Jul312016
Foreclosure victim story: the banks are persecuting her
Most feedback I receive from readers is positive, but occasionally someone with an opposing point of view has an emotional reaction and writes me to correct my many misconceptions.
I recently ran the post, Responsible homeowners did not lose their homes in foreclosure. In that post I made the case that most foreclosures were caused by overborrowing rather than unemployment or other unforeseeable events. Not everyone agrees with my view of the world, and one reader in particular was incensed enough to write me about it.
As with most victim rants, this one points to everyone and everything else to blame for their outcome in life. This woman blames the banks, insurance companies, even the weather for her misfortune. Nowhere is any mention of the decisions she made as a potential cause of her misfortune.
The Rant
Terry S., July 30, 2016
How can you sit there with no investigation into foreclosures and state that everyone who ended up in foreclosure was a irresponsible deadbeat?? You have obviously only “investigated’ the people that actually did over buy, even then the banks involved should have ‘Just said NO!’
First, I never said everyone who ended up in foreclosure was a deadbeat. In fact, I stated, ” The only ones … who are in danger of losing their homes are those who lose jobs; they are the truly sad casualties of the housing bubble.”
I have absolute documented PROOF of every claim I make below. I can guarantee you never even look at it or consider that these banks are run by criminals who could care less about the rule of law or anything else. Arrogant uninformed people like you help these perpetrate the absolute falsehood that these banks can still be trusted. AS can the Federal Reserve Board.
I am rarely labeled as someone who coddles the banks or believes they can be trusted.
I certainly hope they are paying you lots of money to sell our economy out.
Bet you don’t ‘investigate’ what happened to me and publish it!!!!
She is half right. I won’t bother to investigate any of her claims, but I will publish her rant.
I have proof of every single thing that this bank did to slander my credit which directly destroyed my small woman owned business, including stealing payments, forging checks, using my loan account for money laundering, manufacturing statements years after the occurrences, falsifying evidence, flat out lying to investigators and to my legal representatives. The bank did this with complete impunity knowing not one person will ever hide them accountable.
Slander, theft, forgery, money laundering, tampering with evidence: quite a list of felony charges.
They did this according TO THEIR OWN RECORDS submitted via discovery to enable them to keep my 7.99% loan in house.
First reality check: did she bear any responsibility for taking out a 7.99% loan on her house?
When did she get this loan? Rates haven’t been that high since the early 1990s, yet if she is underwater and unable to refinance, then the loan must have been originated in the 00s. Mortgage rates were generally less than 6.5% during most of the oos, so how did she end up with a 7.99% loan?
To say nothing of the fact evidence they submitted looks like they were using my loan to launder money!!!
Except the fall out from them destroying my credit was they destroyed my small woman owned business when snowmeggedon made it impossible to use business critical buildings without significant repairs.
Now the weather is her enemy.
My own ALWAYS IN PLACE ALWAYS IN EFFECT insurance sent a structural engineer to who said “these buildings are at serious risk of collapse, you cannot use them any longer”. Two weeks later ASSURENT Insurance company (made over 15 BILLION IN PROFITS last year) sent me a letter “we are not covering your loss, we don’t like the construction”. No matter that they had an agent personally inspect the building and take numerous pictures BEFORE the cashed the checks paying for the insurance for over 6 years!!! Yep No Bad Faith laws in the state of VA.
I spent over One Hundred and eighty THOUSAND dollars to sue my insurance company so I could repair these buildings to get myself back in business.
After three years of no business, while I CONTINUED to make my forced super high interest rate payments because I was forced to stay with this criminal organization, I finally get the money to restart my business. OH THEN THE BANK FORCES that money into an escrow account, in the end refusing to ALLOW me to use any of it to repair the buildings needed for my business.
Does the story above ring true to you? Insurance company denying a claim? $180,000 of personal funds spent suing an insurance company? The bank seizing customer funds obtained by a legal settlement and freezing the money?
Finally I ran out of money. YET YOU HAVE THE UNMITIGATED GAUL to defend these assholes and tell people the poor people over borrowed??
Well, it certainly sounds like this woman overborrowed, or she wouldn’t be stuck underwater with a 7.99% mortgage.
I attempted to borrower enough to shore the buildings up so I could still work BUT NO the mortgage and line of credit bank had reported to my credit that I missed three months of Line of credit payments.
Except they had the money in a checking account (over $220K!) to transfer the payments. THEY CHOSE to STEAL my money claiming to have been buying me lender placed insurance with Great American. OVER SIXTY NINE THOUSAND DOLLARS IN 18 MONTHS!!! Except turns out they quit doing business with Great American on March 1 2008. Bank never signed the new company American Modern until October 15th 2008.
So the bank literally STOLE MY PAYMENTS. THEY HAD NO INSURANCE POLICY!!!
Payments I stood in line PERSONALLY and was handed a receipt for each and every month.
