Is the Other Recession Shoe About to Drop?
Tags: Government, Morality, recession, The One.
Click here to get Caucus of Corruption: The Truth About The New Democratic Majority by Matt Margolis and Mark Noonan.
A second wave of foreclosures is building:
It is conventional wisdom in the housing blog community (and the OC Register) that a giant wave of foreclosures is coming later this year, but what facts do we have that support this thesis? Today, we take a look at the available data and show this wave in its formative stage.
Foreclosure is a four step process: (1) the borrower quits making payments, (2) the lender issues of Notice of Default, (3) the lender issues a notice of Trustee Sale, and (4) the foreclosure auction occurs on the courthouse steps. Steps 1, 2 and 3 are separated by 90 days each. At any time during this period, either the borrower can get current with their payments, or the borrower and lender can agree to a loan modification. If either contingency occurs, the foreclosure process is aborted.
California passed SB1137 to force lenders to try harder to reach borrowers in default and work out a loan modification plan. Also, the GSEs and many large banks were on voluntary or mandated foreclosure moratoria. This caused a dramatic decline in Notices of Default (step 2). Unfortunately, as I noted Moritorium on Defaults Announced, stopping lenders from issuing notices does nothing to prevent borrowers from actually defaulting (step 1). Borrowers everywhere stopped making payments, and lenders merely stopped issuing notices about it.
The hope of foreclosure moratoria is that additional time will allow lenders to work out the bad loans and avoid the foreclosure process. Unfortunately, it did not work. First, very few borrowers even try to work out the loan with the lenders, and many who try fail to reach an agreement. Second, most who have agreed to a loan modification end up defaulting again; the redefault rate is running at about 50%. And third, financially it is in a borrower’s best interest to give up the house in foreclosure, so the only thing keeping them in the loan and in the home is their sense of morality concerning the payment and their attachment to their properties.
It will come – in Las Vegas, for instance, you can pick up houses which were $400,000 four years ago for $125,000 today. Anyone in a 400k mortgage feels a strong pull to work out a purchase of an equivalent home for a fraction of the price and then just bag it on the more expensive house. Lenders should realize this and thus work out ways to convince people to stay in their homes – they should, in the end, figure out ways and means to set the current mortgage amount in line with current market values with inputs for what the lender paid at the start and what the borrower has paid since the inception of the loan.
In effect, what we need is a bankruptcy re-organization of America’s housing market – its a big, old poop sandwich and everyone has to take a bite. But the banks are cowardly and short-sighted, the government is bent on saving the banks from their folly and the people are going to make rational economic decisions. Ergo, another wave of foreclosures is coming no matter how many moratoriums they have or fiscal hocus-pocus is produced to make it as if economics doesn’t matter – there’s just no economic sense in paying more for housing than you have to.
This second wave of foreclosures will eat into the (mostly mythical) profits banks have been showing of late, which will cause credit to freeze up, with will cause markets to collapse, which will cause a full blown economic depression…and all The One’s spending won’t put Humpty Dumpty back together again. All that money we’ve blown through might as well have been torched in a bonfire – spending doesn’t create wealth; making, mining and growing things does…and if you invest in such things, you’ll make money. Real money – not the bogus wealth of fiat money sifted through a usurious financial system which produces nothing but Chinese slave-goods and fat bonuses for corporate executives who did nothing at all. Liberal financial sharks have done well out of this, just as they have out of every economic debacle since the world started to go off hard money…but Soros having more money won’t make an unemployed truck driver feel very good.
Dumb and dumber, that’s all we’ve been – and we’re going to pay the price. Eventually we’ll work our way out of it, but there’s going to be a price to be paid.
Thank you for visiting Blogs For Victory. If you enjoy our content, please consider making a donation to help us cover the costs of our servers.Mark Noonan is co-author (with Matt Margolis) of Caucus of Corruption: The Truth About The New Democratic Majority. He also blogs at Nevada News and Views. Follow Mark on Twitter.
26 Responses to “Is the Other Recession Shoe About to Drop?”
Caucus of Corruption
Mark
not another shoe…..an anvil !
“…..an anvil !”
Only to be cushioned by the Obamateur’s golden words of unfair lending practices and greed – the useful idiot lemmings will eat it up.
Oh, yeah, and more money from the greedy to the needy.
markloafer:
pay no attention to the droids of foreclosure
the commercial real estate bubble
followed by the personal credit bubble
will be the neptunian nail in earth’s economic coffin
so why was michelle obama disbarred in illinois in 93?
