Chase Further Strengthens Robust Programs to Keep Families in Homes, Including Systematic Review of Entire Mortgage Portfolio
hase today announced it is expanding its already significant mortgage modification program by undertaking multiple initiatives designed to keep more families in their homes, including extending its modification programs to WaMu and EMC customers.
Chase will open regional counseling centers, hire additional loan counselors, introduce new financing alternatives, proactively reach out to borrowers to offer pre-qualified modifications, and commence a new process to independently review each loan before moving it into the foreclosure process. Chase expects to implement these changes within the next 90 days.
While implementing these enhancements, Chase will not put any additional loans into the foreclosure process. This will give affected homeowners an opportunity to take advantage of the enhancements, and applies only to owner-occupied properties with mortgages owned by Chase, WaMu or EMC, or with investor approval.
Chase will continue to work diligently with investors to get their approval to apply these programs to the loans it services for others, so its efforts have the broadest possible impact. These programs are designed for homeowners who show a willingness to pay, so Chase, WaMu and EMC customers should continue to make mortgage payments to reflect their intent to honor their commitments.
"While Chase has helped many families already, we feel it is our responsibility to provide additional help to homeowners during these challenging times, said Charlie Scharf, CEO of Retail Financial Services at Chase. "We will work with families who want to save their homes but are struggling to make their payments.
The enhanced program is expected to help 400,000 families with $70 billion in loans in the next two years. Since early 2007, Chase, WaMu and EMC have helped about 250,000 families with $40 billion in loans -- avoid foreclosure, primarily by modifying their loans or payments. Both the existing and enhanced programs apply only to owner-occupied properties with mortgages owned by Chase, WaMu or EMC, or with investor approval.
Oct. 31 (Bloomberg) -- JPMorgan Chase & Co., the largest U.S. bank by market value, plans to modify $110 billion of mortgages, including some of those made to Washington Mutual Inc. customers.
The bank won't put any loans into foreclosure while it follows through on plans to open regional counseling centers during the next 90 days, the New York-based company said in a statement today.
We personally ran into a funny consequence of home improvement from a couple of years ago. We put ~$200k into our house and pofessional appraisals pre and post verified roughly break-even value (at that time). Our area is off a bit since, but we still have some equity.
But then we got a curious letter from our HELOC bank suspending withdrawals that indicated their "automatic appraisal" system flagged us as dangerously underwater. The value they quoted was way low and it led me to wonder how they arrived at it.
I'm guessing they pulled our house information on sq ft & rooms from something like the county tax rolls. I looked us up on zillow.com and the house information they pulled from somewhere was decades out of date, not even including a renovation that was done before we bought (1998).
I don't know why the data is out of date, but fear updating it might increase our property tax.
I'm also inclined to idly wonder how many other people who renovated during/through the recent boom might have run into this. Maybe some fraction of the "underwater" folks aren't actually underwater? Wasn't home renovation pretty popular for awhile?
This would seem to suggest there is significant downside risk to home improvement spending over the next couple of years.
I suspect rather that home improvement stays elevated as new home replacement structures keep falling thus necessitating ongoing maintainence of the existing stock which will undoubtably collectively age far faster than the historic norms.
I think you're right on the foreclosure explosion forcing continuing home improvements. I doubt it will drop much, although since it's a "broken window" issue it's not a good thing for the economy.
==
back to topic:
we're looking at renovating (windows, doors, siding) and one of the things spurring us into doing this is the fact that we don't want to sell and move in this environment. better to update what we have.
They've got this backwards. Anyone underwater now is toast no matter how they rework the mortgage. House prices are going to plummet once the recession/depression gets in full swing.
They should be handing out money to folks who have less than 10 years to mortgage payoff with good LTVs right now. At least they can prevent these homes from going into the foreclosure pool when the economy completely collapes.
The enhanced program is expected to help 400,000 families with $70 billion in loans in the next two years. Since early 2007, Chase, WaMu and EMC have helped about 250,000 families with $40 billion in loans -- avoid foreclosure, primarily by modifying their loans or payments. Both the existing and enhanced programs apply only to owner-occupied properties with mortgages owned by Chase, WaMu or EMC, or with investor approval.
grim | Homepage | 10.31.08 - 12:57 pm | #
Finally a little European proactive / forward looking thinking. It only took how many billions in write downs before they figured it out...
Chase-"we will offer you a loan modification but to do that you have to keep making payments" sounds to me like they are beginning to take seriously the prospect that people will just sart walking away from underwater homes.
I spent just over $19,000 fixing up a trashed doublwide I bought 4 months ago. The initial intention was to have the local vol. fire dept. "practice" by burning it to the ground and then build on the 9 acre property. It was much quicker to remodel than build new and with the current economy..... I now have a bunker on 9 level acres with gravity flow irrigation. The new building permits are still winding their way through P$Z........
What surprises me in the first graph is that broker's commissions accounts for .5% of the GDP. Even now, after falling consistently since its 2005 peek, it is still at or above its historical norm.
rcc writes:
They've got this backwards. Anyone underwater now is toast no matter how they rework the mortgage. House prices are going to plummet once the recession/depression gets in full swing.
You can't win elections with those kinds of promises!
Come on, you have to tell them what they want to hear!
Home Depo as a barometer for future cash flow related to home improvement, is symptomatic of declining earnings yields and cash burn. As the recession kicks in, the EPS values will continue to fall, as they did for JDSU, thus HD will have to have a Starbucks moment and close stores.
not sure whether the maintenance that people will need to do on older homes they are stuck in will be an offset to high value improvements people were doing to their homes. (incidentally most of them don't recover the value of the improvement.
Plus the improvements that frozen home owners are doing were presumably being done by the people to whom they were selling in the past. Only I bet that those folks did more than the basic minimum.
Now the women are taking over, a spectacularly non-PC government official told the FT. Its typical, the men make the mess and the women come in to clean it up. And the political will is clearly there for the pair to make sweeping changes to the way the banks operate. The paper suggests that Icelanders casting around for someone to blame for their current predicament have settled on young bonus-hungry male bankers, whose eyes became bigger than their stomachs.
It has yet to make it through the dense layers of stupidity the lenders are hiding in that....
You'd be a lot better doing some workouts than foreclosing on folks.
As for improvement. We will see. A little known fact is that in NO year since WWII has enough new housing come on the market to meet the need for new housing CREATED IN THAT YEAR BY NEW HOUSEHOLD FORMATION.
Yep, Murka the nation that stopped knowing how a long time ago.
Could it be that those that can still do "improvements" are those that are embellishing properties that are more insulated from house price declines?
