“Not So Much Surprise As It Is Fulfillment”
Newsweek reports from California. “Regina Miller says she is tired of ‘throwing away $1,520 each month’ to rent the two-bedroom apartment in Long Beach, Calif. But at least for the foreseeable future, a house may be out of the question. ‘I thought for sure I could buy something,’ says Miller, who says her credit rating hovers around 580. ‘Everyone was getting loans. People with worse credit than me, even.’”
The LA Times. “The business boomed as housing prices soared. Orange County was a center of the action. ‘The culture around all of these sub-prime lenders has been ‘Hey, bring it to us. We’ll make it happen,’ said Philip Tirone, a Los Angeles mortgage broker. ‘If you have a client with a [low] credit score who only wants to put 5% down and had a bankruptcy not too long ago, that’s OK. Bring us that loan.’”
“Then it all came crashing down, and few fell harder than New Century. ‘I am a little bit shocked that this meltdown didn’t happen sooner,’ said Jeff Lazerson, president of a Web-based brokerage in Laguna Niguel. ‘In the past, we used to say that if you could fog a mirror you could get a loan. For the last five years, you could be dead and get a loan. That’s why we’re in this mess today.’”
The Orange County Register. “My mortgage pals assured me that they were going to be smarter this time around. World-class technology was making sure that a wave of novel loans for riskier homebuyers would be good bets.”
“This new age had a fresh disciplinarian, too. Wall Street investors were supposedly carefully watching the game while gleefully collecting fattened mortgage payments that came from high-risk loans.”
“But it ceases to amaze me that lenders can’t control themselves. Prime evidence is a curious public document: a ‘cease and desist order’ by the Federal Deposit Insurance Corp. against the Fremont Investment and Loan bank from Brea, once one of the nation’s largest subprime lenders.”
“One would have hoped the FDIC and its regulatory peers were vigorously eyeballing this vintage of non-traditional lending, even in the gravy days of 2003 and 2004, when subprime loans performed admirably. But it’s only as this lending niche is, at best, dramatically scaling back that we start to see regulatory teeth.”
The Desert Sun. “It will be tougher for homeowners in the Coachella Valley, across California and in other states who are accustomed to zero-down mortgages, adjustable-rate mortgages and easy approvals to secure loans.”
“‘What’s happening is a lot of the (subprime lending) programs that were out there have disappeared within the last two or three weeks,’ said Jeff LeCompte, senior loan officer in Palm Desert. ‘The biggest issue is that credit will be looked at a lot harder now.’”
“‘I think there were two groups that really got into trouble,’ said Greg Berkemer, executive VP of the California Desert Association of Realtors. ‘There were the people who used interest-only or adjustable-rate mortgages as a tool to purchase more of a home than they could realistically afford.’”
“Others were investors and speculators who bought multiple properties merely to flip them and make a quick and often substantial profit, Berkemer said.”
The Sacramento Bee. “On the street ever more people who received easy money from mortgage firms are themselves reeling. ‘It’s shocking to see the foreclosures in the paper,’ said Sen. Mike Machado, chairman of the state Senate’s Banking, Finance and Insurance Committee.”
“Last month, 455 people lost their houses to foreclosure in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties compared with 59 in February 2006.”
“‘Sometimes legislators don’t understand the full ramifications of bills coming in,’ said Jack Williams, president of the California Association of Mortgage Brokers. ‘That may harm the first-time homebuyers, putting them into the permanent renter class.’”
The Ventura County Star. “A few who qualified for home purchases only a few weeks ago have seen their financing vanish along with their dreams as lenders spurn 100 percent loans. The situation has many who sell real estate in Ventura County worried. By some estimates, at least 20 percent of first-time buyers in recent years have needed 100 percent financing.”
“‘The market has to be affected, that’s a fact,’ said Joe Virnig, president of the Ventura County Coastal Association of Realtors. ‘I think it will be affected more in certain segments than others. In lower-cost areas of Ventura County, you’re seeing more short sales right now, because people can’t make their payment.’”
