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EJ
03-23-07, 05:51 PM
http://www.itulip.com/images/debtprison.jpgGreeley, Colo.: a front-runner in foreclosures (http://www.latimes.com/business/la-fi-colorado22mar22,0,4270180.story?coll=la-home-business)
March 22, 2007 (P.J. Huffstutter - LA Times)

Colorado led the U.S. in foreclosures most of last year. The mood is grim in once-bustling Greeley.

The phones inside the Weld County public trustee's office ring insistently throughout the day, with questions from harried bank lenders and pleas from residents on the verge of losing their homes.

After relating their particular case, some callers ask the agency, which manages the sale of foreclosed properties for this city on the edge of the Front Range, the same questions: Just how bad is the housing market here? How much worse can it get?

The answers are usually grim.

For nine out of 12 months of 2006, Colorado led the nation in foreclosures — and this county suffered the worst of it for much of that time, according to research by Irvine-based firm RealtyTrac Inc.

As the nation's housing market falters amid the unraveling of the sub-prime mortgage industry, some real estate experts are looking to Colorado as a portent of what other parts of the country could face in coming months.

Housing oversupply and rising interest rates sank the market in Weld County, where mile after mile of pastel-hued suburban homes with neatly mowed lawns have sprung up in this longtime agricultural and meatpacking center, also the site of the University of Northern Colorado.

Home buyers with risky mortgages found themselves with mounting bills they couldn't afford. Those who were forced to sell couldn't find buyers, leading to thousands of residents defaulting on their loans.

In 2004, Weld County had 1,155 properties foreclosed, according to the public trustee's office. In 2006, there were 2,073.

The workload at the trustee's office has grown so heavy that county trustee Susie Velasquez plans to hire more workers to handle the boom in business.

"This is not the type of growth that any community wants," said Velasquez, whose staff members' desks are covered in piles of foreclosure files. "This is the type of growth you pray never happens to your town."

http://www.itulip.com/movies/housingbubblegeo.gifAntiSpin: Long time iTuliper bart reminds us of the words of Arthur Schopenhauer, "All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident." The truth of the housing bubble is entering the stage of self-evidence.

The article above is evidence that our once ridiculed Geographic Housing Price Correction (http://www.itulip.com/housingpriceregionscascade.htm) prediction is becoming self-evident.
The dynamic that drove prices outward was the need for workers in the cities and later the suburbs to escape high real estate prices, to move to where real estate was relatively cheaper and the cost of living lower, but still within an “affordable” commute. As homebuyers traveled farther from metro areas, they encountered lower real estate prices. At the extreme top of the market in late 2004 and early 2005, some home owners who bought property in the mid 1990s in market bubble areas before a housing bubble reached their region, sold their property at a huge profit, purchased equivalent property in size and quality in a rural area, and retired on the profit with perhaps a low wage retirement job. For example, home owners from Boston and nearby suburban towns, as well as from new York and Connecticut, sold their homes and purchased homes in Amherst and surrounding towns, 90 minutes from Boston and have retired using the profit on the transaction. However, most rural homebuyers who purchased at the top of the rural market in mid 2005 did so to have a chance to buy an affordable home. Of course, as more and more homebuyers searched farther away from metropolitan areas, prices increased in outlying areas as well until property values in rural areas reached historical peaks and experienced bubbles of their own.

Living in rural areas and working either in the suburbs or metropolitan areas increased commute time and expense, but this was affordable with gasoline under $1.50 per gallon as it was before hurricane Katrina. But combined increases in gasoline, heating oil, natural gas and propane prices plus higher interest payment on ARMs combined in mid 2005 to pushed many household budgets past the tipping point for those living in homes purchased in rural areas at or near the top of rural market housing bubbles.

Housing bubbles are driven by the same psychological factors that drive all late stage asset bubbles, the popular assumption that prices only rise. A steady drumbeat of negative press today, as evidence mounts that the boom is over, reinforces the negative price expectations, but nothing gets the fear juices flowing like watching home prices collapse in a neighboring town, or watching one’s neighbor lose his or her home.

