“The Days Of The Buying Frenzy Are Gone”
The Sacramento Bee reports from California. “Capital-area home sales remained in the winter doldrums during February, with escrow closings still well below 3,113 sales reported in February 2006, itself a gloomy month for sales. Last month, 2,534 homes changed hands in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, reported DataQuick.”
“An 18.6 percent decline from last year’s sales levels, that compared to a 19.8 percent fall in the six counties of metropolitan Los Angeles and a 7.9 percent drop in the nine-county Bay Area, according to DataQuick.”
“The new statistics arrive as homeowners are setting the stage for the new real estate season in the capital region, by putting up more for-sale signs. TrendGraphix reported 11,410 existing homes for sale at the end of February in El Dorado, Placer, Sacramento and Yolo counties, the highest February number in nearly 15 years.”
Inside Bay Area. “Homes sales in the Bay Area continued a slowing pattern for the 25th consecutive month. A total of 6,305 new and resale houses and condominiums changed hands in February. Last month’s sales volume was the lowest February since 1996, when 5,940 homes were sold.”
“The median price was $620,000. The Bay Area median price peaked last June when it reached $648,000. ‘To some extent, today’s market is the result of buyers and sellers locking horns, refusing to give in to the other side’s idea of what a house is worth,’ said Marshall Prentice, DataQuick president.”
“Another factor driving the slowdown, according to Prentice, is that lots of people bought a few years ago when the market was hot. ‘They rushed to buy sooner than they would otherwise have, and that stole demand from today. It’s tough to quantify, but we think it helps explain the slowdown,’ he said.”
The Ventura County Star. “Ventura County’s median price for new and existing homes and condominiums was $584,000 in February, down from $605,000 a year ago. Sales totaled 737 last month, a 16.4 percent decline from 882 in February 2006, according to DataQuick.”
“The slowdown has been tough on the real estate industry. Real estate professionals are working twice as hard for fewer sales, said (broker) Gustavo Ramirez in Oxnard.”
“Countywide, there are about 20 to 25 properties pending daily, he said, ‘which, if you think about it, really isn’t much, considering what it was a year or two ago, when properties were hitting the market and selling within a few hours.’”
The Salinas Californian. “The number of foreclosures in Monterey County surged by more than 150 percent over the past year. The month of February saw 62 foreclosures in the county, a roughly 400 percent increase over the same month in 2006, which saw 12 foreclosures, according to the Monterey County Recorder’s Office.”
“In February, the median price for a single family home in Monterey County was $657,000 — down from $700,000 the same month last year, according to the Monterey County Association of Realtors. In north Salinas, the median price last month was $568,000, compared with $665,000 the year before.”
“‘Buyers have time to look around (and) take their time,’ said Lucy Jensen, a Soledad-based real estate agent. ‘The days of the buying frenzy are gone.’”
“Subprime lending is especially prevalent in Salinas, where the median home price is about $550,000, but the median household income is less than a 10th of that. Nationally, subprime lending accounts for about 10 percent of home loans. One local real estate agent said that figure could be as high as 70 percent in Salinas.”
“‘These are just foreclosures waiting to happen,’ said Ariel Torres, an agent in Salinas.”
“Torres said the practice of 100 percent financing, in which a homebuyer doesn’t have to put any money down, has worsened the effects of subprime lending. ‘With 100 percent financing, it opened the floodgates, so that every buyer with any whim of buying can buy a house,’ he said.”
“The attribution of the problems to predatory real estate agents and lenders has not helped bring buyers back to the market, local experts say. ‘With all the bad press we received, rightfully or wrongfully, our buyers have gone away,’ said Jensen. ‘They’re terrified by everything they’re reading.’”
The LA Times. “Orange County last month posted its first year-over-year decline in median home price in more than a decade. Since October, the median price of resale homes, the largest housing segment there, had been declining, DataQuick analyst Andrew LePage said. The overall median stayed positive because of price growth in new homes.”
“‘What’s surprising is how long it took Orange County’s all-home median to go negative,’ he said. ‘It was only a matter of time.’”
“Eddie Oruna and Kerman Rogers are sub-prime borrowers, who bought a three-bedroom home in Chino Hills in 2002 and then financed it to the hilt. The interest rate on their two loans recently jumped more than 2 percentage points, and they’re struggling to make monthly payments.”
“Just 13% of mortgages are sub-prime, but if too many in the sub-prime sector default and sell at a discount or are pushed into foreclosure, the market will be flooded with inexpensive real estate — diluting housing prices overall and possibly crimping the entire economy.”
“For Oruna and Rogers, there’s a sense of urgency. ‘We are really on the edge right now,’ Oruna says. ‘We don’t really know what to do.”
The North County Times. “For the third time in seven months, the median price of a single-family home selling in North County has declined when compared to prices last year.”
“The median price slid to $615,000 in February, a decline of 3.2 percent from $635,000 the same month in 2006, according to the North San Diego County Association of Realtors.”
“Single-family-home sales also declined 11 percent from 563 in February 2006 to 501, the report shows. At the same time, inventories began to rise again last month after falling through autumn and early winter.”
“There were 4,931 houses for sale at the end of February compared to 4,657 the previous month.” “‘A bubble has to come to an end, just like every pyramid scheme has to come to an end, because you’re running on fumes,’ econimst Christopher Thornberg said. However, he said it will take a big economic blow to burst the bubble.”
“Foreclosures countywide nearly tripled from 4,541 in 2005 to 13,246 in 2006, according to RealtyTrac.”
“It is difficult to predict at this point, said Heather Benson, president of the North San Diego County Association of Realtors, how the subprime market’s troubles will affect home values. ‘We’re going to have to wait and see,’ she said.”
The Orange County Register. “ACC Capital Holdings, the Orange-based parent of Ameriquest Mortgage Co., said it is laying off workers today ‘across all lines of business’ and combining some of its operations to cut costs amid a downturn in the subprime mortgage industry.”
“The company declined to say how many workers are being laid off. Employees said the number in Orange County was at least 100, and possibly many more than that.”
From Reuters. “Only a few weeks ago, a borrower in Southern California could qualify for 100 percent financing for a house, with no proof of income or assets. Now, the lending spigot is dry.”
“‘Everybody is running scared,’ said Yamila Ayad, a San Diego mortgage broker. ‘I have been getting these flashes across my screen: This product is going away,’ she said. ‘They have retracted the products.’”
The Argus. “In the Oakland metropolitan area about 11 percent of outstanding mortgages in December 2006 were subprime, with 12 percent of those borrowers at least 60 days late on their payments.”
“Homeowners like Juanita Wallace may be affected. Wallace is an retired Gilroy homeowner who said she’s not sure her current loan was subprime, because she says she has excellent credit. But her loan has many characteristics of those subprime borrowers typically get, including a hefty penalty if she refinances within the first two years; and a negative-amortization ‘teaser’ rate of 1.75 percent that’s causing her loan balance to grow with each passing month.”
“Her home of 35 years would have been paid for by now if she had not refinanced three times to remodel and pay debts. ‘Here I ended up owing $590,000 on it,’ she said with a rueful laugh.”
add Poway, CA sign spinners to the unemployed due to this bust:
http://news.yahoo.com/s/kgtv/20070315/lo_kgtv/11260950
I like those sign spinners. they seem to work hard, enduring smog and heat.
anyhow, the subprime is not the real problem. the real problem is the unwarranted appreciations of home price. you’re talking about 100% over 5 years. those who bought into this fantasy using toxic loans will have to pay dearly; it does not matter if you have perfect credit and a good job. the problem is that your salary does not cover the readjusted mortgage. the problem is much, much bigger than the subprime scapegoat.
I am not trying to be overly critical, as my writings are far from perfect, but there is a reason for CAPS. They make the material much easier to read.
I am So Sorry. I forgot to tighten up my rear end when I was typing that. A thousand pardons.
ha ha…you guys are funny
I’ve noticed that I’ve also gotten hyper-sensitive, over the last few months, over typos and bad spelling and grammar. I think it’s because (1) I read too many house descriptions written by Realtors and (2) I’ve never in my life, up until now, read such vast quantities of unedited work, as in blog entries.
Go to a gamer site. Read a forum post from an adolescent with no punctuation, capitalization, or grammatical structure, with over half the words in l33t. It will make everyone’s post on this board seem like Shakespeare.
Well, maybe Christopher Marlowe, but not the real “Shakespeare”!
The real Shakespeare, you mean Francis Bacon?
“to pee, or not to pee that is the question”
imploder
These days, I think it’s an involuntary fear response.
100% appreciation in 5 years? What ghetto do you live in?
Around here (Los Angeles) prices have gone up 4x or more.
my neighborhood in newport beach went up only 100%. but the areas around east or south central la probably went up 4x.
I have seen that in many of the inland CA areas. I doubt those same areas will stick at just a 50% downward haircut when this is all said and done.
Same in SF Bay Area. Typical cost was 110 per sq ft … now its 450 sq ft
So how much would it cost for a 2,350 square foot 2 story-home single family in SF ? Just curious…
and i thought that pretty soon we’d see real estate agents spinning signs on sunday afternoons instead of holding open houses. they could their name and phone number on the signs, right above where it says
“Will work for food!”
and i thought that pretty soon we’d see real estate agents spinning signs on sunday afternoons instead of holding open houses. they could put their name and phone number on the signs, right above where it says
“Will work for food!”
Oh yeah Sacramento, you’re well on your way to that Spring recovery.
Sacramento is in a world of hurt.There will be lots of people under water on their homes by a hundred grand or so real soon.My ex is already 50k in the hole.I told her not to buy but she told me, “everyone else is doing it”.
A lot of people are going to be getting on board the pain train.
People all over the world (everybody)
Join hands (join)
Start a pain train, pain train.
Typical OC homeowner?
Soon to be ex-New Century manager needs advice
I’m a successful manager at New Century who just bought an expensive new house 8 months ago. The builder in my subdivision just lowered base prices by $80k, making me instantly upside-down on my 80/20.
I want to move back to my home state to cut costs but my savings has taken a hit over the last six months. I don’t have enough cash to sell at this time. To continue paying the mortgage I’ll need a job with high income…whether that’s in the mortgage biz or not. Sux because I’ve been with the company 8 years.
I’m in a fine mess and any advice you all can give would be great.
by mtgdude007 March 15, 2007
http://www.brokeruniverse.com/grapevine/thread/?thread=376668
Find the tallest building in town and ….
My type of humor.
Bend over and meet mr homebuilder because he now controls the market.
This guy’s going be hearing the funny looking kid with the banjo on the porch very soon.
LOL!
Deliverance!
Do you have a purty mouth?
I’m struggling with the sympathy strings. Can someone lend me a peeled onion ?
He’s going to learn a life changing lesson.
Next time try saving your money and living within your means. What a novel concept, huh? Sorry, no sympathy for this clown.
Major Doh!
crispy, as I was reading that other site it sound like the guy lives in FL not CA.
You are correct.
Eat my shorts! Who’s laughing now b#tch! Buububuubooyah!
LMAO!!!
One person’s advice on the website (I’m not kidding).
“Could you ask the builder to raise the prices by $100K for……say about 60 days until you´ve sold and moved out?”
that’s what enron energy traders would do
“Could you ask the builder to raise the prices by $100K for……say about 60 days until you´ve sold and moved out?”
A friend put his house on the market as his neighbors was under contract. The neighbor showed up at his door requesting he take his sign down momentarily. Why? Because my friends house was much more attractively priced, and the neighbor was scared his buyer would back out. My friend obliged.
