Housing starts see biggest drop since 1984

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EDITOR’S NOTE: That we have ANY housing starts is nearly preposterous considering the number of homes that are unoccupied — mostly because the banks don’t want to report on the financial outcome of selling them. In truth, the banks are taking these homes with “credit bids” which is to say that they are buying the home at auction with a fabricated piece of paper instead of cash. It is a net gain to them for whatever the home is worth. THEY GET THE FREE HOUSE.

But the way they have reported it, for purposes of establishing the level of capital they in reserves, you would think that they own the homes, when in fact, they don’t. Worse yet, they are showing the homes at “principal due” on the defective notes that were used at closings with borrowers, when the real value, if the notes were real, would be a small fraction of the amount on the books of the bank. So the sale would require them to report a loss that never really occurred, while in truth they realized a gain.

If you read this article a couple of times, it will dawn on you that the TARP and other bailout programs totaling more than $7 trillion had nothing to do with bad mortgages. But by making it appear as though they had those losses, they were able to play the Chicken Little game and the US Treasury and the Federal Reserve fell for it, intentionally or not, hook, line and sinker. All that money legally, ethically and morally should be back in play IN the U.S. economy and not in the pockets of Wall Street. Our current policy is the equivalent of providing safe haven and encouragement to terrorists.

Biggest Drop in 27 years may be followed by larger declines

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Wed, Mar 16 2011

WASHINGTON (Reuters) – Housing starts posted their biggest decline in 27 years in February while building permits dropped to their lowest level on record, suggesting the beleaguered real estate sector has yet to rebound from its deepest slump in modern history.

Groundbreaking on new construction dropped 22.5 percent last month to an annual rate of 479,000 units, according to Commerce Department data released on Wednesday. This was just above a record low set in April 2009 and way below the estimates of economists, who had been looking for a smaller drop to 570,000.

January’s figure was revised up to 618,000 units from 596,000. But that did not change the tenor of the report, which confirmed that the sector is failing to recover despite interest rates near record lows.

Building permits, a hint of future construction demand, fell to a record low of 517,000 units from a revised 563,000, and were down by about 20 percent from levels seen in February 2010.

Housing was at the epicenter of the financial crisis of 2007-2009.

One key impediment to the sector’s recovery is a vast backlog of unsold inventory, while a shaky job market has also made consumers reluctant to embark on any major new financial commitments. Making matters worse, a glut of foreclosures, stalled in recent months by revelations of improper loan documentation, is depressing the market.

(Reporting by Pedro Nicolaci da Costa, Editing by Chizu Nomiyama)

11 Responses

  1. Neidermeyer.

    During those times, if you had money in the bank, and earlier times, what was the interest rate you got for saving money and collecting a little income on saving money for a rainy day? What was it, 10%, then 5%, then 3%, then 2%, then 1%, now what is it?

    What is the interest rate you get today for saving money in a bank? for a rainy day? For having a known income on just saving money? It was a good thing many moons ago. But what do you get in return nowadays for depositing your money into a savings account? Why you get charged fees. So, the view still is that banks can lend money to others based on all the deposits in the bank? Is this really true? The law says they have to have so much money on account from depositors and a certain percentage can be loaned out. Is this still true? Is not banking the idea that many depositors (savers) = loans to be made to customers? And the interest rate charged to those who take out loans is greater than the interest rate paid to the savers and some of that goes to the bank for their fulfilling this need? Isn’t that what banking is about, we kind of help each other out and the service the banks get for this is some of the difference. Is this still true nowadays?

  2. “The Beginning

    Of Wisdom Is

    The Definition,

    Of Terms.”

    Socrates

  3. In 1984 a 30 year fixed mortgage was in the 13% range and the prime rate was about 10.5% ,, the rates had dropped a bit from the all time high of 17% in Carters last year but were up about 1% from the 82 and 83 numbers. http://mortgage-x.com/trends.htm

    There is no upward pressure on prices in my area (central Florida) ,, official unemployment is still at 12% and underemployment is huge.. we have a shadow inventory that is unbelievable … With so much wrong the few people with money are waiting for a bottom.

  4. One reason new housing is being built is that nobody with any brains is going to buy a house that was foreclosed on, as you can never get clear title. if you get title insurance without exceptions, then you are at the mercy of the solvency of the title company, which is dubious. And even if all that works for you, what about the “next buyer” when you want to sell? Is there going to be someone as reckless as you, and buy a place with a dubious foreclosure in the title record? Nope.

