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Wow. This is pretty stark news. I wonder if there are other big builders in similar danger. We're closing on our Centex home next month. I hope we don't get any unpleasent surprises.
All builders are struggling, and have severely shrunk their work force. From what I read, Centex will survive longer than most, and probably longer than it takes your community to be finished.
There's an article about St. Lawro in the N and O today. Their work force is now down 80% to 25 folk. Makes you wonder who's left to build the houses and whether they are the most highly paid, experienced senior builders or some kid who's just left college who is cheap. My guess is that the latter.
Wow. This is pretty stark news. I wonder if there are other big builders in similar danger. We're closing on our Centex home next month. I hope we don't get any unpleasent surprises.
Sammy,
Hopefully you will not be affected by all of this. A LOT of homes are going up in our neighborhood, and we see regular updates of new sales.
Your home is looking good, by the way! Looking forward to having you in the neighborhood!
Wow. This is pretty stark news. I wonder if there are other big builders in similar danger. We're closing on our Centex home next month. I hope we don't get any unpleasent surprises.
We are closing on a small vacation home, built by Centex. Thus far, Centex seems ok. I'm very very happy with them. This is the first "tract" home we have ever built and we've custom built about 5 houses.
We're closing on our Centex home next month. I hope we don't get any unpleasent surprises.
They are still building in my neighborhood. They have reduced their workforce, but they seemed to have done it earlier on. I think they planned accordingly.
The CRA makes such a nice boogieman, until you look at a broader set of facts:
"Believe us, we could go on, but you get the point. Alas, none of these pieces addressed some of the more inconvenient facts about the crisis, many of which were expertly explained by David Goldstein and Kevin G. Hall of McClatchy in an all too uncommon analysis. They point out that Federal Reserve Board data shows the following:
* More than 84 percent of the subprime mortgages in 2006 were issued by private lending firms
* Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
* Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that’s being lambasted by conservative critics.
Clearly it was private lenders, not the government-backed Fannie and Freddie, which issued the lion’s share of subprime lending overall, and to low- and moderate-income borrowers in particular. In fact, economist Dean Baker notes that Fannie and Freddie “lost market share in the years 2002-2007, as the volume of private issue mortgage backed securities exploded.â€
The authors also note that between 2004 and 2006, “private investment banks—not Fannie and Freddie—dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two-thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.â€
As for the Community Reinvestment Act, only one of the top 25 subprime lenders was even subject to that law because it applies only to depository institutions—banks and thrifts. A study released earlier this year by a law firm specializing in Community Reinvestment Act compliance estimated that in the 15 most populous metropolitan areas, 84.3 percent of subprime loans in 2006 were made by financial institutions not governed by the CRA."
We're really looking forward to moving in! My wife works with our side yard neighbor, too. It was funny how we found out - we were just visiting our house one weekend and saw some people sitting on their back porch so we thought we'd go over and say "hi." I was so confused until they told me they worked together! We're closing at the end of Jan and going to move in mid-Feb so we have time to do hardwoods, painting and tiling before all of our stuff is in. We're really looking forward to it.
I may yet decide to go with my own lawyer at closing. Of course, they're offering $450 for using their preferred attorney, but I'm not sure that, with the market the way it is, it's worth the risk. The neighborhood seems to be exploding with lots of lots being built so I'm hopeful that Grandale will be fine no matter what happens with the market. Seems like Rebecca has done a really good job since she moved in, though we're on our 3rd foreman dude already... I don't know what that's about...
BCR, good post. The Community Reinvestment Act so often gets the blame for this mess when buying up all the troubled homes would only cost about 1/2 of the TARP. The problem is, as always has been, the credit default swaps on those troubled assets. It was an example of the rich trying to capitalize on the poor and in many cases betting they'd lose. The current crisis is often called a "sub-prime mortgage crisis" when it's more accurately labeled the "credit default swap crisis, or: how congress fell asleep before Xmas 1999 and let the world economy fall apart"
BCR, good post. The Community Reinvestment Act so often gets the blame for this mess when buying up all the troubled homes would only cost about 1/2 of the TARP. The problem is, as always has been, the credit default swaps on those troubled assets. It was an example of the rich trying to capitalize on the poor and in many cases betting they'd lose. The current crisis is often called a "sub-prime mortgage crisis" when it's more accurately labeled the "credit default swap crisis, or: how congress fell asleep before Xmas 1999 and let the world economy fall apart"
You bet. It is easier, and more attractive, to blame the CRA because it conveniently puts the blame on the Dems and the poor.
Incidentally, though inclined to be suspicious of conservative media's attacks on the CRA, a couple of months back when this started happening, I asked my dad's thoughts on the CRA and whether it's responsible for the whole mess.
His fast response: the whole CRA blame-game is a bunch of hot air, amounting to nothing.
(Unlike his liberal son, FWIW, Dad's a McCain voter, a former G.O.P. chair for a major metro area, and a regional president for one of the nation's fifty largest banks, with 40 years in the industry and a $150m annual loan origination for the past decade or so, so he's not exactly one you'd expect to pooh-pooh the whole CRA meme.)
What many of these lower income folks need is affordable rental units with fixed expenses each month. We lived for years in a middle income Manhattan project that was safe and clean, but the rents were set to help police, firefighters, and other moderate income workers find affordable housing.
When you live paycheck-to-paycheck, you can't deal with unexpected home crises. Not everyone needs to own a home. That's a farce that makes people feel deprived if their finances don't allow them to buy an SFH. The real estate developers planted this trash to increase sales and profits. Kids don't grow up criminals or psychopaths if their parents rent.
We really need better jobs instead of outsourcing them. Retail wages won't buy a McMansion w/o some very creative financing.
I asked my dad's thoughts on the CRA and whether it's responsible for the whole mess.
His fast response: the whole CRA blame-game is a bunch of hot air, amounting to nothing.
Oh, I didn't realize that "your Dad" thought differently. I guess maybe I should have asked my Dad, too.
I know that the bleeding heart liberals would love to make sure none of the blame lands on the Democrats, but that just isn't the case. BOTH parties are to blame. It's funny how all the Democrats that have their fingers covered in blood are the ones refusing to take any responsibility and try to blame it all on Republicans. It's funny how the media has yet to investigate the results of these hearings:
IMO, I want BOTH sides to fry. There should be ZERO programs by the government to force home ownership on ANYONE. It should be simple. You want to buy a home, come up with a down payment, have a job and pay the stupid mortgage. Banks should have to hold the mortgage. They should not be able to sell them. If they had to hold them, they would be damn sure that the buyers could afford the house. The government needs to get out of the business of trying to give things to people. Most government plans start out with a good intentions, but the idiots (both Democrat & Republican) never consider the fallout when things go wrong. The government doesn't know what it is doing, so you can't expect it to regulate much of anything. If they took a 100% hands off approach to mortgage lending, with the exception of mandating that mortgages can't be sold, then this never would have happened. They opened up a nasty can of worms by force feeding home ownership and that affected the entire market. It started with the CRA and exploded throughout the industry. Case closed.
Seriously, isn't this a bit off topic? Just sayin'...
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Sigh...
