How Bad is It?
Unemployment is one measure. Here's another:
Almost 29 percent of all home mortgages in the Chicago area were underwater during the year’s second quarter, an improvement from the 31.8 percent level recorded in the first quarter, Zillow reported Monday.
Still, far more mortgages locally are underwater, meaning more is owed on the loans than the homes are worth, than nationally. Zillow, an online real estate site, said the number of single-family homes nationally that are underwater was 21.5 percent in the second quarter, compared with 23.3 percent in the first quarter and 23 percent a year ago.
We're hearing rumors of "board up missions" being run in certain areas where foreclosures are higher than normal or where people are walking away from underwater loans. Hopefully, these will be followed by "bulldozer missions" where the city just plows the buildings down and carts away the debris.
Labels: we got nothing
posted by SCC at 12:01 AM
33 Comments:
Could not disagree with you more about bulldozer missions.
Leveling housing stock without assessing its viability and usefulness is wasteful and offensive. And to do so just because someone couldn't afford their mortgage is, frankly, asinine.
Yes, underwater mortgages are a national problem. But the solution isn't creating vacant lots. Renters need housing, too. Perhaps a new owner, who can afford the property, is the answer. You're way off base with that flippant 'bulldozer' comment.
Mortgage indices are usually a harbinger of employment, but given the bubble that we just rode out that is still presently hissing, a lot of this is run of the mill speculative comeuppance.
You would be amazed at the number of people who were playing "Chicago Gentrification Lottery" by taking IOM's on board-ups in shitty neighborhoods (that anyone with half a brain knew wouldn't be changing any time soon) and hoping to flip that hot-potato to the greater fool, this time next year.
When the debt vultures go in to buy distressed mortgage bonds, they break down the assets into various classifications. Some of these bond pools are made up entirely of speculatively owned SFD's in VERY shitty Chicago neighborhoods.
A lot of this is just speculative money getting its ass rightfully kicked, however, we can't ignore the social drivers, too. Some of these neighborhoods are seeing significant flight- including a few black neighborhoods where the decent people are leaving for safer places, abandoning the area to the bangers, thugs and vagrants.
It's a bad scene, to be sure. Still, keep your eye fixed on the ball- unemployment. Until *private industry* starts creating jobs again (and not government jobs that result from helicopter-dropping money into the economy), we're stuck deep in the shitter.
Today I had to go to SCHAUMBURG to a staffing agency for a possible assignment in the SUBURBS. They do not charge anywhere for parking let alone I was amazed by the massive displays of CORPORATE HIGHRISES.
Quinn is scurrying now to look as if he's doing shit that will help us along with some of the others like Durbin who signed some bill to train unemployed people in Joliet. Really? How about putting JOBS there?!??!?!
When we had the Great Depression, the corn starch factory kicked off the Bedford-Clearing Industrial Area. They built factories then also had factory row nearby to house the workers. They sure as hell didn't start plopping parking meters, taxing the hell out of people, etc back then to boost the economy.
Let's all remember who is responsible for all this mortgage turmoil: The majority Democratic Congress from 2006 on that felt everyone deserved a mortgage, even if they didn't qualify.
Obamam, Pelosi, Reid, Dodd and Frank did more to destroy this country than AlQaida could even dream of doing.
Remember that in November when you go to vote.
The only thing left will be empty fields of flowers.......
"Urbs in Horto"
I thank the Lord each and every day for the CPD and the City of Chicago. Both of my grandfathers came over from the old country in 1918 and joined CPD. As I follow their footsteps some 80 years later I, along with numerous family members reflect how lucky we have been. Just about every meal,tuition,etc.... all of us have ever enjoyed has been paid for by the city and guess what? NOT ONE OF THE CITYS CHECKS EVER BOUNCED. Cheer up gang!!!!!
"Hopefully, these will be followed by "bulldozer missions" where the city just plows the buildings down and carts away the debris."
well, that's one way to ensure that the population of a given area decreases.
now, if the voter registration records of that same area are then purged, we might have a chance of reducing the influence of all the 'revrunds'.
it would be nice, though, if the bulldozing could be restricted to frame buildings only, so as to leave the decent, brick structures for future rehab.
According to my refi guy, my zip code of 60647 was the fastest selling/growing zip code in the nation during the boom. On my alley right now, I have 7 foreclosures and a few more coming. It's very unsettling. I just hope real people buy them and not Bickerdike or Hispanic Housing, where they allow felons to be paroled to and sell dope at.
