Great news: Foreclosures getting spruced up while taxpayers get trimmed

posted at 11:01 am on April 10, 2012 by Ed Morrissey

Since most people can’t afford to sell their homes, they have had to rethink their existing homes instead — remodeling, painting, perhaps getting some new landscaping.  Unfortunately, thanks to low employment and high gas prices that hammers disposable income, the funds for those activities are on the low side for most homeowners, too.  However, the good news is that a number of homes do get the full treatment.  The bad news?  You’re paying for it:

American taxpayers own close to 200,000 vacant houses, and over the next year they will spend more than $40 million just to mow lawns at these properties. Taxpayers also foot the bills to paint walls, fix cabinets, plant flowers and more — expenses that just last year, exceeded a half a billion dollars.

The housing bailout has already cost taxpayers $124 million, now Americans are spending hundreds of millions more fixing up foreclosed homes to try and sell them. It is a bizarre and expensive side effect of the housing market collapse and failure of Fannie Mae and Freddie Mac, the mortgage giants that went into federal conservatorship in 2008. …

Fannie Mae says fixing the houses and maintaining them will ultimately save taxpayers money, because they will yield higher prices in the marketplace.

Well, that’s true — and that’s why people usually invest in their own homes, and not those of others.  That was one side effect that often gets overlooked from the housing bubble collapse and the crisis in home equity.  During the bubble, people used the rapidly-escalating home values to pull cash out of their homes.  Under normal circumstances, that money would have gone back into the house, making its value increase; during the bubble, homes got used as ATMs in order to buy vacations and merchandise instead.  That leaves a lot of people able to cover their mortgage now but without the equity to do the kind of maintenance work needed to keep up their own homes in the next few years.  Instead, the government now has to take their taxes and use those funds to improve houses just enough to get them off the books.

Don’t expect those outlays to get covered in the eventual sale price, either.  All that remodeling, lawn-mowing, and painting would only impact the sale price significantly if inventory was tight.  The markets will have a glut of these foreclosed properties over the next several months, perhaps for the next couple of years.  Thanks to low employment and high energy prices, demand will remain light for the foreseeable future, too.  At best, taxpayers will take a bath but get out from underneath the foreclosure overhang in a reasonable amount of time.

Unfortunately, all of this is unavoidable now.  Hopefully, though, it will serve as a lesson for the next time that people propose government interventions in lending markets in order to distort outcomes to favor their political priorities.


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Lipstick – pig….we pay for it….and home prices continue to go down..

PatriotRider on April 10, 2012 at 11:03 AM

yeah, we got lucky and sold our vacant house after improvements. Of course we had to lower the asking price by 7,000

DHChron on April 10, 2012 at 11:08 AM

Let’s see….In addition to all my bills, I pay for people to heat their homes, the power for their homes, food for them to eat and clothes for them to wear. Why not throw in a few mow jobs to boot? Hey, how about a cell phone and high speed internet, too? But I’m sure I’m not paying “my fair share”.

search4truth on April 10, 2012 at 11:08 AM

It gets worse.

With the robo-signing scandal in 2011, banks stopped forclosing on homes while the litigation was underway. Now with the settlement of the ligation yesterday, banks are expected to foreclose on more homes in 2012 than they did in 2010.

2012 will be the “Year of the Foreclosure” and part of the Obama legacy.

J_Crater on April 10, 2012 at 11:09 AM

And we spend 40 billion a year on farm subsidies. Seems like a logical place to start to offset these unintended consequences of the mortgage mess.
What? Most subsidies go to red states? The hell you say!
http://farm.ewg.org/top_recips.php?fips=00000&progcode=totalfarm

I thought those were bastions of conservatism…./sarc

Bradky on April 10, 2012 at 11:10 AM

Unfortunately, all of this is unavoidable now. Hopefully, though, it will serve as a lesson for the next time that people propose government interventions in lending markets in order to distort outcomes to favor their political priorities.

You forgot the sarc tag there, Ed.

Bitter Clinger on April 10, 2012 at 11:10 AM

Unfortunately, all of this is unavoidable now. Hopefully, though, it will serve as a lesson for the next time that people propose government interventions in lending markets in order to distort outcomes to favor their political priorities.

You forgot the sarc tag there, Ed.

