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A Few Pictures Are Worth A Thousand Mortgage Mods
Deutsche Bank - "By Q1, 2011 a projected 48% of total mortgage borrowers will have negative equity."
Nuff said.
The only question is when will Deutsche Bank give Karen Weaver the Rosenberg treatment.
Source: Deustche Bank, Drowning in Debt – A Look at
"Underwater" Homeowners
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Sucks for them..... Why be worried about inflation when prices just keep going down, down, down!?!?
I guess that's just home prices though. So nevermind.
Hugh Hendry sez it's everything since there's a $12 Trillion credit hole in the economy and be cause of that the Fed must create money like crazy. Hmmm.
CLICK THE ADS, SUPPORT THE SERVERS...
way cool
Yes, but 30% of homeowners don't owe ANYTHING on their homes. These are the scum we must destroy. How TD?
Most of them are over the age of 62. Can you say "reverse mortgage"? Sure, I knew you could.
They're overwhelmingly elderly. Again, Obamacare rationing will provide the answer we seek.
rationing? of what? here is a hint: the vast majority of the elderly are already on uncle sam's health insurance plans.
rationing? of what? here is a hint: the vast majority of the elderly are already on uncle sam's health insurance plans.
rationing? of what? here is a hint: the vast majority of the elderly are already on uncle sam's health insurance plans.
please post the exact same thing once more!!! oh wait, jesus rose from the dead after 3 days, so i guess you were going for one post for day in the tomb.
Obamacare will kill off the eldery and re-distribute the fully-paid for homes to those unwilling/too lazy to work
If 30% don't owe anything on their mortgages, and 48% will owe more on their mortgages than their houses can be sold for, then only 20% have "sensible" mortgages. Two and a half times as many mortgagees have "gambling" mortgages as have "sensible" mortgages. What can people be thinking? Maybe we ought to start making home-ec a required course to finish high school.
You're mixing categories. No one's talking about homeowners with *no* mortgage, so your mathematical assumptions don't work.
Karen's work has always been fantastic. Great to see it on ZH!
we havent seen nothing yet ...
WOOOOOW ... looking closely to the map all i can say; Goodbye Florida ..
California looks much worse. So CA, FL and AZ in that order (although on a dollar for dollar basis, AZ might come in fifth or sixth).
dnarby, please check out that graph one more time; who ever wrote this report has either a bad case of dyslexia or is simply retarded. As you said the states with the highest percentage of underwater borrowers are CA, FL, AZ, and look what has this genius wrote " The highest percentage of underwater borrowers is located in the North-East" well if I'm not going blind, and I'm not, the largest percentage of underwater borrowers is located in the Southeast and Southwest .. OK, I'm maybe pissed of for no apparent reason, but the people who did this report should really double check it before releasing it to the public ..
Northeast has a greater number of homes per acre than SoCal. Same w/ Fla.
yeah, i get that, but what the hell does that got to do with the total sum of homes/borrowers that are underwater ... i don think NYC has more defaults than LA or SD or SF ...
I'm guessing that DB thinks the east coast has not yet seen the RE bubble deflating. My presumption is based on DB's similar projections for the Metro Denver area, which to date had seen only around 5% depreciation so far (don't quote me, this is my last recollection of Case-Schiller data). My brother is a RE broker there, and his take is that there hasn't been much general decline, isolated circumstances notwithstanding. DB seems to think it's coming.
that's what puzzled me also about this report. i mean it is a well known fact that some parts of the east cost have bigger concentration of prime borrowers and higher income than the rest of the country+large metropolitan areas are not hit by the same price deflation and equity depreciation + CRE, despite of 2008, has not lost so much of its value. Particularly the NYC metropolitan area. And i think that the people from DB got it a bit wrong. If the situation in the financial industry sees further improvement some people who lost their job in 07 and 08 will be re-hired and will become qualified for RE loans. Again, I'm only talking about NYC, DC and Phil. area here. Plus if the dollar fells further you can expect for the foreign investors to pick up some valuable NYC real-estate. And while the rest of the country is tittering on the verge of a motherfucking black hole, i think NYC and the most part of Northeast will do just fine. Never underestimate the greed of the people and their financial power to buy some RE.