Maybe house price declines are not as evenly distributed as the median numbers lead us to believe...maybe the retail numbers from The Depot tell us something.
so home improvement may (will) come down from 1.21% of the gdp to 1.07ish. non-residential construction might similary fall by a fraction of a percent in terms of the gdp.
Correct me if i'm wrong, but then this cumulative slowdown from the last three CR posts won't even be 1% of the gdp next year. (residential investment seems to have correct enough already) It just doesn't seem like much. I mean sure, 1% of the gdp, some will say, is a lot. But it's not catastrophic. could easily be offset by any number of factors.
Looks to me like investments in home improvement are stable no matter what and investments in single family homes are very volatile. I don't see anything making me believe the former will dip because the latter did.
If purchases of big ticket items like cars and boats are going down, most likely home improvement will be going down as well. If you can delay purchasing a 30K car, you can probably delay putting in a jacuzzi and inground pool.
Investment in home improvement ($175.2 billion SAAR) is almost at the same level as investment in single family structures ($176.0 billion SAAR) in Q3 2008.
Great charts as usual, CR. I think you see the relative stability in home improvement in large part because of retired people on fixed incomes who usually own the homes outright who are making improvements. It would be interesting to see some data on who is doing the improvements.
Yah, it is a case of burnout, just as with flappers, fads burn out. I remember the good old days at nakedcapitalism when maybe 10 posts would pop up in a week, or here at CR, 50 people a month would show up and talk about the best steering wheel covers of large tonnage trucks and where the best gravy used to be, and CR woud just be there in full support; God those were the days!
Also see: Flappers had their own slang, with terms like "snugglepup" (a man who frequents petting parties) and "barney-mugging" (sex). Their dialect reflected their promiscuity and drinking habits; "I have to go see a man about a dog" often meant going to buy whiskey, and a "handcuff" or "manacle" was an engagement or wedding ring. Also reflective of their preoccupations, they had many ways to express approval, such as "That's so Jake" or "That's the bee's knees," or a more popular one, "the cat's pajamas."
I wonder when it will reach critical mass. And what that will mean.
Currently Smoking Cannabis
You'll know. The lights will flicker, then go out. Dark gray smoke will puff at the horizon. The sound of poorly maintained cars will approach from that direction. Ahead of them will be people, running, screaming. You won't know them. You'll join them: AAAAHHHHHHHHHRRRRRGGGGHHHH!!!
Great article on AIG , shedding light that the bailout aint helping do anything but fill growing holes, and the question now being asked is this the case with all these firms?
i am planning some improvements to the paid-off manse. Have done some electrical already. The electrician guys wanted to know how long the slow down would last.
A year, they asked hopefully? More like 5 sez I appologetically. Sorry. No, they said, we need to hear the truth.
The late Larry Brown, the author of Joe, Billy Ray's Farm, and seven other classics of Southern literature, had a saying: When things were difficult, complicated, aggravating, or vexing in one way or another, he'd say, "They ain't squirrels, baby."
I know people who bought recently renovated houses, and spent a heloc of money on remodeling.
You don't need to repair working and functional. You may be correct. Odds are against it though."
I'm also thinking about all the shoddily built newer homes were the kitchens and bathrooms just weren't done well. So.. you're five years or ten years in, and the tiles are coming loose and the cheap cabinets are deteriorating and you realize that hardwood floor in the kitchen is a really stupid idea unless you're a clean freak, and you aren't. And your five-foot-tall wife can't reach half the storage space and she's getting tired of it, and you're cooking at home now and realize that the kitchen is actually badly laid out and .... time to remodel.
That's my thinking, anyway. And I think the need for remodel will come sooner on newer homes than ever before.
I call BS on those home improvement numbers. I guarantee you that they are down much further than indicated. Improvements were frenzied in the flip days because they "added value" either to flippers or existing home owners (both using HELOCs). Now that prices are collapsing, home improvements are not "adding value" for flippers (except in a minority) or existing homeowners are shying away because home prices are falling, stock prices are horrible, and HELOCs are hard to come by. Talk to the construction guys. They'll tell you everything is practically shut down on the residential side. Those numbers are wrong and/or don't reflect reality. Count on it.
You'd have to be stupid to go long today, unless you're a daytrader and planning to sell/short the close. We are going to crash, either on Monday or Wednesday.
If you're getting hand-written notes about pre-'65 coins for his planning, he's panicking.
Leads me to wonder what the debt level of his firm might be and business in the pipeline.
We're fully framed out on the basement project and the electricians are downstairs now. Meeting with the contractor this pm to go over some additional business and then the initial set of inspections in about a week. Egress window the week after next.
All done in cash.
I don't necessarily see this as terribly different from the '70s in that people couldn't get financing for a move but could still do some home improvement to make things more palatable. A lot of friends had families doing basement/new upper floors/additions in lieu of buying/moving.
As to last thread with Barney Frank, he's got as much common sense as two of my kids combined. And that ain't much.
And while on the subject, "crazyvermonter" is repetitive.
not sure whether the maintenance that people will need to do on older homes they are stuck in will be an offset to high value improvements people were doing to their homes. (incidentally most of them don't recover the value of the improvement.
Fair statement. What about energy efficiency especially in light of likely tax credits? I see those bumping the numbers.
You are absolutely correct about ROI. Easy answer; improvemnts don't recover costs. There are a few exceptions like mild bathroom remodels and kitchen surface only upgrades but most have less than 60% ROI.
Plus the improvements that frozen home owners are doing were presumably being done by the people to whom they were selling in the past. Only I bet that those folks did more than the basic minimum.
I see a sea change. Before improvements were to fluff the sales price. Soon improvements will be judged by increased livability.
There's also the aging in place issue. Those of us with houses suitable for 70 year olds are sitting pretty but expect some pricey installations of elevators, wide door showers and stair assists amongst others.
"There's also the aging in place issue. Those of us with houses suitable for 70 year olds are sitting pretty but expect some pricey installations of elevators, wide door showers and stair assists amongst others.
Rob Dawg"
Apparently they are not making new children anymore. Luckily my home also has a crematory. I'm golden.
An unidentified "Bush administration official" told Reuters that "the U.S. Treasury Department is not negotiating with General Motors Corp and the owners of Chrysler LLC on a request to provide direct government aid to their proposed merger" this morning. The denial comes after reports yesterday that the Treasury and Energy departments were prepared to offer GM $5 million each to help complete the deal. Instead, the source said, "the administration is working to speed the distribution to automakers of $25 billion in factory retooling funds authorized by Congress last month."
