Santa Maria Penthouse Back on the Market – $14.9M
October 11, 2010 by Lucas Lechuga
As you may recall, Penthouse 4901 at Santa Maria was a bank-owned foreclosure that came onto the market this past May at an asking price of $12.9M. Later that same very day, the status of the listing changed to "closed sale" and showed a purchase price of $11M, or $1100 per square foot. Earlier today, I noticed that the amazing, 10,000 square foot penthouse at Santa Maria was re-listed last month, on September 10th, at an asking price of $14.9M, or $1490 per square foot. There's no question that Penthouse 4901 at Santa Maria is one of Miami's most coveted luxury penthouses. It will be interesting to see how long it remains on the market before garnering the interest of another buyer. I'll be sure to keep the penthouse on my radar and report the sales price after it closes.
View additional pictures and listing information for Santa Maria PH4901.
I went to a party there once and I can honestly say it was the nicest condo I’ve ever been in
This was a fishy deal back in the spring and it continues to be fishy. I hope someone at the bank is asking some questions.
It is easiest way of marketing without having to pay for it. It also sets a perception that it is worth that much.
It’s amazing how this website has changed.
Before there used to be a lot of interesting discussions here, now it has become just another brokerage website.
You deserve it Lucas, but just wishing you hade kept the essence a bit more
Hi Hugo, have you bought an apartment condo in Aventura yet? I remember you on here a long time ago talking about it.Have you heard from Renter Tom?
It’s funny how people keep complaining about the lack of discussions here. It takes two sides to have a discussion, but the bulls made it a point to run off the bears, so here we are. I used to enjoy Renter Tom’s commentary and links, etc., but I don’t blame him for not posting anymore.
Lucas
Any word of wisdom on the foreclosure mess? Are you seeing anyone trying to move back into their very own apartments like the guy on CNN trying to move back in to his $3.8 million house with his lawyer.
Except for maybe one case in a hundred, this new foreclosure scandal is just nonsense being drummed up by liberals and lawyers (but I repeat myself).
Anyone who thinks their mortgage is going to disappear because some piece of paper was lost or wasn’t notarized properly needs to get serious. All the foreclosure moratorium will do is delay the day of reckoning and keep the U.S. economy and r.e. market in the dumpster.
Remember, paying your mortgage is an affirmative defense to a foreclosure action. Going into court and saying, “No, your honor, I haven’t paid my mortgage for the last 17 months, but this piece of paper should have been signed by Person B instead of Person A” isn’t much of a defense. At best, it’s a delaying tactic.
Joe, Joe, Joe
From WSJ “………… Rep. Debbie Wasserman Schultz (D., Fla.) engaged in a heated exchange last weekend on the issue with Rep. Eric Cantor (R., Va.) on “Fox News Sunday.”
Mr. Cantor said that imposing a moratorium, as Ms. Wasserman Schultz urged, would shut down the housing industry.
“People have to take responsibility for themselves,” Mr. Cantor said. “We need to get the housing industry going again. We don’t need government intervening in every step.”
Ms. Wasserman Schultz responded: “Eric, you are not from a state where there are thousands and thousands of people being ejected from their homes through the reckless disregard for regulations….”
http://online.wsj.com/article/SB10001424052748704049904575554603037437086.html?mod=WSJ_article_related
Do you think anyone from this administration want to stop this? No – they want to keep these deadbeats in homes without having to pay for mortgage, taxes, rent …. Not to mention that they have no intention of paying the second mortgages, HELOC, credit cards. What next? Their cars cannot be repossessed if they fail to make payments?
Now – show me a single media report, which has highlighted the benefits of not paying the mortgage. One single miserable media report. Show me what these people are doing with the money! Average American household spends one third of their income on housing – mortgage, taxes, rent etc)
They are not paying mortgage, nor are they paying the rent, nor are they paying the mortgage after collecting the rent! We have reached a stage that people are bragging about it. It is the smart money now. On average $1500 free money per month. No income tax either. Wouldn’t you want to make it last as long as possible? There are flyers from the lawyers – $150 – $200 / month retainer and they will keep you in home for as long as 6 years.
Our legal system has become a joke. Some judges are throwing a book at the guy who is being evicted for nonpayment of rent, while ignoring the fact that the owner has not paid the mortgage or the taxes for years. They call it legality.