So she got through everything with perfect credit, ran out of money as soon as she obtained the settlement, and the bank froze her money so she couldn’t make payments, destroying her credit. Hmmm…
Typically, lenders force borrowers to maintain insurance policies to cover any collateral for the lender’s loan. Usually, the borrower pays this bill either through an impound account or directly. The borrower is responsible for maintaining this policy. If the bank was using an impound account, then they would pay the insurance. If the borrower is making payments into an escrow account, the bank never sees this money as it sits in escrow until payments are made.
Her story has great drama, but it leaves a few unanswered questions.
OH EXCEPT the bank where I stood in line and made my payments and was handed a receipt wasn’t the bank that actually owned my loan. YEP it was just a bank with the same name/logo everything including every single employees referring (even bank officers in depositions) as BRANCHES. Except they we’re NOT. They were only owned by the same holding company.
So what?
This enabled the bank that owned the loans to ADD OVER $430.00 PER DAY to my loans by deleting processing the payments for 3 to 7 days EVERY SINGLE MONTH!! The bank could then add interest to the unearned interest they inappropriately added to my loans each and every month.
So she was making her payments on time, and the bank just arbitrarily decided to post her payment late and add $430 per day late payment fees — approximately $2,000 or more per month.
Does that smell like bullshit to you?
This same criminal organization submitted over 600,000.00 in payments to my line of credit except the Line of Credit payment in process comes through yet none of these payments EVER TOUCH MY ACCOUNT BALANCE!! This money just disappears!! Where do you suppose it went??? OH thats right this poor beleaguered bank was just doing the right thing.
Assuming this statement is partially true and this borrower made some payments, those payments were likely credited toward interest and late fees. Is she really suggesting the bank just arbitrarily took her money and gave her no credit for the payment? Why does this only happen in these silly victim rants?
My lawyer resigned as my lawyer and began work FOUR WEEKS later for the BANKS lawfirm. Yet I am sure you see no conflict there right?
Their lawyer told my lawyer the statement did not exist! The lack of statements is what allowed them to get away with the fraud they were perpetrating on me.
Surely this woman has some record of these payments. Unless she paid cash and failed to get receipts, then an electronic record of her payments must exist.
What seems more likely to you: this woman didn’t make payments, or she dutifully made all her payments, and the bank denies it to try to keep her money?
Your totally naive belief and ignorant, rude, totally uninformed, biased article that these poor banks are victims is what enables these greedy bastards to destroy the American Economy. I trusted these criminals too. After all Banks can’t do things that are illegal can they. You are totally uninformed and I believe intentionally ignorant as to the out and out fraud that is still going on with some of these banking institutions.
Before you get on your high horse and tell me what a freaking idiot I am …
Sorry, but your words speak for themselves.
the FBI is now doing a white collar crimes investigation into the BANK FRAUD including check forging (proven), Insurance scams where the bank stole payments supposedly to pay an insurance policy, except there NEVER WAS A POLICY! United Bank stopped doing business with Great American on 1 March 2008. They did not sign their new policy into effect until 15 October 2008 and then with American Modern.
Which banking institutions are paying you??? The banks want everyone to believe the party line. OH those crooked homeowners over borrowed and shafted us.
Yes I Know there were many people who borrowed irresponsibly. BUT they are not the majority.
And how does she know this?
Where is the REPORT where you INVESTIGATE the types of FRAUD that happened to me and others like me???
I have documented PROOF of every claim made. Right now I can tell you I have documented PROOF! YET WITH ZERO MONEY left to hire decent legal representation NOTHING AND NO one, unless this bank cannot buy the FBI and they actually perform an investigation, in going to step in and help me.
That’s because your claims sound like bullshit.
The things that supposedly enable America to work as a free society is that we are governed by the rule of law. When you knowingly approve and defend any entity buying our legal and financial systems you are selling our country out.
You want to report what really was occurring then come see the evidence before you put this overweening drivel out online. You are part of the problem enabling these banks to continue criminal behaviors.
Lets see some unbiased investigation and reports??? Right I didn’t think so.
How about this investigation: Ravings of an entitled whiner struggling to keep a house she can’t afford.
Or how about these winners: Grifters for God: fraudulently occupying a $1.3M home for five years.
Or the reformed Las Vegas Ponzis: Don’t stress about rising home prices.
Unfortunately, Robosigner David J. Stern’s law license is terminated. He could fix her problem.
[listing mls=”PW16165994″]
In the grand scheme of life, suffering the loss of a home to foreclosure is a minor event. Certainly, far less important then any chronic health issue, marriage. The damage is short term as it eventually rolls off your credit and you can purchase again. Face it. As long as you are alive and have your health, and your family is fine, you are winning, foreclosure or not.
People look at different events differently but yes as long as you aren’t dead and able, you can recover even if it’s not to the degree as before.
I’ll share a foreclosure in my family. My mom and aunt bought a triplex for about 350k in Orange (exact figures are on Zillow), they sold it for about 865k at the top of the market. My mom and step dad turned around and bought a 750k 5% down home in a very nice area of Orange, east Champan (still live there). They opted to start another business instead of putting down 20% (probably not smart but w/e), and eventually had about 250k combined income for several years. They still live in that house today, although I do believe they did some type of modification, (they weren’t very upfront about this). The homes in that neighborhood were selling at about 600-650k at the bottom of the market, not very far off from 750K, with some exceptions, that area is pretty nice so I think most people just don’t sell unless they have to.
