“A Housing Shortage Has Become An Overabundance”
The Yuma Sun reports from Arizona. “Increasingly, people’s dream homes of two or three years ago turn into nightmares because of mortgage payments they no longer can afford. ‘We used to get one or two (foreclosures) every couple of months,’ said Vicki Bardo, 2007 president of the Yuma Association of Realtors. ‘For some years, we didn’t have any at all.’”
“She noted that these days it’s common to find several trustee sales listed in the public notices section of the newspaper on any given day. For example, on Friday, there were 20 listed. ‘We’re seeing a preponderance of them,’ Bardo said. ‘They’re in every price range. They’re new houses and old houses. They’re all over the county from San Luis to Wellton and everywhere in between.’”
“For one thing, people may have used online lenders. Another factor was the number of investors in the market who sometimes bought four or five houses, Bardo said. That resulted in a run-up in prices and an artificial demand for houses. Some of them are now deciding to sell and move on because they can’t rent their houses.”
“And what had been a housing shortage for several years has now become an overabundance, she said. ‘We couldn’t keep a house on the market a couple of years ago. Now we can’t get it off.’”
“This is all having an impact on new home construction as well, Bardo said. If people can’t sell their current house, they can’t pay for the new house they were having built. That trend is reflected in the number of housing permits issued by the city. In the first two months of this year, the city issued 38 new single-family housing permits, said Randy Crist, city building official. During the same period in 2006, there were 187 permits.”
“‘It’s not that money isn’t there to buy a house … and interest rates are still low. People are simply waiting for the best deal they can get,’ Bardo said.”
The Arizona Republic. “Big lenders and Wall Street investors are going after Arizona mortgage brokers, appraisers, real estate agents, title firms and home buyers for fraud.”
“Dozens of civil lawsuits alleging the gamut of mortgage fraud, from cash-back deals to lying about income on loan documents, have been filed against Valley firms and individuals during the past few months. Fraud experts and regulators say the lawsuits are only the beginning as the fallout from mortgage fraud starts to hit the Valley.”
“‘Banks are going to force mortgage brokers to buy back bad loans, and mortgage brokers don’t have the money so they are going to go under,’ said Richard Hagar, a national mortgage and real estate fraud expert. ‘This is the beginning of the wave of lawsuits, lost licenses and criminal indictments in Arizona.’”
“Phoenix-based Biltmore Bank is suing Security Title of Arizona and a group of others over a cash-back deal. The suit alleges the group worked together to get Biltmore to fund a $1.3 million loan for a home valued at $800,000 and then pocketed the extra cash. Also named in the suit are Valley appraiser Kittelmann & Associates and Tucson resident Frank Padilla, who was indicted and pleaded guilty last year to fraud and money laundering as part of a $13 million property-flipping scheme.”
“A Lehman Brothers investment trust in New York and Aurora Loan Services in Denver are suing the parent company of First National Bank of Arizona over 38 home loans. They say the bank misrepresented the values of properties, and the income, debt and employment of some of the borrowers.”
“San Francisco-based Transnational Financial Network is suing Phoenix-based Lending House Financial and a Scottsdale investor who purchased 22 Valley homes within days of each other last spring. Transnational funded loans worth nearly $2 million on seven of the homes but says it wasn’t notified the investor was buying multiple properties and his real debt level wasn’t disclosed on mortgage documents.”
“The investor never made a payment on the houses, which were foreclosed on last year. Most of the homes sold at foreclosure auctions for tens of thousands of dollars less than the mortgages the investor took out on them.”
“This wave of mortgage fraud, bad loans and foreclosures is deja vu for Michael Manning. He was an Arizona attorney for the Federal Deposit Insurance Corp., which seized failed lenders due to bad loans in the late 1980s. He was then the Phoenix attorney for the Resolution Trust Corp., which was formed to clean up the savings and loan debacle and dispose of the overvalued properties.”
“‘This is the tip of the iceberg, but I think regulators got on top of it faster than in the mid-1980s,’ Manning said. ‘And lenders are now really starting to crack down on their own underwriting.’”
The Greeley Tribune from Colorado. “A year and a half ago, Christina Vazquez and her family were happy when they qualified to own their first home in a new subdivision in southwest Greeley. Even though she only made $25,000 a year, a lender said her family could get her in a new home worth $225,000.”
“‘I don’t know how they approved me, but they did,’ Vazquez said. ‘When I bought the home they said my payments would go down in a year.’”
“A year after owning the home, the payments never went down and Vazquez was left with no option but to foreclose. Vazquez is among close to 20 other families from the Gateway Lakes development who have either gone into foreclosure or may soon go into foreclosure. All of the families purchased their homes from the same man, Mark Strodtman of JS Real Estate, LLC.”
“‘I feel they took advantage of me,’ Vazquez said. ‘Even though I speak English, they still did not explain any of the paperwork to me and just told me where to sign.’”
“As the homeowners began investigating their home sale paperwork and talking with appraisers, the families discovered that many of their homes were sold to them several thousand dollars more than market value. They claim that JS Real Estate bumped up the prices as much as $70,000 more than the market price in some cases.”
“Vazquez purchased her home $55,000 more than what similar homes were selling for. ‘What they did was wrong, and all I want is justice to be done,’ said Guadalupe Moreno, who is struggling to make the payments on her home. ‘If I have to tell the whole world, I will.’”
“Librado Herrera works various jobs for about $12,000 a year and was approved for a $230,000 home. He said he was told by Strodtman to say he owned a catering company when the bank called to verify the information on his loan application. Charles Brandt, president of JC Distinguished Finance who worked with Strodtman in selling the homes, declined to comment.”