And once you actually start to READ the article, the truth comes out: AIG isn't "repaying" the Fed - it's mooching even more money, and at MUCH better terms. You see, "officially" the amount that AIG owes (i.e., has already spent) out of the $122 BILLION it originally borrowed actually declined from $90.5 billion to $83.5 billion.
How did this reduction occur? Simple. AIG just "sold" $20 billion in "commercial paper." Who did it "sell" it to? Why, the FED, of course! Translating Wall Street double-talk into English, AIG "repaid" $7 billion TO the Fed - by borrowing $20 billion more, at a much lower interest rate FROM the Fed, and all the Fed got in return was a worthless IOU.
This is so absurd, it's something I could have produced with one of my "Rooter's NEWS FLASHES." When AIG got its enormous emergency loan, just as this once-mighty behemoth was about to fold, AIG was punished for its folly and incompetence with a very onerous rate on this debt: 11.7%. Act II of this farce now commences, with AIG borrowing new money, at 1/3 of the previous interest rate, and for every three new dollars it borrows, it's paying off only one dollar of the much more expensive debt.
dryfly, "we do that at Culver's" LOL! Yes...yes we do. You could practically hear Dave Thomas slap his forehead when he saw that Culver coined the term "Butterburger".
More on rural dev: Now there's talk of my hometown--population approx. 550--building a landfill just outside of town to service the nearby "city" of 25,000 whose landfill closed down after reaching capacity about a decade ago.
These events of course have nothing to do with the recent opening of a SuperWal-Mart and enormous Menard's on the edge of that city, two stores that already had locations in the city but decided they needed bigger stores that never close.
They were built on a cornfield next to a cemetery. Nice view if you can get it.
As far as I know, the old Menard's location is empty, the old Wal-Mart has been moved into by the Farm & Fleet that was across the street, which is now empty. Across the street from that is a strip mall anchored by a KMart and JC Penney.
"When that's the case and the best solution that Ben Bernanke (Federal Reserve chairman) and Henry Paulson (U.S. treasury secretary) can come up with is even more debt - and worse, they are being supported by a number of other central banks around the world - you are on such a wrong track as to defy the imagination. By trying to get people to borrow even more, it's the stupidest solution to this problem that one could imagine. Since nobody seems to have come up with anything better, it's kind of like (the sign over) the gates to hell: 'Abandon hope all ye who enter here.' And that's where we are - we are going into debtors' hell.
"Japan held rates at zero for nearly six years in its decade-long struggle against deflation. When that was not enough it resorted to "quantitative easing", a technical term for what amounts to printing money on huge scale."
If the BoJ has been printing money on a huge scale, where's the inflation? Exported to the rest of the world through carry trade.
States need direct and immediate fiscal relief, Paterson said. Washington needs to step up and help states address a problem that was not of their own making. Just like the financial services industry, we (states) need a partner in the federal government in order to help stave off an impending calamity and stabilize our fiscal condition.
I know we're going down in a blaze of gory, but I would think that home improvement / maintenance still makes sense in parts of the country that weren't as drastically 'bubbled' and consequently (or, at least, arguably) should not be able to lose as much of the past appreciation. e.g. midwest non MI home prices didn't double, so, they should be able to lose 50% of their value.
Now in terms of credit performance, the 30 plus day delinquency rate for managed retail motorcycle loans was 5.6% compared to 4.9% at the end of the third quarter of 2007. Delinquency rates continue to reflect the financial pressures on U.S. consumers. We believe our experience is in line with that of others in the financial services industry.
Because of the extreme volatility in the credit markets during the last few weeks and in keeping with our conservative management of the balance sheet, we do not plan to repurchase shares during the fourth quarter until HDFS has successfully executed a capital market transaction and obtains additional financial flexibility.
Rob Dawg writes:
Oh hey, I certainly want to be owning long stocks over the election weekend. Does anyone seriously think Dow 9350 prices in risk?
Rob Dawg | Homepage | 10.31.08 - 2:07 pm | #
one of the tipping points i've been focusing on is the purchase of our debt. petrodollars are having their own bank collapse in the mideast and russia is having an artery bleed of rubles.
If it does sell off into the close, and that's a big IF, it certainly stays above 9k. YE mutual funds are way more important than any fundamental reasons....
On a conference call, an analyst asked Ayer about his decision in June to speed up a $500 million share repurchase.
"The third quarter was the most challenging in the Hartford's history,'' Ramani Ayer, chief executive officer of the Hartford, Connecticut-based insurer, said yesterday in a conference call. Life insurers are scrambling to build capital as the investments they hold to pay future claims decline in value. MetLife and Hartford sold shares to bolster their finances in October, while Prudential suspended its buyback
Banks are proposing that they forgive up to 40% of the credit card debt owed by the most financially stressed consumers, who are close to bankruptcy. These consumers would then get five years to pay off their remaining card debt, interest-free. Banks would pilot this program with 50,000 consumers, in hopes of expanding it to tens of thousands of others.
Moral Hazard Play of the day:
Stop paying your house payment
Stop paying your credit card payment
Charge all of your living expenses, and hoard your cash buy PMs
"Banks are proposing that they forgive up to 40% of the credit card debt owed by the most financially stressed consumers, who are close to bankruptcy. These consumers would then get five years to pay off their remaining card debt, interest-free. Banks would pilot this program with 50,000 consumers, in hopes of expanding it to tens of thousands of others."
You forgot the best part. As part of this proposal banks would not need to recognize the loss they took until the consumer paid off the rest of the debt.
Dem trick-or-treaters are starting way too damm early...looked out of the corner of me eye an there was a guy in a Bernanke outfit
... bit me on the neck, then turned me upside down...shook out my loose change
Yar
Maybe there needs to be a new support group: Billpayers Anonymous. People can bring in the Sharper Image catalogs they normally recycle and support each other through the urges to be frugal.
well, i can do a special package of repackaged GSE derivatives that came twice bundled and then squared. it's actually more valuable now, cause the risk is spread out. nobody can default, there would be blood on the streets first. safe as houses.
OT- I was just watching BB on the tv talking about the securitization of mortgages past, present, future. I was reminded of an incident about 20 years ago. I'm standing in the local branch of citibank in my hometown on Long Island. Maybe a dozen people in line. I'm a couple years out of high school, still a kid. The new branch manager starts introducing herself to the customers in the lobby. "hi, im mary jones im the new manager here...nice to meet you etc." She goes thru the lobby doing her thing when she gets to a middle age guy standing near me she says"hi im mary...blah blah blah" The guy says " Hi i'm stu schmoile and I'm your largest buyer of mortgages". I went to high school with a stu schmoile and figured this guy was his dad.Question is - back in the day was it some local guy with an in-depth knowledge of the local market purchasing , packaging these loans and then reselling them to various investor groups and if so is it going to return to that model?