My aunt and uncle turned around and bought a 685k in Orange, closer to the Mall of Orange or whatever is called now, near Taft Street. They put down 20% or about 140k, their mistake was getting an interest only loan, and frankly their income would have never sustained that type of mortgage without funny paperwork. My uncle ended up losing his average paying job which made it possible to afford the interest only payment. They lived in that house about 3-4 years max, I don’t remember exactly, they got foreclosed on fast. Had they played it smart they could have gotten another couple of years of free rent but I believe their bank was very aggressive and expedient with the foreclosure, or maybe most banks were at the beginning of the crisis. Homes in that area were selling for about 475k at the bottom of the market.
I learned to never get an interest only loan, to buy in the right zip code if possible, and to really make sure your income can sustain such a home with 3% or 20% down, because you may be one job loss away from losing everything. All this happened around 2009, My aunt and uncle still rent today in Orange, they want to own again but their income hasn’t recovered. They should be looking at retirement planning not a 30 year old mortgage.
Thanks for sharing your stories.
The foreclosure stories that suck, are those with seniors who lived in the same old house for decades, who were convinced to serially refinance taking cash-out, paying massive fees each time, and being placed in progressively more exotic unaffordable mortgages.
The seniors and the people who qualified for more stable financing but were sold riskier products because of the higher commissions and margins for the bank.
I know one person this applies to and he seems happier than ever. I’m sure it was devastating at the time, but he moved to a different area (the original house was in HB; He now lives in Houston) with a lower cost of living and only has to worry about paying rent without the burdens and responsibilities of home ownership. Mostly it’s his heirs that should be upset because any chance at a nice inheritance and easier life for them was squandered. Very short sighted on his part.
I feel bad for them, but at the same time, I dont feel so bad because they took out money and spent it on something else.
The losers in my story were, 1. Aunt and Uncle that lost their complete 140k down payment even though they weren’t very smart with this purchase. 2. The family that bought the triplex because they massively overpaid for 2, 2b 1bath unit and 1 3bed 2bath as an investment. 3. The bank even though they probably made all the money back and some.
I’m not sure who are the winners here since they both bought and sold homes at the top of the market. In my mom’s little neighborhood, average home price is 689k, and homes closer to comps are about 790k.
http://www.zillow.com/orange-ca-92869/home-values/
Key thing here is timing.
2016 housing highlights: Check out O.C.’s record shattering highs – and lows – so far
The median home price record was smashed. Twice. Apartment rents reached new heights, too.
Orange County saw the highest sale ever of a publicly listed residence, one set on a twin promontory jutting into the Pacific Ocean.
As more homes tipped over the line into seven-digit values, the market for those under $750,000 remained strong, and demand for affordable houses outstripped supply. An analysis published in June showed that in recent years, the Orange County and Los Angeles markets have had the most financially stressed homeowners among the largest U.S. metro areas.
In fact, major trends for the first six months of 2016 were similar to what they were a year ago.
“The resale market closings year over year were only two-tenths of one percent off,” says Orange County analyst Steven Thomas of Reports on Housing. “The numbers are nearly identical.”
With the Federal Reserve unlikely to raise rates this year, he figures, “It looks as if the second half will be a lot like last year, as well.”
Or, as he and others note, the election could make a difference. We’ll find out soon enough.
For now, the by-the-numbers, half-year highlights:
$657,500
Orange County’s median home price – the midpoint of all sales – hit a record high in June, surpassing the June 2007 peak of $645,000 for the second month in a row. The new median was up 4.6 percent – or $29,000, over June 2015. (CoreLogic)
18,470
The number of Orange County homes sold, up 2.4 percent over the first half of last year. (CoreLogic)
22.1%
Newly built home sales were up over the first six month of 2015. This year, 2,141 new homes were sold, compared to 1,754 last year. (CoreLogic)
23.7%
The percentage of all homes that were purchased with cash, down from a cash share of 26.1 percent in the first half of last year. (CoreLogic)
$45 million
Twin Points, a Laguna Beach estate with two headlands projecting hundreds of feet into the Pacific Ocean, sold in February, setting a record price in Orange County. The house and guest house on the unique parcel between Crescent Bay and Shaw’s Cove were relatively modest. Previously, the top sale was a newly built 12,000-square-foot, multilevel house in Laguna Beach that went for $35.5 million in August 2014.
$69 million
The priciest home on the Multiple Listing Service: President Nixon’s Western White House in San Clemente, owned by retired Allergan CEO Gavin S. Herbert for more than three decades. The iconic, 5.45-acre estate, initially priced at $75 million in the spring of 2015, is secluded behind private walls and fences, with about 15,000 square feet among all the structures, including a 9,000-square-foot main residence.
390 square feet
The smallest standalone house selling on the MLS had an unusual feature: A Sycamore tree poking through it. The house, set on a 7,841-square-foot lot in Modjeska Canyon by the Cleveland National Forest. was thought to be 268-square-feet, but an appraisal eeked out more. The home, at 28882 Foothill Drive, went for $315,000 in April.
