Boomer’s Blog

I was totally unprepared for the sheer hilarity of this video, which features history’s most notorious dictator caught with his metaphorical pants down. His story is not unique. It all started with a “liar’s loan.” The plot thickens with a home equity line of credit and a vintage Camaro SS …   before long, the anti-hero is slipping underwater with an adjustable rate mortgage (ARM), a property that has lost 45 percent of its value and no way to refinance his home loan. Watch as this fascist gets sucker-punched by negative equity, the credit crunch and foreclosure.

I hope you enjoy watching as the real estate bubble bursts over this unwitting real estate speculator’s head. The drama mounts with his bitter tirade against the National Association of Realtors, his mortgage broker, his diminished 401k and investments in AIG and Lehman Brothers.

Ironically,  the professionals working in the system that made it all this misery possible were: “Just following orders”!

This parody reinforces what the notorious head of state said so many years ago: “The great masses of the people will more easily fall victim to a big lie than to a small one.”

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Sign up either here or on the main page at GaryBoomershine.com and you’ll get the best this industry has to offer in real estate news, real estate marketing, real estate training systems, and all the creative real estate ideas that drive success in this business. Members also get exclusive access to compelling multimedia content and jaw-dropping discounts!

The trend heading into the holidays seems to be one of growing unemployment and a rising tide of homeowners drowning in mortgage debt.

An Ironic Twist on a Familiar Story
The U.S. Bureau of Labor Statistics’ October report finds that unemployment last month soared to a 14-year high of 6.5 percent, as 240,000 jobs were slashed. Yet the Orange County Register’s Mortgage Insider, Matthew Padilla has made an interesting observation. He sifted through the data to report that in September,  352,200 workers were making a living in the mortgage business — that’s up from 349,300 in August.

Negative Equity Plagues Homeowners
But the recent real estate statistics that really capture the real estate investor’s eye come from  First American CoreLogic: 2.1 million mortgages are within 5 percentage points of being in a negative-equity position and 7.5 million mortgaged properties are carrying more mortgage debt than they’re worth. That means that nearly 20 percent of properties with mortgages have plunged into the powerful waves the economic undertow.

Rising Percentage of Underwater Mortgages in the States
See how the mortgages currently in negative equity break down among the states listed below (Note: percentages have been rounded off and the states are listed in descending order starting with the highest reported rate of negative equity.):

1. Nevada: 48%
2. Michigan: 39%
3. Arizona: 29%
4. Florida: 29%
5. California:  27%
6. Georgia: 23%
7. Ohio: 22%
8. Colorado: 18%
9. Arkansas: 16%
10. New Hampshire: 17%
11. Texas: 17%
12. Virginia: 16%
13. Tennessee: 15%
14. Kansas: 15%
15. Iowa: 15%
16. Alaska: 14%
17. Wisconsin: 14%
18. Nebraska: 13%
19. Kentucky: 13%
20. Missouri: 13%
21. Minnesota: 12%
22. Maryland: 12%
23. Rhode Island: 12%
24. Louisiana: 11%
25. Idaho: 11%
26. Utah: 11%
27. Oklahoma: 10%
28. South Carolina: 10%
29. Indiana: 10%
30. North Carolina: 10%
31. Illinois: 10%
32. Delaware: 10%
33. Washington D.C.: 10%
34. Massachusetts: 10%
35. New Jersey: 9%
36. New Mexico: 8%
37. Washington: 8 %
38. Oregon: 8%
39. Alabama: 7%
40. Connecticut: 7%
41. Montana: 7%
42. Pennsylvania: 6%
43. Hawaii:  6%
44. New York:  4%

Source: First American CoreLogic

Notes: Data were unavailable for Maine, Mississippi, North Dakota, South Dakota, Vermont, West Virginia and Wyoming. These data are based on 42 million properties that had a first or second mortgage, accounting for at least  80 percent of U.S. mortgages.

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Don’t miss out on this opportunity to Make Tons of Cash in Real Estate! Join us today and get ahead of the pack!

MSNBC: New Home Sales Fall into Bottomless Market
While existing home sales climbed last month, new home sales dropped 2 percent, the slowest sales pace since 1995, says the U.S. Commerce Department: Median home prices dropped to $244,100, down 3 percent from last year’s levels. This news falls on the heels of a recent S&P announcement that home prices have dropped 11 percent in 20 key markets over the past year. New York University Economist Nouriel Roubini says that declining home prices are driving down home values and squashing hope for millions of people. ”Already today, 8 million houses have negative equity. If home prices fall another 10 percent as expected, we’re going to see 16 million people with negative equity. It’s a big problem.”

Bloomberg.com: Taxpayers Stuck with Fed’s Bail-out Tab?
Even as the White House promises it wouldn’t jeopardize public funds in a bailout, taxpayers likely will foot the bill for the billions of dollars the Fed is spending to calm recent financial crises. If the past is used as a future indicator, the Fed is likely to loose a hefty slice of its investment in Bear Sterns mortgage securities. Also, the Fed’s efforts to push Fannie Mae and Freddie Mac into taking on more mortgage bonds reduces reserves while foreclosures and defaults continue to soar. Senate Finance Committee Chairman Max Baucus, a Montana Democrat, and Charles Grassley of Iowa, the committee’s ranking Republican, have issued a March 28 deadline for JP Morgan and the Fed to describe the assets involved in the Bear Sterns transaction. “Americans are being asked to back a brand-new kind of transaction, to the tune of tens of billions of dollars,” says Bacus. “It’s the Finance Committee’s responsibility to pin down just how the government decided to front $30 billion in taxpayer dollars for the Bear Stearns deal, and to monitor the changing terms of the sale.”

Bloomberg.com: Housing Market Losses Imperil State Revenues
The U.S. Commerce Department reports that approximately 200,000 newly constructed single-family homes are vacant, a record high since the count began in 1973. Partially completed developments harm more than homeowners and businesses; rising foreclosures and falling property values are projected to slash tax revenues by more than $6.6 billion in 10 states, including New York, California and Florida, according to U.S. Conference of Mayors. About 370,000 new homes currently are on the market because people who had contracted to buy them bolted from the deals, finds New York-based CreditSights Inc. Meanwhile, the Commerce Department reports that an additional 216,000 homes are under construction.

Marketwatch: At Enron’s Final Wake, Citi Antes Up for its Role in Scandal, Fraud
Citibank has has been having a tough time. Entangled with tanking stocks, a global financial business with at least $18 billion in bad mortgages last quarter, more projected losses and calls for an operational break-up … another hard hit came this week. More than six years after Enron crashed amid massive scandal and fraud, Citibank today paid $1.66 billion in cash to settle the last remaining claim related to its role in the disaster. And that’s just part of the story ….