Blown Mortgage » Random Thoughts

More than half of homeowners have remodeling plans this year

Jay Hammond — Sat, 04 Jul 2009 02:50:00 +0000

It looks like it going to be a busy year for do-it-yourselfers. A new poll from Consumer Reports reveals that 54 percent of homeowners participating in the poll plan some type of remodeling project during the next 12 months. Sixty-five percent of them plan to do the work themselves.

Now, remodeling is not unknown among homeowners, even during boom times. The recent economic downturn, however, has forced 67 percent of homeowners to rethink their plans. The biggest changes to remodeling plans include:

Doing the work themselves – 42 percent
Fixing or sprucing up what they already have – 39 percent
Remodeling in phases – 36 percent

According to the Consumer Reports poll, the most popular types of work include painting (56 percent), designing (39 percent) and flooring (34 percent). The most popular remodeling projects are kitchens (19 percent) and bathrooms (17 percent).

“Whether homeowners are venturing into a project themselves or plan to hire a professional, you need to lay out a budget, decide what you want most at the end of the project — and decide what you can live without,” advises Bob Markovich, senior home editor at Consumer Reports. “The more homeowners know what they’re getting into, the more money they’ll save.”

Remodeling funds come from a variety of places. Most homeowners, 66 percent, support their projects with their savings. Others, 29 percent, plan to cut back on travel and entertainment while another 21 percent are using a home equity or other loan.

The biggest reason consumers are cutting back on remodeling is that they simply do not have the money, according to 42 percent of respondents. Many homeowners, right now, are focused on paying, modifying or refinancing their mortgage rather than remodeling. There are homebuyers out there, like Chad and Brittany Johnson in Ohio, who purchase a foreclosure home for far less than market price and immediately remodel it.

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Subprime Bananas

Morgan — Sun, 28 Jun 2009 23:07:08 +0000

A great post from Homegrown Evolution on one of the surprising benefits of the housing meltdown: fresh fruit. That’s right. The blog thanks Mr. Mozilo for creating our very own ‘Banana Republic’ as rundown homes and unmanned irrigation systems create the perfect environment for the growth of amazing tropical delights.

These subprime bananas as the blog calls them, were the result of a foreclosed home and a wayward sprinkler system. Homegrown Evolution is a blog maintained by the authors of “The Urban Homestead“. Hat tip Boing Boing for finding this gem.

From Homegrown Evolution:

There’s a house in our neighborhood that’s been for sale for over a year. Two months ago the for sale signs disappeared, junk mail littered the front porch and the mow and blow guys stopped showing up, leaving the lawn to go wild. A busted sprinkler head creates a nightly fountain as the houses’ infrastructure lapses into a timer operated zombification. We knew the nice young family that used to live here and I hope that they were able to sell somehow, but it doesn’t look good.

I started picking up the junk mail to make the place looked lived in. I also remembered that the backyard had both figs and bananas, and ventured beyond the gate to see how the fruit was developing (fyi, picking up fallen fruit is important to keep down the rat population). The figs aren’t quite ready but the bananas, the ones the squirrels didn’t get, were the tastiest damn bananas I’ve ever eaten. It turns out that our national real estate bubble has a fruit filled silver lining. I imagine that all across America there are abandoned fruit trees yielding their bounty for a new generation of gleaners. Thank you Angelo Mozilo for creating a literal banana republic!

Maybe a little scouting in your neighborhood can yield some delicious homegrown summertime fruit too!

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Don’t bet on the consumer

Morgan — Wed, 17 Jun 2009 15:40:02 +0000

All this green shoot talk and pronouncements that the worst is over fails to take into account the sorry state of the US consumer. Sure indicators may be turning (are they really?) but the fact remains that the US consumer, the same people responsible for 70% of our nation’s GDP are still in a world of hurt. Below are an amazing set of graphs that show how much of the consumer-class wealth was eliminated over the last year and a half (22%) and how much debt the consumer is carrying (128% debt-to-income ratio).

These factors don’t portend a speedy or vibrant recovery. When 70% of the economy is still fundamentally hurting, the rest of the economy can’t do much in terms of coming around.

And there isn’t really any clear path out of this. Wages are dropping, total employee compensation is dropping, the average consumer isn’t earning enough to keep up with their debt load.

Until the consumer issues of debt are resolved we will have no recovery.

See more incredible graphs from the Huffington Post (all graphs from HuffPo):

When economist David Rosenberg left Merrill Lynch to head back to his native Canada, he gave a nod to Bob Farrell’s Ten Rules To Remember by penning his own. They are both keepers. Among the most important of the rules Rosie laid down, in my opinion, is #12: Get the US consumer right and everything else will take care of itself. The reason is fairly simple: The U.S. consumer has the biggest balance sheet on the planet. The U.S. consumer represents 70 percent of our GDP and about 18 percent of global GDP.

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Student loans make living with debt a harsh reality for college grads

Morgan — Mon, 15 Jun 2009 07:18:24 +0000

Great visualization of the average student loan debt carried by students coming out of college across the country. Amazing that most states’ averages are more than $15,000 per student. It’s tough to bash people for not saving enough when going to school automatically puts you in the hole as you enter the workforce.

