"It's a mess," says William McLeod, a Boston bankruptcy attorney who says he is receiving twice as many calls from debtors as he did a year ago. "This is fed right now by real estate, and what's been this mortgage frenzy in the last several years."
Says the lawyer with a certain amount of glee.
Visions of dollar signs danced in his head
As he quickly re-calculated his
hourly fee....
Uh retail. Yeah, right. Been there done that got the T-shirt. No thanks. That little stint used up my lifetimes supply of patience for dealing with idiots.
I just added shaded areas to the chart showing economic contractions. I don't know why I didn't think of doing it before, but something in my head eventually saw the pattern.
I wouldn't suggest retail though, for what it is worth.
I'm not sure retail pays well enough to cover the gas money to get you there and back let alone pay off the mortgage. At least from what I see from my retail slave son & his friends... even the managers get paid crap and it's one regional flagships for a major national chain.
"From 2001 to 2006, a total of £256bn in equity was extracted from UK property values in this way. Dependent as it is on rising house prices, housing equity withdrawl cannot continue to prop up our consumer spending at its current level," said the report.
The dramatic change in attitudes to debt has caused the UK savings rate to plummet from 8.3pc of disposable income fifteen years ago to around zero. Personal debt has risen by 137pc since June 1993 to £1,343bn, greater that annual GDP for the first time.
Your chart is nifty. It's hard to believe U.S. retail trade employment is more than 5% of population at a time when you can wander through a vast Home Depot store for a half hour without finding anybody who knows anything, or sometimes anybody period.
There's two big problems indicated by your chart: way too many stores and way too little productivity per store. Both problems will probably be fixed soon as your chart falls back toward 4% or so. That would mean almost two million retail jobs lost from the peak. If you want to call them jobs. When you pay minimum wage in our country today, you get bodies, not workers.
Thanks for that last link Topher. It explained for me the puzzle as to why the dollar held up today.
". . .
Mr Redeker said yesterday's dollar spike was caused by US investors pulling money out of Turkey, South Africa, Hungary and other emerging markets. They had invested $300bn in bonds and stocks over the last year.
"This is just profit-taking on risky assets. The dollar is going to fall further because long-term funding for US assets has collapsed since the sub-prime crisis," he said.
Outgoing IMF chief Rodrigo Rato warned yesterday that the adjustment may be brutal. "An abrupt fall in the dollar could either be triggered by, or itself trigger, a loss of confidence in dollar assets," he said."
These recent wave of bankruptcy filings explain how you can have a year-on-year doubling of foreclosures, but a light dip from August to September. The lawyers' marketing must be getting out there.
The total provision for loss and benefits increased 25% versus last year, as the lending provision increased 41%, the charge provision rose 9%, and the other provision was 5% higher. The increase in lending provision was driven by higher loan volumes and increased past due and writeoff rates in the US portfolio relative to the lower year-ago levels that benefited from the impact of the 4Q05 bankruptcy legislation. The charge card provision rose 9%, reflecting growth in volumes and relatively stable credit indicators.
The following answer to their provisioning policy doesn't make me sit well:
Now, as it relates to our provisioning, we have used the same model for provisioning for the last several years. It's focused on the experience that we see and we used those models the same way this quarter as we have in past quarters. So we continue to use the same methodology. We think it's a methodology that appropriately matches credit expense with the revenues that are being generated and provides us with reserves that are appropriate, given the behavior that we're seeing within our customers.
Oct 22 (Reuters) - Standard & Poor's said on Monday it may cut ratings on $20.6 billion of U.S. cash flow and hybrid collateralized debt obligations after its downgrade to residential mortgage-backed securities last week.
Neumann is the fourth-largest homebuilder based in the Chicago area when ranked by number of units sold, and 59th nationally, according to Builder magazine. The firms revenue fell 18% in 2006, to $425.4 million, according to the 2007 Crains List of Chicagos Largest Homebuilders. Revenue at Neumanns Chicago developments fell 29% to $260.9 million.