Well, out of general kindness, I hope you don't see the cycle I've seen in a western US boomtown. Lots of recent subdivisions with one house in them, some occupied, some not. Took a three hour tour of recent local develpment, saw one new house under construction, lots of for sale signs, lots of foreclosed-looking properties. Not pretty, looks like a multi-year supply of pre-builts and bare lots. DB must not have local contacts; they list the area as <15% underwater in 2011. Hope we see the recovery they do; there's more than that now.
Thank you for your general kindness, and good wishes my good man, but i don't have that problem, see, I'm in Europe ( Swiss ) and here there is no such thing as home equity loan, over-leveraged consumer, massive credit card debt, massive over-supply of homes, CRE urban jungles, there is no heavy taxation ( neither on corporate, or personal level ), there is no governmental intrusion on the free market principles ( I'm not sure we have any markets except for banking, chocolate and skiing ) ... So I'm doing pretty good ... but, again, thank you for your good wishes, and i wish you the same ..
She was just on with Erin go Braless and said it will spread by 2011 to the Northeast !!!
i miss U so much. plus, don't care so much for chocolate or banking but love skiing.
but really like your kindness your heinass
They're comparing to the current market, which isn't really helpful without that graphic. The idea being that more red spots are predicted to emerge in the NE
I still think the stock bubble is a MUCH, MUCH bigger issue than real estate.
I think the derivatives bubble is much bigger than anything real.
second that...dooms day will come at once like tsunami, history books are craving and mankind will remember this for thousands of years to come.
The interest rate swaps are on deck...swinnnnnng batter...swinnnng
Interesting that the areas closest to large bodies of water are projected to be the most underwater.
>30% underwater projection = rogue wave lifting REITs today
SRS crashed today while the market was down. Someone is scrambling, pick pocketing everyone on the deck of the titanic before taking off in their helicopter to the shore. Or someone is acting on insider information related to a new bailout.
Without any oversight or logic, I would recommend getting your money out. This reminds me of the first hand accounts of Weimar Republic - the stock market took on a wild casino like speculative mood where participants bet it all and it became separated from reality. This is not investing, this is mania or panic or both. When the asset pump musical chairs stops, will liquidity exist to get out or will the bots front run you out? Will the exchange just shut down with your positions in & out of the money? Keep an eye on food prices at the grocery store and look for supply disruptions (emptying shelves).
I guess Obama can alway blame it on global warming.
Yuk. Yuk.
You guys are really funny, Obama is a bloody narcissist
He will take us down to another war, VIX is telling me that...
Living outside the U.S. (Europe) I'm just curious about the extend of blame for the Obama administration on this site. I can understand the criticism his administration gets for the blatant complicity in funneling taxpayer's money to large banks and their employees. I can also see the concern about the administration's monetary policies. What I do not understand is the ongoing sarcasm about the impotence of "the people" with regard to ostensibly failing politics of the federal government and the recurrent suggestions that the "natural laws" of the market would do a better job at solving the problems than the current massive government intervention. WTF? Do you remember that you just rid yourself in a landslide election from the absolute morons that got you into this mess? Do you still believe that the "market" dynamics of the past centuries had anything "natural" or consequential in them? Can you suggest any other responsible avenue of political action that would not be equally morally hazardous than what Obama is trying to do? I am not saying give the guy a brake. He's your president, his economic politics should be challenged by the financially literate. But bullshit like "the guy is a narcissistic and will start another war"? Remember Bush? Reagan?
Never let a crisis go to waste. - R. Emmanuel
That's why Obama is worse. He has a plan.
Polish hummer : good one.
to you the "EHYM from Europa", I think you are undercover obama girl.
common don't lie.
sorry to break it to you you job is over. go in peace.
Why so pessimistic? REITs are still a great value! After all, the risk of implosion has been far removed now.
