Question, which of these 4 don’t belong:
- HIV.
- Herpes.
- Gonorrhea.
- A condo in Surfside, Florida.
Answer: Number 3, Gonorrhea, because you can get rid of Gonorrhea.
Category: Real Estate
Nope, No Racism Here
Carlette Duffy decided to get her home appraised, and though that her home was being low-balled because she was black, so, she got another appraisal and had a white friend pose as her brother, and that appraisal was more than double the previous two.
Even if you do all the right things, you pay just for the color of your skin, and this is a fact.
People who claim that racism is over because of Obama, or the Easter Bunny, or whatever, are full of crap:
A Black Indianapolis homeowner who had a nagging suspicion that her house was lowballed in two appraisals last year went to great lengths to conceal her race in a third. She removed photos of herself and her relatives and had a white friend pose as her brother for the appraiser’s home visit.
The result? The appraisal of Carlette Duffy’s home more than doubled.
Duffy’s home, which was assessed by different companies last year, was first appraised at $125,000, then $110,000 and finally $259,000 in November, according to the Fair Housing Center of Central Indiana. The nonprofit announced this month that it had filed housing discrimination complaints on Duffy’s behalf with the Department of Housing and Urban Development.
If you don’t think that bigotry and racism is an ongoing and pernicious problem, you are a hypocrite and a moron.
He is an Evil Son of a Bitch
I am referring to Charles Koch, who has been lobbying for increased evictions relaxed regulations while investing in real estate.
The famously Libertarian Koch, whose family fortune came from selling energy technology to Stalin, is engaging in a classic case of rent seeking behavior, basically being a leech on society by the definition of Ayn Rand (יִמַּח שְׁמו) who Charles Koch is a big fan of.
I guess it’s capitalism for thee and socialism for me from him:
Billionaire Charles Koch’s foundation has bankrolled three conservative legal groups leading the court battle to eliminate prohibitions against tenant evictions during the Covid-19 pandemic in America.
At the same time, Koch’s corporate empire has suddenly stepped up its real estate purchases during the pandemic – including making large investments in real estate companies with a potential financial interest in eliminating eviction restrictions.
………
But since the Covid-19 pandemic began, Koch Industries has been plowing money into real estate.
In March this year, the Wall Street Journal published a report headlined Charles Koch Is Betting Big on Distressed Real Estate. The paper reported that the billionaire’s corporate conglomerate “is emerging as a major real-estate investor during the pandemic, using its robust cash reserves to buy properties at beaten-down prices and betting on a longer-term recovery”.
I might suggest that Mr. Koch arrange for burial at see when he passes on, because the line to piss on his grave would be awfully long otherwise.
Quote of the Day
Look, is the seller a vampire?
No, not that I’m aware of.
If he was, would you be allowed to say, or is there some kind of realtor privilege?
Well, in real estate we talk about the property, not the people, because of housing discrimination.
Oh, that’s a good point. I don’t know if vampires are a protected class.
I’ve learned in fair housing seminar after fair housing seminar, you do not talk about people. You want me to tell you how many square feet or how long the driveway or what it looks like inside, no problem.—Slate, interviewing a realtor trying to sell a vampire-goth themed house in Baltimore.
The listing is linked to in the article, and it’s a trip.
Pass the Popcorn
Without comment, the Supreme Court has rejected Donald Trump’s bid to conceal his tax returns from the Manhattan prosecutor:
The Supreme Court on Monday rejected former president Donald Trump’s last-chance effort to keep his private financial records from the Manhattan district attorney, ending a long and drawn-out legal battle.
After a four-month delay, the court denied Trump’s motion in a one-sentence order with no recorded dissents.
District Attorney Cyrus R. Vance Jr. has won every stage of the legal fight — including the first round at the Supreme Court — but has yet to receive the records he says are necessary for a grand jury investigation into whether the president’s companies violated state law.
Vance responded to the court decision with a three-word tweet: “The work continues.”
………
Vance’s inquiry is one of two known criminal investigations involving the former president. The other, led by the district attorney in Fulton County, Georgia, focuses on Trump’s controversial coversations with state officials amid his failed effort to overturn that state’s election result.
Trump has waged an extraordinary battle to keep private his tax records, which every other modern president has released as an expected part of seeking the presidency. The court’s action does not mean Trump’s tax records are to become public — Vance has said they will be protected by grand jury secrecy rules — but is likely to accelerate an investigation that might be Trump’s biggest legal threat.