Deadbeats are getting as much as $10,000 to vacate the homes after foreclosure. Thanks to this administration and all those who wanted “CHANGE”. Now you have it.
Yes, it’s a total joke. The amazing thing is that even with millions of people not paying their mortgage, the economy is still in the tank. You can be sure the deadbeats are spending the hell out of their “free” money.
I miss living in Miami, but I’m happy I’m living outside the U.S. right now. If I was working and paying taxes in the U.S., I’d be going nuts. I can’t believe all we’ve had are a few protests in D.C. The working people might be making a little noise with the Tea Party, but with 45% of American households paying no taxes, it might be too late to take back the U.S. of old.
Poor and Unemployed:
Although I share your frustration with the pin head borrowers/dead beats/morons/(IDIOTAS!) who took out these mortgages and incurred these debts, you miss the point. The mortgage agreement is a matter of state law, not federal. While the Democratic majority would have you believe that the federal government can solve all of society’s problems and has the power to do so, a closer and more informed look at Article 1, Section 8 of the US Constitution reveals otherwise.
This is going to be a long, ugly, draw-out process. But, much like the flu or dysentery, it must run its course.
In the short term, HOWEVER, if you guys are looking to cash in on this crisis – – for those of you who are not connecting the dots and/or missed David Einhorn’s announced short of St. Joe (check out business insider’s website for a copy of the power point presentation)- – here is how you do it.
Short Bank of America. Short St. Joe (and any Florida company like it) – – if you still can. Short the parent company that now owns GMAC. Short Citibank. If you find a publicly-traded, non-real estate oriented company that was “dabbling” in real estate during the boom (e.g. GMAC) – – short it. Short it 5-days a week and all day on Sunday.
Why?
Because they are going to take huge losses on these properties. I guarantee it. You can bank on it. This ain’t rocket science folks.
We all know that cost basis (the price at which the properties were acquired/purchased and mortgaged) of 110% of the properties presently in or on the precipus of foreclosure exceed fair market value by, conservatively speaking, at least 45.7%. Because profit is the amount by which the sales price exceeds cost basis, there won’t be a lot of profits.
This is particularly true in markets such as Florida where the supply of available units clearly exceeds market demand. Thus, to sell/unload these properties at foreclosure, the lender will have to slash the prices to make the properties attractive to buyers. Thus, for example, the lenders will take a loss on the mortgage liability and the another loss when they sell the property at auction.
Now, if one assumes that Bank of America, for example, has over $1 bn in mortgage-based liabilities, it is not difficult to see that it won’t recover most of that capital; which will adversely affect its earnings and profits (E&P) and thus its earnings per share (EPS). Short the stock and you will earn a profit on the difference between the current stock price and that on the strike date.
Moreover, the holders of the derivative mortgage-backed securities (JP Morgan, Goldman Sacs,Citibank, hedge funds, etc.) are also going to take a bath on their mortgage back security long positions. Shorting them is riskier because they, logically speaking, covered their long positions with shorts.
scriv
scriv, i think you might be targeting the wrong folks with your shorts. many of the financials are only servicing the mortgages. most of the mortgages have been sold off into securities. now there is an outside chance the banks may have to buy back some of those mortgages-but i really don’t think that will happen. pension funds and hedge funds own a large chunk of these securities. also the fed and china have purchased alot of the government backed securities. but not quite sure how you can short those entities.
fannie and freddie were major contributors to the bubble. both sides of the aisle now want to get rid of those entities and return housing to the private sector. that cannot occur if you force BoA, JPMorgan, etc to buy back those securities. They wont have cash to loan out and the housing problem will crash again. just my 2 cents.
Scrivener
Gables is right on money. Banks are mainly the servicers in this problem. Fannie and Freddie (Or Uncle Sam – or you and me) are the one holding the bag. I am sure there are lot of smart people are out there in Washington. Here is a simple calculation. Two million homes in default. If each were to pay average $1000 monthly rent – that would be $2,000,000,000. In a year that is $24 BILLION. This can be recaptured by throwing these people out just like our courts throw poor people out of homes when they are late in paying the rents.
