Housing Doom

“He who defends everything defends nothing.” - Frederick the Great

August 4th, 2008

Home Foreclosed On To Pay Parking Ticket

Thinking of ignoring that parking ticket?  Maybe you’d better go pay up- it looks like it could cost you your home:

Peter Tubic ignored a $50 parking fine in 2004, and on Monday, it cost him his $245,000 house.

In what city officials believe is the first case of its kind, the city foreclosed on Tubic’s house on W. Verona Court after repeated attempts to collect the fine - which over the years had escalated to $2,600 - had failed.

"Our goal isn’t to acquire parcels," said Jim Klajbor, special deputy city treasurer. "Our goal is to just collect taxes. . . . It is only as a last resort that we would pursue . . . foreclosure."

Milwaukee County Circuit Judge Richard Sankovitz technically stayed the judgment to give Tubic one last chance to explain why he hasn’t paid or even responded, but Sankovitz ruled in favor of the city’s foreclosure.

"The city was entitled to a judgment," Sankovitz told Public Investigator on Thursday. "There hadn’t been an answer to the complaint."

Tubic takes the blame for disregarding the 15 or more notices he received seeking payment and warning of the pending foreclosure on the house, which was fully paid off, but says he had good reason.

He was physically and psychologically unable to handle the situation, he says.

According to the Social Security Administration, Tubic, 62, has been disabled since 2001. He has been diagnosed with psychological disorders that limit his "ability to understand, remember and carry out detailed instructions," according to documents from the administration.

In addition he suffers from chronic pain caused by degenerative diseases of the knees and spine, as well as chronic respiratory disease, diabetes and obesity, among other ailments.

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August 4th, 2008

Homebuilder WCI Files For Chapter 11

A lot of us were surprised they lasted this long:

Aug. 4 (Bloomberg) — WCI Communities Inc., the homebuilder whose chairman is billionaire investor Carl Icahn, filed for Chapter 11 bankruptcy protection after failing to obtain new financing and losing 90 percent of its value in the past year.

Chief Executive Officer Jerry Starkey will leave the company and Chief Operating Officer David Fry, 48, will serve as interim CEO, Bonita Springs, Florida-based WCI said in a statement today. WCI is in talks to receive $100 million in debtor-in-possession financing from several lenders, the statement said.

WCI, which began developing master-planned communities in 1946, joins at least a dozen homebuilders that have sought bankruptcy protection since June 2007. Existing home sales in Florida, WCI’s biggest market, fell 5 percent in June to 11,700 and the median price tumbled 16 percent to $205,500, the Florida Association of Realtors said on July 24.

“The company, with all diligence, has attempted to avoid a bankruptcy filing,” Icahn said in the statement. “The filing became necessary because of the recent failed effort to obtain financing and the recognition that the company’s entire $1.8 billion of debt may soon be in default.”

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August 4th, 2008

Crack of Doom: Roubini says “hundreds of banks” will fail

It’s Monday, and Economist Nouriel Roubini was waxing "bearish" this weekend:

NEW YORK, Aug 3 (Reuters) - The United States is in the second inning of a recession that will last for at least 18 months and help kill off hundreds of banks, influential economist and New York University Professor Nouriel Roubini told Barron’s in Sunday’s edition.

Taxpayers will pay a big price for helping bail out the rest of the financial services industry as well, Roubini said — at least $1 trillion and more likely $2 trillion.

The banks will become insolvent because of mounting losses as a result of the housing bust and because they have only written down their subprime loans so far, he said. Still in front of them are their consumer-credit losses, for which they lack the reserves, Barron’s reported.

He also said there are hundreds of millions of dollars outstanding in home-equity loans that could be worth zero, too.

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August 4th, 2008

BBC on CDS: “Is this the light at the end of the tunnel, or a train coming to flatten us?”

A big hat tip to John for digging up this great BBC mini-documentary on Credit Default Swaps.  I thought it was the most comprehensible presentation I’ve seen on the subject. A word of warning though- if you are in the mood to feel warm and fuzzy about the state of our banking system, this isn’t what you should be watching first thing Monday morning.

This is in two parts:

 

And:

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