………
Forensic accounting experts from FTI Consulting are expected to assist prosecutors in assessing whether the Trump Organization manipulated property values for tax breaks, or to obtain favorable loan rates, The Washington Post previously reported.
The investigation is fairly developed, but the tax returns are an integral part of the picture. The Supreme Court order — allowing Vance to execute the subpoena — could mean a lot of work is ahead for investigators as the records are voluminous, spanning eight years.
………
The current fight is a follow-up to a July decision by the high court that the president is not immune from a criminal investigation while he holds office.
………
Vance is seeking eight years of the former president’s tax returns and related documents as part of what was initially an investigation into alleged hush-money payments made ahead of the 2016 election to two women who said they had affairs with Trump years before — claims Trump denies. Investigators have indicated they want to determine whether efforts were made to conceal the payments on tax documents by labeling them as legal expenses.
I’m expecting the investigations to reveal that Trump is basically broke, despite the millions that he managed to extract from the government and government supplicants.
I will love to see him broken like a yearling horse, and I know that he’s going to whine about conspiracies, but, “That’s what I thought you’d say, you dumb f%$#ing horse.“*
*Credit where credit is due, I am quoting comedian John Mullaney.
My Heart Bleeds Borscht for These Rat F%$#S
What a surprise, since the US Treasury has started to require more disclosure in cash only real estate purchases in the United States, this market has imploded.
Seriously, there is no way that everyone involved in the process didn’t know that it wasn’t money laundering, and as the saying goes, “You f%$# with the bull, you get the horns.”
More of this:
Cash sales of homes – mostly the domain of foreign and affluent buyers – fell to 32% of total home sales in April, down 2.8 percentage points from a year ago, according to a new report from CoreLogic. For the first four months, cash sales dropped to 34%, the lowest since 2008.
In Florida, the number one destination for foreign homebuyers, cash sales accounted for 46% of sales, and in New York, for 44%, both decreasing as well. The “strong dollar” and “global uncertainty” were blamed.
In Manhattan and Miami, the luxury condo markets are already getting mauled. For example, we reported that in Manhattan, condo prices plunged 14% in just three months.
We also reported that foreign investors were pulling back, particularly Chinese investors, the most prolific of all foreign buyers. The number of homes they purchased over the 12-month period had plunged 15%.
So is it just the “strong dollar” and “global uncertainty?” Or could there be more to the story?
Today, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced that it would expand a program it had kicked off in January to identify and track secret homebuyers who hide behind shell companies.
The expanded program will “temporarily require US title insurance companies to identify the natural persons behind shell companies used to pay ‘all cash’ for high-end residential real estate in six major metropolitan areas,” up from the two areas designated in January, Manhattan and Miami, among the biggest destinations of global wealth:
FinCEN remains concerned that all-cash purchases (i.e., those without bank financing) may be conducted by individuals attempting to hide their assets and identity by purchasing residential properties through limited liability companies or other opaque structures.
Real estate purchases in the US have been a perfectly good way to launder large amounts of money, no questions asked. Brokers and banks and other industry professionals have played along. Everyone in the world knew it. And they came to launder their cash.
These folks don’t mind paying a little extra. So as an industry-pleasing side effect of this influx of opaque money, luxury home prices soared, from where they trickled down to the rest of the market.
The criminal activity in the real estate market is increasingly pricing ordinary people out of homes, so it’s nice that the T-men are doing this.
This is Good News, Not Bad News
It appears that in response to the Brexit vote, house prices in London have fallen.
This is actually a good thing. Ordinary people have been priced out of London by overpaid parasites from the City of London (investment banking), and foreigners who are using London real estate to as a way to hide and protect their ill gotten gains:
Thousands of London homes have had their prices slashed since the Brexit vote a week ago amid warnings of a slump in the stunned housing market, the Standard reveals today.
An Evening Standard analysis has found a huge spike in nervous home owners cutting their asking prices after the surprise result of the referendum last Friday morning unleashed what was described as “a perfect storm” by one leading investor.
The impact is expected to be most severe in the new luxury development along the river from Vauxhall to Docklands where falls of as much as 40 per cent are feared.
One central London branch manager at one of the capital’s biggest firms said: ”The whole thing is a disaster. The uncertainty will cause the markets to crumble and who knows when that is going to get better.
This is things getting better.
Rich people lose money, and ordinary people may be able to shorten their commute a bit.