Bitter Clinger on April 10, 2012 at 11:10 AM

Fixed

Bitter Clinger on April 10, 2012 at 11:11 AM

Here is another little dandy taxpayers investment! But it will ‘create 15 permanent jobs.’ Most of what bho/team has invested in could all be things gone down the cow pooo road?

http://nation.foxnews.com/president-obama/2012/04/10/all-above-obama-spends-5m-cow-dung
L

letget on April 10, 2012 at 11:11 AM

2012 will be the “Year of the Foreclosure” and part of the Obama legacy.

J_Crater on April 10, 2012 at 11:09 AM

it is bad if I say I hope it is?

upinak on April 10, 2012 at 11:12 AM

So this was where all those new jobs were created.
Illegal landscapers of latino origin are smiling.

OkieDoc on April 10, 2012 at 11:13 AM

I am far from a mathematical competent but can someone please tell me why they just don’t refinance the balance of these mortgages at today’s rates? It would lower the payment amount and they are making loans at these rates anyway. Plus, why does it take so long for them to sell these properties? Who does that help?

Cindy Munford on April 10, 2012 at 11:13 AM

Unfortunately, all of this is unavoidable now. Hopefully, though, it will serve as a lesson for the next time that people propose government interventions in lending markets in order to distort outcomes to favor their political priorities.

I really doubt that any lesson was learned. If the one gets reelected look for the clarion call for “Fairness in lending”. If there is one thing I’ve learned it’s that the Government doesn’t.

buckeyerich on April 10, 2012 at 11:14 AM

yeah, we got lucky and sold our vacant house after improvements. Of course we had to lower the asking price by 7,000

DHChron on April 10, 2012 at 11:08 AM

at least you sold it! Next door neighbor up and left (they have 2 mortgages) and now are trying to rent their house out while they are in foreclosure, but can’t rent it because the area we are in most houses mortgage payments are less than 1000 a month. They even left their animals.. buttheads.

upinak on April 10, 2012 at 11:15 AM

I am far from a mathematical competent but can someone please tell me why they just don’t refinance the balance of these mortgages at today’s rates? It would lower the payment amount and they are making loans at these rates anyway. Plus, why does it take so long for them to sell these properties? Who does that help?

Cindy Munford on April 10, 2012 at 11:13 AM

many people have 2 mortgages, for whatever reason. They thought that having their mortgage and getting a second to spruce up the house (HGTV style) would make a difference. It doesn’t and no bank will refinance on two houses, especially if the house isn’t worth it.

upinak on April 10, 2012 at 11:16 AM

And they only forecast that Obama care will cost 380 billion the first ten years….riiiiiight!
We need the government in every facet of business, so they can turn us into a 1960′s India faster than we could fart!

KOOLAID2 on April 10, 2012 at 11:16 AM

so they can turn us into a 1960′s India faster than we could fart!

KOOLAID2 on April 10, 2012 at 11:16 AM

Slum Dog Millionaire – the Appalachian Chapter
Coming to theaters near you!

Bradky on April 10, 2012 at 11:18 AM

many people have 2 mortgages, for whatever reason. They thought that having their mortgage and getting a second to spruce up the house (HGTV style) would make a difference. It doesn’t and no bank will refinance on two houses, especially if the house isn’t worth it.

upinak on April 10, 2012 at 11:16 AMoops two house mortgages.

upinak on April 10, 2012 at 11:18 AM

it is bad if I say I hope it is?
upinak on April 10, 2012 at 11:12 AM

“You are branded an enemy of the state!” – liberal4life’s ghost

Chuck Schick on April 10, 2012 at 11:18 AM

Hopefully, though, it will serve as a lesson for the next time that people propose government interventions in lending markets in order to distort outcomes to favor their political priorities.

Sorry but it won’t. The Dem demonization machine has convinced progs that the evils banks are to blame and the LSM isn’t about to question the message.

antipc on April 10, 2012 at 11:20 AM

“You are branded an enemy of the state!” – liberal4life’s ghost

Chuck Schick on April 10, 2012 at 11:18 AM

So?

LOL

upinak on April 10, 2012 at 11:20 AM

upinak on April 10, 2012 at 11:18 AM

Did a government mandate force them to take a second mortgage?
Sorry not much sympathy from me. Buy 2/3 of what you qualify for and don’t use the house as an ATM machine. Pretty good recipe for success.

