Friday, December 7, 2012

Best explanation of foreclosure crisis, ever!

A breakdown of the housing crisis in this video that tells the truth.  The reality of its causes and who profited.  Anyone who thinks this is not the truth is wrong.  This needs to be seen by everyone and should be on national news.

Econ4 Video on the Housing and Foreclosure Crisis (With Your Humble Blogger in a Supporting Role) « naked capitalism

Wednesday, December 5, 2012

Consider It Sold Las Vegas: Las Vegas Real Estate is Improving

Consider It Sold Las Vegas: Las Vegas Real Estate is Improving: Las Vegas Real Estate is improving this year.  There have been price increases in many parts of the city.  Some areas have seen over 25% pr...

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Revolution long forgotten? Kings and Queens of Wall Street Rule

Does cutting costs always have to come at the expense of employees jobs?  Maybe.  But it certainly seems that with CEOs raking in millions in bonus dollars, company profit margins greater than ever, and corporate fraud running rampant that there has to be a better way.  One reason this method of business continues is because the workers are so far removed from Wall Street.  The absurd notion that the boss gets $10 million in bonuses when the company is losing money daily is Anti-American.  Our country is founded on the idea that we would not live in a society of kings, queens and peasants.  We have moved back to this type of structure under the veil of capitalism.  We are no more capitalist here than England was in 1776.  We are allowing our system to be corrupted by Wall Street as those who gave their life fighting for our liberty turn over in their graves.  We have gone one step further than England.  We now have many Kings and Queens reaping the spoils of royalty as the American worker gets squeezed.  Our democratic republic is turning out to be more like a monarchy than a democracy.  Our current recession has made it clear. 

 Henry Blodget wrote today how destructive the “cream for the top, crumbs for everyone else” business attitude is:
The first chart shows that big American companies now have the highest profit margins in history.
The second chart shows that the companies are now paying the lowest wages in history as a percent of the economy.
If you happen to be an owner of a big American corporation, these charts could be construed as good news: You’re coining it!
If you happen to be a rank-and-file employee, however–or someone hoping to be such an employee–this is bad news: You’re sharing less than ever before in the success of American industry.
This situation, by the way, is only temporarily good news for the company owners. Because, by pumping so little back into the economy in the form of employee wages (and capital investments–the other area where companies are scrimping), our companies are constraining the growth of the economy.
Because the rank-and-file employees of America’s corporations are also mainstream American consumers–the folks who account for ~70% of the spending in the economy.
Almost every dollar these folks earn in salaries gets spent–on food, clothing, houses, education, entertainment, cars, and other goods and services that big American companies produce.
So, if, instead of hoarding their wealth by hiking their profit margins ever higher, companies invested more in employees and equipment, they would help the whole economy.
And the companies would also, of course, help their employees–the people who are dedicating their lives to helping the companies earn such vast profits.
This situation, by the way, is only temporarily good news for the company owners. Because, by pumping so little back into the economy in the form of employee wages (and capital investments–the other area where companies are scrimping), our companies are constraining the growth of the economy.
Because the rank-and-file employees of America’s corporations are also mainstream American consumers–the folks who account for ~70% of the spending in the economy.
Almost every dollar these folks earn in salaries gets spent–on food, clothing, houses, education, entertainment, cars, and other goods and services that big American companies produce.
So, if, instead of hoarding their wealth by hiking their profit margins ever higher, companies invested more in employees and equipment, they would help the whole economy.
And the companies would also, of course, help their employees–the people who are dedicating their lives to helping the companies earn such vast profits…
The business-ethos pendulum in this country has now swung so far toward “profit maximization” that most American companies would never dream of voluntarily sharing more wealth with their employees.
These employees, after all, are not viewed as people. They’re viewed as “costs”–cash outflows that just drain financial value away from owners…
Think about that for a minute.
Some of the richest, most revered companies in this country–companies that are currently generating record-high profits–pay their full-time employees so little that they’re poor.
Even more depressing is the fact that concepts like “fairness” and “sharing” are now seen as evidence of bleeding-heart socialism–as though the only way to be a bona fide capitalist is to treat your employees like costs and pay them as little as possible.

Sunday, December 2, 2012

Economy not showing strength in spite of spin

We are now getting more data on the reality of our economy.  It is unfortunate but the data is not allowing us to paint a pretty picture.  You can be be assured that the media was spinning things to aid in an Obama re-election but check out the numbers. Here is a quote from Market Watch:

"Yet buried within the recent array of economic reports is sufficient evidence to point to a slower pace of U.S. growth"
If this is true we are in trouble.  A much slower pace will be much closer to another recession than we are to a robust recovery.  It is amazing that we have changed little with the Too Big To Fail Banks and with regulation to prevent another economic catastrophe.  Everyone is hoping and praying for the economy to pick up but there is little evidence that goes along with the media hyperbole regarding a recovery.  The article further states:

"Looking beyond the hurricane, the fourth quarter of 2012 has clearly gotten off to a slow start. Consumer spending, by far the biggest source of economic growth, fell in October for the first time in five months. And orders for expensive, long-lasting goods were flat in October."
Read more in full article HERE

Here is another good point made in a Market Watch article regarding how advanced warning of the Sandy should have helped stores before the end of the month.  It makes a plausible argument that has to be considered as we go forward toward the Fiscal Cliff. 
"That’s strange. When people know a big storm is coming, they usually hit the stores to stock up on groceries, hardware and other goods.  Some of that happened in the days leading up to Sandy. Batteries were low on supply, for example, and water bottles disappeared from store shelves."
"So Sandy should have boosted sales in October as well as decreasing them. If so, all that shopping appears to have had little impact on the national spending numbers."
See more on the cut in consumer spending with full article HERE
I am tired of hoping for a better economy and a recovery.  I would like to see some evidence of this soon so we can stop hearing the spin from everyone.  People are getting squeezed more and more.  Many more well qualified and well educated people are taking lower and lower paying jobs.  It is not necessarily because they want to live on less but their choices are shrinking.  We have seen the data for black Friday was not as expected as people are running down savings to survive.  Discretionary
spending still could take a hit this holiday season and easily through economy back into recession.  We have been sold a bill of good for a long time now.  It is about time we get some of the goods and not just the bill. 

Tuesday, November 20, 2012

Monitor of mortgage settlement shows banks still winning

Short Sale is option of choice for too big to fail banks and NAR. 

Monitoring of the mortgage settlement with the too big to fail banks may be showing the true fraud and scam of this agreement for the people.  It is full of loopholes and bank favored clauses that allow them to get away with doing virtually nothing to help homeowners stay in their homes.

The short sale has become the method of choice for the banks and for realtors across the country.  It is basically giving the banks a way to clear out home owners under the veil of help.  The reality is that this is a forced sale for people who would much rather have stayed in their home.  The options for people forced from their home due to a short sale are very limited due the credit issues that are a result of the sale.

The NAR (National Association or Realtors) has bought heavily into the short sale option because it keeps Realtors in business and it keeps the dues coming in to pay for the ridiculous amount of lobbying that goes toward promoting the NAR agenda.  It is little know that the NAR is a well oiled political machine that spends millions of dollars on lobbying each year.  It is no secret that NAR is pushing some type of agenda at all times.  Right now they are pushing to help the banks because they are the ones in control of the real estate.  If they banks do not continue to do short sales hundreds of Realtors will be out of business and therefore will not being paying the outrageous dues each year.