Jimmy McMillan for President
Yet more evidence that the rent is too damn high:
A popular narrative of the U.S. housing market has been that big city prices are locking out young buyers, feeding a cycle in which a growing number of people are forced to rent at ever higher rates as demand overwhelms supply. Throw in the fact that wages haven’t kept pace, and you have a world where a wide swath of Americans can’t save enough to ever buy that first home.
The reality may be a bit more complicated. It’s true that, when combined with a lack of government support for affordable housing, this situation has pushed the number of cash-poor renters to a new high. Some 26 percent of U.S. renters paid at least half their income to landlords in 2014, up from 20 percent in 2001, according to the State of the Nation’s Housing report, published on Wednesday by Harvard’s Joint Center for Housing Studies.
Unfortunately much of our economic policy has conflated price increases in real estate prices with economic prosperity, which has led to shelter become increasingly difficult for ordinary people to obtain.
We need to stop viewing housing and real estate as a way to generate returns that exceed inflation, and we need to discourage unproductive speculation in real estate. (Full disclosure, I am speaking against my own interest as a homeowner with a 30 year fixed rate mortgage)
Good Point, But Wrong
Over at The New Republic, David Dayen observes that observes that that transcripts from Hillary Clinton’s speeches to the Vampire Squid are irrelevant, because she has always been in Wall Street’s pocket anyway:
I don’t want to see the transcripts from Hillary Clinton’s Goldman Sachs speeches.
………
The actual transcript is unnecessary because we already have enough in the public domain to know the real issue with these speeches: the rapport and camaraderie between political leaders and financial institutions, which results in a frame of mind that accepts their arguments and privileges their views. In fact, the best example of this comes from a speech that Clinton habitually touts as an example of her get-tough approach to Wall Street.
On the stump and in debates, including last week’s in Brooklyn, Clinton highlights a speech she made at Nasdaq in December 2007, in the thick of the foreclosure crisis. “When I was serving as the senator from New York, I did stand up to the banks,” Clinton said last week. “I did make it clear that their behavior would not be excused.”
In the speech, available here, she castigated Wall Street for “playing a significant role in the current problems,” for fueling irresponsible mortgage lending through securitization, and for having “shifted risk away from people who knew what was going on onto the people who did not.” Clinton has been criticized for this speech, however, because of a few lines where she said “there’s plenty of blame to go around” for the housing bubble, and that “homebuyers who paid extra fees to avoid documenting their income should have known they were getting in over their heads.”
You can read this as a throwaway nod to personal responsibility, a typical politician’s remark, when the thrust of the speech indicts Wall Street. I would argue that spreading around responsibility for something that was a demonstrably criminal action by lenders fits with Wall Street’s moralizing about deadbeat borrowers who should have known the risks. It’s a form of public shaming. And it arguably led to the lack of accountability we saw for the financial crisis—after all, if everybody is responsible, then ultimately nobody is responsible
………
When something could have been done to pressure mortgage servicers, Hillary Clinton, like many politicians, adopted their argument that they were prevented from helping homeowners. She believed their claims that they were hamstrung, when they weren’t. And I have to believe that’s attributable to proximity, access, and whose arguments get priority of place.
Wall Street purchases that priority of place simply by donating to campaigns, bringing politicians in for chats, marinating them in its worldview. Finance executives can make very compelling arguments about the complex intricacies of the financial system. They can sound charming and smart and logical. And in a moment of truth, they can get the payoff, when a powerful politician like Hillary Clinton makes a reasonable-sounding statement about mortgage servicers needing legal immunity.
On a strictly factual level, DDay is right: We do not have to read her transcripts in order to know that she is, always has been, and likely always will be be Wall Street’s stooge.
The only question is whether Hillary and her Evil Minions™ or not she will be a bigger stooge than Barack and his Evil Minions™.
Needless to say, this sucks like 1000 Hoovers all going at once.
That being said, her the fact that she is a suck up to Wall Street means nothing without sound bites for the press to make it a real issue for most of the voting public.
That is the reality of our culture, media, and political system,
A Real Estate Developer Does the Right Thing
In response to larcenous demands from the incumbent (monopoly) connectivity providers, the developer of Jasper Highlands built and wired up his own gigibit ISP to serve his new development:
Tennessee is at the center of a nationwide battle over whether cities and towns should be allowed to build broadband networks without facing restrictions that help private ISPs avoid competition from the public sector.