$140,000
A Trabuco Canyon home listed at $200,000 was the cheapest standalone house sale. The residence, with 475 square feet, had one bedroom and one bathroom. Built in 1933, the home at 20731 Trabuco Oaks Drive on a 7,420-square-foot parcel, “has charm for the imagination and handyman,” the listing said.
$1,770
The average price for Orange County rents in the second quarter, up $62 or 3.6 percent year over year, according to real estate data firm Reis Inc. A survey by Real Answers, limited to large-complex apartments, showed a higher average – $1,946, up $98 or 5.3 percent for the same period in 2015.
53.6%
Slightly more than half of houses and apartments for rent in the county were considered affordable as of April, down from 64.3 percent in April 2015, according to a Trulia analysis. Orange County placed No. 2 for its shrinking affordability in the 25 rental markets around the nation that the real estate website analyzed.
$150,000
The monthly rent for a 7,200-square-foot house overlooking the Pacific Ocean in Laguna Beach’s secluded Irvine Cove. But the price includes more than luxe rooms and fancy furniture. The home comes with a personal chef.
$3.77 million
A landmark Balboa Island home by acclaimed architect John Lautner, on and off the market for the past six years, finally sold. Built in 1979, the home at 804 S. Bay Front has 2,100 square feet, three bedrooms and an elevator. The shape of the home at the water’s edge when it was being built reminded some of a great white shark and earned it a nickname among the neighbors: The “Jaws” house. It was listed in 2010 at $5.49 million.
Why your home appraisal may be lower than you think — and what you can do about it
Most sellers are delusional
With home prices on the rise, it’s easy to assume that property appraisal levels will increase accordingly. But that isn’t always the case.
Quicken Loans recently found in its so-called Home Price Perception Index that home values assigned by appraisers were 1.93 percent lower than what homeowners had estimated in June. For example, if an owner estimates that his or her home is worth $200,000, the appraiser’s value (according to the national study) would come in at $196,140 (1.93 percent or $3,860 less than anticipated).
“Perception is everything,” said Quicken Loans Chief Economist Bob Walters. “That’s why it’s so important for homeowners to realize [that] how they perceive their home’s value could vary widely from how an appraiser views it. If the estimate is lower by just a few percentage points, the buyer could need to bring as much as another several thousand dollars to the table to avoid having to restructure the loan.”
Prudent homeowners may be wise to look at criteria that is similar to what appraisers use and then come up with their own preliminary estimate of value. Any problems that are found can be repaired or remedied before the mortgage application is made and before the start of the subsequent formal appraisal process.
Pending home sales down monthly and yearly in West
The gains over the month of June in the Northeast and the Midwest were partially offset by monthly declines in the South, 0.6%, and the West, 1.3%. However, while the PHSI for the South partly offset the month-over-month gains in the Northeast and the Midwest, a growth rate of 1.7% for the past year contributed to the annual increase in the PHSI from these other two regions. In contrast, the PHSI in the West fell over the month by 1.3% and declined over the past year by 1.8%
Construction spending declines 0.6% in June
Spending on construction tumbled 0.6% in June, with declines spread evenly across the private and public sectors, the Commerce Department said Monday.
That was well below forecasts. Economists surveyed by Econoday had expected a 0.6% increase.
June spending of $1.13 trillion was 0.3% higher than a year ago, and outlays for the first six months of the year are 6.2% higher compared to the same period in 2015.
Housing seems to be holding its own: private residential construction was up 2.6% during the month, making it one of the strongest categories.
Trump slams Clinton’s ‘rosy-dory’ optimism
Donald Trump is condemning the optimistic picture of the nation that Hillary Clinton painted at the Democratic National Convention.
Trump, speaking at a rally in Denver Friday night, says Clinton was “talking last night about how wonderful things are.”
“She made it sound like everything is rosy-dory,” Trump says. “Things are not rosy-dory, folks.”
He claims Clinton ignored recent terror attacks and disturbing trends in long-term unemployment and housing purchases.
Many observers have said Trump’s convention in Cleveland outlined a very dark depiction of the United States.
Political rhetoric is nauseating. Everything’s black or white. The US is either in “great” shape, or “terrible” shape.
CFPB will update Know Before You Owe rule
Here’s everything in the works right now
http://www.housingwire.com/articles/37658-cfpb-will-update-know-before-you-owe
The mortgage-regulation balls are back in the air at the nation’s largest regulator of consumer debt products.
Staying true to its announcement back in April, the Consumer Financial Protection Bureau released a set of proposed updates to its Know Before You Owe mortgage disclosure rule after industry calls asked for greater clarity and certainty on the rule.
However, despite the welcomed changes, the bureau failed to address one major concern the industry asked for clarity on, the secondary market.
After the Know Before You Owe mortgage disclosure rule, also called the TILA-RESPA Integrated Disclosures rule, went into effect on Oct. 3, 2015, there were initial hiccups and headaches centered on how long loans would take to close, potentially causing a lot of problems for consumers who are strapped for time.