Bradky on April 10, 2012 at 11:20 AM

at least you sold it! Next door neighbor up and left (they have 2 mortgages) and now are trying to rent their house out while they are in foreclosure, but can’t rent it because the area we are in most houses mortgage payments are less than 1000 a month. They even left their animals.. buttheads.

upinak on April 10, 2012 at 11:15 AM

true :-) with a 5,000 profit. This is Texas, things are a little better here.

I can’t stand people who leave animals…I’m no PETA guy but wth?! The next step down is early adoption of serial killing.

DHChron on April 10, 2012 at 11:21 AM

upinak on April 10, 2012 at 11:16 AM

I know some folks who refinanced but two loans is just plain stupid. Improvements on a home can be beneficial, I know someone who refinanced and took the family on a cruise. Crazy people.

Cindy Munford on April 10, 2012 at 11:22 AM

Pretty good recipe for success.

Bradky on April 10, 2012 at 11:20 AM

I completely agree with you. However, I am trying to get the cats out and to the shelter.

upinak on April 10, 2012 at 11:22 AM

I am far from a mathematical competent but can someone please tell me why they just don’t refinance the balance of these mortgages at today’s rates? It would lower the payment amount and they are making loans at these rates anyway. Plus, why does it take so long for them to sell these properties? Who does that help?

Cindy Munford on April 10, 2012 at 11:13 AM

Underwater mortgages do not qualify for refinancing.

firegnome on April 10, 2012 at 11:24 AM

However, I am trying to get the cats out and to the shelter.

upinak on April 10, 2012 at 11:22 AM

Good on you for that. I like people who make that extra effort.

Bradky on April 10, 2012 at 11:24 AM

It gets worse.

With the robo-signing scandal in 2011, banks stopped forclosing on homes while the litigation was underway. Now with the settlement of the ligation yesterday, banks are expected to foreclose on more homes in 2012 than they did in 2010.

2012 will be the “Year of the Foreclosure” and part of the Obama legacy.

J_Crater on April 10, 2012 at 11:09 AM

Yup, come around June the next round of foreclosures are going to hit, causing an estimated 20 percent drop in the value of existing houses yet again. The Obamanation Administration is implementing the Cloward-Piven Strategy. And it is working like a charm.

The US Constitution destroyed right before our very eyes, and we did nothing.

SWalker on April 10, 2012 at 11:26 AM

DHChron on April 10, 2012 at 11:21 AM

We sold out cabin last July. It is one of those picturesque Alaska types that we knew it would sell. We sold it for 10K less than what we wanted but still made quite a bit off of it. German couple from Germany bought it with cash. How do you say no to cash?

We had enough to build our 900 sq foot garage, which is almost done.

upinak on April 10, 2012 at 11:26 AM

Next door neighbor up and left (they have 2 mortgages) and now are trying to rent their house out while they are in foreclosure, but can’t rent it because the area we are in most houses mortgage payments are less than 1000 a month. They even left their animals.. buttheads.

upinak on April 10, 2012 at 11:15 AM

Sounds like there might be some regret about that whole statehood thingy. /

platypus on April 10, 2012 at 11:27 AM

Crazy people.

Cindy Munford on April 10, 2012 at 11:22 AM

yep.

Good on you for that. I like people who make that extra effort.

Bradky on April 10, 2012 at 11:24 AM

trust me, it is an effort. But these cats didn’t deserve what their owners did.

upinak on April 10, 2012 at 11:28 AM

I’ve been wanting to build another garage, but the “progressives” have successfully stopped that progress.

kirkill on April 10, 2012 at 11:29 AM

We had enough to build our 900 sq foot garage, which is almost done.

upinak on April 10, 2012 at 11:26 AM

sweet! Ya’ll should get a car lift. They’re awesome and they annoy liberals apparently (whom call them car elevators…because they’re stupid).

DHChron on April 10, 2012 at 11:29 AM

We had enough to build our 900 sq foot garage, which is almost done.

upinak on April 10, 2012 at 11:26 AM

Dang! That’s more than half as big as our duplex. Guess that’s what they mean by living large. :)

platypus on April 10, 2012 at 11:30 AM

sweet! Ya’ll should get a car lift. They’re awesome and they annoy liberals apparently (whom call them car elevators…because they’re stupid).

