Reggie Middleton ON CNBC’s Fast Money Discussing Hopium in Real Estate

Note: For videos and embedded spreadsheets detailing NPVs of hiarcuts during the Portuguese restructuring, you will have to visit this post on BoomBustBlog due to formatting issues.

I made an appearance on CNBC’s Fast Money show yesterday.

It was
a very short clip on real estate, and the fast moving short clips are
not conducive to the communication of the thick, fact heavy style of
analysis that is common to BoomBustBlog, and yours truly. Nevertheless I
am quite thankful for the opportunity to share my contrarian views in
the mainstream media. Now that I have (quite honestly) issued my most
sincerest thanks, let’s attempt to remedy the shortcoming of the limited
amounted of time that I had. You see, after the 3 minute hit ended
there was a brief discussion of commercial real estate in which I didn’t
get to participate, thus I will take the liberty of doing so through
this medium.

Yes, commercial real estate has shown some marginal increases in the
last quarter, and REITs have been on fire. The issue is, many publicly
traded equities have detached from their underlying fundamentals. Let’s
reference “A Granular Look Into a $6 Billion REIT: Is This the Next GGP?” The following are excerpts from it:

Notice the loan to value ratios of the
properties acquired between 2002 and 2007. What you see is the result of
the CMBS bubble, with LTVs as high as 158%. At least 17 of the
properties listed above with LTV’s above 100% should (and probably will,
in due time) be totally written off, for they have significant negative
equity. We are talking about wiping out properties with an acquisition cost of nearly $3 BILLION,
and we are just getting started for this ia very small sampling of the
property analysis. There are dozens of additional properties with LTVs
considerably above the high watermark for feasible refinancing, thus
implying significant equity infusions needed to rollover debt and/or
highly punitive refinancing rates. Now, if you recall my congratulatory
post on Goldman Sachs (please see Reggie Middleton Personally Contragulates Goldman, but Questions How Much More Can Be Pulled Off),
the WSJ reported that the market will now willingingly refinance mall
portfolio properties 50% LTV, considerably down from the 70% LTV level
that was seen in the heyday of this Asset Securitization Crisis.
Even if we were to assume that we are still in the midst of the credit
bubble and REITs can still refi at 70LTV (both assumptions patently
wrong), rents, net operating income and cap rates have moved so far to
the adverse direction that MAC STILL would not be able to rollover the
debt in roughly 37 properties (31% of the portfolio) whose LTVs are
above the 70% mark – and that’s assuming the credit bubble returns and banks go all out on risk and CMBS trading. Rather wishful thinking, I believe we can all agree.

For those of you who didn’t catch it in the table above, I’ll blow it up for you…

You have to factor in non-market factors that have gone into
supporting CRE prices. We have government bubble blowing where you can
see where property prices were in a massive bubble, they rose and that
bubble popped, and they were artificially supported and that bubble was
partially reblown. Yes, the bubble was purposefully reblown, reference Buried
Deep Within The Files That The Federal Reserve Released On Thier MBS
Purchase Program, We Found TARP 2.0!!! More Taxpayer Money To The
Banks!:

We have conducted analysis on all MBS
sale and purchase transactions conducted by the Fed whose data was
recently released. Of the total 10,058 MBS transactions, 72% were done
at a yield of less than 5% (5% below yield of 4.0%, 32% between
4.0%-4.5%, 35% between 4.5-5.0%) with an average yield of 4.75% on all
MBS transaction. The table below presents the number of transactions
under their respective yield category.

We have also analyzed the yield on
MBS purchased and MBS sold, looking for price discrepancies between MBS
purchased and MBS sold. The data points out that the average yield on
MBS purchased was 4.71%, 29bps lower than average yield for MBS sold,
thus implying MBS purchased were at a higher price than MBS sold. You know that old government adage, buy high and sell low!