“Gustavo Ramirez, broker in Oxnard, estimates that subprime borrowers made up more than 20 percent of his buyers over the past three years. One who bought a house with 100 percent financing in 2005 despite a low FICO credit score of about 600 is having to sell, because his payments jumped recently from $2,100 to $3,500 monthly.”
“‘They’ve decided to go ahead and sell their home, and go rent for a while,’ Ramirez said. ‘They’re going to barely break even when everything is said and done.’”
“About 15 percent of Oxnard brokerage Mortech Financial Group’s clients are subprime borrowers, said Michael Hobbs, a partner in the firm. Hobbs said one of his clients lost the house he was buying when Silver State Mortgage closed suddenly last week.”
“‘Funding was authorized and all the documents were signed on Tuesday, but the company closed its doors on Thursday,’ Hobbs said. ‘Their reps said they were walked outside, then their boss went back in and locked the doors. It was abrupt, quick, and my client’s loan was not funded. I think this will happen increasingly for a while.’”
The Bakersfield Californian. “The party is officially over. A booming housing market that spurred an increase in no-down, fully financed loans has gone flat. The purse strings are drawing to a close as defaults on so-called ’subprime’ mortgages skyrocket.”
“Mortgage broker Frank St. Clair in Bakersfield, said overly liberal subprime lenders ‘are reaping what they sowed now.’ ‘Bad loans were made to people that couldn’t really afford them,’ said Diane Boultinghouse, manager of A2Z Escrow in Bakersfield. ‘So now you’re seeing notices of default going up like crazy.’”
“In the Bakersfield area, February notices of default were up more than sixfold from a year before at 275. Local appraiser Gary Crabtree, who produces monthly reports on the Bakersfield home market, said the number of sales per month could decline by 25 percent or 30 percent because of factors including the difficulty of getting a subprime loan.”
“A local couple were preparing to buy a home earlier this month, having been pre-approved for a loan despite having little money in the bank and a relatively low credit score.”
“Shortly before escrow was to close, their lender canceled the loan. The sale dissolved. ‘Two, three months ago, this would have gone through,’ said Anthony Kessler, the couple’s Bakersfield loan officer.”
“The couple’s realtor, Diana Williams, said they should not have qualified for the loan in the first place. Instead, they should have been counseled to shore up their finances before attempting to buy. ‘They had their heart set (on) becoming homeowners,’ she said. ‘Now they’ve somewhat lost faith in the system.’”
The San Francisco Chronicle. “Now that sales volumes are down, re-fi fever has cooled and some markets have softened, mortgage brokers and even lenders try to set their target value in advance of hiring their appraiser.”
“‘Internet-based mortgage companies call all the time,’ says Curt Thor, a Marin appraiser for more than 20 years. ‘They’re fishing for appraisers. They tell me what the number is and ask me if I can match it.’”
“John Philipp, an appraiser based in Sonoma County, says that he’s experienced similar ‘dialing for appraisals.’ ‘Sometimes they tell me what value they need to make their loan go through, which is illegal. The appraiser is not supposed to be made aware of the owner’s estimate of value, or the value that is needed to make the loan, so as not to be influenced or have a predetermined number prior to the inspection,’ he writes.”
The Union Tribune. “As far as San Diego bankruptcy attorney Mark Miller is concerned, many homeowners are only in the ‘denial’ stage regarding the subprime lending crisis, although they may soon slip into ‘anger.’”
“In the past eight months, he has watched as clients lost about 150 homes through foreclosure. ‘We’re seeing a ton of people come in with their shoulders sagging, wondering what they should do,’ Miller says. ‘The numbers are going up month by month.’”
“Miller tells the story of a married couple who had been talked into an adjustable-rate loan by a mortgage broker who gave them a $10,000 rebate when they put their name on the dotted line. Even in the beginning, with mortgage rates at historic lows, the couple could barely make the payments.”