UPDATE 1-FelCor Q2 FFO falls 61 pct, cuts '09 view
Wed Aug 5, 2009 5:24pm EDT* Q2 FFO $0.30/shr vs year-ago $0.78/shr
* Adj Q2 FFO $0.33/shr
* Sees 2009 FFO $0.74 to $0.86/shr
Aug 5 (Reuters) - FelCor Lodging Trust Inc (FCH.N: Quote, Profile, Research, Stock Buzz) posted a 61 percent drop in second-quarter funds from operations and cut its 2009 outlook, citing continued deterioration of lodging demand.
"We remain cautious, as the timing of the recovery is difficult to predict and visibility into future demand trends remains low," the company said in a statement.
FFO fell to $19.3 million, or 30 cents a share, from $49.4 million, or 78 cents a share, a year ago.
Adjusted FFO was 33 cents a share.
Analysts were expecting FFO of 39 cents a share, according to Reuters Estimates.
Revenue per available room (RevPAR) decreased 20.6 percent during the quarter.
For 2009, the company now sees adjusted FFO of 74 to 86 cents a share on RevPAR decline of 15 to 17 percent. It had earlier forecast 2009 FFO of 76 cents to $1.
It's a steal They'll probably top their earnings estimate every quarter from no on - forever
Bingo ! If a 50% return since March on financials isn't enough, I won't care about them when they ride it back down just as fast, which it will.
I don't know if DB's graphics guy was intentionally being ironic with his colour choices, but isn't it eerie to see the states that voted for Bambam ("blue states" in political terms) are coloured in red, while the states that mostly supported McCain ("red states") are in blue.
Maybe those voters knew the proverbial was going to hit the fan, and trusted Bambam more than McCain to help them deal with it. Too bad they didn't know he was going to bail out his friends at GS first.
Probably not. The blue to red gradient is a standard option in most GIS packages, and red is universally understood to be bad.
The mafia and richest elite are making the money in stocks and jeopardizing the economy. Real estate is simply not that overvalued and there are many different solutions and it is systemic involving many people on an equal level so there are political ways out of that.
Stocks is where the corruption is. Stocks is where all the rampant speculation is. People simply are not all that wrapped up in real estate right now. That is a fact.
It would be interesting to find out which of these states have non-recourse statutes and which are full recourse... just to see how much more private wealth may be lost when more of the negative equity mortgages implode.
Here you go:
Anti-Deficiency / Non-Recourse States:
Alaska
Arizona
California
Connecticut
Florida
Idaho
Minnesota
North Carolina
North Dakota
Texas
Utah
Washington
http://www.helocbasics.com/list-of-non-recourse-mortgage-states-and-anti...
Very cool... thanks...
At least in these states : people ought to just walk away from their underwater mortgages as a matter of principle. That would be a better form of protest than breaking your printer with a baseball bat.
The amount of security one has to go through to see the goings on in the US mint and yet all that cash is handed over to Wall Street to swindle.
Gallop Poll: Consumer is confident
http://www.upi.com/Business_News/2009/08/05/Gallup-says-consumer-outlook...
He He
I like Marla's plan of selling California to China.
Is there a way we can break it off CONUS and float it across the sea?
Any more earthquakes in the Gulf of California and you may get your wish...
California and Florida Foreclosure Tours for Chinese...Huge success......ironic that they are using your Target/Wal Mart savings to buy your foreclosed home...
Can we please give them Fla. instead and let em figure out how to get it through
their newly acquired Panama Canal.
I've reported this site to flag@whitehouse.gov - gotta run now. When I get to 100, they've promised to promote me to lieutenant. The Obama Youth corps rocks!
Oh good I was wondering when someone was gonna report us. I already got a letter from ETFS bitching about my report. If I can get a letter from Turbo Tax Timmy or Rahm Failwahle i'll consider myself in the big leagues.
Watch. Listen. Report Dissent.
I turned myself in already. Seriously sent an email to the bastards and directed them to my website.