Yield on sale: 5.00%
Yield on purchase: 4.71%
Difference in bps: 29.1

Now, imagine this artificial suppression, both in the form of MBS
purchases (which are supposed to be over) and QE in the form of
Treasury Ponzi purchases, are overpowered by the market driven rate
storm brewing ahead. You also have the government looking the other way
at depreciating asset values, see FASB Appears to Have Bent Over For The Final Time & Accuracy In Financial Reporting Dies An Ignominious Death!!!:

The Fed, Barney Frank, et. al., and the
Treasury colluded to lift the prices of equities, real assets.
government bonds, and the derivatives based upon them to considerably
above their fundamental values in an attempt to reflate the bubble and
pull the country out of recession the “stanky” way.

A natural result of this is that banks can easily hide the true condition of their holdings from most investors. Reference The Financial Times Vindicates BoomBustBlog’s Stance On Goldman Sachs – Once Again! wherein I detailed this occurrence:

I declared insolvency throughout the banking system, and it looked
as if I was wrong for some time, then the truth’s ugly head started
peaking out. See The Financial Times Vindicates BoomBustBlog’s Stance On Goldman Sachs – Once Again!

Goldman Sachs
has revealed details of about $5bn in investment losses suffered during
the crisis for the first time this week, in a move that will deepen
the debate over companies’ financial disclosures. The figures, issued
as part of internal reforms aimed at silencing Goldman’s critics, show that the
bank suffered $13.5bn in losses from “investing and lending” with its
own funds in 2008. But Goldman’s regulatory filings and its executives’
comments to investors at the time pointed to about $8.5bn of losses
arising from its investments in debt and equity, as markets were rocked by the turmoil.

Hmmmm! I walked through this in explicit detail in “When the Patina Fades… The Rise and Fall of Goldman Sachs???“
and I did it without being privvy to Goldman’s financial innards. Long
story short, practically all of the major banks are lying about the
value of some of the largest assets on their books.

How many institutional and/or retail investors will be able to
ferret out such? Or more importantly, why should they have to? It is
the reporting company’s responsibility to report, not to obfuscate. The
big problem with this “hide the market marks” thing is that markets
tend to revert to mean. Unless said market values fundamentally
catch up with said market prices, you will get a snapback. That is
what is happening in residential real estate now. That is what happened
in Japan over the last 21 years!!! That’s right, it wasn’t a lost
decade in Japan, it was a lost 2.1 decades!

This has been the first balance sheet
recession that the US has ever had, but there is precedence to follow.
Japan had a balance sheet recession following their gigantic real asset
bust. They made a slew of fiscal and policy errors, which essentially
prolonged their real asset recession (now officially a depression) for T-W-E-N-T-Y  O-N-E long years! For those that may have  a problem reading that, it is 21 long years. What did the Japanese do wrong?

• They refused to mark assets to market
• They attempted to prop up zombie banks
• They failed to promptly clean up NPAs in the banking system
• They looked the other way in regards to real estate value shenanigans

I’ve covered this topic left and right, since 2007 after warning that
GGP was insolvent and bound to crash. I got into a tit for tat with the
CFO who called my research “garbage”. A year after that comment, they
filed for bankruptcy. See the whole story and over 700 pages of analysis
at “GGP and the type of investigative analysis you will not get from your brokerage house“

The retail investment banker Davidowitz had similar choice comments on this space: Davidowitz On Overt Optimism In The Retail Space And Mall REITs, Stuff Which We Have Detailed Often In The Past.

Listen up people, HERE ARE THE NASTY FACTS!!!

Real estate is a highly rate sensitive asset class. Capitalization rates (the popular method of pricing real estate) is explained in Wikipedia as:

Capitalization rate (or “cap rate”) is the ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value.^[1] The rate is calculated in a simple fashion as follows:

Without going into a CRE class, when interest rates go up, cap rates
generally go up as well and the value (or cost to purchase) of the
property goes down in sympathy unless the rise in interest rates is
offset by a commensurate or greater rise in net operating income. Now,
either everybody believes that unemployment is going to drop towards
zero  in an era of US austerity (reference Are the Effects of Unemployment About To Shoot Through the Roof? then see Budget Austerity: Goldman Sees Danger in US Budget Cuts – CNBC) at the same time that historically low interest rates that actually went negative are going to get lower (see the Pan-European Sovereign Debt Crisis) —- or cap rates are about to skyrocket. I’ll let you decide!

