Foreclosures: Banks Trade Bails of Sh!t (according to Jon Stewart)

Jon Stewart tries to make sense out of the mortgage crisis and the subsequent foreclosures:

He says it started with the mortgage companies bundling bad loans and then trading bails of sh!!! back and forth. Then it all came to a screeching halt.



The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Foreclosure Crisis
Daily Show Full Episodes Political Humor Rally to Restore Sanity

Meanwhile, according to TV, Jon Stewart is having trouble negotiating the use of 400+ porta potties.  The Marines are using the area on Sunday.  Stewart has offered to split the cost.  The Marines won’t play ball.

After foreclosure, things might just get worse

Sometimes people just allow a foreclosure to happen when they have exhausted all resources. Huge loans and reset mortgages have often led to foreclosures nationwide. Prince William County was one of the hardest hit areas in Virginia. Now the Washington Post tells us more bad news:

After the bank foreclosed on Fernando Palacios’s Gainesville home in March, he thought he was done with what he described as the most stressful financial situation of his life.

The bank sold the home for far less than Palacios owed on it, as often happens with foreclosures. What Palacios did not see coming was the letter from his lender demanding that he pay the shortfall: $148,064.02. “I really thought I was through with this house,” said Palacios, who fell behind on payments when the economy soured and his cleaning business stumbled.

Over the past year, lenders have become much more aggressive in trying to recoup money lost in foreclosures and other distressed sales, creating more grief for people who thought their real estate headaches were far behind.

In many localities — including Virginia, Maryland and the District — lenders have the right to pursue borrowers whose homes have sold at a loss to collect the difference between what the property sold for and what the borrower owed on it, also called a deficiency.

Before the housing bust, when the volume of foreclosures was relatively low, lenders seldom bothered to chase after deficiencies because borrowers had few remaining assets to claim and doing so involved hassles and costs. But with foreclosures soaring, lenders are more determined to get their money back, especially if they suspect borrowers are skipping out on loan they could afford, an increasingly common practice in areas where home values have tanked.

Palacios said he was committed to staying in his house, which he bought in 2005. He sunk $20,000 into improving it and hoped to raise his children there. But his lender refused to modify his loan, he said. To avoid personal liability for the deficiency, Palacios is filing for bankruptcy protection, as many people do who are in similar situations, said Nancy Ryan, his bankruptcy attorney.

It makes sense that if people could afford to pay their mortgage, they just would. Isn’t this practice going to greatly increase the number of bankruptcies in the area? That hurts all the other creditors.

Elena and Alanna Thwart Corey Stewart’s Attempt to Rewrite PWC Immigration History

When Localities Take On Immigration
Click the above to listen to the show.

Elena and Alanna apparently had a good time calling Chairman Stewart out on his “inaccuracies” today on the Kojo Nnamdi Show on NPR (WAMU).   Corey Stewart is STILL trying to spin that the resolution, neutered of the “probable cause” mandate, is tougher than the original resolution.  

I believe I recall a certain Chairman saying “over his dead body” would he allow the probable cause mandate to be stricken from the immigration resolution.  Hmmmmm, well, it WAS stricken and he is clearly still walking around, alive and well.   Why on earth did he fight soooo hard if he didn’t mind the probable cause being taken out.  As I recall, Anti-BVBL, along with many other citizens who had spoken out against the resolution, celebrated when the probable cause mandate was stricken from the enforcement language.

PWC Crime Statistics 2009

The Ugly Side of the Real Estate Market

What was supposed to be a boon for home buyers, especially first time home buyers, has fallen flat.  Many folks out there trying to buy houses are being squeezed out of the housing market by cash laden investors.  Even those bidding more than asking price are not getting called back. 

The investors are paying cash and buying ‘as is’ at discount prices.  No regular buyer who needs financing and inspections can compete with the cash-rich investors.  Investors are also back to flipping houses.  The buy-fix up- resell cycle has begun again. 

The down side for those of us who aren’t even trying to buy a house is that those foreclosures will now become rental property.  It is no secret that neighborhoods with a disproportionate number of rental properties goes downhill much faster than where homes are owned by the occupants. 

According to the Washington Post:

“There are bidding wars out there. It’s like the 2005 market but at discount prices,” said Stella Barbour, a real estate agent at Jobin Realty in Northern Virginia. “I put in offers for my clients only to find there are already multiple offers. They always choose the one that’s all cash.”