It's their own fault. So many bought more than they could afford. Especially at those over-inflated prices. Now homes are returning to their true values.
Obama wants to forgive the "underwater" portion of mortgages to give homeowners a fresh start, but Republicans won't let him.
That number is highly suspect. More than 29% of homes are underwater. For example, I went an open house at Peterson and Pulaski area. The sellers want to sell their single family house. It is 1500 square feet. A regular standard house. They want $530,000. The realtor said "that is what comps are selling for". While a bank owned house that is slightly larger is selling for $260,000.
"Underwater" doesn't mean anything other than at this moment in time your mortgage is assumed to be greater than the value of your home. Of course, the value of your home is what you can sell it for, so a bank appraiser doesn't actually *know* this number. Furthermore, if the housing market in Chicago starts to recover the same people will magically no longer be underwater.
I may well be underwater. I bought in 2007, so my equity is pretty minimal. So what? I am not selling. I probably cannot refinance, but otherwise, it matters not at all.
the massive displays of CORPORATE HIGHRISES.
Nice to know their doing well.
SUPPLY AND DEMAND
Too much housing was created during the boom, especially condos.
The price pendulem swung way ahead of rising incomes and now can be expected to swing way short of falling incomes.
A huge supply of inventory, both owner occupied and REO, will only serve to move selling prices lower. Higher loan standards, lower credit ratings and incomes
will magnify this problem.
Bulldoseing inventory may keep prices from droping to the point where 70% of loans are underwater.
all of us have ever enjoyed has been paid for by the city and guess what? NOT ONE OF THE CITYS CHECKS EVER BOUNCED. Cheer up gang!!!!
Numerous Police Department are laying off or being disbanded. Meanwhile, we just got our retro checks and a little over $260 a month raised. Yes, like you, I am very thankful I have a job in order to provide needs for my family.
"I went an open house at Peterson and Pulaski area. The sellers want to sell their single family house. It is 1500 square feet. A regular standard house. They want $530,000. The realtor said 'that is what comps are selling for.' While a bank owned house that is slightly larger is selling for $260,000."
--8/11/2010 08:52:00 AM
The realtor is full of s__t -- but, then, that's by definition. Boy, if this doesn't illustrate how the real estate business is like the antiques business -- floating on its own hot air about "value."
All lies, in an authoritative tone. It's as though they don't credit us with being able to see the "seven board-ups on my alley alone," as another writer here said.
Remax, Ebay, WorthPoint, Roadshow...read Mackay's Memoirs of Extraordinary Popular Delusions and the Madness of Crowds. It was written in 1841.
http://librivox.org/memoirs-of-extraordinary-popular-delusions-and-the-madness-of-crowds-volume-i-by-charles-mackay/
What happens when people say, "Hey! This here's Confederate money! Ain't no good."
The brakes were fully applied on this freight train a long time ago; it's still jerking and juddering and smoking its way to a full stop -- but stop it most assuredly will. There is increasing talk even in the "conventional" financial media about a really deep double-digit disaster to come in about a year.
More and more people like that realtor are going to be shooting themselves, unable to face any diminution in their elaborate lifestyle.
Good riddance.
You can blame the housing mess on whatever political group you would prefer but in reality, the true problem was financial institutions that were not well-regulated. Add in people making grave errors about what they could really afford and you have a housing disaster.
"....unable to face any diminution in their elaborate lifestyle.
Good riddance.
8/11/2010 01:56:00 PM"
i eat cat food three times a week.
does this mean i'm gonna be okay?
I paid $450,000 for my Mt. Greenwood yellow frame bungalow in 2005. Now it's worth $45,000 -- a G*d-forsaken yellow submarine.
Anyone know if I can still keep my property's 501(c)3 non-profit church designation if I file chapter 7 bankruptcy?
Anonymous said...
Obama wants to forgive the "underwater" portion of mortgages to give homeowners a fresh start, but Republicans won't let him.
8/11/2010 08:28:00 AM
So what are you trying to say?? That Obama should give away our money??? Since we bailed out the banks, it is our money.
How about a novel concept...your borrowed 200,000.00, so pay back your debt.