This change in psychology will start to cause housing bubbles around suburban then metro areas to decline in a reversal of the process that drove prices from metropolitan markets outward to suburban and rural markets.
Fast-forward to now.
(http://www.nytimes.com/2007/03/23/us/23vacant.html?_r=1&ref=us&oref=slogin)
Foreclosures Force Suburbs to Fight Blight (http://www.nytimes.com/2007/03/23/us/23vacant.html?_r=1&ref=us&oref=slogin)
March 23, 2007 (Erik Eckholm - New York Times)

SHAKER HEIGHTS, Ohio — In a sign of the spreading economic fallout of mortgage foreclosures, several suburbs of Cleveland, one of the nation’s hardest-hit cities, are spending millions of dollars to maintain vacant houses as they try to contain blight and real-estate panic.

Rosa Hutchison Yates of Shaker Heights, Ohio, may be losing her home of 30 years after a refinancing deal created bills she could not pay. “When folks pay for a home, they expect to die in it,” Ms. Yates said.

In suburbs like this one, officials are installing alarms, fixing broken windows and mowing lawns at the vacant houses in hopes of preventing a snowball effect, in which surrounding property values suffer and worried neighbors move away. The officials are also working with financially troubled homeowners to renegotiate debts or, when eviction is unavoidable, to find apartments.

“It’s a tragedy and it’s just beginning,” Mayor Judith H. Rawson of Shaker Heights, a mostly affluent suburb, said of the evictions and vacancies, a problem fueled by a rapid increase in high-interest, subprime loans.

“All those shaky loans are out there, and the foreclosures are coming,” Ms. Rawson said. “Managing the damage to our communities will take years.”
Mowing your neighbor's lawn? Who could have known?
Step D: Three years into the decline, marginal home buyers will learn what owning a home really costs, versus renting when housing prices are declining and jobs are more scarce. Rent is a fixed cost, whereas home ownership presents many variable costs, including increased interest payments on ARMs, and rising tax, insurance, and energy costs. Also, upkeep for the average home typically costs five to ten percent of the price of the home, annually. As prices fall, homeowners will have less access to home equity loans. Many will not be able to afford repair and maintenance expenses. Homes in some neighborhoods—and in some cases, entire neighborhoods—will begin to look neglected, further depressing prices.

- iTulip Housing Bubble Correction, January 2005 (http://www.itulip.com/housingbubblecorrection.htm)The equally predictable solution to this predictable disaster: more debt!
Ohio Plans Bonds to Bail Out Homeowners Strapped by Mortgages (http://www.bloomberg.com/apps/news?pid=20601087&sid=asu8RitVhBIE&refer=home)
March 23, 2007 (Martin Z. Braun - Bloomberg)

hio, which had the highest foreclosure rate among the 50 U.S. states at the end of 2006, plans to issue $100 million in taxable municipal bonds next month to help homeowners refinance mortgages they can't afford.

Proceeds of the bond issue by the Ohio Housing Finance Agency will provide financing for about 1,000 loans with a fixed rate of about 6.75 percent, said Robert Connell, the agency's director of debt management.
Next: States' fiscal management rules are changed to allow states to run deficits. You heard it here first!

iTulip Select: The inside scoop (http://www.itulip.com/forums/showthread.php?t=1032).
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Tet
03-23-07, 06:07 PM
Greeley, Colo.: a front-runner in foreclosures (http://www.latimes.com/business/la-fi-colorado22mar22,0,4270180.story?coll=la-home-business)
March 22, 2007 (P.J. Huffstutter - LA Times)

Colorado led the U.S. in foreclosures most of last year. The mood is grim in once-bustling Greeley.
Very important to note that about 80% of Colorado foreclosures come from one or two counties and these counties just happens to be the ones that supply water to Denver. I think we'll find this housing bubble to have been very selectively created throughout the country and the land grabs will end up netting natural resouces, water, gas, oil for corporations that can produce more revenue for themselves than the states could from the property taxes. With home prices having already dropped about 15-20% I'd say we are no longer in a housing bubble, but we have a pretty good chance of another one being created. :)

don
03-23-07, 06:30 PM
Alarming comment, to say the least. "Very selectively created" sounds a bit off the mark. How about ingeniously exploiting a more general condition? The housing bubble deflation just appears too widespread to see a coordinated, before-the-fact planning effort. Cherry picking the train wreck? No problemo.

Tet
03-23-07, 07:06 PM
Alarming comment, to say the least. "Very selectively created" sounds a bit off the mark. How about ingeniously exploiting a more general condition? The housing bubble deflation just appears too widespread to see a coordinated, before-the-fact planning effort. Cherry picking the train wreck? No problemo.
I'd believe they were Cherry picking the train wreck if everyone wasn't pointing the finger some other direction. The Denver Airport doesn't expand without these foreclosures and Denver doesn't grow without water. Colorado isn't having a foreclosure problem these two counties are, why not paint the picture how the picture really is in Colorado if this wasn't the intent in the first place. Lot's of big money in Denver and even bigger money in Aspen. Adams County and Arapahoe County are the two counties with all the foreclosures how can this be explained otherwise?

bill
03-23-07, 09:07 PM
Next: States' fiscal management rules are changed to allow states to run deficits. You heard it here first!