Read more of the story at Naked Capitalism by following the link below: 

Mortgage Settlement Monitor “Progress” Report Gooses Numbers to Hide Lack of Real Relief to Homeowners « naked capitalism

Saturday, November 17, 2012

Beware of 'contract for deed' housing schemes, Mpls. officials warn | Minnesota Public Radio News

MINNEAPOLIS — Minneapolis officials and housing advocates are concerned about a trend in the housing market.
They say more property owners are striking up informal "contract for deed" deals as a way to sell homes to people who don't qualify for loans.
Really?  Now people who are given the option to buy a home with poor credit or little money down are now victims?  What does the contract for deed have to due with regulation.  If someone buys a home and they become the owner, that means they get to take care of it and pay for the upkeep.  This is how the Contract for Deed works in MN.  You do not get title to the property until  you pay off the note but you become the owner of record.  It is the same as if you get a loan from the bank for your car.  The bank will hold the title until you pay off the note.  The you will get the note in the mail.  Also in MN when you buy a home you get possession of the title while the bank places a lien on the property.  Often the title can be stored with a title company or you can keep it in your own safe place.  MN is a not a trust deed state.  
Some of these sellers are landlords the city says are using the arrangement to skirt safety and housing laws.
North Minneapolis resident George Williams, 48, bought his house through a contract for deed last year and said it was the best deal he could find given his shaky credit. He isn't able to get a mortgage.
"I don't qualify for it right now and I've been talk to the banks to see I even ran a check online to see if I qualify for it but I don't have any extra income coming in," Williams said.
In a contract for deed, the seller provides financing for the buyer, who makes monthly payments to the seller. Advocates say some contracts for deed, especially those provided by non-profit housing organizations, are fair.
But unlike a traditional mortgage, contracts for deed are usually just a few years long — typically three to five years. So most buyers have to refinance in order to make a balloon payment, complete the deal and get the deed to the house. But refinancing is often difficult because properties sold this way are often not appraised, so buyers may be agreeing to pay more than a home is worth. Williams is hoping to get a mortgage in time to pay his $58,000 balloon payment in three years.
"My main concern is to make sure that I am able to go to a bank and refinance on this house," Williams said.
One more way for the city to get in the way of the housing market.  The mission for years in Minneapolis and St. Paul Minnesota has seemed to be systemically remove landlords by making the costs so onerous that it no longer becomes profitable to own a rental home.  I bought my first house ever on a contract for deed in Minnesota and it was a way for me to get a home while starting out in a commission job.  I had not worked long enough to qualify for a bank mortgage. 

If the buyer of the property gets their credit in order over the course of a couple of years and the property is of reasonable value they should be able to get some type of mortgage to pay of the contract for deed.  Also the buyer can possible work a deal with the seller to push out the balloon payment if they need more time.  

Of course there are risks associated buying a home on a contract for deed but there are risks when getting a loan from the bank.  When someone it unable to qualify for a loan with a bank, the contract for deed a reasonable option.  It also is a way to promote home ownership and owner occupied home ownership.  This is helping the city accomplish its mission of reducing the number of landlords and increasing the number of owner occupied homes in the lower priced neighborhoods. 
Williams bought his home through north Minneapolis real estate broker Howie Gangestad. The broker said contracts for deed are a good way for people like Williams, who have bad credit or low incomes, to buy homes.
"There is a lot of underground society in north Minneapolis," Gangestad said. "They don't have enough income to qualify or low credit scores due to their own fault or through no fault of their own."
Gangestad charges higher interest rates than a bank. In most cases, he said that's because buyers put little to no money down. He said nobody who could get a lower interest loan would ever buy from him. "It's not a good deal for them if they can get a regular mortgage at the bank," he said. "I would never sell on a contract for deed if they qualify."
Read the full story: 
Beware of 'contract for deed' housing schemes, Mpls. officials warn | Minnesota Public Radio News

Wednesday, November 14, 2012

Consider It Sold Las Vegas: Another Truth about Las Vegas Real Estate

Consider It Sold Las Vegas: Another Truth about Las Vegas Real Estate: Las Vegas Real Estate has people stuck in limbo now but the word is things are getting better.  The reality is that 60-to 75% of homeowner...

Also follow this link for more information on 

Las Vegas Real Estate

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Tuesday, November 13, 2012

Petraeus CIA Scanal Amazingly kept under radar during election. Genius!

 Funny how this mega scandal was held under wraps until after the 2012 election.  I don't know if it would have made any difference in the outcome but it makes me suspicious of the media agenda.  How could this have been so hush hush for so long during the election campaign?  I have to guess that the media was in the tank for Obama again during this election as they were in 2008.  I find it hard to believe that democrats are not even suspicious of the media at this point.

However, you have to admit that the political machine of the Obama administration is very good.  They were able to keep this story completely out of the public eye during the campaign.  It is also hard to believe that this would not have caused a major outcry regarding the recent embassy bombings.   With such major scandal going on at the CIA, how could it be possible that the effectiveness of the agency was not altered in some way?  I don't have the answers to this question but it is clear that we no longer live in the free country we claim.  The government and banking industry have teamed up to take control of massive amounts of wealth that previously belonged middle America.  Now the government has taken control of the media as well or at least formed a partnership between the democratic ruling elite and the media.  How else could such a titillating story be kept from the public eye.  You know any outlet would have by crazy over running this story in 2008 prior to the election.  It would have been a hit against the administration but not this year.  It was another free pass given to the Obama team.  It is as if we have seen such drastic improvement over the past 4 years that the media decided it would team up with the government to give us 4 more years of the same.  We will not see anything that will reflect poorly on the president of the next 4 years regardless of the situation.  We have given the Obama administration a free 8 year pass.  It is as if we have come to accept that it is impossible for change to happen in Washington.  The country has opted for looking progressive over making progress.   It makes little sense to the people who have suffered the most from the quasi banking/government partnership that has lead to the down fall of the American dream.

The dream now has become one of hope and change.  However, it is one of false hope and little change.  American has come to accept stagnation and even reversal of progress for the appearance of being the country of freedom.

The reality is that we are losing more and more of the freedoms that were fought for during the Revolution.  It has nothing to do with race or prejudice and everything to do with lowered expectations and willingness to allow the country to become more and more divided between the haves and the have nots.  Why?  Because people fell for the spin that this President was one of the common folk.  Unfortunately, this could not be farther from the truth.  It has to be said he understands the media and he understands politics of being elected.  His team is very good at winning elections and very good at running a campaign.  No one can argue this point.  However, we need to see if they are as equally qualified to run the country.  For four years I have seen little evidence that the administration is as concerned about the people as it is about re-election.  Maybe now that re-election is a not an issue we will see things being done for the good of the people and the good of the country. 