The only thing in his defense is that he was stupid, not evil, since he’s in the same boat as his customers.
Agreed, normally you can make a mistake and not go bankrupt. The lack of lending standards just weren’t there this time.
Erm, well you know what I mean.
So this is not limited to subprimes as GS, MER, SBC told us.
There are thousands of Realtors, loan officers with no job, no income, and lots of investment properties.
What’s he been doing with his money during the last 8 years? Never mind, I know the answer.
“I’m a successful manager”
That’s what I call being successful…in pushing paper and spending like an idiot.
It’s interesting that the REIC types are noting that stolen demand MAY be part of the problem. Nothing like cannibalizing your future years’ sales, people. And, alas, that future is NOW.
There all stareing at each other wondering where the buyers went.Look at the car makers sales after they did 0% financeing and the employee priceing scam.Is it that hard to lower the price?
“Orange County last month posted its first year-over-year decline in median home price in more than a decade.”
Are you sure?……but Mr Watts promised us a banner year……are you sure?
i forgot all about mr. warts (intentional misspelling.) didn’t he say 7% in the bag?
I’d like to put Mr. Warts in a small brown paper bag with some brown company, drop him on David Learah’s door step and light im up.
Actually it was 15%, not 7%. And I think that prediction was for last year, but either way, he’s still stupedously, gloriously wrong.
“Orange County last month posted its first year-over-year decline in median home price in more than a decade.”
This must be a misprint. Because OC real estate has NEVER gone down!
” Real estate professionals are working twice as hard for fewer sales, said (broker) Gustavo Ramirez in Oxnard.”
Doing what? Sticking Open House signs out and buying choclate chip cookies?
Furiously cold-calling everyone on their rolodex.
Think Glengarry Glen Ross.
rolodex… that was just funny
A friend of mine at work told me he just received a call from the guy who leased him his Bimmer 2 years ago. I guess this idiot went from selling cars into real estate. My friend is one of us who just laughed at him. He said he must be pretty desperate to start calling his old BMW customers! I though people were still lining up to buy houses in Southern California??? Call me stupid…..BUT…
get that guys phone number. we’ll start cold calling him asking him to buy a condo. a real estate agent getting cold called by another realtor might be enough to get him on a tall building.
I know someone who absolutely loved Glengarry Glen Ross, thought it was one the all-time great American plays/films, then went right ahead and bought in 2005 in CA with IO ARM. duh (sigh) - people don’t put 2 and 2 together correctly
imploder got fancy Mortgage and Finance Journal from Wamu broker in Westlake Village. imploder thinks friend in the business give imploder’s address to this man as joke.
glad i read it. now i know we have “turned the corner in the real estate “correction”.
headline:
Positive Marking Signs?
the question mark is especially reassuring….
And since most of them have more listings than they know what to do with, they’re bleeding out bigtime in advertising and MLS costs. By the time they finally do get a commission, their best hope is that it’s enough catch-up money to get their heads back above water. Oh, that real estate is a two-edged sword that cuts you deep on the backstroke.
Per National Mortgage News:
Job Cuts at Ameriquest May Total 3,000
ACC Capital Holdings, Orange, Calif., laid off hundreds of retail and wholesale workers Thursday at affiliates Ameriquest and Argent Mortgage, consolidating its consumer call-center operation into just one location.
Any word on which location they are consolidating to? It’s funny that in all the talk of the subprime blow-up, everyone seems to have forgotten about the worst one out there. Glad to see they managed to make the headlines regardless.
Yes, where?
I have a friend there who has been trying to transfer for six months (non-broker support staff, I won’t say more to preserve his desire for privacy).
And I’m to call his sister tonight… how do I bring up this subject?
Oh yea…
Got popcorn?
(kidding! I’m more diplomatic than that!)
Neil
The report I saw (Broker Outpost) said that they were closing a loan production facility in White Plains, NY and transferring the business to their Rolling Meadows, IL and Orange, CA offices. Another thread on BO states that they were moving their operations personnel from the Orange, CA office to Rancho Cucumonga (employees had the option to move or be laid off). Not sure how accurate this info is, but I hope it’s at least somewhat helpful.
And my commute just got better. I drive by the Ameriquest building every day. I also work exactly between Option One and New Century, so it really does keep getting better and better.
lucky bastard
All the local prime lunch spots are probably pretty empty too! Sweet! See, there is a silver lining to the end of the world as they know it!
Hmm, wouldn’t those be SUBprime lunch spots? ha ha.
Anyway, it’s great to get word of Ameriquest’s problems.
Of implode-o-meter’s top seven, only Wells Fargo has not weighed in as a Dead Man Walking.
Wells Fargo is “triple A”. In other words, they have a lot more money sitting around in case things get bad. Don’t expect them to go under, they did a much better job of getting others to carry the bag.
I’m not saying that its right… but Wells is very secure.
Well, I’ve pegged New Century in the “Enron” role, but Wamu or Wells could easily land the “Worldcom” role in the sequel.
Wells Fargo is by far the market leader in subrime - 13% share per a VERY VERY Good report just out by Credit Suisse (found it on seeking alpha).
PEr this report, WFB just discontinued no-doc, no ratio, stated income loans in Ohio on 2/26/07. Some state law in ohio made them do this. The report also stated that they just cut 70 jobs in concord and 250 in fort mill SC, both times citing “tightening credit policy”.
WFB is getting hit a bit by this meltdown but, knowing wells quite well, I think they are WAY to big/savvy to let a little thing like subprime hurt them in a significant way. They are just too big and spread out. I still remember how everyone thought the end of the internet boom would hurt wells (being in california and also with a huge venture arm at the time) but nothing happened … they just got bigger
Hey, this is what happened after the dot bomb. The commute in Silicon Valley improved noticeably - rents went down too. There’s always a bright side…
“Single-family-home sales also declined 11 percent from 563 in February 2006 to 501, the report shows. At the same time, inventories began to rise again last month after falling through autumn and early winter.”
It took about a week and half longer than I thought, but here it comes. Have you taken a look at LA, OC, and IE’s inventories lately? We’re in for a ride indeed!!
Along the same lines, I’m annoyed to report that the Morro Bay inventory of SFH below $600K rose only from a low of 29 on 2/28/07 to the current 31. However, on the brighter side, the number of active foreclosures in MB, which was stuck at 1 for months and months and months, has now risen to 3.
Typical OC Homeowner:
Soon to be ex-New Century manager needs advice
I’m a successful manager at New Century who just bought an expensive new house 8 months ago. The builder in my subdivision just lowered base prices by $80k, making me instantly upside-down on my 80/20.
I want to move back to my home state to cut costs but my savings has taken a hit over the last six months. I don’t have enough cash to sell at this time. To continue paying the mortgage I’ll need a job with high income…whether that’s in the mortgage biz or not. Sux because I’ve been with the company 8 years.
I’m in a fine mess and any advice you all can give would be great.
by mtgdude007 March 15, 2007
http://www.brokeruniverse.com/grapevine/thread/?thread=376668
When I read that…
Pure schadenfreude. I know, that isn’t nice.
“Savings has taken a hit over the last 6 months.”
Was she worth it? Are the symptoms gone? bwaa haa haa.
And yes, I realize the irony. I posted above about concern for a friend getting laid off yet here is someone I don’t know and I’m talking schadenfreude.
Ummm… Its that old quote in paraphrase:
One “problem” is a tragedy
A million “problems” is a statistic
And no, I’m not a fan of the man who originated that quote. But unfortunately, its true. Scaringly, we’re going to have a lot of statistics.
Got popcorn?
Neil
Guess all of you can do Schadenfreude on az_lender if my policies were not conservative Enough. Time will tell. No defaults just now.
Gee, let me introduce myself. “I’m a successful manager…who just bought an expensive new house…”, humility and modesty being just a few of my many fine character traits.
“To continue paying the mortgage I’ll need a job with high income…whether that’s in the mortgage biz or not.”
my advice:
Well, if you were involved in those sex exchanges posted by Quiggly…and you have a long wanger…SFV, CA is not out of state, but you might be able to extend your income for a while longer.
Here’s a hint for the successful manager. His new high-income job will NOT be in the mortgage biz. Can he quickly train to become a real-estate auctioneer?
“‘Everybody is running scared,’ said Yamila Ayad, a San Diego mortgage broker. ‘I have been getting these flashes across my screen: This product is going away,’ she said. ‘They have retracted the products.’”
I’m still getting my e-mails, and it’s running about 4 or 5 e-mails a day outlining new guidelines. Today IndyMac sent out their changes. Looks like everyone is going pucker-butt.
“ Looks like everyone is going pucker-butt. ”
ROTFL.
Thankfully, its only water on my laptop.
That does describe the forward credit market.
Got popcorn?
Neil
“tighter than a bulls ass at fly time”
Sounds funny, but I don’t get it. My oldman was famous for one-liners like this. I’d laugh my butt off, and then go “huh?” Take this one for example: “It’s hotter than a popcorn fart in a Nebraska windstorm!” ….What the heck?..I still don’t get it. Damn funny though….oh, if someone does know, fill me in. It would solve a forty year mystery.
I don’t get the Nebraska one, but I think I get hwy50’s joke, if “fly time” means a time when there are a lot of flies flying around looking for damp, smelly flesh.
“Her home of 35 years would have been paid for by now if she had not refinanced three times to remodel and pay debts. ‘Here I ended up owing $590,000 on it,’ she said with a rueful laugh.”
When she is living under her blanket on the local YMCA steps, that “rueful” laugh will very soon become “yelping” cry.
FICO scores don’t mean much if you sudenly cannot pay this months bills.
FICO scores mean you have a history of doing the right thing. It seems a lot of folks didn’t have much conviction that what got them the good scores was worth it, so they take a dive into the shallow end head first.
“Her home of 35 years would have been paid for by now if she had not refinanced three times to remodel and pay debts. ‘Here I ended up owing $590,000 on it,’ she said with a rueful laugh.”
I am disgusted by such irresponsibility - out, to the poor house she should go. She could have (and should have) enjoyed a paid-off house in retirement.
This is the most out of proportion story yet. Three years away and now 595K in debt. WTF!!!!!!!!!!!!!!! You know how many of us on this blog would have liked to be in her position of 3 years away? This woman deserves to lose it all just because of her stupidity!
Go to the story. She is 80 yrs old.
OMFG!!!!!!
Ripped and stripped by some snarky mortgage rip-off specialist. May his karma lead him to years of trouble.
I concurr…
Anyone who deserves that deserves a really bad incurrable rash. Land of the free and home of people who will send you to the poor house for $8k.
Got popcorn?
Neil
I agree with SalinasRon, this lady is 80 years old! What slime bag got her into these loans. If the LO sat down and said ” I really don;t think you should do this because….., and she still bit then that is her fault, but I bet it went something like… ” Don”t worry grandma, we’ll do a refi in a few years and everything will be just fine”. It is really sad ( and criminal) when people prey on the elderly. I hope this was not the case but I have my doubts.
I agree with SalinasRon, this lady is 80 years old! What slime bag got her into these loans.
The old lady probably thought he was cute. Who knows, maybe he even slipped her the bone.
OK OK I’m sorry I didn’t mean it. I think I’m going mental tonite.
Actually when my mama was alive I spent what felt like half of my waking hours protecting her from an array of these very slimebags. (May they all rot in h3ll).
