Housing Doom Housing Bubble Blog

No, the headline isn’t a typo. From today’s Wall Street Journal- Bailout ideas just keep getting dumber.  Here’s a gem from Fannie Mae: [Thanks John!]

Normally, it is impossible for underwater borrowers to qualify for refinancing because the collateral isn’t worth enough to support new loans that would let them fully pay off the old ones. But Fannie officials say in some cases it can make sense to refinance such people if the new loan will reduce their interest rate or let them lock into a fixed rate rather than risking future upward adjustments.

"We’re saying to the consumer, ‘You’re not trapped any more,’" said Jeff Hayward, a senior vice president at Fannie.

The program will allow refinancing loans of as much as 120% of the property value. Fannie officials project that 150,000 households could qualify for such refinancings.

Rather than reducing the principal due on the loan and taking an immediate loss, Fannie is betting that these people will be able to keep up on their new loans and prices will recover.

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Even rich guys are walking away from their underwater properties these days:

[Thanks L!]

Former U.S. baseball star Jose Canseco said on Thursday he had lost his California mansion to foreclosure — one of the first celebrities to publicly admit being a statistic in the U.S. housing crisis.

Canseco, 43, one of the most flamboyant U.S. baseball players until his retirement from the major leagues in 2001, told the celebrity TV show "Inside Edition" that it did not make financial sense to keep his 7,300 square-foot (678.2 sq-metro) home in the Los Angeles suburb of Encino.

"Inside Edition" said it had foreclosure documents showing Canseco owed a bank more than $2.5 million on the house.

"I’ve been out of the game for about eight or nine years and obviously this issue with the foreclosure on my home," he told "Inside Edition."

"I do have a judgment on my home and it to me is very strange because it didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else," he said.

Maybe this could be the start of a new HGTV series:  "Foreclosures Of The Rich And Famous"!

Well, I suppose desperate times, call for desperate measures….. [Hat tip L!]

In February, throngs of people gathered at a $100,000 poolside party in Miami, downing Roberto Cavalli vodka, sampling food from local restaurants and dancing to a DJ blasting hip-hop and house music. Nearly 1,000 more people showed up than expected, sending the hosts scrambling to provide extra booze and triggering noise complaints from neighbors.

It wasn’t a wedding or a birthday bash. The swanky event — designed with a film theme, with a red carpet and a giant movie screen — was hosted by the Related Group, a luxury developer, to get people to see, and eventually buy, apartments in its new 1,000-unit complex.

"I was nervous when I saw how many people had shown up," admits Ricardo Vadia, an assistant vice president of development for the company. "But it was well worth it. We got people into the buildings who otherwise wouldn’t have come."

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Good luck to the Chandler, AZ police when they try to sort this one out: [Thanks L!]

Chandler police arrested two men driving a U-haul filled with furniture stolen from model homes after the men say they were duped into believing they were buying the items from a homeowner facing foreclosure.

A neighbor near the model homes near Queen Creek and Cooper roads saw the men loading furniture into a truck Saturday evening, became suspicious and called police.

After police pulled over the U-haul, Phillip Martinez of Chandler and Frank Valenzuela of Mesa were separated by officers but each told the same story: a man they met in a bar offered them furniture and other goods from the houses for $500. Martinez and Valenzuela said the man, who they had not seen before and knew little about, told them he owned the houses but they were about to go into foreclosure.

According to a police report, the pair said they rented the U-haul and met the man at the houses, where he took their money and left them to haul out the furniture. Martinez and Valenzuela told police they packed as much furniture as they could into the truck and left before police pulled them over near Arizona Avenue and Queen Creek Road.

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L sent me the following listing, and it’s priceless:

Short sale opportunity - tenant hasn’t paid rent in a year - eviction unsuccessful. Hired an attorney and made false claims about who owned the property and got the eviction quashed. No time or money to fight it - giving property back to bank. Perfect for investor who wishes to make an offer and kick tenant out after closing. If not sold by march 30 - giving deed in lieu of foreclosure.