Some of these cash-only investors use their own money to buy properties, while others borrow it at high interest rates from other private sources.

Chris “CC” Cormack, an investor, said she used her own money to beat out four other offers and buy a townhouse in Ashburn this year. The home, a foreclosure, was listed for $214,500, and she got it for $220,000. Cormack fixed it up and sold it a few months later for a sizable profit.

“It had been under contract twice before, and both of those loans fell apart,” said Cormack, who is also a real estate agent. “By the time I came along with all-cash offer, the bank said, ‘I’ll take it.’ They did not want to take a chance on the deal falling apart again.”

Many of the real estate practices are happening right here in Prince William County:

Investors have reemerged with brute force in the Washington region’s real estate market over the past few months, triggering bidding wars in some neighborhoods teeming with foreclosed properties and hindering traditional home buyers such as Melissa Diggins.

Diggins and her fiance, George Mills, made a dozen offers on houses in Prince William County but lost more than half of them to investors making all-cash offers.

Frustrated, they gave up their search for a new home, convinced that they could not compete.

“We thought to ourselves: ‘Enough is enough,’ ” said Diggins, a graphic designer. “We’d sometimes offer more than the asking price and we wouldn’t even get a call back.  It was crazy.”

A year or so ago we heard several commentators singing the praises of the Prince William County Real Estate market. They spoke of how things were snapping back and how new families were moving in, returning the neighborhoods to the pastoral  scenes before the ‘illegals’ came to town. In the first place, many of the foreclosures were not illegal immigrants or even Latino families.  They were families who simply had bitten off more than they could chew.  This new situation truly reminds us of being careful what we wish for.  Homeowner occupancy is generally always superior to a neighborhood of rental units when it comes to homeowner upkeep and the general conditions of the community. One can expect both cities to be undergoing the same real estate situation.

Foreclosure Rates Over Around 1000 per Month in PWC



Occoquan saw one. Woodbridge, 481. And Prince William as a whole? A total of 1,043.

That’s the number of foreclosures for July for the county, according to RealtyTrac, a group that compiles information on the housing market nationwide.

The rest of the breakdown in the county for July: Manassas, 218 foreclosures; Triangle, 84; Bristow, 74; Dumfries, 73; Gainesville, 67; Haymarket, 31; Nokesville, 12; and Catharpin, 2.

The figures aren’t so dismal when viewed through the context of a year. In July 2008, the number of foreclosures in the county stood about 1,200.

It sounds like things are still mighty grim.  The article continues stating:

In all of Virginia, 6,406 foreclosures were added in July, representing a 23 percent jump over June figures, and an 11 percent hike from July of 2008. Between January and July, total foreclosures for the state hit 39,210. And despite lower prices and a decided buyer’s market, sales haven’t been so brisk. In the six-month period that began in January, only 10,229 of those foreclosed homes have been resold.

Do these numbers mean that Prince William County respresented 1/6th of all foreclosures in the state for the month of July?  If that is the case, then why are our elected officials not horrified?

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PWC Property Taxes Set at $1.21: 2nd Highest in Metro Area

In a rather anticlimactic move yesterday, PWC supervisors locked in a $1.21 tax rate per hundred. The tax rate can always be lowered but cannot be raised. The vote was predictable. According to the Washington Post:

The spending plan County Executive Craig S. Gerhart proposed last month would reduce services, suspend road construction, freeze salaries and tap reserves to close a $190 million shortfall projected for the fiscal year that begins in July.

The $1.21 rate is the second highest in the metro area. However, looking at the bottom line, it certainly is not the most expensive real estate taxation. Plummeting property values have caused an overall reduction in property taxes. Most homes will find the real estate taxes cut by about $400.

Chairman Stewart, who opened the meeting by commenting on the federal stimulus package money, had this predictably partisan remark to say about the new tax rate:

“I believe the way to spur the economy is by cutting taxes, not raising them. It comes down to a philosophical divide,” board Chairman Corey A. Stewart (R-At Large) said. “Prince William is the only Republican-led jurisdiction in the D.C.-metro area. It shouldn’t be too much of a surprise we’re cutting taxes.”

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Fewer Illegals, More Crime

In 2007, Prince William County Supervisors passed the “Immigration Resolution” which stated in part that “illegal immigration has been determined to cause economic hardship and lawlessness.” Has our outcome supported the assertion that ‘more illegals cause more crime and worse economic conditions’ with the converse being ‘less illegals therefore less crime and a better economy’?