What makes you think some slimebag did anything to her?? Sounds to me like she SPENT 500K in the past few years. ON What? …..Trips to Europe, cruises, spa time……..fancy clothes………….dinners at the finest restaurants, most likely. She must have had a great time!! At 80, she probably figured she didn’t have much time left and to live life to the fullest. Now the party is over, and no, she didn’t die. Who’s to blame?
I think she knew full well what she was doing. I know people like this. They plan on not leaving an inheritance and enjoying their final years……..to become someone else’s problem. Now she is.
You hit the hail right on the head, diogenes. I sure as hell don’t feel sorry for her. She refinanced 3 freakin’ times for remodeling.
Well, come on. Lots of my clients are in their 70’s, and they know that what they can afford is a trailer in a nice park, where the park has a swimming pool, billiard room, library, laundromat, jacuzzi, ballroom, and a social director. They can get it for 5 figures. Just because this lady is 80 doesn’t really give her an excuse to be a moron, unless she has Alzheimer’s.
To those in here who say they never had kids because they couldn’t “afford” them, I would note that my mom, who is getting up in years, has been very glad to have her kids around to look out for her since my dad died a few years ago. We’d never let her get preyed on like so many older people do.
But the elderly are often victimized into doing things they would not have considered when they were young. My eightyish inlaws bought a variable annuity from a stranger who came to their door! An elderly patient of mine is about to lose her house to a man who befriended her at church, promised her an impossibly low interest rate, and absconded with her funds. She found out last year that her rate was adjusted upward, and now she and her adult, blind son in a wheelchair are being foreclosed on.
In cases like these, lawsuits against the lenders have been successful. If the lenders are gone, go after the
deep pocket enablers: Goldman Sach, Bear & Stearns …
My mom is in her 90’s. She refused to run up debt, paid off her house, and now lives in a nice retirement apartment courtesy of returns on investments (and the profits from selling her unencumbered house). She always put her money in CD’s. Now if she would only give up her driver’s license…
OXNARD, CA is ground zero in Ventura County for subprime meltdown.
This is schocking- I did a MLS search in ventura county with this criteria:
Marketing remarks containing ‘foreclosure’ or ’short sale’ or ‘reo’ or ‘bank owned’. The results were 3 pages of listings. 90% of them were in OXNARD or sister city Ventura(same city).
Im not making it up, ask a realtor to do the same search.
I pulled up a few to look at title records and noticed all the now familiar subprime lenders at work. FYI Oxnard is 90% hispanic thus subprime heaven.
Disaster in ventura county continues.
“FYI Oxnard is 90% hispanic thus subprime heaven.”
Have fun kicking them out. I’ve heard from many friends down there that in order to afford these homes, they’re going 2 to 3 families per house. Can you imagine serving notice on a place like that? We’re talking a mini war in the front yard.
Good luck getting past all the cars parked in the front yard.
The Alamo in reverse.
Its EZ you just call the SWAT team to place a NOD notice on the door.
Sniper covering the position and everything.
Anyway Hilary and Dodd are going to pass ’subprime reset and forgiveness’ so they can live free off the taxpayers another couple of ‘anos’.
Well, you didn’t really want to pick lettuce yourself, did you?
I live in Ventura and it is getting worse by the day….More short sales and the For Sale signs are popping up all over…
Krills, have you been to the auctions at the govt center? I’ve been curious for a long time and wanted to go but am waiting another year or two until the first few legions to catch a falling knife are cleared away. But I feel I should go just to watch and get a benchmark. Do these properties sell (mostly junk in Xnard, Fillmore, etc.)?
Bring on the sub prime meltdown!
You wnat to buy real estate - fine here are the terms:
FICO over 700
Skin in the game - (down payment)
Cannot borrow more than 3x annual household income - if it is more than that you cannot afford it - or would not want to try anyway…
Fixed rate amortizing loan - Option Arms and I/O OK if you can prove that you have enough liquid assets to cover the entire loan balance (I/O financing was designed to be used by high income/ net worth persons who can make more on investments that the mortgage costs)
I know my suggestions if implemented would probebly crash this pyramid scheme fake-ass debt driven enonomy but it is going down anyway if things don’t change…
KMFDM rules, this thing was headed down long ago. The RE bubble is part of a much larger debt bubble, which is going to pop very big time with this RE bubble popping.
As an aside, drove by an open house today at lunch. Standard 2K sq. ft., on a lot the size of postage stamp (1 run with the lawn mower will cut it) and in Lake Forest. This house could not have sold for more than $300-$400K, originally. Current asking price….a staggering $875K.
All I could think is, HELLO! Are you sleeping. This market is tanking. The only people left to buy this house are millionaires who would rather buy at the beach or out of state, not 15 miles inland in South OC. This guy either thinks he is going to hit the retirement lottery or has a lot of debt to payoff, or a combination, thereof. I thought about going in ad offering $500K just on a lark since I know it will be less than that in a year. However, I thought it would be a nice joke!
No matter, South OC is toast. No one is left who can afford at these prices.
totally agree OCDan, I was looking at the MLS, most of these houses in Lake Forest while nice are not worth more that 400k.
Now my question is should I start some nasty lowballing
( like 50% lower ) or do you think it is still early .
by the way my realtor advised that I should try to lowball even after I told her how much I would cut asking prices. WOW
by the way my realtor advised that I should try to lowball even after I told her how much I would cut asking prices. WOW
As the Realtor® turns…to the side of the buyer. (6% of 400k could pay for an eye lift and tummy tuck.)
MMG, even for me 300K is tops. I don’t know if I will ever see those prices in Lake Forest, but Rancho Santa Margarita is another option I have. With all the HOAs out here I would still be a little gun shy because no one is going to me when and how I can do something to my property unless they are paying all the bills. And to think, they charge homeowners a monthly fee. What a racket these associations have!
Sorry for the extra post. MMG, I didn’t answer your first question. I think it is def. a little early to lowball. Let things settle a bit. Subprime is toast. Impac and COuntrywide seem to be in trouble so Alt-A is def. next. Many of these owners will be sweating by the June and July heat. While I have been sooooo tempted to lowball one of these dorks, I think we are about 4-6 months away.
Okay, one more on this part of the thread. Suppose I made an offer of 800K on that original asking price of 875K and it was accepted. No suppose I did just have 20% to put down. I am looking at a 640K mortgage. Let’s do the math. 3,840/month on the mortgage. Add another 300 for HOA and another 660/month for taxes. So far, 4400/month for that monster. Now, let’s add another 750/month for upkeep (remember this is a HOA, probably) and utilites. Yowzah! That monster rings in at $5,150/month! Now let’s assume 3X income, you will need to make 15K net, which translates into about 22K/month gross. Take that 22K and multiply by 12 and you need, drumroll please……….$264,000/year salary!
Holy moly. What does that put you in? The top 2.5% nationally. Sure, people who meet these fundamentals are lining up for the shot at this baby.
Sorry my math was off, it should be $5,550/month for that monster! Now you should be making almost 280K a year. Still no takers.
OCDan, according to the Blog’s HOA, you cannot post more than once in a row.:P
OCDan, as a former OC resident myself…keep in mind that 99% of the US has lower housing prices than the OC…many, many very nice areas in other states (midwest, etc.) to choose from. You have a lot of options.
I’ve told wifey to find that perfect house because she can start lowballing in August. The seller need to sweat out the long hot dry summer before they’ll begin to capitulate.
You guys are WAY too early. Wait for late 08, you aren’t going to believe what you see between now and then.
You better trash the lowball idea. Tell the wife to stock up on dry goods, canned food, lots of water, and ammo.
I live in Lake Forest or Forest Lake sub division now. I hate that name or names. Most overused name since Main Street.
Go for it. Maybe it will wake them up. It might tick them off, but there are plenty of houses out there to choose from. If I were buying now I’d seriously lowball instead of waiting.
How does KMFDM (loosely translated from German meaning, “No pity for the masses”) fit into a discussion on RE? Maybe I am missing something important here.
Josh
I’m seeing the exact same thing here in the SFV. New listing today for a 3/2 1700 sq. ft. house in sherman oaks for 850k…hello???? look at the calendar…it’s not 2005….dumbass greed mongers.
Suggested correction…
FICO over 700: require 20% down
FICO over 760: require 10% down
FICO over 820: require 5% down
Small change to rnrkennedy:
FICO
I said “FICO,” Neil. I don’t understand your point…?
AAgh…
I typed the “less than” sign and the rest of my post was cut off!
Intended to type the new normal down payments:
FICO less than 600, 35%+ down payment
FICO 600 to 650 30% down payment
FICO 650 to 700 25% down
FICO 700 to 780 20% down
780 and higher, 10% down
But after the current burn, everyone will need to keep “skin in the game.”
Sorry… I keep forgetting “math signs” end a post.
Got popcorn?
Neil
Let’s make that clearer:
FICO over 700: require 20% down => $120K
FICO over 760: require 10% down => $60K
FICO over 820: require 5% down => $30K
BWHAHAHAHAHAH….Yeah Right!!!!
Laugh if you want, but it’s what the mortgage industry will soon demand after this debacle…
Oh I hope to hell they do require that much down. Why? Because I already have that 20% ready and waiting and growing…while I rent.
You bet I’m going to keep on laughing.
How about the investors lost all their money and have no more to loan. So no money for anyone. 100% financing.
You also have to figure that *anyone* — regardless of FICO — will pay a significantly higher rate for anything less that 20% down.
You bet. This tiny real lender cares NOTHING about FICO, doesn’t even look up their FICO, doesn’t listen to any of their assertions about their income, cares ONLY about LTV and down payment.
Last nights tv local Salinas news said something to the effect that Monterey County property taxes were in arrears to the tune of 15 Mil so housing numbers aren’t telling the whole story. April is 1st 2007 tax installment for the new year and unpaid taxes for CA will tell the true plight of home owners here>
My dad pays his bill in person at the Los Angeles Department of Water and Power….he goes every month, because he is tired of getting dinged by late charges from different CC companies, etc. Plus the mail isnt as reliable…anyway, he said the lady at the counter thanked him for paying his bill. He asked why she said that…and she said there are a very large number of people who are non paying in City of Los Angeles. The smaller cities like Burbank, or Glendale will shut you off….but LA has too many customers and too few workers to do that.
Get the word out. If you live in LA only suckers pay their water bill.
It should be Dodo not Dodd. Because he too will be extinct like the subprime mess he is trying to keep going.
Oakland is the BA hood. Typical family income is like 40K. Homes with bars on them listed for 500K. Who bought those homes?
I see many mexicans day labor hanging around Oakland. They may became victims of this bust.
“I see many mexicans day labor hanging around Oakland. They may became victims of this bust.”
Nah, they’ll just head back home where it’s cheap. Less work = less illegal aliens.
And if the American labor movement got a clue (fat chance), they could start a “Hire Americans first!” campaign.
Dodd has no idea what he’s looking into. He thinks and sells the idea of the poor first-time homebuyer who has been victimized. Yeah, they exist. But what he’s really going to find when he looks under the hood is stories like the one in the previous thread, the guy who leverages to the gills to spec a couple of properties. Then you got the folks who maxed out the equity in their home and started playing the leverage game, buying several, sometimes dozens of homes. Should reckless speculation be bailed out? I’d really like to see how he’s gonna sell that.
“Should reckless speculation be bailed out? I’d really like to see how he’s gonna sell that.”
I expect him to sell that by either ignoring it or sweeping it under the rug of political rhetoric.