Breaking News and Opinion on The Huffington Post

Monday, November 12, 2012

Regulation being wiped out story from Naked Capitalism

.  Read the full story here from Naked Capitalism Blog
No matter how bad things seem to be, there are always ways for them to become worse. While the campaign against Medicare and Social Security is being couched in the sort of faux inevitability that has become familiar via European austerity measures, other pernicious lame duck session measures are moving forward in the hope no one will notice.
Dave Dayen wrote up a remarkably ugly one last Friday. Here we have just been through a wreck-the-economy level global crisis which was in large measure due to deregulation. The measure underway would not only weaken already pathetic regulators like the SEC but for good measure would hobble other ones like the Nuclear Regulatory Commission (after Fukushima, how can anyone with an ounce of sense argue for less stringent oversight of nuclear facilities?). From Dayen:
The Senate Homeland Security and Governmental Affairs Committee, under the direction of outgoing chair Joe Lieberman, plans to pass the Independent Agency Regulatory Analysis Act, S.3468, out of committee and into a fast track process. Mark Warner, Susan Collins and Rob Portman are the drives forces behind it. Americans for Financial Reform and other groups have raised alarms about it.
The bill would, according to AFR, strip away independence from various regulatory agencies, including the Securities and Exchange Commission, Commodity Futures Trading Commission, OSHA, the Nuclear Regulatory Commission, the FCC and the Consumer Financial Protection Bureau. These and more agencies would have to submit additional cost-benefit analyses to the executive branch, as well as submitting their rulesand regulations for executive branch review. The immediate effect of this would be to slow implementation of things like Dodd-Frank. Review processes take time, and adding an executive branch layer gives Wall Street and other corporate interests another point of attack against various regulations. Heads of all the major regulatory agencies have already complained in a joint letter that the bill would give the executive branch far too much ability to influence their policy decisions.
Americans for Financial Reform writes:
Existing cost-benefit analysis requirements, and related legal challenges, are already a major source of delay in financial rulemaking. S. 3468 would ad 
at least thirteen new resource-intensive analyses of regulatory costs before a rule can be finalized. In addition, the Office of Information and Regulatory Affairs (OIRA) would get to review any significant new rule, guidance, or policy – a process could add far more time and possibly lead to new rules being abandoned altogether. OIRA has a long standing reputation for blocking environmental and safety regulations, as well as generally being sympathetic to industry arguments that regulation is excessively costly. The big banks could use their influence to turn this tiny office into a bottleneck for all financial regulation. Wall Street lobbyists would have another powerful set of tools to delay and derail the implementation of the safeguards that are needed to protect our banking system and the wider economy.
AFR asks that all members of the Senate Homeland Security Committee get a phone call, to object to this gutting of the regulatory process. It’s bad enough that partisan officials get installed in these agencies, but this would just make the process of influence over the agencies complete.
Lieberman was one of the moving forces behind reducing the SEC from being a competent, even feared, agency to the mainly toothless overseer it is now. Clinton had installed Arthur Levitt, former head of American Stock Exchange, as SEC chairman; he was no doubt assumed to be friendly towards securities firms. But Levitt came out of the brokerage business and believed firmly in protecting small investors. Even with that narrow vision of the SEC’s role Lieberman, the Senator from Hedgistan, would threaten Levitt with cutting the SEC’s budget when he implemented pro-investor programs. So even though Lieberman isn’t one of the lead actors behind this measure, it is completely consistent with his history of unleashing financial firms to prey on a largely unsophisticated public.
I hope you’ll take the trouble to call or e-mail the members of the Senate Homeland Security Committee:

Sunday, November 11, 2012

Consider It Sold Las Vegas: 10 Truths about Las Vegas Real Estate

Here is an article written about the 10 truths of Las Vegas real estate.  The real estate market has been in recovery according to the media and pundits.  We have yet to see a real recovery starting in the south west and we may be setting things up for another bubble and crash in the next few years.  a

It is hard to tell just how much the market manipulation was related to the recent election or if it just is a sign of the time.  There seems to be little concern from the White House regarding the massive housing problem still dragging down the United States economy.  There has been a lot of tough talk regarding actions being taken to hold those accountable for the housing meltdown but little to nothing has been done.  We have been 5 years along into this recovery and the housing market is still being manipulated by the same people who brought it down in the first place.

The housing market will never be as valuable to middle America if the takeover from Wall Street is not stopped.  The government has allowed the golden goose of the American economy to be taken over by Wall Street institutions and players.  Until real estate is given back to little guy, our housing market will be in danger of continually running a bubble/crash cycle every few years.

Read the article linked below to find out more about the Las Vegas real estate market and the future of housing. 
Consider It Sold Las Vegas: 10 Truths about Las Vegas Real Estate:   I was listening to a radio show on Las Vegas real estate last night hosted by a Las Vegas real estate broker.  What I heard seemed to v...

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Tuesday, November 6, 2012

Consider It Sold Las Vegas: Will Election change Las Vegas Housing Crisis and ...

Consider It Sold Las Vegas: Will Election change Las Vegas Housing Crisis and ...: The 2012 Presidential election seems to be one of the most anticipated elections in years.  The early voting seems to have drawn high numbe...

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Las Vegas, NV

Consider It Sold Las Vegas: Las Vegas Real Estate is unique

Consider It Sold Las Vegas: Las Vegas Real Estate is unique:  Las Vegas real estate is very unique with its abundance of relatively new housing that that is nearly all in gated communities with strict...

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Sunday, November 4, 2012

The False Dodd Frank Narrative on Bank Profits (No, Honey, Obama Did Not Shrink the Banks) « naked capitalism