“‘I have never seen a Realtor selling a house $40,000 or $50,000 more than the market price,’ said David Kiekhaefer, a Greeley broker and home builder who built five houses in the Gateway Lakes subdivision. ‘Another scary thing is that many of them (the families) haven’t seen their appraisals from when they purchased their homes.’”
“He said he was not able to sell the homes he built in the subdivision and ultimately turned them into rentals. He was always curious, however, how the other homes that were built were sold so quickly and at a higher cost.”
“‘There are homes on one side of the street selling at $70,000 more than the same house across the street,’ Kiekhaefer said. ‘There are a lot of freaky things going on, and it just brings up a lot of red flags.’”
We’ll here we go with the lawsuits! Another nail gets pounded into the lax lending standard coffin.
I’ve been saying for a long time that the “lawsuit phase” of the housing bubble would be the end. Here we go!
Look at these stories. At what point will people look at the real estate market as so corrupt that it is not worth touching anything? I think the faith in that market is eroding quickly. When people lose faith in markets they abandon those markets.
The REIC is digging its own grave. R.I.P. you piece of garbage.
I could easily say the same about the stock market
The stock market went through this phase in 2000 - 2002. It took a 78% loss of value in the NASDAQ before people felt the risk of investing was worth the price. Investors saw that massive drop as an affirmation that the market had cleansed itself properly.
What does that lesson tell us about where the housing market is headed?
–
“The stock market went through this phase in 2000 - 2002. It took a 78% loss of value in the NASDAQ before people felt the risk of investing was worth the price. Investors saw that massive drop as an affirmation that the market had cleansed itself properly.”
The NASTYQ! drop was shortcircuited by the Housing Bubble. Get ready for 90%+ drop in NASTYQ! before 2010 is out.
People have seen nothin yet when its comes to deflation of asset bubbles.
Jas
There is one difference, illegal immigrants were not buying stocks in stock market, but many of them bought houses without even reading ( or comprehending) those cumbersome mortgage papers before signing them. Those poor people were the victims of how the business is run in America now. Next is going to be the stock market.
That is why President and Congress want them to come so they will work for $ 3 an hour , will buy houses , stocks …
gal said: Those poor people were the victims of how the business is run in America
Read the above quote. Many were complicit. people sometimes forget that ILLEGAL immigrants are doing ILLEGAL things. Yeah, sure I know they want a “better life” but I’m not sure that means they can just break border laws indiscriminately either. And then when “a better life” means lying on a loan application, faking SS numbers, and so on they do it.
“Librado Herrera works various jobs for about $12,000 a year and was approved for a $230,000 home. He said he was told by Strodtman to say he owned a catering company when the bank called to verify the information on his loan application.”
Where does it say they were illegals?
Absolutely stocks like Fannie mae havent reported earnings at all in 3 or so years. Any other company would have been delisted. All the stock options problems, the list goes one and on. How about when a company loses money and the CEO makes a record amount of money.
I refuse to invest in such companies.
RIP? Don’t you mean DSF (Doleat sine fine)?
The end of credit as we know it…
Welcome to the new no frills Amerika.
“Welcome to the new no frills Amerika”
You are correct. Witness the warnings emanating out of Nordstroms. I have been telling loved ones what is approaching and in my opinion, it is here. I predict, and I hate predicting all things market related, that we will be in recession (if we are not already there) by summer.
Dukes,
I agree. I have been telling my wife for a few months now that when the sh*t hit the fan, that many businesses that cater to the upper middle class like Nordstroms, PF Changs, Retoration something or another, Cheesecake Factory, etc. will be hurting. I keep telling her, that assuming we make it thru this, we can buy anything cheap from garage sales. Why pay 20% off a ridiculously high price for things like cars, furniture, clothing, when you can just wait for the economic fallout and get it for basically free.
I always laugh to myself when I go into a Nordstrom and wannabe looks down on me because I am black and they assume I probably cant afford what they are selling (even thought my mother buys things like St John which no one working at Nordstrom could even afford). I wont be sad to see Nordstom employees out on their *sses.
Your mom must be a class lady. St. John suits are beautiful.
Believe it or not, there used to be a St. John outlet at Franklin Mills mall right outside of Philadelphia. I don’t know if it’s still there though. If mom’s ever in this area, tell her to check it out.
Thanks Phillygal. You are also classy and knowledgeable. Whomever lands you will have made a wise choice in life.
Hear hear. During the great depression people were selling off everything they had for a song, only, most people didn’t have a spare dime to buy it with. I’m fending off my wife’s request for a new bedroom set (had the same set since university days) because there are going to be some incredible deals coming down on Craigslist as FBs start jettisoning furniture, collectibles, vehicles, HDTVs, etc. to cover each month’s mortgage.
I’ve had realtors at higher-end properties look down the end of their nose at me when I park my 11-year-old Acura and walk into open houses wearing faded Levis and a T-shirt. While I may look like I just rolled in from a morning of shooting rats at the county dump - which, in fact, I might have been - little do they know that I’m probably the most creditworthy looky-loo to darken the door of their open house that day. It’ll be charming to run into some of these characters during the coming RE nuclear winter, when I might be the only thing between them and insolvency.
I often go looky-looing in faded jeans and a t-shirt too. It’s interesting how many salespeople don’t know that very often it’s the unpretentious (but articulate) people who have the cash. We’ve got it, but we don’t need to flaunt it.
its funny you guys that because i just turned 28 and do this when i go to car places and they are actually very nice with me. i have test driven some expensive sports cars right off the show room floor. and i supposedly look younger than my age. but i generally dress in jeans and tshirts to this stuff as well. i would hate for someone to treat me different based on that. and yes if places do that i would never again go there. rodeo drive is like that. when my mom was buying multiple shoes at one of the stores there the people there treated her so rudely. how lame is that?
well either way, every condo i have seen in the last 2 weeks has been vacant in my price range of $400k which is assuming about $2000 a month mortgage before HOA and Tax, etc. on my single income. people are insane to think that prices will stay even close to what they are going for right now.