But with a lawsuit and legislative battle over a Tennessee state law still pending, one home developer decided to build his own ISP. John “Thunder” Thornton of Chattanooga needed to install high-speed Internet for “his mountaintop residential development in Marion County,” but was unable to get affordable service from AT&T or Charter Communications, a Chattanooga Times Free Press article said yesterday. He also couldn’t get service from a Chattanooga electric utility that also provides Internet because the state law prevents it from expanding to nearby areas that lack fast, affordable service.
To solve the problem, Thornton “spent more than $400,000 to build his own fiber network and link it with a power cooperative in Stevenson, Ala., where fast broadband is available,” the article said. He announced yesterday that his Jasper Highlands community in Jasper, Tennessee, “is now able to offer high-speed, gigabit-per-second Internet service for all home sites in his 3,000-acre complex.”
Thornton’s ISP is called Hi-Tech Data. It sells 100Mbps fiber service for $70 a month and gigabit service for $80 a month. Phone service is available for another $30 a month. Since the existing fiber didn’t go all the way to the Jasper Highlands development, Hi-Tech Data deployed its own fiber to cover the final 2,000 feet.
This is a natural consequence of the rent seeking behaviors engaged in by the baby Bells, cable companies, and the rest of the incumbent providers.
It’s yet another case where we have actors whose primary business model is to sit athwart the productive work of others, and extract rents, which they use to pay off politicians so that they maintain their privileged position.
My Heart is Actually Bleeding Borscht Here
It turns out that the it appears that recent difficulties experienced by hedge funds has caused a decline in house prices in the Hamptons.
After about 40 years, people are starting that hedge funds both under-perform the market and charge outrageous fees, and so the most overpaid professionals on Wall Street can’t pay as much their 35,000 square foot Summer cottages any more:
This had to happen. Now we’re getting reports that in the Hamptons, on Long Island’s east end, where Wall Street’s richest hobnob over the summer, home prices at the very top, after a phenomenal boom, are getting crushed.
What’s getting blamed? The crummy performance of the markets last year.
The average price in 2015 of the ten most expensive homes sold in the area has crashed 20% from a year earlier – to a measly $35.5 million.
After soaring a mind-bending 180% in five years, from $15.9 million in 2009, the average price of the top ten homes had reached $44.6 million in 2014, according to a report by Town & Country Real Estate in East Hampton, cited by Reuters.
The year 2009 was when the Fed’s “wealth effect” strategy was kicking in. It was precisely what Bernanke wanted to accomplish. He spelled it out in an editorial. The Fed’s “strong and creative measures” would inflate asset prices, which would lead those benefiting the most from it, including those on Wall Street that extract fees and get paid big bonuses, to feel wealthier and spend a little more, which would crank up the economy. And this is what happened in the Hamptons.
I am so not crushed by this news.
That Company Foreclosing You May Not Hold the Mortgage, Part MCMLXXVI
The California Supreme court just ruled for a plaintiff who claimed that the company that foreclosed on her never held the mortgage:
The California Supreme Court on Thursday ruled unanimously in favor of a fraudulently foreclosed-upon homeowner in a case that should serve as a wake-up call to state and federal prosecutors that mortgage companies continue to use false documents to evict homeowners on a daily basis.
“A homeowner who has been foreclosed on by one with no right to do so has suffered an injurious invasion of his or her legal rights at the foreclosing entity’s hands,” the justices wrote.
………
In this case, Tsvetana Yvanova purchased a $483,000 mortgage in 2006 from New Century, a company that went bankrupt in 2007. Four years later, in December 2011, New Century somehow transferred the mortgage to a trust, from which thousands of pooled mortgages had created mortgage-backed securities. But by law, the mortgages placed in that pool had to be put in it by January 27, 2007.
The eventual trustee, Western Progressive, foreclosed on Yvanova and sold her house at auction in September 2012. Yvanova later argued that her foreclosure was illegal because a bankrupt company (New Century) could not have transferred the deed of trust, and because the trust had closed to new loans four years before the transfer was executed. Therefore, the assignment document was false, and the foreclosure void.
A state appeals court ruled that Yvanova lacked the ability to challenge the defective assignment, because she was not a direct party to the transfer of ownership. But the state Supreme Court rejected that analysis.
“We conclude, to the contrary,” the ruling states, that “an allegation that the assignment was void… will support an action for wrongful foreclosure.”
