Good, bad? I don't know. I know one thing, Disney will never let them go.
“This is really weird!” she recalled saying to the man, whom she had found on Craigslist. “I don’t even know you, and I’m leaving my apartment in your hands.”
The apartment, yes. And also the books, the candles, the rugs, even the standing mixer in the kitchen. “All of that stayed,” she said. “I just took down my photos.”
The arrangement, for $3,000 a month, went well, though Ms. Rey found the month-to-month renewal process frustrating. When her first tenant cleared out in May, friends of her brother signed a one-month lease, and she started looking for her next tenant. She returned to Craigslist for a replacement. This time, her luck was not so good.
She rented the place to a dancer who agreed to stay for the summer. But at the beginning of August, the young woman moved out without paying for most of July. She still owes Ms. Rey $2,000.
Gary Malin, the president of the Citi Habitats, a New York brokerage, says few brokers spend much time on sublets, furnished or otherwise. Many of those transactions are conducted online on sites like Craigslist and sublet.com.
“It’s not as lucrative,” he said. “A lot of owners don’t price their apartments appropriately, and some want to do things outside of their board’s approval.”
Farnoosh Torabi’s studio apartment on West 80th Street has been listed for rent since the first week of July, but she has yet to receive a nibble. Earlier this month, she decided that she would pay the broker fee herself.
“I feel like listing it as a no-fee is going to help it a lot,” she said. “Whoever is looking at a studio doesn’t have a huge budget.”
Compared with subprime loans, option ARMs are fewer but tend to have larger balances. Resets on option ARMs in recent years have often doubled the payments.
“Everyone’s been focused on subprime, but we’re more concerned about this,” said Todd Jadlos, managing director of LPS Applied Analytics, which analyzes data for the financial industry. “By the time subprime defaults had increased 200 percent, in June and July of 2007, option ARMs had gone up 400 percent. People just didn’t notice because the overall numbers weren’t as high.”
First American CoreLogic anticipates 600,000 option ARMS will reset within four years.
Option ARMs, which lenders stopped offering last year, gave borrowers four payment options: less than the interest, which increases the balance every month; just the interest; the equivalent of a 30-year fixed-rate mortgage; and the equivalent of a 15-year fixed.
Three-quarters of borrowers take the minimum option, which usually expires after five years or when the balance reaches a cap, generally 110 percent to 125 percent of the original loan, according to the Mortgage Bankers Association.
Once the cap is reached, borrowers have to pay down a higher balance at a higher rate in a shorter period of time.
“This was a loan meant for sophisticated investors, or people who expected their cash flow to increase over time,” said Elena Warshawsky, a residential credit analyst with Barclays Capital, which expects 81 percent of the option ARMs originated in 2007 to default, with many ending in foreclosure.
HGTV’s new series "Uprooted" is looking for high-energy home buyers
who are saying goodbye to their hometowns, totally picking-up, and
moving to a new place where everything is different. Whether they’re
moving from the mountains to the ocean, a major city to the country,
or making a move overseas, HGTV wants to hear your story.
In order to qualify:
• you must have begun the closing process on their new home or will be
closed mid September '09
• your old home must not immediately be occupied (unless current
residents would allow filming)
• you must not be moving because of retirement or military reasons.
• Price range must be between 400k to 1 million.
We are especially looking for families moving to or from one of the
• New York
• New Mexico
Candidates and realtors who are chosen for the show will receive compensation.
If you have the perfect clients and want to be on the show, e-mail
-your contact info
-where you are moving from
-where you are moving to
-when you are are moving
Few economists expect the country to return to the relatively flat income distribution of the 1950s and 1960s. Indeed, they say that inequality is likely to remain significantly greater than it was for most of the 20th century. The Obama administration has not proposed completely rewriting the rules for Wall Street or raising the top income-tax rate to anywhere near 70 percent, its level as recently as 1980. Market forces that have increased inequality, like globalization, are also not going away.
