Set fire to your mortgage broker?

You might as well shut down the comments now, Kevin.
Who's gonna top Quaker?

thersites has a point. I was going to write "booby traps". What a boob. Just don't ahve a criminal mind.

Besides, if Quaker is thinking about extreme violence, I don't want to know what Episcopalian has in mind.

cannibalism is right around the corner

Set fire to your neighbors houses as well as your own...who needs falling home prices to bring the whole neighborhood down when multiple housefires will do the trick.

Just take out the copper pipes before you light the match.

No, we're in phase III, banks are refusing to take back foreclosed properties, creating slums and leaving upkeep to local governments.

Of course a homeowner might torch his house in a fit of anger, but I would be concerned about mortgage bankers hiring professionals to torch houses in their growing inventories. A homeowner might think it is possible for him to profit a little if he torches his house. With the decline in FMV experienced in many places it is most likely that the homeowner won't benefit. The insurance proceeds will be paid to the mortgage holder. On the other hand, the mortgage broker stands to benefit a great deal if it torches its growing inventory of unsaleable houses. Of course, the mortgage broker engaged in arson would be breaking the law, but for the last 15 years or so many mortgage bankers have been engaged in an unethical and possibly criminal enterprise, shielded by their friends in Congress. I am sure they could find somebody in Congress to propose a law legalizing mortgage banker arson.

Apparently we're now in phase two: homeowners are beginning to set fire to their houses instead. What comes next?

Phase three: Profits!

I guess the gnomes weren't clever enough to realize that they needed to burn up the underpants in order to get to phase three...

And it's not just your average homeowner; the high and mighty are involved as well: http://www.nytimes.com/2008/01/18/us/18texas.html?ex=1358398800&en=83b89f552f57c0d7&ei=5124&partner=permalink&exprod=permalink

On a related note, a similar problem is already widespread. There is a rash of big SUVs being "stolen" and set on fire for the insurance money. I guess people can do without their big gas-guzzlers easier than they can do without their homes.

Oops, didn't RTFA before posting, they talk about that.

Banks setting fire to the houses. After all, they made the homeowner get insurance as a condition of the mortgage.

This may be the best long term solution. It doesn't cost anybody anything, and it reduces supply.

And everybody knows that cheating an insurance company is okay.

How does arson work anyway? I know if you burn down your own house, you invalidate the insurance claim. But what if it is some unknown third party, like some icelandic guy who has seen his town's services shut down?

A link to go with my first comment above:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aveyF_JnvjSo

Setting fire to their keys.

Sheesh, aren't any of you parents? You sell the kids first, of course. I mean, duh!

Claim there is a Hamas, al Qaeda or Mehdi Army leader hiding out in the house and let either Israel's or the US' military destroy it.

Arson has long been the traditional method of refinancing here in Southern Appalachia.
and
Sheesh, aren't any of you parents? You sell the kids first, of course. I mean, duh!
Posted by: karla lalla
Well, to be Biblcally correct, that only applies to the daughters: from Levitcus 21:7-8 " When a man sells his daughter as a slave, she will not be freed at the end of six years as the men are. If she does not please the man who bought her, he may allow her to be bought back again."

Setting fire to mortgage brokers? Man, that's cold. And here I thought repo men had it tough.

Is everyone start to understand why insurance is a bad idea? No one would burn down an uninsured house that they owned outright. America bought into the idea of insurance (life, fire, health) about the same time that the Supreme Court said that corporations were legal persons with 'rights'.

What fiction all this is... written by lawyers for criminals.

This whole thing is spiralling downward faster than is to be believed. AIG is no longer insuring mortgages for condos in many "declining markets" - so a buyer can't get a loan with less than 20% down - and buyers today don't typically have that kind of money.

So a buyer can go FHA, which requires only 3% down - but the government just revised the FHA rules regarding condos, making the requirements very difficult to meet given the current market conditions and placing all sorts of burdensome administrative and legal requirements on lenders which they're better off avoiding.

This is going to further drive down condo prices in declining markets, make them very difficult to sell, increase the foreclosures and walkaways, and ultimately probably contribute to the deterioration of those complexes as the association fee income just isn't there to keep up the maintenance.

This latest disaster brought to you by the Republican Party of America, who gutted oversight of lenders and obstructed efforts by states to rein them in.

cannibalism is right around the corner

Eat your mortgage broker!