But a lot of these have past, and once those problems subsides, mainly the secondary market was left to experience the biggest pain points from TRID at this point.
Besides these addressed changes below, the industry, for now, will be required to heed the original guidance the bureau put out that “examiners will be squarely focused on whether companies have made good faith efforts to come into compliance with the rule.”
Here is the full explanation of changes from the CFPB:
1. Tolerances for the total of payments:
Before the Know Before You Owe mortgage disclosure rule, the total of payments disclosure was determined using the finance charge as part of the calculation. The Know Before You Owe mortgage disclosure rule changed the total of payments calculation so that it did not make specific use of the finance charge. The Bureau is now proposing to include tolerance provisions for the total of payments that parallel existing tolerances for the finance charge and disclosures affected by the finance charge.
What this means:
This change would make the treatment of the total of payments disclosure consistent with what it was prior to the Know Before You Owe mortgage disclosure rule.
2. Housing assistance lending:
The rule gave a partial exemption from disclosure requirements to certain housing assistance loans originated primarily by housing finance agencies. The bureau’s proposed update would promote housing assistance lending by clarifying that recording fees and transfer taxes may be charged in connection with those transactions without losing eligibility for the partial exemption. The rule would also exclude recording fees and transfer taxes from the exemption’s limits on costs.
What this means:
Through the proposed update, more housing assistance loans would qualify for the partial exemption, which should encourage lenders to partner with housing finance agencies to make these loans.
3. Cooperatives:
The bureau is proposing to extend the rule’s coverage to include all cooperative units. With a cooperative, a buyer becomes a shareholder in a corporation that owns the property. The buyer is then entitled to exclusive use of a housing unit in the property. Currently, the rule only covers transactions secured by real property, as defined under state law. Cooperatives are sometimes treated as personal property under state law and sometimes as real property.
What this means:
By including all cooperatives in the rule, the Bureau would simplify compliance.
4. Privacy and sharing of information:
The rule requires creditors to provide certain mortgage disclosures to the consumer. The bureau has received many questions about sharing the disclosures provided to consumers with third parties to the transaction, including the seller and real estate brokers. The bureau understands that it is usual, accepted, and appropriate for creditors and settlement agents to provide a closing disclosure to consumers, sellers, and their real estate brokers or other agents.
What this means:
The bureau is proposing additional commentary to clarify how a creditor may provide separate disclosure forms to the consumer and the seller.
Mortgage Bankers Association President and CEO David Stevens commented on the proposed updates saying, “MBA appreciates the CFPB’s efforts to update and clarify certain aspects of the ‘Know Before You Owe’ rule. This particular regulation has a big impact on both borrowers and lenders, so it’s important that the Bureau and stakeholders continually reassess the implementation process to ensure its effectiveness. We look forward to commenting on the rule, and continuing to work with the CFPB to gain further clarity in order to improve this and other rules and regulations.”
National Association of Federal Credit Unions President and CEO Dan Berger, while positive on the news, is still hesitant on if the changes are complete enough.
“NAFCU appreciates the CFPB revisiting the TRID rule and, at first glance, there appear to be a few positive components that we strongly advocated for on behalf of our members,” said NAFCU President and CEO Dan Berger. “Most notably, the bureau has taken our advice regarding the codification of its informal compliance guidance.
“However, the bureau has not gone nearly far enough to address the numerous substantive compliance issues that have been highlighted by credit unions. Although our compliance experts will continue to analyze the proposal to identify its full impact, NAFCU believes this should be the first step in a process to create a mortgage disclosure rule that is workable for financial institutions and benefits consumers.”
The CFPB stated that it is allowing input from a wide range of stakeholders and invites the public to submit written comments on the proposal. Comments are due Oct. 18, 2016 and will be weighed before final regulations are issued.
China’s debt
Coming clean
Plans to rein in credit slowly take shape
http://www.economist.com/node/21701793/print
AS ANYONE who has conquered addiction knows, the first step is admitting that you have a problem. China, hooked on debt for much of the past decade, may be reaching that point. In recent weeks officials have talked at length about the country’s troubling reliance on credit to fuel growth. They have also sketched out a range of possible solutions. It is only a start—withdrawal symptoms in the form of defaults and slower growth are sure to hurt, and could yet prompt a relapse. But the new tone is encouraging nonetheless.
The frankest admission came in a front-page article in the People’s Daily, mouthpiece of the Communist Party, in early May. An anonymous “authoritative person”, widely believed to be Liu He, an economic adviser to President Xi Jinping, warned that high leverage could spark a systemic financial crisis. China’s total debt load jumped from less than 150% of GDP in 2008 to more than 250% at the end of last year. Increases of that size have presaged economic trouble in other countries.
Last month the government convened its first news conference on the topic, bringing together officials from the finance ministry, the central bank, the banking regulator and a top planning agency. The Chinese Academy of Social Sciences, a prominent official think-tank, has also opined on it. The research arm of the central bank has published a paper with a section on what can be done. And this week, a forum in Beijing gathered officials, bankers and academics to sift through the suggestions.
