40,000 mortgage jobs lost so far

[steven]

CHARLOTTE, N.C. — At the North Carolina offices of mortgage lender HomeBanc Corp., Archie Clark is the only employee left. But in a few days, he’ll be gone, too.


“It’s pretty much a ghost town over there,” Clark said. “Somebody went in and took the furniture from the lobby. I don’t know who did that. I put some of the other stuff in the back and locked it up.”

When Clark finishes helping movers from the company’s Atlanta headquarters collect computers and other property, he’ll join the more than 25,000 workers nationwide who have lost jobs in the financial services industry since the beginning of the month — with more than half coming since last Friday. With few exceptions, the cuts are the direct result of woes in the nation’s housing market.

More layoffs are announced daily. On Wednesday, Lehman Brothers Holdings closed its “subprime” mortgage business, laying off 1,200 workers at 23 offices; Scottsdale, Ariz.- based 1st National Bank Holding Co. closed its wholesale mortgage unit and cut 541 jobs, and Accredited Home Lenders Holding Co. added 1,600 positions to the heap.

Tuesday night, banking giant HSBC said it would close a mortgage service office in Carmel, Ind., with the loss of 600 jobs.

Since the start of the year, more than 40,000 workers have lost their jobs at mortgage lending institutions, according to recent company layoff announcements and data complied by global outplacement firm Challenger, Gray & Christmas Inc.

Meanwhile, construction companies have announced nearly 20,000 job cuts this year, while the National Association of Realtors expects membership rolls to decline this year for the first time in a decade.
It’s an employment collapse that threatens to rival the massive layoffs in the airline industry that followed the Sept. 11, 2001, terrorist attacks, when some 100,000 employees lost their jobs.

“It’s far from over,” said Bart Narter, a senior analyst with Celent, a Boston- based financial research and consulting firm. “The subprime lending collapse will continue to ripple through the financial sector.”

For five years, the nation’s housing market was booming and mortgage companies grew quickly. But as home values declined and interest rates rose in the past year, rising delinquencies and defaults — especially in subprime mortgages targeted at borrowers with risky credit — have pounded lenders.

http://www.buffalonews.com/145/story/146983.html

[seattletobuffalo]

Nice article.

I know buffalo prices are very low, but did prices go up at all in the last 5 years. Were there any areas of town, where people did really well with buying houses?

[Effigy]

Nice article.

I know buffalo prices are very low, but did prices go up at all in the last 5 years. Were there any areas of town, where people did really well with buying houses?

I'm not a realtor. Just speaking about my house, where I live, (an inner ring suburb of Buffalo), different (smaller) school district, low crime, lower auto insurance rates, higher taxes than Buffalo proper...

Lot size: 56' X 120'
House: Single story ranch, 2 BR, 1 Bath, 1 1/2 car garage ~ 900 sq ft.
Value in 1997: (when my Dad died and I inherited it) $65 - 70K.
Today? Maybe $75 - 80K. Note: this is a one owner, one family, 52 year old, never abused solid home in a totally 100% nice quiet peaceful neighborhood. If you'd like to do a private reverse mortgage to buy my house, contact me. I'm an unencumbered owner.

Taxes: (2006)

City of Tonawanda: $ 1250.00
Erie County: $ 435.00
Tonawanda Schools: $860.00 (would be $1300++ without STAR).

Neighbors: Priceless! (They're that good.)

Pizza: best between NYC and CHI. Dipaulos at Brighton & Colvin (5 minutes away) is better than any Pizza Hut that ever existed.

Beef on Weck: Swistons, right down the street

Wings?: Too numerous to mention. Duffs 10 min away.

The latest trend/fad/gadget/panicpoint (all due exception given to unsafe bridges and dogfighting rings)? (Damn that media, anyway. I'm sure Seattle has no unsafe bridges, or at least none that your politicians want to raise the gasoline/sales/alcohol/tobacco/transfat tax to fix now that there's a problem that is in the spotlight?)

Sorry. We're talking about WNY, where Pizza Hut and Taco Bell get No Respect. Buncha crap, I say. We have 1,000 Mom and Pop pizza joints that kick PH's ass. Taco Bell? one word... mighty taco.