Mark: This second wave of foreclosures will eat into the (mostly mythical) profits banks have been showing of late, which will cause credit to freeze up, with will cause markets to collapse, which will cause a full blown economic depression…
And the captialist vulture in me is licking his chops at the prospect. At the same time, the compassionate wussy in me prays to heaven it can be avoided.
js02: so why was michelle obama disbarred in illinois in 93?
Here’s my guess: because she decided to become a vampire. And vampires aren’t allowed to practice law in IL. In CA it’s okay, but not in IL (I’m pretty sure). It’s part of that “Blue Law” heritage.
So… how’d I do? Lol!
rico
what will happen when california declares bankruptcy, followed by NY, and michigan?
the dominoes are about to start falling.
js02
Michelle hasn’t practiced law since 1993. Why didn’t we know about this before the election?
source:atlashrugs
First off, the biggest as8*s-kissing media refers to Michelle Obama as a ‘distinguished attorney” despite the fact that Michelle Obama has been”inactive” since 1993. Click here: ARDC | Lawyer Search
ARDC – Attorney Registration & Disciplinary Commission of the Supreme Court of Illinois
!
Click to enlarge image. Everyday another Obama skeleton comes careening out of the closet.
This ADRC is for discipline reasons…not for those volunteering to stop practicing. It is COURT ORDERED…not “Michelle Obama ordered.” Their website is very clear about their function and why they step in. (see below)
If this was a Republican, the Dems would have her up on charges already.
Schmoo, an attorney, points out, “sounds more to me like she was drummed right out of the practice of law. I am just dying to know what she did… she ran to have a court ordered inactive status done…and then no malpractice report needed to be provided.
She wanted this to ‘go away” fast and furious and the details not come out in depositions, courtroom documents, rulings for the client/plaintiffs…etc..
I would love to know what she did. I believe barack himself was also disciplined–I know his law license is on “inactive” he lied about ever going by any other names when he applied for bar application. He also failed to state any prior drug use…(which he admitted in his books…and he had outstanding tickets that were never paid).”
Michelle Obama is on COURT ORDERED INACTIVE STATUS–order said since she has been placed INACTIVE that “no malpractice record required.”
WHAT DID SHE DO THAT in 1993 — AFTER only 4 YEARS — HER LICENSE to PRACTICE LAW WAS REVIEWED AND PUT ON INACTIVE by a DISCIPLINARY AGENCY?
What Is the ARDC? (this is NOT the Illinois Bar-where one can voluntarily be inactive) As our name implies, the ARDC is the agency of the Supreme Court of Illinois which registers attorneys and investigates complaints of misconduct filed agains
looks like about we can say about rico is…
stooge
huh?
In 1992 Michelle Obama left her job at Sidley Austin to launch a career in public service, serving as an assistant to Mayor Daley and then as the assistant commissioner of planning and development for the City of Chicago.
strange…but wasnt obama’s buddy rezko dealing with housing development contractors..and extorting money from them in they wanted to get jobs?
another…strange tidbit…bernadine dorn…also worked at sidley austin law firm…until 88…while michelle worked there…but even more strange is that…bill ayers was associated with dorn…and his family got her the job…
js02
* Leader of the 1960s and 70s domestic terrorist group Weatherman
* “Kill all the rich people. … Bring the revolution home. Kill your parents.”
* Participated in the bombings of New York City Police Headquarters in 1970, of the Capitol building in 1971, and the Pentagon in 1972
* Currently a professor of education at the University of Illinois
Born in 1944, Bill Ayers, along with his wife Bernardine Dohrn, was a 1960s leader of the homegrown terrorist groupWeatherman, a Communist-driven splinter faction of Students for a Democratic Society. Characterizing Weatherman as “an American Red Army,” Ayers summed up the organization’s ideology as follows: “Kill all the rich people. Break up their cars and apartments. Bring the revolution home, Kill your parents.”
Today Ayers is a professor of education and a Senior University Scholar at the University of Illinois. He has also authored a series of books about parenting and educating children,
fmrmarine and js02, you guys make me laugh. You’re too much, lol! Of course the difference is that I’m quite sure fmrmarine knows when he’s being outrageous whereas I’m equally sure js02 doesn’t have a clue.
In answer to fmrmarine’s other question: what will happen when california declares bankruptcy, followed by NY, and michigan?
the dominoes are about to start falling.
The first part of my answer is… I dunno for sure. What are you offering as an alternative? Okay, not really you, but the GOP in general. That to me seems to be an essential question, because so far no coherent response has been offered. And to the extent that any partial answers have been offered, they all involve the notion that the “dominoes” have to fall.
