KeNo's Housing and Economic Portal: Wednesday February 2 Housing and Economic stories

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You Think Houses Are a Slow Sell? Try a Yacht - (www.nytimes.com) What is tougher than having one sleek mega-yacht for sale in a glutted market? The answer, for the moment at least, is having two mega-yachts on the market. In boom times, yacht enthusiasts would order a new dream boat and keep their old one for the two or three years the builder needed to complete the new boat. Then, they would quickly sell the older yacht to impatient new millionaires and billionaires eager for their requisite status symbols. But that equation changed with the financial crisis two years ago and took the super-yacht market down with it. Some of the wealthy have ended up like Peter A. Hochfelder, the principal and founder of Brahman Capital Management, a private investment firm in Manhattan. Mr. Hochfelder already owned a 134-foot Lürssen, named Blind Date, that was built in 1995. He commissioned a second boat in 2007, a 161-foot Trinity yacht, that he christened with the same name. It was completed in 2009.

Legal confusion and uncertainty now surrounds the housing market - (www.thestreet.com) The latest sword placed in the heart of the housing market occurred on Friday with the first high court ruling against banks and in favor of homeowners in Massachusetts, which ruled that there was no legal right to foreclose because assignment was not done properly -- again, questioning the integrity of the home title chain, the legal right to have foreclosed on 3 million homes since 2007 and the right to foreclose on another 8 million homes that are currently in the distressed/foreclosed pipeline. In addition to this verdict's immediate impact, it brings about death by a thousand cuts ... the litigation phase of the foreclosure crisis is going to get out of control. Homeowners, originators, underwriters, trustees, servicers, title companies, MI firms and everybody else involved in the origination, funding, securitization, servicing and insuring spaces will be suing everybody else. Multiple, big cases will come from state AG's, and class action suits will be announced daily. -- Mark Hanson.

Massive legal confusion and uncertainty now surrounds the housing market, and with the recent rise in interest (and mortgage) rates, how anyone can make an optimistic housing forecast (or any forecast at all!) is beyond me. For housing, it's (very) different this time.

Brooke Astor Apartment to Sell For $27M Off? - (www.nypost.com) A mystery buyer has agreed in writing to obtain the late Brooke Astor's Park Avenue home -- but for way less than half of the original $46 million asking price. The Upper East Side building's co-op board has yet to accept the bid, which a source described as "in the high teens." In the meantime, the sprawling duplex on the 15th and 16th floors of the classic 1931 Rosario Candela building has been shown to other interested parties -- in an attempt to raise the bid past $20 million, said sources who have toured the unit. As one broker put it, Astor's estate is "simply dying to get another bid." That the low offer was accepted at all suggests Astor's son, Anthony Marshall, and his wife, Charlene, "are desperate for money," the broker said.

The Post reported last year that Marshall, 86, owed $7 million in legal fees. And those bills continue to mount since he's appealing his conviction on charges of trying to swindle his mom out of $60 million -- and is enmeshed in an epic legal battle over how much he's entitled to from the estate.

A Lawsuit That Dirty Debt Collectors Should Be Worried About - (www.dailyfinance.com) Federal Circuit Court Judge Denny Chin just issued an opinion in a consumer class action case that should send chills down the spines of debt collectors, perhaps including foreclosure-mill law firms and their process servers, nationwide. Judge Chin decided that plaintiffs alleged enough information about the debt collectors in this case -- a law firm, a process-serving company and a debt-buying company -- to sue them for being a criminal enterprise under the Racketeer Influenced Corrupt Organization (RICO) law. Judge Chin also allowed claims under the Fair Debt Collection Practices Act. Why should other companies in and related to the debt-collection business be so nervous?
Well, Monique Sykes and the other plaintiffs claim that the defendants' business model is as follows:

· Buy debt with little documentation that the debt is accurate.

· File lawsuits claiming personal knowledge of the debt but using robo-signed affidavits instead.

· Deliberately fail to tell the "debtor" that the lawsuit is pending (a practice called "sewer service").

· Get a "default" judgment against the debtor when she fails to show up in court to defend herself.

· Enforce the judgment, including by freezing the debtor's bank account.

Grandma in California Uncovers Major Robo-notary Violations - (www.4closurefraud.org) Anita Carr is used to discovering fraudulent activities, even when she is not employed. In 2001 she discovered accounting irregularities at a Fortune 500 where she was a Director in Information Technology. This led to investor lawsuits against that company for accounting fraud and insider trading. At a prior employer she contacted the FBI and worked with them to ensure they investigated Medicare Fraud. The CFO of that company went to prison. Now, in fighting to determine title on her home, she has discovered something even more slimy and with much broader implications. In an attempt to validate a ‘squiggle’ type mark on a recorded document with the Alameda County Recorder’s office, Ms. Carr felt it imperative that she obtain a copy of the page from the notarial journal from the California notary who performed the notarization of the ‘Corporation Deed of Assignment’ related to her property. Ms. Carr, under California laws, is entitled to purchase a copy of the page in the notarial journal related to her property and so she wrote to the Orange County Recorder’s office and sent a check to cover the copy fees. Orange County is where the notary was registered. Within weeks she received a certified letter back from the Orange County recorder stating that they should have the notarial journal, but they did not have it. See, once a notary is no longer a notary in California, it is the law that they must turn in their notarial journal to the county recorder. Ms. Carr, in a lawsuit against her home loan originator Home123 Corporation, now in bankruptcy in Delaware, asked recently in informal discovery if they had the notarial journal. The answer came back ‘no’.