My neighbor lost $1000 per day on his house: Exurban Nation: Half Off!

No short sale. It had to go back to the bank and still hasn't found a market price.

Damn RD that place has 9 toilets to clean!!! Where's that robot housekeeper when you really need it!!

Lenders get nervous about short sales because they are frequently being defrauded by them. Simple as that. In general, you do not want a deadbeat homeborrower to be responsible in any way for finding a buyer for the place. That just begs for fraud.

Wouldn't a flood of short sales (assuming a flood, of course) force banks to recognize significant losses? Losses that currently are hidden?

I'm so confused. The interaction between delinquent mortgages, short-sales/REO's, and the MBS market always confuses me.

Am I correct in assuming a direct link between the short sale and the relevant MBS that contains that loan?

Financial Information
* Deposit: $3

$3 to start the transaction? Cheaper than a movie.

edit: on RD's house link.

I predict 2010 will be the year of the bulk sale:

1. Bulk sales of whole mortgages on banks' books at large discounts.
2. Bulk sales of MBS and ABS, especially from distressed owners and completely unleveraged owners (mutual funds, pension funds).
3. Bulk sales of banks. Yes, I mean it. Somebody will get a special deal for a series of entire banks, like 6 or more independent failing banks.
4. Bulk sales of REOs.
5. Bulk sales basically worthless homes with the restrictions that they must be bulldozed. This one might take until 2012-13.
6. Bulk sales of sovereign debt portfolios, from one central bank/sovereign wealth fund to another. Perhaps with undisclosed terms.

In each of these cases, I expect 2010 volume to be 2x or more 2009 volume.

In some cases, motivation for bulk sales will be the high cost or impracticality of disposing of properties one by one. In at least some cases, the motivation will be obscuring or hiding the real economics, to keep from reducing booked values, market values, or comparables.

The new ALTA and CLTA policies are going to make lenders a good deal more leery of short sales,something not many are taking into account.

Fair Economist wrote:

I really wouldn't want a toilet-cleaning robot roaming around the house.

It's no different than a Saint Bernard, really.

Oh, Rob, great proposed law on that pigged thread. (Derivatives are insurance products.) Pity nothing like that could ever get through Congress.

noob goldberg wrote:

Am I correct in assuming a direct link between the short sale and the relevant MBS that contains that loan?

Many loans never made it into a MBS. Those are typically sitting on bank's books as whole loans.

If put into a MBS, the loan may have been sliced and diced numerous ways. Small details about timing an recovery could mean the difference between a decent return and nothing for a particular tranche.

RE wrote:

Media control in Italy. The PM says so.

Yeah, well, he owns all (or a huge portion of) the media in Italy, I believe. It's like if Rupert Murdoch were POTUS...

OT: Evening Humor: The E&Y Ethics Hotline | zero hedge
.
Need more to be said?

some investor guy wrote:

To modify the popular phrase, everything's faster in Texas. You can get permits, finance, build, default, foreclose, and get kicked out in Houston faster than you can make it past environmental review in LA.

Thanks. Yeah, well, at least Texas has some pretty great consumer credit protection laws...

some investor guy wrote:

Many loans never made it into a MBS. Those are typically sitting on bank's books as whole loans.

I appreciate that description, SIG. I can see why it would be in the best interest of a bank, sitting on a whole loan, to minimize losses with a short-sale.

I assume that the 'recovery' you referred to in the MBS scenario is the value of collateral, and not just waiting for an economic recovery, correct? I guess I'm just searching for the person with a vested interest in undertaking a short-sale/REO in the MBS scenario. Is there someone?

Yep, noob we are all Orwellian now.

and so it begins

Idaho Bill Permits State Taxes Be Paid With Silver

BOISE, Idaho (AP) — Idaho lawmakers are backing a plan that would allow state tax bills to be paid down with silver medallions instead of cash.

The bill approved Monday is intended to encourage the use of silver as a form of currency and reinvigorate Idaho's silver mining industry, which has been in decline for decades.

Athol Republican Rep. Phil Hart told the House State Affairs Committee that consumers should rely less on money printed by the federal government because inflation will diminish its value. His bill reignites a long-standing debate about the value of paper money not backed by commodities.