"It's a mess," says William McLeod, a Boston bankruptcy attorney who says he is receiving twice as many calls from debtors as he did a year ago. "This is fed right now by real estate, and what's been this mortgage frenzy in the last several years."
Says the lawyer with a certain amount of glee.
Visions of dollar signs danced in his head
As he quickly re-calculated his
hourly fee....
Mike in Long Island
The new Bk law was set up to make it difficult to go chapter 7 and eliminate your debt...instead you have to get "counseling" and go chapter 13 which benefits unsecured creditors such as the credit card companies (who literally wrote the new law).Unless you are "insolvent" by the new law's definition.where I am in Sonoma county most of those filing are so far underwater on their homes that they meet the insolvency rule and are able to go chapter 7.Oddly these people do not wish to pay 3x the cost to rent the same home when they owe $100k plus in excess of what the home will sell for.The judges are going for it both because of the letter of the law,and because the new BK laws are so Blatantly unjust.
Not sure whether this is on-topic or not: I remember when they were "reforming" the bankruptcy law there was a lot of talk about the "homestead exemption". Is that relevant for people who can't make mortage payments?
According to Citi's credit strategist Matt King, there are four phases to the credit cycle, each of which has an implication for share prices.
In phase three, the credit market rolls over as investors lose their appetite for leverage. Spreads widen and bonds fall as the credit crunch bites but equities shrug off the gloom. This is where we are now, what Citi calls the beginning of the mature bull market.
Phase four is the true bear market when both main asset classes decline. Falling profits and a steady drip of warnings hit equities and only cash and government bonds make sense. Hold on, we're at the bumpiest part - Telegraph
I bet if we combined all the charts that individually scream of troubles into a structured prediction chart (SPC) it wouldn't look nearly as bad. We could then sell the chart to unsuspecting optimists in other countries for billions of dollars.
Just for the record: bankruptcy is a flat fee, not an hourly fee. The increase in filings will not increase the cost per person. And it's coming off of such lows that the percentage increase doesn't matter as much as it appears.
Billy Hill:
Not sure whether this is on-topic or not: I remember when they were "reforming" the bankruptcy law there was a lot of talk about the "homestead exemption". Is that relevant for people who can't make mortage payments?
The limit on homestead exemption is limited to $125,000 for those who have not met the time period of 1215 days before filing for bankruptcy.
This provision was enacted, in part, to prevent pre-bankruptcy asset planning by which debtors were acquiring homesteads for the primary purpose of taking advantage of certain states' favorable homestead laws. Some states, including Florida, Iowa, Kansas, South Dakota, and Texas, have no cap on the value of a homestead that may be exempted under state law. Whether coincidental or not, several of these jurisdictions have tended to see a pattern of purchases of expensive homesteads made sufficiently in advance of bankruptcy filings to qualify for the state law exemptions.
(I can't believe they left out Oklahoma. I guess our homes just aren't worth enough to be considered, even though we also have an monetarily unlimited homestead exemption.)
Anyway, that provision of the law was designed to prevent people from moving to states where they could keep high-valued homes in bankruptcy. But if that was the intent, the time period should have been limited to the same time period it takes to establish residency requirements. This punishes people who have no intent on filing bankruptcy at the time they buy their home and -- in a perverse way -- gives more protection outside of bankruptcy than in.
Verry loong time lurker. What's up with the 20x increase on REO's on Countrywide's foreclosure site. Bank of America. Contrast today's stats on this site to these of Countrywide Foreclosures (REO) Blog on 10/19/07
MS where I am jumped from 115 to 1414. CO where I'm from 410 to 8322. CA where I never want to be 3342 to 28137. W-T-F!!!!!
What part of Bankrupters and Fraudsters of New York City (BFNYC), a financial criminal gang raised in a "culture of fraud," don't people get?
I wonder how many Americans wake up worrying about terrorism versus worrying about debt? The real problem that Americans face is the evildoers at home and not abroad.