According to the Prince William County Crime Report for 2008, crime now, one year after the resolution’s passage crime is slightly increased. This effectively ends our 5 year decreasing crime rate trend which obviously must have existed during our “influx of illegals.”

In financial terms, can we state that our economic hardships have lessened since the introduction of the resolution? Prince William County now leads the state and ranks top in the nation in foreclosures, and our home values have dropped 32%. The neighborhood issues that existed prior to the passage of the resolution are resurfacing as foreclosed homes bought by real estate investors are turned into rental properties. And our County budget is facing deep cuts this year with an equally dismal prospect for next.

Many predicted dire consequences but Supervisors refused to heed their warnings. Probably nobody said it better than Oklahoma Republican State Representative Shane Jett, who opposed similar legislation in his state, when he stated:

“[the passage of these types of legislations] will be the single most destructive economic disaster since the Dust Bowl,”

Now with almost one full year of crime figures, foreclosure numbers, home values, and tax revenue numbers compiled can we definitively state that the assertions in the resolution were completely unfounded?  Strictly speaking, we had lower crime rates and a better economy when the ‘illegals’ were here.  Will the status quo remain, as Stewart continues to assert that the resolution is working well?

Obviously this issue has been the single most divisive issue to happen here.  Will Supervisors heed Dr. Fuller’s advice, and change course?  Or, are they content with allowing Chairman Stewart to continue down this path hoping that voters will only hold him responsible?

Prince William County Foreclosure Rates in Comparison to Surrounding Jurisdictions

According to this chart from the George Mason Regional Analysis Center, Prince William County Foreclosure Rates are OFF THE CHART in comparison to surrounding jurisdictions. WTOP news is reporting Prince William property values have dropped more than double of Fairfax County and slightly more than double of Loudoun County.
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Prince William County Home Help Winners Announced Tuesday

More than 150 Prince William County employees had a lucky day on Tuesday. The county received 323 applications for 167 spots in the Home Help Program. Through this program, the county seeks to cut the number of vacant houses in the county by providing low interest loans and reduced mortgage rates to entry level county employees. These employees will become home owners in Prince William County in the very near future, which is seen as a desirable goal.

According to the DC Examiner:

The plan helps fulfill a long-time county goal to have more public employees living in the county. Martino [county finance director] hopes the program will help Prince William recruit and retain employees, many of whom live outside the county and face long commutes.

The county invested $50 million in certificates of deposit at SunTrust Bank to fund the first year of Home Help. County officials emphasized that the money comes from an investment portfolio and does not use taxpayer money.

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Low, Unprincipled Dogs of the Mortgage Foreclosure Industry

There are just no shortages of low, unprincipled dogs in the world. Crooks now have discovered a new scheme to take advantage of those in foreclosure. “Foreclosure rescue companies” are springing up everywhere there are an abundance of foreclosures and these swindlers move in on desperate people.

Today’s NYTimes exposes how ubiquitous, smarmy and sleazy these unscrupulous companies are.

Borrowers seeking loan modification are often frustrated that they cannot reach the right people at their lender or that the lender insists on a repayment plan they cannot keep, said Ira Rheingold, executive director of the National Association of Consumer Advocates.

“When you’re desperate, that’s when the crooks come out,” Mr. Rheingold said. “You’ve tried everything, and a guy calls you up on the phone or there’s an ad on TV, and you have no other options, what do you do? You go to those guys.


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Corey Stewart Gives State of the County Address, Disseminates Misinformation

Rod Stewart tells us that the ‘First Cut is the Deepest.’ Corey Stewart tells us that cuts will be ‘deep’ and ‘painful’.

The News and Messenger highlighted part of yesterday’s BOCS meeting but concentrated on Chairman Stewart’s State of the County Address. Excerpts include:

As part of his “state of the county address,” Stewart talked of Prince William’s unusual circumstances in comparison with surrounding jurisdictions.
“Last year, when other major localities in the region hoped for the best, we prepared for the worst,” he said.

And as a result, Prince William differs from other communities in that budget shortfalls were not felt in this current fiscal year, and taxes are not planned to increase in the coming fiscal year. Still, he said, challenges are coming.

“[Our] work has just begun,” Stewart said, “[and] 2009 will present the toughest fiscal challenge this board or this county has ever faced. Declining home values and
shrinking sales tax and other revenues means a projected shortfall in the next fiscal year of $190 million. This problem is compounded by the substantial cuts expected from the General Assembly.”