All of them have homed in on corporate debt as the main worry. That is obvious enough from a quick comparison with other big economies: China sits in the middle of the pack for total debt but is at the high end for corporate liabilities (see chart). Yet it marks a change of tone from recent years, when officials focused on cleaning up the debt of local government. This presented a more immediate but smaller problem, and also a more manageable one.
The most important outcome from all the discussions has been an outline, albeit rough, of how China hopes to tackle its burden. There will be no rush to deleverage. Sun Xuegong, a central planner, said China would start by slowing the rise in its debt-to-GDP ratio before guiding it lower, trying to avoid too much collateral damage to the economy in the process.
Officials think they can cushion the blow from eventual deleveraging in three ways. First, they want to get more bang from new debt. That, in theory, means choking off credit to underperforming state-owned firms or restructuring them in the image of their sleeker private-sector peers. Loans would flow to better firms generating higher returns.
Second, they want equity financing to help replace debt. That is tough, given the woeful state of the stockmarket after last year’s crash. But there are other ways. Regulators are working on a programme under which banks will swap some loans to indebted companies for equity stakes instead. Banks have pushed back, fearing that they will be saddled with bad investments. Officials insist that only viable companies will receive this treatment.
Finally, the government will use fiscal policy to prop up growth, in effect transferring debt from corporate balance-sheets to its own. That makes sense: official public debt is low, at less than 50% of GDP, while state-owned companies are the biggest debtors. However, direct bail-outs would give state firms little reason to improve their operations. So the central bank’s researchers suggest other measures, such as tax cuts, which would improve the business environment for all.
Scepticism about whether China will end its credit binge is warranted. Last December the government identified deleveraging as one of its main tasks for 2016. Yet credit issuance has outpaced economic growth by a wide margin, raising overall debt levels. And China’s approach to state firms is inconsistent. Officials recognise that getting them to operate more like private firms, constrained by budgets, is critical to controlling debt. But at the same time the Communist Party recently reiterated that they must obtain its approval before making any big decisions. China is sure to keep one promise, at least: there will be no speedy resolution to its debt problems.
How China handles these issues is important because the next “black swan” could fly in from China.
I think Terry here is the owner of an apartment building which would explain the higher interest rate. I also think she did not understand that when an insurance payment is made on a property it goes to the actual OWNER of the property (the bank) not the debtor (her).
I don’t really get what the phrase “women owned business” is suppose to illicit. She used it a couple of times as if the system was stacked against her because of her gender. Typical victim mentality on this one. I guess she didn’t realize property investment entailed some risk.
Her story is difficult to follow because she is conflating what happened to her business and insurance company proceeds, with losing her home to foreclosure. Whatever happened with her business is a completely separate issue and has nothing to do with the mortgage they sold her or how that mortgage was serviced.
It sounds like the insurance company dicked her around (which is typical) and that started the chain of events causing her to lose the business. She is blaming the bank, but they are not the insurance company, and without the insurance proceeds there is nothing they can do. Losing her home was an indirect consequence of the insurance company’s actions and had nothing to do with the type of mortgage she was sold.
She may have been a responsible borrower just caught in a lousy situation. That is the risk you take when running a small business. Sometimes unfair things happen beyond your control that put you out of business. Irvine Renter’s original post had sympathy for people that genuinely lost their homes due to job loss without over borrowing, so I don’t see why she is so upset with him. Obviously, he is not a bank sympathizer, so her personal attacks don’t hold up.
I think my post was so antithetical to her world view, she felt threatened by it and needed to lash out to censor the dangerous idea if only in her own mind.
Obama will be the first US president since stats have been kept never to hit 3% GDP growth in a single year.
http://www.zerohedge.com/news/2016-07-30/barack-obama-will-be-only-president-history-never-have-year-3-gdp-growth
We just got another extremely disappointing GDP number. It was being projected that U.S. GDP would grow by 2.5 percent during the second quarter of 2016, but instead it only grew by just 1.2 percent. In addition, the Census Bureau announced that GDP growth for the first quarter of 2016 had been revised down from 1.1 percent to 0.8 percent. What this means is that the U.S. economy is just barely hanging on by its fingernails from falling into a recession. As Zero Hedge has pointed out, the “average annual growth rate during the current business cycle remains the weakest of any expansion since at least 1949″. This is not what a recovery looks like.
In addition, Barack Obama remains solidly on track to be the only president in all of U.S. history to never have a single year when the economy grew by at least 3 percent. Every other president in American history, even the really bad ones, had at least one year when U.S. GDP grew by at least 3 percent. But this has not happened under Obama even though he has had two terms in the White House.
What responsibility share of GDP should we attribute to the President?
Well he specifically promised that The American Recovery and Reinvestment Act would prevent unemployment from rising above 8%, which it did not. He then focused on passing Obamacare, which killed jobs, as opposed to helping businesses find ways of creating jobs. So as a President that took office during the worst recession of our lifetimes, I hold him responsible for not focusing on job creation. It’s the reason Trump exists.
Hmm, I’d say Trump exists due to both parties’ unwillingness and/or inability to address the causes and effects of trade with China, and years of extreme rhetoric by Republicans politicians and pundits.