But economists say that the rich will probably not recover their losses immediately, as they did in the wake of the dot-com crash earlier this decade. That quick recovery came courtesy of a new bubble in stocks, which in 2007 were more expensive by some measures than they had been at any other point save the bull markets of the 1920s or 1990s. This time, analysts say, Wall Street seems unlikely to return soon to the extreme levels of borrowing that made such a bubble possible.
But if the rich have done well in bubbles, they have taken enormous hits to their wealth during busts. A recent study by two Northwestern University economists found that the incomes of the affluent tend to fall more, in percentage terms, in recessions than the incomes of the middle class. The incomes of the very affluent — the top one ten-thousandth — fall the most.Over the last several years, Mr. McAfee began to put a large chunk of his fortune into real estate, often in remote locations. He bought the house in New Mexico as a playground for himself and fellow aerotrekkers, people who fly unlicensed, open-cockpit planes. On a 157-acre spread, he built a general store, a 35-seat movie theater and a cafe, and he bought vintage cars for his visitors to use.
He continued to invest in financial markets, sometimes borrowing money to increase the potential returns. He typically chose his investments based on suggestions from his financial advisers. One of their recommendations was to put millions of dollars into bonds tied to Lehman Brothers.
Foreclosure rates in the U.S. remain near record highs. More than 13% of American homeowners with a mortgage are either behind on their payments or in foreclosure. The latest report from the Mortgage Bankers Association, released today, shows the percentage of loans that entered the foreclosure process dipped slightly to 1.36%, down from an all-time high of 1.37% in the first quarter.
However, that number may soon rise again as mortgage delinquency rates continued to climb in the second quarter.
That news is no surprise to Karen Weaver of Deutsche Bank. She startled everyone a few weeks ago when she predicted that, by 2011, nearly half of American mortgage holders would be underwater (meaning that they'll owe more on their mortgages than their houses were worth).
New figures showing a decline in wholesale prices and a drop in new-home construction highlighted how weak the economy remains, even as some optimists declare the recession to be over.
Producer prices fell more than expected in July as the costs of food and energy slipped, the Labor Department reported on Tuesday. The 0.9 percent monthly decline came after three months of increases, and suggested that demand was weak up and down the ladder of production, from consumer goods to intermediate goods like chemicals and rubber to raw materials.
Producer prices declined a record 6.8 percent from last July, when crude oil prices soared above $145 a barrel and pushed the costs of fuels, food and other products sharply higher, before they fell back amid the global financial crisis. The decline in the last 12 months is the largest drop in 60 years, since the government starting keeping such records.
So-called core prices excluding food and energy costs fell 0.1 percent, their second monthly decline of the year.
The figures offered more evidence that inflation remains a distant concern for the American economy, even as some investors speculate that higher oil prices, rising interest rates and a weaker dollar are in the pipeline, a result of the government’s enormous recovery programs.
On Friday, the government reported that consumer prices were unchanged in July from a month earlier and were down sharply from a year ago, reflecting the drop in gasoline and transportation costs. Economists say that there is still tremendous slack in the economy, and that wages are likely be flat over the next few months as unemployment ticks up.
“The economy remains weak and even as it begins to recover, the amount of excess capacity is high,” said Peter Kretzmer, senior economist at Bank of America.
Hard times are causing more homeowners to fall behind on their property taxes. But in thousands of cases, they are not responsible to their local governments, but to private companies that charge double-digit interest and thousands of dollars in service fees.
This is because in recent years struggling cities and counties have sold their delinquent tax bills to the highest bidder. It seemed a painless way to turn old debts into cash to finance schools or public services.
But housing advocates say the private companies may be exacerbating the foreclosure crisis, pushing out homeowners faster than would governments, which are increasingly concerned about neighborhoods becoming wastelands of abandoned properties.