"A lot of friends had families doing basement/new upper floors/additions in lieu of buying/moving."
itsnt it all relative??? if you wanna bigger house, sell the little one and buy a bigger one..the improvements dont pay for themselves..esp 2nd stories...all the houses are gonna be cheap...what are you holding out for? you sell yours cheap and you buy another larger one for alittle more, but i bet the square footage cost is the same...
Mortgage borrowers who are "upside down" but still paying, as well as those who are not paying, are highly likely to curtail sharply their spending on residential improvements. I mean, what's the point?
I'm happily out of California and riding it out in NY. Reason why NY is at the bottom you're wondering? Because the property taxes here are insane...3-4%. The prices can't be more beat down than they already are because of retirees who flee the state with their fat state (and non-taxable) pensions.
"Improvement" is subjective.
No link..
Chase Further Strengthens Robust Programs to Keep Families in Homes, Including Systematic Review of Entire Mortgage Portfolio
hase today announced it is expanding its already significant mortgage modification program by undertaking multiple initiatives designed to keep more families in their homes, including extending its modification programs to WaMu and EMC customers.
Chase will open regional counseling centers, hire additional loan counselors, introduce new financing alternatives, proactively reach out to borrowers to offer pre-qualified modifications, and commence a new process to independently review each loan before moving it into the foreclosure process. Chase expects to implement these changes within the next 90 days.
While implementing these enhancements, Chase will not put any additional loans into the foreclosure process. This will give affected homeowners an opportunity to take advantage of the enhancements, and applies only to owner-occupied properties with mortgages owned by Chase, WaMu or EMC, or with investor approval.
Chase will continue to work diligently with investors to get their approval to apply these programs to the loans it services for others, so its efforts have the broadest possible impact. These programs are designed for homeowners who show a willingness to pay, so Chase, WaMu and EMC customers should continue to make mortgage payments to reflect their intent to honor their commitments.
"While Chase has helped many families already, we feel it is our responsibility to provide additional help to homeowners during these challenging times, said Charlie Scharf, CEO of Retail Financial Services at Chase. "We will work with families who want to save their homes but are struggling to make their payments.
The enhanced program is expected to help 400,000 families with $70 billion in loans in the next two years. Since early 2007, Chase, WaMu and EMC have helped about 250,000 families with $40 billion in loans -- avoid foreclosure, primarily by modifying their loans or payments. Both the existing and enhanced programs apply only to owner-occupied properties with mortgages owned by Chase, WaMu or EMC, or with investor approval.
second?
multiple initiatives designed to keep more families in their homes, including extending its modification programs to WaMu and EMC customers.
Whenever they talk about keeping families in homes, I wish they would change the phrasing to "keeping paying families in homes".
JPMorgan to Modify $110 Billion Mortgages Including WaMu Loans
JPMorgan to Modify Mortgages to Limit Foreclosures (Update1) - Bloomberg.com
Oct. 31 (Bloomberg) -- JPMorgan Chase & Co., the largest U.S. bank by market value, plans to modify $110 billion of mortgages, including some of those made to Washington Mutual Inc. customers.
The bank won't put any loans into foreclosure while it follows through on plans to open regional counseling centers during the next 90 days, the New York-based company said in a statement today.
Maybe lenders are boosting home improvement spending fixing up all those damaged REOs!
Been in an REO recently?
I don't see much spending going on in there!
Since I'm too uncertain to move, I've been spending on minor improvements. If I'm not going anywhere, I may as well fix things.
We personally ran into a funny consequence of home improvement from a couple of years ago. We put ~$200k into our house and pofessional appraisals pre and post verified roughly break-even value (at that time). Our area is off a bit since, but we still have some equity.
But then we got a curious letter from our HELOC bank suspending withdrawals that indicated their "automatic appraisal" system flagged us as dangerously underwater. The value they quoted was way low and it led me to wonder how they arrived at it.
I'm guessing they pulled our house information on sq ft & rooms from something like the county tax rolls. I looked us up on zillow.com and the house information they pulled from somewhere was decades out of date, not even including a renovation that was done before we bought (1998).
I don't know why the data is out of date, but fear updating it might increase our property tax.
I'm also inclined to idly wonder how many other people who renovated during/through the recent boom might have run into this. Maybe some fraction of the "underwater" folks aren't actually underwater? Wasn't home renovation pretty popular for awhile?
This would seem to suggest there is significant downside risk to home improvement spending over the next couple of years.
I suspect rather that home improvement stays elevated as new home replacement structures keep falling thus necessitating ongoing maintainence of the existing stock which will undoubtably collectively age far faster than the historic norms.
CR do they separate home improvements from say new home construction in those numbers?
I think you're right on the foreclosure explosion forcing continuing home improvements. I doubt it will drop much, although since it's a "broken window" issue it's not a good thing for the economy.
Obama speaking. I'm getting ready for 5% inflation...
k harris posted this info on JPM earlier.
This is more bad news for used house salespeople. Keeping prices elevated will keep transactions done.
"keeping paying families in homes"
There are going to fewer and fewer of those as the months wear on.
Wasn't home renovation pretty popular for awhile?
just a little.
==
back to topic:
we're looking at renovating (windows, doors, siding) and one of the things spurring us into doing this is the fact that we don't want to sell and move in this environment. better to update what we have.
Free Ponies in Japan
transactions down, that is.
They've got this backwards. Anyone underwater now is toast no matter how they rework the mortgage. House prices are going to plummet once the recession/depression gets in full swing.
They should be handing out money to folks who have less than 10 years to mortgage payoff with good LTVs right now. At least they can prevent these homes from going into the foreclosure pool when the economy completely collapes.
The enhanced program is expected to help 400,000 families with $70 billion in loans in the next two years. Since early 2007, Chase, WaMu and EMC have helped about 250,000 families with $40 billion in loans -- avoid foreclosure, primarily by modifying their loans or payments. Both the existing and enhanced programs apply only to owner-occupied properties with mortgages owned by Chase, WaMu or EMC, or with investor approval.
grim | Homepage | 10.31.08 - 12:57 pm | #
Finally a little European proactive / forward looking thinking. It only took how many billions in write downs before they figured it out...
The value they quoted was way low and it led me to wonder how they arrived at it.
Are you sure?
Chase-"we will offer you a loan modification but to do that you have to keep making payments" sounds to me like they are beginning to take seriously the prospect that people will just sart walking away from underwater homes.