Hart's measure also includes tax breaks for any company that agrees to process silver ore for the medallions.

Lawmakers in Georgia considered allowing citizens to pay taxes with gold and silver last year.

Idaho Bill Permits State Taxes Be Paid With Silver | Metals and Mining | Financial Articles & Investing News | TheStreet.com

RE wrote:

Yep, noob we are all Orwellian now.

V for Vendetta was a cool movie for making me feel all rebellious-like, and then the feeling faded and I went a few years thinking of it as a bit of a silly popcorn flick.

And now I find myself getting a little more agitated these days, and wondering if our own Guy Fawkes will emerge

"Remember, remember, the Fifth of November."

noob goldberg wrote:

I don't know if I could support the entire broad label of 'derivatives' (i.e commodity markets, etc), but I could certainly support it in the CDS-sense of the word.

For commodities there was a time when the contracts were actually filled. A couple tankers docked at Wall & Broad and no place to offload would cure the speculative fever.

24 Hour Gold Chart - Last 3 Days 

and gold rises with silver

as its leaked (deliberately i would guess) that bunker buster bombs are on their way to diego garcia...to be used against

enter the church lady on SNL

ummm

couldd it be

satan

Bunker busters headed to Diego Garcia « Don Surber

some investor guy wrote:

Bulk sales of whole mortgages on banks' books at large discounts.

What does Shelia do with the assets of the banks that no one wants?

some investor guy wrote:

Usually it is difficult to impossible, unless the loan is refi'd and taken out of the pool.

The Fed bought all those MBSs. Could they put them together? Sell the whole loans? Sort of rearange the puzzle pieces.

Blackhalo wrote:

What doe Shelia do with the assets of the banks that no one wants?

Usually they try to sell the whole portfolio (i.e., the whole bank). If that doesn't work, they often take the assets onto the FDIC's books.

While not directly on point, you might like this, Anatomy Of A Bank Takeover : NPR

mock turtle wrote:

it just gets worse

What's gotten worse? Have I missed out on some good sans Repo 105, moving bombs to the Indian Ocean, Congress still robbing us plebes, and Mish getting angrier?

some investor guy wrote:

The person in the next tranche up. The tranche which will have lower yields, or even be wiped out, if losses get moderately worse. The funny thing is, those people often don't know who they are, and usually have difficulty getting a large portion of the other people with partial interests in the loans to all act together. If you want to make this problem less severe, try getting the loans/tranches reassembled into whole loans. Sometimes this is easy. Usually it is difficult to impossible, unless the loan is refi'd and taken out of the pool.

Thanks again for the elucidation. This sounds needlessly complex, in my mind. Does it need to be this complicated? Is there a benefit from slicing loans in this manner? I'm not asking rhetorically, I'm genuinely curious if risk-profiles justify slicing an individual loan in this manner. I had always thought (without justification) that whole loans would be present within a particular MBS, but it would be bundled with loans having different risk profiles. Then it at least resides wholely in one security. I then figured that those securities would have been bundled into broader meta packages, but I never figured that individual loans would have been sliced in half.

Am I correctly interpreting this? If so, that just blows my mind.

Blackhalo wrote:

If I recall correctly, it did not end well for Fawkes OR V...

Leaders of social/progressive means usually end up that way. Sparticus, Oda Nobunaga, Ghandi, Guy Fawkes...

Someone finally bought the foreclosure next door to us. I think it was about two years ago that the tenants were removed by the police.

Last sold for close to 900k in 2006. The new owners are busy fixing the roof, various holes and putting in new copper plumbing to replace what was stripped out by the tenants. Probably 100k worth of work.

poic wrote:

Probably 100k worth of work.

I bet the contractors are happy.
Instead of building houses contractors can fix up the trashed REOs. A job is a job.

mock turtle wrote:

Phil Hart told the House State Affairs Committee that consumers should rely less on money printed by the federal government because inflation will diminish its value.

I wonder how much of a market there would be for 20$ coins minted with ~ $6.66 worth of copper silver and gold each in alloy, to discourage manipulation. Reputable, mints could probably sell them for 25$ easily, as an inflation hedge, if they standardized on size and content. If enough of them entered circulation, they might be able to supplant paper currency.