The work for the upcoming budget season will focus mainly on cuts: “The cuts will be deep. The cuts will be painful. But the cuts mean that … this board shall deliver a tax cut to all of you at home,” he said.

Stewart touted some of the county’s perceived successes of the past year — deporting more than 1,300 illegal aliens; implementing an illegal immigration policy that’s being copied by other communities; building roads in the face of transportation budget shortfalls and cuts; creating a housing assistance program for government employees that “helps reduce the oversupply of unsold homes” and foreclosures.

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All Eyes are on the PWC Budget

The BOCS Halloween Financial Retreat begins today. Instead of going to some swanky place to convene, to their credit, the PWC BOCS are staying put and doing their work right at County Complex.

Their task is daunting. Running a county on a $190 million dollar shortfall is not for the faint of heart nor for one with a personal agenda. Pre-released agenda documents pretty much spelled out how dire the situation is.

At root of the financial problem is the huge, disproportionate amount of foreclosures in PWC. Each foreclosure lowers the property values of the houses around it. Many people have seen an almost 50% drop in the value of their home in the past 2 years.

The loss of value of the homes naturally changes the property tax assessments. As if things weren’t bad enough, sales tax receipts have dropped for 5 months in a row. The county is hurting.

Each county department was directed to create a budget with 10%, 20%, and 30% cuts. Looking through the documents, there were some extremely severe cuts. All eyes will be on the public safety departments first.

According to the Washington Post:

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Foreclosure Phenomenon in Prince William County

Prince William County Supervisors need to account for this phenomenon. What is the difference between the Counties? What accounts for this horrific occurrence of foreclosures which will most likely have lingering effects for a decade? Plain and simple, it’s the immigration resolution. The sooner Supervisors recognize this fact the faster we could turn this thing around. They have the power to stop the hemorrhaging but will they act on it? Do they prefer to see property values decline, real estate assessments plummet and the County’s budget completely destroyed? Perhaps so.

In my opinion, a more prudent course of action would be to not give anybody further reason to abandon a home. There’s never been a complete cost benefit analysis and it’s becoming pretty evident that any perceived savings from drops in ESoL enrollment have been more than off-set by devastating losses in our residential real estate market. These losses are causing extreme economic hardship among home owners who planned to use their home equity to finance their kid’s education, retirement or financing for business operations. Eventually, we will hit rock bottom but at what cost?

Falling House Prices, Rising Sales

Real estate agent Tracy Comstock shows a Prince William County property to Chris James of Clifton, who has been investing in foreclosed housing. Buying and renting foreclosed properties is good for the community, he said. (By Sarah L. Voisin — The Washington Post)

Today’s Washington Post, front page claims Prince William County is the ‘epicenter of the boom’ and a bargain-hunter’s paradise because of the extreme number of foreclosures.

The more foreclosures in a neighborhood, the more the value of the other homes is depressed. According to the Post:

The buying frenzy is the silver lining of a staggering decline in home values. With banks choking on a glut of empty, foreclosed properties, the median sale price for detached single-family houses in Prince William plunged 41 percent in the past year, from $405,000 to $239,900. In September, 118 homes in the county sold for less than $100,000, and many foreclosed townhouses sold for less than $70,000. One three-bedroom Manassas townhouse recently sold for $43,500, even though it was assessed at $273,100 in 2007.

“Prince William County is a fire sale,” said Joey Remondino, a “ridiculously busy” real estate agent with StoneHouse Realty in Manassas. “People are looking for amazing deals, and I’m writing offers as fast as I can,” he said.

Somehow being the cheapest is just not what I considered to be a good thing. Who wants to be described on the front page of a national newspaper as a ‘firesale’? I see our county becoming an oasis for investors and absentee landlordism, confirmed by the Post with:

Much of the dealmaking has been led by investors, according to real estate agents who specialize in foreclosed properties. Doctors, lawyers, engineers — anyone with good credit and disposable cash — are becoming part of a burgeoning class of landlords. Some are forming business partnerships to acquire properties; others are realizing that they can buy cheap homes and rent them out for more than the monthly mortgage payments.

I think this might be a cleaned up version of saying ‘slum-lords.’ Does anyone else feel this is something to celebrate? I know the dark screen was clicking its heels and thinking it was going to end up in Oz.

With credit as tight as it is now, I doubt that ordinary couples who have saved for a house will be able to obtain financing. I don’t think our new neighbors will be Mom, Dad, 2.3 kids and a dog.