There is a old saying – Don’t fight the City Hall! When there are 10 stupid people in the room and you alone. They win! Unless, moral majority goes out and votes against all the politicians who support bailing out the deadbeats – we are doomed. If you think these deadbeats are the problem – wait for their children to grow up……. They will not only defualt on their financial obligations but will steal from the neighbors to buy the fancy cars and go to Starbucks to drink some expensive wine and eat some expensive Cheese (Yes! Starbucks is planning to serve wine and Cheese.)
This is Chicago tactic. Glass insurance anyone?
And we are debating about ending Bush era taxcuts! Too expensive for this country! Rich people get richer.
Everybody is EQUAL but some are MORE EQUAL. What a country! What a President!
Gables & Poor and Employed:
Fair enough. Maybe I am going after the wrong target. But…maybe not; particularly if Fannie and Freddy require the banks to buy back their loans because they were not properly securitized.
If lenders are required to buy back the loans that were shifted to Fannie and Freddie – – and Gables, you are right, they may not have the capital to do so and maintain profitability – – then the lenders will take major financial hits. The shell game orchestrated by the present administration and Congress – – where by noncollectable mortgage debt was, only seemingly, shifted off lender’s books through federal guarantees – – creates an enormous opportunity for financial gain for investors willing chase profits on the short side.
One of the myths I saw reported in the newspapers was that once a lender securitized a mortgage, it was a mere “trustee” and, as such, had to no liability in case the borrower defaulted. This myth is just that, a myth.
Securitization is merely a hedge – – in some cases a straddle – – whereby the lender offsets the risk of the mortgage default with a contractual obligation under which, for example, it agrees, in exchange for a stream of cash payments, to pay an investor a certain amount when the mortgage is paid off and the investor agrees to pay the lender a certain amount if the borrower defaults. The lender is still on the hook for the mortgage. The securitization merely allows the lender to shift the loan off their books for accounting purposes – – and generate a stream of income during the lift of the mortgage. Put in the most simple terms, securitization is the lender’s way of saying “who wants to bet borrower pays me back?”
Which brings me to the third issue here: if the mortgages are faulty, the securities (mbs, derivatives, etc) built on those mortgages are also faulty. If securities investors can’t foreclose because they were not given proper documentation, they will sue. Law suits are costly and damages could be huge.
scriv
poor and unemployed, your vision seems to get too clouded at times with politics to offer clear financial advice. don’t let your political bias influence your financial views. that is not a good path to prosperity long term. the majority of money is not made by ideology.
scriv, my overall view is all of the money and effort spent over the past couple of years has been to help banks regain a strong financial footing to stabilize our financial markets. if the government were to turn around and force all the banks to take back those loans, that would have been 2 years of wasted money. you may as well have just let the banks tank to begin with. the government will realize this, and develop a new program to make sure the burden is not entirely shifted back to the banks on the foreclosure issues. remember, today the issue is not the quality of the securities (everybody has accepted the fact the issues stink). the question is who has the legal right to foreclose. the mortgages are not being repaid-there is no chance the homeowners will keep their properties-they earned the right to lose them. it will be merely a situation to address what is the cost to legally recover the property for the mortgage owner.
what this does is delays the flood of REO properties-reducing supply over the near term. it also creates anxiety over the long term for buyers, because of the uncertainty in legality in purchasing a property. may end up being a bit of inadvertant help for the new home builders.
and scriv, completely agree with you on the legal costs if fraud and/or fault is found in the securitization process. but the SEC is in charge of overseeing this, and as of now I have not seen much action on their part. if the SEC does not take action, i think it will be very hard for the buyers of these securities to take any successful action as well. buyer beware?
Joe -“but the bulls made it a point to run off the bears, so here we are. I used to enjoy Renter Tom’s commentary and links, etc., but I don’t blame him for not posting anymore”.
Gee, I seem to remember it the other way around. The bears ran off the bulls(remember what you guys did to AJ?). RT promised he would run off to Canada because this country was goind down the drain. Let’s just hope he is a man of his word. Now if only the rest of those who promised to leave this country would keep their word.
This condo looks like a lobby of 900 Biscaune. I just been there, and the similarity is obvious.
Papercut,
That’s not the lobby. The picture above is of the penthouse that’s available for $14.9M.
“Bank Of America Getting Crushed As NY Fed And PIMCO Join Mortgage Putback Parade
nteresting! Shares of Bank of America (BAC) are getting crushed on headlines that the New York Fed and PIMCO are about to jump on the Bank of America mortgage putback bandwagon.