Awesome! Thanks for being so cool about it. Oh, I asked Marla to set up PM so I could send people like you a cool Gold star. You can wear it for your own protection - PLUS it helps the environment. I've never felt so über-awesome!
Oops... I am SO sorry. I'd gathered all of my new Gold star buddies together to teach them about the total awesomeness of Obama's health care reform - when some DODO HEAD tripped the gas main. I am totally bummed about it.
Lies! The economy is getting better each day and Team Obama and GS should be thanked for saving the United States from disaster!!
Please remember that negative equity as per recent correlation studies is approximately the moment when borrowers start mailing in the keys
Hey - all the Gold star people died from the gas leak at the seminar :( I hope nobody blames me! That's so uncool.
Ah well, the next train is coming in - gotta go meet and greet! Obama's health care plan is totally awesome and stuff. I wish people wouldn't protest against it - then we wouldn't have to load them up and teach them to concentrate on all of the GREAT things in the plan...
Dammit, Rahm tripped over the gas main... AGAIN!!! I'm starting to think he's doing it on purpose.
I'm all about mailing in the keys -- the debt is illegitimate and fraudulent.
Yep, time to be as "aggressive" with the defaults as the banks were with the loans.
Last recession the Fed and its member institutions mailed everyone a few credit cards. This time they decided to just mail the cards to themselves.
BTW, before mailing the keys make a copy and have them available to the those that are challenging these folks. It will be a 1-3 years before the bank does anything with the property anyway and sooner or later the Fed will make the government crack down on those of us who dare to challenge their collective wisdom with facts. It may well sound like Iverson discussing practice.
It is referred to as Odious Debt meaning that the lender knew or should have known it could not be repaid.
We are witnessing a modern day Jubilee.
Keep watching FHA. It will implode.
on a side note, Taylor Bean shut down the pipe today. they were a big player. the article on bloomberg is a worthy read.
No kidding - I need to check that out. You're right, TBW was a big player - typically beating the pants off any other prime lender out there and paying a decent yield spread to boot. I've been out of the game for a few years but I thought they may hold their own. Rigid guidelines, no deviation, solid on documentation. F*ck it - time to send in the keys!
Wowzers.. i reckon that in 2 years the red blobs will be a few times larger than they are now
AWESOME! Obama has officially opened up Summer Camps to help people concentrate on the benefits of his health care system. He's our bestest President EVER!
I'm going out tonight to check with my neighbors to see where they stand, so I can maybe sign them up.
flag@whitehouse.gov - Because the enemy of your enemy is your BFF! So what's going on with finance today? I hope it's more good news!
Why is this site still up? I already reported it :( Ah well, I guess these things evolve slowly over time, warping into something you never expected.
Or were Germans just really mean people? I think they were. Yeah, we're way smarter and better than them.
I plan to flood the White House "flag" email address with Obama's own press releases. Afterall, the ideas are all crap. I doubt they would see the humor/seriousness of the message.
Maybe they would shut it down if enough people spammed their Gestapo/Stasi asses. "Hey... spy on your neighbor and we'll give you a Trabi Ford."
Maybe spamming the "flag" address would be a good 'Project Mayhem' task?
I bet these low life Chicago Cock Suckers will feel the Heat, pull this Operation back into the dark, and continue submarine warfare as usual.
This Flag shit is just the ugly exposed head of their Info War. The subterranean operations are hideous..
The housing market is a great reflection of how fractional banking effects the society in which it operates. All we need to do is apply the glide path on real estate from 2000-2011 to what every other market the fed and its member institutions manipulate to get a decent guess of future economic activity.
When you are out of altitude, airspeed, and ideas, a crash usually follows. It will be a miracle if it is just a hard landing.
The only part of Florida that isn't red is the everglades.
Word...that's a fact. And a lot of the red used to be everglades thanks - or not - to the Army Corps of Engineers.
hilarious
LOL. and the only part of California which isn't red is Mexico ..
Can we get a larger picture? I am more interested in MA and it looks like western mass and south shore are hosed but north shore isn't?