The 33-page ruling is narrow – the court did not rule on the validity of the assignment itself in the case, nor did it allow state homeowners to pre-emptively challenge threatened foreclosures on these issues. But it did establish that borrowers have a chance to receive compensation for a wrongful foreclosure if they find it to have been executed with false documents.
………
California Attorney General Kamala Harris filed an amicus brief last April supporting Yvanova’s right to challenge her foreclosure. But Harris, like every other state and federal law enforcement official in the country, has not stepped in to prevent the continuing flood of false documents submitted to courts.
The 2012 National Mortgage Settlement with the five largest mortgage companies (Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Bank) included language committing the firms to end the production of false documents. But they continue to be used on a daily basis to evict homeowners. The foreclosure in the Yvanova case occurred in September 2012, seven months after the completion of the National Mortgage Settlement.
Despite promises from the banks and the mortgage servicers, mortgages and their progress through the financial system continues to be resemble nothing more than Captain Benjamin Willard meandering up stream in his pursuit of Colonel Kurtz in the movie Apocalypse Now.
Our own heart of darkness.
MERS is In the News Again.
I am referring to the Mortgage Electronic Registration Systems, not Middle East Respiratory Syndrome.
To refresh your memory, it is an electronic registry created by the big banks.
They created it to evade registry fees when they sliced and diced mortgages, and sold them to greater fools.
Additionally, it creates a shell game where all sorts of skulduggery is hidden in a labyrinth of obfuscation.
The banks, and MERS, have claimed that it does, and does not, own the mortgage, and now the Tennessee Supreme Court has ruled that they have no property interests in the mortgages that they transfer:
Chattanooga, Tennessee — The Chattanoogan.com news site is reporting that in a lawsuit filed to set aside a tax sale of mortgaged land in Hamilton County, the Tennessee Supreme Court has held that Mortgage Electronic Registration Systems, Inc. was not entitled to prior notice of the sale because MERS did not have an interest in the land that is protected under the Due Process Clause of the U.S. Constitution!
READ THE OPINION HERE: MERS v DITTO_TN Supreme Court rules against MERS! The Tennessee Supreme Court is the first to rule in such a manner!
The site is reporting that the purchaser of the Hamilton County land borrowed money from a MERS member lender, signing a promissory note secured by the property by a deed of trust, which was recorded in the Hamilton County Register of Deeds office. The deed of trust described MERS as “a separate corporation that is acting solely as nominee for [the lender]” and said that MERS was the beneficiary of the deed of trust “solely as nominee” for the lender and any successor to the lender. As is customary in the MERS® System, the originating lender sold the note to another lender. Subsequent to that, the property owners failed to pay their 2006 property taxes, so Hamilton County initiated tax foreclosure proceedings.
The county sent notice of the foreclosure and the tax sale to the borrowers and to the original lender, but not to MERS. Eventually, the property was sold at a tax sale to Carlton Ditto. Just like in the Cabrera, Robinson and Johnston cases in California, after learning of the action, MERS filed a lawsuit to set aside the tax sale, naming Hamilton County and Mr. Ditto as defendants. MERS argued that Hamilton County violated its constitutional right to due process of law by selling the land without notifying MERS. This crap is the same argument propounded in the California cases, where MERS claimed that the deed of trust gave MERS its own independent interest in the Hamilton County property, so it was constitutionally entitled to prior notice of the tax sale. In California, MERS also wanted the courts to rule that the California Quiet Title Statutes were unconstitutional and that the judges who rendered the quiet title judgments in all three cases were civil co-conspirators, something this blogger has learned has infuriated the state judges! (I sure hope MERS doesn’t show up in front of one of them any time soon! LOL)
………
The Supreme Court considered whether Hamilton County was required to give MERS prior notice of the tax sale. The Court recognized that the Due Process Clause of the U.S. Constitution generally applies when the government sells a taxpayer’s land to satisfy unpaid taxes, so if the government fails to give the taxpayer such notice, the sale is unconstitutional and void. The Court then considered whether MERS had an interest in the land that was protected under the Constitution. The Court first noted that the deed of trust for the Hamilton County transaction used contradictory language to describe the role of MERS in the property loan transaction; it described MERS as a “beneficiary” but also said that MERS acted “solely as nominee” for the lender. Considering the parties’ roles in the loan transaction, the Court also held that MERS was not in fact a beneficiary but only an agent for the true beneficiary, the note holder, and that MERS acquired no independent interest in the Hamilton County land. Because MERS did not have an interest that was constitutionally protected, Hamilton County was not required to give MERS notice before it sold the land to pay the unpaid tax obligation. For this reason, the Supreme Court affirmed the trial court’s judgment in favor of Hamilton County and the tax sale purchaser, Mr. Ditto.