It’s particularly surprising to see the NYFED jump in on the action, since that means they’d be actively working to weaken Bank of America.
PIMCO is private, so their only interest is making more money. It makes sense.
All told, the parties may be looking for as much as $47 billion in reimbursements for soured mortgages.
The Dow is off 200 points.”
http://www.businessinsider.com/bank-of-america-getting-crushed-on-news-that-ny-fed-and-pimco-want-to-put-back-mortgages-2010-10
———————————-
Bring on the short-selling!!!!
scriv
you can short BAC to about $10, but it probably cannot go down much further from there. I would back up the truck and load up on shares at that point. that bargain would be almost as good as when it was sub $5 a share in the depths of the crisis. remember it has already fallen from $18 earlier in the year. FYI BAC paid nearly $2.50 a share dividend before the crisis. you can bet it will pay at least half of that within the next 2 years. how would you like to own a stock paying you 12.5% a year and up over the next 20 years-even without capital appreciation. remember BAC’s exposure to the bad mortgages is really through countrywide-which the government basically forced it to buy. still don’t think in the long term the feds will try to sink BAC because of this.
Gables, Scrivener – I do not offer financial advice. This is the worst administration this country has ever seen. This whole episode of robo-signers is just to energize the flock and get them to get off their a$$ and vote. They want the banks to stop foreclosures and scare / prevent the buyers from buying the foreclosed homes. They need time to create inflation, which will hold the home values, make the old debt go away. People who have money will lose, people who have debt will win. Perfect solution to wealth distribution.
They have tried and have succeeded in keeping their flock in the homes for free since they took the reins. They have used every excuse to do that without any regards to the consequences.
I do not know if you have any experience in Class actions in securities – the legal process goes on for years if not for decades. The litigation in settlement of these securities would go on forever. The sophistication of these parties and the public forum they are using indicates a strong political motive. They are trying the BoA in media not in a courtroom. Idea is to pressure the banks to stop the foreclosures completely in order to allow this administration to play Robin Hood. How do you justify, people breaking and entering the homes which have been purchased by others. Didn’t O.J. Simpson go to jail for trying to retrieve his own property? This is a country of law. We used to worship the constitution.
I have two neighbors who are not paying taxes, mortgages but are driving Merc. S500 and have boats costing over $100K. Both purchased homes with ZERO down and did not pay a penny from their pockets for the cars or the boats. Financed by HELOC.
In summary – you cannot play this table. It is rigged. Moment the banks fall in line, the government would step in to bail them out once again. Most likely, these moves may lead to further consolidation with Citi buying BoA. Fannie and Freddie are living in a government run orphanage and need a home.
Next Presidential election is two years away. That’s right Robin Hood is in WH for past two years.
Here is food for thought – You house will be twice what you paid in 2006 but the bread will cost you $100 a loaf. Heard about the currency war?
Lucas,I know. That penthouse looks just like 900Biscayne lobby. At least on this pic. Just my opinion, of course.
haha! conspiracy theorists of the world, unite!
P&U, you do realize the fed exists under two mandates-maintain price stability and ensure full employment (or growing economy). that is why they exist. they are doing exactly what they are supposed to do. deflation is a huge negative-more so than inflation. you may not like their actions-if so change the laws regarding the fed’s responsibility.
last i saw, inflation was near 1%-too low for growth. and your $100 loaf of bread is nothing more than your imagination. my daily costs have actually dropped in the past two years. i bet yours have risen the same amount. i’m sitting on cash so I love deflation. but it will just decrease demand and cause me to lose income in the future-really not a good thing at all.
the robosigners issue has nothing to do with the administration. it has everything to do with contracts and following the law-exactly what you say we are avoiding. it is simply an emphasis on the banks to make sure they are legally dotting i’s and crossing t’s before evicting somebody from their house. the foreclosures will still go through-just delayed because lenders were very sloppy in following the rules.
be careful about blaming administrations for everything. last time i checked, all these loans were made under the Bush administration with a Republican controlled congress. so is it their fault we are in this mess to begin with?