Sammy, I have this vision of the woman you described some months ago trying to sell her house and giving you the nasty treatment, in the same position as the woman at the beginning of “Van Wilder”. Only this time she’s not a seamstress.
Brace yourself for some SAVAGE SELLING in the equities markets on Monday. HSBC reported a staggering $11B writedown over the weekend in connection with home loans. Luckily, I am short and long PUTs on many lenders at subprime and AltA… especially those heavily into OptionARM. They will get KILLED this year.
End of credit and end of a lot of lenders. This is what will bring the RE market to its knees just before the much anticipated spring bounce…
Did anyone else catch Maria Bartiromo (i think that’s how its spelled) on the Today Show this morning? It was classic. She was doing the “now, everyone stay calm and don’t freak out and call your broker on Monday” thing.
I was going to write “twat” but that doesn’t seem nice. A lot of people don’t like that word. So I won’t call Maria a “twat” even if the description fits.
It’s a Brit way of describing someone as a complete idiot. I concur: She is a twat.
Remember that scene in Animal House where Kevin Bacon was the traffic cop when the parade went awry?
“Everyone stay calm there’s no need to panic!”
Better Animal House quote:
“Face it Flounder, you F*cked up… You trusted us”
Hoover: They confiscated everything, even the stuff we didn’t steal!
How about line from Deliverence. “Squeal like a pig”
spoken part: “now, everyone stay calm and don’t freak out and call your broker on Monday”
inaudible thought baloon part: “so that the smart/institutional/hedge money can get out first”
It’s like the Titanic — the hope to keep the steerage class from filling up the lifeboats
I just put stop losses in place for all stocks I am long on. If it slips, they will sell and I won’t lose that much.
Sold my ’spec’ stock last week. Sold my index fund in January. I’m long one stock and I’m not selling. They pay a good dividend. I might even buy if the price is right in the next few months. It’s a company that does well during weak dollar regimes.
Not investment advice.
I sold my REIT mutual fund last week VGSIX it had done very well the last few years. I think the parties over though. Well we will see won’t we?
HSBC reported a staggering $11B writedown over the weekend in connection with home loans.
Are you sure? HSBC reported an $11 Billion writedown a few weeks ago. This isn’t new news, it’s old news. Unless they’re announcing a second $11B writedown (unlikely) this info was already known
Looks new to me….
http://www.marketwatch.com/news/story/hsbc-reportedly-write-off-11/story.aspx?guid=%7B6F6899CB%2D684C%2D451C%2DBA8F%2DFF64DD68461F%7D
Probably one and the same. The previous was probably a warning….this was the deed.
You’re correct this is old news; they already gave the warning earlier this month. HBC is just giving out a more recent number because it’s formally reporting earnings on Monday. I think the estimate was slightly lower at the start of Feb (10.5B?).
“The end of credit as we know it…”
It’s a new REM song (now known as REAM)
“It’s the end of the credit as we know it…”
… and I feel fine.
–
“And what had been a housing shortage for several years has now become an overabundance, she said. ‘We couldn’t keep a house on the market a couple of years ago. Now we can’t get it off.’”
The shortage was artificial just as the demand was artificial, or speculative. There never was a shortage for house-dwellings. The promoter kept lying about the demand to sell homes at ever-increasing prices.
Jas
There was a shortage I think, about a decade ago, in certain markets.
The market stepped in and filled that shortage … and then some.
“Librado Herrera works various jobs for about $12,000 a year and was approved for a $230,000 home.
Well, I guess I was wrong. I have been saying for some time that illegals with low paying jobs would eventually end up buying the inventory with 2 to 3 families per household.
I see now that they have already bought up a lot of the inventory.
My bad.
$12K a year. Does that even cover food and utilities? Not to mention a mortgage payment? Unbelievable.
$12k is working 30 hrs/wk at $8/hr. Not mch.
“Another factor was the number of investors in the market who sometimes bought four or five houses, Bardo said. That resulted in a run-up in prices and an artificial demand for houses. Some of them are now deciding to sell and move on because they can’t rent their houses.”
This is Yuma for God’s sake! Who in their right mind thought they could get rich flipping in Yuma??? Yuma has 3 things:
1. The Marine Corps air station
2. Lots of trailer parks.
3. The hottest damn July/August/September temperatures this side of hell. (Yes, it’s hotter than Phoenix even)
I’m the most boring guy in the world and Yuma makes me want to take up drinking again..
Yuma makes Blythe look good.
lol
Long ago I did a post on Yuma. I think it was the Sun, too. They made it very clear it was Californians doing the buying.
And the town responded with a huge new subdivision. Hundreds of houses.
No doubt that those homes were purchased primarily by the equity rats in the 619 area code.
Next Quartzsite but on the CA side of the border.
Gee, I wonder what Quartzsite was famous for?
Every time Ive driven through Quartzite I’m remided of Mad Max. Looks like a smear of bombed out junkyards and trailer parks. It’s a big snowbird destination during the winter, but summer its the prototypical shack in the desert rest stop.
Retire to your dream home in action-packed Wendover, Nevada [or Bendover as they say in Salt Lake City].
Don’t all the Mormons go there to gamble? Or is that Ely?
Right on the border on I-80. The UT side Wendover is quiet as a church mouse; cross the border into NV (actually West Wendover) it looks like a tiny Las Vegas.