"poic wrote:
Last sold for close to 900k in 2006.
Any idea what the new owners are into it for?"

I believe the bank was asking high 500k. Still too high IMO when you add in the extra work. They're trying to do some of the work themselves.

some investor guy wrote:

give you a flavor

The scary thing is that after being here on CR for a while, I actually understand most of what that document says, and I dont have anything to do with the mortgage industry....

I didnt read anything in there about assumptions regarding the total meltdown of the real estate industry though...

Surprise!! You know that AAA bond you bought from us - well it's still AAA but now it's worthless....

ok finally some good news

Simon Johnson: Senator Kaufman: Fraud Still at the Heart of Wall Street

SENATOR KAUFMAN; FRAUD STILL AT THE HEART OF WALL STREET

"Now, the Senator has gone one better, putting many private criticisms of the financial sector -- the kind you hear whispered with conviction on the Upper East Side and in Midtown -- firmly and articulately on the public record in a Senate floor speech to be delivered tomorrow (this is a direct link to speech). He pulls no punches: "fraud and potential criminal conduct were at the heart of the financial crisis"

and heres the speech to be delivered by the good senator tomorrow

Senator Ted Kaufman — Senator for Delaware: Newsroom - Floor Statement

near the bottom looks like the senator is thinkin about going after glodman sucks

"n Greece, the main transactions in question were called cross-currency swaps that exchange cash flows denominated in one currency for cash flows denominated in another. In Greece’s case, these swaps were priced “off-market,” meaning that they didn’t use prevailing market exchange rates. Instead, these highly unorthodox transactions provided Greece with a large upfront payment (and an apparent reduction in debt), which they then paid off through periodic interest payments and finally a large “balloon” payment at the contract’s maturity. In other words, Goldman Sachs allegedly provided Greece with a loan by another name.

The story, however, does not end there. Following these transactions, Goldman Sachs and other investment banks underwrote billions of Euros in bonds for Greece. The questions being raised include whether some of these bond offering documents disclosed the true nature of these swaps to investors, and, if not, whether the failure to do so was material.

These bonds were issued under Greek law, and there is nothing necessarily illegal about not disclosing this information to bond investors in Europe. At least some of these bonds, however, were likely sold to American investors, so they may therefore still be subject to applicable U.S. securities law. While “qualified institutional buyers” (QIBs) in the U.S. are able to purchase bonds (like the ones issued by Greece) and other securities not registered with the SEC under Securities Act of 1933, the sale of these bonds would still be governed by other requirements of U.S. law. Specifically, they presumably would be subject to the prohibition against the sale of securities to U.S. investors while deliberately withholding material adverse information."

yippie yi yo kiyay

noob goldberg wrote:

And now I find myself getting a little more agitated these days, and wondering if our own Guy Fawkes will emerge

I think we are starting to see various versions of Guy Fawkes emerge. Some of them fly planes into Skyscrapers and others into IRS offices.

I was fortunate that my rebellious youth was greatly aided and guided by the "peace revolutions". I haven't completely lost hope that we'll see thinkers that can foster constructive awareness instead of Guy Fawkes' facsimiles. We need awareness of complexities nowadays and not easily exploited and targeted hate campaigns. Our societies face extremely complex problems which require education and extended public discourse, not Orwellian manipulation by the rule of intellectual simplicity. A really tall order!

Jonathan wrote:

It's the Roman roads all over again!

For exactly the same reason.

some investor guy wrote:

The 2001 edition of this book is preinsanity (published before the "how can people be this stupid" MBS of 2003-2008, or the 2007 version Mortgage-Backed Securities, Frank J. Fabozzi Series, Frank J. Fabozzi, Book - Barnes & Noble, it has a good overview of various ways of cutting up interest and principal.

I'm in your debt, sir. A couple of years ago I read through "Collateralized Debt Obligations and Structured Finance" (or at least attempted to), but that's like reading how the story ends, and it didn't make much sense to me at the time. I'll start with the MBS this time (I have access to the second book you quoted, by Fabozzi, the '07 edition). Thanks!