Maybe they can turn all those unsellable condos into apartments, kind of the opposite of 20 years ago when they turned all the apartments into condos. Don't you just miss those Reagan years?

"Set fire to your mortgage broker?"

This will be a "Law & Order" episode within the next six months.

"Eat your mortgage broker!"

This will be a "CSI" episode within the next six weeks.

Arson?! That's not arson. It's the spontaneous combustion that occurs when a mortgage rubs against an insurance policy. (Very old joke)

Robert Waldman is right.
When the Quakers break from their meeting to distribute torches and pitchforks, the fat lady is already headed for the after-hours.

Out of curiosity - did we see a similar uptick in similar events during the last serious housing downturn? (And to that question - does Google have a means of getting info from Lexis/Nexis?)

No, the next step is organization of a homeowner's union to negotiate collectively with the lenders.

Make sure you remove the catalytic converters before your SUV gets stolen!!

There are three precious metals in a cat-verter. Platinum is valued at $1,298 an ounce.Palladium, which is $375 an ounce. Rhodium that's $5,950 an ounce.

*

I read a story where a guy locked three pigs in the house when he left and they trashed the place.

Pig-a-fication.

Leave the cat coverter in and let the pros do it.

Put a hundred dollar bill in the visor, call "Vinnie", call the cops in the morning when it was gone. Nothing for the insurance investigators to find thats tied to you. That's how it was done in Boston during the last gas crisis, and I assume that the Vinnies of the world are getting back in business.

"Out of curiosity - did we see a similar uptick in similar events during the last serious housing downturn?"

A lot, and I mean a lot, of arson in Texas during the oil bust of the eighties. Of course, home prices dropped by thirty-forty percent that time.

>"Set fire to your mortgage broker?"
>"Eat your mortgage broker"

Silly people. A rational approach would be to barbeque the mortgage broker over the flaming house... then eat. Why waste a good fire?

What comes next? People covered in BEEEEZZZZZZ!

Check out the videos on the front page of the NYTimes today. One is about a man who clears bees out of empty houses. Lee County in SW Florida is the foreclosure capital of the country and the humid weather of SW Florida is perfect for nurturing restless swarms of bees. Once people move out a house, a swarm of bees can move move in. In the last 2 years, the guy has cleared over 100 houses of bees and could have done more if there were a local owner to talk to.

There's even an ironic picture of a bee newspaper which carries a story about the mysterious human colony collapse!

Many people are walking away from their homes because they never had any skin in the game to begin with. They bought the homes with no money down and little regard for the amount of the mortgage payment thinking that appreciation would bail them out should anything go wrong. Well, she got sick or he lost his overtime or they decided that keeping the hi-def plasma tv was more important than continuing to make house payments that were a stretch to begin with. Oh, and the appreciation didn't happen they way they thought it would. So they walk away, mail in the keys, no harm no foul. They may have ruined their credit rating but fiddle-de-dee tomorrow is another day.

Phase two?! By my count we are in phase 5 of the stagnant wage parade:

1. Send Spouse to work
2. Max out credit cards
3. Use house as ATM
4. Fall behind on house payments
5. Collect insurance from house fire
6. Move in with relatives
7. Get sick and die. Quickly.

Louis Mahern,

You forgot the ARM raising the house payment. I think that is a bigger factor than any large purchase such as a plasma TV.

I suspect that walking away from the American dream is a little harder than "fiddle-dee-dee" too.

This is why Kevin's the big-shot blogger and I'm a lowly commenter. If he'd shut down the comments when I said he should, we'd have never had:

Buford: barbeque the mortgage broker over the flaming house... then eat

Accidental arson would be the kindest thing that could happen to the 3 abandoned houses on my block. All 3 are in need of (easily) $50k or more of renovation.

the appreciation didn't happen they way they thought it would.

The appreciation did not happen the way licensed realtors and mortgage brokers, who were very well compensated from the home purchase, assured them it would.

Enough is enough!

I have had it with these motherfucking snakes on this motherfucking plane!

Just take out the copper pipes before you light the match.

I think they should strip out all of the building materials and remove the empty houses and put a solar farm on the empty lot and hook that to the grid. Use the recycled building materials to build TWO smaller and more affordable homes in areas closer to work.