Here is another very interesting article from Naked Capitalism.  It explores the ideas relating to new regulation and Wall Street Profits.  It appears that the banks fortunes were saved by Tarp and that new regulation has not much of an effect on profits.  However, we are hearing stories from both sides of the aisle before the election.   It is clear that the banks are doing well and making money and there is no correlation between Dodd Frank and a reduction in bank profit.  Even if the Obama administration would like to take credit for doing the American people justice, it really doesn't appear that anything has changed much at all.  The banks seem to be profiting nicely and they seem to still be in control of the fate of the country.  Banks will again cause another meltdown at some point if lessons are not learned from the current crisis.  So far it doesn't look like anyone in Washington DC wants to clean up the system and keep the banks for causing another meltdown.   Here is part of the article and a link for the full piece. 
Now let’s go the other part of the Tett narrative, which as someone who has been in and around the industry since 1980 I find truly peculiar. While the aggregate figures from her article, cited below, are accurate (and Simon Johnson has invoked similar statistics regarding the financialization of the economy), it leaves the reader with the misleading picture that the financial services industry, particularly the highly paid end that has been a magnet to the “best and brightest,” has had a linear march upwards from the the late 1970s-early 1980s to now:
Take a look, for example, at some research conducted by a New York based economist, Thomas Philippon, partly in association with Ariell Reshef of the University of Virginia. They chart the fluctuations of American finance since 1880 and show, firstly, how dramatically finance swelled from the late 1970s to today. Jobs in banking multiplied and the financial sector, adjusted for defence spending, rose from 4 per cent of gross domestic product to just under 9 per cent at the peak. Banker pay swelled too: although average banking salaries relative to non-banking professional salaries were almost at parity in the 1950s, by 2007 they were 1.7 times higher.
This masks serious, wrenching downturns in investment banking businesses, meaning the highly paid debt and equity origination/distribution/trading businesses, which traditional commercial banks, by dint of well over a decade of effort, finally colonized. When I joined Goldman in 1981, the firm was not enjoying great earnings and was still shell-shocked from the one-two punch of the major equity bear market of 1973-1974 and the deregulation of commissions. Wall Street was similarly hard-hit by the combo of the end of the stock bull market and takeover boom of the 1980s. First Boston effectively failed in 1988 and was merged into Credit Suisse, which was a not recognized de facto end of Glass Steagall, since this was the merger of a bulge bracket investment bank with a full fledged commercial bank. Employment in M&A, which had been one of the major profit drivers of the previous decade, fell by 75% in 1990-1991. This was also the time when the S&L crisis was ravaging major banks (Citi received its equity infusion from Prince Al Waleed in 1991). In 1994, an unexpected increase in interest rates sent shock waves across Wall Street (necessitating among other things a back door bailout of firms unduly exposed to Mexico, courtesy Robert Rubin raiding the Treasury’s Exchange Stabilization Fund). The resulting derivative losses destroyed more value than the 1987 crash. One of the casualties was Goldman:
But in 1994, substantial investment and trading losses, along with Friedman’s departure (Rubin had left in 1992),precipitated the loss of about 45 partners and their capital. Jon Corzine was elevated from head of fixed income to senior partner and named the head of investment banking, Henry M. (Hank) Paulson, as president. Corzine and Paulson immediately reduced employee headcount and costs by slashing pay and bonuses, stabilizing the firm by the end of 1995. They also put restrictions on the withdrawal of partners’ capital, and replaced Goldman’s traditional partnership structure of unlimited liability with one that named the firm as general partner and named individual partners and equity holders as limited partners.
There is also a key difference between that past, smaller S&L bubble unwind and aftermath: Alan Greenspan engineered a very steep yield curve, which allowed both commercial and investments to earn easy and comparatively low risk “borrow short-lend long” profits. By contrast, the severity of this financial crisis has led the Fed not only to drop short term rates to unheard of low levels, but to flatten the yield curve (via Operation Twist and the purchase of mortgage bonds). While that flattered financial firm balance short term by supporting asset values, it also undermined a lot of low risk traditional income sources (for commercial banks, also simply using customer “float” or money in transit, which can be deployed profitably on a short term basis when interest rates are not in ZIRP land).
Look at what has happened in areas that have not felt the hand of Basel III or Dodd Frank. M&A again is the poster child. Consider this gallows humor from the FT’s Lex column in late September:
Hooray! So far 2012 has been dismal for mergers and acquisitions. According to Mergermarket, activity in the first nine months is 20 per cent below the same period in 2011.
And 2011 was not at all a good year either.
How about private label mortgage backed securitizations? That was a huge profit engine in the bubble just passed, and it is making zip in the way of profit contribution now. There was all of one deal in 2011. The reason, sports fans, is not reregulation, but the lack thereof. As we’ve recounted at some length in this blog, investors were badly burned by the pre-crisis abuses, and they aren’t getting back into the pool ex serious protections, which simply have not been implemented (or enough newbies finally taking the helm at investment firms that memories will have faded, but that will take at least a few years).
Isn’t the Volcker Rule making a difference? It’s hard to say, since rules are still being duked out, and we are strongly of the suspicion that, as before prop desks were spun out as separate activities, that banks will still be able to do a lot of positioning on customer desks. But the opportunities for prop trading profits parallel those for hedge funds, and hedgies have had a lousy last two years, again strongly indicating that it is hard to blame Wall Street’s fading fortunes largely or even meaningfully on new regulations.
Look, for instance, at this earnings recap from October last year (post Dodd Frank) as an illustration:
Goldman Sachs, weighed down by problems in its private equity portfolio and the broader global economic woes, reported a loss of $428 million, compared with a $1.7 billion profit a year ago.
It’s only the second quarterly loss for Goldman since the investment bank went public in 1999.
The company reported a loss of 84 cents a share, worse than analysts’ predictions of a loss of 16 cents, according to Thomson Reuters.
The troubles, which follow similar weakness in the second quarter, underscore the difficult environment for investment banks. Goldman, widely considered the savviest trading firm on Wall Street, had a significant revenue drop in crucial divisions like fixed income and investment banking amid the market turmoil.
The firm got whacked by negative net revenue of $2.48 billion in the investing and lending group. The results included a $1.05 billion hit on its private equity investment in the Industrial and Commercial Bank of China, a strategic investment made in 2006; I.C.B.C. stock fell roughly 35 percent in the quarter. The firm also booked net losses of roughly $1 billion related to equities, on top of net losses $907 million in debt positions.
“Our results were significantly impacted by the environment, and we were disappointed to record a loss in the quarter,” Lloyd C. Blankfein, Goldman’s chief executive, said in a statement.
None of the causes cited has squat to do with regulations. And we have not even gotten to other factors, such as how the rise of HFT has led retail investors, a good source of bread and butter profits, to withdraw from trading.
The broader picture of the financial services industry similarly does not paint the picture that the Democrats would like you to believe, that the passage of Dodd Frank has been the driver of Wall Street’s fallen fortunes. Via e-mail from Matt Stoller:

Source: BEA
His comment:
TARP (which is really shorthand for the bailouts, it means TARP and HERA, which is the bill that bailed out Fannie and Freddie, which was passed at roughly the same time) is correlated with a spike in financial profits. Dodd-Frank is correlated with… nothing.
Stoller’s second analysis shows the strong correlation of financial services earnings with the housing bubble (click to enlarge):

This chart reveals that financial sector profits are actually still at 2004 bubble levels, and that the profit increases and declines are correlated with the bubble and TARP, not Dodd-Frank.

This is a major topic, and we’ll be returning to it, but there is one big takeaway: in trying to bolster the case for Obama, Democrats are unwittingly carrying the financial services industry’s water in blaming new regulations for their crappy profits, when the direct consequences of the crisis they created is far and away the biggest culprit.

 The False Dodd Frank Narrative on Bank Profits (No, Honey, Obama Did Not Shrink the Banks) « naked capitalism

Thursday, November 1, 2012

Consider It Sold Las Vegas: Another Real Estate meltdown for Las Vegas?

Consider It Sold Las Vegas: Another Real Estate meltdown for Las Vegas?:  Is there a Real Estate Recovery in Las Vegas or are we just seeing a last ditch effort by politicians and the media to buy votes?  Yes Las ...

Few housing solutions offered in presidential race - CBS News

It is quite remarkable that no one expects the housing crisis to be addressed in the presidential campaign.  It is clear that the banks have gotten over on everyone with the real estate companies jumping on board to side with the banks.  I am sure we will see a different tune in Las Vegas after people are held accountable and are taxed for the amount of debt relief they get with a short sale or foreclosure.  Currently the Las Vegas market is seeing short sales as the preferred method of sale and with 60% of the home owners underwater ( according to the article linked below) what else could be expected? It is as if we are living in bubble that has little to do with reality.  It is as if the politicians are trying to ignore the issue because they know the banks and the self righteous can sway the election.

It is clear the housing crisis in Nevada is no where near being over and will not be for several years.  The short sale will not be the saving grace as it will only continue to burden the economy as people are taxed on the forgiven debt.  If they are not taxed it will be because they are insolvent and likely incapable of buying another home.  It may even prove difficult for many short sellers to find quality rental space.