It will be interesting to see how the secondary education bubble deflates over the next few years as students can’t turn to parents’ home equity loans and 401k’s etc. to fund overpriced college tuitions.

Image and h/t Brazen Careerist:

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Largest Bankruptcies in History

Morgan — Sun, 14 Jun 2009 20:52:09 +0000

GOOD Magazine has a great graphic representation of the biggest bankruptices in history. (click link for bigger size) Check out Lehman bro’s $691 billion BK, more than 7 times the size of GM’s recent bankruptcy. (h/t Boing Boing for the image)

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Abracadabra Obama

Morgan — Fri, 12 Jun 2009 16:46:59 +0000

I remember going through a phase where I wanted to learn how to do card tricks to impress my friends and members of the fairer sex. I read several books on the subject and the number one thing to learn is to get the observer’s eyes off the deck of cards. Create a distraction. In fact, it’s in all good illusion handbooks. Misdirection, getting the audience to look in one place so they don’t notice what is going on in another is the key to being a good magician.

As the Obama administration announces its turn to its key campaign issue of healthcare, I cannot help but think back to those books and the key tenent of illusion – creating a distraction so that no one notices what’s really going on. Now, granted, pulling it on a national level in front of an unwitting audience of hundreds of millions is far more difficult than getting your three snot-nosed friends off the scent; but the fact remains that this public move to healthcare by Obama seems nothing less than a ruse to get us off the scent of the bailout. To get us to stop scrutinizing the complete lack of enforcement, investigation, reform or action (other than handing them hundreds of billions of dollars) against the malfeasance, greed, ineptness of those that engineered this meltdown.

As bills like HR 1728 wind through Congress shifting ever-more power in the real estate market to the remaining big banks, and accounts of the Fed buying more mortgage backed securities and running secret repo accounts to keep the markets moving, and the dog-and-pony Congressional hearing of Ken Lewis and the complete lack of enforcement activity by the Federal government and…no wonder the administration is playing slight of hand.

Hopefully you’re as pissed as I am. Your pissed that the government decides that 3-card monte is the way to reduce the public ire and let the status quo remain. That the same folks who caused the mess and are now benefiting from it are also being given the wink-wink, nudge-nudge from the government. An unspoken offer of amenesty to anyone who goes along with their ill-advised plans.

There is a great piece in the Huffington Post about the same thing, and is well worth the read.

This makes me nervous for two reasons. First, it portends a long drawn out legislative battle on health care reform with more time for industry lobbyists and the Congresspersons and Senate persons on their payrolls to compromise away or wreck the change we so deeply need.

Second, it confirms that the lobbyists for financial institutions — the people responsible for the collapse of our economy—have been scheming and wrangling to gut the reforms that could stop anther economic breakdown. Reviving this industry without restructuring and re-regulating it just guarantees another disaster down the line.

…

Shamus Cooke writes on Global Research: “History will likely show that these bailouts involved the largest transfer of wealth ever – from the working class to that small group of billionaires who own the corporations. This fact is recognized by most people now and is such common knowledge that even the mainstream media feels comfortable discussing it . . . matter-of-factly.

These corporations have also exerted tremendous influence in other realms of politics, working towards destroying Obama’s campaign promises of health care, job creation, civil liberties, the Employee Free Choice Act, peace, etc.

In each case, the promised reform was gutted of its essence, and ‘compromise’ versions of the bills are now being discussed: instead of universal health care, we will likely be universally mandated to purchase health insurance; instead of ‘job creation’ we are told that the stimulus has ’saved jobs’ (contrary to the evidence); while troops are ‘drawing down’ from Iraq, the war in Afghanistan/Pakistan is being escalated; instead of allowing workers to organize unions easier, a compromise version — Employee Free Choice Act, minus card check – seems more politically ‘pragmatic,’ etc.”

What do you think? How angry are you that while employment tanks we’re being fed a line of crap about healthcare to take our minds off the fact that nothing, NOTHING, has changed.

Hocus Pocus.

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GM to file bankruptcy tomorrow

Morgan — Mon, 01 Jun 2009 03:08:52 +0000

“What is good for General Motors is good for America” Charlie Wilson, CEO of GM, 1955.

Maybe the country will follow GM in to bankruptcy as well…

The storied American car maker, which by some estimates employs one out of every ten Americans will head to bankruptcy tomorrow morning. It will be restructured by an Obama appointee, after negotiations, bail out money and loans failed to keep the bloated corporation afloat.

Americans will end up owning the corporation, as the Treasury Department will take a 60% stake in the company by providing more than $50 billion in loans (that don’t need to be paid back).

The company will be delisted from the DJIA and shareholders will be wiped out.

From The Detroit News:

GM, the storied 100-year-old Detroit automaker that once was the world’s largest company, was forced into bankruptcy by the administration after losing $88 billion since 2005. The company ran out of money in late 2008 before being rescued by $13.4 billion in government loans in the waning days of the Bush administration.
“Today will rank as another historic day for the company — the end of an old General Motors, and the beginning of a new one,” the White House said in a fact sheet.