Oh yeah, one more thing: You can take all of the stuffâ„¢ that used to be crammed in the original larger house and sell it back to China (used, at a discount of course). Chinese consumers can then take advantage of the weak dollar and buy back the stuff used and at a discount that they made and sold to us in the first place.

Phase II has been around for at least two years, Kevin. Where have you been?

Ron is onto something, but, because a mortgage broker has more invested, he/she will hire a more professional arsonist.

Buford: A mortgage broker, especially undercooked, will give you indigestion. (erp)

Back in the '30s, when house seized for nonpayment of taxes were auctioned off, the neighbors sometimes turned the auction into a "shotgun party" to make sure nobody bid. Then somebody paid a nominal price for the house and returned it to the owner.

If we ever wind up with unemployment at Great Depression levels again, "occupancy and use" may well become the default option. Rather than abandoning houses they can't make payments on, entire neighborhoods may simply barricade off their cul de sacs and remain on the premises. In the case of apartment dwellers, likewise, a nationwide rent strike. There aren't enough sheriff's deputies alive to evict a nation of squatters.

Kevin (Carson): that is happening fitfully, here and there, in some places, in a more polite way. The local sheriffs in some places "mysteriously" dragging their feet on repo work, etc.

Too soon to say how much momentum this will get.

I read that Bloomberg story linked to upthread.

Question: Why are municipalities destroying (or maintaining unocuppied) these abandoned houses/condos? So stupid to knock them down or let these houses deteriorate and bring down the rest of the block. Yeah... knock down a hundred year old Victorian in a nice neighborhood because it's abandoned. That's a plan!

So, Harry Reid has introduced bill to help municipalities do this?

Why don't municipalities seize these houses and auction them off (with caveat that buyers must personally live there for five years and take a course in personal finance).

Is MY plan too naive?

>Is everyone start to understand why insurance is a bad idea?

Great, another libertarian brainiac.

However, I don't understand why this works. It wouldn't work for me. When I bought my first (and still only) house, besides being covered for getting squished by a brontosaurus, my insurance agent brightly informed me that my policy *guarenteed* that they would rebuild and furnish my house back to the way it was. They call it "replacement insurance".

I thought at the time that this was odd
thing, and very generous of them to go to all that trouble, unlike their auto insurance that would depreciate my car and give me a check.

Now I realize that it prevents *exactly* this situation. I burn my house down, no check for me. A 1/2 year later or so, just like Groundhog Day, it's right back up again. The only thing I get is my lodging in the interm paid for.

And I still gotta pay my mortage payments during that period.

Tilly: how much beautiful, unique old stock have we lost thru local, developer-controlled government stupidity. Pittsburgh's liveliest two places, the South Side and Strip District, only survived because the steel crash in the 70's stopped "Renissance II" dead in its tracks, so we weren't blessed with another set of "public spaces" so human-unfriendly that they would even render James Kunstler speechless.

Doc at the Radar Station: Funny. The problem is, and this is how we all got screwed, is that it would take a hell of a discount off what the end user paid for the Chinese to take it back. Although our middlemen made sure that the prices appeared cheap to us, how little they paid the Chinese for that stuff is always shocking when you find it out.

doesn't matter,
I'm being hyperbolic about the Chinese consumer, but Americans *do* have an unprecedented quantity of stuff that's, well, got to go somewhere if we have no place to store it. However, the new Chinese labor laws that have been enacted (they are supposed to get OT now), will put more money into their pockets and if they improve worker job security their very high savings rate should drop some and they could conceivably be significant potential consumers of American exports. Somehow I do see one way out of our troubles as a fundamental reversal of the process that got us here.

Why don't municipalities seize these houses and auction them off (with caveat that buyers must personally live there for five years and take a course in personal finance).

Is MY plan too naive? -Tilli

When I first started house shopping in the early '90s, there was some kind of HUD sponsored, non-FHA conventional loan program that was available that I went through the process of qualifying for in case I found a house that fell within the program constraints. The deal was, you had to purchase a home in a HUD approved area (mostly urban-older homes), you put a min. of 5% down and all of it went into escrow to be used for home repairs. I believe it was a 30-year fixed rate. One caveat was you had to attend a certified personal finance class sponsored by the bank. The class was pretty decent actually.

The real estate scene is taking on aspects of The Producers.