In an attempt to be positive we can hope that much of they housing back log owned by the banks and by Fannie Mae is being cleared from the market by massive purchases from private investment firms (as we see happening in Florida) .  This could possible speed up the process of market clearing and start to move the market toward equilibrium as well as transfer more and more of the country's wealth to the elites.  Rather than let the banks fail, as should have been the case, and let private investors take over, they government has chosen to prop up the banks with taxpayer funds and feed sweet deals on real estate to massive equity firms.  If the banks would have been allowed to fail and be taken over by private investors we would have seen far more measures taken to reduce mortgage debt and keep homeowners in their property.  We would have seen recovery long ago and the market would be on the upswing again even in Las Vegas.

But of course politicians and elitists alike are so attached to the banks and big money there was no way we would see the major banks fail.  Bear Sterns was used at the excuse to keep dying banks alive.  It was all smoke and mirrors and we have seen nothing but the rich getting richer and taking over more and more of the country's capital.  The average American has been wiped out and in Las Vegas people are going to be suffering for many more years.  The housing will never get back to the levels we saw in 2006 but banks are free to go about their business and leaving the home owner to hold the bag.

Banks were rescued and banks have killed the economy.  All the government programs that were to help the homeowner helped virtually one.  The only beneficiary has been the banking institutions and those on Wall Street.  It has been criminal but there is no accountability.  Laws put into place in Nevada were meant to help homeowners have only served to prolong the housing meltdown.  It is now a war of attrition with home owners and citizens of the state losing out because the banks have deeper pockets.  The banks are going about business as usual pretending they are abiding by new rules and pretending they are doing something to help the recovery.  The truth is that banks are not doing a thing to help the recovery and they are actually delaying the recovery.  The float just enough propaganda to get stories out about a few people that have been given sweet deals so other people will hope and wait.  They get people to jump through hoops over and over again in the hopes that the exasperated homeowner will finally just have to give up and move on.  This again is a win for the banks.  It is of course a loss for the economy and a loss for the neighborhood.

It is clear that no one really gave a dam about finding a solution the housing crisis because where the money goes so goes the power.  No politician when facing re election will ever step on the toes of the banks.  They will spin everything they can to give the impression they are on the side of the people but they will conspire in private to keep the money in their hands.  It is clear we have become a state run by big money.  Follow the money and you will see the undeniable ties between the governments and Wall Street.  The system survives because people have been brainwashed into believing middle class, now lower middle class, something to be hailed as wonderful.  People are willing to accept wages which will not pay for normal living standards so billions and even trillions can be paid for government election campaigns and CEO bonuses.  How could it be structured that the executives of failing companies (ex.  Citibank) have their CEO paid hundreds of millions of dollars?

I can see the entire system is based on corporate and state/government bedfellows.  Even the real estate companies and the NAR (National Association of Realtors) are buying into the government/banking rhetoric.  We see that the propaganda from them all could be produce for each other because they all repeat the same things.  They want everyone to be satisfied with high unemployment, a short sale, and a tax break, even though it means moving to an apartment and having no savings left for retirement.

We have lost sight of why our country was founded in the first place and we have become exactly what we were dead set against.  The Revolution is such a distant memory but I am sure those who were willing to fight and die to be free from the Queen would abhor our current situation. 

Few housing solutions offered in presidential race - CBS News

Wednesday, October 31, 2012

Redistributing wealth through real estate. Las Vegas home owners wiped out

What is Fannie Mae doing with all their property that is not hitting the real estate market in Las Vegas and other hard hit cities?  In Las Vegas a lot of property is in limbo because of the anti robo signing laws that were passed in Nevada but many states are seeing hundreds of foreclosed home being sold in bulk to private companies.  Hundreds of properties are being sold at a time to large private investment companies with very favorable terms and small capital outlays.  These large companies are getting sweet deals with little up front capital investment. 

Here is an excerpt from a story I read today at Naked Capitalism. 

Fannie Mae sold 699 Florida properties, appraised at $81.5 million, for $12.3 million cash to San Diego based Pacifica Companies. In exchange, Pacifica must rent the homes, paying Fannie another $78.1 million from rental proceeds, but during that time Pacifica is allowed to keep a 20-percent management fee plus 10-percent of rental proceeds.
If that doesn’t sound like money for nothing, like the song goes, Fannie sweetened it by adding a trigger allowing Pacifica to keep 50-70 percent of rental proceeds, depending upon performance, after Fannie’s been “paid” (read: collected rent) amounting to $49.3 million.
Finally, adding insult and injury – to the American taxpayer and the former homeowner – Pacifica can eventually sell the houses and keep the proceeds or use them to pay off the expected rental income stream faster.
You can see how the public is not being able to bid on these properties and the small investor is getting left out in the cold.  Not only are we seeing the transfer of wealth out of the home owners hand, we are seeing it put into corporate hands without anyone else ever having a chance to buy property at such great terms.  The very vehicle for the small investor, real estate, has been taken away by real estate meltdown.  Now quasi government agencies are dictating this redistribution of wealth out of the hands of the common citizen and into the large investment companies.  The long term effect of the Wall Street grab to take away the last hope for the little guy, real estate investing, has now come full circle.  It is likely millions of properties taken back by Fannie Mae will end up in the hands of corporate America, who will become some of the nations largest land lords. 

It is hard to believe but it is actually happening.  Bank owned or repossessed homes have often been some of the best deals for new investors, small time investors to get started building their portfolio.  Now many of these properties are not evening seeing the market as they are sold in bulk to large companies at very favorable terms and interest rates. 

How long will this continue? Will it forever effect the real estate landscape and permanently be a massive redistribution of wealth?  It seems like the massive real estate meltdown has actually helped the rich get richer and the average and middle class citizen get poorer and poorer. 

READ MORE on Pacifica HERE

Tuesday, October 30, 2012

Wednesday, October 24, 2012

Consider It Sold Las Vegas: Stay or sell? Selling a home in Las Vegas

Consider It Sold Las Vegas: Stay or sell? Selling a home in Las Vegas:  Getting your home sold in Las Vegas is not a problem this year.  2012 we have seen the lowest inventories in years.  This has made selling...

Chris LaHaie RealtorList with Chris
Prudential Americana Group,
Las Vegas, NV

Monday, October 22, 2012

Income Property Las Vegas: Income property and commercial financing

There are many things to consider when starting a venture into real estate investing.  Whether you are looking for real estate in Las Vegas or any state in the country, there are a few things anyone needs to understand before they begin.  One of the most important distinctions is the differences between residential financing and commercial financing.  Starting out with a 4 unit or less property will allow buyers to obtain favorable residential financing which most lenders have several options at their disposal. 
The game changes once you get to five units or more.  This type  of income property is considered commercial and commercial financing is necessary.  This can change the terms and the rates considerably and add substantial to your down payment costs.  It is also more difficult to qualify for 5 unit rental property if you have little or no experience in managing 4 unit or less real estate.  If you wish to jump right into the 5 unit and above real estate you will be best advised to look for seller financing.  If you have large down payment your search will go much easier but you can find ways around not having a bundle of cash.  It is not easy but it can be done.  It may take longer to find the right fit for you and the right property owner but motivates sellers are always out there waiting for the right buyer. 