Why do you all think he has a double-digit IQ?
I call BS on any bill coming out of the Congress that will help anyone but the financial institutions. I am sorry for the 80 yr old lady, but I am sorrier if we have to bail out the financial institutions that caused this mess.
Dodd has a blog, too. And I quote:
“Within days I will announce the date for a hearing I will conduct to ask tough questions and demand answers from state and federal officials and the industry. I intend to use all the powers and tools at my disposal as Chairman to find solutions that will keep families in their homes, ensure that America’s dream of homeownership remains alive, and protect America’s economy.
“Tomorrow, I will further address this issue and how it affects families and our economy in a speech before the U.S. Hispanic Leadership Institute in Chicago, IL.”
http://dodd.senate.gov/index.php?q=node/3781
Good find GStucco…..it’s about votes…..it’s about politics….and the clock is ticking to ‘08. There will be a bailout in some form or another. They will not allow this opportunity to pass them by.
So write the bastard, as I did, and tell him not to do it and that you are watching. If he gets a couple of hundred, or even a thousand angry emails, he’ll certainly give it more thought.
Josh
I believe it’s going to take some kind of Congressional Watch Group to keep it from gaining momentum. Dodd is merely the most vocal…..now…..but when the rest; both parties, discover they can “champion a victim”…..they could jump on board. Every person who’s lost their home, is in danger of losing their home, or WANTS to buy a home, will whine…..Wall Street will whine, for different reasons, but will whine nontheless.
Take the total times the number of adults in the family and you’ve got a LOT of potential voters. When has either party done something because it’s right?…..never….it’s about their job security.
Dodd can suck on it. That just royally pi$$es me off. I’ve already sent letters to both of my senators (whom I despise) telling them no bail out for any FBs.
Keep families in their homes? I didn’t know that was the role of our government. Most of those folks are going to lose their homes because they are financial morons and lemmings who thought buying a stucco box WAY beyond their means was the key to riches.
Bail out, my A$$! Damn, this makes me so mad to see this garbage dribbling from the mouths of our “representatives.”
How about representing the prudent people once in a while Mr. Dodd, you freaking a-hole. Rant off.
Amen, Brothah CA Guy. Testify!
Not too fond of the Florida senators, either.
Yea, when I found out what Dodd was doing I sent him an email telling him if he did bail these subprime borrowers out he would be sending them the wrong message. The message that irresponsible actions will be bailed by responsible taxpayers. Everyone should email him so he gets the message.
Screw this guy. He’s on the Senate Banking and Finance Committee. He HAD to know what was going on and he just looked the other way for his banker/Wall Street buddies. If he didn’t know, then he’s too stupid to be on that committee and unfit for his position.
Either way, the guy stinks like 10 day old fish.
There will be little funding for this and less will. I doubt there is enough money in the universe to bail this one out.
The problem for the pols is that no such bailout scheme would work because the only way many of the subprimes can make their payments are with 1% teaser and neg-am loans. Even if there was a government refinanced fixed-rate loan, they wouldn’t be able to make the payments. Then what do you do? Give them a 30-year 1% loan? If you give it to subprimes you have to give it to everyone (there would be a firestorm of unrest otherwise). Then no one would get a loan if they could get a 1% loan from Uncle Sam. The government would “nationalize” the housing market. Forget it, it wouldn’t work. There is no way to keep the subprimes in their homes at the current home prices. Any bailout that they try will be a total disaster one way or the other.
should read
“no one would get a loan from a bank if they …”
“They may became victims of this bust.”
There are no victims here, just volunteers. Calling them victims makes them sound as if they were minding their own business when a hurricane hit them. They lined up to conspire with lenders to buy into a can’t miss investment that would make them rich, the easy way. Their investment went south. Tough, that’s why they call them investments, not savings, since the outsize returns come with a serious risk factor. Calling them “victims’ is doing Sen. Dodd’s work for him.
People in my neighborhood are getting desparate to sell. The latest scam is including garage square footage as total square footage in the home. An example being a roughly 2,600 square foot air conditioned home gets advertised at roughly 3,000 square feet. Everyone is doing this all of the sudden and they did not used to in this area. My God realtors truly are realthores
:) 
Good point, I saw this for the first time today on a listing in Newport Beach i believe.
They said square footage includes garage and workspace. Huh?
Thank you Mr. Vincent, used to live there, doesn’t surprise me.
I am fairly certain in some states that is illegal.
FL Watcher,
I’m seeing the exact same damn thing in Louisiana,…..you have to DIG for accurate sq ft. In addition, they will say ANYTHING to boost the chatter. One particularly offensive listing states “waterfront”. Because I know the area, that’s crap and I called them on it. When pressed, the “waterfront” feature was “I think there’s a creek running somewhere around there”.
Hell, just put up 2′ high sandbags around the front yard with pansies stuck in’em, turn on the hose overnight…list it as “waterfront”
Here in Tampa/Hillsborough County, houses on retention ponds or ANY kind of water are defined as premium properties, advertised as waterfront, and carry higher prices. A broken sewer pipe or backed-up septic tank can increase your “equity” by 50 percent.
Thanks for passing along that info Dan.
I have seen listings for land “near Tahoe”. Upon further inspection, it’s desert scrub located in central Nevada. Not even remotely close. These clowns will do anything to get someones attention.
Yeah, some of them even show photos of Tahoe on their websites.
OT, from the Observer:
Desperate houseowners: The US property boom has shuddered to a halt - and if the resulting dip in jobs and consumer spending alarms Middle America, falling house prices will be the least of everyone’s worries
“All across Middle America, ‘For Sale’ boards are creaking forlornly in the wind, and real-estate agents are slashing prices and throwing in free gifts to tempt reluctant buyers.
“The decade-long boom that has swept American house prices to extraordinary levels has begun to crumble. It’s obviously bad news for ‘realtors’ and house-builders; but the damage could spread far beyond the housing market, and fears are mounting that the US economy will be rocked to its foundations.”
Yes, I think we can safely say the housing bubble has gone tits-up.
Question is, what happens now? Stagflation and an agonizingly long (8 to 12 years) downhill trend, or recession with fast crash (1 or 2 years) in prices due to mortgage meltdown?
I’m going with door number 2, fast crash. Won’t be good, but the subprime thing is a factor we’ve never really seen before.
The monetarist system is so broken. Enact NESARA (google it, too long to explain).
Sheesh, on second thought, I just turned up a bunch of “false flag” NESARA websites that attempt to discredit the proposal by associating both the opponents and proponents with alien-believer kooks. Wow. First time I’ve ever heard of constitutional law being associated with beings from outer space. I guess some folks must have been working overtime to discredit it and must’ve gone nuts. Sheesh, the net is becoming less and less of a place to get balanced info. Blogs seem to be the last refuge.
I still say door number 2, followed immediately thereafter by door number 1. Worst of both worlds. Remember, there are politicians and Fed governors involved.
A fast crash won’t be a recession - it’ll instead be time to resurrect a word we haven’t used in a while - depression.
Boy, even if it is true, I still get screwed. I have no debt to be erased!
I’d still go for it, though. The elimination of the income tax would be the biggest productivity booster ever.
Not too hard either. If we repealed personal income tax, we’d still have a gov’t the size of the one in ‘94. And nobody was complaining of small gov’t then.
Paul
Suddenly everyone has gone from wanting to make millions in real estate to wanting to find the best deal. I kid you not, there is a guy at work who browses the Obits looking for recently deceased people so he can scoop up their properties. He also claims you can find a deal where you find an unkempt lawn. It’s one thing to want a deal, it’s another trying to scrape the bottom of the barrel. I guess we’re now in a mode of trying to buy for less than the next person. Novel idea, it’ll be fun to watch at what lengths people will stoop. Can’t wait for the crash.
Discuss the “Catching a Falling Knife” theory with your friend. Wait another year and those homes he is looking at now will be another 50% off what they would fetch now. People just need to wait. WHy the rush?!
BTW, the proper terminology is “sweet deal”, although usually “sweet deals”.
He also claims you can find a deal where you find an unkempt lawn.
The home I sold in ‘05 was situated on two acres. From time to time, the grass wasn’t cut on schedule. It would have really sucked to be the jackas$ knocking on our door wondering if the house was for sale.
LOL - Thanks for the laugh.
“I kid you not, there is a guy at work who browses the Obits looking for recently deceased people so he can scoop up their properties. He also claims you can find a deal where you find an unkempt lawn.”
That is exacly from those piece of shit, low life, cover up the mold and termites, scum sucking pigs, montengo bros from flip that house. They are the most lowly of scum on that show and I hope they get sued for the crap they pull.
If anyone that bought one of their dives reads this,, get a lawyer and sue their ass.
“Her home of 35 years would have been paid for by now if she had not refinanced three times to remodel and pay debts. ‘Here I ended up owing $590,000 on it,’ she said with a rueful laugh.”
A few months ago some Dufus was commenting about how his wife was ready to divorce him if they didn’t buy a house. I refrained from bringing up how emotions seemed to be involved in every disaster that happens during financial decisions. How can someone need to remodel three times to solve her emotional needs for an upgraded home?
Juanita, it must be tough to be 80 years old, stupid, and almost $600K in debt.
Go ahead and slap me if you want. But, I don’t need granite, stainless or a fish pool. I want a toilet that flushes, water that runs, light switches that turn on the light and an automatic ice maker for the liquor!
Good comment, as I’ve said before, if this recession really gets rolling and becomes deflationary we will go back to what people’s basic needs are. There won’t be any excess anywhere except with the wealthy (non-posers).
Until you get back to the basics the economy will be incapable of rebuilding. Once we see most people living like you described (except the auto-ice) then we’ll know the correction has run.
You need light switches, too? Come on. Where I grew up we had bare bulbs out of a socket and a rope pully system my Dad rigged up. And don’t get me started on the toilets. Half the time we had to run a bucket of water to flush them.
From Reuters: “Only a few weeks ago, a borrower in Southern California could qualify for 100 percent financing for a house, with no proof of income or assets. Now, the lending spigot is dry.”
From Greenspan: “I’d expect it to — I’m waiting — but the spillovers are just not there.”
Exactly how quickly does Greenie expect this all to play out? This subprime debacle is only a few weeks old, and he’s hinting that it’s no big deal because a total meltdown in the overall credit market isn’t yet manifesting? I wish he’d just retire somewhere and shaddap.
“U.S. Hispanics may disproportionately feel the pain as the subprime mortgage sector implodes, shutting off the credit they had relied on to realize the American dream of owning a home.
Hispanics hold roughly 40 percent of mortgages in the troubled subprime mortgage market, a sector that caters to those with damaged credit or little borrowing experience, according to the Center for Responsible Lending.”
So let’s see. A bunch of Wall Street investment banks have been funnelling money into subprime lending, 40% of which has landed in the hands of Hispanic borrowers who will feel the pain. Note carefully that the 40% refers to the national level; it must be far higher in California.
How does this sit with Senator Dodd, whose campaign contributions were paid in large part by big Wall Street investment banks?
Many of the OC-based subprime lenders got started by ‘mining’ local Hispanic areas like Santa Ana. Actually ‘churning’ is probably a more accurate description since they convinced all of these ‘customers’ to refi over and over and over. They then applied this “proven business model” to the rest of the country. Sad, very sad. The subprimification of America.