Gables on U&P
Thanks for cutting through P&G’s politcal agenda and clarifying the facts. It’s refeshing especially during election season.
gables — The robo-signer issue is a lot more than making banks “dot the i’s and cross the t’s.” Lawyers are going into court and getting judges to agree that anything less than the original mortgage document and/or original title is unsatisfactory for purposes of foreclosure. This is so absurd it’s beyond comprehension. Imagine if you had to keep the original title to your condo in your pocket at all times, and then, if you lose the title, or put it in the washing machine by mistake, or some guy spills coffee on it, your right to your home evaporates forever. This is what’s happening right now in the courts (and media), and it’s absurd. Maybe 1% of foreclosures have legitimate issues, which could have been addressed without a national foreclosure freeze and without raising foreclosure costs by a factor of two or three (or more).
gables said: “be careful about blaming administrations for everything. last time i checked, all these loans were made under the Bush administration with a Republican controlled congress. so is it their fault we are in this mess to begin with?”
— Come on, man, I thought you were better than this. Anyone who knows anything about the r.e. mess knows Bush proposed to reign in Fannie and Freddie YEARS before the r.e. meltdown, but he was both rejected by Barney Frank (and his Dem cronies in Congress) and harshly rebuked by the media for being “anti-poor.” At least 95% of the r.e. meltdown was the result of extending huge loans to people who had no business getting loans, which was a 20-year pet project of the Democrats that has come home to roost in a big way. Remember “redlining” and “community reinvestment” and all that nonsense? Those were just codewords for “liberal reasons for forcing banks to give loans to people with horrendous credit.” (BTW, this was something Obama was personally involved with in Chicago in the ’80s and ’90s.)
Clearly, the Bush administration wasn’t perfect when it comes to banks and financials, but if anyone is going to assign blame for the r.e. meltdown in a fair, neutral manner, Dems get at least 80% of the blame. All the spin in the world can’t change that.
Joe, you need to get the facts straight. Maybe you were stuck in Mexico “working” during the bush years but that is no excuse for posting blatantly false info. You choose to simply ignore Bush advocacy of home ownership in his push for the “ownership society”. You also choose to ignore the fact that Most sub prime loans were issued by unregulated independent mortgage companies and investment banks who were not regulated by CRA. The CRA has been law since 1977 but you and your right wing hacks find it politically expedient to blame this policy for the cause of the housing crash. Once again you are wrong, it is not dems or repubs to blame for the sub prime mess. The bubble lasted from 2001 to 2006, those were years the republican had control of congress and the presidency, how can you say dems are 80% responsible? Market forces saw an opportunity to take advantage of market conditions and it did what comes naturally. This wasn’t the first bubble and it won’t be the last. You really need to educate yourself with the facts before you repeat the fox news talking point.
OK Guys! What is QE2? Is it Queen Elizabeth II they are talking about or about printing money and giving it to WH to give to unions?
Just because a girl gets raped once, that does not mean the next guy who comes along has the right to rape her.
What was your opinion of the Miami real estate market in 2005? How many people did you tag as conspiracy theorist back then? Hell everyone was beating drums of Miami real estate and how it could never fall!
How quickly we forget about the people who lied on the mortgage applications. Shouldn’t they go to jail? So this administration want to put some people who earned $10 / hr, signing papers in jail. What would be the purpose? Scare other employees so the banks will have difficulties in finding people to sign the papers? End result? prevent foreclosures and let people live in the houses for free? What should we call these housing units? No income housing.
What about deflation? How can you discount the core rate when the energy and food prices have skyrocketed and remained in the stratosphere for past 5 years? If we did not have inflation when people were spending the funny money they did not have – tobe precise $2.3 trillion, why would we have to worry about the deflation when people do not have the funny money to spend. I have seen and lived in the spriraling inflations of Mexico, Brazil, Argentina, hell – all of central and south america starting from 70’s. You do not want to wish that life. That is when wives, sisters, daughters start to walk the streets. Grandfathers, fathers, uncles, brothers, sons become the agents.
“No income housing” is awesome. Well done, P&U.
It’s amazing to me that we’re years into this r.e. meltdown and economic recession but most people still seem to think it’s cyclical rather than structural. The people and government of the U.S. have spent billions upon billions of dollars yet we’re still at zero inflation (or even deflation). Think about that for a second.
When the cable news programs show the riots in France and Greece, they should splash a “Coming Soon” graphic on the images, just like a movie preview. Those problems and harsh realities are indeed coming soon.