Rob Dawg wrote:

For exactly the same reason.

Yep, see the following selective quotes:

China had offered to bankroll the Burmese line in exchange for the country's rich reserves of lithium, a metal used in batteries.
"We would actually prefer the other countries to pay in natural resources rather than make their own capital investment."

We might see the world's fastest freight trains! And I just can't wipe the image from my mind of the monoliths in 2010: Odyssey Two turning Jupiter into a Sun.

RE wrote:

We need awareness of complexities nowadays and not easily exploited and targeted hate campaigns. Our societies face extremely complex problems which require education and extended public discourse, not Orwellian manipulation by the rule of intellectual simplicity. A really tall order!

Excellent précis of the task at hand.

AAAAA++++++ would read again.

EDIT: Time to hit the hay.

noob goldberg wrote:

which require education and extended public discourse

Might as well write "fail" all over that right now. Sigh.

My short sale offer is supposed to open escrow this week. Our bid is 36% below the early 2007 sale price. I am still concerned that the bank will try to counter higher. We will know in a few days.

I'm not sure you could easily defend a massive rail network.

Doesn't that kind of huge and vital infrastructure creates a mindset where a pre-emptive strike is more likely, better to defend against known threats?

And this kind of transparent resource grab is a clear on-going and future threat to the US, so China must expect to be challenged.

It makes you wonder why we are letting our own infrastructure fall into disrepair.

I'm sure this has been ment'd..

Ford Had 20 Acceleration Deaths as Regulators Cited Human Error - Bloomberg.com

Jonathan wrote:

It makes you wonder why we are letting our own infrastructure fall into disrepair.

Hey, you can fund bankers or roads, and the folks in charge are making the tough choices you expect from true leaders.

some investor guy wrote:

You can get permits, finance, build, default, foreclose, and get kicked out in Houston faster...

Foreclose, not so fast. Texas has the strongest Homestead Exemption (the Rep. of T. was the first government to have one in 1839 or so) around. There are exceptions...

some investor guy wrote:

A couple of states have expressed interest in a "friendly" version of this. They would regulate certain derivatives as insurance, and recruit participants

The lately-out-of--favor Governor Paterson proposed this, I seem to recall.

some investor guy wrote:

A couple of states have expressed interest in a "friendly" version of this.

Repeal CFMA and reinstate Glass-Steagall. It served us well for 70 years,

TJ and The Bear wrote:

Hey, you can fund bankers or roads, and the folks in charge are making the tough choices you expect from true leaders.

I guess the old adage needs updating: Guns, graft or butter.

picosec wrote:

Where are you geographically?

Better yet, how does it stack up as a doomstead???

I see Weather Helm is back with his knee-jerk public union bashing. No evidence or numbers, as usual. This time he qualifies that the hard-working rank and file aren't the problem, it's their leaders, who are as bad as the banksters. ("The ordinary Iraqi/Soviet/Cuban/boogieman is a fine person, it's just the leaders....")

If only the union thugs got hundred million dollar bonuses instead of getting thrown in jail... That's right, despite the evil bargaining power they wield, public union leaders in NY get thrown in jail (by union police officers) if they so much as call for a strike.

The First Amendment doesn't protect them. Labor law doesn't protect them. They can't hide their secret communications like Jamie Dimon and Tim Geithner and the Fed.

The nominal value of public pensions is protected in the NYS Constitution, because of historical abuse. The real value is still set by the Fed. Oh, that's right, Jamie Dimon is a director of the NY Fed. Not Allen Toussaint.

Flippers get foreclosed, fast. Helocs were not even subject to foreclosure until Texas adjusted the Homestead law around 1994. But families can squat forever:

The urban residential homestead consists of a lot or lots of 10 acres or less that is located within a city or town. There is no limit on the value of the land and its improvements entitled to homestead protection. Rather, what is defined as homestead is based solely on the size or acreage of the land involved.

The Texas Homestead Act

picosec wrote:

Thanks for sharing.

I'll second that.