Except at the tattered edges, Western New York is unique in its occupation of a DUAL ZEN continuum. We lead by lagging. There is no idea so new that we cannot make old and dismiss, yet there is no idea so old that we cannot resurrect and subsequentially ruin. We just have not learned how to focus that kind of power. 20 years behind, but still forward-looking.

We don't set or follow trends in WNY... We just are.

Honest. Solid. Stolid. Trustworthy. And maybe a bit boring and behind the times.

There are no better Friends than those found here - The City of No Illusions, sadly exploited by hype and hypnosis.

If WNY ever turns into Charlotte, NC or Cincinnati, OH I will either kill myself or move to Denmark, whichever is easier.

In a Just World, Buffalo would be the paradigm, rather than the antithesis, of a Good place to live.

[atotaltotalfan2001]

Nice article.

I know buffalo prices are very low, but did prices go up at all in the last 5 years. Were there any areas of town, where people did really well with buying houses?

I think the suburbs in general did well over the last five years. It sort of shocked me. Parts of Buffalo as well. But you're still talking VERY low prices, compared to many other areas of the nation. It was surprising to me that houses on my street were selling in the high $200,000s.

[run4it]

Elmwood Village has skyrocketed over the past 5 years...

[Enough]

Meet victims of the mortgage mess

People who don’t qualify for 30-year, fixed loans get steered into trouble

By Dave Carpenter and J.W. Elphinstone - ASSOCIATED PRESS
Updated: 08/26/07 7:13 AM

Gwendolyn Walkley got tricked into refinancing her Daytona Beach Shores condo with a convoluted mortgage that is leaving her financially strapped. For five years, the housing boom put money in the pockets of lenders, brokers, realtors and investors, and granted easy mortgages to homeowners with both good and blemished credit. But as home prices decline and interest rates climb, the cracks in the housing market’s foundation are widening.

An increasing number of homeowners are getting caught up in the fast-spreading mortgage crisis that is claiming victims from all income levels and demographic groups. Many are trying desperately to get their loan terms reworked but are finding it’s difficult in a tightened market.

Exotic mortgages, once hailed for helping to increase U.S. homeownership to its highest level at 68.9 percent, have become the undoing of many.

Loans with adjustable rates, payment choices and loose requirements have trapped borrowers in too-high payments with few options for escape. Some have taken on second and third jobs, depleted savings, retirement and college funds and wrestled with lenders to stave off foreclosure. Those who fail see their homes sell at auction.

David Downs, a professor of real estate at Virginia Commonwealth University, believes blame for the current quagmire falls on all involved. But he says the consumer should be held accountable first.

“If somebody takes on financial risk, it’s incumbent on the consumer to understand that,” Downs said.

Many of the victims are subprime borrowers — people who don’t qualify for market interest rates because of blemishes on their credit record. The Center for Responsible Lending estimates that 2.2 million subprime home loans made in recent years have ended or soon will end in foreclosure.

Some people were sold on too much house, piled up huge loans based on the inflated value of their property and didn’t fully understand the interest rates they would have to pay.

Here are a few of their stories:

Surprise: Foreclosure looms

The walls are bare, the closets are empty, and Connie and Timothy Pent and their two teenage children are living out of boxes as they wait for a dreaded knock at the door of their three-bedroom house in Ocala, Fla.

They’ve fallen behind in payments on their home loan, and their lender told them in July that foreclosure was imminent.

“We thought we were fine,” said Connie regretfully. “You never know.”

The Pents grieve about losing their three-acre property in the middle of horse country, with its swimming pool and fish pond.

“It was my dad’s house,” said Connie, 39, an elementary school receptionist. “It’s quiet, it’s open — we love it.”

Their troubles began in April 2006 when they refinanced the remaining $207,000 on a 30-year fixed loan to a two-year adjustable rate mortgage so they could pay down hefty obligations on their SUV and pickup truck.

A mortgage broker informed them just before the closing that the remaining debt would be $3,500 more than expected, but they signed anyway.

With their new payments, a sequence of events left them unable to keep up. First Connie’s mother moved out and stopped helping out with mortgage payments. Then her husband Timothy lost his job at a mobile home factory because of the housing industry slump.

Their loan servicing company first demanded payments, then stopped returning their calls.

“We probably should have been better prepared for it,” Connie said. “When the job goes, unfortunately, so does everything else.”

