Meet Black Dog. She is a purebred, or nearly so, German Shepherd that was abandoned a month ago in my neighborhood. She is still here, living off the land and whatever the concerned residents leave out for her. For the first few days, she would sit by the road and watch every car go by, waiting for her family to drive up and save her. She is a bit wilder these days, but you can tell from her demeanor that she was once a cherished part of a family. Animal Services doesn’t have the time to try to capture her – they tell me there are hundreds more just like her out there.
Meet Bob, a manager at Rite-Aid. I was just buying some Tylenol and he opened up another lane for me. I recognized the name on his badge from my searches of homes lost to foreclosure, and averted my eyes. Weird.
Meet Jose, a crewman with Charter. We have never met, but he was in charge of moving some cable lines on my Mayberry property, and we talked often. He was cool, professional, and got the job done on time and on budget. A week later he was a TD.
As we become a community of the foreclosed, it is getting personal. It isn’t just the speculators, the flippers, the Realtors run amok, or the dilettante developers anymore. It is your dentist, your produce manager at Raley’s, your mechanic, and most of all, your neighbors who are the casualties now. And Black Dog.
durhamdude
I don’t know the circumstances of the people you discuss. Maybe they are blameless, but maybe they drank the kool-aid instead. They did so based on the recommendations of professionals who should have known better.
I specialize in arcane area of the software industry. Over the past 30 years, I have seen the rise and fall of numerous new technologies. And each and every time one of these new technologies comes out, some smarta*s tells me it is different this time. The heck it is.
At tax refund season, I always spend an hour or two in front of Best Buys. I look closely at the teeth of the children whose parents are buying large screen TVs. I just want to yell at them: why the f*ck, don’t you fix their teeth first.
When I bought my first house years ago, you had to PROVE to the bank you could afford the house. No more. It seems that at the height of the bubble, my disabled relative who has been in an institution for 30 plus years could have gotten a mortgage.
So don’t think me a mean person because I have no sympathy for these folks. If they got screwed, they most likely eagerly participated in their own set up. But I do have great sympathy for the dog. Perhaps you could capture it and take it to a local rescue society.
DD
Grand Wazoo
Mike – the only “person” I feel sorry for in your story is the dog – he is the only one who didn’t sign on the line that was dotted – he’s a victim, the rest of the cast of characters in that story are just bunch of dumbasses.
So, where are you and where is the dog? There are private agencies in town that go __way__ out of there way to deal with situations like this, now’s the time for that guy (the dog, not the artists formerly known as “Homeowner”.
BanteringBear
I wouldn’t sleep until I rescued the poor dog. Of course, I’d probably keep her. Some scumbags dumped a stray near my house several months back. The people who do these things are disgusting, despicable characters. There are far too many of them in this country.
I’ve been reading stories of these “victims” (gag) leaving their pets locked inside of the homes they abandon, unable to even forage for food or water. It’s left me a bit cynical. Many of the perps should be turned into dog food themselves.
LC
Mike, thank you for your post, I find your story very compassionate. We all at some time in our lives are at least tempted to “sign on the dotted line” and many of us do when we shouldn’t have. If not concerning real estate perhaps some other venture or sound good scheme.
Anyway, while it is true that the only “true” victim is this story is black dog compassion is a much better way to treat folks (IMHO). Someday we may find ourselves in need of the same. We all pay the consequences for our bad decisions. Hopefully we all learn from them too.
As to why someone would leave a dog (or any pet) behind to fend for itself when it is so easy to either call or take the animal to a shelter or other rescue agency..that I do not understand.
NAS
I was in Reno a few days ago looking at properties with Guy. BTW, Guy is one hard
working agent! We saw a variety of homes for sell. The only thing consistent in this market is (IMO) it is mostly chaos.
We looked in Somersett, Arrowcreek, Saddlehorn, SW Vistas, and Northgate areas. We looked at immaculate and beautifully maintained homes. And, we looked at dead landscape, walkways strewn with debris, piles of bird droppings, rodent traps, missing appliances and sinks. Reminded me of some of Ray Bradbury’s tales.
Our family Shepherd of 14 years died a few months ago. To think someone would dump off an animal in this manor breaks my heart. Casualties. Indeed.
durhamdude
Other reasons I don’t have sympathy for most people who run into money problems.
For years, I told people I could make them richer if the followed my advice. My advice boiled down to three rules:
1. Live below your means;
2. A penny saved is equal to two pennies earned;
3. Low cost index funds are always better than high cost actively managed funds.
(Please no debates over #3).