Read the following article on income property financing by following the link below:

Income Property Las Vegas: Income property and commercial financing: If you are considering an investment in income property or a larger multi-unit property you need to have a sold business plan and strategy....

Friday, October 19, 2012

Consider It Sold Las Vegas: Short Sale? Yes or NO?

Consider It Sold Las Vegas: Short Sale? Yes or NO?: A short sale in Las Vegas? Is it reasonable to consider a short sale? Or can you wait until the real estate market catches up to your mortg...

 Is a short sale the prudent thing to do at this time in the housing crisis.  If you are in Las Vegas you might want to give it a second look.  The situation for real estate here may not change drastically for years.  It is still in  question as to real estate in Las Vegas is on the upswing.  We have seen temporary shifts up in price primarily due to the shrinking inventories and lack of traditional seller with equity.  Many people have no chance of selling their home in the next 10 years if they don't consider a short sale.  The following article from gives more of the story: 

A short sale in Las Vegas? Is it reasonable to consider a short sale? Or can you wait until the real estate market catches up to your mortgage? These are all questions nearly every home owner is asking in Las Vegas. Some people have seen their property values drop nearly 60% and have little hope of ever getting back to break even. This is a heavy thought to carry every month when you are making your mortgage payment or shelling out bucks to do home repairs and maintenance. It is a reality that your house may have become an albatross around your neck. The once thought of sure thing has now become a major liability for most people living in Las Vegas. Selling a home in Las Vegas has now become a pipe dream for most people and the short sale is the only option.

It is unfortunate but it may be the smartest financial decision you ever make. Even if you have to rent for a few years before you could buy another home, you are likely to be saving. If you factor in the upkeep and repair costs and insurance costs it makes little sense to keep paying for a home that will never give you a dime. In the past owning a home was a sure way to plan for the future to prepare for retirement. Real estate was always the best and safest place to keep your money. We have seen that reality get set up side down recently. It is not clear if real estate will ever be the savior of our economy as it was for many years. The past few years have cost many families their entire life savings as well as their kids chance at college. People have tried hard to do the right thing and meet their obligations but the powers that be seem to have no interest in keeping the institutions with the money accountable for their actions. It is really time to make a business decision regarding such a personal investment.

This is extremely difficult but it is the only way out in many cases. The advice "cut your losses" never seemed to apply so well do a situation as it does to a home that is worth half of its mortgage. The morality argument can be thrown out the window. Making a sound business decision and moving on to better things is nothing more than being practical and wise. Tomorrow is a new day and a new opportunity to create the future. It may just take a short sale to give you that chance again.

Chris LaHaie Realtor
List with ChrisPrudential Americana Group,
Las Vegas, NV

Thursday, October 18, 2012

Is the economy a lost cause? - 1 - - MSN Money

Is the economy a lost cause? - 1 - - MSN Money

New research here from Northwestern University this is PDF file of a great paper! 

This is a very interesting theory and could mean we are in
 for a not so bright future.  I hope we are going to see technology improve the economy down the road but it seems for now it is not working to increase the standard of living in the country.  It may be creating jobs elsewhere and it may be that we have more new gadgets that are dropping in price but it is questionable as to whether or not we are progressing as a society.  Or have we just gotten used to unrealistic prosperity?  This research makes an interesting case for the "new normal" might not be so great. 

Imagine our economy right now if the people were not making money on the Internet or if the cell phone companies were not generating so much income just by selling data packages?  It seems as we have gotten into the information age we have become more efficient at getting things done more cheaply and with less people.  Also we have found ways to get labor for far less pay in other countries.  It is the way of free trade but also maybe just a product of the times and how things evolve. 

It is also interesting to see just how devastating the housing market collapse has been on the country.  the government took for granted the goose that was laying golden eggs for years.  They took their eye off the ball and let Wall Street kill the goose.  The housing market and industry was the only thing left that was keeping the country prosperous.  In typical fashion the politics of greed and self preservation caused the average American to get wiped out. 

We have lived with trust that our homes would not depreciate 50% and that we could count on this to help us through retirement.  We were lulled to sleep by the politicians and the magicians on Wall Street as they pillaged the last golden goose of the age.  With the housing market down and out, jobs can not recover.  There is no way to make up for all the construction, title, appraisal, realtor, handyman and mortgage banking jobs lost due to the housing crisis.  As we watch both parties pander as well as the can to either side, it is clear that neither party will likely do what is necessary to allow Americans to ever regain their trust in our financial institutions and our government. 

We know banks are getting a free ride and a bailout on top of a bailout when they are getting paid several times over for a toxic mortgages they have bestowed on the taxpayer.  It it time to figure out how to generate an income that is based in technology and the Internet.  It looks like the future of the jobs market will be weak for years and that wages will be down for a number of years.  It might become a necessity to have a home based business of some kind even if people are employed full time. 

We can only hope for better times ahead.  What I have seen so far this year and in politics it does not appear that anyone in Washington really gets it and likely the newly elected will follow the same path. 

Wednesday, October 17, 2012

Monday, October 15, 2012

Investment Property Insurance and what to cover.

I have been managing real estate investment property for many years.  I am a big believer in having the right insurance to cover your assets and to avoid major disaster.  However, there are things insurance will not normally cover that can cost you a small fortune.  Over the past 20 years the two things that stand out in my mind regarding insurance policy coverage are: Water damage and flood damage and Personal Liability issues.

Typically you will be covered for fire on your rental property but at times you may not be covered for water damage caused by flooding or by a leaking roof.  It is very important to read your coverage and confirm with your insurance agent before you relax and rest easy.  There are many ways for insurance companies to defend against payout when it comes to water damage or leaks so it is necessary to be very clear as to what will be covered in your rental property.  Ask your agent if you will be covered when a pipe breaks in the middle of winter during a tenant changeover.  Then make sure that your pipes can withstand a few cold nights in case the power or gas is ever shut off.  This is especially important if you are living out of town that is miles away from your unit.  Most people will swear they will never have power turned off at an apartment but when you have tenants in a property and they are responsible for the gas bill, things can happen.  In certain cold weather states it against the law to turn off gas during the coldest months of the year so they often decide to turn things off right before the cold weather date hits and if the tenants do not pay the bill, the power could be off for several days before you find out.  I cold snap could cause major damage to your copper pipes.  Typically pipes will not burst due to cold after just a day or two but it is important to be sure you are covered in case of emergency.

Your insurance agent may not be as concerned as to what is covered as you are and may not be clear about the details of your coverage if you do not ask the right questions and if you do not shop around to get the best deal.  Insurance agents have a huge incentive to just get you locked in and collect a premium because they know most people rarely change insurance and rarely make claims on rental policies for minor claims.  Protect yourself and your interests by being an informed consumer and know the details of your income property insurance policy. 

The other thing I have learned that is important is that if your tenant falsely accuses you of an assault your insurance typically does not cover any legal fees or cost necessary to defend against bogus and frivolous law suits.  If someone accuses you of an assault the insurance typically has an exclusion to this type of coverage.  So even if you are innocent and have not done anything wrong, the fact that someone has accused you of something means your insurance will not cover you in this matter.  Of course that is unless you pay extra in the beginning and get a special rider that will cover you against you get sued for assault by a disgruntled tenant or by someone trespassing on your property.