It Is the Debt, Stupid! (That will take the American econo-political system down).
Tom Stone: I would say that the new bankrupcy laws are "blatenly unfair" only to the extant that the effectivly changed the rules for debts that had been created under the old rules. The CC companies were intimately familiar with the BK laws and people's propensity to take advantage of them when they extended credit to people. changing the laws after people had borrowed the money was a huge freebie for them.
The arguments against the BK changes (infact for BK protection in the first place) are largely public policy ones. There will always be people willing to borrow themselves to the poor house. Freedom or not, this is a bad thing. The only way to prevent it is to make lenders unwilling to lend them the money to do so.
All of the ones for Florida are showing list price of $0. Many of them are "NO BROKER ASSIGNED". Are the REOs outstripping the ability to process them ?
Some homeowners file chapter 13 thinking it will save their home. It will temporarily. Once they fall off the bankruptcy payment plan (which does happen), the lender will ask for a stay of relief and ask that the home be taken out of the bankruptcy. Then the homeowner finds out all the arrearages and late fees are now still due, and they are worse off now than if they had taken their bitter medicine up front and sold their home. They should always start by contacting the loss mitigation department at their lender. If they cannot get a favorable workout with the lender they should SELL! Many will find that they need to do a Short Sale because they now owe more than what their home will sell for. Many will be those that have refinanced within the last 3 years with a teaser rate ARM and now they are adjusting up raising their mortgage payment by 30 - 50%.
"It's a mess," says William McLeod, a Boston bankruptcy attorney who says he is receiving twice as many calls from debtors as he did a year ago. "This is fed right now by real estate, and what's been this mortgage frenzy in the last several years."
Says the lawyer with a certain amount of glee.
Visions of dollar signs danced in his head
As he quickly re-calculated his
hourly fee....
Mike, lol.
Perhaps people can take on a second job to pay for their homes.
I wouldn't suggest retail though, for what it is worth.
Uh retail. Yeah, right. Been there done that got the T-shirt. No thanks. That little stint used up my lifetimes supply of patience for dealing with idiots.
I just added shaded areas to the chart showing economic contractions. I don't know why I didn't think of doing it before, but something in my head eventually saw the pattern.
I wouldn't suggest retail though, for what it is worth.
I'm not sure retail pays well enough to cover the gas money to get you there and back let alone pay off the mortgage. At least from what I see from my retail slave son & his friends... even the managers get paid crap and it's one regional flagships for a major national chain.
Mike,
That little stint used up my lifetimes supply of patience for dealing with idiots.
So you turned to blogging?
Tell Long Beach I said hello.
dryfly,
I'm not sure retail pays well enough to cover the gas money to get you there and back...
Isn't that the truth, especially if you've moved out into the burbs to find "cheap" housing.
Things might be getting that way in the UK soon.
Good read.
"From 2001 to 2006, a total of £256bn in equity was extracted from UK property values in this way. Dependent as it is on rising house prices, housing equity withdrawl cannot continue to prop up our consumer spending at its current level," said the report.
The dramatic change in attitudes to debt has caused the UK savings rate to plummet from 8.3pc of disposable income fifteen years ago to around zero. Personal debt has risen by 137pc since June 1993 to £1,343bn, greater that annual GDP for the first time.
Telegraph.co.uk: news, business, sport, the Daily Telegraph newspaper, Sunday Telegraph - Telegraph money...cnuksham122.xml
OT But a good read.
New credit crunch looms - Telegraph
Perhaps people can take on a second job to pay for their homes.
I bet some of these folks are already working two of them. There's plenty of jobs out there, they just don't pay crap.
Mark,
Your chart is nifty. It's hard to believe U.S. retail trade employment is more than 5% of population at a time when you can wander through a vast Home Depot store for a half hour without finding anybody who knows anything, or sometimes anybody period.
