Foreclosed Homes Sell at 27% Discount as Supply Grows

From a story by Dan Levy - Jun 30, 2010 on Bloomberg News, excerpts below

"Homes in the foreclosure process sold at an average 27 percent discount in the first quarter as almost a third of all U.S. transactions involved properties in some stage of mortgage distress, according to RealtyTrac Inc."

"The average price of a distressed property was $171,971, according to the Irvine, California-based data seller."

“The discount will probably stay between 25 percent and 30 percent as lenders carefully manage the number of new foreclosure actions in order to avoid flooding the market,” Rick Sharga, RealtyTrac’s senior vice president for marketing, said in an interview.

"The discount reflects the average sales price of homes in the foreclosure process compared with the average sales price of properties not in distress. About 31 percent of all U.S. sales in the quarter were of homes in some stage of foreclosure, RealtyTrac said. "

"Home foreclosures set a record for the second straight month in May, with increases in every state, as lenders stepped up property seizures, RealtyTrac said earlier this month. Bank repossessions climbed 44 percent from a year earlier and will probably set a record in the second quarter, the company said."

You have to ask yourself: are economic conditions that much worse or have banks found another outlet to dispose of these distressed properties?

Do I smell the stink of vulture investors again? How about buying a property for a third or so less than it is worth, slapping on a coat of paint and reselling it at a 50% profit (still way below what its market value might be)? And you dont even have to watch This Old House to find out how, or even get your hands dirty...there is an unlimited supply of undocumented workers literally dying to work for less than minimum wage paid in cash under the table to do the dirty work.

Who has the kind of resources to do this? Those dastardly hedge funds? Wilbur Ross ( owner of a mortgage servicer empire with inside access to the cherries of distressed homes) Carl Icahn? George Soros ( who undoubtedly has the ear of the Administration)?

And of course, those banks are being paid by the Government (TARP remember) using our tax dollars and servicers and banks are being given free money incentives to "try" and modify mortgages. These are the same banks that bought insurance against default on these mortgages from AIG.

And they were paid out 100% by the NY Federal Reserve under Tim Geithner, on these contracts so that they possibly have already been made whole on these home mortgages that they are now foreclosing.Do they even own them anymore? Shouldnt AIG have been given the collateral?

Double dipping, nay triple dipping comes to mind. The mortgage crisis was caused by irresponsible lending...but it was legal lending for the most part.

Today it appears that a nasty unintended consequence of the bailout of the banks is very likely a collusion between Government (in its burocratic ignorance), the Too Big To Fail crowd,the uber-Rich, those nasty Wall Street Types and compliant Politicians creating legislation written by lobbyists for those same beneficiaries that is setting up another scandalous rip off of the helpless populace.

Gobal Warming debunked by Japanese Scientists

Chalk one up for dissent. Japanese scientists were smart enough to find the fraud in the anthropogenic global warming hypothesis and then had the balls to publicly disagree with the UN's Intergovernmental Panel on Climate Change about it.

The Japan Society of Energy and Resources issued a report that says global warming is related to solar activity, and the rise in global temperatures was primarily a recovery from the so-called Little Ice Age, which lasted from 1400 to 1800. Kanya Kusano, program director for the Earth simulator at the Japan Agency for Marine-Earth Science & Technology, says computer climate modeling used to support the manmade global warming theory is like "ancient astrology."

If you think fraudulent climate science doesn't affect you financially, you may wish to know that, according to The Politico, there are now four climate change lobbyists for every member of Congress.

Summers warns of deflation threat

Warning that the U.S. does "not have time to wait," Lawrence Summers, director of the National Economic Council, said the country faces "a real risk" of slipping into deflation. He said it is urgent that Congress quickly adopt the economic stimulus proposed by President Barack Obama. Bloomberg.
I agree with the deflation threat, but again as I have highlighted this stimulus bill is an abomination!

Dishonesty in labelling: The house "stimulus" package

Thought this rant pretty much sums up why the Congress has the lowest approval rating in history! Hope it wont drag down the approval rating of our President:

Courtesy Chuck Butler, President, Everbank World Markets.

OK, speaking of stimulus... I'm very upset with the "new and Improved" stimulus package. I'm sure you've figured this out already from previous rants. However, now... I'm even more ticked off! Oh, and the TV / Cable media are swallowing the propaganda from the White House, hook, line and sinker! Here's what I'm talking about folks...

The package has a "buy American" portion in the package... This is protectionism folks... And here's what gets my goat the most about protectionism at this stage of the recession... Fed Chairman, Big Ben Bernanke, is supposedly a "U.S. depression guru"... Well, Big Ben, wasn't the protectionism of the 1930's one of the reasons for the Great Depression? And is just so happens that now we've had "the cheater's" confirmation, calling China "currency manipulators", and that was followed up with the "buy American" portion of the package...

Look... There's nothing wrong with the slogan, Buy American... In fact, I think it would be a great thing to go around saying and doing, based on our manufacturing prowess... But, that's not what I'm talking about here... I'm talking about protectionism, at a time when the global economies are hurting and need to export to us... I'm really surprised that the currency traders haven't seen this and taken the dollar to the woodshed... But then, maybe they're getting the wool pulled over their eyes...

The other thing that ticks me off on the "new and improved" stimulus package is the fact that a very small piece of the $816 Billion (before the Senate adds their pork!), stimulus is for the infrastructure projects that have been billed as a "major piece" of this plan! HOGWASH! Now, I'm not going to sit here and pass judgment on all the "items" that are being allocated Billions of dollars, like $1 Billion to deal with the census problems, and $88 Billion to help move the Public Health Service into a new building next year, and $650 million for TV Converter boxes. The list of items like this goes on and on... And all worthy items, I'm sure... But none of these types of spending allocations, and I repeat this so you get the full force of this statement... None of these types of spending allocations are doing anything to create jobs. Oh... And just for those of you keeping score at home... $50 Billion is allocated to bricks and mortar... Infrastructure... Which has had "top billing" on this package... Well, the truth is out... I sure hope someone takes their lawmakers to the woodshed for this!