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How much is RefinanceRates.com worth?

Jay Hammond — Fri, 08 May 2009 19:11:01 +0000

Domain names are an integral part of business in the 21st Century. Some are perpetually popular. Most rise and fall in popularity, influenced by a variety of factors. One domain name that is currently enjoying an upsurge in popularity is RefinanceRates.com. And it is going to be auctioned off in early June 2009.

“Domain names continue to show an incredible increase in interest with recent acquisitions, such as Toys “R” Us buying Toys.com for $5.1 million and REDC purchasing Auction.com for $1.7 million. This demonstrates that even in today’s economy companies are continuing to aggressively invest in e-commerce,” said Cheryl Wright, vice-president Sales, at McKenzie Marketing, a full service brokerage specializing in helping organizations secure and sell premier domain names anonymously. “Companies that wish to dominate their space realize that premier domain names play a major role in this goal.”

In the mortgage industry, TheMortgage.com sold for $500,000 and Refinance.com went for $700,000. Citi purchased Mortgage.com for $1.8 million. Elsewhere in the financial services industry, InsuranceRates.com sold for $225,000 while FreeQuotes.com sold for $210,000.

The timing of the domain name RefinanceRates.com going to auction appears to be perfect. Mortgage rates are at or near historic lows and predicted to drop further. Even if the don’t continue to decline, the sustained low rates will attract those interested refinancing at least until the real estate market begins to turn around.

The auction for RefinanceRates.com will be transacted through Sedo. Most auctions are held specifically for expired domain names, indicating someone may have previously registered and used RefinanceRates.com. Other domain names available through Sedo auctions include mortgage.eu and untiedrealtors.eu.

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A big thank you

Morgan — Fri, 17 Apr 2009 16:12:35 +0000

Hi Folks,

Morgan here. I wanted to take a minute of our day to recognize a member of the Blown Mortgage family who has done yeoman’s work over the last several months. Cindy Lopez has been the powerhouse behind the “quickie’s,” the afternoon and morning links to the other pertinent news in the world of finance happening out there on the web. She has done, in my estimation, a spectacular job. I have found myself on more occasions then I can remember coming to Blown Mortgage just for the links. I have them all in my blog reader, but I knew that Cindy had found the best of the best. She never missed. I personally believe that she added a ton to the site, and those daily link posts were ways for us to add value to your day even if we didn’t have something ready to run. It was like our steady drum beat, Cindy was our editorial view out on to the landscape, and she handled that responsibility gracefully and expertly.

Which brings me to today. Unfortunately, the economy is hitting us all, and our little blog, while growing, has taken a hit on the advertising-revenue side of the game. With that hit we have to say goodbye to Cindy. We can’t afford her wonderful talents any more, and so we take a loss as a group, and wish Cindy the best, and thank her for her great, great contribution here at Blown Mortgage.

I’m going to try to carry on the link tradition, but it won’t be twice a day, it won’t be regular, who knows how good it will be, but it won’t be Cindy’s work. I want to personally thank her for everything she did, and please take a minute to wish her continued success.

Morgan

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Thoughts on Tax Day

phillenbrand — Wed, 15 Apr 2009 22:36:53 +0000

Ahhh tax day, one of the few days each year that everyone loves to hate. This year, though, the tax man’s dues have been met with a larger amount of resistance than usual. Across the country, protesters have gathered at a number of cities to vent over their disdain for taxes. I’ll be the first to agree that I don’t like paying taxes. In fact I’ve never met anyone who liked paying taxes, only those that, like myself, tolerate the practice because A) Such things are unavoidable and B) Some taxes are perfectly legitimate and necessary.

Now, the rub here is that over the past few years, the number of tax dollars going out the door seems to be ever increasing, even if taxes have not. Both under Republican and Democrat administrations (since we don’t want to make this a political argument if at all possible), Uncle Sam is spending much more than he is taking in. This, as you might expect, isn’t a sustainable practice, so we’re going to end up at one or two outcomes. We will either have to cut our spending (and it will hurt) or we will have to raise taxes (pain here too).

Being an opponent of the bailout myself, I wish everyone luck in protesting something that they don’t agree with. On the other hand, comparing this to the Boston Tea Party isn’t really a fair comparison. The original party had to do with the tax on tea that wasn’t voted on by elected representatives. As you might already suspect, this is the opposite of what happened here, and no matter which side of the political argument you happen to be on, you’re comparing apples and oranges here.

The President isn’t deaf to these concerns either, it appears, as he addressed the nation today:

“We will make it quicker, easier, and less expensive for you to file a return, so that April 15 is not a date that is approached with dread each year.” He went on to point out that “We need to stop giving tax breaks to corporations that stash profits or ship jobs overseas so that we can invest in job creation at home,” Obama said. “And we need to end the tax breaks for the wealthiest 2% of Americans, so that folks like me are paying the same rates that the wealthiest 2% of Americans paid when Bill Clinton was President.” Bold words, to be sure, but unless I don’t have to pay my taxes anymore, I’ll probably continue to dread tax day.

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