There's two big problems indicated by your chart: way too many stores and way too little productivity per store. Both problems will probably be fixed soon as your chart falls back toward 4% or so. That would mean almost two million retail jobs lost from the peak. If you want to call them jobs. When you pay minimum wage in our country today, you get bodies, not workers.
Thanks for that last link Topher. It explained for me the puzzle as to why the dollar held up today.
". . .
Mr Redeker said yesterday's dollar spike was caused by US investors pulling money out of Turkey, South Africa, Hungary and other emerging markets. They had invested $300bn in bonds and stocks over the last year.
"This is just profit-taking on risky assets. The dollar is going to fall further because long-term funding for US assets has collapsed since the sub-prime crisis," he said.
Outgoing IMF chief Rodrigo Rato warned yesterday that the adjustment may be brutal. "An abrupt fall in the dollar could either be triggered by, or itself trigger, a loss of confidence in dollar assets," he said."
These recent wave of bankruptcy filings explain how you can have a year-on-year doubling of foreclosures, but a light dip from August to September. The lawyers' marketing must be getting out there.
AmEx confesses:
American Express Q3 2007 Earnings Call Transcript -- Seeking Alpha
The total provision for loss and benefits increased 25% versus last year, as the lending provision increased 41%, the charge provision rose 9%, and the other provision was 5% higher. The increase in lending provision was driven by higher loan volumes and increased past due and writeoff rates in the US portfolio relative to the lower year-ago levels that benefited from the impact of the 4Q05 bankruptcy legislation. The charge card provision rose 9%, reflecting growth in volumes and relatively stable credit indicators.
The following answer to their provisioning policy doesn't make me sit well:
Now, as it relates to our provisioning, we have used the same model for provisioning for the last several years. It's focused on the experience that we see and we used those models the same way this quarter as we have in past quarters. So we continue to use the same methodology. We think it's a methodology that appropriately matches credit expense with the revenues that are being generated and provides us with reserves that are appropriate, given the behavior that we're seeing within our customers.
OT, S&P may cut $20.6 bln CDOs tied to RMBS
Business & Financial News, Breaking US & International News | Reuters.com
Oct 22 (Reuters) - Standard & Poor's said on Monday it may cut ratings on $20.6 billion of U.S. cash flow and hybrid collateralized debt obligations after its downgrade to residential mortgage-backed securities last week.
County government debt in Washington state under review by S&P due to SIV paper:
King County, Wash., Fund Is Hit by SIV Turmoil - WSJ.com
OT, Homebuilder Neumann to file Chapter 11
Homebuilder Neumann to file Chapter 11 | Crain's Chicago Business
Neumann is the fourth-largest homebuilder based in the Chicago area when ranked by number of units sold, and 59th nationally, according to Builder magazine. The firms revenue fell 18% in 2006, to $425.4 million, according to the 2007 Crains List of Chicagos Largest Homebuilders. Revenue at Neumanns Chicago developments fell 29% to $260.9 million.
"It's a mess," says William McLeod, a Boston bankruptcy attorney who says he is receiving twice as many calls from debtors as he did a year ago. "This is fed right now by real estate, and what's been this mortgage frenzy in the last several years."
Says the lawyer with a certain amount of glee.
Visions of dollar signs danced in his head
As he quickly re-calculated his
hourly fee....
Mike in Long Island
Ha! I was thinking the exact same thing!
Bankruptcy!
Uh....
Is that a good thing,
or a bad thing...
Stag Mark,
Do you have any charts showing workforce participation over time with recessions shaded?
rich,
The easy button will solve the problem.
tj & the bear,
St. Louis Fed: Civilian Participation Rate
The new Bk law was set up to make it difficult to go chapter 7 and eliminate your debt...instead you have to get "counseling" and go chapter 13 which benefits unsecured creditors such as the credit card companies (who literally wrote the new law).Unless you are "insolvent" by the new law's definition.where I am in Sonoma county most of those filing are so far underwater on their homes that they meet the insolvency rule and are able to go chapter 7.Oddly these people do not wish to pay 3x the cost to rent the same home when they owe $100k plus in excess of what the home will sell for.The judges are going for it both because of the letter of the law,and because the new BK laws are so Blatantly unjust.