Over the years, I must have made this offer to 100s of people. Only one ever followed up. I charged him a pizza for a half day discussion.
As I look around my neighborhood and acquaintances, I am always shocked at what I see.
The house with a three-car garage but six plus cars.
The neighbor who is always broke, but borrowed from his 401K plan to install wood floors in his house and completely redo his backyard.
The neighbor who had a doctorate in chemical engineering but who could not understand a prospectus nor take the time for me to spend one-hour with him to show him the four lines he had to be really concerned about.
The acquaintances who owns a Hummer to drive to the grocery store and back.
The acquaintances who grosses around $150,000 a year but spends $140 a month on satellite television.
The neighbor who is recently widowed and kids are gone bought a big 2700+ sq. foot house and is now having financial problems
This list could go on and on.
BanteringBear
Henry Paulson today, on the government takeover of Fannie and Freddie:
“The huge potential liabilities facing each company, as a result of soaring mortgage defaults, could cost taxpayers tens of billions of dollars, but Paulson stressed that the financial impacts if the two companies had been allowed to fail would be far more serious.
“A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance,” Paulson said.”
Our government is rotten to the core, evidenced by this pathetically transparent statement. This has nothing to do with the plight of Americans or their inability to secure loans. It has everything to do with the poor financial health of the big banks, and the rapidly declining value of the assets backing their loans. The government is treating falling home prices like some sort of catastrophe, rather than acknowledging that the hyperinflation of home prices WAS the problem. They are desperate to put a floor under prices, to the detriment of every hard working taxpayer, as well as their children.
Rather than be proactive 4 or 5 years ago when it was obvious what was happening, the government chose to turn a blind eye and allow the greatest bubble of all times to inflate to epic proportions. Now, instead of allowing it to burst as they should, they choose to compound the problem by meddling. They will only prolong the agony, which ultimately leads to a lower quality of life for all citizens. What the citizens really need are high paying jobs, and affordable houses, not low paying service jobs, which don’t even afford a shanty. Thanks Uncle Sam, for nothing.
Ann Onn
Black Dog has been haunting me since I read this post last night. I’m relieved to see I’m not the only one affected by it. I don’t think people who can’t make a commitment to a pet should have one. After spending $3,000 on our German shepherd in the last 5 days of his life a few years ago, we came to the conclusion we can’t afford any more pets, but we will keep our commitment to our remaining dog as long as she lives. (And we’re going to be awfully lonely when she’s gone.)
I’ve also heard about people locking their pets in their foreclosed homes when they move out. I only hope that’s a myth. Are people that heartless and stupid? Maybe they’ve been so afraid The Bank Man would come knocking at any moment they just assume he’ll show up the next morning and find Mittens and Buddy and then they’ll be his problem.
Although durhamdude is off topic, I just have to comment that my husband and I have followed his three rules for the past 35 years, and we are far from rich. However, we’re not in debt, either, and we’re reaching a point where not being in debt is almost like being rich.
longerwalk
BB: I believe that Congress (or at least some Congresspersons) actually meddled in prompting these agencies to loosen lending requirements to put more people (read: those with less means) into homes. Can’t have the fox watching the chicken coop. Now the chickens are barely alive, and bleeding.
For all: I DO have sympathy for many folks out of a home, and I’m a firm believer in the ‘live below your means’ approach to life. Why? Because it’s not reasonable to expect Joe & Jane average citizen to be able to read through and UNDERSTAND the white blizzard of paperwork accompanying a home purchase. It’s gotten too complex with all the CYA paperwork. So they trusted their agent & the mortgage pusher . . . and are no longer owners. Certainly, some knew it, but a healthy proportion were certainly misled. If a physician or lawyer were to do this kind of thing, they’d be hauled up short. (Though their systems aren’t the best, either.)
cash buyer
stock market seems to like government intervention……..at the open of overnight trading, sp index gapped up 25 points from friday close.
Waldo
I would expect the stock market would like the bailout. The spector of Fannie and/or Freddie failing, and the resultant turmoil across the world markets, has cast a serious chill on the market for months now. If the possibility of the GSEs failing has now been removed, I expect the markets to respond positively.