If you disagree, I'd like to borrow 1,000.00 bucks for my next house payment, and I'll pay you back $500.00 over 30 years and Obama can forgive the rest of my debt.
not one of the citys checks bounced for grandfathers in 1918...ask them if they remember payless paydays in the late 20's and early 30's for the police officers. Sometime, maybe 30 some years ago there was a class action law suit on behalf of those officers to be paid some of that money. Of course it didn't happen.I do believe though, according to my mother, the officers were given vouchers for rent and groceries
In a bid to stem taxpayer losses for bad loans guaranteed by federal housing agencies Fanny Mae and Freddy Mac, Senator Bob Corker (R-Tenn.) proposed that borrowers be required to make a 5% down payment in order to qualify. His proposal was rejected 57-42 on a party-line vote because, as Senator Chris Dodd (D-Conn) explained, "passage of such a requirement would restrict home ownership to only those who can afford it."
I can't add anything to this
"NOT ONE OF THE CITYS CHECKS EVER BOUNCED."
During the 1930's "Great Depression" the city stopped issuing paychecks and issued "script." Script was an IOU. The police officer & firefighter would sell the script to large healthy banks or businesses for 10-50% of face value. After the Depression the holder of the script redeemed it from the city for full value and a very large profit.
I'm liking the idea of a bulldozer OT initiative. Sit by the dumpster for 8 hours for time and a half.
8/11/2010 11:21:00 AM -
Exactly. That's what pays for the all the police officers, nice cop cars, top-notch equipment, etc.
That's why Bedford Park PD was able to buy Dodge Chargers...
You can blame the housing mess on whatever political group you would prefer but in reality, the true problem was financial institutions that were not well-regulated. Add in people making grave errors about what they could really afford and you have a housing disaster.
You are so right however I would like to add this. I'm a Realtor I can tell you that the Financial institutions made those loans knowing full well that these people would fail if the bubble burst, Yet most did it anyway because of the thousands they make on closing a loan and that the government insurances the loans.
I'm no loner a Realtor, however don't blame the victims make no mistake Corporate greed is the offender.
I'm no loner a Realtor, however don't blame the victims make no mistake Corporate greed is the offender.
Perhaps, but I think the government is the whole problem. The government makes banks give loans then blames them when things go wrong. Look at the South and West Sides of this city. The old CHA Loans. All government. Then they blamed the realators. Government must get completely out of the housing industry. People mut earn a house not be given one.
Gee whiz, during the Depression the city paid the police in city script. Subsequently, the poor lads were forced to sell the script to unscrupulous bankers for substantially less than face value. However did they survive. I wonder. My father who came on the job before WWII told me tens of thousands of unemployed professionals and average Joe's all tried for a spot when they were offered. They must have been very dedicated to work for IOU's that they had little chance of recovering.
Anonymous Anonymous said...
8/11/2010 11:21:00 AM -
Exactly. That's what pays for the all the police officers, nice cop cars, top-notch equipment, etc.
That's why Bedford Park PD was able to buy Dodge Chargers...
8/11/2010 10:20:00 PM
And have state of the art computers and dispatching systems, not the junk huberman got a steal err deal on!
If we bulldoze all the vacant housing stock in this city, we'll be well on our way to looking like Detroit. Place responsibility on the banks who hold the leins on the property for boardup,upkeep and maintenance. Any violations would be subject to sizable fines. The banks are flush with stimulus money. They can afford it. It would be a nice revenue maker for the city and they wouldn't have to tax the average citizen to death.
"i eat cat food three times a week.
"does this mean i'm gonna be okay?"
--8/11/2010 04:38:00 PM
You've already adapted to bad conditions, and stand a much better chance of survival than some fired stockbroker who, unable to face a one-Lexus household without high-end takeout food every night and the very fastest, best cable/web service, shoots his wife and family and then sets the huge, unpaid-for split-level ablaze and shoots himself. There've been a lot of these.
"Blessed are the meek, for they shall inherit the Earth."
Perhaps, but I think the government is the whole problem. The government makes banks give loans
No dear Banks give loans to made Big Money no one and I mean no one makes banks give money they lend money for profit- greed. Thousands of extra charges for nothing look at you closing statement. anywhere from 3,500 to 10,000 thousand dollars an average. Every time you refinance or buy or sell. Thousands collected for (made up) items that cost nothing. However if you want to keep thinking the banks are your friends go right ahead.
So what are you trying to say?? That Obama should give away our money???
I think he is trying to say Bush did this and we need to get out from under it. I have a boarded up house next to my home in Edsion park- Gods country. The owners were good people with two kids they purchased the home in 2006. The husband lost his job company moved over seas the wife is working part time they have two children. The owners walked away went to Virgina looking for work. What do you think my house is worth???? Sometime you have to suck it in and do the right thing for all of us.
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