Not sure whether this is on-topic or not: I remember when they were "reforming" the bankruptcy law there was a lot of talk about the "homestead exemption". Is that relevant for people who can't make mortage payments?
Target lowers outlook on greater-than-normal daily volatility.
Another Homebuilder (Levitt) gets loan default notices.
UPDATE 1-Levitt home-building unit gets loan default notices
| Reuters
At least India is doing the right thing. India Assures Market Foreign Money Won't Be Cut Off - Forbes.com
According to Citi's credit strategist Matt King, there are four phases to the credit cycle, each of which has an implication for share prices.
In phase three, the credit market rolls over as investors lose their appetite for leverage. Spreads widen and bonds fall as the credit crunch bites but equities shrug off the gloom. This is where we are now, what Citi calls the beginning of the mature bull market.
Phase four is the true bear market when both main asset classes decline. Falling profits and a steady drip of warnings hit equities and only cash and government bonds make sense.
Hold on, we're at the bumpiest part - Telegraph
WOOF! Thanks, Mark. Damned if that chart doesn't scream trouble.
Thanks for the link re. King County, WA./Seattle malinvestments, Clyde.
Gawd, the things we learn just by coming to this site.
tj & the bear,
I bet if we combined all the charts that individually scream of troubles into a structured prediction chart (SPC) it wouldn't look nearly as bad. We could then sell the chart to unsuspecting optimists in other countries for billions of dollars.
Just a thought.
Clyde & waitinginPNW,
That's splendid news. I live in King County.
Countrywide releasing plan today to redo $16B in ARM loans. (around 82k borrowers)
Countrywide will rework $16B in mortgages - USATODAY.com
waitinginPNW,
I sent that one off to Ken Schram @ KOMO.
Also, check your Nov 6 ballot/pamphlet for HJR 4215 and the first words of the "statement against". Yup.
OT-
Bank United of Florida warned last week and has now doubled the loss provision it announces last week!
"In our pre-release we reported a loan loss provision of $8 to $10 million. We have increased the provision to $19.1 illion."
Expired
Mike in Long Island:
As he quickly re-calculated his
hourly fee....
Just for the record: bankruptcy is a flat fee, not an hourly fee. The increase in filings will not increase the cost per person. And it's coming off of such lows that the percentage increase doesn't matter as much as it appears.
Billy Hill:
Not sure whether this is on-topic or not: I remember when they were "reforming" the bankruptcy law there was a lot of talk about the "homestead exemption". Is that relevant for people who can't make mortage payments?
The limit on homestead exemption is limited to $125,000 for those who have not met the time period of 1215 days before filing for bankruptcy.
From ABI World:
This provision was enacted, in part, to prevent pre-bankruptcy asset planning by which debtors were acquiring homesteads for the primary purpose of taking advantage of certain states' favorable homestead laws. Some states, including Florida, Iowa, Kansas, South Dakota, and Texas, have no cap on the value of a homestead that may be exempted under state law. Whether coincidental or not, several of these jurisdictions have tended to see a pattern of purchases of expensive homesteads made sufficiently in advance of bankruptcy filings to qualify for the state law exemptions.
(I can't believe they left out Oklahoma. I guess our homes just aren't worth enough to be considered, even though we also have an monetarily unlimited homestead exemption.)
Anyway, that provision of the law was designed to prevent people from moving to states where they could keep high-valued homes in bankruptcy. But if that was the intent, the time period should have been limited to the same time period it takes to establish residency requirements. This punishes people who have no intent on filing bankruptcy at the time they buy their home and -- in a perverse way -- gives more protection outside of bankruptcy than in.
Looks like Countrywide is doing a small Homeowner Bailout:
Get You Free Money Here!!!