I see that the American auto makers are going to Congress to ask for a $50 billion loan to retool to more energy efficient products. $50 billion for the auto makers, $50 billion to bail out the GSEs, $10 billion a month in Iraq, $8 trillion in existing debt……
I would encourage Diane and Guy to encourage their children to learn how to speak Chinese.
pineydog
Because it’s not reasonable to expect Joe & Jane average citizen to be able to read through and UNDERSTAND the white blizzard of paperwork accompanying a home purchase. It’s gotten too complex with all the CYA paperwork. So they trusted their agent & the mortgage pusher.
————————–
I agree completely. When I put my initial $10,000 deposit down on a unit at the Montage, I was given a 3-inch binder full of disclosures. It included a number of disclosures, HOA/CC&R agreement, proposed budgets and the like. I attempted to read it through. However, it is so complex there is no way I could understand it all.
Recently I learned the Montage filed a REVISED HOA/CC&R last May. I downloaded it from the Recorder’s office and attempted to read it. The only way to compare it to the original HOA was to eyeball it. I have discovered a number of changes that I consider important.
The Montage claims it has 40% (150 units) already under contract. Anyone want to give me odds as to the number of the planned purchasers who (1) have read the new HOA/CC&Rs and (2) even begin to understand how it differs from the old.
PD
smarten
pineydog –
How is a publicly traded stock or mutual fund prospectus any more intelligible to the lay person than a real estate purchase contract? So should any of us saps who’ve lost money in the stock market because of sales puffing brokers be bailed out for the same reasons as sub-prime borrowers? Where exactly does it end?
And here’s some free advice concerning your contract to purchase your Montage unit you’d like to get out of. If the HOA bylaws/CC&Rs have been materially changed from those originally represented without your consent, you probably have grounds to rescind if you act promptly.
Good luck.
Reno Ignoramus
Today the federal government effectively became the largest mortgage lender in the country at a potential cost of $200 billion to the American taxpayers. (At the same time, the presidential candidate hawking “smaller government” pulled slightly ahead in the polls,for whatever that may be worth at this point in time).
A few months ago one of the most venerable mortgage banking houses, Bear Stearns, was sold for a sum less than the contract salary of the baseball player Alex Rodriguez.
More than two years ago, I started commenting on this blog that the ultimate fallout from the Voodoo money frenzied bubble was going to be impossible to estimate. Perhaps I underspoke. Indeed the chickens are coming home to roost. From abandoned dogs to the socialization of the nation’s mortgage and credit industry, these are extraordinary times indeed.
DonC
Yes there was a lack of regulatory oversight, and yes Fannie and Freddie did a fine job lobbying Congress. So yes, Fannie and Freddie may have had this coming. However, keep in mind:
1. Fannie and Freddie are the two largest financial institutions in the world — you can’t ignore the impact of a failure of something this large.
2. Placing financial institutions in receivership is standard practice — how many banks have been closed this year?
3. The cost to the taxpayers, estimated to be as large as $25B, does not seem that great relative to other expenditures. One trillion for the Iraq war and almost $100B over the last eight years for farm subsidies — essentially wealth transfers from taxpayers to agribusiness — which one would be hard put to justify on any grounds.
4. Henry Paulson seems up to the challenge.
5. Placing Fannie and Freddie in receivership will allow the real estate markets to continue functioning but it will not effect real estate price increases or decreases, other than by lowering interest rates. Lower rates will follow because Fannie and Freddie have been paying much higher rates than the government for loans, they will now be able to borrow at the government rate, and these lower rates will be passed on to those seeking mortgages.
The takeover itself is no big deal. One potential for greater impact is the ripple effect of wiping out the value of the preferred shares (Tier 1 capital) held by regional banks and S&Ls. A second potential for greater impact is the wiping out of subordinated debt (Tier 2 capital). The identify of the entities holding this debt are unknown and the credit swaps related to the debt, engaged in by those holding the debt and those not, may exceed the value of the debt by several magnitudes.
The markets will probably sell off until the dust settles. The credit swaps may profoundly and negatively affect all sorts of players having no obvious connection to the home mortgage markets, including pension funds. Until these losses are sorted, there won’t be any visibility.
DonC
BB and others: I find the black dog story very touching and wonder if there is any way we can help with this. Any ideas?
NVMojo
While the lying conservative GOPs frontmen/women are running around talking about how they are going to make CHANGE happen, their current king george just signed all the US taxpayers up to back the investments in Freddie/Fannie for Japan, China and Mexico.
As usual, we all get screwed for the diddling-schemes of the rich and their corporations.