Bad advice leaves her hanging on

After her mother died four years ago, Gwendolyn Walkley retired and moved from California to a three-bedroom condominium in Daytona Beach Shores, Fla.

She originally bought the $299,000 condo with a $100,000 down payment and an adjustable- rate loan with interest rates that would reset after two years. At the end of last year, she wanted to refinance into a fixed-rate loan to avoid the higher interest rates on the ARM, but her broker sold her on a “great loan that very few people qualify for,” she said.

Walkley, 56, had a high credit score in the 730s, she said, and carries no debt, except for her mortgage.

She thought the loan had an interest rate slightly above 6 percent, making her monthly payment less than her $1,600 monthly retirement check. But it turned out that was a “minimum” payment that didn’t cover the full monthly interest or any principal on the loan. If she wants to pay off the principal and interest on the loan each month, her interest rate bumps to around 8 percent and her payment to around $1,800. Otherwise, the difference is tacked onto the amount she owes, ballooning her debt.

To avoid a swelling principal, Walkley has used all her savings and is now working through her stock investments to pay the full interest and principal payment each month. She hopes her investments last until the prepayment penalty period expires, 2z years from now, and then refinance into a 30-year fixed loan.

Walkley remembers her mortgage broker’s promise. “He said ‘You’re gonna love this loan, trust me,’ ” she said. “What a line.”

Rushed into a bad deal

Jeanna and Vernon Marshall were renting a home for themselves and their seven children when the owner decided to sell and gave them 30 days to move. So in January last year, they hurriedly signed what they thought was a $365,000 30-year fixed mortgage on a four-bedroom home in Henderson, Nev.

After the closing — during which “so many documents” passed through their hands — they realized they had signed onto a two-year interestonly adjusted rate mortgage that they could barely afford, with a payment of $2,923 a month.

Jeanna Marshall, 36 and disabled, receives $1,500 in Social Security payments a month, while her husband Vernon, 41, is a driver for UPS netting about $3,000 a month. Last year, however, Vernon’s work slowed down and they fell behind on their payments. They tried renegotiating, but the mortgage companies only wanted more every month. No other company would refinance the loan because it carried a $20,000 early payment penalty.

The house went into foreclosure in May, and the Marshalls are looking for a place to rent. With their oldest now 17, Jeanna is worried about college.

“We’re hoping and praying on scholarships,” she said.

They’re fighting back

The three-bedroom bungalow that Milca and Josy Fanfan bought in 2002 in Brockton, Mass., a blue-collar suburb of Boston, wasn’t their dream house. But at $215,000 it was what they could afford for themselves and their 3-yearold son Nathaniel.

With subpar credit scores, the Fanfans were able to secure a loan from Ameriquest Mortgage Co. with a hefty fixed interest rate of 9.5 percent. The problems began when their mortgage broker called at the last minute to say they needed to come up with an extra $8,000 in fees. At the closing, they were told the loan would be adjustablerate, not fixed.

Then Josy, a self-employed remodeling contractor, lost a finger in an on-the-job accident and was out of work for months. That put the couple behind in payments.

Milca asked that the loan be reworked, to no avail. Meanwhile, monthly payments on the adjustable- rate mortgage have ballooned from $1,700 to $3,000.

Milca called her lender almost daily without response and piled up attorneys’ bills and late fees. She had problems sleeping from all the anxiety, and her hair started falling out.

“Every month it was like, ‘Is this nightmare going to be over?’ ” she said.

Ameriquest spokesman Chris Orlando said the loan was made through an independent broker and that his company had worked with the Fanfans to keep them in their home.

After foreclosure proceedings began in February, Milca was referred by her state bank commissioner’s office to a state-funded agency that fights unscrupulous mortgage lenders and brokers.

Through the agency, the Fanfans negotiated a rate of 9.5 percent and the right to refinance in two years. The monthly battle to make payments isn’t over, but Milca is working several jobs to make sure it is won.

“I want people to know they can fight,” she said. “Don’t be ashamed to cry out for help.”

Thank goodness! Someone who actually came out and said EXACTLY where the blame should lie!

I think the housing bust shows how fragile our economy really is. Astronomical credit card debt, people purchasing $40,000 vehicles and houses they cannot afford only spells disaster for our countries economy!