MA has been F'ing themselves for years. Won't be surprised to see the whole state flaring red soon. If you're in MA follow your brethren north to NH - the Mass effect is spreading like HIV in an African village there...
This is an underestimation. Think musical chairs with 8 chairs and 10 million people.
Scan some of the media reports this week and you will see a buildup of a viewpoint: Most of the mortgages that are in trouble are where people pulled out equity to finance their greed for stuff - the tenor of studies is that their greed needs to be punished. Those kind of articles are a warm-up to lobbying for legislation to revoke non-recourse. The banks nightmare scenario is people walking away in droves from underwater-dead end mortgages.
It's an old case but still relevant.
Note, this is more of a legal analysis than finance related.
UCC Article 3 and all that fun stuff.
MERS v. Cabrera
http://debtsofanation.blogspot.com/2009/08/debts-of-spenders-mers-v-cabr...
I find it amusing that this is such a good inverse of the Election "Red vs. Blue" map (red here vs. blue on election):
http://elections.nytimes.com/2008/results/president/map.html
That's actually pretty interesting. I'm not sure if there is a correlation but it's seems more than coincidental.
I should have said to click on the "County Bubbles" box on the left side of the page (it didn't change the link, and it I can't seem to edit the comment).
Now I find it amusing to click on "County Bubbles" to compare vs. the Housing map. Couldn't be more aptly labeled.
The only problem with that map is that nobody lives where it's white.
'cept the white people.
CLICK THE ADS, SUPPORT THE SERVERS...
So much for that Fuktard Cramer's housing bottom...
And all the other Shit Weasels pushing Green Shoots.
Is the full DB report online anywhere? Couldn't find it.
Congratulations again TD; Reuters picked up on this and wrote a piece on it ( http://news.yahoo.com/s/nm/20090805/bs_nm/us_usa_housing_deutschebank ).
Other media linked it, and it's on the top of Drudge at the moment.
Great work Karen, if you read this. Probably top financial piece for the overnight cycle.
What's the big deal?
More than 2 years to prepare for a reset with new currency, no debt and all that.
Has been done before and those countries are still functioning today.
Maybe America has a chance to export the fraud banksters and corrupt politicians right with their debt to China. At least the Chinese are not dicking around with corruption. Executions and all that good stuff.
from a red area, in southeast Louisiana. everything I see in this area , confirms the information I've gleaned on this site, that's why I'm short re, albeit much to my detriment. the retail space bubble is overwhelmingly evident, new strip malls that have never had a tenant since being finished two years ago, a public/private retail behemoth that has been stopped for six months or so, although the public money has been spent on road infrastructure, and condo units that are listed for sale, stating completion date of fall of this year that hasn't even been started.
Home owners need an insurance market to buy put protection.
Underwater is a neccessary, yet not sufficient condition for walking away from the house. Generally need a second, exogensous shock, such as job loss, family issue to force homeowners to walk away. That said I am sure a lot will be in that exact position. Consider us lucky that we dont have mortgage top up provisions like they do in parts of Asia. When the value of the underlying asset falls below a preset LTV you must add equity. Big ouch!
Cheers
I am not sure if you guys truly understand this issue. Those stats are heavily misrepresented. They are correct but misleading.
We are forgetting that most of these homes that are underwater were investment properties, meaning the owner never lived there or planned to live there. Like us trading Ford or most likely options on ford when we know we will never drive one
Now still with me?
Its like a structured product in witch you are guaranteed the principal but you have a chance also in participating in the gains. You buy a house at 100% ltv your losses are min worst that can happen is zero profit (risk you would take on a ETF wouldn't you)
But the market crushed and there is no gain to participate in.
What you do, you say oh well at least I did not loose anything and you walk away.
Stop patronizing these guys they did what you do day in and day out.
But what this means is that this stats should be divided according to o/o and n/o/o rules. I have a feeling FL would look less red more off white or pink then. While MA would then be more Red'ish, so would CT in comparison.
What would that change? lots I am sure you will agree.