A Navy buddy of mine grew up there and told me horror stories of drunken Mormons going on a tear and then hightailing it back just in time for church on Sunday. Strange mental picure…”Mormons Gone Wild!”
When I moved cross country I drove through there. 100 miles of desert and salt flats and then….casinos!! I thought I was just delirious from the heat and that it was a mirage.
Remember to keep your sense of Yuma!
“‘And lenders are now really starting to crack down on their own underwriting.’”
Whoa boy, just in time too!
Why have an underwriting dept. when you are going to “start to crack down” only *after* the bad stuff happens?
We ALL know that the whole industry was playing with fire, that the lies on loan applications were known about and even sanctioned, just to keep volume up and fees rolling in. It was called “keeping up with the Fremonts”. And it all worked, at least until home prices stopped skyrocketing.
And we still have outfits like this (how bad does your credit have to be to have a 500 FICO?):
http://www.500fiko.com/500fiko.aspx
“With 100% financing from a 500-800 credit score, the 500FIKO product is changing the way the mortgage industry does business. Why say no, when you can say yes more often with 500FIKO?”
“500 Credit score minimum
100% LTV Financing
…”
Tha has fraud written all over it. Who would buy that crap? It’s worse than JUNK BONDS.
Fannie Mae and the Chinese would gladly buy that feces re-wrapped in toilet paper
The company’s tagline… Integrity When It Matters Most.
Sigh.
It’s always seemed a little sleazy to me to call loans “products”. They are not products, they are services. Calling them products seems like an attempt to make them seem more legitimate - an attempt that shouldn’t be necessary - I mean, responsible use of credit does have a place in the world.
I just always had the feeling that when someone refers to a loan as a product they’re trying to hide somehting.
I can’t explain it any better than that.
“‘Banks are going to force mortgage brokers to buy back bad loans, and mortgage brokers don’t have the money so they are going to go under,’ said Richard Hagar, a national mortgage and real estate fraud expert. ‘This is the beginning of the wave of lawsuits, lost licenses and criminal indictments in Arizona.’”
All the villains of the piece are turning on each other like scorpions in a jar - truly a joy to behold.
As they predict, subprime will bleed over into prime and you will see a contraction on credit like you have never seen before.
So we have inflation, but could the contraction on credit cause enough forces to counter it? Could we end up with stagflation?
Bingo. Thanks Alan Greenturd.
If this is happening in AZ, I can only imagine what will happen in SoCal. With the prices being what they are in SoCal, I can only figure that mortgage fraud is much, much worse in that region.
This should get bloodly.
Maybe the US can sell California when the Chinese start asking us to pay their debt and we can’t? That or China will repo it. What will they do with all the Mexifornians though?
Maybe the Chinese can just eat their bad investments.
Most of the kitchens in Chinese restaurants are filled with Mexicans. It’s how they say….Kismet!
So what are the possibilities of us, after having dined on exquisite dishes of Chinese credit, served on a lazy susan of financial recklessness…
Getting some more?
“served on a lazy susan of financial recklessness…”
s/b lazy “suzanne” of financial recklessness
“‘This is the tip of the iceberg, but I think regulators got on top of it faster than in the mid-1980s,’ Manning said.”
I’m convinced. The powers that be were all over it.
On top of it
You mean like a ship on top of an iceberg?
“…like scorpions in a jar…”
Lovely image there!
The Greeley Tribune from Colorado. “A year and a half ago, Christina Vazquez and her family were happy when they qualified to own their first home in a new subdivision in southwest Greeley. Even though she only made $25,000 a year, a lender said her family could get her in a new home worth $225,000.”
“‘I don’t know how they approved me, but they did,’ Vazquez said. ‘When I bought the home they said my payments would go down in a year.’”
Good golly! In 1990 I made $35,000 and the RE agent and title company said I could only qualify for a $96,600 house and not the $120,000 house I had my mind set on. So I bought the $96,600 house. Didn’t Ms. Vasquez think something was seriously wrong for her to qualify for a $225,000 house on a $25,000 income? That’s 9 times her income! On that note, in 2000 I earned $65,000, so if I qualified for a $590,000 house, I would think some serious mistake on their part occurred. And no, I heard nothing but bad things about ARMs for well over a decade. These things are not new. I knew that ARMs adjust UP!!!!!!! In my opinion, ARMs should be banned (as a gun owner, I emphasize the acronym, not the word).
Go to work tomorrow, look around you, and think how many of your co-workers have the first clue about anything financial. I work in a part of the financial industry and the people around me could be stunt doubles for Christina Vazquez. Their complete lack of understanding of their personal finances is astounding.
most americans are functionally brain dead
That’s the way those in power want it. We are flooded with news of Anna Nicole Smith and Britney Spears. Even financial channels like CNBC are a joke with clowns like Maria Bartiromo, Kudlow and Cramer.
Instead of teaching math and science in the schools, our students are taught how to put a condom on a cubcumber. That’ll prepare them to compete as a hooker in the real world.
They don’t even teach that any more … Would do some good if they did. Too many children being born to mothers who haven’t even finished high school. Cycle of poverty.
What’s so difficult about personal finances? Just fill out the paperwork and they will let you know if you qualify. Right?….Right? What’s so funny?
2 out of 6 of my co-workers recently bought new houses without selling their existing house. One of them has had his house on the market for 6 months with maybe 1 showing per month.
Hey Sleepless, I’m currently in New Zealand as a wine maker but will be moving back to the US of A in 2008, possibly in the Seattle area. What’s the market looking like there? I sold out of \Seattle in 2004 to come down here and was happy with the profit I made on our house, but am priced out now. Any changes? Thanks.