“‘When the rates went up, they drained their retirement accounts and started charging things with credit cards just so they could make their payments,’ he says. ‘They now have $50,000 in credit card debts. And when the mortgage rates adjust this year, their monthly payments will go up by $800 a month, which is a terminal sentence.’”
“During the year ended Jan. 31, there were 13,249 homes in default or foreclosure in San Diego County – a 192 percent jump from the previous year. Defaults and foreclosures went up 131 percent statewide and 42 percent nationally, according to RealtyTrac.”
“Real estate agent Stan Sexton says the foreclosures and distressed sales will affect property values across the board. Once a bank takes over a property, it will put it on the market at a price low enough to make a quick sale, he says.”
“‘They’ll slash and trash because they don’t have an emotional attachment to the property and it costs them money to keep it on the books,’ he says. ‘They could sell the property at less than market price and take the loss.’”
“‘For people to think that we could go back to traditional lending standards and have prices remain where they are now is just crazy,’ said Peter Schiff, head of Euro Pacific Capital in Newport Beach. ‘Real estate will have to go back to 2000 levels. And a lot of people who just bought a home will find that instead of having an asset, they have a liability.’”
The Daily Bulletin. “For five years or so, the housing market was like a slot machine that couldn’t stop paying out jackpots. Or so it seemed.”
“Ian Bishop, a senior financial adviser in Upland, says that this year’s problems shouldn’t come as a surprise to anyone. ‘A year ago, there was a lot of dialogue about how these funny-money mortgages would come back to bite people,’ he said. ‘So this is not so much surprise as it is fulfillment.’”
“Bishop says that at least for now, prices appear to be holding. But they will be under much more pressure this summer. ‘I think you’ll see a lot more inventory on the market this summer as people realize they have problems with their adjustable mortgages,’ he said. ‘A lot of people invested in real estate; if a sector does well, more people get attracted to it. As often happens, the ones who are late to the game may get hurt.’”
karma is increasingly becoming more of a bitch than normal.
You can never swindle an honest man.
someone said this. probably a wise man. maybe even an ex-subprime mortgage holder. haha.
Hey, what really pisses me off is if you watch CNBC they are still down playing this thing and saying it will be limited to subprime and wont be such a big deal. But you know as soon as it really blows up they will be saying “we knew it all along” , the whole gang-Maria, Jim, Lawrence and on and on, they should be ashamed-it is the dotcom thing all over.
Here is one of the big problems in society. People assume that just because somebody is on TV they are smart or have something to say. Pure and utter bull$hit.
I agree, I heard someone on TV say that the other day
We have DirecTV and they are still showing “Flip This House.”
Incredible.
From Last Year!! Ha Ha Ha!!! Can’t wait to catch episodes filmed this comming summer.
The real smart people aren’t the ones on cnbc. They either don’t need to be, or get chased off.
“Hey, what really pisses me off is if you watch CNBC they are still down playing this thing and saying it will be limited to subprime and wont be such a big deal.”
Anybody else think they’re just pimpin for the big money/smart money crowd like Stephen Schwarzman at Blackstone so they can get out before things go into the crapper?
Big Buyout Firm Prepares to Sell Stake to Public:
http://online.wsj.com/article/SB117405731529839461.html?mod=home_whats_news_us
But… According to the LA Times…
L.A. housing market holds its ground
Never mind a sales slump and now sub-prime uncertainty, prices are on the rise.
http://www.latimes.com/classified/realestate/news/la-re-market18mar18,0,685578.story?coll=la-class-realestate-news
I suppose the press may succeed in suckering a few stragglers into hell, but overall, this will unwind in the manner in which it will. The forces at work here are stronger than any government or press organization could control, so really these feeble efforts to breathe life back into this corpse are irrelevent.
I have predicted for a long time that any loan for more than the borrower could afford to repay is at risk, and with resets setting in fast now, by the time those with previously high credit scores are done they will have the same 500+ scores their subprime neighbors have. The percentage of loans which will go bad in the next 5 years will be staggering, and of course will feed on it’s self as the real estate employment centers lay off more and more former RE employed persons. So bouncing back etc? Not a chance in hell.