I spent just over $19,000 fixing up a trashed doublwide I bought 4 months ago. The initial intention was to have the local vol. fire dept. "practice" by burning it to the ground and then build on the 9 acre property. It was much quicker to remodel than build new and with the current economy..... I now have a bunker on 9 level acres with gravity flow irrigation. The new building permits are still winding their way through P$Z........
What surprises me in the first graph is that broker's commissions accounts for .5% of the GDP. Even now, after falling consistently since its 2005 peek, it is still at or above its historical norm.
rcc writes:
They've got this backwards. Anyone underwater now is toast no matter how they rework the mortgage. House prices are going to plummet once the recession/depression gets in full swing.
You can't win elections with those kinds of promises!
Come on, you have to tell them what they want to hear!
Politics 101.
geesh.
I wish I were japanese. because then I'd have a pony too!
I made too much money to get an american pony.
Icelandic Ponies really are the best -- they've got SuperTölt
YouTube - Super Tölt on an Icelandic Horse
Home Depo as a barometer for future cash flow related to home improvement, is symptomatic of declining earnings yields and cash burn. As the recession kicks in, the EPS values will continue to fall, as they did for JDSU, thus HD will have to have a Starbucks moment and close stores.
We'll get our ponies.
They will be called 'food.'
UB,
WTF is going on here, this seems so boring anymore!
Shiiiit. If I am getting a foreclosed home for 1/2 the price of 2 years ago I am getting me a jacuzzi installed.
Currently Smoking Cannabis writes:
We'll get our ponies.
They will be called 'food.'
You want another liability?
I'm not feeling it...
Super Tölt on an Icelandic Horse
YouTube - Super Tölt on an Icelandic Horse
Where are the super hot Nordic chicks?
Wow, I was wondering why all those cable home improvement pr0n shows went.
Knurd!
Nostrovia,
Robert Dawg
not sure whether the maintenance that people will need to do on older homes they are stuck in will be an offset to high value improvements people were doing to their homes. (incidentally most of them don't recover the value of the improvement.
Plus the improvements that frozen home owners are doing were presumably being done by the people to whom they were selling in the past. Only I bet that those folks did more than the basic minimum.
I can haz cow?
You can't win elections with those kinds of promises!
Very true. Otherwise we would have honest people like Ron Paul winning the election.
I'm still not feeling it:
Women on top in Iceland
Women on top in Iceland - Banking, Financial Services & Insurance - Management Today
Now the women are taking over, a spectacularly non-PC government official told the FT. Its typical, the men make the mess and the women come in to clean it up. And the political will is clearly there for the pair to make sweeping changes to the way the banks operate. The paper suggests that Icelanders casting around for someone to blame for their current predicament have settled on young bonus-hungry male bankers, whose eyes became bigger than their stomachs.
CSC,
no. you will not be able to afford to eat a cow. you will only be able to afford to eat imported japanese ponies.
It has yet to make it through the dense layers of stupidity the lenders are hiding in that....
You'd be a lot better doing some workouts than foreclosing on folks.
As for improvement. We will see. A little known fact is that in NO year since WWII has enough new housing come on the market to meet the need for new housing CREATED IN THAT YEAR BY NEW HOUSEHOLD FORMATION.
Yep, Murka the nation that stopped knowing how a long time ago.
Currently Smoking Cannabis writes:
I can haz cow?
That's better, at least you can put a bond out and get it rated AAA from S&P.
I dunno Kone, I think the Scandinavian Models got frustrated from lack of attention after the initial flurry.
Could it be that those that can still do "improvements" are those that are embellishing properties that are more insulated from house price declines?
Maybe house price declines are not as evenly distributed as the median numbers lead us to believe...maybe the retail numbers from The Depot tell us something.
Well if you can't move into your dreamhome, what else are you going to do but fix up the old dump and make it more liveable. Things do wear out.
I expect this kind of "renewal" remodeling to make up for at least some of the "flipper" renovations that are no longer happening.
And yes, I just had the kitchen done -- new tile, new floor, new windows, new oven, more counter space, more storage space.
so home improvement may (will) come down from 1.21% of the gdp to 1.07ish. non-residential construction might similary fall by a fraction of a percent in terms of the gdp.
Correct me if i'm wrong, but then this cumulative slowdown from the last three CR posts won't even be 1% of the gdp next year. (residential investment seems to have correct enough already) It just doesn't seem like much. I mean sure, 1% of the gdp, some will say, is a lot. But it's not catastrophic. could easily be offset by any number of factors.
Looks to me like investments in home improvement are stable no matter what and investments in single family homes are very volatile. I don't see anything making me believe the former will dip because the latter did.
THE BROKERS WITH HANDS ON THEIR FACES BLOG
Had a visit with a 'canary' of mine last night.
Last time we spoke, nothing had really changed, this was just a normal business cycle, I was paranoid, and any disruptions were contained.
Last night I left with a 'Survival Guide' containing handwritten notes about pre-1965 coins and 'bug out' bags.
I wonder how common this shift of perception is.
I wonder when it will reach critical mass.
And what that will mean.
RebelRenegade,
If purchases of big ticket items like cars and boats are going down, most likely home improvement will be going down as well. If you can delay purchasing a 30K car, you can probably delay putting in a jacuzzi and inground pool.
Investment in home improvement ($175.2 billion SAAR) is almost at the same level as investment in single family structures ($176.0 billion SAAR) in Q3 2008.
Great charts as usual, CR. I think you see the relative stability in home improvement in large part because of retired people on fixed incomes who usually own the homes outright who are making improvements. It would be interesting to see some data on who is doing the improvements.
Bob Dobbs,
"I expect this kind of "renewal" remodeling to make up for at least some of the "flipper" renovations that are no longer happening."
I know people who bought recently renovated houses, and spent a heloc of money on remodeling.
You don't need to repair working and functional. You may be correct. Odds are against it though.
Nostrovia,
UB,
Yah, it is a case of burnout, just as with flappers, fads burn out. I remember the good old days at nakedcapitalism when maybe 10 posts would pop up in a week, or here at CR, 50 people a month would show up and talk about the best steering wheel covers of large tonnage trucks and where the best gravy used to be, and CR woud just be there in full support; God those were the days!
Also see: Flappers had their own slang, with terms like "snugglepup" (a man who frequents petting parties) and "barney-mugging" (sex). Their dialect reflected their promiscuity and drinking habits; "I have to go see a man about a dog" often meant going to buy whiskey, and a "handcuff" or "manacle" was an engagement or wedding ring. Also reflective of their preoccupations, they had many ways to express approval, such as "That's so Jake" or "That's the bee's knees," or a more popular one, "the cat's pajamas."