NYCityboy,
I work in a CPA firm, so you think that maybe my co-workers would be fiscally conservative from an investment standpoint. I have one co-worker who is a CPA and is buying a new home and still hasn’t sold his current home (in Buckeye, an armpit of metro Phoenix). I have another co-worker who is buying a condo in Tempe for about $250,000 and hasn’t sold her current home. She cant afford the condo payment with a fixed rate loan, so she is using a World Savings pick-a-payment (and obviously picking the partial interest-only). She doesn’t want to lose the $5,000 earnest money, but she understands that market may be tanking. She also drove by the area a few weekends ago on a Saturday night and she said it was full of college students partying it up. Sounds like a good investment to me - lots of soon-to-be deferred maintenance, payment she cant afford, two mortgages, a 2-yr arm. What can go wrong?
And these are people who are advising others on their financial affairs.
Wow, it’s worse than my wildest nightmares! I used to work with financial analysts who were only semi-competent, but your co-workers are something else. And we used to joke that, for an analyst, buying a lottery ticket should be a firing offense. I guess people on this blog are hyper-conservative by today’s standards (or lack thereof).
SF Bay, my wife thinks I am hyperconservative as well, because I finally got a pair of jeans after going about a decade without having any. Can anyone say Alex P. Keaton?
I got some today at Big Lots. They were $12.
My wife likes shopping there. I got mine at the BX (base exchange) at Nellis, NV during Christmas with my folks. Inexpensive and no sales tax.
ARMs adjust up and down. In 2004, my ARM was at something like 3.5%.
I’ve used ARMs since they became available, but I was educated and paid to understand them. Maybe ARMs should only be available to those who can pass an exam…but, naah, the lowlife RE “professionals” would give borrowers the answers.
If there was an exam >99% of the ARMs would never happen. You are definitley in the minority SF. Congratulations.
I wonder how many guys have sworn to Cristina that they’ve had a vascectomy.
I live in LA and everytime I mention the housing bubble the response is always the same, “Oh, that’s the rest of the country, LA is different because people will always be moving here.” But if the job rate is not increasing at the same pace as the housing prices and Wall Street cracks down on these wacky loans, how many people can come up with a decent down payment and make $5,000 a month payments regardless of the specialness of Los Angeles? I just saw a condo foreclosure yesterday which originally sold for $829,000 in 2005 is listed at $767,000 and was told that if I bid $500,000 who knows they might take it. Only 4 out of 40 properties I have looked at over the past two months have sold; everything else is sitting or has been pulled off the market.
Veronica,
I live in LA also (Redondo). IMHO, it may be a wise time to continue to rent…the worst is just around the bend.
I work contractors and homeowners in Redondo, Manhattan, Hermosa, Palos Verdes, Malibu and Pacific Palisades designing custom cabinets. Most folks seem to be clueless as to the demise of real estate outside of their world. My observation of them is that they view the rest of the USA as though other places were just as happy and well off as they are.
They can easily see why home prices would collapse in places like AZ, FL and CO…but not CA. C’mon…everybody wants to live here.
Veronica,
as I have posted in the past, L.A. will soon implode from high unemployment, too many illegals, too many uneducated minorities (I am black so I am not being racist just telling the truth) and then the riots will come.
If you are Caucasian or Asian and you live in West L.A. areas (including beaches), you are crazy. The next social disorder will be ugly. When the illegals dont have construction jobs and the economy as a whole takes a dive, people will get desperate.
And there isn’t any condo in L.A. worth over $300,000. Back in early 1990’s, condo’s right in the heart of B.H. were only selling for $300,000, and I know people who lived in those back then. Since then, real wages have gone down, so the prices in L.A. are way out of whack with the fundamentals as based on wages.
L.A. is bad investment. I love USC, but I believe that at some point the place will either be unsafe or will have to move, like Pepperdine did (they moved from Crenshaw ghetto area to Malibu).
Only suckers are still buying in L.A.
“too many uneducated minorities (I am black so I am not being racist just telling the truth)…”
Chris - the color of your skin isn’t your point, the education level of these people is. No need to apologize, there are plenty of uneducated whites as well.
Agreed. Thanks.
I don’t think class and character are tied to education or income level. My dad didn’t have much of an education or income, but was an honest and honorable man, and a good father and provider. When you have a gangsta rap culture that glorifies “bling-bling” and the thug life, and disparages being a productive, law-abiding member of society, it should come as no surprise to see disproportionate criminality and class envy/hatred among so-called “disadvantaged minorities.”
I agree. What’s interesting is that my mother made it out of there, so what’s everyone else’s excuse. My grandfather on my father’s side, committed suicide when my father was a preteen. But in both cases, they had sound Judeo-Christian values put upon them by their mothers, so they understood hard work. An understanding that many, in all racial backgrounds, are lacking today.
I’m seeing a lot of sales in SFV. If the wishing price is over a million…not so much. However, if its in Sherman Oaks and its priced anywhere in the 7s…it seems to sell. The flippers are going crazy in my neighborhood. At least 10 teardowns and mcmansions in various stages of finish w/in 10 blocks around me. More Hispanic workers than you can shake a stick at. BUT, when the wishing price is above a million….not so much movement.
There IS a lot of $$$ floating around. I personally know 3 potential buyers who make lots of $$ looking to buy up.Lots of equity gains also.Between 2003-2005 OMG….more than doubled the price of SFH around here. I’m lucky I sold 8-05. BTW…the guy that bought my old house is trying to sell it…just reduced the price50k. It MAY be the first short-sale in my neighborhood(Studio City) Either way he’ll be taking it in the pants real bad.(Selling at a loss)
So, my point is…there is hope…prices seem to have flattened for the past year…I believe this ship is turning around andprices will sink.