Maybe so. And thus, the second part of my answer is that I am a big believer in covering as many contingencies as I can. Fortunately, I am in a position that allows me to cover quite a few. I like the simple things in life, and I have never been one to spend beyond my means. Also, I seem to have developed a knack for knowing when to cut my losses well before getting submerged. My track record isn’t perfect, but pretty good and getting better. As a result, my honey and I (by the way, the Big Day is June 1) have no major debts other than the mortgage on her house (it’s fixed at a relatively low interest rate (5.25), I like where we’re living, and apparently so do many others (meaning that values are more buoyant here than many other areas that might be worth investing in eventually), so there’s no point in paying it off at the moment), and have many hundreds of thousands of dollars in either relatively or totally liquid assets. So why should I care where the dominoes fall? No matter what happens, I’m quite convinced we can come out of it smelling like roses — ya know, assuming our kids don’t target us. And I’m pretty confident one won’t. I’m not so sure about the other one. Then again, I’m pretty sure that if he tries, he’ll have a whole platoon of Marines on his ass post haste. It’s another example of the network of contingencies I’ve established, lol!
fmrmarine (referring to Bill Ayers): He has also authored a series of books about parenting and educating children,
I’m guessing you haven’t read any of them, but have you at least heard anything of substance about them? Probably not. But I suspect that if you didn’t know who wrote what he wrote, it’s very likely you could get behind what was written. Weird, huh? But that’s the value behind distinguishing the messenger and the message. If you can’t do that you run the risk of throwing the baby out with the bathwater.
Here’s my guess: because she decided to become a vampire.
I was going to guess it had something to do with the legendary “hatin’ Whitey” tape, but your guess seems more plausible.
Ricorun,
I’m caught between a desire to take advantage of the collapse and my obligation to my lender – I’m hoping to work it out.
I was going to guess it had something to do with the legendary “hatin’ Whitey” tape, but your guess seems more plausible.
Maybe Americans for Freedom of Information can provide the truth?
rico
The first part of my answer is… I dunno for sure. What are you offering as an alternative? Okay, not really you, but the GOP in general. That to me seems to be an essential question, because so far no coherent response has been offered. And to the extent that any partial answers have been offered, they all involve the notion that the “dominoes” have to fall.
They(dominos) already have started falling = 3 TRILLION for banking, mtg., auto, wall street.
the next are two or three large states, then SS and medicare after that ???
No one can stop it now, I forsee a full collapse and a 1929 type depression.
Me? id pay off all real estate if I could and keep as much cash as possible in reserve.
rico
If you can’t do that you run the risk of throwing the baby out with the bathwater.
in that case throw them both out.
Why read the books of a nutcase murdering terrorist? There are plenty of good authors to read.
That is like saying Hitler wrote some really compelling books…. why not read them?
The guy sucks, and until he croaks nothing about him interests me.
All I can say is, I worry for my sister living in a house in MI that she cannot sell, at a job related to GM, and a son getting near college age. Most of the rest of us are living in the Midwest and fairly secure. I do have one niece in Phoenix, but she is an RN, so her work is fairly secure. Now her husband’s job – well it is being phased out. But he could always try and go back to teaching.
kjstrouble1
do you have room in your house for your sister and her family if the bottom falls out?
Families will have to re centralize,
We are in perilous times with the most inexperienced empty suit with a marxist agenda to ever sit in the big chair.
A true formula for disaster.
fmrmarine says:
May 20th, 2009 at 8:12 pm
You do realize if thr US economy collpases all the dollars in the world stuffed in your mattresses will have little or no value. An American economic collapse will be a dollar collapse. If you pay down all your debt and take cash you should convert that cash into gold or diamonds. If you really thought this were the case you would sell your house and get the smallest lowest rent aprtemnt you could find and divest yourself of most material possessions that are not portable.
lead
what happened to bloch? she in getting nother abortion?
If you really thought this were the case you would sell your house and get the smallest lowest rent aprtemnt you could find and divest yourself of most material possessions that are not portable.
Actually I fully agree with you.
I pray this wont happen, however it very may will.
PS
being the LEAD-economist answer this,
what russian economist noticed thet every 50-70 years a free market economy collapsed, the wealth was automatically redistributed and things began over?
js02 says:
May 20th, 2009 at 2:40 pm
fmrmarine says:
May 20th, 2009 at 3:27 pm
js02 says:
May 20th, 2009 at 4:01 pm
—————-
Dammit! I demand that Michelle Obama step down as First Lady IMMEDIATELY!
Would that make you two clowns happy? You guys are so freaking hilarious.
lead,
Which is why I wish I could liquidate my 401k and convert it to gold…but the rules of the plan say as long as I’m employed, I can’t liquidate short of retirement…
Mark
read this interesting
http://www.globalresearch.ca/index.php?context=va&aid=11161