My husband REALLY,REALLY wants to buy! He is sick of renting and says he has yet to see any real fall in prices. He keeps saying “you told me things were going to go down for the past 2 years and it never does!” I too am very frustrated - Any idea how soon before this really starts hitting LA? Everyone says LA is different!!
“Everyone says LA is different!!”
It’s not be patient…
LARenter,
Your husband needs to understand this is a very complex situation. There will be many attempts to “fix” the foreclosure crisis. There will be many dead-cat-bounces as we move past the 10% down, 20% down, 30% down, etc. marks.
This will be slow until the risk manifests itself firmly in the mortgage market. We are just now beginning to see the tip of the iceberg. By this fall, barring any govt intervention, we should be seeing a good deal of distress. It will likely accelerate through 2008 and 2009 (at least).
IMHO, tell your husband that it will not be time to buy until fall of 2009, at the earliest. Even when we reach the bottom, we will probably sit there for a good, long time (1-3 years). There is NO hurry!!!!!!
Yeah dead cat bounce…here on San Mateo County coast 20 sales at the end of Jan./beginning of Feb. Then half that amount and dropping each week. Still there are last gasps…. my son’s sister-in-law in AZ did “Dialing For Dollars” for an appraisal to get cash out to buy out a soon to be ex-husband. Lo and behold she GOT IT!. She CAN”T SELL the house but she can STILL get a Re-Fi for cash out!!WTF!!??
“He is sick of renting and says he has yet to see any real fall in prices.”
Then he’s blind. Real prices are down 10% YOY and you can lop another 5% off the asking price, no problem. Yes, people are still buying but sales are down 20% YOY, market support is essentially evaporating, and the largest ARM reset in the history of the world is due to hit LA, the city where nearly all of the loans made in the past few years were ARMS.
Do the math. If you buy now, your monthly outlay will be much greater than your rent, for a comparable place, and you will be underwater on day one for the next five years at least.
Keep renting, and save like you’ve never saved before in your life. I’m maintaining a 25% savings rate so that I’ll have a massive downpayment for when I buy.
“…said Jeff Lazerson…In the past, we used to say that if you could fog a mirror you could get a loan. For the last five years, you could be dead and get a loan. That’s why we’re in this mess today.”
LOL! Finally, people are telling it like it is. This sort of talk is really blowing the lid off things. Much to the horror of many banks and investors I would imagine…
“Real estate will have to go back to 2000 levels. And a lot of people who just bought a home will find that instead of having an asset, they have a liability.”
Bravo Peter Schiff, head of Euro Pacific Capital in Newport Beach!!
So who did he short??? That’s a powerful statement from a guy who probably counts a number of ex-New Century employees as neighbors!!!
You don’t own the house, the house owns you!
What’s more, the lender owns the house; IOW, he owns you. Heads he wins tails you lose. Unless of course, you walk; then, he is left owning the bag.
But Maven, renting is just throwing your money away! I am so sick of these idiots.
I’m sick of throwing money away on food. I just eat it and it ends up coming out of my Lereah. I then have to eat again.
I’m tired of throwing money away on water, Coke, beer and Jack Daniels (well, maybe not the Jack). I just drink it and pi$$ it out. A little while later I’m thirsty again.
I’m tired of throwing money away on heating bills. There should be a way to not be cold.
I’m tired of throwing money away on clothes. I buy them and they either shrink, get worn out or go out of style. I should be able to buy 1 shirt and 1 pair of pants and never buy again.
Housing is just another cost of “living”. The same dip$hits that throw money away on $1,200 handbags, $5 for a venti macchiato, $60,000 for a Beemer think that their place of shelter is a waste of money. Dumb people deserve to have bad things happen to them. Twice!
“Dumb people deserve to have bad things happen to them. Twice!”
At this point, I want to say to these people who are dying to own and crying over lost opportunities, “Those are not chocolate chips in the Kool-Aid.”
NYCityBoy:
You need to work on your sense of entitlement.