The Next Debt

House approves http://waterindustry.org/New%20Projects/infrastructure-5.htm

Bush say's http://www.whitehouse.gov/omb/legislative/sap/110-1/hr720sap-h.pdf


http://www.fhwa.dot.gov/ppp/defined.htm#5
What types of financing mechanisms are available for PPPs?

PPP projects are often undertaken to supplement conventional procurement practices by taking additional revenue sources and mixing a variety of funding sources, thereby reducing demands on constrained public budgets. Some of the revenue sources used to support PPPs include:

Shareholder equity;
Grant anticipation bonds (GARVEEs and GANs);
General obligation bonds;
State infrastructure bank loans;
Direct user charges (tolls and transit fares) leveraged to obtain bonds; and,
Other public agency dedicated revenue streams made available to a private franchisee or concessionaire:

- Leases
- Direct user charges from other tolled facilities
- Shadow tollsAdditional information on these financing approaches is available on InnovativeFinance.org.
PPP financings often involve the co-mingling of different federally-sponsored tools and private commercial debt. The following federal innovative finance programs are important tools that the public agency sponsors can use to make PPP projects financially viable and attractive investment opportunities for private sector developers:

Flexible Matching (http://wwwcf.fhwa.dot.gov/exit.cfm?link=http://www.innovativefinance.org/topics/federal_aid/federal_matching/match_federal.asp)
Toll Credits (http://wwwcf.fhwa.dot.gov/exit.cfm?link=http://www.innovativefinance.org/topics/federal_aid/federal_matching/toll_credits.asp)
Grant Anticipation Revenue Vehicles (GARVEEs) (http://wwwcf.fhwa.dot.gov/exit.cfm?link=http://www.innovativefinance.org/topics/finance_mechanisms/bonding/bonds_garvees.asp)
Grant Anticipation Notes (GANs) (http://wwwcf.fhwa.dot.gov/exit.cfm?link=http://www.innovativefinance.org/topics/finance_mechanisms/bonding/bonds_gans.asp)
State Infrastructure Banks (SIBs) (http://wwwcf.fhwa.dot.gov/exit.cfm?link=http://www.innovativefinance.org/topics/finance_mechanisms/state_credit/statecredit.asp)
Section 129 Loans (http://wwwcf.fhwa.dot.gov/exit.cfm?link=http://www.innovativefinance.org/topics/finance_mechanisms/Federal_loans/section_129.asp)
Transportation Infrastructure Finance and Innovation Act (TIFIA) Credit (http://wwwcf.fhwa.dot.gov/exit.cfm?link=http://www.innovativefinance.org/topics/finance_mechanisms/federal_loans/tifia.asp)Additional information on these tools is available on InnovativeFinance.org.

jk
03-23-07, 10:49 PM
infrastructure renewal and privatization [or public-private partnerships] looks like a "solution" to a lot of problems: employment, including for many of those previously in the building trades, economic stimulus "pump-priming," the production of new debt [see below], the production of assets which can be sold for all those dollars floating around abroad.

re new debt- corporate balance sheets were cleaned up over the last 5 years, at least that was the case up to the current lbo binge which involves re-levering the purchased entitities. the u.s. federal budget went from surplus to heavy debt. [remember when greenspan testified in favor of the bush tax cuts, saying he feared that federal surpluses as far as the eye could see would lead to the feds having to purchase private assets. ah, those were the days...] and of course we are all aware of the incredible debt amassed by american consumers. if the american consumers can no longer accumulate more debt [directly], and can't even afford to service the debt they already have, then they must start repairing their balance sheets, by default or by saving or some combination thereof. the resultant reduction in consumption will kill the economy unless some other sector steps forward to claim the mantle of consumptive leadership. the feds are doing their part, especially with our military expenditures. increased federal and state expenditures on infrastructure, debt supported, can keep the train moving. before, debt was being privatized. now debt must be re-socialized.

the financing of these projects will generate nice fees for the investment banks. instead of a lot of general obligation bonds, however, we will get bonds linked to revenue streams from the infrastructure projects being funded, as well as equity or equity-like participation in the private side of the private-public project. since not all projects will be equally predictable in their ability to generate revenue, we will have a market of variably rated financial instruments, and we can look forward to the banks chopping these up and recombining them in a new generation of municipal cdo's. life will go on. in fact, i can imagine an infrastructure bubble, in which less and less economically sensible projects get funded in this manner - for example, we can sell participations in the toll revenues of ted stevens' famous bridge to nowhere in alaska. la plus c'est change, .....