………
From gandering at the opinion issued by the Court, it appears they quoted MERS’s own counsel on company policies! Many attorneys have told me, as have certain legislators in DC, that just because MERS has a “business model” doesn’t mean: (1) it’s perfectly okay to rip off 3,007 counties across America in denying fees while obfuscating the real parties in interest from the borrowers; and (2) it should be accorded the same interests as the Lender, especially when the Lender doesn’t have a recorded (perfected) interest that still could be challenged.
(emphasis original)
Mortgage and property law has developed over hundreds of years through trial and error.
This process was pushed along by the very real need for property owners, lenders, and local governments to have certainty and protections on a process that would otherwise be rife with criminality and risk.
MERS was developed to short circuit that process, and it’s nice that some courts are recognizing that just because someone in Wall Street comes up with a way to make money, it doesn’t mean that it is legal.
FYI, you can also read a somewhat more sedate account of these cases, you can go here.
Politics Got a Bit Less Entertaining………
Jimmy “The Rent Is Too Damn High” McMillan has announced that he is retiring from politics:
Jimmy McMillan, the whiskered political showman who became a viral Internet star when he ran for governor of New York in 2010 as a candidate of the Rent Is Too Damn High Party, has announced his retirement from the political arena, citing a lack of public support for his agenda.
In a news release infused with misspellings and other errors that was dated Tuesday, Mr. McMillan said voters had been “totally brainwashed” and criticized Gov. Andrew M. Cuomo and Mayor Bill de Blasio, both Democrats, for not securing “a rent reduction for the people in the cities of Brooklyn, Bronx, Staten Island, Manhattan and Queens.”
“Rent is too damn high is an international crisis,” he wrote. “There are many questions the people should ask themselves. I which them the best — I’m out.”
The news release said the Rent Is Too Damn High Party was “for sale, trademark and all,” and listed a Manhattan lawyer, Vincent Imbesi, as a point of contact.
He will be missed from the political scene.
We are Going to Bail Out These Motherf%$#ers Too
The private equity group Blackstone is now the largest private owner of real-estate in the world:
Blackstone has grown its size nearly four-fold since its 2007 IPO.
But the biggest private equity firm on Wall Street has seen even greater growth in its real estate division, which has expanded from a $17.7 billion business when Steve Schwarzman took his company public to one that today manages nearly $100 billion worth of property.
Steve Schwarzman is America’s landlord, now, and he’s not afraid to acknowledge it.
“We’re now, we believe, the largest owner of real estate in the world,” he told Business Insider in an interview at his company’s Park Avenue headquarters in midtown Manhattan.
“We have a performance record that is… pretty much in a league of our own, we’ve compounded [returns of] around 18% after fees. We’ve had almost no losses of any type.”
They went into real estate after the crash, which was the bottom of the market.
They have been making insane margins, which means insane risk, though they probably do not realize this,
Then this game of Jenga ends with a crash comes tumbling down, and it will, Blackstone will be too big to fail.
It’s already too big to fail.
And the rest of us are going to have to bail them out.
Quote of the Day
London is a city whose two priorities are being a playground for corrupt global elites who turn neighbourhoods into soulless collections of empty safe-deposit boxes in the sky, and encouraging the feckless criminality of the finance industry. These two facts are not unrelated.
—Cory Doctorow on why he and his family are leaving London for Los Angeles
It appears that much of London is being razed in order to construct empty apartments whose sole purpose is to provide a refuge for the parasite high finance class when the revolution hits their home countries.
Not this Sh%$ Again!
Interest-only mortgages: They’re baaack:
They were the villains of the housing crash. Federal regulators called them toxic. Now interest-only mortgages are making a comeback, but these are not the loans of yesteryear or yester-housing booms.
“I think it’s opening the door back to responsible lending, giving people choices,” said Mat Ishbia, president and CEO of Michigan-based United Wholesale Mortgage, the second-largest lender through brokers in the nation.
The company announced Monday it is now offering interest-only loans through brokers, with significant safeguards. Borrowers must put 20 percent down, ensuring that they have the “skin in the game” that so many did not during the heady days of the housing boom. They must have at least a 720 FICO credit score, which is well above average, and they must qualify on what the payments will be once they’re adjusted higher, not at the starter rate.