Out here in Cali, we teach self-esteem classes in the schools. Without a proper edumacation, it’s hard to stay warm without a heating bill on cold days. But the old saying still applies to beer: “you can’t buy it, you can only rent it”.
NYCityBoy- thanks for the belly laugh!
You don’t own the alligator, the alligator eats you…
In old America, YOU eventually burn mortgage docs. In new America, mortgage docs eventually burn you.
Schiff moved his company to CT about 3 years ago……
Oddly enough he is right for SoCal.. however we (SF Bay Area ) will need to go back to 1998 prices. Prices from 1998 to 2000 doubled… I kid you not…
I know you’re not kidding because the same thing happened in the lovelier Seattle neighborhoods- prices doubled from 97- 99.
At the time, it seemed to do with fundamentals of newly minted Microsoft millionaires going at stupid bidding wars with each other. Then the new (high) bottom was set and since ‘99 I don’t think it’s had much, if anything, to do with fundamentals. there were only so many micro. millionaires to go around afterall.
At that time, in those ‘hoods, there were for sale signs everywhere (much more than now) as evryone was looking to get rich quick-lol. If they’d only known, they would have hung in there a few more years til they tripled then quadrupled.
Just goes to show- you have to be very careful when it comes to RE. Can’t wait to see how far back Seattle will fall. If it overcorrects, it could go back to ‘98 I guess. Why not?
The Bay Area house price has not increase from 2000 to 2007. I know I still own one and it has gone up like 10% at most. Prices in the Bay Area may not go down much because there are high paying jobs to support it. For example, my renter make nearly $300K a year and that’s not including stock options. For the San Jose area, subprime lending is only %7. While Irvine (or Orange County in general) has gone up at least 50% from 2003 to 2005 and the average household income is only $78K. Note, it’s household not per person. So there is room to go down in Irvine. I’ve been waiting since 2003. I don’t see the bubble burst yet. My neighbor just sold his house in Irvine with a minor price reduction. However, I noticed builders in Irvine such as Standard Pacific, Lennar, Williams Lyons have dropped price significantly like in the hundreds plus more money on options. I was around here the last housing recession and I don’t recall builders drop that much price so there is more to come.
“The Bay Area house price has not increase from 2000 to 2007. I know I still own one and it has gone up like 10% at most. Prices in the Bay Area may not go down much because there are high paying jobs to support it. For example, my renter make nearly $300K a year and that’s not including stock options.”
Only CEOs and CFOs make 300K in salary. Dont bother with stock options.. they dont give those out anymore like they did back in 1995..99. Mediam salary is only 85K in San Jose/Santa Clara.
Get a grip…Average salary is 78K in Santa Clara county and 77K in San Mateo. So what, that works out to 312K (in a RATIONAL market) for a house. Hmm can’t even buy on east side of San Jose for that. You’re smok’in crack if you REALLY believe your house only went up 10% from 2000 to 2007. YOU ARE LIVING IN A CAVE. My first house I bought in 1978 in San Jose for 58K is now on Zillow (for what that’s worth) for 615K. This price rose almost 100% from 2000. I can’t imgine where a house is in So Bay that it “only’ went up 10%.
Don’t worry about highly paid engineers. As soon as they find one, they will ship that job oversea, guarantee!
Louie,
Prices in our former neighborhood (San Diego area) also doubled between 1998 and 2001.
I totally agree with you. We are going to pre-2001 pricing, +/- inflation/deflation.
2001 is when the housing bubble morphed into the credit bubble. Indistinguishable to most people who weren’t paying attention. It’s also why the sheeple could be convinced that it was based on “fundamentals” of supply & demand.
I thought I was the only one who noticed prices doubling during that time. I’m in the N. Bay and we attributed it to the dot com money comming in. I still have RE flyers that show prices doubling during that time from different parts of the area.
Anyone else think Peter Schiff reads here?
He sounds just like a true HBB’er, God bless him!