I wonder when it will reach critical mass. And what that will mean.
Currently Smoking Cannabis
You'll know. The lights will flicker, then go out. Dark gray smoke will puff at the horizon. The sound of poorly maintained cars will approach from that direction. Ahead of them will be people, running, screaming. You won't know them. You'll join them: AAAAHHHHHHHHHRRRRRGGGGHHHH!!!
Heh, money managers are painting the tape hard today. Not a surprise.
Today is shaping up to be a major up day. Go long, young man.
Great article on AIG , shedding light that the bailout aint helping do anything but fill growing holes, and the question now being asked is this the case with all these firms?
AIG Already Running Through Cash - CNBC
I like the word TANTAlizing....
i am planning some improvements to the paid-off manse. Have done some electrical already. The electrician guys wanted to know how long the slow down would last.
A year, they asked hopefully? More like 5 sez I appologetically. Sorry. No, they said, we need to hear the truth.
Up 400 by the close. Big rally day.
Larry Brown's Squirrel, Biscuits, and Gravy (Serves four)
404 - Page Not Found | Field & Stream
The late Larry Brown, the author of Joe, Billy Ray's Farm, and seven other classics of Southern literature, had a saying: When things were difficult, complicated, aggravating, or vexing in one way or another, he'd say, "They ain't squirrels, baby."
Looks like the jumper is climbing to a higher point on the bridge.
Fudd Alert!!
He will be on CNBC in 10 minutes for your viewing pleasure.
It's all priced in.
"Corpse Misean is Dope writes:
I know people who bought recently renovated houses, and spent a heloc of money on remodeling.
You don't need to repair working and functional. You may be correct. Odds are against it though."
I'm also thinking about all the shoddily built newer homes were the kitchens and bathrooms just weren't done well. So.. you're five years or ten years in, and the tiles are coming loose and the cheap cabinets are deteriorating and you realize that hardwood floor in the kitchen is a really stupid idea unless you're a clean freak, and you aren't. And your five-foot-tall wife can't reach half the storage space and she's getting tired of it, and you're cooking at home now and realize that the kitchen is actually badly laid out and .... time to remodel.
That's my thinking, anyway. And I think the need for remodel will come sooner on newer homes than ever before.
You might be missing the buying opportunity of the century.
I call BS on those home improvement numbers. I guarantee you that they are down much further than indicated. Improvements were frenzied in the flip days because they "added value" either to flippers or existing home owners (both using HELOCs). Now that prices are collapsing, home improvements are not "adding value" for flippers (except in a minority) or existing homeowners are shying away because home prices are falling, stock prices are horrible, and HELOCs are hard to come by. Talk to the construction guys. They'll tell you everything is practically shut down on the residential side. Those numbers are wrong and/or don't reflect reality. Count on it.
You'd have to be stupid to go long today, unless you're a daytrader and planning to sell/short the close. We are going to crash, either on Monday or Wednesday.
And nothing counts until the last 10 minutes.
Agreed REOs are being fixed up by buyers. Don't know of any banks that are doing anything.
I see home improvement going up, not down.
I shorted spy @ 98; how much will I lose today?
I will be making one more home improvement in the near future.
Razor Wire - Stainless Steel, High Security Barbed Wire For Fencing
Razor Wire for $60/roll seems like a damn fine investment.
Persecuted Comrade Anonymouse
i guess 2-3%
I said early this week we's see a retracement to 1060 on the SPX, completing the Wave 4 up. Then its 650 on the downside Wave 5.
I wonder how common this shift of perception is.
I wonder when it will reach critical mass.
And what that will mean.
Currently Smoking Cannabis
Especially when used in conjunction with a strategically placed machine gun nest.
[Up 400 by the close. Big rally day]
The beard of stability is clearing his throat as I write this...
CSC:
If you're getting hand-written notes about pre-'65 coins for his planning, he's panicking.
Leads me to wonder what the debt level of his firm might be and business in the pipeline.
We're fully framed out on the basement project and the electricians are downstairs now. Meeting with the contractor this pm to go over some additional business and then the initial set of inspections in about a week. Egress window the week after next.
All done in cash.
I don't necessarily see this as terribly different from the '70s in that people couldn't get financing for a move but could still do some home improvement to make things more palatable. A lot of friends had families doing basement/new upper floors/additions in lieu of buying/moving.
As to last thread with Barney Frank, he's got as much common sense as two of my kids combined. And that ain't much.
Yeah, I'm pissed at them, too.
crazyvermonter writes:
Robert Dawg
Dawg please or WereDawg for the day.
And while on the subject, "crazyvermonter" is repetitive.
not sure whether the maintenance that people will need to do on older homes they are stuck in will be an offset to high value improvements people were doing to their homes. (incidentally most of them don't recover the value of the improvement.
Fair statement. What about energy efficiency especially in light of likely tax credits? I see those bumping the numbers.
You are absolutely correct about ROI. Easy answer; improvemnts don't recover costs. There are a few exceptions like mild bathroom remodels and kitchen surface only upgrades but most have less than 60% ROI.
Plus the improvements that frozen home owners are doing were presumably being done by the people to whom they were selling in the past. Only I bet that those folks did more than the basic minimum.
I see a sea change. Before improvements were to fluff the sales price. Soon improvements will be judged by increased livability.
There's also the aging in place issue. Those of us with houses suitable for 70 year olds are sitting pretty but expect some pricey installations of elevators, wide door showers and stair assists amongst others.
oops, meant to respond to this: Razor Wire for $60/roll seems like a damn fine investment.
Currently Smoking Cannabis
Especially when used in conjunction with a strategically placed machine gun nest.
Razor Wire for $60/roll seems like a damn fine investment.
Do the installation instructions come in Spanish?
"There's also the aging in place issue. Those of us with houses suitable for 70 year olds are sitting pretty but expect some pricey installations of elevators, wide door showers and stair assists amongst others.
Rob Dawg"
Apparently they are not making new children anymore. Luckily my home also has a crematory. I'm golden.
Homedad:
"Leads me to wonder what the debt level of his firm might be and business in the pipeline."
Very insightful. This actually came up and you are spot on.
I didn't mention that considering junk silver today is probably a wee bit late. I was too surprised to find the canary tits up.
Apparently they are not making new children anymore. Luckily my home also has a crematory. I'm golden. - Elvis
We aren't making and/or importing enough children. There's a difference.
Do the installation instructions come in Spanish?
Rob Dawg
I think if you can point your finger and rack a shotgun, the workers will figure it out.
