Chicago will not evict people whom do not pay mortgage

 

http://apnews.myway.com/article/20081008/D93MFL900.html

 

I know this sounds like a good thing to do, but in reality it's a horrible policy. Things like this are the types of policies that can lead to a complete collapse of financial systems. If it ends up being everyone with a mortgage may just decide to stop paying, and never get evicted, the whole system is FAIL.

Chicago will not evict people whom do not pay mortgage

 

http://apnews.myway.com/article/20081008/D93MFL900.html

 

I know this sounds like a good thing to do, but in reality it's a horrible policy. Things like this are the types of policies that can lead to a complete collapse of financial systems. If it ends up being everyone with a mortgage may just decide to stop paying, and never get evicted, the whole system is FAIL.

So, there is some backstory here...the guy instituting this policy will still perform evictions, but only if the bank provides documentary proof that the people he's evicting actually have been notified and given 120 day warnings. The idea is to avoid the mess where a person goes in to foreclosure and either isn't told at all before they're evicted or even worse when a property owner goes in to foreclosure and the people he's renting to wind up being evicted despite having paid their rent in full and no warning given to them whatsoever.

 

Don't see how it's inappropriate for a bank performing an eviction to follow the laws even if that makes it a little more expensive for them.

So, there is some backstory here...the guy instituting this policy will still perform evictions, but only if the bank provides documentary proof that the people he's evicting actually have been notified and given 120 day warnings. The idea is to avoid the mess where a person goes in to foreclosure and either isn't told at all before they're evicted or even worse when a property owner goes in to foreclosure and the people he's renting to wind up being evicted despite having paid their rent in full and no warning given to them whatsoever.

 

Don't see how it's inappropriate for a bank performing an eviction to follow the laws even if that makes it a little more expensive for them.

 

From the quotes on the radio, he was doing it mainly because of renters. The landlords get the eviction notice, but never bother to tell their tenants. Then, 120 days later, the police show up at the rental property and kick the tenants out.

 

genius, Please tell me how that is fair. I support what is being done here until the rules can be fixed/ followed.

Edited October 9, 200817 yr by StrangeSox

Here's a positive anecdote I read this morning. He is a high-end financial planner.

 

"Here's some good news credit wise...

 

I called my lifelong best friend who's the CFO for a fortune 500 company on Monday to bust his chops about some bonds they issued two years ago (10 years, 7.75% coupon) that were trading at 70 with a current yield of 11% and a yield to maturity of a little over 15%. Yeah, in finance we find that funny (not the ha ha kind). Anyway the discussion led to his situation in not being able to move some inventory even at a loss to raise money for product that they can sell and make money on rapid turnover. Anyway, he was genuinely concerned at the lack of capital out there from the sources he typically taps into. He was even alluding to asking me to arrange some private financing through my clients/sources, thats how desperate he was. Fast forward to yesterday morning he calls me and tells me that the credit lines opened up and was able to get his hands on a chunk of cash. I was surprised at how quckly things transpired since the bill being signed last week and the fed buying some commercial paper on Monday apparantly made the difference for him, so far....

 

As it relates to the stock market, credit markets tend to bottom out just prior to equities. If this is indeed a sign the credit markets have turned the equity markets should follow. The returns on short term coporate paper are so equity like right it is frightening. I'm finding 30% (annualized) returns on three month A+ rated paper. The spreads are gigantic. Same thing on A rated munis. The spread case is too hard to ignore even in the face of whats going on. If the markets continue to collapse nothing will have value, not gold, not RE, nothing... Recovery is the only thing fathomable."

From the quotes on the radio, he was doing it mainly because of renters. The landlords get the eviction notice, but never bother to tell their tenants. Then, 120 days later, the police show up at the rental property and kick the tenants out.

 

genius, Please tell me how that is fair. I support what is being done here until the rules can be fixed/ followed.

That actually happened to a friend of mine. They woke up, got served and told they needed to vacate.

 

Although the other big problem out here is landlords not paying water bills, so the city was threatening to shut off the water to all of the affected apartments. Huge issue--since the tenants weren't responsible for the water bills.

Dow down 3.5% again today, to a current 8939.

 

S&P down 4.5% to about 940.

 

Dow down 3.5% again today, to a current 8939.

 

S&P down 4.5% to about 940.

Make that 4% and 5% respectively now.

 

So, worth a little bit of your time if you have it today is this NYT piece, 4 pages, going through Greenspan's role in the buildup of these bubbles and in particular his work in helping expand all these complicated crazy credit swaps/derivatives/whatever the Hell they're called.

Holy crap!!!!!

 

DJIA now down 6.62% to 8645

 

SP down 7.49% to 911

 

Wow.

 

We're all f***ed. It's just a matter of time before we wind up laid off...

I'm getting very nervous about job security in these times.

Yea, it's going to get way worse before it gets better I have a feeling.

 

That actually happened to a friend of mine. They woke up, got served and told they needed to vacate.

 

Although the other big problem out here is landlords not paying water bills, so the city was threatening to shut off the water to all of the affected apartments. Huge issue--since the tenants weren't responsible for the water bills.

 

As a landlord I had mixed feelings about water bills. My first inclination was to have the tenants be responsible for the bills. That way if they were late with the rent, I wasn't also out the water bill as well. I was annoyed to be shelling out for utilities when they hadn't paid their rent. Then I had a tenant that shut off the drip irrigation system and destroyed the lawn and landscaping. He felt that since he was paying for the water, he should have total control over the bill. I couldn't really argue with him, although I really wished he had complained before doing that, I would have split the water bill with him.

bounce. DJIA still down 5.1%, S&P 5.9%. VIX at all time highs today.