Speaking of the dead. This thread reads like everyone in the REIC including borrowers were having a pimping good time at a haloween party clowning around and playing make believe when suddenly the music came to a screeching stop. Now as dead silence fills the air, everyone has to leave but some don’t want to so they are wringing their hands and begging for more. The party is over folks.
“The party is officially over…”
Note to self — Read entire thread or risk stating the obvious; now, quietly remove foot from mouth and hope no one notices.
Let’s see what Christopher Thornberg said last year…
Full length Video
:50 second clip
I’ve never seen Thornberg speak before. Well worth watching the full length video. Thanks, Athena!
“‘Funding was authorized and all the documents were signed on Tuesday, but the company closed its doors on Thursday,’ Hobbs said. ‘Their reps said they were walked outside, then their boss went back in and locked the doors. It was abrupt, quick, and my client’s loan was not funded. I think this will happen increasingly for a while.’”
wow thats almost like robbers being caught
“‘Sometimes legislators don’t understand the full ramifications of bills coming in,’ said Jack Williams, president of the California Association of Mortgage Brokers. ‘That may harm the first-time homebuyers, putting them into the permanent renter class.’”
You mean until they actually save enough money to allow them to purchase a house they can afford? What a novel idea…
“Sometimes legislators don’t understand the full ramifications of bills coming in,’ said Jack Williams, president of the California Association of Mortgage Brokers. ‘That may harm the first time homebuyers, putting them into the permanent renter class.”
The fox complained to the farmer: “You don’t understand chickens. They need to be let out of the coop to get their daily exercise.”
LOL.
Yea, I had to read that a few times myself and I’m broker. Sheesh
as if “the renter class” were somehow unclean. But wait, we see where Jack’s pay check comes from. He’s just toeing the party line.
there will ALWAYS be a renter class…our gubmint and the bleeding hearts need to get a clue and accept that fact…..only in fairytopia does everyone own
Oxnard is toast!!
Burnt toast
“‘Funding was authorized and all the documents were signed on Tuesday, but the company closed its doors on Thursday,’ Hobbs said. ‘Their reps said they were walked outside, then their boss went back in and locked the doors. It was abrupt, quick, and my client’s loan was not funded. I think this will happen increasingly for a while.’”
That is brutal…
Just out of curiosity: When I was told on a Friday that I had lost my job back in Dec of 1984 (I was employed for 48 months), I was given two weeks severance pay by a corp that was listed in the NYSE. Is this still the norm now, or do these big companies offer more than just 2 weeks severance pay these days?
I found this on About.com:
http://humanresources.about.com/od/glossarys/a/severance_pay.htm
BayQT~
there are still a few cos that give much more…..
Great! Another client saved from corruptive rep who was ready to pochet comissions/fees in a falling market.
“‘For people to think that we could go back to traditional lending standards and have prices remain where they are now is just crazy,’ said Peter Schiff, head of Euro Pacific Capital in Newport Beach. ‘Real estate will have to go back to 2000 levels. And a lot of people who just bought a home will find that instead of having an asset, they have a liability.’”
Anyone who “just bought a home” in the last seven years…
Well, in most cases, even if they had a small part of an asset, most of the home purchase was a liablity anyway (as there were tons of 100+% financing going on out there).
So, I would reword that.
Instead of having a liability that is offset by an asset, now they have a huge liablity, and a rapidly depreciating asset.
Ahh.. After typing that, I realize the original is better.
How about this:
Your f**ked if you bought in the last 7 years and need to sell today?
LOL
Your screwed if you need to sell today or within at least the next 5 yrs.
I just want to say “Congratulations” to my Brother-in-law who called today to say that he and his wife are buying a home. This follows a two-hour discussion I had with his wife two weeks ago during a family outing to Breckinridge. I explained that buyers would be strangled out of existence by tighter credit standards… We had a (crazy) quilibrium between supply and demand… and any change to either variable yields a new equilibrium - hence 2000 prices. A HOUSE is a liability at any price.
Don’t bother. Save yourself.