Mexicans are making a killing off this market. My nextdoor neighbor’s housekeeper’s husband, a handyman, who speaks English but with a heavy accent, told me today that he just closed escrow on his seventh house, and recently flipped two others. Now he’s buying a tear down for 390K, with ten percent down, to build a 3,000 SF house for himself and his family, which he tells me — totally casually — will be worth 900K. 900K for a house on 43rd Street in South Central! Incredible, seven years ago you could buy NINE houses over there for 900K. Either he and all the other ghetto flippers are going to be millionaires, or they’ve got a world of pain coming to them.
“he just closed escrow on his seventh house, and recently flipped two others.”
I assume this is the sort of fellow Senator Dodd is trying to help stay in his homes with his subprime bailout proposal?
Sorry — trying again:
“I assume this Mexican flipper is the sort of fellow Senator Dodd’s subprime bailout proposal is trying to help by making sure he can hold on to his seven investment homes until their prices all go up again?”
A handyman with 7 houses. Does he hold 7 right now, or has he bought and sold them?
Unless he’s owned these houses since the late 80s, early 90s, put me in the “they’ve got a world of pain coming to them” camp.
Apparently he holds 4 or 5 that he’s rehabbing now to flip, plus the one he’s building for himself. He was actually laughing at me today when I told him that he would have a hard time selling those things if his future buyers couldn’t get financing, which was possible because some of the lenders were not giving the 100% financing anymore. Then he started rubbing it in that I’ve been saying this for however long, while he’s been buying at least one house every year. He’s right. Pr!ck.
Fixing up homes to sell isn’t flipping, it’s a longstanding tradition of working hard to gain money. Buy a fixer upper, work your ass off to fix it (if you hire a contractor, he makes the money, not you), and then sell it for more than you bought it for. I’m not talking about the kind of cosmetic changes most people think are fix-ups, I mean real changes. I had a friend who had to strip a house to the studs to get rid of mold. But even in the dark ages of the mid-90’s there were people making money fixing up beat up houses and selling them for a profit. How much this guy wins of loses depends on how smart he bought and how hard he is willing to work. It’s the lazy people who bought thinking that a paint job would increase the value of their home 50% that are losing their shirts.
Diane-
Everybody is going to lose on this one. The market is sliding too fast. If you bought a fixer-upper in the past 5-7 yrs and haven’t fixed and sold it six months ago you are toast.
Agree w/ mrincomestream on this one. I bought a fixer late 2004 and the big deal was, the previous absentee owner didn’t realize he could get an ocean view by putting a dormer window in the 2nd floor. Hence, a likely 50% value increase by fall 2005 (about half of which was paid to contractors). However, I was too stupid to sell it then. Put on mkt May 2006, sold it at 40% more than 2004 price. After commission and so forth, am reporting a very very tiny gain. Even to get that tiny gain I had to accept paper for most of the price (had bought for cash, am in the lending business anyway). The new owner is probably underwater but since she doesn’t know it, I don’t care much. The worst thing that could happen would be, I’d have to go back and live in it. I don’t own any other houses.
“I bought a fixer late 2004 and the big deal was, the previous absentee owner didn’t realize he could get an ocean view by putting a dormer window in the 2nd floor.”
Geezuz, was the guy blind? Definitely not a visionary.
“Apparently he holds 4 or 5 that he’s rehabbing now to flip, plus the one he’s building for himself.”
If I had to take a wild guess, based on the little information you’ve provided, this guy’s already bankrupt. Like other manias, the stupid money got in at the very end. This guy is holding 5 or 6 flips. Not hard to figure out where he’s headed. It’s called “going down in flames”.
I know several rehabbers who have stopped business for the time being. Too many sellers knew that there was a demand for fixers and baked in cost that brought the price close to the After Repair Value (ARV).
Also, there has been a lot of new demand by amateur investors who don’t do their homework. They just assume they can buy high and sell higher.
BTW, “flippers” are traditionally known as those who sign an option to buy a house with a seller, and then “assign” it to someone else, usually for a fee. They tie up the house and their fee allows for the actual buyer (a rehabber) to still make some coin. In this run-up flippers came to include rehabbers as well since they were only short-term in the property.
This guy bounced a 21$ check last week for some supplies he was supposed to get me from the hardware store. He actually blamed ME because the check I gave him to cover the supplies didn’t “post” for seven days because I use a NY bank. How can you have 5+ properties and bounce a 21$ check?
Bwwwaahhhhhaaaa 900k?!?!?! 900k?!?!?! Bwahhhaaaahhhaa.
The whole neighborhood won’t be worth 900K by the time the backdraft from this credit implosion blows through.
Wait till La Raza teams up with La Lawyers to go after not only the subprime lenders, but the Lehmans, Bear Stearns, and, hopefully, the NAR itself for their role in the subprime debacle. The predatory lenders and their co-conspirators who ran roughshod over a lot of mostly naive and unsophisticated Hispanic FBs are going to have night sweats at the prospect of facing juries in places like LA, Miami, and other places with high concentrations of “disadvantaged minorities” who aren’t going to be in a very forgiving mood to what was done to their hombres.
All that may be true, but the guys giving them loans on the ground here are all brown all around.
“The prospect of facing juries”
Don’t you have to be a citizen to serve on a jury?
Besides, what’s with this “predatory lending” stuff…lenders and borrowers conspired together to produce this mess. Repeating “predatory lenders” enough, and people will start thinking “innocent victims”. And do you really think the FBs were ‘innocent victims”?
“Don’t you have to be a citizen to serve on a jury?”
I am sure that there is a congressional bill sitting around somewhere that allows “immigrants” to serve on juries…otherwise their rights would be violated…
sarcasm off
I wonder at what stage the mortgage bagholders allow short sales to happen on the hope that it is better to get 90% back than mess around with REO as that will require them to staff and organize.
Those bagholders will probably be panicking when they realize get out @90% of loan doesn’t work as # of qualified or willing buyers who would have previously bought, are now disqualified.
Ah, Newton would have been proud as he lays under the great appletree in the sky:-
1.Every object in a state of uniform motion tends to remain in that state of motion unless an external force is applied to it. (Thank you Mr. Greenspan for this)
2. Force = mass x acceleration (a=lowering of lending standards)
3. For every action there is an equal and opposite reaction. (Yep. called going back to the mean !)
‘Ah, Newton would have been proud as he lays under the great appletree in the sky:-’
“I can calculate the motions of heavenly bodies, but not the madness of men.”
– Sir Isaac Newton –
Newton would chuckle
Remember, he lost his fortune on the South Seas Trading company bubble.
You think today’s bubble is bad, one based on a monopoly in trading slaves?!?
Sigh…
Got popcorn?
Neil
Neil, …and at the collapse of the south sea bubble it was made illegal to hold bullion as all the insiders saw what was happening by dumping paper for physical metal. It was halted due to increasing debasement of their currency.
Forgot that tidbit…
Confiscation of gold also happened in the Depression. See a trend?
Gold has been demonetized. Though I still consider it real money, The Powers That Be won’t get any bang for their buck by banning it. Who trades in gold now?
Paul
Houston I have noticed a few listings that include comments like, “This is a short sale and the lender has approved.” Whether anybody is buying these remains a question.
“The median price slid to $615,000 in February, a decline of 3.2 percent from $635,000 the same month in 2006, according to the North San Diego County Association of Realtors.”
Well hell! At my current income of 100K I’ll only need the median house in San Diego to lose 55% before I can legitimately afford one myself. So if I extrapolate from here, is it safe to assume that everybody in SD makes 250-300K a year? I mean Von’s has a strong union for the packers doesn’t it?
When things go wrong they really go wrong! This from the Sun-Sentinal.com in Florida. Wait for the hurricanes baby and your problems will be over. Gee, I hope you really are enjoying the bene’s you are getting for your $600K and up house.
“Mandatory water restrictions were approved Thursday for Broward, Palm Beach, Miami-Dade and Monroe counties as South Florida region continued to experience its worst drought since 2001.
The governing board of the South Florida Water Management District approved restrictions on lawn watering, car washing and other uses intended to cut consumption by 15 percent. Rainfall is down about 50 percent this year, drawing down Lake Okeechobee to below 11 feet, which is the region’s backup water supply.
Starting March 22, lawn watering and car washing will be limited to three days a week from 4 a.m. to 8 a.m. Odd addresses can water Monday, Wednesday and Saturday. Even addresses can water Tuesday, Thursday and Sunday. No watering will be permitted on Friday. Hand watering will be allowed on water days from 5 to 7 p.m.”
Median is useless. They might as well make up a number.
This is a real issue the term ‘median’ should be banned.
I think Dodd and Hilary should run on a platform to outlaw quoting the misleading ‘median price’ stat!!! I WOULD VOTE FOR THEM! That beats the ‘Flipper Subsisdy’ platform.
Read about Directory of Publicly-Traded
Mortgage-Related Companies
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SHORT TIME!!!
I went short WM, CFC, TOL again today. I got rewarded after market when S&P downgrade WM on sub-prime exposure.
I’m also giving a lot of weight to the fact that Wed. index interday lower beat the interday low of the previous dump. That means to me we’ve yet to see a bottom on this near term bearish move. I look forward to tommorow, options expiry, Friday get to cash day, and not a lot of good news out there.
Pulte (PHM) 25 Puts given me a very sunny week. “The Trend is Your Friend” is proving to be an excellant barometer. Watch out Below!!!
Well, the days of bidding are still going on in NE Pasadena!! I have a friend who told me yesterday her and her husband just bought a $820k 1200 sq. ft. house with 1000 sq. ft. guest house this week. She said there supposidly there were 4 other bids and they wrote a letter to the owner to “win” the house!! I thought this sh*t was over!! I guess some of the bids were over the asking price, but the retiring owners liked them better. I know this could all be realtor lies, but it is still sickening! They did put 20% down, who knows what kind of loan, though… I thought she had more sense than this, but I guess not. I guess to each his own. I still refuse to buy at these crazy prices!!! Next year we may look at buying, but not unless it makes sense! My accountant says a $2500/mo. rent payment is the equivalent of a $4,000/mo. mortgage payment with PITI. He says we should look at spending between $500,000 - $600,000 for a place. That is still soooo much money!!!
Geez…and in NE Pasadena!!!?? I’ve heard the bubble has taken longer to deflate there…
Reminds me of Homer Simpson fighting his own hand to swallow the rotten ham. One can only hope the herd of mortgage-devouring zom-bots here in LA is culled enough as a result of money drying up and self-inflicted bankruptcy to lance the bubble. Lesson: If you have a cliff, someone will beg to jump off it.
“There were 4 other bids and they wrote a letter to the owner to “win” the house!”
“Letter” is circulating (unread by sellers) at the real estate office. (well… back and forth between the two agents that are left) This letter may have saved some poor agent from the “rope”. Laughter IS the best medicine.
Agent is tactical genius, with deep ironic sense of humor.
She said there supposidly there were 4 other bids
ummhumm
Exactly.
I plan to bow out of any “bidding war.” Oldest trick in the book… Took brass balls to claim 4 though…
I would counter with a lowball offer of 40% OFF.
Maybe it was a Dutch auction?
My accountant says a $2500/mo. rent payment is the equivalent of a $4,000/mo. mortgage payment with PITI.
Benny “Break-ARm” Bonalumi?!? Who the hell has he been. Tell him my sister is feeling much better now.
italics ruins the funny way imploder’s name looks
“My accountant says a $2500/mo. rent payment is the equivalent of a $4,000/mo. mortgage payment with PITI.”
What? Am I missing something?