 

Bounce didn't last. Dead cat.

 

Dow closes down 7% to 8609

 

S&P closes down 7.4% at 912

 

Nasdaq relatively well off, closing down 5.47% at 1645

 

Ouch.

 

The DOW has lost almost 25% of its value from September 9th.

So, there is some backstory here...the guy instituting this policy will still perform evictions, but only if the bank provides documentary proof that the people he's evicting actually have been notified and given 120 day warnings. The idea is to avoid the mess where a person goes in to foreclosure and either isn't told at all before they're evicted or even worse when a property owner goes in to foreclosure and the people he's renting to wind up being evicted despite having paid their rent in full and no warning given to them whatsoever.

 

Don't see how it's inappropriate for a bank performing an eviction to follow the laws even if that makes it a little more expensive for them.

 

they need to figure out a way to tell tenants if they are going to get evicted 120 days before time. but if banks can't forclose on properties, this whole economic disaster is only going to get much worse. banks not being able to recoup money form loans is a major reason for what is going on. if this 'will not evict' policy spreads banks will not give out home loans anymore. it's that simple.

Bounce didn't last. Dead cat.

 

Dow closes down 7% to 8609

 

S&P closes down 7.4% at 912

 

Nasdaq relatively well off, closing down 5.47% at 1645

 

Ouch.

 

the lower the market gets, the more people will panic and pull their money out. the public has lost faith in the stock market to an extent. not a good sign.

There are only two premises, which are tenable as to the future. Either we are going to have chaos or else recovery. The former theory is foolish. If chaos ensues nothing will maintain value, neither bonds nor stocks nor bank deposits nor gold will remain valuable. Real estate will be a worthless asset because titles will be insecure. No policy can be based upon this impossible contingency. Policy must therefore be predicated upon the theory of recovery. The present is not the first depression; it may be the worst, but just as surely as conditions have righted themselves in the past and have gradually been readjusted to normal so this will again occur. The only uncertainty is when it will occur.

Dean Witter, May 6, 1932

the lower the market gets, the more people will panic and pull their money out. the public has lost faith in the stock market to an extent. not a good sign.

Actually, I doubt it. Think about this in terms of who has their money in there...

 

--You've got people who are personally active in the markets, or who are relatively market savvy and go through others. For any of them, they realize that getting out now is idiotic. Its locking in huge losses, and ignoring the buying opportunity.

 

--You've got people with brokerage accounts and small investments - similar, they'll know how it goes.

 

--You've got 401k types, where that is all they have. People don't think short term on 401k's - they'll stay in.

 

--You've got those near retirement - they can't retire as easily now, so they'll stay in.

 

--You've got trading firms and IB's, who certainly won't leave the markets, unless they go out of business. Even then, their positions will still be there with their market value. Other firms will buy it up.

 

 

Basically, no large group in the market will leave. The markets are, in this case, the opposite of retail banks. Panicked downturns don't result in collapses (1929 being the exception, but that was a different scenario). At SOME point, they result in a reverse and upward trend. The only question is, where is that bottom?

 

This won't result in a panic liquidation. A few will, but they will be far offset by the larger monies going IN on the buying opp.

 

Also, trend wise, this type of crash out typically means a good time to buy real estate.

 

Also, trend wise, this type of crash out typically means a good time to buy real estate.

Except right now is probably as bad of a time in at least 20 years, perhaps a lot more, to be buying real estate, because the bubble is still only half deflated.

Actually, I doubt it. Think about this in terms of who has their money in there...

 

--You've got people who are personally active in the markets, or who are relatively market savvy and go through others. For any of them, they realize that getting out now is idiotic. Its locking in huge losses, and ignoring the buying opportunity.

 

--You've got people with brokerage accounts and small investments - similar, they'll know how it goes.

 

--You've got 401k types, where that is all they have. People don't think short term on 401k's - they'll stay in.

 

--You've got those near retirement - they can't retire as easily now, so they'll stay in.

 

--You've got trading firms and IB's, who certainly won't leave the markets, unless they go out of business. Even then, their positions will still be there with their market value. Other firms will buy it up.

 

 

Basically, no large group in the market will leave. The markets are, in this case, the opposite of retail banks. Panicked downturns don't result in collapses (1929 being the exception, but that was a different scenario). At SOME point, they result in a reverse and upward trend. The only question is, where is that bottom?

 

This won't result in a panic liquidation. A few will, but they will be far offset by the larger monies going IN on the buying opp.

 

People are already liquidating their shares. That is a major reason for stocks tumbling. Selling low is dumb, but people act dumb in a panic. You will continue to see panic sells, the question is where the market will level off. Maybe a Dow at the low 8000's, possibly even dip into the 7000's. You are right to a certain extent, there are long term investors who will not pull out their savings and sell low (which would screw them in the long run).

Edited October 9, 200817 yr by mr_genius

Also, trend wise, this type of crash out typically means a good time to buy real estate.

 

real estate prices will continue to drop if banks are not giving out loans. but it will be a cash buyers bonanza. huge profits could be made

real estate prices will continue to drop if banks are not giving out loans. but it will be a cash buyers bonanza. huge profits could be made

True on cash buyers, and their buys will help stabilize prices. But more important, the combo of the bailout, lower rates and a clearing out of some of the substandard lenders will create lending opps. Banks still need to lend to survive - and lend they will.

 

Long run, this is a good time to buy.