DHChron on April 10, 2012 at 11:29 AM

thinking about it, but for the toys.. like our snow machines. The door was commercial grade and over 11 ft tall and 15 ft wide. It is also two stories.

When we bought the house we are in now, we went on many factors. Can we expand? Can we build other buildings? Many people don’t think like that, and it is one of the reasons why they go into debt. Other than not using money out of pocket to redo their houses. We also went on price and got a decent (small) house, but with a acre lot.

upinak on April 10, 2012 at 11:33 AM

firegnome on April 10, 2012 at 11:24 AM

What is the difference if the owners are going to walk away from them anyway? The mortgage company still loses money and the homeowner’s credit is ruined. Plus the lack of foreclosed homes helps stabilize property values. I know it isn’t standard operating procedure but these are not standard times. That said, I don’t understand people walking away from houses they are still capable of making the contractually agreed on payments but apparently that’s happening.

Cindy Munford on April 10, 2012 at 11:34 AM

Buy 2/3 of what you qualify for and don’t use the house as an ATM machine. Pretty good recipe for success.

Bradky on April 10, 2012 at 11:20 AM

Well now you’re just talking crazy talk.

BacaDog on April 10, 2012 at 11:35 AM

We also went on price and got a decent (small) house, but with a acre lot.

upinak on April 10, 2012 at 11:33 AM

I think we’ve identified the debt problem in this country: liberals :-)

DHChron on April 10, 2012 at 11:37 AM

Hey, how about a cell phone and high speed internet, too?

search4truth on April 10, 2012 at 11:08 AM

Why not? How to get a free cellphone from the gubmint

Lost in Jersey on April 10, 2012 at 11:38 AM

Dang! That’s more than half as big as our duplex. Guess that’s what they mean by living large. :)

platypus on April 10, 2012 at 11:30 AM

Platy, this was the deal, buy small house and build a nice garage. We knew we would have the money, and we were never going to borrow. This is a nice garage.. infloor heat, 2×12 construction. We are thinking ahead. But we are also “weatherizing” our house. Just paid a small fortune for a new heater. New windows (triple pane) will be going in this summer as well as a new metal roof and new roofing stuff as well as the blow in fluff for insulation. We also gutten the house when we bought it (it was a rental) and redid everything including the plumbing. This is all out of pocket and expensive. We are just hoping that the tax write offs will be in out favor this coming year…. or we are screwed.

upinak on April 10, 2012 at 11:39 AM

banks are expected to foreclose on more homes in 2012 than they did in 2010.

This is problematic, if only because the refusal of FM/FM and others to sell the current inventory “below market price”.

If they don’t sell the houses to reduce the existing inventory glut, then the market won’t truly recover and it’ll get far worse when there’s a huge wave of new foreclosures.

teke184 on April 10, 2012 at 11:44 AM

I think we’ve identified the debt problem in this country: liberals :-)

DHChron on April 10, 2012 at 11:37 AM

No, stupid people. When you don’t want to work on a investment, why do people buy houses just for them to become run down?

I have yet to figure this out other than self projection.

upinak on April 10, 2012 at 11:45 AM

Cindy Munford on April 10, 2012 at 11:34 AM

Coming Apart: The State of White America, 1960-2010 [Book] by Charles Murray

is a very good book about what has changed in the country and well researched data on why. Bankruptcies have gone up 7 times the rate of 1960 — this had been climbing well before 2008. Book focuses on things the founders held dear; Integrity, religion, industriousness and Honesty.
Makes an interesting contrast of how the country has gotten worse since 1960.
Title is a little misleading as he is really laying out a scenario in which there are two classes left (w/o regard to color) with “elites” concentrated in major metro areas.

Bradky on April 10, 2012 at 11:47 AM

What is the difference if the owners are going to walk away from them anyway? The mortgage company still loses money and the homeowner’s credit is ruined. Plus the lack of foreclosed homes helps stabilize property values. I know it isn’t standard operating procedure but these are not standard times. That said, I don’t understand people walking away from houses they are still capable of making the contractually agreed on payments but apparently that’s happening.