Finster
03-24-07, 10:08 AM
Okay Yet to Admit the Fact of the Housing Bubble - Given it Ended Two Years Ago?

:D

It's just the Fed types that are constrained to recognize their blunders only years after the fact ... the rest of us are free to acknowledge them in real time ...

don
03-24-07, 12:31 PM
I'd believe they were Cherry picking the train wreck if everyone wasn't pointing the finger some other direction. The Denver Airport doesn't expand without these foreclosures and Denver doesn't grow without water. Colorado isn't having a foreclosure problem these two counties are, why not paint the picture how the picture really is in Colorado if this wasn't the intent in the first place. Lot's of big money in Denver and even bigger money in Aspen. Adams County and Arapahoe County are the two counties with all the foreclosures how can this be explained otherwise?
Tet: You know a lot more about the Denver area than I do. What's your take on the way this was achieved? Through the lenders? Modulating the degree of enforcement on foreclosures? I think it's a valuable local insight into what's going on nationally. Looking forward to your details.

bart
03-24-07, 05:53 PM
Adams County and Arapahoe County are the two counties with all the foreclosures how can this be explained otherwise?

Data at http://www.foreclosurenet.net/states/colorado.asp seems to contradict, or at least deemphasize, your statement about those two counties being the only rough areas in Colorado.

Tet
03-24-07, 06:14 PM
Data at http://www.foreclosurenet.net/states/colorado.asp seems to contradict, or at least deemphasize, your statement about those two counties being the only rough areas in Colorado.
Thanks for the info, seems to prove what I said.
Montezuma County 3 listings. Dolores county 1 listing. La Plata 4 listings. Routt County 0 listings. Las Animas 9 listings Rio Blanco county 1 listing. Eagle county 1 listing. Kit Carson county 6 listings. Logan County 14 listings. Grand County 5 listings. Huerfano county 8 listings. Summit County 5 listings. Yuma county 4 listings. Chaffee County 5 listings. Gunnison county 0 listingsSaguache County 0 listings. Park County 41 listings. Garfield County 4 listings. Delta county 12 listings. Denver 1,170 listings. Now we get to Adams County that I mention 1,214 listings. Arapahoe county 1,279 listings.

Quite the land grab going on around Denver.

bart
03-24-07, 06:24 PM
Thanks for the info, seems to prove what I said.
Montezuma County 3 listings. Dolores county 1 listing. La Plata 4 listings. Routt County 0 listings. Las Animas 9 listings Rio Blanco county 1 listing. Eagle county 1 listing. Kit Carson county 6 listings. Logan County 14 listings. Grand County 5 listings. Huerfano county 8 listings. Summit County 5 listings. Yuma county 4 listings. Chaffee County 5 listings. Gunnison county 0 listingsSaguache County 0 listings. Park County 41 listings. Garfield County 4 listings. Delta county 12 listings. Denver 1,170 listings. Now we get to Adams County that I mention 1,214 listings. Arapahoe county 1,279 listings.

Quite the land grab going on around Denver.


Somewhat true, but now take into account both population and recent growth in all the areas.

You excluded Colorado Springs, which has 463 listings, and has way more foreclosures per person than Denver. I don't have and didn't look up population figures for Adams or Arapahoe counties, and that could significantly affect the conclusions. My point is that it does not appear to be as black & white as just those three areas you noted.

jk
03-24-07, 07:07 PM
if certain counties show an abnormally high number of foreclosures, my guess would be that's where the low-medium end tract house developments have been built in the last few years. you need info on where the building has gone on and average home prices, which would let you draw inferences about the socio-economic makeup of the purchasers.

why those counties? my guess is that's where land was relatively cheap for developers, which in turn would reflect prior patterns of development, commuting distances, highway construction. for example, you would not expect high foreclosure rates in well-established communities with more expensive homes of median age 10 years.