As you can see above, CRE drops in value whenever yields
spike more than the + delta in NOI. Looking below, you can see that US
CRE actually runs to the inverse of the 30 year Treasury.

That visual relationship is corroborated by running the statistical correlations…

The relationship is obvious and evident! In addition, we have
been in a Goldilocks fantasy land for both interest rates and CRE for
about 30 years. CRE culminated in the 2007 bubble pop, but was reblown
by .gov policies and machinations. The same with rates. Ever hear of
NEGATIVE interest rates where YOU have to PAY someone to LEND THEM
MONEY!!!

So, BoomBustBloggers, where do YOU think rates are going to go from
here? Up of Down??? Let’s ask Portugal or any of the other PIIGS group. I
have shown, very meticulously, how Portugal can not only afford the
path that they are on (record high interest rates) but the losses that
will come when they restructure (default) – for all to see. I have done
the same with Spain, Ireland and Greece (for subscribers only). See The Truth Behind Portugal’s Inevitable Default – Arithmetic Evidence Available Only Through BoomBustBlog followed by
The Anatomy of a Portugal Default: A Graphical Step by Step Guide to
the Beginning of the Largest String of Sovereign Defaults in Recent
History (December 6th & 7th, 2010). Be sure to carefully and
very thoroughly peruse the spreadsheet below to see the many scenarios
present that show the NPV of investor losses due to haircuts and
restructurings…

Please upgrade your browser

I discussed this in New Amsterdam a couple of weeks ago…

I definitely look forward to returning to the Fast Money Show so we
can hash this topic out much more thoroughly. As you may have been able
to ascertain, I have a lot to say on the subject

Interest parties may want to also read The
Coming Interest Rate Volatility, Sovereign Contagion, Geo-political
Unrest & Double-Dip Recessions: Here’s The Answer To Valuing Global
Real Estate Through This Mess. I will go in depth in Amsterdam (as well as presenting solutions) in a little more than a month, see www.seminar.ingref.com. Call the number at the link for invitations and tickets.

Comments

[moneymutt]

Well lookey lookey here....I feel another gloating posting coming our way from Reggies....litigation costs eating them up but not "material"....my arse

http://www.bloomberg.com/news/2011-02-26/bank-of-america-wells-fargo-see-fines-actions-on-foreclosures.html

[Boilermaker]

....Yea, and, as USUAL, the REITs completely reverse the last weeks losses in one single day as the IYR and RMZ raise over 2% even with a sad GDP miss and $100 barrel oil.

It doesn't matter what you think.  It's the same shit with the REITs.  They'll run the damn valuations to a million x earnings.  They simply will slaughter the shorts and put holders at will and without shame...daily.

[10kby2k]

Reggie--Thanks for fixing the chart Japans 'lost decades' (74% housing decline. I often draw parallels to Japan in my thinking (demographics, debt to GDP, etc.).

My big question : Is if the US is following Japan's path, why did the Nekkei crash and pretty much stay down (almost a similar 74% from peak loss --38K to todays 10K) while the S and P keeps holding up?

Try to get on earlier so you can get Aaron Burnetts #.

[eatthebanksters]

Reggie, I'm with you.  I have been in the commercial real estate business for 31 years...when interest rates rise, cap rates will rise....if you go to any book on appraisal and real estate valuation and go through the exercise of deriving a cap rate you will notice that all you are doing is deriving a risk adjusted yield.  If interest rates rise then correspondingly, cap rates will rise...this means unless there is a corresponding increase in net income that values for properties will fall.  It ain't rocket science.   BTW, those guys on CNBC are morons and will likely cost some people a lot of money...the only CRE assets worth anything are high quality, well located, core properties with credit tenants and longer term leases.  Any thing else is still on its ass.

[IQ 145]

 A hard working analysist, who deserves his clients. Agree with him, and you. CNBC is dangerous.