Cindy Munford on April 10, 2012 at 11:34 AM

I have firsthand experience with this. I would love to refinance my home. I can’t. The banks look at the application through the lens of a new application. The same standards apply. If the loan wouldn’t qualify as a new mortgage, it doesn’t qualify as a refinance. Some of this is federal regulation.

firegnome on April 10, 2012 at 11:51 AM

firegnome on April 10, 2012 at 11:51 AM

Ugh. You aren’t in California, are you?

upinak on April 10, 2012 at 11:54 AM

Not to toot my horn too loudly, but you all should really check out properties in Puerto Rico. We were in recession long before the rest of you, and property prices here are insanely cheap right now. Especially if you leave the capitol of San Juan and get out into the beautiful beach and mountain towns.

Case in point: a HUD repossession in Rincón, which is a world-famous beach town. It is a two-level house with a small bakery (still in business) downstairs. Upstairs, you have two apartments which would be great for short-term rentals. In back, another apartment. So three apartments in a town that ALWAYS has surfer dudes looking for a place to rent for a few weeks, a steady income from the bakery renting space, and the apartment in back to live in. Ocean view. Warm breezes year round. English-speaking town in Puerto Rico (lots of expats.) How much? $62,000.

Oh, and since we have a Republican governor, it’s business friendly. Just cut our corporate taxes by 20%. And pushed through a 0% property tax – that’s ZERO – on your main property. Seriously, what are you all waiting for? I’m saving my pennies till I can get a place like this, and they are EVERYWHERE right now. The difference is, with no winter to wreck homes, and given the fact that they are built like tanks to withstand hurricanes, even repos are in good shape for years and years.

JoseQuinones on April 10, 2012 at 11:56 AM

Why not? How to get a free cellphone from the gubmint

Lost in Jersey on April 10, 2012 at 11:38 AM

Here in Texas we are getting inundated with the “Call 211 from Anywhere” adds promoting all things all things free from the g’ment. It is the cheesiest ad telling people even if they have a car and a house they may qualify for free stuff.

And phones? Our house line is used to get internet and for the alarm system. I cut every feature out to reduce the bill to the advertised $20 through AT&T. It costs $36.43 with all the taxes added.

I’m hoping for change.

DanMan on April 10, 2012 at 11:58 AM

Do your buying and selling of real-estate now before the Obamacare transaction tax goes into effect!

slickwillie2001 on April 10, 2012 at 12:00 PM

firegnome on April 10, 2012 at 11:51 AM

I know this is happening and I think it is crazy. Plus federal regulations got us into this mess.

Cindy Munford on April 10, 2012 at 12:02 PM

Ugh. You aren’t in California, are you?

upinak on April 10, 2012 at 11:54 AM

Maryland

firegnome on April 10, 2012 at 12:03 PM

We are governed by economic illiterates: Obama, Pelosi, Reid, and most recently, the noted economist David Axelrod.

If you want to help prevent a 2nd Obama term, then don’t purchase anything you don’t need until October 20 or thereabouts — data too late to effect the election.

My wife wants a new stove. I told her Christmas, not sooner.

Yes, we may all endure pain in the short term, but Obama has to go, or we will all have nothing left in 2013 and beyond.

Don’t spend on anything that is not essential. Teach these people a lesson they will never forget.

matthew8787 on April 10, 2012 at 12:11 PM

I flip houses for a living. The amount of maintenance done on these HUD houses is just barely enough to keep the roof from falling in and sometimes not even that as they sit empty for 12 to 24 months before they go on sale.

Also, there is a very strong correlation between being a mortgage deadbeat and being lousy at home maintenance. Even things that just take elbow grease to keep up don’t get done on these houses for years and years before they go belly up. Awful.

Allahs vulva on April 10, 2012 at 12:18 PM

Also, there is a very strong correlation between being a mortgage deadbeat and being lousy at home maintenance. Even things that just take elbow grease to keep up don’t get done on these houses for years and years before they go belly up. Awful.

Allahs vulva on April 10, 2012 at 12:18 PM

Yep. Living proof of that all over the area I live in.

We need to stop horsing around with all the programs intended to preserve in amber the situation of 2006. It was an artificial situation, and trying to short it up (or, more accurately, recapture it) will only make things steadily worse.