“These people can afford these mortgages. They’re savvy homeowners,” said Ishbia. “We’re giving them the choice. It is no more risk to us. We actually think it’s less risk.”
United Wholesale Mortgage does not hold the loans but sells them to investors. Fannie Mae and Freddie Mac, the government-backed mortgage giants, do not buy these types of loans.
Yeah, This Time, It Will Be Different!
Notwithstanding the myths of the housing crash, the GSE, Fannie Mae and Freddie Mac, actually had a smaller role in mortgage securitization as the housing bubble came expanded like a supernova.
It was the private loan investors that were at the core of the last real estate collapse, and now they are back, and investing in insane mortgage products.
It’s déjà vu all over again.
Fox News Tries to De-Trumpify the Debate
It looks like Fox and the RNC are looking to find a way to keep Donald Trump out of the debates:
The large field of Republican presidential hopefuls jockeying to make the cut for the first 2016 debate will have to file a public disclosure of their personal finances on time to participate.
That means every candidate who declared before July 6 — a group of 14 contenders including former Florida governor Jeb Bush and real estate magnate Donald Trump — will have to reveal information about their assets and debts to get into the Aug. 6 event in Cleveland.
Trump told The Washington Post in an interview Thursday that he will file his financial disclosure ahead of schedule, perhaps next week. Bush has not yet said whether he will do so.
Fox News, which is hosting the debate with Facebook and the Ohio Republican Party, clarified Thursday that the criteria for candidates to participate include filing the required personal financial disclosure within 30 days of declaring their bids.
“FOX News has never wavered from the initial debate criteria we set forth,” Michael Clemente, the network’s executive vice president of news, said in a statement, which was first reported by the New York Times.
………
Under a 1978 federal ethics law, all presidential candidates have to file details about their financial interests with the FEC within 30 days of declaring. The agency allows two 45-day extensions.
………
Aides to Trump — who claims to be worth $8.7 billion — have maintained that he will file his disclosure within the 30 days allotted, giving him until July 22. Bush has until July 15 to meet the deadline for his paperwork, but his campaign has asked for a 45-day extension. A spokeswoman did not immediately respond to a question about when he plans to file.
I don’t know how/if Trump is going to finesse this.
If he were to reveal his full personal finances, which would necessarily involve making it public, it would almost show that his wealth of “$8.7 billion” is a complete mirage, which would likely put a serious crimp in both his reputation, and his ability to conduct further business.
I do not think that this is going to work: If Trump’s finances are as byzantine as I think, and as a real estate mogul, they likely are, he will file a report that is both technically legal completely uninformative.
Look Out Below!
If there is a rule in modern investments, it is that they will become increasingly complex, and then the small investors get in, the “Smart Money”, who created the complexity, and there is a crash, where retail investors lose.
It follows fairly simply from Saroff’s Rule.*
Well, it’s happening again, less than 7 years after the last crash:
People buying homes to live in – rather than as investments to be rented out – form the bedrock of a healthy housing market. It was once called the American Dream. Then came the bubble, its collapse, and the new boom that is already a bigger bubble than the prior one in many cities. And in some metro areas, investors are now the majority of buyers!
In the first quarter, the proportion of owner-occupant buyers fell to 63.2% of all residential sales, down from 65.8% in the fourth quarter last year, and down from 68.6% a year ago, RealtyTrac reported today. It was the lowest quarterly level in the data series going back to 2011.
Who were the other buyers? Investors. The report defined them as buyers who purchased a property but then had their property tax bill mailed to a different address. And these investors accounted for a record of 36.8% of all home sales.
In some metro areas, investors went hog-wild, elbowing owner-occupants into minority status. Here are the metro areas with a population of at least 500,000 where this miracle of our “healed” housing market has occurred in Q1, the miracle being that investors make up the majority of all homebuyers:
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But “institutional investors,” entities that buy 10 or more units a year, accounted for only 3.4% of total sales in Q1, the lowest level in the data series, down from 6.2% in Q1 2014, and from 8.7% during the heyday in Q1 2013. These big investors, including large PE firms that used to buy tens of thousands of units – the “smart money” – have been losing interest for two years. But in the last quarter, they just about pulled up their stakes:
The investors that are now piling into the market like never before are “smaller, mid-tier, and mom-and-pop investors,” explained RealtyTrac VP Daren Blomquist.