There is no “conversion factor.” In my mind total monthly housing costs should be total monthly housing costs, independent of whether you rent or buy. Owning might carry some premium to renting but > 50%?
Someone enlighten me please.
He maintains that this is due to the tax write-off we would get from the deduction. We have a family income around $200k.
Ah. While I see his point, that’s not something you receive but once a year. And while I doubt they’d take it away, it’s not a guarantee.
I still maintain your monthly payment should be “like for like.” If you can afford $2500 rent, you should aim for $2500 mortage (for the same type of dwelling). The tax “reward” should be icing on the cake for the risk of taking on the mortgage.
You might want to inform him of AMT, and then do the calculations again.
I would cry BS on those other bids, probably made up. And in the slim chance they were real, I would just walk away. To get involved in a bidding war blows. As one old guy once told me “Bub…if you are standing in line for ANYTHING…you are getting screwed!”
Every asset class has it’s day, and multiple bids on properties show me people should be net SELLERS, not being a buyer! They are on the wrong side of the transaction. Same goes with all those people that were camping out on the sidewalks as new home subdivisions were being sold, they got screwed.
Your friend got hosed. And they humiliated themselves by writing a letter BEGGING the seller to screw them!
You need to get a new accountant. The mortgage deduction more or less takes care of tax, and maybe insurance, depending on where you are. But then you have to add in maintenance. So it’s mostly a wash. Lots of good calculators out there on the web. Find one, and ditch the accountant who can’t add.
Where the hell do they get this from ?
“Japanese stocks may rise after an earnings report from Bear Stearns Cos. eased concerns over U.S. loan defaults.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aloJAuplQz0M&refer=home
How did Bear Stearns ease concern over US loan defaults ? Do they have magical mystical powers ?
The more I follow this story the more I realize the media is filled with idiots.
“…media is filled with idiots.”
Either that, or there is a lot of manipulation going on between Wall Street and K Street…
Well they did recommend NEW as a buy only a few days before it cratered…..
They were easing concern among NEW’s shareholders
A lot of times they just need a headline so they loosely associate the day’s events.
“The more I follow this story the more I realize the media is filled with idiots.” Cramer said his CNBC show is the second most popular on Cable behind O’rielly. People actully listen to his advice for their financial future. 2 years of this clown and you are finally coming to the “idiot” conclusion.
Whoops, looks like they weren’t so impressed. Nikkei down -170.
Question:
How long can we have unstable markets before we have either a ralley or a crash? I think we could do one last good suckers ralley. Totally bankrupt a generation…
Or is it time to finally go over the cliff?
Got popcorn?
Neil
I think this goes on for a long time, while trending lower. Volatility is still historically very low:
http://finance.yahoo.com/q/bc?s=%5EVIX&t=my
“Homeowners like Juanita Wallace may be affected
Poor poor Juanita had to HELOC that suker to death so’s she could tool around in that shiny new 7 series BMW and buy her’s purses at the Coach store.
I think eventually congress will bail out these FBs/specuvasters by:
- Eliminating the use of the differential of loan value vs. foreclosure value as income for IRS purposes.
- Allow for real estate losses on primary homes to be tax deductible
- Implementing a waiting period for foreclosure eviction, as well as onerous requirements for the lenders to bend over backwards before foreclosing.
This will accomplish both a return to rampant speculation and a greatly restricted mortgage market, producing the exact opposite effect they wanted (as happens will most legislation).
They didn’t do any of that after the early 1990s bust, though pols from Connecticut were begging for it.
All of those things would lower tax revenue — not going to happen.
Interesting read from Jim Rogers (sorry for the long post, but it’s worth the read):
MOSCOW — Commodities investment guru Jim Rogers stepped into the U.S. subprime fray on Wednesday, predicting a real estate crash that would trigger defaults and spread contagion to emerging markets
“You can’t believe how bad it’s going to get before it gets any better,” the prominent U.S. fund manager told Reuters by telephone from New York.
“It’s going to be a disaster for many people who don’t have a clue about what happens when a real estate bubble pops.
“It is going to be a huge mess,” said Rogers, who has put his $15 million belle epoque mansion on Manhattan’s Upper West Side on the market and is planning to move to Asia.
Worries about losses in the U.S. mortgage market have sent stock prices falling in Asia and Europe, with shares in financial services companies falling the most.
Some investors fear the problems of lenders who make subprime loans to people with weak credit histories are spreading to mainstream financial firms and will worsen the U.S. housing slowdown.
“Real estate prices will go down 40-50 percent in bubble areas. There will be massive defaults. This time it’ll be worse because we haven’t had this kind of speculative buying in U.S. history,” Rogers said.
“When markets turn from bubble to reality, a lot of people get burned.”
The fund manager, who co-founded the Quantum Fund with billionaire investor George Soros in the 1970s and has focused on commodities since 1998, said the crisis would spread to emerging markets which he said now faced a prolonged bear run.
“When you have a financial crisis, it reverberates in other financial markets, especially in those with speculative excess,” he said.
“Right now, there is huge speculative excess in emerging markets around the world. There will be a lot of money coming out of emerging markets.
“I’ve sold out of emerging markets except for China,” said Rogers, long a prominent China bull.
Even in China, the world’s fastest expanding economy, Rogers said stocks were overvalued and could go down 30-40 percent.
But he added: “China is one of the few countries in the world where I’m willing to sit out a 30-40 percent decline.”
The last stock market bubble to burst was the dot-com craze which sparked a crash from March 2000 to October 2002.
When the last bubble burst in Japan, said Rogers, stock prices went down 85 percent despite the country’s high savings rate and huge balance of payment surplus.
“This is the end of the liquidity party,” said Rogers. “Some emerging markets will go down 80 percent, some will go down 50 percent. Some will most probably collapse.”
good post. rogers is pretty smart dude, but I think he’s too bullish on China still
Shall we all chip in and offer him $3 million for his so-called $15M house?
check
off
Another good read - We all knew this a few years ago BUT… (Sorry for the long post!)
Merrill: Housing Bust to Spark Recession
The blow up in the subprime market will lead to tighter credit standards and plunging home prices which could push the U.S. economy into recession, says Merrill Lynch & Co.
New Century Financial, the second biggest subprime lender, and other lenders are on the verge of bankruptcy as defaults on mortgage payments in the subprime category have risen to a seven-year high, according to the Friedman Billings Ramsey Group. More than two dozen subprime lenders have closed or put themselves on the market since the beginning of 2006, according to Friedman.
Overall, delinquent mortgage payments rose to a four-year high, according to a report by the Mortgage Bankers Association.
The result has been pressure from bank regulators to tighten lending standards on mortgages. Tighter lending standards, in turn, will lead to fewer home sales and falling home prices, says Merrill.
Merrill analyst David Rosenberg estimates that the subprime market boosted home sales by 20 percent annually. He says that the loss of the subprime market alone has the potential to shave a half percentage point from gross domestic product, the nation’s measure of economic growth.
“Even if the pullback is only aimed at the subprime market, there could well be potentially significant further drags on home prices, construction activity and of course consumer spending growth,” Rosenberg said in a note to investors.
MoneyNews told readers on Monday that Bloomberg, citing economists, realtors, analysts, and a Federal Reserve governor, said Americans could face foreclosure on 1.5 million more homes, 100,000 layoffs in housing-related industries, and the collapse of another 100 mortgage firms.
The big debate is whether the trouble in the subprime market will spread to the rest of the economy. Many members of the Fed say no, but Merrill Lynch is clearly in the camp that believes the housing bust could ultimately lead to recession.
[Editor's Note: 5 Recession-Proof Stocks to Buy Now.]
Rosenberg puts the probability of a recession by the end of the year to “very close to 100 percent.” That’s above former Chairman Alan Greenspan’s “one-third probability of recession.” Rosenberg says that the plunge in home prices would impact everything from furniture and appliance sales to landscaping and the price of copper. He says this would drive unemployment to above 5 percent, resulting in a recession.
“What we are concerned about most are the knock-on effects from the pullback,” Rosenberg said.
Rosenberg says the only way to prevent a recession from happening is if the Fed were to cut interest rates by a full percentage point. However, as MoneyNews sister publication Financial Intelligence Report has pointed out, the Fed is hamstrung when it comes to cutting interest rates. The Fed needs to keep interest rates high in order to prop up the value of the dollar by attracting foreign buying of U.S. Treasuries.
I think the name of the game here is to pressure the Fed into cutting, respiking the punchbowl. That way, if there is a recession, and the Fed does not cut, Merrill can cast blame.
The Lenders/Financial’s are just hopeing for a rate cut so they have something to offer their investors as a premium. Either way Mortgage rates are going up due to Margin’s, Reserves, and said Premiums. Can you say “Housing Lead Recession”.
“Can you say “Housing Lead Recession”
Munch munch munch
(sorry, mouth’s full, so no, I cannot say it at this time. But its going to happen.)
Got popcorn?
Neil
This is picking up steam…
http://www.latimes.com/business/la-fi-subprime16mar16,0,324243.story?coll=la-home-business
Most Mexicans, Latin American immigrants will be the first hurt in the resulting economic downturn. Most are in construction, gardening, retail, roach coaches, etc. I would think that especially construction workers will be hit hard.
hello there,
I am in the bay area. I started to hear my colleagues talking about the RE is hot again here, such as multiple bids and sales pending in 2 weeks. Does anyone here in bay area hear similar stories recently?
thx
Boo yawn, I am in BA too and I seeing a slowdown in the economy. Admittedly the hiring pace has slowed the firings haven’t began yet.
How will CA pay for those bonds is what I want to know, if we enter a slowdown?
Chime in AS (arnie to his friends).
Im in a start up and revenue took a plunge of 50% in our company for first quarter. M&A is heating up. Several large deals have been made just this week.
Im in a start up and revenue took a plunge of 50% in our company for first quarter. M&A is heating up. Several large deals have been made just this week. I expect Q1 for many not to be bright. AMD already warned ! more to follow.
No.
Multiple Bids…
Realtors little ploy.. .LOL i bet not many of these bids are documented or comfirmable. They advertise to the media and everyone believes it as if
it was fact. Yet as they say… trust but confirm. Its all fake bidders.
Multiple Bids…
Realtors little ploy.. .LOL i bet not many o f these bids are documented or comfirmable. They advertise to the media and everyone believes it as if
it was fact. Yet as they say… trust but confirm. Its all fake bidders.
OT, but related and I think you guys will get a chuckle. Yesterday I was talking to one of my patrons and she said that she is moving. When I asked where she said Cote de Caza. I said dad must have some serious money. She said yeah, the house he wants is 2 million. I asked her what he does. Life/health insurance and salesman at Fletcher Jones.
Anyway.
WOW! was all I could think. Unless this guys likes losing money on a depreciating asset and he has at leat 50% down, which if I had a mil in the bank, I wouldn’t buy here, I can only think complete death spiral suicide credit implosion loan from some last joke bank looking for a monster commission.
I can’t believe someone who works on commission is thinking of buying at 2mil! What is up with that?!
Sounds like the typical OC poser.
Life/Health Insurance and also sells cars? Whatever.
What do you do for work anyway, Dan? You mentioned your patrons, was just curious.
Wage slave at Blockbuster.
Does anyone have any info on LA, south central area? I have two friends that are still buying properties there to flip, and just laugh at me when I tell them to be careful because the market might turn. They are totally arrogant and say there won’t be a downturn there.
