on UPS in a recession?
Pat,
It would certainly be a cash crop, but good luck with that one in Virginia!
That is one huge greenhouse, though. I thought it would be fun for jogging in and staying warm. Kids could ride bikes and roller skate.
I was stuck with an errand at the Fair Oaks mall today and I was surprised that traffic wasn't nearly as bad as former years, although it was brisk. Maybe people are ordering online. That was my problem, though - I had to return something and didn't want to ship it back. But thankfully that was my only shopping trip this Christmas - the internet works for me.
Contrarian-
I don't know why so many people think second liens are worth nothing. Yes it is true if the big banks wrote down all of their second liens to $0 the banks would be insolvent, but it makes no sense for the loans to be marked at 0. For most of these banks 95% of people are still paying their second liens on time, so they clearly have value.
There are a lot of people like my parents that took out a second lien to help pay for their kids college expenses. Combined the first and second lien are ~200K, on a 4K sq.ft. house with an acre of land in Fairfax Station. Even if housing prices plunge the second lien will be worth 100 cent on the dollar.
http://franklymls.com/AR7469275
sells at peak for 380
REOs and sells for 248K.
just about 50% off, i'd have bid but it was too close to the highway and cherie is chemically sensitive.
HB
I think the value of second liens is purely a matter of location.
in CA, AZ, FL, they are clearly worth nothing. It's just a matter of time for when they go bad.
The Outer counties around here? PW, FQ, LO. I suspect they are no good.
The deal is it's tied to Negative equity. The DC area is middle of the pack for negative equity. When they Negative equity exceeds 10% they start becoming subject to strategic default, when they are 25% theya re 100% likely to default.
Many seconds are adjustables.
Benanke has been keeping interest rates low to keep default rates low.
It's part of the reason why I despise the market manipulation.
Rather then a write down and return to normal we have massive manipulation to protect the people who conducted these frauds.
I would agree that, in the event of a default on the First, seconds would probably be worthless.
Are many virtually unsecured at this point? Yes. Does this automatically equal default? No.
So the ultimate question is LTV on seconds likely to default. I saw no stats on that in contrarian's article.
I have 3 heloc's that I am happy to report are current and well secured.
I would add that much of this loss has already occured, imo.
Aren't a lot of those seconds used for home improvement? I don't know what proportion it would be, but it could be that many of those homeowners are not in any difficulty with income and aren't underwater.
Anyone checking out open houses today? I'm sure there will be more on the market after the first of the year but will be curious to see how many more.
Pat-
I agree with VA and Ace. If the second lien is because a person did an 80/20 loan in 2006 the loan is probably close to worthless, but the majority of second liens are on houses where even with both loans the owner is well above water. If ~95% of people have paid their loans for the 3-5 years since the crash started do you really expect they all start defaulting soon.
The reason that the fed has rates at zero is not keep defaults low. Sure they are happy that it is helping keep defaults low, but it is to try and help unemployment and increase inflation. They have models that say where they should have interest rates based on inflation and unemployment. Those models currently say interest rates should be between negative 2 and negative 6%. This is why rates are at zero and they consider the fact that it helps keep defaults down as just an additional benefit.
cheryl
let's look at negative equity and Default.
http://www.housingwire.com/2009/12/08/white-paper-sees-strategic-defaults-rise-with-negative-equity-2
http://www.doctorhousingbubble.com/strategic-default-world-mortgages-30000-default-monthly-cash-flow-increase/
(DR Bubble says once someone is $100K under, their moral compass flips around)
http://www.federalreserve.gov/pubs/feds/2010/201035/201035pap.pdf
(Let us ask the Federal Reserve, Default rises until equity exhaustion, they don't survey negative equity)
http://bit.ly/gSn5Hf
Here the Boston Fed shows that Negative Equity is a preconditon for default, the other is i suspect cheaper rent. That's why the Fed is trying to keep ZIRP, if they can hold ZIRP they can delay Default and smooth out the default wave.
http://problembanklist.com/negative-equity-causes-half-of-mortgage-defaults-0124/
The Federal Reserve study reveals that when mortgage debt exceeds 150% of the property’s value, “half of the defaults are driven purely by negative equity”. With property markets showing little evidence of a fast recovery in values, this comes as bad news for banks and other mortgage holders who now face the prospect of continuing defaults by borrowers who have the capacity to make payments.
So it's a matter of Second mortgages, depth of Neg equity and knowledge of other defaulters.
http://www.zerohedge.com/article/jeff-gundlachs-december-presentation
slide 61 is interesting to me, it says commercial values have hit normal, (Malls,hotels, office, MFDU)
but residential still has a lot of air in it.
http://franklymls.com/DC7427899
People can call this Dumpy if they like but if a cute property in a good area drops 33% from Assessed.
the plus side is i am seeing better inventory hitting the market, which means the dumpy stuff has to drop in price.
pat,
I read contrarian's article and it seems perfectly rational that people will keep up car payments and credit cards. Absent an available line to draw on, I can't see any reason that defaulters on a first would continue to pay a second. In fact, this is one thing I look at when considering a condo purchase - hoa delinquencies (a definate sign of foreclosures to come).
The experience cited in the article stating that heloc holder still have access to their lines is mystifying to me.
I had one cancelled (non-renewed) and 3 others frozen. The one's that were frozen were done so due to a credit mistake and I didn't realize the misreporting for 3 months. The same lender reduced the line on a cc by 75%. So I find it extremely hard to believe that people with a poor recent history are not getting these things yanked left and right.
pat,
I'm seeing alot of stuff going UC. I wish mris would update inventory.
gpat-
I believe you are reading the chart on slide 61 incorrectly. They are not adjusting for inflation, so the chart is saying that commercial properties have not increased in price in 10 years. Residential properties increased ~30% over this time, which is slightly more than inflation, but only by a few percent.
HB
I think the chart on 61 is inflation indexed, which matches what C-S
says.
all I'm saying is that Commercial is about fully corrected, and Residential still has air in it.
Commercial fully corrected because the Treasury wasn't bribing people to buy strip centers and apartment houses.
oops, mris is up to date! MLS is not.
pat,
I'm not in the business but my understanding was that lenders held off on foreclosures and let the commercial keep operating. Seems to have been a good move b/c from what I hear CRE has rebounded nicely.
And when things did change hands, the notes (debt) were sold - no foreclosure but write-downs none the less.
You would be amazed at the LACK of bargains available on CRE (unless it's crap in a crap location). I know people who have been trying to chase down 10 - 100mil+ deals for the past 3 yrs. Hens teeth.
contrarian,
I know of companies that got really burned on locking fuel costs.
http://franklymls.com/AR7492324
seems nice but 409K? $250/SF?
pat,
Is that with or w/o land value. I've got a place worth 500K with or without the 800sq ft "house".
I don't have my calculator but that would be darn expensive per sq ft on 800 (esp. since it's T-111 over cinderblock).
Want to hear about my lastest reo? Just found out yesterday that I got it.
href="http://cr4re.com/charts/charts.html?Delinquency#category=Delinquency&chart=CoreLogicNegQ3Fig4.jpg"
maaryland, virginia aren't great,
DC is a bit better
Pat, thanks but the link doesn't work. Here is a site that explains how to make links:
making links
chart
it seems there is plenty of neg equity
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