The real estate market is part and parcel of the general economy, and the fundamental problem is a regulatory approach that discourages productivity and initiative. We can’t idle a gigantic portion of the work force and make the necessities of life cost steadily more and expect to “preserve” anything. We will just keep losing everything instead.

Let the people get back to work, by lifting the regulatory burden that’s killing small business initiative and jobs. That will take care of everything else, if it’s allowed to.

J.E. Dyer on April 10, 2012 at 12:31 PM

I flip houses for a living. The amount of maintenance done on these HUD houses is just barely enough to keep the roof from falling in and sometimes not even that as they sit empty for 12 to 24 months before they go on sale.

Also, there is a very strong correlation between being a mortgage deadbeat and being lousy at home maintenance. Even things that just take elbow grease to keep up don’t get done on these houses for years and years before they go belly up. Awful.

Allahs vulva on April 10, 2012 at 12:18 PM

As an agent who has been on both sides of REO sales, I completely agree. Even with the minimal amount of care that these homes get they are almost always an eyesore, dragging down the image of the entire street. I’ve seen it in foreclosure-ground-zero neighborhoods, where up to half the homes are vacant, and in high end gated communities filled with million dollar homes. I once saw a home listed over $1M where the owners had stripped it completely, down to the phone/computer cables pulled out of the walls.

It’s a mess.

peski on April 10, 2012 at 12:40 PM

Let the people get back to work, by lifting the regulatory burden that’s killing small business initiative and jobs. That will take care of everything else, if it’s allowed to.

J.E. Dyer on April 10, 2012 at 12:31 PM

Allahs vulva on April 10, 2012 at 12:18 PM

Please…. it was the loosening of several regulations that put the home market on the road to rack and ruin. It also made a lucrative market for Allahs vulva in the wild world of Flipping. Perhaps he can illuminate us on what service or product he actually contributed to the economy.

Bradky on April 10, 2012 at 12:45 PM

Don’t forget the new trend among non-paying renters. When apartment and rented-home landlords finally says its time for non-paying tenants to go because it’s hurting them in the wallet, the to-be-former tenant sometimes strips the residence of copper wiring, appliances, and even clogs the drains and leaves the water running to damage the property even more.

I know of a few friends whom this has happened to.

shick on April 10, 2012 at 12:51 PM

The housing bailout has already cost taxpayers $124 million, now Americans are spending hundreds of millions more fixing up foreclosed homes to try and sell them.

That number doesn’t seem right, especially since the point of this article was that we’re spending 500 mill on maintainence.

And we spend 40 billion a year on farm subsidies. Seems like a logical place to start to offset these unintended consequences of the mortgage mess.
What? Most subsidies go to red states? The hell you say!

I thought those were bastions of conservatism…./sarc

Bradky on April 10, 2012 at 11:10 AM

Great idea there, Bradky! But before we go after that, why don’t we try trimming the $71 billion for SNAP that is proposed for FY 2012. Of course, that is predicted on the fact that even liberals are not stupid enough to think that forfeiting a nation’s ability to grow its own food is a good idea. If you are unsure about this, check with N Korea or the former Soviet Union and ask them how that all turned out.

Maddie on April 10, 2012 at 12:54 PM

Maddie on April 10, 2012 at 12:54 PM

Sooo save the subsidies for red states and eliminate the more liberal ones??
We are not forfeiting the food supply by eliminating subsidies.

Bradky on April 10, 2012 at 12:57 PM

This is nothing new. I was doing this work back in 1997. Once a house was vacant I’d go to change the door lock, drain the water heater, put RV anti-freeze in the drain traps and bid to cut grass and remove food and garbage hazards.

I worked the Tidewater Virginia area, Richmond and most of the areas in between. I went to evictions to represent the bank and record damage and put personal property to the curb as directed by the Deputy serving the papers.

In Richmond we’d do nothing but evictions for a full day. Most were usually vacant. Some people used us to empty the house and then they’d get their stuff from the curb to go wherever they were going. When public housing projects were torn down, the occupants were farmed out to neighborhoods where FHA houses had been vacated. That’s who the majority of our “clients” were.