Joe, have you forgotten about the Bush home “ownership society” and its great good for our country? Now you tell me, if the Republican’s controlled the WH for 8 years, and the Congress for 6 of those years, and did nothing to fix a problem you say they were aware of-what in the heck were they doing all those years?
you said “At least 95% of the r.e. meltdown was the result of extending huge loans to people who had no business getting loans, which was a 20-year pet project of the Democrats that has come home to roost in a big way. Remember “redlining” and “community reinvestment” and all that nonsense?” Are you serious about this? I guess Brickell and downtown Miami were redlined districts with poor minority buyers. The big money losses in mortgages did not come from these poor neighborhoods-they may be foreclosed on but never really bubbled. The big losses come from middle and upper income city center and suburbs in FL, CA, NV and AZ. The no documentation loans were the result of poor regulation enforcement and the greedy banks/securitizers-not public policy. Quit listening to the talking heads on TV.
P&U, you said “What was your opinion of the Miami real estate market in 2005? How many people did you tag as conspiracy theorist back then?” I thought it was overplayed back then, which is why i did not buy. Its getting back to reality now.
P&U you said “What about deflation? How can you discount the core rate when the energy and food prices have skyrocketed and remained in the stratosphere for past 5 years?” Show me the data that indicates all this inflation. It does not exist. And my own pocketbook agrees. P&U, i used to have the same view as you. Then I looked at the real data, and it tells a completely different story. Again do not let ideology confuse you with the facts.
Nice to see the blog picking up again. I visited Miami and this time spent some time in the Brickell area. I actually felt is was a nice contrast to the touristy SOBE scene. Just wondering if anyone can tell me how I can find out how well a building’s HOA is doing? In particular Emerald at Brickell. Will the association give me info directly? Gables I believe you were looking in this area as well. Any thoughts?
Gables, I hope you heard Shaun Donovan’s interview on CNBC this morning. – “All this is about making sure that the some of the banks do everything possible to keep people in their homes”
Great news! So we have no foreclosures, no REO, no sales and no jobs!
“Then I looked at the real data, and it tells a completely different story. Again do not let ideology confuse you with the facts.”
————
Where is real data? Glass is half full or half empty? According to data, we are not even in recession. Home sales are up and milllions of jobs are being created every month. Actually they did include 450K census jobs to show job creation earlier this year. Wake up! Do your own research, read between the lines. Have you ever paid attention to revised numbers? Did all the REAL data point towards the real estate collapse or it was that one weekend, when aliens caused the financial meltdown around the world?
gables — Yes, I remember the “ownership” society that Bush liked to endorse. But I don’t recall Bush, or anyone in his administration, endorsing the issuance of $650,000, interest-only, no-down-payment mortgages to bus drivers. In fact, I remember quite the opposite, but as with Social Security reform and Medicare reform and Katrina, etc., Congress and our other “leaders” didn’t want to take charge, make tough choices, and risk a public backlash. They just wanted to keep the gravy train running, and now here we are, pretending it’s a big mystery how we arrived at this desolate economic destination.
Also, I didn’t say poor people caused the r.e. meltdown. My point was that once lax underwriting standards took hold in poor/bad-credit neighborhoods — which basically happened under government duress, as the Al Sharpton/Jesse Jackson crowd was threatening boycotts against banks that didn’t comply — the same lax underwriting trickled up to middle-class borrowers, which then collectively leveraged itself to the hilt (actually, beyond the hilt). Obviously, the numbers are bigger in Brickell and Las Vegas than they are in Little Haiti, but it all traces back to the same misdeed: lax underwriting.
Poor and Unemployed:
QE2 stands for “qualitative easing,” round 2. Alternatively, think of it as “qualitative easing 2.0”
scriv
Joe, banks did not put themselves and investors into bad financial positions because of duress from the government. that is a huge copout where you try to make the dems scapegoats. banks got us into this mess because they are greedy and did not follow the rules. government oversight was negligent, i fully agree, but they did not put a gun to the banks head and say make this loan. there was a big scam going on by the banks, people buying homes and regulators. you need to remember to spread the blame around. and again, i point out this mostly occured under a Republican controlled WH and Congress. I am not a Democrat, but i do make a point of emphasis when this bias of blame exists on Democrats to remember who was in charge when the bad things were occuring. And since 2006 the Dems didnt help matters-but the problems were already in existence at that point as well.
i just find it funny how when businesses make bad decisions for the country, they were forced to by Dems. but when they make good profitable decisions, it was because Reps provide freedom to do so. it has become very scapegoat PR in the media, but it is just not true. businesses do good and bad regardless of the political powers in influence at the time.