[AsIseeIt]

Reggie -

Additional ammo - James Grasskamp, a University of Wisconsin professor, is widely recognized by the institutional real estate players as one of the pioneers of bringing commercial/investment real estate into the institutional areana.  Using the Capital Assets Pricing Model (CAPM) of identfying a risk pemium over a "risk fee" yield, his research came up with a historical spread of approximately 400 basis points between "institutional grade" cap rates and the 10-year treasury.  Just a quick heads-up to some additional background information so you can draw your own conclusions regarding where pricing is today. 

[hardcleareye]

Good read, as always Reggie, Thanks

[Troy Ounce]

Reggie for President!

[hardcleareye]

+++++++

[Common_Cents22]

Good job Reggie, notice how they wanted to hurry and get you off the air.  The problem with getting the truth out is access to the media.  If you don't serve their purposes and message you will get little if any time.   If they have you back on be sure they'll have 2 or 3 people ready on the other side to counter, of course after they cut you off so you can't respond.  

Start ReggieTV channel w/ all your clips and do a daily video brief.  People are starting to wake up more and more and you'll get more exposure.

I think its time for ZeroHedge TV, alternative to CNBS.  I swear, it'd go viral in a hurry.  Someone like Glenn Beck could have some pull and be a champion for this idea at Fox.

[moneymutt]

you are really not thinking clearly if you think Beck, Fox is on side of financial truth. Both mainstream parties and both left and right MSM have been pathetic on exposing financial corruption, but please wake up and don't put anymore faith in right media to expose this anymore the rest of MSM.

If anyone in MSM has exposed financial corruption and the crap that is out there, it is Dylan Ratigan, a CNBD refugee, on MSNBC. Watch some of his stuff on 'net. He has done a million times more stuff than Beck. Shoot HuffPost has more financial critique of Geithner and Obama than any traditional conservative blog. 

This fight for rule of law, anti-corruption, anti-Wall Street, is coming from both left and right, while middle MSM and middle establishment politicians protect their funding source at all costs. Who got up in the House and pleaded and cried for Republicans to change their votes and ensure passage of TARP in 2008? It was Boehner, crying, begging for votes. 

Beck plays around the edges of financial stuff but never goes for it. What did he do with his rally, have everyone march to the Treasury building and ask for our money back? Nah, he talked about God. He is designed to riled you up and march you into a quagmire. Watch him, you will see this over and over.

[Judge Judy Scheinlok]

"Someone like Glenn Beck could have some pull and be a champion for this idea at Fox."

Didn't Beck get his radio show pulled in NYC?

A pro-israel supporter who got his radio show canceled in jew-york city?

I'd say he lost his pull, wouldn't you? Maybe you should campaign for Mish to be the anchor of ZeroHedge TV.

[Common_Cents22]

Ouch that hurt! ;)

[Zero Govt]

ZeroHedge TV sounds like a good idea... Reggie could be the CNBC equiv' of Steve Liesman... he'd have to put on some pounds mind, Reggie start super-sizing yourself, get on the pies 

[savagegoose]

just when i think its business as usual, some report like this smacks me upside the head.

yeah businee is as usual, and its totally fucked up.

[ebworthen]

Good job Reggie.

You laid out the most important facts clearly; which may put a crack or two in the veil of icy delusion encrusting the windshields of so many.

I love how Terranova jumps on the REIT's and pumps them; is it delusion or is he getting a kickback? 

No doubt the TBTF banks and the FEDs would LOVE to see Pension funds and retail investors pile back into REITS so they can then dump the junk; that is why they have been propped up post collapse along with the rest of the markets.

[dumpster]

 Judge Judy Scheinlok
on Fri, 02/25/2011 - 15:34
#997810

is that judy smuck..

what do you do . besides foam at the mouth. and wheel donuts into the mouth along with a side of spit

so every time you turn on the lights and get blasted by GE bulbs

you jump in with the enemy

and fly in airplanes with GE powered engines jump in bed with the enemy/

smuck

[JW n FL]

some people are stuck leasing thier engines from them... some people are stuck getting thier planes foamed by GE... that they bought from GE... that GE then insured... OUCH!