FHA and VA would pay $25 for the initial cut on a lot size up to 10,000 sq ft, then $15 every 2 weeks for recuts through the growing season. All the work required a before and after photo. This was pre-digital camera so film was used.

Anything above the allowables (larger lots, really high grass) was bid and had to await approval. If it was mid summer on the first trip the grass was usually 3-4 ft. If a city was sharp on code enforcement they’d have cut the grass and billed the bank, which submitted to HUD for reimbursement.

I did very few loans that were straight up, bank finance. Everything on those had to be bid and approved. In the summer I could cut grass just about all day. Big lots sucked, but townhouses with a 20′x10′ back lot paid the same, so it evened out.

I used a high wheel push mower and one summer wore out the compression rings on the piston. It was cheaper to just go buy another $200 special from Lowe’s and keep pushing.

I was just out of the Navy, working basically for myself and it was great. Best part of the job was breaking into the house. In the thousands of properties I visited I only had the law called on me once. Had many little old ladies come ask me what I was doing. Most people were thankful the grass was finally being cut.

Around 2005 the bankers and bureaucrats must have seen this fiasco coming because they changed the way property maintenance was being done. It got to where the price of gas and time on the road was not worth what they were willing to pay.

TugboatPhil on April 10, 2012 at 12:57 PM

Please…. it was the loosening of several regulations that put the home market on the road to rack and ruin. It also made a lucrative market for Allahs vulva in the wild world of Flipping. Perhaps he can illuminate us on what service or product he actually contributed to the economy.

Bradky on April 10, 2012 at 12:45 PM

Uhh, no. It was government intervention to protect against redlining that did the housing market in. In the interest of “fairness” and “economic equality,” people who hadn’t even saved for a down payment and didn’t have a track record of paying on time and in full were offered mortgages. If you haven’t mastered the arts of thrift and delayed gratification, there’s no way you can swing homeownership.

Maddie on April 10, 2012 at 1:06 PM

Sooo save the subsidies for red states and eliminate the more liberal ones??
We are not forfeiting the food supply by eliminating subsidies.

Bradky on April 10, 2012 at 12:57 PM

Oh, come on. If more farmers decide that farming is no longer profitable, what is their incentive to farm? Of COURSE that would result in a reduced food supply!

Maddie on April 10, 2012 at 1:12 PM

Maddie on April 10, 2012 at 1:06 PM

In this case the government intervened to loosen regulations.

If more farmers decide that farming is no longer profitable, what is their incentive to farm? Of COURSE that would result in a reduced food supply!

Maddie on April 10, 2012 at 1:12 PM

So farming can only be profitable if the government intervenes ann props it up with our tax dollars?
I thought the free market and capitalism was always the preferred option. Comparing to Korea is a red herring because Korea has nowhere near the natural resources that we do.

I do admire your flip flops from intervention bad but intervention good…

Bradky on April 10, 2012 at 1:17 PM

I thought those were bastions of conservatism…./sarc

Bradky on April 10, 2012 at 11:10 AM

They usually ARE bastions of conservatism. Subsidies were the liberal’s attempts at buying off support and turning red states blue. While it hasn’t yet flipped them, they have gotten farmers more addicted to government money.

And FYI… both of my grandparents were farmers, and I grew up in farm country… and as a conservative, I don’t agree with subsidies. (And btw, most of those subsidies are collected by farming corporations, not family farmers.)

dominigan on April 10, 2012 at 2:24 PM

So farming can only be profitable if the government intervenes ann props it up with our tax dollars?

Bradky on April 10, 2012 at 1:17 PM

Sorry dude, that dog don’t hunt. Regulations (especially from the EPA) make farming WAY more expensive than any money they receive from subsidies. Get the government out of farming and things get WAY cheaper.

For example, while ethanol requirements have jacked up the price of corn (resulting in a profit), they have absolutely decimated the beef production industry since people aren’t buying as much beef since the price jumped more than $1/lb in the last two years. My granddad was a beef farmer, and I grew up with having a freezer full of beef. Now, we never touch it because chicken is still affordable, but beef is outrageous.