BB to HP "It's Working"
An unidentified "Bush administration official" told Reuters that "the U.S. Treasury Department is not negotiating with General Motors Corp and the owners of Chrysler LLC on a request to provide direct government aid to their proposed merger" this morning. The denial comes after reports yesterday that the Treasury and Energy departments were prepared to offer GM $5 million each to help complete the deal. Instead, the source said, "the administration is working to speed the distribution to automakers of $25 billion in factory retooling funds authorized by Congress last month."
Is Ben's halloween pep talk being carried live anywhere ?
And once you actually start to READ the article, the truth comes out: AIG isn't "repaying" the Fed - it's mooching even more money, and at MUCH better terms. You see, "officially" the amount that AIG owes (i.e., has already spent) out of the $122 BILLION it originally borrowed actually declined from $90.5 billion to $83.5 billion.
How did this reduction occur? Simple. AIG just "sold" $20 billion in "commercial paper." Who did it "sell" it to? Why, the FED, of course! Translating Wall Street double-talk into English, AIG "repaid" $7 billion TO the Fed - by borrowing $20 billion more, at a much lower interest rate FROM the Fed, and all the Fed got in return was a worthless IOU.
This is so absurd, it's something I could have produced with one of my "Rooter's NEWS FLASHES." When AIG got its enormous emergency loan, just as this once-mighty behemoth was about to fold, AIG was punished for its folly and incompetence with a very onerous rate on this debt: 11.7%. Act II of this farce now commences, with AIG borrowing new money, at 1/3 of the previous interest rate, and for every three new dollars it borrows, it's paying off only one dollar of the much more expensive debt.
"$25 billion in factory retooling funds authorized by Congress last month."
aka merger funds and bonus funds.
Uncle Billy, Better Debtor and dryfly,
Thanks for the thoughts on the previous thread.
dryfly, "we do that at Culver's" LOL! Yes...yes we do. You could practically hear Dave Thomas slap his forehead when he saw that Culver coined the term "Butterburger".
More on rural dev: Now there's talk of my hometown--population approx. 550--building a landfill just outside of town to service the nearby "city" of 25,000 whose landfill closed down after reaching capacity about a decade ago.
These events of course have nothing to do with the recent opening of a SuperWal-Mart and enormous Menard's on the edge of that city, two stores that already had locations in the city but decided they needed bigger stores that never close.
They were built on a cornfield next to a cemetery. Nice view if you can get it.
As far as I know, the old Menard's location is empty, the old Wal-Mart has been moved into by the Farm & Fleet that was across the street, which is now empty. Across the street from that is a strip mall anchored by a KMart and JC Penney.
There are no sidewalks in that part of town.
Anonymous,
Perhaps it finally dawned on the administration that mergers do not typically result in preserving existing levels of employment.
Today's words of wisdom:
Never light a short pipe
while wearing a big straw hat.
"When that's the case and the best solution that Ben Bernanke (Federal Reserve chairman) and Henry Paulson (U.S. treasury secretary) can come up with is even more debt - and worse, they are being supported by a number of other central banks around the world - you are on such a wrong track as to defy the imagination. By trying to get people to borrow even more, it's the stupidest solution to this problem that one could imagine. Since nobody seems to have come up with anything better, it's kind of like (the sign over) the gates to hell: 'Abandon hope all ye who enter here.' And that's where we are - we are going into debtors' hell.
I dunno. Consumers seem not to be borrowing any more.
It only took until about 10:45 to break 100 million volume on the DOW.
Like a clique over there it is I tell ya' I said I said.
CSC--is the hat a total loss?
400 point day!
From the Japanese ponies link:
"Japan held rates at zero for nearly six years in its decade-long struggle against deflation. When that was not enough it resorted to "quantitative easing", a technical term for what amounts to printing money on huge scale."
If the BoJ has been printing money on a huge scale, where's the inflation? Exported to the rest of the world through carry trade.
@ Currently Smoking Cannabis
Thanks...I'll keep that in mind..LOL!
"Never light a short pipe
while wearing a big straw hat."
Got bong water?
safe_as_apartments writes:
400 point day!
You don't get two guesses!
CSC--is the hat a total loss?
Whatev
Not this time.
But attachment to objects will be the subject of another day's words.
List Of Cos Planning To Participate In U.S. Govt's TARP
CNNMoney.com: 404 Page Not Found
Cos Participating In US Govt's Commercial Paper Program
CNNMoney.com: 404 Page Not Found
States need direct and immediate fiscal relief, Paterson said. Washington needs to step up and help states address a problem that was not of their own making. Just like the financial services industry, we (states) need a partner in the federal government in order to help stave off an impending calamity and stabilize our fiscal condition.
5,000,000 point move on the dow today....
crispy&cole writes:
5,000,000 point move on the dow today....
crispy&cole | Homepage | 10.31.08 - 2:04 pm | #
or negative 5,000,000?
Are we going to break through 9500?
You have to subscribe to the newsletter to get the sign of the move.
Oh hey, I certainly want to be owning long stocks over the election weekend. Does anyone seriously think Dow 9350 prices in risk?
Hard to believe all the MUFs and HFs assembled their cash before today.
Ben speaking now on CNBC!
Text of speech: FRB: Speech--Bernanke, The Future of Mortgage Finance in the United States--October 31, 2008
I know we're going down in a blaze of gory, but I would think that home improvement / maintenance still makes sense in parts of the country that weren't as drastically 'bubbled' and consequently (or, at least, arguably) should not be able to lose as much of the past appreciation. e.g. midwest non MI home prices didn't double, so, they should be able to lose 50% of their value.
Now in terms of credit performance, the 30 plus day delinquency rate for managed retail motorcycle loans was 5.6% compared to 4.9% at the end of the third quarter of 2007. Delinquency rates continue to reflect the financial pressures on U.S. consumers. We believe our experience is in line with that of others in the financial services industry.
Because of the extreme volatility in the credit markets during the last few weeks and in keeping with our conservative management of the balance sheet, we do not plan to repurchase shares during the fourth quarter until HDFS has successfully executed a capital market transaction and obtains additional financial flexibility.
Rob Dawg writes:
Oh hey, I certainly want to be owning long stocks over the election weekend. Does anyone seriously think Dow 9350 prices in risk?
Rob Dawg | Homepage | 10.31.08 - 2:07 pm | #
I have to believe we sell off before the close.
one of the tipping points i've been focusing on is the purchase of our debt. petrodollars are having their own bank collapse in the mideast and russia is having an artery bleed of rubles.