P&U, can’t really follow your rant. the data i refer to is related to inflation-it is not occuring. and yes, the real data did point to a RE collapse-which is why i did not buy-even when i had a 50% mortgage match from my employer in 2006. home prices (in MIA) far exceeded income-hence the bubble. it was rather obvious to me at the time.
gables — You are revising history in a truly troubling way. It’s simply ludicrous to flatly blame “the banks” for the r.e. meltdown given that they couldn’t have extended the damn loans in the first place but for massive GOVERNMENT complicity. Do you really believe the banks would have been extending these putrid loans if Fannie and Freddie weren’t buying all the garbage paper the banks were writing? Again, I’m not some big pro-Bush, pro-Republican apologist, but the facts are the facts. Just like Bush tried to reform Social Security and got obliterated in the media, he tried to reform Fannie and Freddie and got rebuffed by Congress. You can search high and low, and you won’t find right-wingers who supported giving LIAR loans to anyone with a pulse, FICO be damned. As Kevin Bacon’s character said in “A Few Good Men,” these are the facts, and they are indisputable.
the banks, and mostly mortgage brokers, were not properly underwriting these mortgages according to the rules fannie and freddie defined. now F&F failed in their part to check that the underwriting was correct to be sure. but the initial parties knowingly conducted sustantandard due diligence because they knew they would not have to hold onto the mortgage. they committed the improper action first, and F&F did nothing but enable it. but don’t blame the bar for the alcoholic walking out drunk. or do you want to live in a nanny state where the government tells you what you should and shouldn’t do?
remember, many of these really bad loans did not go through F&F-they came on board really late because subprime was not in their mandate initially. many of these subprime loans were securitized through the private sector because of the supposed money that could be made-without government backing. government had a hand, no doubt, in enabling this stuff to happen. but much of the bad behavior occurred strictly within the private sector, trying to pass risk on from one entity to the next like a hot potato.
Joe…you are funny. Banks own the government in this country. If you have a dog you probably have no clue which side is the head and which is the tail. “Banks were made to do it” is the most hillarious thing I’ve ever read.
and there are many banks who moved through the RE and financial crisis with very few problems-because they stayed out of the broker and securitization game being played. yes they had to live off of smaller profits-but they chose to be not greedy and the result was not being bitten. banks could make money outside of this RE game-but many chose to participate in the game because it appeared to be a one-sided risk-reward scenario. in the financial world its called chasing yield-and typically does not end well for the last man holding the bag.
gables — So Fannie and Freddie shouldn’t have bought the paper, but somehow it’s still all the banks’ fault. That’s rich. We have a president of the United States who actively pressured banks to give loans to high-risk borrowers throughout the ’80s and ’90s, but somehow the whole r.e. implosion was entirely the banks’ fault.
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Papercut — Nice try, but I didn’t say the banks “were made to do it.” I simply pointed out the FACT that bank underwriting standards were under assault from the government and liberal interest groups dating back to the ’80s, and things snowballed in the 2000s. Banks have always been greedy, but before around 2002, they weren’t stupid. During the r.e. boom, banks simply reacted to market pressures — the government (and then, later, the private sector) created a market for garbage loans and the banks were happy to supply them. It’s as simple as that.
joe, you said “So Fannie and Freddie shouldn’t have bought the paper, but somehow it’s still all the banks’ fault. That’s rich.” Yes. It takes two people to complete a deal. Either side can say, nope this is not correct. contrary to the media portrayal, the banks were not forced into making any type of loans at all. integrity and ethics should play a role in business. And i fault the banks far more than F&F in this case. And for full disclosure, I own alot of banking stocks so i have a vested interest in protecting them. but they are not really defendable. at the same time, i don’t think the banks owe any of these investors “put backs” on the securities they purchased. they knew what they were buying just like the banks new what they were selling. the innocence argument carries no weight with me.
just as a side note, joe said “During the r.e. boom, banks simply reacted to market pressures — the government (and then, later, the private sector) created a market for garbage loans and the banks were happy to supply them. It’s as simple as that.” so market pressures are justification for not doing the right thing? i guess there exists personal responsibility, but that is abdicated in the world of business?