Party at your place if the deal closes!!!

sitting here in Narita airport waiting for the mechanics to replace a piece of equipment and then
hopefully on the Detroit...
....
trust me, won't be a happy trip!
....
hard to find a plug for my computer in this damn place.

my younger brother his wife died in a very tragic home fire, luckily their boys 17 and 21 were staying elsewhere....
thanks for the condolences!!!!!
everyone

1 Currency
yeah, even his lawyers can't give a straight answer.... he was involved in an unlimted partnership in '85 and got stuck holding the bag when the other 2 filed for BK

Safe trip and condolences again.

Federal deficit/surplus in chart form from 1901-2010:

http://2.bp.blogspot.com/_wmz32xeNKtU/S58RcDD8cSI/AAAAAAAAB4Y/ech47beFyHY/s1600-h/Federal+Surplus+or+Debt+1901-2010.png

A chart that makes me confident that holding Gold makes more sense as a cash equivalent than holding U.S. Dollars.

http://3.bp.blogspot.com/_wmz32xeNKtU/S58RGZ9cG8I/AAAAAAAAB4Q/F7iw42BOMPM/s1600-h/Adjusted+Monetary+Base+1918-2010.png

http://theeconomiccollapseblog.com/wp-content/uploads/2010/03/The-Second-Wave-Of-Mortgage-Defaults.bmp

Cui bono?

Nine months after Michael Jackson’s death, his estate has signed one of the biggest recording contracts in history, giving Sony, Mr. Jackson’s longtime label, the rights to sell his back catalog and draw on a large vault of unheard recordings.

The deal, for about 10 recordings through 2017, will guarantee the Jackson estate up to $250 million in advances and other payments and offer an especially high royalty rate for sales both inside and outside the United States, according to people with knowledge of the contract who spoke anonymously because they were not authorized to speak about it publicly.

It also allows Sony and the estate to collaborate on a wide range of lucrative licensing arrangements, like the use of Jackson music for films, television and stage shows and lines of memorabilia that will be limited only by the imagination of the estate and the demand of a hungry worldwide market.

Michael Jackson’s Estate Signs Sweeping Contract - NY Times

And the government will bear the risk that you silver is fake

You cannot " fake " silver like you can with gold, silver will not stay together like tungsten filled gold. .

Mr Slippery wrote:

Is silver easy to fake?

I have no idea. I guess the risk is that the weight might be a little "light". Forgers are an ingenious lot...

At my current (temporary) job, I sit in the middle of a bunch of cubicles occupied by young ladies who are employed to spend time on the phone counseling people with mortgage problems. All I can say is: good grief. There are people out there who make substantially more than I do and who are TWO YEARS behind on mortgage payments and still have not received been foreclosed on or had Sheriff's sales scheduled. That means they can expect at least another 9 months before they are actually evicted.

the proles are getting restless. They need to get more flatscreens in every home over there.

More than one in two Chinese savers regard the current inflation rate as unacceptable, according to a central bank survey on Tuesday that is likely to fan official concern about deteriorating inflation expectations.

I think the "fake coin risk" is a little bit hidden. When you buy PMs, the person selling them doesn't check for fakes because you're buying them and taking the risk. But when you try to sell them, the buyer will be more careful and will probably check...

Juvenal Delinquent wrote:

That's like saying if you put me in a dress, i'm a woman.

No, it's like saying that "because lead looks nothing like silver" is easily dismissed by plating. There might be other techniques to discern the two, but appearance of a careful forgery ain't it.

wally wrote:

That means they can expect at least another 9 months before they are actually evicted.

I wonder how motivated the sheriff's departments will be after another couple of years of cutbacks. If I knew that could be me, tomorrow, I think I'd drag my feet. Send the bankers swordless to Damascus instead.

Silver-plated lead coins or bullion is quite simply not a problem, don't worry about it...

(...and that's 30 years of experience talking)

2010 and 2011 will be REOs, short sales, and state and local government evisceration. Lots of new taxes and fees being piled up. Several cities are adding a 911 tax or medical services fee if they send out an ambulance. Water rates behind the Orange Curtain are up about 60% over the last two years in some places. Squeezed from the top while wages drop.

Housing Starts decline in February

Do you have any idea what lead looks like compared to pure or 90% pure silver?

There is no comparison...