Brad Setser: Follow the Money » Blog Archive » The money is flowing out even faster than it flowed in …
china of course holds the trump cards and the biggest pockets and they are spending like mad on infrastructure.
awaiting the TIC data with a zombie drool...
If it does sell off into the close, and that's a big IF, it certainly stays above 9k. YE mutual funds are way more important than any fundamental reasons....
gotta give the masses warm fuzzies for tuesday.
Ciao
MS
one of the tipping points i've been focusing on is the purchase of our debt.
And Barney Frank wonders why the banks aren't lending. Drying up of petrodollars not too good for interest rates, I'd imagine...
ms - look for some 3:59 moves in small blocks to window dress shitty pistions by mutual funds
On a conference call, an analyst asked Ayer about his decision in June to speed up a $500 million share repurchase.
"The third quarter was the most challenging in the Hartford's history,'' Ramani Ayer, chief executive officer of the Hartford, Connecticut-based insurer, said yesterday in a conference call. Life insurers are scrambling to build capital as the investments they hold to pay future claims decline in value. MetLife and Hartford sold shares to bolster their finances in October, while Prudential suspended its buyback
Now, I'm just getting pi$$ed:
from a USAToday article:
Banks are proposing that they forgive up to 40% of the credit card debt owed by the most financially stressed consumers, who are close to bankruptcy. These consumers would then get five years to pay off their remaining card debt, interest-free. Banks would pilot this program with 50,000 consumers, in hopes of expanding it to tens of thousands of others.
Moral Hazard Play of the day:
Stop paying your house payment
Stop paying your credit card payment
Charge all of your living expenses, and hoard your cash buy PMs
yes ala the crap Merril's been pulling buying 1 share at some wild-ass price...
Ciao
MS
Bernanke's speech is a big. fat. nothingburger.
with small beer.
"Banks are proposing that they forgive up to 40% of the credit card debt owed by the most financially stressed consumers, who are close to bankruptcy. These consumers would then get five years to pay off their remaining card debt, interest-free. Banks would pilot this program with 50,000 consumers, in hopes of expanding it to tens of thousands of others."
You forgot the best part. As part of this proposal banks would not need to recognize the loss they took until the consumer paid off the rest of the debt.
I'm sticking with my 400 pt. up day call.
JoGa
Makes me feel like a chump.
I'd rather be an honest fugitive than do the moral hazard play. I'll stop paying my taxes.
Step 1 : max out all cards
Step 2 : stop making payments
can TARP be used to repurchase shares?
Safe as-
and another 200-300 on monday for good measure....
They certainly are capable of it.
Ciao
MS
a critical player in any world economic unrest, Turkey and it's current status -
Google
everybody wants IMF ponies.
CSC,
Can you post the straw hat episode on youtube - pleeeeease?
Home improvement costs money. People don't and won't have it in 2009.
Dem trick-or-treaters are starting way too damm early...looked out of the corner of me eye an there was a guy in a Bernanke outfit
... bit me on the neck, then turned me upside down...shook out my loose change
Yar
Since the government is backstopping GSE debt, are they not as good as treasuries? How much do they pay? How do I buy GSE debt?
Maybe there needs to be a new support group: Billpayers Anonymous. People can bring in the Sharper Image catalogs they normally recycle and support each other through the urges to be frugal.
Taxes due on cc loan forbearance will be used as leverage to force repayment.
It's all about putting off the recognition of the loss...
MOT "How do I buy GSE debt?"
well, i can do a special package of repackaged GSE derivatives that came twice bundled and then squared. it's actually more valuable now, cause the risk is spread out. nobody can default, there would be blood on the streets first. safe as houses.
special offer!
Builder Bob writes:
I'd rather be an honest fugitive than do the moral hazard play. I'll stop paying my taxes.
You heard him Mortimer...
Mr. Valentine has set the price.
May already been posted here.
The Guardian's Naomi Klein..
"Bush gang's parting gift" A LOOTING..
Those naughty Brits.
Now we are ready for the election;
Suspected U.S. missile strikes kill 29 in Pakistan - USATODAY.com
Summary of Bernanke's speech:
MBSs were flawed, and in the future we need to fix them.
Thanks for coming!
Be
Markets will rocket in the last hour. Of course, nothing other than my gut tells me that.
Markets up another 50, did Bernanke leave the room?
I wish they could get Bush to speak. That would be good for atleast 300 points off the DOW.
OT- I was just watching BB on the tv talking about the securitization of mortgages past, present, future. I was reminded of an incident about 20 years ago. I'm standing in the local branch of citibank in my hometown on Long Island. Maybe a dozen people in line. I'm a couple years out of high school, still a kid. The new branch manager starts introducing herself to the customers in the lobby. "hi, im mary jones im the new manager here...nice to meet you etc." She goes thru the lobby doing her thing when she gets to a middle age guy standing near me she says"hi im mary...blah blah blah" The guy says " Hi i'm stu schmoile and I'm your largest buyer of mortgages". I went to high school with a stu schmoile and figured this guy was his dad.Question is - back in the day was it some local guy with an in-depth knowledge of the local market purchasing , packaging these loans and then reselling them to various investor groups and if so is it going to return to that model?
This would seem to suggest there is significant downside risk to home improvement spending over the next couple of years.
Hear that, Flipperville USA? Pay attention to Uncle CR.
Pile on the granite and other crap at your own peril.
You bought the enlarged thyroid disguised as a house; now, ha ha ha, live in it!
[safe_as_apartments writes:
400 point day!]
Bernanke spoke and the market will respond by going red...
Idea for a Self-Help group:
BillPayer's Anonymous
"A lot of friends had families doing basement/new upper floors/additions in lieu of buying/moving."
itsnt it all relative??? if you wanna bigger house, sell the little one and buy a bigger one..the improvements dont pay for themselves..esp 2nd stories...all the houses are gonna be cheap...what are you holding out for? you sell yours cheap and you buy another larger one for alittle more, but i bet the square footage cost is the same...
Mortgage borrowers who are "upside down" but still paying, as well as those who are not paying, are highly likely to curtail sharply their spending on residential improvements. I mean, what's the point?
Here's a super plot that says it all:
1-in-4 Calif. homeowners lost their equity - Lansner on Real Estate : The Orange County Register
I'm happily out of California and riding it out in NY. Reason why NY is at the bottom you're wondering? Because the property taxes here are insane...3-4%. The prices can't be more beat down than they already are because of retirees who flee the state with their fat state (and non-taxable) pensions.
Another interesting thing about this plot...
loans - Lansner on Real Estate : The Orange County Register
...it appears to correlate very well with illegal immigration. I need numbers to do a regression analysis.