“…the guy that bought my old house is trying to sell it…just reduced the price50k. ” First you say there are lots of sales and flippers in your neighborhood, and then you tell me the guy that bought your house in selling short and taking a loss.
We like to deal in facts on this blog, and your info doesn’t make sense.
Are the Glengary Glen Ross leads still up for grabs?
funny comment, great movie!
“Are the Glengary Glen Ross leads still up for grabs?”
Questions are for closers!
A= Always
B= Be
C= Closing !!
and “Coffee is for closers” Beer Mw !!
ABC, whether in r.e., stock brokerage or the nightclub…
‘When I bought the home they said my payments would go down in a year.’
OK Christina,… so what in the written documents detailed how this would happen? Did you ask to see this part? (It doesn’t exist, does it?)
“…they still did not explain any of the paperwork to me and just told me where to sign.”
And Christina,… Did you shop around a bit before you got to the paperwork stage?
“Vazquez purchased her home $55,000 more than what similar homes were selling for.”
Guess not…
“OK Christina,… so what in the written documents detailed how this would happen? Did you ask to see this part? (It doesn’t exist, does it?)”
You’re awful! How dare you bring logic to an argument and expect anyone to take your side???????
What about the fact that Christina must of signed a document overstating her “stated income”. Don’t tell me that these buyers claiming victim didn’t know they were lying to get the loan .The fact that these FB’s believed that their payments would go down ,while at the same time they didn’t question the mortage broker on misstating their income shows how dumb/greedy people can be .Nothing can be worse than be dumb and greedy at the same time .
As far as the builder sellers and the crook RE agents on these deal ,they were seeking unqualified people who would be thrilled with getting into a home for no money down . The FB’s wanted a chance to get in on the RE appreciation . All parties were gamblers/crooks …not victims .
“Nothing can be worse than be dumb and greedy at the same time.”
Reminds me of a Buffett quote:
“When you combine ignorance and borrowed money, the consequences can get interesting.”
“‘I don’t know how they approved me, but they did,’ Vazquez said. ‘When I bought the home they said my payments would go down in a year.’”
He also told me the Tooth Fairy was real and that I should knock out a molar and put it under my pillow… so I did.
In my opinion, ARMs should be banned (as a gun owner, I emphasize the acronym, not the word).
I support the right to keep and arm bears.
“‘This is the tip of the iceberg, but I think regulators got on top of it faster than in the mid-1980s,’ Manning said. ‘And lenders are now really starting to crack down on their own underwriting.’”
Oh, now this is rich! Talk about a crock of crap! I just love the “nothing to see here folks, it’s all under control” attitude these idiots are sporting as the urine runs down there legs.
I find it rather comforting that the MSM has stopped their rhetoric of trying to deny a housing bubble exists; They just ignore it. Just wait a few more months and even they will capitulate.
‘What they did was wrong,
- and all I want is justice to be done,’ said Guadalupe Moreno,
who is struggling to make the payments on her home. ‘If I have to tell the whole world, I will.’”
Guadalupe - justice was done! We allow the Nation of Islam to preach that the USA is the great Satan on TV, grant credit cards to Ilegal’s and give 100% financing for homes to dunder-heads.
Yep. These people only want justice when the system bends them over. They don’t throw around words like “justice” when they are bending the system over. I hope you rot, Guadalupe Moreno.
I don’t see how Guadalupe loses much in this deal(probably 0 downpayment). Wasn’t she basically a renter in disguise?
Here you have people who lied on their loan applications to get into a house they couldn’t afford and now they are pissed that the appraisal was 50 to 75k overvalued . Like attracts like ….The FB’s were crooks wanting something for nothing and they ended up with crooks putting them into inflated priced houses .
Guadalupe loses her ’self-esteem’ and bragging rights to being a ‘home-owner.’
Facing reality is a big loss for losers.
So you’ve told the whole world, now what?
‘What they did was wrong, and all I want is justice to be done,’ said Guadalupe Moreno
Kind of sick — people making such big purchases without an ounce of effort to determine fair market value on their own. Their lazines and ignorance driving up prices for the rest of us. What they did was wrong, and all I want is justice to be done.
Always trust the white man with the nice suit.
That and other blacks that start out with “we need to stick together and do business with each other”, usually every time I have fallen back on my 1960’s NAACP liberal upbringing, I get screwed out of some token amount of money…
It’s safe to say that whenever someone tries to sell you into a financial decision by appealing to something that doesn’t actually apply to the actual decision, you can immediately chop off 20% of the business value.
“C’mon, we’re family.”
“C’mon, we’re from the same church.”
“C’mon, we X got to stick together.”
“C’mon, you get the pride of ownership.”
Unfortunately, that’s not the only way the black community is ripping “their own” off. As I’m sure you already know, the whole “bling” thing is the surest way to financially rape the most naive and uneducated.
That they’ve actually convinced a whole culture that “grills” (sp?) and $100K+ jewelry pieces, $500 tennis shoes, Escalades, etc. show how “successful” one is — is totally unreal.
IMHO, the best thing for the black community would be if a majority of “their own” rose up and exposed this scam for all it’s worth (wouldn’t hurt to slam the whole gangsta rap culture, entirely). Very sad what’s happened there.
I have never seen a mortgage broker with a nice suit.
Funny, but true.
Whenever I see an adult in a suit and tie I grab hold of my wallet.
Why do furniture salespersons seem to dress so well? I am told they make $80k or better on commission. True?
“all I want is justice to be done.”
What, she wants jail time too? What a masochist!
“”"Their lazines and ignorance driving up prices for the rest of us. What they did was wrong, and all I want is justice to be done.”"