South LA (formerly South Central LA) has been hot lately. It’s probably one of the few areas to be posting big YOY price gains. I think when everything else around LA got so expensive people got desperate and starting buying around there because that’s all they could afford…then the “investors” rolled in…you know how it goes…but it will all end badly as in all downturns these “transitional” areas will fall hard and fast.
Hopefully your friends don’t get stuck living in one of their “flips” when they can’t unload it (or maybe not..lol)
South LA, East LA, Compton, Watts….they’re all the last stand on widespread mortgage fraud and speculation in Los Angeles County, ergo the 2/07 y-o-y price appreciation for the county. The Los Angeles County median has been “pushed from the bottom” imho. Now that the subprime spigot has been cut off, that party’s over. Look for L.A. county’s yoy numbers to change dramatically for april/may.
Investorgirl, you’ll find all the info you need about every zip code in los angeles county this weekend (i believe) in the la times zip charts posted on dqnews.com.
You are exactly right…the LA County median has been “pushed from the bottom”…and subprime was fueling the fire there especially around the ghetto…it’s going to be scary to see how far the prices go down in those areas in the next few months…
This is a repost from my March 12 posting in Ben’ CAL section. This will answer any questions regarding the massive fraud in RE pricing occurring in SCentral.
“If possible i will attempt to provide links to zillow for these showcase examples of rampant LA mortgage fraud, hideous and out in the open.”
I have provided zillow links to some recent sales of homes in LA Zip 90011. These sales raise gigantic red flags as they show increases of $200k-300k just in several months on 3/1 full lot 100 yr old decayed victorian SFH’s in a virtually 100% immigrant impoverished zone just south of LA DWTN. This is IMOH just the tip of the iceburg: other decayed LA zip areas such as Pacoima which i have perused also scream red flags.
http://www.zillow.com/HomeDetails.htm?zprop=20616742
http://www.zillow.com/HomeDetails.htm?zprop=20618353
w.zillow.com/HomeDetails.htm;jsessionid=E3F83E3893B5FE84607EFF260B787B92?zprop=20616742
http://www.zillow.com/HomeDetails.htm?zprop=20621744
http://www.zillow.com/HomeDetails.htm?zprop=20615563
BTW: The amt of gargage, trash,toxic auto fluids,broken discarded furniture,alley dumping which occurs in this district is appalling. Amazing that in an environmentally-conscious state such as California political correctness regarding illegal aliens allows the SCentral LA district to be a third-world environmental hellhole. Just get off harbor fwy and go east or west on Slauson for 3-5 miles and observe the environmental degradation.
“South LA, East LA, Compton, Watts….they’re all the last stand on widespread mortgage fraud and speculation in Los Angeles County, ergo the 2/07 y-o-y price appreciation for the county”
All true. The widespread Mortgage fraud is likely a vertical operation involving straw buyers, bogus sellers, crooked realtors, brokers, lenders, and so forth. ALL interlinked in criminal Mortgage rackets possibly involving LA Gangs funneling illicit drug profits(Laundering)into RE properties. THis is similar to the stolen car rings/auto accident fraud rings operated by foreign nationals right here in LA in the 80’s/90,s.
This is not tinfoil hat stuff: I have had extensive contacts in the illegal alien Hispanic community and am aware of the widespread criminal fraudulent activities in LA committed by immigrant criminal rackets. The widespread inner LA RE mort fraud is just an extension of these criminal rackets into a new more profitable racket.
I have looked up sales activity just in one LA zip(90011)and have spotted several instances of fraudulent transactions. look in zillow, punch in any LA ZIP along the 110/710 fwys, get an address, and check comparables. Better yet take a drive east along jefferson/slauson/florence from the 110 and locate these properties and the surrounding area and tell me how in hell they can be appraised and sold for half-a-mil.
The immigrant LA Hispanic RE market is either getting screwed or is screwing over the lenders. They will walk. Lenders will loose 10’s of billions in LA inner cesspools.
The South Central situation is going to end very very badly. The hispanic mortgage brokers and realtors are doing a number on their people. they are selling 2/1 schacks down there for 500k and making 3 to 5 points a deal on the shadiest financing they can find. In 2 yrs you’ll be buying 3/2 bedroom houses for 90k again. The things I’m hearing coming out of there are incredible. Absolutely no conscious.
Uh oh…
that area is a firestorm when things head south…
Not anymore, that demographic has been pushed out.
Not anymore, that demographic has been pushed out.
You’re kidding, right? So, south central L.A. has turned into some sort of haven for WASPs looking for the new trendy makeover neighborhood? I seriously doubt that. Aside from the few flippers that are bold enough to go in there, I suspect that loan sharks have suckered many of those long-term homeowners into cashing in their equity and mortgaging themselves into bankruptcy and homelessness. I’ll bet it turns out to be one of the hardest areas hit.
“You’re kidding, right? So, south central L.A. has turned into some sort of haven for WASPs looking for the new trendy makeover neighborhood? ”
If I might interject here. I believe that lainvestorgirl was referring to the fact that the last riots in South Central LA were “ignited” by the Rodney King verdicts.
The verdicts angered the younger African American population and they initiated the riots and subsequent “firestorm”.
What many don’t know about South Central is that the historical population of African Americans that have inhabited the area have been largely replaced by Hispanics. Hence, that “demographic” has been pushed out…. by the immigrant Hispanic population.
Or did I misinterpret the comments?
Think you are right, imploder. White flight from the state as a whole has been accompanied by Black Flight from places like South Central. The African Americans went home to SC, that’s South CAROLINA.
Mexicans don’t usually riot. If their RE values head south, they’re more likely to do so too, i.e., slink back across the border to where they came from.
azlender - as far as I can tell, most of the blacks moved to the IE or Lancaster/Palmdale.
“The hispanic mortgage brokers and realtors are doing a number on their people. they are selling 2/1 schacks down there for 500k and making 3 to 5 points a deal on the shadiest financing they can find. In 2 yrs you’ll be buying 3/2 bedroom houses for 90k again. The things I’m hearing coming out of there are incredible. Absolutely no conscious.”
AT last someone knows what is really going on in the SCentral LA slimezones. Mrincomestream, what is really bad is that there is not one bit of reporting nor any news about this stuff. No one is aware of the widespread fraudulent RE activity going on in the LA S*itburgs because these areas are in heavily-immigrant rundown areas which are completely ignored by the city of LA. The authorities allow any s*it to go on in these dumps, and allow the Gangs to roam at will. I was in the zip 90011 and came upon a large dilapidated apt/home which had detached Big-rig cabs and assorted junk autos/truck parked right on the yard. You can basically open up a greasy auto garage/junkshop right out of your own home in inner LA S*itzones .
“L.A. County’s median price — the point at which half of all homes sold for more, half for less — had been virtually flat since June, when the median was $520,000.”
If anyone wants to know why LA medians still show puzzlingly 7.8% yoy gains read this:
Warning: THERE IS RAMPANT MORTGAGE FRAUD RUNNING IN THE INNER LA HOOD DISTRICTS. I did a 1-HR casual check on RECENT zillow sales in zip 90011, which is an LA slimezone area which makes Compton look like Paradise. Here is what i saw:
1. 282 E 46th st 3/1,1120 sq ft yr 1913. sold 8/25/06 for $330,000. sold again on 2/15/07 for $600,000. +270,000 increase in 6 monthes.
2. 306 E 35th st. 3/1, 1500 sq ft sold on 6/19/06 for 305k. Sold again on 9/13/06 for 415k. Sold yet again on 1/26/07 for 580k. increase of $275.000 in 8 months thru 3 nearly consecutive sales transactions.
This is just thru scoping an hour om zillow just on LA ZIP 90011. Saw several more likely fraudulent transactions nearly in same area of LA zip 90011.
BTW: LA 90011 IS EASILY THE NASTIEST DECAYED IMMIGRANT-IMPACTED RUN-DOWN ZIP IN ALL OF LA, AND MAKES COMPTON LOOK LIKE BEVERLY HILLS. IF I SPOTTED HALF-A DOZEN FRAUDS LIKE THIS IN ONLY AN HRS WORTH OF CHECKING IN ONLY ONE LA SLIMEBURG ZIP, IMAGINE THE 10′S OF THOUSANDS OF MORT FRAUD CASES ONE COULD SPOT ON ZILLOW IN A WEEKS TIMES. THERE ARE 20-30 LA ZIPS ALMOST AS BAD AS 90011.
The parent company of subprime lender Ameriquest Mortgage Co. said Thursday it was slashing its work force and consolidating operations in its retail call centers and wholesale loan production offices. It is the second wave of cuts in less than a year for Orange-based ACC Capital Holdings Corp., one of the nation’s largest subprime lenders.
http://biz.yahoo.com/ap/070315/ameriquest_cuts.html?.v=3&.pf=real-estate
OT, but anyone from Tacoma, WA in the house?
Returning from Seattle today, I detoured into downtown Tacoma. South of town there are a LOT of properties for sale. Granted, this was south of S. 11th which is not exactly “prime” but there was about 1 house for sale on every block.
That’s largely a rental market in that neighborhood, and it’s landlords selling to prospective landlords. Unfortunately, the price has gotten high enough that there’s no guarantee of positive cash flow from rentals there any more. I’m guessing that’s the reason for all the signs there.
‘To some extent, today’s market is the result of buyers and sellers locking horns, refusing to give in to the other side’s idea of what a house is worth,’
To heck with the locking horns bit… This is more like a show on the History Channel where we (the buyers) have the poor folks “inside” (the sellers) cut off and surrounded. We are just waiting things out until those inside capitulate.
While the folks inside are getting hungry, I’m well fed, living cheap, my kid plays on the grass that someone else cuts, we swim in a pool that some one else maintains,… Hey,… life is good!
There’s just no sense in locking horns.
Oh, and you folks inside,… just let us know when you are ready.
“While the folks inside are getting hungry, I’m well fed, living cheap, my kid plays on the grass that someone else cuts, we swim in a pool that some one else maintains,… Hey,… life is good!”
Are we neighbors? Because this lifestyle sounds very familiar…
Here is a video of a presentation given by Chris Thomberg he did in early 2006. The first 5 minutes are pretty boring. The rest is priceless. He explains things right on, calling them like they are.
http://video.google.com/videoplay?docid=-2640239019877885520
At 37:30 into that video Chris is talking about real estate frenzies and he explains when it ends. It ends when the new buyers can’t get in on the bottom anymore. When no bank will lend them the money. Sounds like the sub prime melt down to me.
He takes a shot at Greenspan at 38 minutes.
You can download the video to your computer if you want.
And Chris’s last name is Thornberg, not Thomberg. I highly recommend watching it.
At 47 minutes, he starts talking about the sub prime lenders.
“Is OC different ? Yes, they will get hammered when the market breaks !”
Remember, he gave this in early 2006. And he is bang on !
Somewhere after 47 minutes he says that the market isn’t going to go down drastically (selling your house in 2006 and buying back at 25% less in 2007, ain’t gonna happen)..(his words, not mine)
Any thoughts on that?
He might be right.
This thing is getting so big that it looks like the Federal Government is going to try some kind of bailout. Exactly what that is - who knows.
They may try multiple solutions to try and keep the market propped up to some degree.
He says that the housing market typically doesn’t go down quickly. Remember that his reasoning is that its all related to jobs. Remember where he says we are in uncharted territory. Well, I think this is the first housing bust that will be driven by a lack of liquidity rather than a lack of jobs. I think the housing market will correct much, much faster than what he predicts.