Said in my best Ball Park Voice!
Countrywide to offer refinancing to subprime borrowers - MarketWatch
Verry loong time lurker. What's up with the 20x increase on REO's on Countrywide's foreclosure site.
Bank of America. Contrast today's stats on this site to these of Countrywide Foreclosures (REO) Blog on 10/19/07
MS where I am jumped from 115 to 1414. CO where I'm from 410 to 8322. CA where I never want to be 3342 to 28137. W-T-F!!!!!
What part of Bankrupters and Fraudsters of New York City (BFNYC), a financial criminal gang raised in a "culture of fraud," don't people get?
I wonder how many Americans wake up worrying about terrorism versus worrying about debt? The real problem that Americans face is the evildoers at home and not abroad.
It Is the Debt, Stupid! (That will take the American econo-political system down).
Jas
It Is the Debt, Stupid! (That will take the American econo-political system down).
Please refrain from calling People stupid..Especially Americans...They are not Stupid..Just Mentally Challenged.
Mike,
That little stint used up my lifetimes supply of patience for dealing with idiots.
So you turned to blogging?
Tell Long Beach I said hello.
Banker | 10.22.07 - 10:32 pm
With blogging while I may be tempted to punch the monitor and may do so from time to time it won't result in any jail time....Not so in retail lol...
Long Beach says hello back. Saturday the water temps were still around 68 to 70 degrees...Not bad for late October.
That last comment to Banker was from me.
Tom Stone: I would say that the new bankrupcy laws are "blatenly unfair" only to the extant that the effectivly changed the rules for debts that had been created under the old rules. The CC companies were intimately familiar with the BK laws and people's propensity to take advantage of them when they extended credit to people. changing the laws after people had borrowed the money was a huge freebie for them.
The arguments against the BK changes (infact for BK protection in the first place) are largely public policy ones. There will always be people willing to borrow themselves to the poor house. Freedom or not, this is a bad thing. The only way to prevent it is to make lenders unwilling to lend them the money to do so.
REO's on Countrywide's foreclosure site.
All of the ones for Florida are showing list price of $0. Many of them are "NO BROKER ASSIGNED". Are the REOs outstripping the ability to process them ?
Countrywide in the news . . . debt restructuring for homeowners.
Countrywide to Refinance Up to $16 Billion of Loans (Update7) - Bloomberg.com
D'oh! Sorry for the multiple post.
"Verry loong time lurker. What's up with the 20x increase on REO's on Countrywide's foreclosure site."...
I believe the former corp. website includes ALL loans for which CFC services...i.e. REOs for multiple banks investors.
The latter foreclosure blog is only REOs held in CFC's corporate portfolio.
Are the REOs outstripping the ability to process them ?...
Perhaps CFC is trying direct marketing for awhile before deciding on paying a realtor's commission for nothing more than listing on the MLS.
gosh
having had just recently ended my direct exposure to residential market i can tell you that i now read this blog with a sense of relief.
i see the signs up around town and i think thank god. thank god.
dryfly, i owe you a little piece of the upside on my non-residential business now!
of course i have the primary residence but i've got the 30 yr fixed and a 30 yr time horizon.
weeeeeeeeeeeeeeeeee!
Reining in Home Mortgage Creditors - Credit Slips
Some homeowners file chapter 13 thinking it will save their home. It will temporarily. Once they fall off the bankruptcy payment plan (which does happen), the lender will ask for a stay of relief and ask that the home be taken out of the bankruptcy. Then the homeowner finds out all the arrearages and late fees are now still due, and they are worse off now than if they had taken their bitter medicine up front and sold their home. They should always start by contacting the loss mitigation department at their lender. If they cannot get a favorable workout with the lender they should SELL! Many will find that they need to do a Short Sale because they now owe more than what their home will sell for. Many will be those that have refinanced within the last 3 years with a teaser rate ARM and now they are adjusting up raising their mortgage payment by 30 - 50%.