Can I get a big Amen for that. All these whiny people blaming brokers for their problems, they absolutely deserve what they are getting. My wife and I net over 150k a year and we cant afford a decent home. At 2.5 times are net income we come out to a 450k house. In our area that is a turd. I’m sorry I’m not working the rest of my life for some sticks. We make a hell of alot more than our neighbors and people that we know, yet we take more vacations and own better cars, while they have 2 jobs to afford the crap holes they live in. At 400k you should have some luxury, not plywood cabinets.
Great post Bob! “I’m not working the rest of my life for some sticks!” LOL!
lol
I read recently that a guy in AZ got 100 years in the pen for looking at nekked kids on the puter. I shudder to think what all these nasty lenders will get when the Arizona court system is through with them.
What did Keating get?
More HSBC news that’s gotta be a bit unnerving to next week’s market:
Look out below!
DRL Down 20% after hours on Friday, I can’t keep up:
http://www.marketwatch.com/quotes/drl
52 week $11.79
After hrs $1.70
Something about bad loans and a cash crunch, where have I heard that before…
NEW YORK, March 2 (Reuters) - Doral Financial Corp. (DRL.N: Quote, Profile , Research) said it will post losses for 2006 and warned on Friday of a cash crunch if the mortgage lender is not able to refinance $625 million in debt that matures in July.
The Puerto Rican lender expects to sink to a net loss of at least $117 million for 2006 from a profit of $13.2 million in 2005. The company also said it had to delay the filing of its annual report.
Failure to refinance the $625 million debt and the absence of a capital injection from the outside may impair Doral’s ability to continue to operate, the company said.
________________________________________________
Looks like the “going concern opinions” are making a cameback in this “goldie-locks” economy?
What’s $11b between friends?
——————————————————————————————
HSBC reportedly to write off $11 billion on U.S. mortgages
By Steve Goldstein
Last Update: 5:44 AM ET Mar 4, 2007
LONDON (MarketWatch) — HSBC Holdings (HBC : Last: 86.27-0.63-0.72%
4:03pm 03/02/2007) will take a charge of $11 billion to cover the bad debts seen by its acquired Household division in the U.S., according to reports from the Sunday Times and Sunday Telegraph newspapers. HSBC reports its annual results on Monday. The bank recently issued its first profit warning over mounting bad debts in the U.S.
Yikes! $25K income gets her into a $225K house?!? I remember stretching to get into a $78K house with $32K income! Then that $78K house went to $40K-$45K! 15 year loan and several years later…I got out. Luckily interest rates were going down then and my income was rising rapidly.
“Another factor was the number of investors in the market who sometimes bought four or five houses, Bardo said.”
Who would have thunk there could ever be a problem from investors buying four or five houses? Because real estate is the best investment, right? So if you buy five houses you will make five times the profit?
$11 Billion here and $11 Billion there and pretty soon it adds up.
Here’s a nice dichotomy of how well we’ve been keeping the good ship steady, since those heady days before 9/11
We are plunged in an unwinable war, a war in which our enemies refuse to respect our weapons, which cost us many billions and were built to fight an enemy state, or the last war, if you will. Of what use have Abrams tanks, F 18 fighters or Apache helicopters been lately?
The expenditure in capital so far has been around $300 Billion
We’ve so alienated the rest of the industrialized world from visiting our country, that our share of the lucrative world travel market has dropped from 9% to 6%, a loss of revenue of around $300 Billion, since 9/11
$300 Billion here, $300 Billion there, it adds up.
But that was more than offset by the trillions and trillions of dollars of “wealth” that was created when homes started appreciating at 20% per year. Oops!
I’ve been lurking over at the Broker Outpost Forum for the last several month trying to better understand the lending business. The last few weeks have been very interesting, with brokers scrambling to secure funding as one subprime lender after another shuts down or changes its lending policies. A reoccurring suggestion on the forum is for brokers to direct their subprime customers towards Federal Housing Administration (FHA) products. As a taxpayer and avid bubble watcher, this raised some questions that I hoped some of the very well-informed people on this blog could answer.
According to the FHA website, these loans are more difficult to obtain then some of the subprime junk that been pushed over the last few years - max debt to income ratio of 29%, documentation including W-2 and paycheck stubs, SS#, and 3% down (it’s not much, but better than zero down or cash back). Brokers providing these products have to be approved by the FHA. Also, there is a max loan size by location - $200,000 for Austin and $464,449 for Los Angeles.
Are the lending standards on these products strictly enforced so that a cashier at Target won’t be using taxpayer money to buy a $400,000 starter home in Fontana? Is it possible that a Federal bailout of the housing industry would involve a relaxation of the FHA lending standards, keeping the first-time and low-end buyers in the game?
Before most of the subprime stuff, borrowers on the fence (with shaky credit) could go FHA and if they didn’t have enough trade lines, they could use alternative credit trade lines, like say their phone bill, utilities, etc. So this would be a natural reversion back to those loans. The problem is what you already alluded to, in that the loans wont cover current housing prices, thus they fell out of favor in the last five or six years.
One advantage of FHA loans is that you can have as many people on the loan for income qualification purposes as you want, even people who dont live in the home. So, they can be an alternative to subprime, and they may begin to be used again as the prices continue to correct/crash and subprime MBS buyers continue to backout of the market.
Maricopa County Arizona Notices of Trustee’s Sale
Jan 06 726
Feb 06 687
Mar 06 790
Apr 06 638
May 06 764
Jun 06 797
Jul 06 851
Aug 06 1019
Sep 06 1114
Oct 06 1238
Nov 06 1493
Dec 06 1407
Jan 07 1624
Feb 07 1577
Sheriff Joe’s boys are gonna’ be busy a knock, knock, knockin!