I think economic anxiety is at the core of Trump’s support. It’s not the reason I support him, but it’s the reason the typical working class male is supporting him. For them, 2008 was the dividing line between economic prosperity (real or perceived), and the past 8 years of fear, anxiety, stress, and low self-esteem. Obama didn’t cause the decline but he has not made any real efforts at addressing it. Neither has anybody else. Obama also tends to talk down to people he disagrees with and the working class despises that.
And I’ve agreed with you previously, that spending so much political capital to reform healthcare delivery at that point in history, was ill advised.
Yep, I remember.
“which directly destroyed my small woman owned business”
She earns an A+ for victim class enhancement.
Of course the “destruction” and closure of a female-owned business is inherently more tragic and intolerable than the same outcome for a male-owned business, because…..???
This person who emailed her story, would have been much more effective in telling it, and convincing reasonable un-foolish minds of her plight, by remaining calm, refraining from hyperbole and uncontrollable rage, and by focusing and detailing the facts methodically.
I would have deleted that message. You have got too much patience IR, good thing you just got back from vacation…..
LOL! Thanks. I hope you enjoyed the post.
Chicago property tax bill double whammy: Increases plus an assessment hike
http://www.chicagotribune.com/news/local/politics/ct-chicago-property-tax-double-whammy-met-20160731-story.html
Anne McDermott had braced herself for a big increase in the property taxes on her Near South Side town home, but when she opened the bill last month, she was still taken aback.
She’d figured a boost of maybe $550 on the $4,214 she paid last year. That’s a jump of about 13 percent, the average increase on Chicago property tax bills for 2016. But McDermott’s bill went up by nearly $1,360 — more than 32 percent.
It was the result of being hit with a double whammy: Not only were huge tax hikes by City Hall and Chicago Public Schools taking effect, but the taxman came as he does every three years and reassessed the value of McDermott’s home. And he concluded it was worth a whopping 31 percent more.
“I had to sit down, and then I read things to see if I could make sense of it,” said McDermott, who moved to the city seven years ago from the western suburbs, where the tax rates were higher but the housing prices were lower. “It’s a little scary, because this is I think one of the largest property taxes the city has done, and that may not be the end of it.”
Thousands of home and business property owners in trendier parts of the city saw tax increases far above the average boost of 13 percent. Like McDermott, the growth in the value of their house for tax purposes — as determined by Cook County Assessor Joe Berrios’ office — far outpaced the growth in other parts of the city.
Those hefty assessed value increases compounded the effects of the recent tax increases, which Mayor Rahm Emanuel pushed through the City Council and Chicago Board of Education last year to shore up pension funds for city police officers and firefighters and give financially struggling CPS more money to pay for construction projects.
The practical effect is that folks in many city neighborhoods are rejiggering household and business budgets to come up with the money needed to make this year’s second property tax payment, which reflects the larger-than-expected increases and is due Monday.
In many cases, taxpayers are struggling to understand why their bills went up far more than anticipated. The explanation lies in the complex way property taxes are calculated in Illinois, and how property values factor into that equation.
How it works
Local governments — including the city, Cook County, CPS, the Chicago Park District and the Metropolitan Water Reclamation District — figure out how much money they want to collect from property taxes. That’s called the levy. Emanuel asked for a record property tax increase at City Hall and a larger-than-usual tax hike at CPS. The result was a much higher total property tax levy in the city.
County tax officials then take the total amount of money government wants and divides it up among all city property owners based on each home’s individual assessed value relative to the total value of all properties in the city. Think of it as a giant pie. If the whole pie is worth $100 and your piece is worth $1, you would pay one one-hundredth of the tax levy, or 1 percent of the total amount government wants.
If your piece of the pie is bigger than your neighbors’ — meaning your home is worth more — you’ll pay more in property taxes than they do. And if your home value goes up more than theirs, you end up paying for a bigger portion of any property tax hike.
The assessor takes a look at the value of homes and business properties in Chicago every three years. He did so last year, but your home’s new value wasn’t reflected until the property tax bill you got this year. In this particular reassessment, the tax man caught up with several years of growth during which property values were recovering after the Great Recession.
“The reason you saw such a huge increase in the more affluent neighborhoods, like the Gold Coast and Lincoln Park, is because they had a larger increase in values over the last three years, whereas other neighborhoods did not see as much of a rebound from the recession,” said Molly Phelan, a Chicago attorney who specializes in real estate taxation.
Data provided by the assessor’s office show that property values increased faster downtown, along the lakefront and in up-and-coming neighborhoods, where the median increase for single-family homes was 20 percent or more.
In Kenwood, Hyde Park, Wicker Park and Logan Square, the median increase topped 25 percent. In Old Town, Lincoln Park, the Gold Coast, the Magnificent Mile, Near North, River North — and even part of the “Hipster Highway” along Milwaukee Avenue in Ukrainian Village and Bucktown — the median increase exceeded 30 percent.
