How low can it go?
Footnoted regulars know that I’ve been chronicling the fate of Countrywide’s (CFC) sex party house in Holmes Beach, Fl and using it as a metaphor to explain just how serious the whole subprime mess really is. Not to mention how little Bank of America (BAC) executives seem to really get the problem.
Next Tuesday, the house will go on the auction block. And the starting price is now listed at $279K. That’s a $90K drop from just last month and considerably less than the $1.1 million that Countrywide appears to be on the hook for as Floyd Norris noted last month. Oddly enough, Countrywide’s own REO site still lists the house at $729K.
Now obviously there’s a bit of danger of taking one particularly sorry house and using that as a metaphor for the crisis. But on a day when foreclosures jumped 53% and Fannie (FNM) and Freddie (FRE) are dropping yet again, it’s hard not to view it exactly that way.
Also: just to show that the problems in that part of Florida — a place I used to call home — aren’t just limited to Countrywide, I just caught this story in my old paper: Regions Financial (RF) is looking to foreclose on an entire condominium building that has 58 units and was originally part of a 2-building development. Regions inherited the loan from AmSouth Bank, which Regions acquired in 2006.
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Posted in Tags: Countrywide, subprime |
 11 Comments » |
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July 14th, 2008 at 7:32 pm
Ah, Florida, my original home state …
Since I drafted a blog nearly a year ago titled “Sub-primal Scream” nothing has changed. Sub-prime was only the tip of the iceberg even then — the financial rot was systemic. I was telling my daughter-in-law to expect a serious downturn. Her response was “You’re scaring me!” Well, she wasn’t prepared and now, the company she works for is doing some layoffs, she anticipates the axe falling any day .
July 14th, 2008 at 10:14 pm
George Bush laughs at homeowners.
Florida moron Republican’ts are getting what they deserve.
July 15th, 2008 at 12:19 pm
Breakfast: George Bush may be laughing at homeowners, but these people are not completely responsible for the housing bubble. The Bush ‘administration’ was replacing regulators with lobbyists, printing lots of US dollars, manipulating interest rates and following accounting principles which are illegal on Wall Street.
These aren’t ‘republicans’ suffering, these are regular people.
That said, the filthy rich ARE snapping up “bargains”. The only people I know now who claim the economy is good, and still like Bush: they APPRECIATE what he’s done, and own much more than “just one house”.
July 15th, 2008 at 2:50 pm
I like Bush and the economy is good. The media is trying to say it isn’t but the GDP is still increasing. Things are not a cushy as they were but smart financial savvy people are still making it just fine. It’s the people that bought houses WAY beyond their means because of “Creative Financing” that are dying. Or people that had no business what-so-ever spec marketing houses and now they are stuck with them.
I only have one house and I do enjoy two cars. The newest, ‘07Ram, I bought after the gas prices went up because the guy bought way over his means and couldn’t afford the payment and the diesel fuel. But I still have them. My friends that bought 500,00 dollar homes and both were driving brand new cars are dying. It is their own greed. As Americans we have progressively become more and more greedy. Just because the bank says you can afford something doesn’t mean you should. Stop blaming the economy and legislature or gas prices for lack of personal financial responsibility. I may decide now to buy my friends house since I can get it for 125,000.
July 15th, 2008 at 5:55 pm
Oh you LIKE Bush, well good for you. I don’t like Bush, I don’t like seeing my country destroyed by hubris, greed, and the “soft bias of low expectations.” I want a president who can get a bj and run the country at the same time while being investigated by a pack of wealthy sex pervert wife swapping Republicans-Clinton was the MAN! Bush is a crook, he is destroying this country so he and his rich buddies can cash it out, and he is going to skip town before we can prosecute and confine him and every murderous psycho in his administration.
July 15th, 2008 at 8:11 pm
There’s plenty of blame to go around. I “was” a developer of residential for sale units in the San Diego area and there are many reasons real estate imploded. For starters, my own greed, my inability to grasp the simple factors of fundamental logic in home values that should have dictated my actions through all the “to the moon” hoopla. Secondly, why were these lenders giving me loans in the first place to buy 50, 100, and 300 properties, can’t they add and subtract, do they have anyone onboard that crunches the fundamentals and knew how inflated values were? I sure didn’t but i was a new kid on the block not a billion dollar bank. I guess now I know. Thirdly, Who are the dudes that crafted the ZERO down programs to generate loans and then package up and sell to bond investors, who approves this stuff? Fourthly, Why don’t bond investors know what crappy bonds they are buying, it’s pretty easy to scan the offering packages? I guess when your trading other peoples money you can just follow the herd and don’t need to know what your buying….as long as those FEES are rolling in. Fifthly, Why do people assume the average real estate agent and loan officer knows anything more than the surface info about where the “market” is headed or the new “loan program” that offers zero down than the current hype on the market by endless talking heads? Lastly, Why would you buy a home if you can’t understand the loan, and/or have no sure fire way to repay the loan for the next many years to come when you onviously knew nothing about the homes fundamental value?
In simple terms the Developers, Lenders, Mortgage Back Securities Packagers, Bond Buyers, RE Agents, Loan Offifers, Home Buyers all, at the same time went way beyond logical fundamental numbers, fed by lots of hype, not much math and they all lost everything.
On a positive note this clears the way for many people to re create assets in real estate as the values get pummelled to the ground by the perfect storm facing the US housing market. If we all remember are lessons we can stave off another bust for 20 years after this one fades away.
July 16th, 2008 at 12:36 am
My home was appraised two years ago when I placed 2.5 Kw of solar panels on my detached garage where I have a full apt I rent out for half my mortgage. My main 3000 sq ft home had an electric bill of $36 two months ago and last month of $49. I’ve been told I can sell my home for more than last appraised. All it took was planning and desire to invest in green energy. I don’t plan to sell as I’m very pleased with where I live and desire to stay. We’re not rich. I’m retired and my wife still works. If people weren’t trying to live up “to the Jones’” perhaps thinking woukld rise higher than greed.
July 16th, 2008 at 9:20 am
For years I have crunched the numbers for flipping in my area. They never worked. It was buy a distressed house for $190,00 but $30,000 into to it and sell it for $230,000, if you used a real estate agent he took 6% and you made nothing. Thank God I didn’t buy into the madness.
July 16th, 2008 at 6:13 pm
we democrats from europe have no doubt about are opinion that bush is a warcriminal and the biggest american political idiot ever born. he doesn’t care about the environment. and the lucky duckies non tax-paying rich are idiot creations of an american society. the war industry is much more important than worldwide health and push is praying and praying and praying lol
July 16th, 2008 at 8:50 pm
What Blueken says makes good sense. I’ve bought rental properties occasionally over the last twenty five years, have generally gotten them to write black ink but it is no instant pathway to riches. Then about four years ago I’d look at a place that I figured was worth X, based on a liquidated cash flow approach. Some guy would come out of nowhere and pay 2X. I began to think I was missing something until I talked to some of these guys. They had no idea what their costs or revenues would be. For them it started and ended with “a) I’m not any money out of pocket to own this place and b) Real estate always goes up in value.” I dunno about a, but b is not true.
SEO
July 17th, 2008 at 12:10 am
Move to Iraq. They are really grateful for being liberated, the surge has worked, and house prices are really cheap. Even DU is not so bad when u are past childbearing age, thanks to major rethinking about nuclear poisoning.