DonC
NVMojo – the Democrats are 100% behind this. In fact Barney Frank (the Democrat who heads the banking committee in the House who works very well with Paulson) was the chief architect of the legislation permitting the takeover. This is one action that is really not partisan, which you could see when both Obama and McCain voiced support.
billddrummer
Pets are always casualties, as has been commented on earlier. But how about children? My kids have had to move 4 times in the past two years because I wasn’t taking care of my responsibilities as a breadwinner. Thankfully, things are getting better.
NAS
DonC, etal,
re Black Dog Rescue. I live in L.A., but if there is an effort to save this animal, I will
contribute.
smarten
DonC –
You state “lower rates will follow because Fannie and Freddie have been paying much higher rates than the government for loans, they will now be able to borrow at the government rate, and these lower rates will be passed on to those seeking mortgages.”
Some of us have commented on the fact that long term mortgage rates are higher than they should be [not necessarily knowing the reason why] given the Federal discount rate [although I understand the two are not directly related]. You now provide an explanation.
So my question to you is how much lower do you anticipate long term mortgage rates will drop until they reach “the government rate?” And how long do you anticipate it taking for these drops to trickle down to those seeking mortgages?
Thanks in advance!
BanteringBear
If I were in town, I would already have rescued Black Dog. I’m surprised by the fact that nobody has gained her trust and brought her home. I find it disturbing that the humane society will not fulfill it’s responsibility to capture her. I know that, around here, I can borrow a trap from the local shelter (with a small refundable deposit) and use it to capture any animals which are running loose. I would propose that GreenNV, or one of his caring neighbors attempt such a thing. It is only a matter of time until she is hit by a car and injured, or worse. Somebody in the area please do something. It’s not an expensive endeavor by any means, but it sure is satisfying for the soul.
DonC
smarten — perhaps 1/4% at the low end and 1/2% to even 3/4% at the high end? It’s hard to say. I see that USA is reporting a half point drop today as opposed to Friday. We’ll have to see.
Perhaps more importantly, with new management the rules may change. I suspect this will be pushed off until after the election but this is unprecedented so perhaps not. One thing which is certain is that the rates and rules will not be set to maximize shareholder value.
smarten
Thanks DonC –
Picked up this quote from Bloomberg.com on the question I posed/you answered: “The difference between the 10-year government bond yield and the average U.S. fixed mortgage rate has averaged 2.3 percent this year through last week, compared with 1.6 percent during the prior four years, as lenders and investors demanded higher rewards for owning mortgage bonds. That spread will narrow dramatically because investors now will perceive that much of the risk of owning mortgages is gone.”
“The average U.S. rate for a 30-year fixed mortgage was 6.35 percent last week, according to Freddie Mac.” As you state, it’s already down 1/4% today and if the above-quote/prediction comes to pass, it could be down to about 5.5% in short order. Given Freddie Mack [“the world’s No. 2 mortgage buyer…will release this week’s average rate on Thursday”], we should have our eyes glued to the news for any clue.
Although I am now a minority on this Board, I see a drop in mortgage interest rates coupled with increased inventory and a dropping median sales price as the perfect storm for a purchase come…January of next year. Unless the entire economy goes to hell, I can’t see prices [at least at the low end of the market] getting appreciably lower, while I can definitely see interest rates going higher.
DonC
billddrummer – I understand your sentiments about your children. But to your credit you’ve actually taken care of them. If you had dropped them on the street to fend for themselves we would all be more concerned than we are about the black dog.
Please understand that this is not in the least way intended to trivialize the problems inherent in raising the next generation.
DonC
smarten – you need to look at the longer term as well. Interest rates may be too low at the moment as the Fed tries to stave off a number of economic problems. Depending on inflation fears, rates could rise over the next year even as the spread between mortgage rates and treasury rates narrow.
smarten
I agree DonC. That’s why I said “I can definitely see interest rates going higher.”
The point I was trying to make was that if we all sit on the sidelines waiting for prices to rise while long term mortgage rates are going up [remember, typically we pay three times the acquisition cost of a home once we factor in mortgage costs for a thirty year mortgage], what have we really accomplished?
GreenNV
First, a heart felt thank-you for your compassionate responses to the plight of Black Dog. She has a lot of people out here working hard to make the situation better for her. If she had to be abandoned, at least she is in a place where food and water are readily available, traffic minimal, and the neighbors are watching out for her.