And these investors are much more highly leveraged:
Of all investors, 44.7% were all-cash buyers, down from 61% a year ago. Cheap debt is just too tempting. A large variety of easy-money financing options have become available for small investors as “a new crop of nationwide companies has emerged offering financing specifically for investment properties,” Blomquist said. I can attest to that; I get their spam in my inbox.
Look out below.
History may not repeat itself, but there is some seriously heavy duty rhyming going on right now.
I expect another bust sometime in the next 2-3 years.
If some of the banksters were breaking rocks in a Federal Penitentiary, it would not have repeated itself so soon.
It would have taken at least a decade for the finance industry to create a new infrastructure of fraud.
* Saroff’s Rule: If a financial transaction is complex enough to require that a news organization use a cartoon to explain it, its purpose is to deceive.
Something is Going Right in Detroit
The Detroit City Council is passing a law requiring recipients of public benefits for development sign binding contracts as to their benefits:
When Marathon Petroleum received a $175 million tax break from the city of Detroit in 2007, they promised jobs for Detroiters. And, as of last January, the $2.2 billion expansion of Marathon’s refinery on the city’s southwest side had, in fact, created new jobs for tax-paying residents —all of 15 of them.
Now, members of the Detroit City Council want to pass an ordinance that will hold developers seeking public money accountable: They’ll have to work out a community benefits agreement (CBA) with community leaders. A CBA is a legally binding pact covering everything from local hiring requirements and environmental concerns to redevelopment of public space and infrastructure. It’s a way to assuage the fears of current residents wary of displacement and change and ensure the public’s money is put to good use. It would be the first law of its kind in the country.
“We are allowing these large corporations—companies that could build a hockey arena without our money—to get in the corporate welfare line and take resources away from us,” Rashida Tlaib, a Michigan state representative who serves Detroit, told me. “In exchange for what?”
The hockey arena Tlaib mentioned is for the city’s beloved Red Wings, owned by pizza baron Mike Ilitch. The Ilitch family, whose net worth is estimated at $3.2 billion thanks in part to their Little Caesars pizza empire, received $284.5 million in public money to build a new, $450 million arena in the city’s Cass Corridor neighborhood. (They are desperately and vapidly rebranding it as the “arena and entertainment district.”)
While the Ilitch family was finishing up its honeypot stadium welfare deal last year—not to mention a wildly below-market rate $1 land transfer for 39 vacant parcels—they refused to sign a CBA that would ensure a certain percentage of permanent, non-construction jobs at the arena went to Detroiters. A group of locals formed the Corridors Alliance in an attempt to engage with the Ilitches, but their efforts were futile. The Ilitches did, however, agree to a mayoral executive order that demanded 51 percent of construction jobs go to residents and 30 percent of construction contracts go to local businesses. (The mayoral order, like Marathon’s hollow promise, is not legally binding.)
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The proposed ordinance in Detroit would take what Los Angeles and Pittsburgh have done a step further. It would require developers to engage in a CBA. Under the most recent draft of the ordinance, any project totaling more than $15 million in investment (or $3 million in renovation or expansion) seeking at least $300,000 in public tax dollars—from tax abatements to land transfers—will have to enter into a community benefits agreement. Developments between $3 million and $15 million are encouraged, but not required, to execute a CBA. Developments funded entirely by private money are exempt.
Business leaders—no surprise!—are pissed. It’s another hurdle, they say. Just more red tape, they scream! In October, Rodrick Miller, president and CEO of the Detroit Economic Growth Corporation (DEGC), wrote an irritated and bullying letter to City Council expressing his true feelings.
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The opposition made it all the way to the state capitol in Lansing during December’s lame duck session, where Republican State Representative Earl Poleski introduced House Bill 5977, which would “prohibit local units of government from creating a ‘community benefits ordinance.'” The bill, which died in December and was reintroduced in January, would ban Detroit’s proposed ordinance outright.
“House Bill 5977 sets up the state as a dictatorship telling local units of government that they cannot do what is best for their community, workers and residents when it comes to wages and benefits tied to economic development in that community,” Tlaib said in a statement.
Of course the klepto-capitalists pretty much all of the Republicans, and quite a few of the Democrats in Lansing, hate the idea, but this should be seen as an endorsement of an insanely good idea.
It’s kind of like being condemned by ISIS. It means that you are doing it right.