to prove a conspiracy, on the other hand, you would have to show that the conspirators have arranged to "grab" this land by pushing development in some direction it would otherwise not have gone, presumably via some sort of subsidies or other incentives, then somehow finagled the house construction there to be of particular interest to the kind of borrowers who were going to get foreclosed on 2-3 years in the future. further, you need to show that this process was somehow more beneficial for the conspirators than just buying the property in the first place. also you need to follow this process forward, and show that a single entity, or at least a small and cohesive group of entities in fact arrange to purchase all these foreclosed properties and then utilize the land in an entirely different way, since the conspiracy theory was based on the idea that the land would be used to expand the airport and lock up watershed. residential housing and watershed really don't mix very well, so i guess the conspiracy theory would predict that all these homes will be torn down in short order, and certainly will not be resold as single family residences.

Tet
03-24-07, 07:22 PM
Somewhat true, but now take into account both population and recent growth in all the areas.

You excluded Colorado Springs, which has 463 listings, and has way more foreclosures per person than Denver. I don't have and didn't look up population figures for Adams or Arapahoe counties, and that could significantly affect the conclusions. My point is that it does not appear to be as black & white as just those three areas you noted.
Only 23 new listings for colorado springs. Local realtor articles have shown the counties I mention to be running at about 1/35 for foreclosures, throughout Colorado you're in the 1/100's. Ratios being key. Local Realtors think some of the foreclosure numbers reported by some of the agencies as triple the actual number of foreclosures for the state as a whole. Somebody wants something that's for sure, no mention of colorado floating a bond issue to save all these homes from foreclosure, somebody is going to take them. Unfortunately you don't know what they were wanted for until another ten years go by. Those two counties are sitting on some good size aqua filters though and I'd bet that's a big part of it. Water could very well prove to be the next resource, the bush family supposedly bought a lot of land in Paraquay sitting on top of a huge aqua filter.

bart
03-24-07, 07:34 PM
Only 23 new listings for colorado springs. Local realtor articles have shown the counties I mention to be running at about 1/35 for foreclosures, throughout Colorado you're in the 1/100's. Ratios being key. Local Realtors think some of the foreclosure numbers reported by some of the agencies as triple the actual number of foreclosures for the state as a whole. Somebody wants something that's for sure, no mention of colorado floating a bond issue to save all these homes from foreclosure, somebody is going to take them. Unfortunately you don't know what they were wanted for until another ten years go by. Those two counties are sitting on some good size aqua filters though and I'd bet that's a big part of it. Water could very well prove to be the next resource, the bush family supposedly bought a lot of land in Paraquay sitting on top of a huge aqua filter.


Given the general ethic level of a small number of scum, there's undoubtedly some truth in your view about water in those two counties.

Watch your mouth in using four letter words like bush though. ;)

Tet
03-24-07, 11:56 PM
why those counties? my guess is that's where land was relatively cheap for developers, which in turn would reflect prior patterns of development, commuting distances, highway construction. for example, you would not expect high foreclosure rates in well-established communities with more expensive homes of median age 10 years.

to prove a conspiracy, on the other hand, you would have to show that the conspirators have arranged to "grab" this land by pushing development in some direction it would otherwise not have gone, presumably via some sort of subsidies or other incentives, then somehow finagled the house construction there to be of particular interest to the kind of borrowers who were going to get foreclosed on 2-3 years in the future. further, you need to show that this process was somehow more beneficial for the conspirators than just buying the property in the first place. also you need to follow this process forward, and show that a single entity, or at least a small and cohesive group of entities in fact arrange to purchase all these foreclosed properties and then utilize the land in an entirely different way, since the conspiracy theory was based on the idea that the land would be used to expand the airport and lock up watershed. residential housing and watershed really don't mix very well, so i guess the conspiracy theory would predict that all these homes will be torn down in short order, and certainly will not be resold as single family residences.
My bet would be that these residences stay intact, Colorado has the strangest water laws in the nation and in both of these counties each house has their own private water well. My bet would be these homes get their water rights changed and they in turn need to purchase their water from a private or public company. Way too much money at stake to allow cows to supply themselves with their own water. In a few years we'll know for certain.

Tet
03-25-07, 11:24 AM
Data at http://www.foreclosurenet.net/states/colorado.asp seems to contradict, or at least deemphasize, your statement about those two counties being the only rough areas in Colorado.
Thanks for the link, for comparison San Diego County has 848 listings, over 2 million living in San Diego county, Orange County has 277 listings, Los Angeles County has 838 listings and I believe LA county has over 8 million people living in the county. What's up with Colorado.