It seems more likely in Las Vegas I suppose because the over abundance of lawyers here and the fact that often people will decide to settle if they have any degree of guilt or any fault in the matter.  It can just be for $10,000 or $50,000 but there are lawyers who will work on a contingency basis and file suite against a landlord if they think they can get a quick and easy settlement.  If you are guilty of assault it may be in your best interest to hire a lawyer and work out a settlement but if you are not guilty and have not touched your tenant or harmed them in anyway then you need to fight this claim and not allow it to be settled.
I have dealt with a bogus claim recently and refused to even consider a settlement or even hire a lawyer.  The absurd case went on for nearly a year and it did cost me over $500 in order to answer the charges and to claim my innocence.  It was several hours of my time as well and a lot of aggravation wondering what would happen and how to get beyond something so silly.  It went as far as the mandatory arbitration hearing.  I was informed when I arrived at the hearing of the changes to the case.  Apparently the lawyer was informed by his clients to withdraw the case and not move forward toward a court date.  It was a big relief to know that the truth came out and that the plaintiff had not one shred of evidence to substantiate the claim.  It was a complete falsehood.  The plaintiff had filed an false police report and incurred several charges in the emergency to try and set up the ruse.  He even went as to far as to have the ambulance come to take him to the hospital for his alleged injuries.

I had never dreamed it would be necessary to have an insurance policy to cover me in case I was accused of an assault and battery.  I didn't realize that it didn't matter if I actually did anything or not and that if you are accused you have to pay to defend your good name and reputation.  After nearly 20 years of being a landlord and dealing with many wonderful tenants and a few bad ones, I learned just how low some people will go if they have an unwarranted feeling of entitlement.  However, I still believe real estate investment property is the best way to generate income and to plan for your retirement.  There are so many tax advantages when generating passive income.  Also real estate is the best vehicle to get started investing because you can often get in to a property with less than 10% of the total cost of the investment. 

Read more about using leverage to get started in Real Estate Investing Here at  Income Property Las Vegas and read the article Leverage and Investing

Friday, October 12, 2012

Income Property Las Vegas: Avoiding the pitfalls that come with older rental ...

Income Property Las Vegas: Avoiding the pitfalls that come with older rental ...: It may give people a few things to consider when they are in the market for an investment property.  The trend in Las Vegas is to only want...

Consider It Sold Las Vegas: Las Vegas Real Estate Under water and rained on

Consider It Sold Las Vegas: Las Vegas Real Estate Under water and rained on: We have recently seen some serious rain in the Las Vegas Valley but  we all are hoping that some of the real estate is starting to rise fro...

Chris LaHaie Realtor
List with Chris
Prudential Americana Group, Las Vegas, NV

Wednesday, October 10, 2012

Consider It Sold Las Vegas: Selling your home has nothing to do with luck

Consider It Sold Las Vegas: Selling your home has nothing to do with luck: Selling your home has nothing to do with luck.  It has everything to do with choosing a Realtor with a proven record and proven results. ...

Chris LaHaie Realtor
List with Chris
Prudential Americana Group,
Las Vegas, NV

Consider It Sold Las Vegas: Short Sale Still May Be Best Option in Las Vegas

Consider It Sold Las Vegas: Short Sale Still May Be Best Option in Las Vegas:  If you are behind on your mortgage or stuck in limbo waiting for your bank to give you the illusive loan modification it may be time to co...

Chris LaHaie RealtorList with Chris
Prudential Americana Group,
Las Vegas, NV

Tuesday, October 9, 2012

Global Growth Slowing at wrong time

It is a reality that global growth is slowing and it could not be worse timing for the United States.  As the housing market struggles to recover in Nevada, AZ and CA, the job market is not growing strong enough.  If the overall world economy declines it could have devastating effects on the housing recovery in the US.  We are already seeing sales declining in CA and NV even though prices seem to be rising.  The problem is lack of inventory but if more people lose their jobs or stay unemployed for longer and longer the housing recovering could be stalled in its tracks. 

It appears as though Las Vegas is lagging behind everyone in terms of real estate recovery.  The recent stats from September show that the short sale and bank owned sales are still accounting for nearly 60% of sales in the city.  Traditional sales, also know as equity sellers, are on the rise but they still make up only 41% of the September monthly sales.  The big change has been in the increase in short sales.  The number is staggering and it is almost unbelievable.  Short sales in Las Vegas made up 45% of the real estate transactions in September 2012. 

It is amazing to see that nearly half of all monthly sales are short sales.  All of these people have given up on the hope that they will ever get back to even with their underwater home.  It is the best decision for most people and with the economy slowing world wide, it probably will become a better decisions for many more people.

The new solution for the government and the banks has been to encourage the short sale.  It really is not the best solution but it is a way to clear some of the bad mortgages off the books of the too big to fail banks while still not letting people think people are getting special treatment because their home is worth less than their mortgage.  So it seems politicians and government officials have worked a deal to allow the banks to get more money out of the people under the disguise of the short sale.  Several government programs will be supplementing bank losses on short sales and in turn the government is being less strict with banks when it pushes for stress tests. 

We need to get the housing recovery on stronger footing and the current solution is to allow people do a short sale.  It will help the market and the economy if we can clear out many more underwater homes, especially in Las Vegas, but it really may hurt the market as well because most people who short sale are not able to buy another home for several years.  The housing market has always been driven by people moving up or moving to a new place.  The American dream was to buy a house and build equity, use this equity to move into another larger home or home in different area.  Now as we have seen record sales last year in places like Las Vegas, we are running the risk of much lower sales. 

The high sales volume in 2011 was driven by the extreme low prices but as prices increase the demand from investors is sure to slow and their will be few move up buyers to fill the void.  Hopefully, we will see the economy start to grow more and then more buyers will be brought into the housing market as the abundance of underwater homes are cleared from the landscape. 

If you are considering a short sale or traditional sale in Las Vegas go to and get a free evaluation for your current situation. 

Mirabile Dictu! The Media Notices the Sucking Sound of Growth (What Little There Was) Leaving the Economy and Underplays IMF Malpractice « naked capitalism

Mirabile Dictu! The Media Notices the Sucking Sound of Growth (What Little There Was) Leaving the Economy and Underplays IMF Malpractice « naked capitalism

Monday, October 8, 2012

IMF Slashes Global Growth Forecasts - 24/7 Wall St.

IMF Slashes Global Growth Forecasts - 24/7 Wall St.

Income Property Las Vegas: Real Estate and Investment Property still best inv...

Income Property Las Vegas: Real Estate and Investment Property still best inv...: If you are tired of living paycheck to paycheck then it is time to start looking into investing in income property in Las Vegas or anywhere...

Chris LaHaie Realtor
Prudential Americana Group
Las Vegas, NV

FHA Mortgage Insurance Premiums May Rise To 2.05%

 Mortgage insurance premiums may be on the rise rat and it will effect homeowner's monthly payment.  Even with interest rates as low as they are this will reduce the amount of home that can be purchased as borrower ratios are effected. 

FHA Mortgage Insurance Premiums May Rise To 2.05%

Chris LaHaie RealtorList with ChrisPrudential Americana Group, Las Vegas, NV

Thursday, October 4, 2012

Thursday, September 27, 2012

What is going on with Short Sales in Las Vegas

What is happening in a Las Vegas with all the short sales? It is amazing that the short sale process is taking over the market.  Over half of the sales in August 2012 were shorts sales and only 16% of sales for August were bank owned sales. 