[Judge Judy Scheinlok]

Hello Creggie, it was so, so, so great to see you on CNBC[actually I do NOT watch that shit]. Wow, you're a movie star. Manipulated media darling. Are you going to have dinner with CNBC super agent Sal Weinstein and Jayzee @ NOBU tonight? I'm sooooo impressed. Wow.

You da man, bra. You go dawg.

[Common_Cents22]

Judy, you are just pissed that Reggie didn't call your daughter back after he banged her.

[Judge Judy Scheinlok]

Ouch, that hurt. Please say you're sorry.

[JW n FL]

Reggie if you are ever in South Florida and in the mood for some Sushi at Nobu... http://www.oneluxuryhotels.com/index.php Dinners on me for the Bang Up Job that You have done to spread the truth to any and all who would listen!

[gordo]

Reggie..

you're late to the party.. I've been talking about this since 2000...

My grandmother has a home in the Beverly Hills of Tokyo

going for 20 million in 1987

now 3 million...

we will see another 50% drop in US home prices in 5-7 years easy...

also another thing you missed.

Case Shiller does not include foreclosure, reo or short sales data.. so it's

all a lie...

the rest is conversation

[moneymutt]

ummmm, Reggie called the housing bust right on, irght before it happened, and called Lehmans failure 6 months before...don't call someone late to a game if you don't know when they arrived.

And Reggie has made your point about Case Shiller many times on his blog and here at zerohedge with lots of data, anlaysis and graphs to back up his assertions...its pretty stupid for you to claim he is missing this...you are pretty full of yourself to think no one else here knows this stuff and Reggie doesn't either...do you assume you are smartest guy in the room always? wrong assumption buddy

I'd be completely embarassed if I were you, but you probably don't have enough sense to feel shame when you should...

[gordo]

I basically emulated the writer's writing style to prove a point.. you did that for me..

nothing new or original here except for self-promotion..

and if you want a friend, get a dog...

hmm....

[moneymutt]

Reggie has never said no one else saw housing coming, he never dissed on someone that says same things as him, rather he has said this blogger smarter than Wall Street, a bit different than saying "this commentor smarter than Reggie" as you did....because Reggie has been right and Wall Street wasn't, so you dissing on Reggie for not being right, for not being on time looks pretty silly to me, not like Reggie at all.

And your comment about dogs and friends seems to mean in your mind I'm objecting to negative comments and criticism in general, which clearly I am not. I'm objecting to your fact-less, out-of-ignorance comment, as if Reggie has never mentioned CaseSchiller flaws, as if he just started now, late in game, making these calls. Reggie may be a bit bombastic and may make some calls other contrarians have also but it does not mean his critiques of MSM/Wall Street are as fact-less as yours. When Reggie critizes Wall Street/CNBC he at leasts knows their body of "work", so you were not emulating Reggies style at all, nice try to cover yourself tho... 

[gordo]

Reggie's posts are me..me..me... me and just in case you forgot. oh yes me!

That we are going the way of Japan is old news... really old news.. that's a fact.. but if you think it's new, timely and different go for it...

I call BS when I see it... and I'm calling BS..

btw, I like dogs...

[moneymutt]

Please, little ole me, I saw housing crash coming too, so did Schiff, so did patrick.net, so did MISH, so did many, but why exactly should I hate on Reggie because he saw it too and put together lots of thorough evidence and analysis to back up his case. You act like he just showed up.

[dumpster]

by gordo
on Fri, 02/25/2011 - 15:27
#997791

well put a couple of gold stars on your forehead.  and who gives a shift what you have been saying since 2000,, prices rose into 2004,in the usa ,

reggie had three minutes dude , 

he has covered all of this in prior posts

and give  a link to your warnings of 2000,,  

[Magua]

Like your work Reggie, but as a retired long reit fund manager, an important point in determining whether a reit will fail, is not only how much debt there is on the property, but also how much debt there is at the corporate level.