Drop the ethanol requirements and grain costs would drop. And while that might impact the grain-only farmers, it would make general food costs much more affordable, and would bring back the beef industry.

dominigan on April 10, 2012 at 2:30 PM

Bradky on April 10, 2012 at 1:17 PM

Oh, and going so far off-topic as you have is marking you for banning. I’d be careful about that.

dominigan on April 10, 2012 at 2:31 PM

Drop the ethanol requirements and grain costs would drop.

dominigan on April 10, 2012 at 2:30 PM

The EPA is on schedule to implement E15 this summer. If you drive a car older than a 2007 expect many problems t the point of ruin. No engine manufacturer has endorsed it. Small engine equipment will be seriously compromised too. Oh, and the price of food will jump as subsidized corn goes to blend with petroleum.

DanMan on April 10, 2012 at 2:38 PM

Perhaps the former CEO’s of Fannie and Freddie can give back all those bonus dollars in order to maintain the homes sold on their watch and now in foreclosure.

Wouldn’t that be “fair” Mr President?

GarandFan on April 10, 2012 at 6:24 PM

Under normal circumstances, that money would have gone back into the house, making its value increase; during the bubble, homes got used as ATMs in order to buy vacations and merchandise instead

Heard a caller on Dave Ramsey’s show today – she was paying down her mortgage & “financial” folks were telling here that she should only pay it down to 25-30%, then take out a loan at a low interest rate & invest in the stock market. She wanted to know from Dave why her gut told her that was not the right thing to do. Dave agreed with her. But she is correct that many of the “financial experts” have espoused just this plan for years – use your home for leverage & investment. Makes you wonder about the accuracy of expert opinions.

mdenis39 on April 10, 2012 at 10:56 PM

Please…. it was the loosening of several regulations that put the home market on the road to rack and ruin.

Bradky on April 10, 2012 at 12:45 PM

No. It was the federal government’s requirement that lenders lend to the non-creditworthy in order to stay in business.

The resulting increase in bad debt should have been remedied through higher interest rates for the creditworthy — basically, making it costlier for you to buy a home, assuming you’re creditworthy — but that would have discouraged the market too much. Nevertheless, it would have been the right thing to do. If you insist that non-creditworthy buyers be given home loans, you should have to pay for the additional risk they represent by paying higher interest rates.

That was politically untenable, however, so the industry and Congress between them came up with spreading mortgage risk around by generating more and more debt, and spreading it further with the credit default swap reinsurance scheme. The more mortgage-payers there are, so the theory went, the smaller will be the percentage of bad debt, even when the federal government forces lenders to pony up more and more loan money for Acorn to mismanage.

In the 1990s, Democrats and Republicans both bought into this scheme to make bad debt seem like a smaller problem by increasing total debt. Democrats were dead-set against reining it in when Fannie and Freddie became wildly undercapitalized, in the early 2000s, in relation to the increasing bad debt problem. But Republicans have themselves to blame for not overriding the Democrats and taking action anyway. They held Congress and the White House both, and they didn’t tighten the capital standards for Fannie and Freddie, which would have been a giant step in the right direction.

And here’s the kicker. In the four years since 2008, Congress has STILL not corrected the problems that led to the bubble and collapse. This is a problem that can properly be hung on both sides of the aisle, but it’s not about loosening regulations. It’s about trying to set up a constituency-tending lending requirement whose costs no one has to “pay.” It blew up in the people’s faces, as it was always going to. It was a case pf colossal irresponsibility and disrespect for the people, without whom government is and has nothing.

J.E. Dyer on April 11, 2012 at 12:31 AM

This just opens the door wider for Mike Castle.

Bishop on April 11, 2012 at 11:03 AM

I didn’t get to type that, but I will have the pleasure of linking to Chris Christie’s infamous Mike Castle endorsement.

It’s all of one minute and nine seconds of pure “love you long time”:

http://www.youtube.com/watch?v=dnQPS2Qhzi4

sartana on April 11, 2012 at 11:14 AM

I am a realtor in North Carolina who handles foreclosures. Buyers are looking for steals right now, not deals. We see how much the bank paid and then we see how much the bank received when the home sold. Then you have all the upkeep which is usually done badly by idiots. It is ugly.

Problem is, with all the dollars being wasted, I mean its several million here and a couple of billion over there, seemingly on everything, money is starting to become meaningless.

Generational taxpayers are going to curse our corporate stupidity and lack of backbone.

newpine on April 11, 2012 at 11:15 AM