I believe you are right. For a year I’ve been surprised that “Nothing” was happening — i.e., nothing dramatic. The subprime freeze (a better word than meltdown) will stop all sales in many markets.
http://biz.yahoo.com/rb/070315/usa_subprime_borrowers.html?.v=3
Everyone should read that article.
Notice how people like to blame others for their own stupidity.
The court system is going to be busy in Cali for a few years.
Looks like the blame game has really started.
“his independent broker pushed him to take out a popular adjustable mortgage with a two-year low fixed rate, known as a “2-28,” as well as a second mortgage to buy a $240,000 condominium.”
man was educated and knew how to add and subtract…
did broker “push” the hand holding the pen when he signed?
“You fall down and they stab you.”
I don’t know why, but every time I read that I start laughing.
How about: “You borrow more money than you can repay, to buy an overpriced place you can’t afford, and when you don’t pay the mortgage, they take it back.”
Empty parking lot at Ameriquest today, in OC… over 2500 cars missing!
Theme song for March 07
“Time Has Come Today” - The Chambers Brothers
Time has come today
Young hearts can go their way
Can’t put it off another day
I don’t care what others say
They say we don’t listen anyway
Time has come today
(Hey)
Oh
The rules have changed today (Hey)
I have no place to stay (Hey)
I’m thinking about the subway (Hey)
My love has flown away (Hey)
My tears have come and gone (Hey)
Oh my Lord, I have to roam (Hey)
I have no home (Hey)
I have no home (Hey)
Now the time has come (Time)
There’s no place to run (Time)
I might get burned up by the sun (Time)
But I had my fun (Time)
I’ve been loved and put aside (Time)
I’ve been crushed by the tumbling tide (Time)
And my soul has been psychedelicized (Time)
(Time)
Now the time has come (Time)
There are things to realize (Time)
Time has come today (Time)
Time has come today (Time)
Oh
Now the time has come (Time)
There’s no place to run (Time)
I might get burned up by the sun (Time)
But I had my fun (Time)
I’ve been loved and put aside (Time)
I’ve been crushed by tumbling tide (Time)
And my soul has been psychedelicized (Time)
Now the time has come (Time)
There are things to realize (Time)
Time has come today (Time)
Time has come today (Time)
God I love this song……
Yep, it is one of the best from the late 60s in my opinion. Wonder what ever became of those Chambers brothers? Anyhow, wish they played it more on the radio..
One of my favorite housing-related web sites is thehousingbubble.com, which I discovered late last year. Gary Carmell, Red County Online
Game Over
http://www.redcounty.com/tabid/146/articleType/ArticleView/articleId/50/Game-Over.aspx
All I can say is “wow”…
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Let me tell you about just one borrower from today:
• Husband and wife
• Husband on fixed income military retirement $1800/mo
• Wife makes $9500/mo as a registered nurse
• 5 properties with $3,400,000 in mortgages
• All mortgages currently have prepays
• 8 interest-only mortgages
• 1 option Adjustable Rate Mortgages deferring $3500/mo
• 3 in Chula Vista and 2 in Escondido
• No more than $75,000 equity in any of the homes (verified by comp checks with 3 appraisers)
• All properties with front end Loan-to-Value ratios over 90%
• $65,000 credit card debt $672 Mercedes payment
• One property had 3 mortgages, one of them hard money
• 621 mid FICO
• 2×30 in the past 12 months
• Not a dime in the bank
They have been making mortgage payments with their credit cards and refinancing to pay off the credit cards. They are at the end of their rope, but refuse to throw in the towel.
What do people mean by “hard money” ?
Short-term very high interest. Flippers use hard money when they do fixer-uppers.
People who provide personal loans to others. Rates are usually much higher than from a traditional lender. A lot of investors who have low credit scores or don’t have equity to borrow against use them since they can’t get loans elsewhere. A few that I know lend at about 14% APR. Also known as Private Lenders.
I believe those are loans where they break your legs if you don’t repay, as opposed to traditional foreclosure methods.
$65K in credit cards - I don’t even make that much a year.
“621 mid FICO”
These guys are in trouble. $3,400,000 in mortgages…
LMAO
$9500 per month as a nurse?!
Obviously California. Nurses in any other state are lucky to make half that. I love now how every medical title has to have an assistant. Nurses used to be the assistant for doctors; then nurses think they’re too good to be an assistant, so they created nurses’ assistants and a whole slew of meaningless other titles (RN, CNA, etc, kinda like realtors). Ditto with pharmacists, physical therapists, etc. No wonder there is so much waste/expense in the medical profession.
I work as a scientist for the U.S. government…can I have an assistant too?
Of course you can. Just entice some grad student somewhere to apply for some fellowship that will fund his research on … whatever it is you are being paid to find out.
yeah, stupid nurses. How dare they practice labor arbitrage. Gotta H1B ‘em like us engineers, amirite?
Why 5 properties?
I could swear I read about these same people 6 months ago. The $95K nursing salary sticks in my mind. How current is your source, B-hamster?
The link just above my post…towards the bottom of the article:
http://www.redcounty.com/tabid/146/articleType/ArticleView/articleId/50/Game-Over.aspx
I agree… this couple was posted about 6 months ago. I remember the Mercedes payment of $600 with no money in the bank and the $60K in credit card debt that was used to pay the mortgages. Thought at the time they should implode financially in about 6 months.
The article said this was taken from Ben’s blog.
Paul
“I am in the bay area. I started to hear my colleagues talking about the RE is hot again here, such as multiple bids and sales pending in 2 weeks. Does anyone here in bay area hear similar stories recently?”
Multiple Bids are fake. None are confirmed or documentated.. Oldest trick in the book.
I am in CA and just emailed our two senators about my opinions on ‘bailing out’ families. I expressed that no means no ina ny language. And the fact that if this was a natural disaster, I am first in line, but not when a person buys a home they didn’t have to in the first place. They were all living somewhere before? Right? Told the senators to follow the money trail and get the money back that way. Let the lenders duke it out amongst themselves, just leave me the hell out of it. Looking forward to purchasing again someday when it’s not so out of whack .
Investment bankers hold all the cards. They can change the direction of a stock with a simple press release. According to the WSJ:
Many subprime-mortgage lenders rose after investment banks such as Lehman Brothers and Bear Stearns said they may commit more funds to the high-risk mortgage business, quelling recent panic around the subsector. Accredited Home Lenders Holding added $3.39, or 56%, to $9.43, helped by apparent takeover speculation in the wake of its statement Tuesday that it would explore “strategic options.” On the pink sheets, New Century Financial rose 68 cents to 1.35, more than doubling its share price from a day earlier.”
Subscribers Link: http://online.wsj.com/article/SB117400258875338694.html?mod=todays_us_money_and_investing
Another WSJ find (about how all the sub prime companies in Orange County are getting destroy).
Jo Anna Bonkowski, a 25-year-old in Tustin, Calif., started at subprime lender Encore Credit Corp., in January 2005 at $13 an hour as a receptionist but moved up in the company to earn $42,000 a year — plus a lot of overtime.
Ms. Bonkowski started eating at restaurants several times a week, often ordering $30 filet mignon at the Cheesecake Factory. She was laid off late last year, a month after Encore agreed to be sold to Bear Stearns Cos. Ms. Bonkowski is seven months pregnant, gets $1,800 a month from unemployment, and spends about $430 of that on health insurance for herself and a daughter. She hasn’t been to the Cheesecake Factory in months.
I do feel sorry for this person but, clearing my throat, but only to a point… no savings, 1 kid and another on the way, no dad around, 20 months of living the big life, ala Casey eating at marconi grill, and now her problems are suddenly mine for some reaon
I’m reminded of a quote “Your problems caused by your own lack of planning doesn’t make create an emergency for me” (or something like that)
I believe it’s:
“Failure to plan on your part does not constitute an emergency on mine.”
Why didn’t FBs take the FHA? It offered better terms for both lenders and borrowers. Plus, the government is always willing to work-it-out. According to the WSJ:
For decades, the FHA was a major backer of mortgage funding for borrowers with poor credit. But the FHA’s share of the market has dropped sharply in the past decade as hordes of aggressive subprime lenders wooed away borrowers with an array of seemingly attractive options, including no-money-down mortgages and interest-only payments. The subprime players also offered faster approvals, instant home appraisals, less paperwork and fewer hassles, winning over consumers even though subprime mortgage rates were generally higher than rates for FHA-insured mortgages.
According to Inside Mortgage Finance, subprime mortgage originations, or the dollar volume of such new loans nationwide, totaled $600 billion last year, more than triple the 2002 volume of $185 billion. FHA-backed loan volume fell to $53.7 billion last year, down from $145.1 billion in 2002.
There is no free lunch. Subscribers link:
http://online.wsj.com/article/SB117400504161738764.html?mod=todays_us_page_one
Read the same wsj article about the FHA…
New York Sen. Hillary Clinton told the NCRC yesterday that FHA mortgage limits should be increased in high-cost areas and outlined a series of proposals aimed at boosting consumer protections. “This market is clearly broken, and if we don’t fix it, it could threaten our entire housing market,” she said.
As a taxpayer, i’m shuddering. Ms. Clinton, the market is fixing itself! Its reverting back to historical norms of 65% home ownership, 3%-5 YOY increase in real estate prices (mind you, a -20% downdraft in values is coming first), and a revision back to the approximately 2% of national discretionary income being financed by cash-out refinances (its a lot lot higher now).
Hillary, please stay away from trying to “fix” something that is NOT broken.
now if Senator Dodd has his way - we are supposed to bail out idiots
that nurse and her husband will soon be entering bankruptcy - there is almost no doubt looking at those numbers - however let’s not get too carried away by comparing RNs to real estate brokers
RNs have extraordinary training, provide critical services and add value to society - whereas most brokers provide nearly no value other than shuffling papers, telling lies, and harassing FSBO sellers all day
any RN could be trained to be a broker in about 2 hours - however brokers subsituting for a nurse - would probably end up killing most patients after only 2 hours training
note many of the things brokers brag about doing for clients fall under the category of unauthorized practice of law - and their claimed expertise is laughable anyways in most cases
in the next boom 10 to 15 years down the road -computers will have replaced probably 95% of all real estate brokers -and they will provide more information w/o those overpriced commissions
“…and harassing FSBO sellers all day.”
LOL, so true.
Hillary once again proving her socialist credentials - what a surprise
When they write the definitive history of this boom and bust, I believe the author will center the book around november of 2005, which might be the top of the bubble - and also because it had symbolic important - because in that month one of those informercial midgets died, John Rice - of the Rice Brothers - CASH FLOW GENERATOR
It came on late at night and had to be the craziest insane ad ever done - and seeing those 2 guys riding in their giant SUVs was very entertaining
Of course the ad was absurd, having he usual hype and 1/2 truths and misinformation - although one had to admire the entrepeneurship and courage these two guys exhibited by actually getting out there instead of feeling sorry for themselves - even though anyone with common sense would have known the ideas were mostly nonsense.
Here is a picture of the Rice twins http://www.saneasylum.com/articles/98
The actual original ad - which was at one point available on the net i cannot find
The UCLA Andersen School economist video lecture from last spring - cited earlier - is very scary - as it clearly shows how real estate in CA (and arguably elsewhere) created a super wealth effect which created a secondary boom in other goods and services - and the unwinding of all that wealth creation to the extent it occurs - will be a very very nasty shock to most people