Quite a few reits, especially mall, hotel, and office reits will negotiate with the lender on a particular property, and if that lending institution won't move enough to make the property a positive cash flow generator, the reit will just give it back to them, called "throwing them the keys."

GGP had another more serious problem beyond high debt to property value, they had significant debt at the corporate level, that was syndicated.

When it came time to try to negotiate a restructuring, there was really no one who could represent all parties. Unsecured debt at the corporate level is a reit killer.

The reits and the banks now know that, which is why reits, despite their massive equity raises, still faced reduced lines of credit at higher rates in 2009 - 2011.

As far as loans to value going forward, the 50% level you mentioned is the base. From 50% to 75%, a different type of lender fills the gap, and even the federal government has stepped in as was the case with DDR's debt restructuring.

Reits are really resilient to failure because the stable (historically) nature of their cash flows. It really takes very bad management foresite to load up on corporate level debt. GGP is the prime example.

[P-K4]

Simon says "Lie about the housing recovery and don't use facts." Reggie used facts and told the truth. Simon says "Reggie's out of here!"

[stkboy]

How old is this Judge Judy? You sound like an idiot teenager

[stormsailor]

how can the treasury and the fed reserve keep so many plates spinning in the air.  

its amazing,  they are a world class circus act.

[moneymutt]

I know, I had finally decided in 2008 it would never crash, even tho housing had, evne tho manufacturing in toilet, even tho oil$140 barrel...but it finally did...this too will crash, its just never when we think it will.

[topcallingtroll]

Yeah it is bad out there in cre land.
It is so bad that I got a 1000 square foot office at 500 per month for three year lease in a great location. Their willing to sign a three year lease at about a 50 percent discount from what they projected to investors who bought the building shows the world.of hurt small professional office real estate is in, at least in my area.

[IQ 145]

 Also the case, here; (hawaii). Good indicator. "it's an ill wind indeed, that blows no man some good"; from the days of the sailing ship.

[Rick64]

Reggie you never answered their question.

 Should the banks be allowed to foreclose on people?

[Monday1929]

It was a trick question. Reggie wisely did not waste his few seconds on trying to answer it. There are obviously some cases where.... F--k it, F--k the banks, NO they should never be allowed to foreclose ever again on anyone and they should burn in hell. I guess it's  good I wasn't being interviewed.

[moneymutt]

agreed Monday, well said

[topcallingtroll]

I dont know what reggie would say but let me ask a hypothetical.
Did you sign a mortgage?
Did you agree to make monthly payments?
Are you making those payments?
If you answered yes yes no then if I were
god you would be thrown out on your ass.

[hardcleareye]

TCT, agree with you, (if you are going to be stupid you had better be tough) however, lets look at the "complete" picture.

Did the bank review the income/credit worthness of the person signing the mortgage, to assure that the note would and could be repaid? 

Did the bank request that the mortgagee put down a nice chunk of equity to assure that the mortgagee had some "skin in the game"?

Did the bank do an realistic appraisal on the property to determine it's "distressed" resale value, in the event that they had to foreclose, so the loan amount plus cost of foreclosure could realistically be recouped?

If you answered no, no, no, then if I were God your bank CEO would be in jail and your bank shareholders would lose their money..........

The banks, first and foremost, had a fiduciary responsibility to make sure this kind of shit didn't happen........

I see people getting "wiped out" because of their stupidity and greed (and that is unfortunate, but they used bad judgement), but I don't see bankers going to jail.........

[moneymutt]

good points...I used to just think we all just had housing hysteria and got stupid, indivdual consumers, lenders, regulators etc.(which is basically true)....but now I have read the internal email discussions of those packaging mortgages in MBSs, those that created derivatives, those brokers that were so incentivized to create loans they lied about mortgagee and lied to them and tricked them. Since I've read this stuff, I now know they, these lying thieving, greedy fraudsters KNEW, they all KNEW they were creating/packaging crap loans. They all knew it would come crashing down, long after they had made fortunes. They wanted crap loans to keep making huge money in short term. They bet against their custopmers and their clients. They packaged crap, sold it and then made financial bets that said crap would indeed turn out to be crap.

