Category Archives: Foreclosure

Stimulus Confusion Benefits and Blues

Little Rock      These are times like we have never seen before in the United States.  The government is actually giving almost all of us some money up to $1200.  If we’re among the eighteen million and rising “vast army of the unemployed,” we can get our check plus $600 per week for a time.  I know I’m not the only one who is confused, because I get questions hither and yon on a daily basis.  All of that is what we believe to be true, but, as always, the devil is in the details, so let’s look Satan in the eye, and see if we can get our feet on solid ground somewhere.

Let’s start with the one check to almost all.  First, if your income has been so low that you have not been filing, you need to get your paperwork into the IRS, so that they can transfer money to your account.  If you are on social security, railroad retirement, or other federal benefit programs, it will be automatic for you because your number and account information is already known.  If you have a question, the IRS has a site that might work for you called:  https://www.irs.gov/coronavirus/get-my-payment.  I can’t guarantee that it will work, but it might help if you’re not sure of your situation.

Much is made of the $1200 bump.  If you made less than $75,000 as a single filer, you get it all or $150,000 as a joint filer with a spouse.  You will still get something between $500 and $1200 if you made less than $100,000 or $200,000 filing jointly, as I read it.  If you have children under 17 years of age, you will get another $500.  If they are over 17, but you are still claiming them as exemptions, you get nada for them, and they don’t get anything for themselves either.

These payments do not count against your food stamp eligibility, but the expanded unemployment, the extra $600 per week will count against SNAP levels, although they will not affect Medicaid and CHIP program eligibility.  The $600 bump is good from April 4th until July 31st, about 16 weeks.  If you applied by then, but haven’t received the additional money, your money will be paid back to the application date.  Unemployment has been expanded to 39 weeks, as I read it which is basically throughout 2020, and you can hope a bump will be added, but that is not in any of the packages that have been passed to date.

If you have been self-employed, an independent contractor, a gig worker or in whatever situation where an employer was not paying into the state unemployment fund, in a real breakthrough you will qualify for unemployment benefits under the package.  Additionally, the headline on the applications that I have seen indicate that if you have been laid off or furloughed because of Covid-19, you will not be required to do a job search.  This is all new ground for the states, so there may be some early slips between the cup and the lip, but hang in there until you get paid.

I hope this helps cut through some of the info-fog about all of this.  We’ll keep at it!

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Computerized House Flippers and Conflicting Interests

New Orleans       It was bad enough when Wall Street sharpies like Blackstone started buying tranches of foreclosed houses in the suburbs to paint, rent, and then cash out.  Now, algorithms are being deployed for house flippers.  What could go right or wrong with this picture?

A story in the Wall Street Journal claimed that metro Phoenix is ground zero for the future of home purchases.  More than 5% of the home sales in 2018 involving 5000 properties were made by companies launching computer driven, algorithm powered approaches to the market.  Opendoor, a San Francisco startup, Zillow, the listing and area pricing web giant, and Offerpad are breaking this ground.

The Journal walked the reader through the new world:

“At the edge of the city’s stucco sprawl, a beige, three-bedroom house with a gravel yard sold last month for $240,000.  The seller, Opendoor Labs, Inc. paid $215,000 for the house in January, replaced carpet and repainted, and put it back on the market.  A computer told the company what to offer and how much to ask.  There was no need to schedule a showing with a real-estate agent.  Prospective buyers of Opendoor homes can download an app to unlock the door.”

Wham, bam, thank you Alexa, Siri, or whatever they call their thing!

What is it about Phoenix?  The city can’t catch a break.  First, the sketchy boom and then the bust over a decade ago, and just as things begin to even out again, here come the techies.

Sadly, real estate agents and realtors are a bit like taxi drivers in the love-hate relationship they maintain with consumers.  There are over two-millions of them and 1.3 million are actually licensed realtors with access to multi-listings and supposedly a code of ethics.  Even if you like your person, you know she only gets her slice if you buy or sell, so her self-interest and yours are always in conflict, and her advice always comes with many grains of salt.

Many consumers would be delighted to bring the Airbnb model to home buying, although that’s sobering for more than just the loss of jobs.  Airbnb now slants its algorithm to favor listings at its demand price and destinations.   What is there to keep Zillow from favoring the houses it owns on its listings compared to the rest of the field?  Nothing!

Add to the mayhem this disruption will bring is the fact that algorithms will undoubtedly not be limited to purchase and sales prices, but also to rents, which is surely what Blackstone is doing for its 80,000 properties.  Tell me that won’t accelerate gentrification and community mayhem.  Is there a better argument for rent controls? I can’t think of anything else off hand that will stop predatory practices.

Looking at the Uber model, we would have to predict that it would just be a matter of time before the fixed agent price of 7% or whatever would fall like a house of cards.  The companies win and base their business model on volume, which almost always favors price cutting, and that’s the easiest piece to cut.

Hey, you might say, it can’t happen here.  Opendoor is now in 23 cities and is targeting another 27 by next year.  Zillow claims it will be buying 5000 houses per month. Think again!

We need to get ahead of the e-world coming to home and apartment purchase and rental or the consequences could be huge.

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