“In the beginning, you’re getting this immediate windfall of cash,” said Anita Lopez, the auditor of Lucas County, Ohio, which sold off more than 3,000 tax liens for $14.7 million. The county includes Toledo. “But when you think about abandoned properties, foreclosed properties — the cost to the community is far more expensive than the short-term benefits.”
Investors say the arrangement actually benefits everyone. School districts, fire departments and public parks get an infusion of cash. The investors take on a risky but potentially high-yielding investment. And taxpayers do not have to pick up the slack from scofflaw landlords or tax evaders.
Governments, of course, can charge interest and penalties too, and they foreclose on properties for back taxes. But governments charge interest rates that are half what private investors charge — often offering no-interest payment plans — and are also more likely to be concerned about the long-term prospects of neighborhoods.
"How would you feel? This is terrible. This is really awful. I can't imagine it. Some young kids are dead because they're stupid."
Westchester County entered into a landmark desegregation agreement on Monday that would compel it to create hundreds of houses and apartments for moderate-income people in overwhelmingly white communities and aggressively market them to nonwhites in Westchester and New York City.
The agreement, if ratified by the county’s Board of Legislators, would settle a lawsuit filed by an antidiscrimination group and could become a template for increased scrutiny of local governments’ housing policies by the Obama administration.
“This is consistent with the president’s desire to see a fully integrated society,” said Ron Sims, the deputy secretary of housing and urban development, which helped broker the settlement along with the Justice Department. “Until now, we tended to lay dormant. This is historic, because we are going to hold people’s feet to the fire.”
The agreement calls for the county to spend more than $50 million of its own money, in addition to other funds, to build or acquire 750 homes or apartments, 630 of which must be provided in towns and villages where black residents constitute 3 percent or less of the population and Hispanic residents make up less than 7 percent. The 120 other spaces must meet different criteria for cost and ethnic concentration.
The county, one of the nation’s wealthiest suburbs, has seven years to complete the construction or acquisition of the affordable housing.
Affordable housing is defined by a complex formula, but generally it is meant to help working families keep from spending more than a third of their gross income on housing. A family of four could make up to $53,000 as a tenant and up to $75,000 as an owner and still qualify.
There is no minimum income level, “but it’s not going to be no-income,” said Craig Gurian, executive director of the Anti-Discrimination Center, which filed the lawsuit. “This agreement is not focused on facilitating housing for the poorest of the poor.” The center is a nonprofit anti-bias advocacy and litigation group based in New York City.
“Residential segregation underlies virtually every racial disparity in America, from education to jobs to the delivery of health care,” said Mr. Gurian.
No communities have been chosen to receive the homes, officials said. But according to the Anti-Discrimination Center, more than two dozen predominantly white towns or villages are eligible, including Bedford, Bronxville, Eastchester, Hastings-on-Hudson, Harrison, Larchmont, Mamaroneck, New Castle, Pelham Manor, Rye and Scarsdale.
A federal monitor, James E. Johnson, has been appointed to ensure that the county abides by the settlement. Given that 120,000 acres in the county meet the criteria, the monitor “should have no difficulty making sure that Westchester ends its policy of allowing affordable housing to be off-limits in the most highly white neighborhoods in the county,” Mr. Gurian said.
The lawsuit, filed under the federal False Claims Act, argued that when Westchester applied for federal Community Development Block Grants for affordable housing and other projects, county officials treated part of the application as boilerplate — lying when they claimed to have complied with mandates to encourage fair housing.
A Westchester official originally dismissed the suit as “garbage.” But the county was largely repudiated in February when Judge Denise L. Cote ruled in Federal District Court that between 2000 and 2006 it had misrepresented its efforts to desegregate overwhelmingly white communities when it applied for the federal housing funds.
Judge Cote concluded that Westchester had made little or no effort to find out where low-income housing was being placed, or to finance homes and apartments in communities that opposed affordable housing.