It was not just the ever-increasing price of housing that encouraged them, it was their realization that the credit worthiness of the those being lent to, did NOT matter to them. Volume was the thing that paid. Average Americans became their straw men in this fraud scheme. While average Americans figured that in worse case scenario, if they couldn't keep up with mortgage, they'd sell at or above the load, the mortgage packers knew this was a whole bunch of garbage that would start stinking and decaying soon enough, but they were making fortunes, so they did not care. It's all there in their emails, they admit to knowing. They weren't deluded about always increasing housing market, they knew it was crap. It's all there in the testimony of whistleblower mortgage brokers that routinely saw colleagues hold altered mortgage documents up to windows and copied peoples signatures etc...

I also used to think it was bad no one was pursuing fraud because very guilty people were escaping prison. What I now think we are missing due to lack of law enforcement is: a BIG PUBLIC TRIAL. Imagine if Mozilo was on trail, on TV everyday like OJ. If Americans could see how these financial types freaking knew what they were doing, and how they used average working Americans as canon fodder in their battle to steal everyone's money, from investors, from pensions, and from taxpayers, from consumers, from us, if this all came out in a dramatic trial, if people knew how much the financial guys knew, if people knew how much intentional fraud was perpetrated on us....then public opinion, public perception would be reset, and all this crap would be stop tomorrow and we would insist on a return to rule of law and simple, clean,transparent financial and property markets.

The guy that nails shingles on a roof, retails sports equipment, fixes air conditioners, builds plastic part, he's good at his job, but he did not get a good big picture of the financial loan world, all he knew was houses kept going up, and he bought what had, for 70 years, always been a solid investment. The bankers knew, the mortgage packers knew, the mortgage brokers knew; it was all crap and a house of cards. Those that knew and who lied and frauded their way to fortunes are a million times more guilty and responsible than some working joe that walks away from a underwater house. l

[Rick64]

 If you were me then you would have been living within your means for most of your life and would have little risk of ever defaulting. Having said that I would require the banks to register all mortgages with the county clerks according to the law instead of circumventing this process before proceeding with any foreclosures that aren't properly documented. On top of this each bank should pay penalties for breaking the law.

[JW n FL]

Let them (the Bank) show you a wet copy of your mortgage... then prove where they got it...

if they can do that, if MERS didnt touch your mortgage... get a good lawyer and let the legal system handle the rest to the letter of the law..

but if MERS was within a fucking 1000 miles of your mortgage... it is illegal, says the Federal Judge above.

http://4closurefraud.org/ guy who is here with us.. has all the docs you will need to defend yourself and a great many should be thankful for him!

[Rick64]

 Thanks but I am in no danger of defaulting, just wanted Reggies opinion.

[dumpster]

as an aside it is not against the law to default a mortgage.  In Fact the NRA just defaulted on their great big new office bldg .after their president castigated the peons from doing the same. 

When a person signs the papers he puts the house as collateral ,, no sin of giving the house back , 

this idea dont walk away is so archaic.. business does it every day,

both sides to the contract should realize the risk ,, the banks do,  

[GreenSideUp]

Um, not a whole lotta risk to the bank when they essentially create money out of thin air and secure it with a home.  "Homeowner" defaults-->bank gets house-->bank resells house-->sounds like a profit making venture to me! 

[JW n FL]

sorry Bro... my bad.

[JW n FL]

***** " The Court recognizes that an adverse ruling regarding MERS’s authority to assign

mortgages or act on behalf of its member/lenders could have a significant impact on MERS and

upon the lenders which do business with MERS throughout the United States. However, the

Court must resolve the instant matter by applying the laws as they exist today." *****

UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF NEW YORK

Case 8-10-77338-reg Doc 41 Filed 02/10/11 Entered 02/10/11 14:13:10

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I dont owe anyone else a Mortgage... for the record.

[kengland]

I would like to see a sensitivity done on each .25 basis point move in rates. It will be a freaking train wreck at 7.0%