She spends 95% of her time on one working ranch (I spotted her again this morning). The owners are one of her feeding “sponsors”, but won’t allow animal control to set traps for her. They are convinced she will be considered a feral dog, and be euthanized if captured. They also have concerns about possible harm to their livestock from the trap. I am working with animal control and the rancher to reach an agreement on a approach. In the mean time, we are feeding her on a schedule to make capturing her a stronger possibility, and trying to make friends with her. She is extraordinarily poised in her motions, but is deathly terrified of any human contact.
As Captain of the Universe, I would love to be able to swoop down and make everything right for Black Dog, and am frustrated that the situation is more complicated that it seems. Wish all her backers luck – I’ll keep you posted our progress.
Ann Onn
Thank you, thank you, thank you, GreenNV/Mike.
Sethsayer
Imagine you are Black Dog. Would you rather run free in your adopted neighborhood, eating and drinking as you desire thanks to the hospitality of your human friends, or would you rather be in a cage at the Humane Society awaiting euthanasia or extradiction to who knows where?
The happiest animals on the planet are those that live in the wild, free to follow their animal souls. That’s not to say that domesticated animals cannot experience joy with their human companions, but usually the need to please the humans eventually takes its toll. Animals in the wild do not die of cancer.
Please account for the possibility that Black Dog is much more evolved than limited human understanding can comprehend. Let her be. Allow her to follow her animal soul. Even to “death” if she desires. She knows she will back soon enough.
Is it your limited understanding that an animal does not fully understand what it is doing when it runs under the wheels of a moving car?
BanteringBear
Sethsayer posted:
“Please account for the possibility that Black Dog is much more evolved than limited human understanding can comprehend. Let her be. Allow her to follow her animal soul. Even to “death” if she desires. She knows she will back soon enough.
Is it your limited understanding that an animal does not fully understand what it is doing when it runs under the wheels of a moving car?”
No. That’s an emphatic no. You’re wrong here. I’ve argued with idealists like yourself about these sorts of things. You wouldn’t happen to be a radical vegan, would you? Just wondering if you’re that same person I argued with 15 years ago.
Allowing stray DOMESTICATED animals to run free is irresponsible, and leads to their untimely death. Dogs are ill equipped to survive on their own, and generally can’t. Even a feral cat has a life expectancy of less than 5 years. The dog needs a home with a fenced yard. Period.
pineydog
Sethsayer posted:
“Please account for the possibility that Black Dog is much more evolved than limited human understanding can comprehend. Let her be. Allow her to follow her animal soul. Even to “death” if she desires. She knows she will back soon enough.”
———-
In my neighborhood (I live near McCarran and Manzanita)any cat or small dog left out overnight is called dinner. And even big dogs cannot stand up to a pack of coyotes. Many nights I can hear them “sing” in the hills across McCarran.
PD
MKchick
Smarten, that is what I was basically saying in the other thread.
Until people stop defaulting on their loans, the real risk of the mortgage-backed securities is a question mark. We all pretty much agree that with the defaulting prime & alt-a paper coming down the pipe, that kind of capitulation isn’t going to happen until a few years from now. The good mortgages have to outnumber the bad.
Low rates are for the short term (less than 6 mos) because the gov’t announced they are guaranteeing the mortgage securities, which raises the price of the securities but lowers the yield (and then mortgage rates come down in sympathy like they did today).
But treasuries can’t continually take a beating in price that long or we could default on the high yields.
Yesterday, a $1 TRILLION credit default swap was reported by ISDA — directly related to the GSE bailout.
So long term, mortgage rates are going up. Way up.
Royal Flush
Dear Sethsayer,
You’ve inspired me to follow my animal soul.
DonC
I’d have to agree with BB here. This time of year is one thing. Winter is another.
DonC
MKchick – yes the credit swaps are going to be interesting. The first question is how you can have a trillion dollars of debt swaps based on $20B of subordinated debt. The second question is whether there is one trillion available to pay off.
The answer to the first question is you can only do it if you have a government that actually believes that markets can work by themselves. The answer to the second question is no.
MikeZ
So they trusted their agent & the mortgage pusher.
A real estate attorney will run less than $1,000 and make sure all the terms are reasonable and understood. And that includes representation at the closing.
I’ve never bought a house without passing every single document by an attorney working for ME (not the mortgage co.) and having representation at the closing.
IMO, anyone who buys a house without getting their own attorney involved is assuming a tremendous degree of risk.
Reno Realty Blog: Reno Real Estate, Market & Trends, Nevada » Foreclosures Dogs and Squirrels
[…] all the bad news we’ve been hearing, I’d like to share some good news. Black Dog has been rescued! She spent two months living off the land, and was ultimately brought […]