Miami2009, i have not had much success obtaining HOA information. although i will admit i have not looked that hard since serious purchase opportunities never really materialized. i really liked emerald-almost rented in the place a few years ago. the HOA costs seem excessively high-and rumor has it mortgage fraud was rampant. but the view from the pool deck atop the building is amazing-although rather windy. my preference is coral gables over brickel-but to each their own.
Some of you guys have a very selective reading! Too much noise and very little substance.
Those big fat cat bank shareholders enjoyed losing their life savings, 401K’s and now they blame the poor deadbeats for not letting them lose more. With all their fancy 401k and their savings they think they own the world.
They call me deadbeat but I have the boat, and a expensive cars not to mention the mansion I live in without paying my mortgage! What do these bank shareholder have to show? Good Credit1 Ha! Ha! Ha! Show it to Obama and he may give you a job at the soup kitchen waiting on me.
Joe, seriously you really need to get you head checked. Are you saying the government made the banks give 729K loans to lettuce pickers with a 14K annual salary. The government made banks accept vastly over valued appraisal on run down shacks not suitable for an out house? Dude you are really out there. The truth is that sub-prime mess started with wall street bankers and their packaging of the junk and selling it to their clients all around the world. They sold it as AAA securities and clients couldn’t get enough of it. Independent Mtg Companies would give anyone who could fog a mirror a mtg and made lots of money doing so. Wall st would buy the junk and re-package it to clients all around the world. Conventional banks saw how lucrative the business was and decided they wanted some of the action. Freddie and Fannie decided to get into the game and as the last ones in they got stuck with a bunch of shit on their books. As gables said if the Govt. forced banks to write those garbage why is it that some banks and savings institution had very little of that garbage on their books. Did they get some kind of exemption? Get real.
gables — You seem to be drawing lines wherever you feel like it. You say it “takes two” to complete a deal, but you assign all the blame to the banks and not much to Fannie and Freddie (despite the fact Fannie and Freddie, if they had done their jobs, could have prevented most of the crap loans from being made in the first place). Then you switch gears and say the banks don’t owe put-backs to investors, despite what you call unethical activity by the banks. This makes no sense. Are you seriously saying that the banks’ unethical activity exempted Frannie and Freddie from blame, but not the investors? If the investors should have known, then the much bigger Fannie and Freddie should have known.
Most oddly of all, you said absolutely nothing about the ethics of borrowing money and not repaying it. You seem to score this 100% banks’ fault; 0% investors’ fault; 0% Fannie and Freddie’s fault; and (amazingly) 0% borrowers’ fault. With all due respect, you’re exhibiting some strange logic here. From reading your comments, one gets the impression bankers dragged millions of people into their offices and forced them to borrow way more money than they could afford to repay. I was in or near plenty of banks from 2002-08; how did I not see this happening? I guess I should thank my lucky stars none of these nefarious bankers forced me to borrow way beyond my means. (Sorry to be so snarky, but I can’t believe what I’m reading here today.)
Makes Me Think — No, you get real. You and gables need to check your facts. As I’ve said repeatedly today and as just about every analyst now agrees, Fannie and Freddie could have preempted 90% of the r.e. mess by simply refusing to buy the first waves of crap paper issued by the banks. The MBS craze didn’t take off like wildfire among private investors until **AFTER** Fannie and Freddie had fanned the flames by encouraging and buying bad paper. Had Fannie and Freddie not bought the first waves of the crap — which gave it the appearance of a performing asset — then the secondary MBS wave never would have happened (or would have been far, far smaller). The MBS craze didn’t pop up out of the blue in 2002; it came later in the boom/bubble. This is a simple fact.
Makes Me Think said: “As gables said if the Govt. forced banks to write those garbage why is it that some banks and savings institution had very little of that garbage on their books. Did they get some kind of exemption?”
— You’re dreaming. Please name some major banks that weren’t heavily involved in the r.e. boom/bust. A few smart ones might have jumped off the train right before it crashed (i.e., dumped the bad paper), but for you and gables to claim that a large number of major banks/financials totally sat out the r.e. boom is utter nonsense. It’s fiction.