As part of Monday’s agreement, the county admitted that it has the authority to challenge zoning rules in villages and towns that in many cases implicitly discourage affordable housing by setting minimum lot sizes, discouraging higher-density developments or appropriating vacant property for other purposes. Westchester agreed to “take legal action to compel compliance if municipalities hinder or impede the county” in complying with the agreement.
It was unclear Monday to what extent localities could thwart the agreement, if any chose to do so. Mary Beth Murphy, the town supervisor of Somers, which is among the possible locales for new housing, said that while she was unaware of the agreement, “we certainly are committed to affordable housing and have amended our zoning legislation in recent years to create more opportunities.”
The agreement could spark challenges to suburban county governments across the country that have resisted pressure to undo decades of residential segregation.
Andrew J. Spano, the Westchester County executive, attributed the settlement to “a historic shift of philosophy” by federal housing officials. He said he had signed the agreement to avoid further litigation and possible penalties.
The county admitted no wrongdoing, attributed the judge’s ruling to a technicality and argued that since it had previously invested in affordable housing, “what is different is the locations where the housing must be built.”
“We are settling the lawsuit because we have no choice,” Mr. Spano said.
The suit by the Anti-Discrimination Center applied to towns and villages in Westchester. The federal government deals directly with the county’s larger cities, among them Yonkers, which nearly went bankrupt before capitulating in a housing segregation case that began in 1980 and dragged on for years. That city, which had concentrated public housing in its southwest, was forced to build on the east side, where more whites lived.
The agreement is subject to approval within 45 days by the county’s Board of Legislators, which is also required to approve a $32.9 million bond sale to help finance the housing. Without legislative approval, the litigation would resume and the county would be faced with having to prove at trial that it did not knowingly file false claims.
Most of the homes would be new construction, although some existing houses and apartments could qualify if the county made them permanently affordable.
VALUE OF TOXIC ASSETS UNKNOWN
"No one has a good handle how much is out there," Warren said. "Here we are 10 months into this crisis...and we can't tell you what the dollar value is."
Estimates are that "somewhere between $600 billion and $1.5 trillion in toxic assets (is) spread across the balance sheets of the small and the large banks," Warren said, adding: "That's a lot."
COMMERCIAL PROPERTY TIME BOMB
The Congressional Oversight Panel said, however, that smaller U.S. banks faced billions of dollars in losses from delinquent commercial property loans and were far less able to raise capital and absorb losses than their larger counterparts.
An analysis done by the panel showed that under a scenario 20 percent worse than assumptions used in the Federal Reserve's stress tests, about 719 banks with assets between $600 million and $100 billion would need to raise some $21 billion in new capital to offset loan losses.
"Treasury must be prepared to turn its attention to small banks in crafting solutions to the growing problem of troubled whole loans," the panel said, adding that it should consider using similar stress tests -- along with pledges for additional capital -- on smaller institutions.
Some wire reports about 2 Fifth Avenue, the post-war building just north of Washington Square Park (on the west side of Fifth): "10-12 FLOOR WALLS ARE BULGING" and "BRICKS ARE PULLING AWAY FROM THE 17TH AND 18TH FLOORS." Yikes! Apparently the Department of Building was called and authorities are preparing for a possible "minor collapse." And here's some history about the 20-story, 391-unit building—did you know there were originally 11 brownstones on the property—built by William Rhinelander for his family—between Washington Square Park North and 8th Street? When plans for this apartment building were released, there was a "Save Rhinelander" campaign. UPDATE: Now it's an "all hands" situation for a wall collapse
Nearly a year after New York City said it had a plan to retest the concrete in an untold number of buildings because a testing company was suspected of failing to perform required tests or falsifying results on scores of projects, only a handful of buildings have been retested.
The City Department of Buildings first learned of the allegations against the company, Testwell Laboratories, in June 2008, and two months later, an official said that the agency had developed a plan to begin the required retesting. In October 2008, when several company officials and employees were charged in the case — accusations that involved some of the city’s highest-profile construction projects — the Buildings Department received a formal list of the affected buildings.