And for those of us without access to the Realtor remarks, L also sent us the following note:

SORRY–HOME CANNOT BE SHOWN - I HAVE AN APPRAISAL DONE A YEAR AGO FOR 256K - HAS PICS.  OWNER/AGENT

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In January 2007,  Doom received information that a  mortgage office had shut down- and that the contents were being sold at auction.  Files remained in the cabinets and the hard drives were not wiped.  Mortgage files contain a great deal of personal information, and with the large number of lenders that have gone under, the disposition of these files is a serious concern, and the potential for identity theft is huge.

I was perusing Broker Outpost last night, [a bulletin board for mortgage brokers] and ran across this comment:

A company across the street is throwing away full loan files…with credit reports, bank statement, etc….who do I call to report this to?

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From Reuters last Friday:

PHILADELPHIA (Reuters) - Authorities in Philadelphia will suspend foreclosure sales of homes whose owners have fallen behind on adjustable-rate subprime loan payments — potential relief for tens of thousands of struggling debtors.

Sheriff John Green said on Friday he would halt sales of foreclosed properties in April and would seek a court order extending a moratorium for an unspecified period.

The response from this Philadelphian "People will stop paying their mortgages, because they know they will not be foreclosed on."

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From Yahoo Finance this morning:  [Thanks L!]

Bear’s stock has popped to $10, now that the Fed has caved and Bear and JP Morgan have announced a new, higher-priced deal.

What does this mean?

Among other things, it means tha all that jawboning from Treasury Secretary Hank Paulson last week about how the government wasn’t bailing out Bear Stearns was a bunch of hooey. The Fed and the Treasury Department gave Bear and JP Morgan shareholders a $30 billion gift from taxpayers. And the moment Bear Stearns realized that all the crap on its balance sheet had been transformed into a Treasury Bill, it, sensibly, demanded more for itself.

And why shouldn’t it have? When the Fed suddenly guaranteed Bear Stearns with the full faith and credit of the US government, it became worth more. Specifically, it went from being worth zero to at least $10 a share.

And now US homeowners, justifiably, will scream that the government cares more about Wall Street fat cats than it does about the Little Guy. And the Fed and Treasury will have to start scrambling to put together a plan to buy everyone’s house. Welcome to Bailout Nation.

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It’s Friday, so we’re willing to consider off-beat topics around here.  Last night I discovered Igor with an unusual comment clasped between his talons.  I thought about letting  him have his way with it, when I thought, what the heck.  I’ll not only let it through but post it.  Here’s "Legal Immigrant’s" offer to buy a million dollar house from anyone who can help get his wife a visa:

I am a legal permanent resident (Green Card holder) with excellent credit history and savings. By buying a house, I can help any local economy get a million dollar boost. My American Green Card has given me an opportunity to live and work here legally. I am willing to invest in the American dream and support Americans and American economy at this turbulent time by investing in the economy. In return for investing, all I ask is to be united with my nuclear family: my wife, in America!

Any realtor, real estate agent or anyone who wishes to sell a house and who can help my wife get a visa to enter the US legally will get my business.

What kind of a Visa?

The spouse of a Green Card Holder is not eligible for a Visitor’s Visa! Any visa with an Dual Intent (Immigrant intent) is welcome. Alternatively, help with a Visitor’s visa is welcome too.

So Doomers, anything else unusual or of note we should know about?  Links, stories, comments, what have you?

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Thanks to L for this story out of Georgia last week:

ATHENS, Ga., Feb. 22 (UPI) — A gun-wielding man in a ski mask robbing a Georgia bank told a teller he wanted payback for losing his house to foreclosure.

The robbery occurred at a Regions Bank branch in Athens just before noon Thursday, the Athens Banner-Herald reported.

"You took my house, now I’m going to take your money," the robber told the teller as he pointed a gun at her, Police Capt. Clarence Holeman said.

Holeman said that the FBI, which is investigating the robbery, would probably check bank records. Bank officials said they could not remember anyone who had been especially upset about losing a house.

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