The climate for real estate has changed greatly over the past several months and the inventory is getting cleared but it is creating a problem.  There is not enough inventory on the market due to the abundance of underwater sellers.  There are hundreds of people who would love to sell if they could get their home sold and make a profit or at least break even.  Something has to give in Las Vegas.  There is no supply to fill the demand for homes.  Even with weaker demand, the limited number of units for sale, in the 4000 per month range, is not nearly enough to accommodate buyers.  It is as if another bubble is being created because of the lack of inventory.  It looks to be several years before things will be back to level in Las Vegas and the economy is suffering because of the circumstances

The willingness of banks to entertain a short sale is becoming more common place as banks realize the underwater problem is never ending.  If they do not clear some of the underwater homes from the market, the economy will continue to suffer as will home values.  The short sale also gives banks the ability to short circuit some of the issues they face due to AB 284.  AB 284 is the law that says original documents are needed for the bank to claim ownership and to foreclose on a property.  The short sale avoids this problem all together so the banks are very likely to do a short sale for you if you have one of those loans that was passed from company to company.  If there is any question about the original documentation for your loan, you can more often than not, get approval for a short sale. 

The short sale is the quickest and easy way for the bank to get out from under several problems and the most important being that they don't have the original paperwork.  You could fight for years to keep your home because bank does not have originals or you can cut a deal and get out from under the debt now and get on with your life. 

Get more information on Short Sales in Las Vegas HERE

Wednesday, September 26, 2012

On FICO’s Dubious Explanation of Why it Treats Short Sales the Same as Foreclosures « naked capitalism

April Charney sent me a link to a post which had a condescending explanation of a recent piece by FICO that warrants further discussion. The FICO article attempted to justify its position that someone who enters into a short sale gets his credit score dinged as badly as for a foreclosure. Yes, you read that correctly. One of the reasons many borrowers go to the effort to arrange a short sale, as opposed to the faster and easier process of “jingle mail” is that they assume that the damage to their credit score will be lower.
Here is the rationale, per FICO’s Banking Analytics blog (emphasis theirs):
One of the questions we get asked most often is whether it remains appropriate for the scoring model to treat a short sale in a manner similar to a foreclosure….
…we conducted a study isolating more recent occurrences of mortgage stress events. By studying the subsequent performance of these borrowers on all accounts, we determined the credit risk associated with their mortgage events. Looking at data from October 2009 to October 2011, we were able to verify that short sales and other events of recent mortgage distress continue to represent a high degree of risk. These results closely match earlier studies of the risk associated with short sales and other events of mortgage stress.
As the graph below shows, short sales remain extremely risky. However, foreclosures have a bad rate of 72.0% while short sales have a better bad rate of 55.1%. Should that lead to less punitive treatment for short sales?


On FICO’s Dubious Explanation of Why it Treats Short Sales the Same as Foreclosures « naked capitalism

Visit Income Property Las Vegas at

Consider It Sold Las Vegas: Short Sale accounts for nearly half of all August ...

Consider It Sold Las Vegas: Short Sale accounts for nearly half of all August ...: The Short sale is becoming so common place in Nevada that it will likely account for over half the sales in September 2012. It could possi...

Chris LaHaie Realtor
List with Chris
Prudential Americana Group
Las Vegas, NV

Monday, September 24, 2012

Bank of America Offers Mods with a Gag Order to Buy Silence « naked capitalism

An inteesting tid bit offered here about the mission of banks.  It brings into question their motives.  However, I think most people know the motive of the large banks and the politicians running for office this fall:  "save our reputation and convince people we are all here to help".  The unfortunate reality is that the big banks are helping if the need to to save their reputation and if they are pressured enough by politicans looking to buy votes before the election.  They both are working hand and hand to profit from the real estate crash while attempting to appear like they wish to be part of the solution.  The reality is that all they have done is prolong the pain for just about everyone except the banks and the politicians.  The so called gag order as a requirement to agree to a loan modification is as anti American and the bank bailout itself.  It seems to indicate the banks are as self serving as ever and only looking to save face as they need and likely have an arbitrary process to approving or denying home loan modifications across the country. 

check out the full story below at Naked Capitalism by Yves Smith. 

Bank of America Offers Mods with a Gag Order to Buy Silence from Naked Capitalism

It appears the banks are in business of public relations just as much as politicians are because they are making attempts to silence the biggest complainers who are speaking out on the truths of doing a loan modification. 

Consider It Sold Las Vegas: Need to Buy or Sell in Las Vegas Consider These Fe...

Consider It Sold Las Vegas: Need to Buy or Sell in Las Vegas Consider These Fe...: If you need to buy or sell a home in Las Vegas there are a few things you need to consider. Las Vegas has the reputation for taking ...

Chris LaHaie Realtor
Prudential Americana Group,
Las Vegas, NV

Friday, September 21, 2012

Las Vegas Real Estate Story

Las Vegas Real Estate is getting back some price appreciation but the market is still in deep trouble.  If you were underwater by about 30% you might be back to even in some areas of the city.  This large of a rebound has only happened in very selected areas of the Las Vegas.  Some areas have been stagnating or even declining over the past year but over all Las Vegas Real Estate has seen about 15% price appreciation from last year according to recent statistics. 

So the hype that we have hit the real estate bottom might be true right?  It could be true for most parts of the country but it might not be true for Las Vegas Real Estate just yet.  The big reason for the upswing in prices is the massive reduction in inventories.  The real estate market is seeing record low numbers of sellers.  The bank owned property accounted for only 16%  of sales in August of 2012 while over 46% of closed sales where "short sales" as people or pushed to sell before the debt relief act that allows sellers to not be taxed on their forgiven debt, has people desperate to get out from under their mortgage. 

The illusion that is being created is that the demand for real estate is at a sky high level.  The reality is that the supply is so low that it can not even sustain below average demand levels. The good news is that there are people that qualify to buy property and they will buy something if they can find a suitable home in Las Vegas.  What is hurting sales now is the long drawn out process of the short sale and the large amount of underwater homeowners who will never short sell and likely never see their home be worth the current mortgage amount. 

Is there a solution to the devastating effects of the 60% drop in housing values in Las Vegas?  I don't really know but something has to give sooner or later.  My feeling is that the 17% drop in sales this August compared to last August in Las Vegas has much more to do with lack of inventory than slowing demand.  With inventory levels at records lows it is hard to tell what really is driving the drop in sales.  It could be the low number of newly created jobs as well as the high unemployment or it could just be that there are no homes to buy. 

It will be interesting to see how the banks proceed with the "shadow inventory" that is being whispered about daily in real estate offices in Las Vegas.  Are banks holding back thousands of homes or are they truly having problems taking back the real estate because they have lost the original paperwork? 

Nevada and particularly Las Vegas, has been devastated by the real estate crash.  People have suffered tremendously and thousands have lost good paying jobs.  You know it is serious when even casinos are going under.  If you can't make money off legal gaming, the economy must have been in the tank. 
Hopefully something will give so the real estate market will begin to find some equilibrium because now we are just seeing another bubble being created due to the extreme market changes. 

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