Archive for 2011|Yearly archive page

Downwardly Mobile?

In News on April 19, 2011 at 9:25 am

This article about business professionals who have been laid off in the past few years highlights an emerging problem in the economy.  The few jobs that are being created are not replacing the job positions that are eliminated.  The story linked to below highlights one MBA credentialed business executive who spent 2 years on unemployment and then took a part time position teaching bookkeeping for $15 per hour.  There is a shortage of high value executive business positions to absorb the legions of business professionals that were caught up in recent corporate re-sizing measures.

Another problem is that many people have built skills in industries that no longer exist.  The story also profiles a woman who gained experience as a construction estimator.  With new construction at a virtual standstill the question becomes what was that experience worth.  As many are finding out now the value of your skills in the prior economy may not be even close to how today’s economy values the same skills.

Making matters even harder, is that this problem is exacerbated by the housing market that handcuffs professionals to their homes and restricts mobility.  If skilled professionals can’t move to find a job that matches their skills they are forced to accept employment in areas that either cant make use of thier experience or dont value the experience enough to translate it into compensation.

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1 in 7 Nevada homes are vacant

In Data, News on March 15, 2011 at 9:19 am

US Census data shows us the enormity of the housing problem in Nevada and why it will take decades to get out of the hole.

There were 167,564 empty houses in the state last year, according to newly released U.S. Census data, more than double the number in 2000. The number of vacant homes represents about one out of every seven houses across Nevada.

An interesting blip in the statistics is that Nevada has – simultaneously – the highest rate of mobility in the country and the worst market to sell a house.

More than 16 percent of Nevadans relocated to new residences within the state in 2008 alone, the highest mobility rate in the nation, the Census data shows.

So what does that mean? It means that Nevadans are not moving willingly, they are being forced to move. Without a doubt it is going to take Nevada many years to rebuild an economy capable of supporting the excess housing inventory and clear the vacancies.

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Dysfunctional Home Loan System Stacked In Favor of Servicers

In Legal on March 8, 2011 at 6:18 am

Huffingtonpost reports about a proposed “settlement agreement” between Federal and state regulators and the top home loan servicers in the country.

Whether any of the largely common sense “reforms” end up in a final agreement or otherwise get adopted by the industry in any meaningful way remains to be seen. In the meantime the reporting and attention on the abuses in the system are welcomed and deserve more attention.

For years we have been told that the foreclosures are the fault of greedy borrowers who overextended themselves. Instead banks have been acting in their own best interest pushing homeowners toward default and even in many cases requiring default as a precondition to loan modification consideration. The result has been perverse:

servicers are instead forcing through foreclosures, racking up fees through prolonged foreclosure proceedings, and effectively disregarding the rights of investors and borrowers in pursuit of their own profit.

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AZ to make lenders prove chain of title

In Legal on February 26, 2011 at 8:08 am

Famed mortgage meltdown maverick commentator Martin Mandelman has an indepth report (rant?) on the recently passed AZ Senate Bill 1259 which if signed into law, would among other things, require that the foreclosing lender record a chain of title summary document showing the original and current note holders and all transfers in between.

Speaking directly to Paul Hickman, chief executive officer of the Arizona Bankers Association, who is against the passage of this bill, Mandelman properly points out:

And by the way, Mr. Hickman… the whole chain of title thing is already the law in Arizona and elsewhere. This new law just requires your membership to follow the existing laws and actually make sure the chain of title is not destroyed by banker incompetence or blatant disregard for the law.

Yes, chain of title is required. As a basic element of the foreclosure action only the true party in interest may bring the action and for too long MERS and thirds party loan servicers were able to get away with cutting out a fundamental step in the process – to identify the plaintiff.

Mind boggling.

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Miss Colorado USA Wins Crown, Loses a Home

In News on February 26, 2011 at 7:20 am

Blair Griffith crowned Miss Teen USA in 2006, currently Miss Colorado USA and vying for the Miss USA pageant in June, is homeless.

Griffith and her mother are among a growing cadre of homeless families across the United States. The number of homeless families rose from 131,000 in 2007 to 170,000 in 2009 due to the recession, according to the Annual Homeless Assessment Report to Congress

As you might expect Ms. Griffith displays the poise and composure of a title winner despite her hardships. It is currently reported that Griffith and her ailing mother are staying with friends.