    The other reason is that if the entire development of 200 houses is foreclosed on and is a ghost town, as is the situation in Nevada, then who wants to go live there? To the extent there are neighbors, they are squatters and druggies and criminals hiding out, or stripping out the plumbing and wiring for scrap value. So, who are your kids going to play with? Who is coming to your barbecue? Who is watching your house while you are on vacation? Answer: nobody.

  5. Carrie – how did ou go about making the claim against the notary bond. We have the infamous Jeffrey Stephan notary signature and would like to pursue this as well.

  6. We were reading in the LA Times this morning that approximately 20% of all homes in Florida are unoccupied. That is one frightening figure. The sociological ramifications are horrific — not to mention where are those displaced people now? I think we all know the answer to that question: They are renting (if they’re lucky and can afford it), living with friends or relatives, are homeless and living in their cars, or hitting the road to visit friends and relatives to have a roof over their heads and trying to find another place to live, far away from where their home used to be. The impact on children of all ages hasn’t even hit the public consciousness yet. I believe that the impact will be severe, with psychological scars that will go on for generations and not dissimilar to the impact on children when the divorce rate skyrocketed in the 70s. I ought to know; I was one of those children and I can tell you it tore our entire family apart, and my siblings are repeating history by doing the same thing to their children. I was robbed of being able to have a normal adolescence; my parents split up off and in the 60s; in 1970 the divorce proceedings were heating up; I was 12. The divorce was nasty; the divorce was not final until 1975. By the time 1980 rolled around, the madness that was my life finally started to cool down; I was 20 by then — I lived on the streets for most of my teens, at the mercy of strangers and homeless off and on from age 13 to 20. I’ve spent most of my life trying to get over what happened to me from age 13 to 20 (which actually began when I was in 5th grade and my father left after beating my mother with a metal belt until her pajamas were shredded from her body. I am now 52, very successful, but it was a very hard road. Early hardship from my youth did ultimately make me into a very strong woman who can withstand virtually any hardship or personal or financial disasters, including almost losing my business, surviving bankruptcy (which was a relief actually) and continuing to fight a UD action prop per and now suing for quiet title.

    My siblings weren’t quite as lucky; one sister died at age 35 from complications of an eating disorder that spanned 15 years. My other sister became a monster, abusing her kids and three husbands, with a new baby on the way from an illicit love affair and so marriage #3 is over now too. By the time she has the baby she will have turned 40 years old. Her other two kids are from marriages #2 and 3.

    I guess what I’m trying to say is that there’s a new generation of children who may lose their childhood and adolescent because they will have to grow up very fast in order to survive.

    Man’s inhumanity to man. It’s heartbreaking that Man, as the world’s largest predator, is eating its own because Money, Greed and Corruption are what makes this country go round.

    It’s a tragedy that continues to unfold in an increasingly ugly way.

    You may be thinking what’s the upshot of all this mayhem and deep sadness? It’s simple actually: Regardless of what happens to us, we must love one another and not lose our compassion for others, whether they be loved ones or total strangers. We can’t save the world, but we can ultimately save ourselves and make the world a better place by reaching out to one another for moral support and to share information that may help others weather this s**tstorm that seems never ending at the moment.

    Maybe at the end of all this (or at least when some semblance of normalcy returns), we have made the world a better place one person at a time. This is what I hope for, and I live it every day by helping others realize that they do have rights and that they need to fight like mad — and get rid of the fear, educate themselves of the reality vs. the lies we’re fed daily, get angry and take the bull by the horns and fight fire with fire.

    My favorite quotes, which are mantras I live by are:

    “What would you attempt to do if you knew you could not fail?

    “Never, ever, EVER give up.” [Winston Churchill]

    As for us, our UD case started last July and we’re still in our home — AND in the midst of the financial hardship we’ve been able to hire a lawyer to bring a quiet title suit. Business is improving so we’re getting back on our feet. AND we’ve made a claim against the notary bond, which will net us $15,000. The bonding company has rejected our claim three times, so now we’re taking it to the CA DOI for review. I am confident that we will prevail as a result of our persistence.

    Where there is Life, there is Hope.

    All the best,
    Carrie

  7. With a 10 year inventory in surplus housing,why do they continue to build more? They can’t even sell the preexsisting homes and with financing becoming much more stringent alot of folks simply can’t afford to play in the market.Another great example of abject stupidity at its finest.

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