It’s all good in Sedona, Ben. No bubble in sight
March - April 2007 “Around Sedona” Newsletter
We would really like to know a little more about the people on our
newsletter mailing list. If you haven’t already done so could you please
take two minutes time and click on the link below and fill out the tiny
survey?
http://www.sedona-real-estate.com/questionaire2.htm
Thank you.
Real Estate News: Just about the same as the last newsletter. The
Sedona market has slowed from its peak in 2004 – 2005 but the market is
far from dead (and there is no bubble in sight). Sales of higher priced
homes (over $1 million) remain strong here in Sedona as well as most
other areas of Arizona. The best buys continue to be homes priced
under $500,000. Vacant land sales have slowed to a crawl and most of those
lots that have sold were priced at the lower end of the market. My
opinion is that with building costs increasing and with a large number of
homes for sale – people are choosing to buy existing homes – rather
than purchasing home-sites and building. There is far more inventory
of homes and vacant lots available than this time last year. Most
prices have not dropped, but there are some great buys – and sellers are
more negotiable in many cases. Sedona tourism remains strong – with
people now booking up to a year ahead (a great sign of recovery). Fall
& winter bookings were about the same as last year. Tourism drives
everything in Sedona and an increase in tourism may be the precursor to
another run-up in home sales – so if you plan on a purchase in the
Sedona area this may be your best buying opportunity.
A brand new subdivision is being marketed by our office. The
Highlands, located in Clarkdale (about 25 minutes south of Sedona) has homesites
starting at only about $110,000. Come enjoy a sanctuary of 240
residential parcels resting in the foothills above the Verde Valley. The
Highlands will be a planned community, which will include: 3 parks, a
community center, shopping, and scenic trails in an unspoiled environment.
Call us for more information and directions.
As I said in my last couple of newsletters – there are still a few
new and resale Verde Santa Fe units available to be purchased now
starting at under $250,000 (we just sold one for $239,000). The new community
of Mountain Gate, located about 20 miles south of Sedona in Clarkdale
(30 minutes) has both town homes and regular estate homes available with
prices starting under $200,000. These are the two most affordable
areas at the current time. There are many new condo projects coming on the
market in Sedona & Cottonwood with prices starting at under $200,000 to
over $800,000.
We still have three Bed and Breakfasts for sale: The Lodge at Sedona
(www.lodgeatsedona.com), Saddle Rock Ranch (www.saddlerockranch.com) and
Cozy Cactus Bed & Breakfast (www.cozycactus.com). If you have interest
in a Sedona B & B – these are 3 great properties – priced from
about $1.3 million to $3.79 million. Please just give us a call for an
information package or see our web-site listings page for virtual tours of
these inns (www.sedona-real-estate.com/property1.htm). The Lodge at
Sedona just had a significant price reduction and can now be purchased
with an adjoining .8 acre lot.
For those of you who like statistics and numbers, here are some numbers
as of March 2, 2007 (1/1/07 to 3/2/06).
Number of listed homes & condos in all of the Sedona market: 482 (was
483 - 120 days ago).
Number of homes & condos listed below $400,000: 75 (was 69 - 120 days
ago)
Number of homes listed over $1 million: 106 (was 92, 120 days ago).
Median listed price: $629,000 (was $629,000 120 days ago).
Number of homes & condos sold year to date: 49
Median sales price of all homes and condos sold: $609,000 (was $530,000
through May 10, 2006)
Number of listed home-sites in all areas of the Sedona market 340 (was
360 – 120 days ago)
Number of lots listed below $300,000: 56 (was 62 - 120 days ago)
Number of lots listed above $1,000,000: 26 (was 31 – 120 days ago)
Median listed price: $462,000 (was $449,900 – 120 days ago)
Number of home-sites sold year to date: 8 (average of 10 per month in
2006).
Median sales price: $315,000 (was $520,000 120 days ago – expensive
lots are not selling!)
I happen to own a lot in Sedona and own it out right! The problem with Sedona is the TAXES. No consistancy. Just look at your tax bill you RE agents! Many people are paying more than they should. I just appealed my taxes and am waiting for a response. Just as many people over pay for real estate because of stupidity they will continue to over pay taxes because they do not pay attention . It may take a full blown depression like the 30’s to shake out this mess and believe me it is a mess!
“Big lenders and Wall Street investors are going after Arizona mortgage brokers, appraisers, real estate agents, title firms and home buyers for fraud.”
California is probably a bigger fraud house than Arizona.
“Probably?”
Ok, I should say “California has got to be a bigger fraud house than arizona.” I mean there are thousands of willy nilly agents who would do anything to get their commision, including lie and cheat.
Black Monday?
“The world’s third-biggest bank is on Monday expected to report bad debt provisions of more than $10.6bn for 2006 – up more than 35 per cent from 2005.”
http://www.msnbc.msn.com/id/17454440/
Sounds like the sub prime market will remain in the news
“Lenders loosened underwriting standards in recent years to maintain origination volumes in a slowing housing market. But the poor quality of loans made in 2005 and 2006 is now coming home to roost, forcing nearly 30 subprime lenders to close their doors in recent months.
New Century Financial, a big subprime lender, said late onFriday that the US attorney for the central district of California was investigating trading in its securities and its accounting practices.
New Century has also received information requests from the Securities and Exchange Commission and the New York Stock Exchange watchdog.
The company said it would report a loss for 2006 and that its auditors could raise questions over its viability if it failed to negotiate waivers from some of its creditors.
Fremont General, a smaller subprime lender, said it would agree with the Federal Deposit Insurance Corporation to stop making risky mortgage loans and end other violations, adding that it planned to exit the business.”