Housing Doom Housing Bubble Blog

Just when I think I’ve heard it all….

Many thanks to J.R., who emailed me last night and shared the following story:

I just got a call from my brother a few hours ago, from jail.  My brother has never been in trouble before, so I was totally shocked when I got the automated collect call message.  The reason he is jail is even more shocking- he failed to sell his house. 

He just went through a nasty divorce which left him cash poor but equity rich, so as part of the divorce, there was a list of debts that would be paid off when the house was sold.   It turns out that one of the debts was for a lawyer appointed by the state for their children.  The judge called a hearing to find out why the house wasn’t selling. (the house has been on the market for eighteen months now)  My brother came in with evidence showing house improvements, listings with realtors, open houses, and price reductions, but it was to no avail.   Six months in the slammer for contempt of court, or until I can wire him the money to pay off the lawyer.

I was wondering if you have ever heard of anything like this before.

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Igor earned his pay yesterday when he grabbed some "posts" promoting a paycheck faking service.  I was, frankly, horrified.  I refuse to post the link, or give the outfit’s name, the last thing I want to do is send them any business.  However, for anyone who might think that the fraudsters are out of the market, here’s the scrubbed post and ad:

I say if you cant beat them…..join them! GET THE COMMISSIONS YOU DESERVE!!! Slimyfakers.com [Not the real name- it should be though.] seems like you can get any bad credit home or car loan simple fast and easy! if you are needing a proof of income letter or any other ways to make or create the perfect pay slip cheque then you are on the right track. Slimyfakers.com-it is simple, for you can use the easy  to use fake pay check stubs anytime anywhere even if you need a fast cash pay day loan. How about refinancing or consolidating all of your bills! this is it! if you want fake id or need fake pay check stubs for the job then i suggest using the best site on the net, slimyfakers.com

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Thanks Implode-O-Meter for pointing out this YouTube. Doom hopes a Financial Media Awakeness Week follows shortly.

Once upon a time, according to Northwest News Channel 8, 33 year-old bagholder Shane Lovett decided he wasn’t just mad about losing his Oregon home to foreclosure, he was going to get even:

Lovett bought a home on SE Wildcat Mountain Drive in Eagle Creek a few years ago. In January the house went into foreclosure. Neighbors told police that Lovett was extremely distraught over the the situation. He apparently told several [people] that he had put the animals [three pigs] inside the house over a week ago and even joked about the fact that they did not have any water.

When deputies responded to complaints about the pigs, the inside and outside of the home were trashed.

I’ve heard stories of disgruntled home owners losing their homes to foreclosure and trashing the properties, but Lovett was, pardon the pun, a real swine about this.  Here’s the video:

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I must confess though, it’s hard to say which one is scarier.  [Hat tip to E.S. for sending these to us!]

First is a news piece from Sacramento, showing the record number of foreclosures.  The second is on the lack of reality in A&E’s reality show, "Flip this House."

Enjoy- or whatever.

If that one hasn’t made you ill yet, try this one:

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In yesterday’s Arizona Republic, Catherine Reagor talked about "foreclosure rescue groups":

For those on the verge of losing their home, foreclosure-rescue groups seem like their only hope. But many so-called rescuers aren’t helping at all.

Instead, their offers are thinly veiled schemes to take control of a struggling homeowner’s house and strip any equity left in it.

"Foreclosure rescue sounds like something good, but it isn’t. There are some sharks out there," Arizona Attorney General Terry Goddard said. "They are taking advantage of desperate homeowners and need to be stopped."

There are variations on the rescue theme, but generally these companies promise to helping homeowners refinance or lease back their property temporarily- then take over the property and evict their victims.

Reagor gave the case of Mary D’Amico:
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Yesterday Doomer G found a hot new investigative series at the Fort Worth Star-Telegram. If I understand reporter Danny Robbins [1] [2] and video journalist M.L. Gray [3] correctly, things may get even uglier on the way down the house price curve than they were going up. Here’s where the rubber hits the road:

"For the better part of six years, the vast majority of the property foreclosed in the Dallas-Fort Worth area by Genesis [a property tax lender according to the story] and sold by Frossard has been acquired by Kidwill or one of his companies.

The sales have resulted in $13 million in such property winding up in Kidwill’s hands at less than 10 cents on the dollar.

Frossard and Kidwill say there’s nothing unusual or improper about the sales.

But others say at least some have not been fairly bid, giving voice to larger questions about the foreclosure process, a little-known corner of the lending industry and the state’s oversight." [1], my emphasis

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Doomers will remember this January 28th post when Admin and I expressed concern at the discovery that HP computers from a failed subprimer storefront operation were scheduled for disposal at auction (on Craigslist, yet) with no effort being made to wipe the disks. Well, it’s a month later and the situation seems to be escalating. A report [1] coming out of Las Vegas earlier this week suggests that disgruntled employees at distressed subprime lender Silver State Mortgage may actually be stealing computers from the company. Should this indeed be the case, this is potentially much more serious than the auction, as there is the real danger an insider may have continued access to sensitive information on media taken from the work site. Furthermore, there were hundreds [2] of employees effected by events at Silver State. Dozens of similarly sized subprime lenders have experienced major disruptions or even gone out of business since December, so the risk to consumer security may not be trivial.

Financial service industry regulators have strict rules regarding the protection of consumers against violations of privacy and identity theft. What I fear is that once a distressed company loses cohesion, these safeguards could become weakened. Once a company’s problems become serious enough to force significant layoffs of staff, who’s going to protect the paper files and electronic media? When a subprime lender implodes, somebody needs to secure their customers’ data.

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On December 23 in a Denver Post article entitled Builders often key players in high risk game, the Post describes how builder financing seems to be a major culprit in the record number of foreclosures in Colorado:

On one Greeley street, seven adjacent new homes have been foreclosed. Across town, dozens of families paid $40,000 to $50,000 too much for a new home, according to an analysis by David Kiekhaefer, a Greeley broker and builder.

That neighborhood "is primed for foreclosure," he said.

A computer-assisted geographic analysis of Weld and metro-area foreclosures by The Denver Post found many concentrated in new neighborhoods developed by local builders. Others clustered in new neighborhoods where national builders doubled as lenders. In one, more than 90 percent of foreclosures on the original buyers involved loans from the builder.

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There was a sobering post on the Yahoo Finance boards [note: this link crashed my Netscape 8.1.2, IE was OK, JM] early this morning.  Under the heading Foreclosures of Biblical Proportions it said:

Look at my little county of DuPage, in Illinois.  I have never seen so many of my neighbors in foreclosure.  I have never seen so many FOR SALE signs either.  Week by week, it gets worse. Sheriff Sales are now big time, liquidations by banks will probably start next quarter. It is just awesome, growing exponentially, and you know what ? WAMU is very well represented on the Sheriff Foreclosure Sale List, in a country where they have very little market penetration. That really sends a BIG message on how well they underwrote the loans.

A link is provided to the DuPage County Foreclosure Sales.  I tried counting the number of properties, and gave up around one hundred.  Guessing from how far my scroll arrow moved, there are over 300.
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