So folks living in those areas paid for more of the combined $425 million property tax increase for the city and CPS than folks who lived in economically struggling neighborhoods on the South and West sides. By comparison, the median increase was below 10 percent in such neighborhoods. Coming in with increases of a little more than 5 percent were Calumet Heights and Riverdale.
Many Northwest and Southwest side neighborhoods saw increases ranging from about 10 percent to 13 percent.
Homeowners who live in the areas that fell in the middle of that spectrum were likely to see tax increases close to the 13 percent average. Those at the bottom of the spectrum saw lesser tax increases — and in some cases possibly none at all — and those at the top were hit particularly hard.
A Tribune analysis of data provided by the assessor’s and treasurer’s offices show that the 10 biggest residential property tax increases occurred in single-family homes in River North, Lincoln Park and the Gold Coast. The business titans and sports stars who own many of the homes ended up with tax bills that increased anywhere from $67,429 to $104,909. In each case, the tax hikes topped 90 percent.
The impact
Property tax increases don’t only affect homeowners. They also can chip away at the margins of commercial property owners who don’t have the ability to immediately raise rents for the businesses that occupy their buildings.
Significant commercial property assessment increases along the booming Hipster Highway or in Fulton Market west of the Loop posed a problem for many owners who rent to business tenants with multiple-year leases that have fixed rates, Phelan said. To lower their tax bills in line with the revenue their property value generated, they had to appeal their assessments, she said.
“Obviously, they have to go back and appeal every three years to make sure that they’re not getting their valuations pushed up with the surrounding neighborhood, because they’re locked into” leases, Phelan said. “Which is a huge concern for the small landlords that operate in these up-and-coming neighborhoods.”
Phelan also recommended that homeowners who think their assessed values increased more than was warranted appeal their assessments. Although it’s too late to change this year’s tax bills, appealing could lower them in future years.
“You can always go back every single year and file a property tax appeal, and if it’s unsuccessful, it’s unsuccessful,” Phelan said. “They’re not going to raise it on you.”
This year’s tax increase is not the end of it.
“The unfortunate truth is that the pain is not over,” Phelan said. “It is just beginning.”
The city has locked into increases of at least $225 million over the next three years, while CPS is planning to increase taxes by an additional $250 million for teacher pension funding next year. That’s $475 million total over the next three years.
McDermott, the Near South Side town home owner in Dearborn Park, said she understands the city has chosen to raise more money to cover contributions to long-shortchanged public worker pension systems. And she said she prefers city living to the suburbs, even though she now does a reverse commute for her job as an office designer.
“The good news is the city is still attracting businesses, but the bad news is there is still a substantial pension shortfall,” she said.
“You kind of wonder — do you want to stay in the city?” she asked. “I don’t think I would move to the suburbs; it does make you consider other cities in the Midwest.”
This is what California would look like if Prop 13 were ever repealed.
I hope they get their official “I’m with her” or “With Hillary” banner because they can thank her and Obama for that property tax increase.
Well, they can thank the liberal policies in Chicago which are just a part of the Obama/Hillary admin.
Moderate Democrats are increasingly feeling isolated.
What Happened to my Party
The nomination of Hillary Clinton has been secured, but the future of the Democratic Party is far from certain. Despite the patina of unity at the end, the Democrats, like their GOP adversaries, seem divided as to their future direction. Each party is being pulled to the extremes by an increasingly unruly base which regards its own establishment as a cesspool of corruption, influence-peddling and naked opportunism.
For virtually all of my adult life, I have been a registered Democrat. But as the party has abandoned critical commitments to color-blind racial equality, upward mobility and economic growth, I have moved on to become a registered independent. This makes me part of the fastest-growing “party” in America – the politically homeless.
http://www.ocregister.com/articles/party-724083-democrats-economic.html
There’s no shame in being an Independent. I don’t think it’s being “politically homeless,” as much as it is being “party-less.” I have political/issue positions I hold, some dearly.
I agree. I like my cross-party independence. I see times when both sides of the political spectrum are correct, and I go with the times. I’ve voted for both parties in one cycle or another.
Personally, I don’t like to join a coalition until I know what the coalition stands for. Republicans just got remade into something most long-term Republicans find distasteful. That’s the price they pay for giving their allegiance to the coalition in advance.
I like being independent, and I would never be shamed into joining a coalition party because I’m partyless.
That is why I registered Libertarian after the 2004 election. It didn’t seem like I fit into either major party after Bush was re-elected. There isn’t much you can do to influence the parties, but I figured my registration could at least contribute to the declining number of California Republicans.
But, being registered as Republican in Southern or Northern California, is very reasonable.
I have to qualify California. My wife is from the Central Valley, where Republicans are the typical national type – very socially conservative.
Well, at the time my representative in Congress was Christopher Cox, who ended up becoming Bush’s appointee to the SEC, failing to do anything about the subprime crisis or the Madoff scheme. Basically, he was totally unqualified to lead that agency but he was a loyal Bush crony. I remember when it came time to vote in 2004, he didn’t bother putting up positions on his website. It was assumed he would be elected since it was a safe Republican seat, so why bother putting up fodder for your opponents? That really turned me off as well.