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JPMorgan says get ready for good times in 2011

In News on February 23, 2011 at 7:32 am

In addition to noting that the foreclosure crisis that his firm helped to create and perpetuate is no where close to being over,

“JPMorgan CEO Jamie Dimon sees good times in 2011… new regulation which he says will make banking more expensive for customers. Dimon explains some of the higher fees coming your way”

Good times for whom, Mr. Dimon? It is always astonishing when corporate CEOs especially those in the financial industry openly speak out of both sides of their mouths. The bottom line is that 2011 will get more expensive for average people processing average transactions in normal checking accounts and credit cards.

Dimon assesses that we are half way though the mortgage meltdown, but not one to let a good crisis go to waste he notes that if the financial industry can’t stick it to homeowers by churning refi’s they’ll find another way to increase their profits at the expense of the average consumer.

I don’t buy the implication that regulation is causing higher fees. If terrible business practices were highly profitable and led to the financial ruin of many Americans, increase regulation is not what is causing the higher fees it is inability to get away with raping the American homeowner anymore, so now they’ll just pick our pockets.

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See Also:
USA TODAY: Credit card rates move higher, but it’s unclear exactly why [ed. unclear?]

Housing data ‘may’ have understated extent of collapse

In Data, News on February 22, 2011 at 5:40 am

The National Association of Realtors is reporting that they may have “overstated home sales by as much as 20 percent” dating as far back as 2007.

This comes as no surprise because it has been in their best interest to present a better than normal picture of the real estate market that they represent. It seem that only after four consecutive years of being called out by California real estate analysis firm, CoreLogic, did NAR admit that they ‘may’ have made an error.

Unfortunately, the biggest tragedy here is Reuters shoddy reporting in which they say:

The crash of U.S. housing markets, in part because of shoddy lending practices, was at the heart of the economic meltdown that started in the United States and spread around the world.

As we know, the shoddy lending practices were a symptom of the meltdown — not the cause of the problem, the causes having been well documented, as the US Federal Reserve keeping the interest rate artificially low in support of a misguided federal housing policy, lack of meaningful discretion by Fannie Mae and Freddie Mac, complete lack of regulation of syndicated mortgage market, and the fraudulent or negligent participation of the rating agencies who duped the market and fueled the appetite.

The shoddy lending practices were a part of the system, but even the worst mortgage originators, merely ordered a drink at the bar that was staffed by the Federal Reserve and Fannie Mae, supplied with an unending supply of money from investors who were being led to the party by Moodys and the major investment banks.

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Homeowners stay in home 17 months after default

In Data on February 21, 2011 at 7:23 am

Many news sources are reporting on the latest figures from LPS Applied Analytics a real estate database company who owns the industry’s largest database of mortgages covering more than 39 million active first and second mortgage loans, including portfolios serviced by nine of the top 10 mortgage servicers in the nation.

According to LPS:

“the number of days that the average borrower in foreclosure went without making a payment stretched from 410 in January to 507 in December, … before the foreclosure crisis, the norm was more like 250 days, says Herb Blecher, LPS senior vice president.”

There is no doubt that with this type of lag time built into the system there will continue to be downward pressure on home prices throughout 2011.

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Average Milwaukee Teacher Makes $100k/year

In News on February 18, 2011 at 7:26 pm

For the first time in history, the average annual compensation for a teacher in the Milwaukee Public School system will exceed $100,000.

via Average MPS Teacher Compensation Tops $100k/year.

Housing Crash Is Hitting Cities Once Thought to Be Stable

In News on February 14, 2011 at 3:11 pm

The New York Times is repoirting today that:

In the last year, home prices in Seattle had a bigger decline than in Las Vegas. Minneapolis dropped more than Miami, and Atlanta fared worse than Phoenix.

The bad news is that there are few, if any safe spots in the country.

The good news is that as more cities feel the pain, the reality becomes more clear, that this crisis is not a over-speculation bubble in a few geographically isolated markets. The reality is that this crisis is a the result of a market wide fraud that has had deep implications throughout the country.

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