This follows a two-hour discussion I had with his wife two weeks ago
Nightowl has a lot of stamina. When I used to have the “discussion” with friends about to slip a noose around their own necks, I generally limited the talk time to about ten mins.
Yep, It is very frustrating when you are trying to save friends from buying, especially at this time, and then they just go on ahead and buy. Or they just go on ahead and HELOC for the third or fourth time in the last 3 years.
She’s right. Just save yourself, and be contented that you have friends on the blog who understand you and know that you are right.
I guess not all the animals were wise enough to get on Noah’s ark before the flood came.
In a very short time, you will be able to (tactfully) say “I told you so.”
I have two brothers who want to sell their homes. One in TX, and one in bubble central (boca raton) in FL. They both have owned their houses for about twenty years now, and have equity in their houses, but that equity is dissolving. They both have told me they want to get stuff done to their houses to get ‘em ready for sale, and I have been telling them for over a year now to hurry up and get it done. But there is no use trying to say anything, the more you talk the more they couldn’t care less. My brother in TX wants to downsize and get out from under these large utility bills (He raised a large family). The one in FL wants to move out of FL. His retirement is getting smaller and smaller with every passing month.
I have done my part. It is sad to have to watch the equity dissolving away like this to people you care about, but what can you do?
Got 10% down?
To tcm:
Although they are both pretty much screwed, perhaps you might say that they should be careful about the “stuff” they thinks they need to get done before they (try to) sell. Too many people do what they think are improvements that will get them top dollar (whatever THAT is these days), when there are very specific improvements/remodels that will actually add some value. But in this climate it’s hard to say what is going to really add value since the “value” of their homes are on a slippery slope.
I just hope they have patience enough to wait before they sign up for another house before selling. That would be an even worse predicament than they are in now. Large utility bills will be way better than 2 mortgages.
BayQT~
agreed - paint and MerryMaids should be about it
Peter Schiff is one bright guy. Listen to an hour long interview with him on FinancialSense.com regarding his recent book entitled “Crash Proof: How to Profit From the Coming Economic Collapse.” He’s the 2nd hour guest on March 10. Well worth a listen on our economy as a whole.
http://www.netcastdaily.com/fsnewshour.htm
It was a good interview. His thinking is the dollar is toilet paper, real estate is toast, stocks are worthless, and the collapse is coming.
It was upbeat! lol
Not completely true; he does think that foreign equites will do rather well
Yes, I was referring to U.S. company stock. Even then, some will do better than others.
“The couple’s realtor, Diana Williams, said they should not have qualified for the loan in the first place. Instead, they should have been counseled to shore up their finances before attempting to buy. ‘They had their heart set (on) becoming homeowners,’ she said. ‘Now they’ve somewhat lost faith in the system.’”
Can you believe the crap this bag is selling? I gaurantee you if the LO that pre-qualified this couple had called her up and said, “you know what, your clients really should back off and shore up their finaces, they really shouldn’t be buying right now”, Diana would have gone ape-shit and told the LO to get it done or she’ll go some place else. Now that she knows there’s now way these folks are getting a loan, suddenly she Mrs-do-the-right-thing. Let me put this as eloquently as I can: YOU SUCK!!
lol. I was thinking the same thing. That’s EXACTLY what she would have done.
Eloquently stated!
All I will say is that WE HAD BETTER NOT BAIL THESE IDIOTS OUT!
~Misstrial
“Senator Dodd hasn’t quite worked out the details of the legislation that he’ll propose to bail out these troubled borrowers. But there’s good reason to suspect that it will involve Fannie Mae and Freddie Mac, the nation’s biggest mortgage companies. Fannie and Freddie are nominally in the private sector, but they operate under a congressional charter to make a market for low-income and middle-class home buyers, largely by purchasing mortgages from banks so that the banks have more money to make new mortgages. According to the Wall Street Journal, HUD secretary Alphonso Jackson said Wednesday that he had asked Fannie and Freddie “to look into possible steps that could be taken to assist troubled borrowers.” It’s conceivable that Dodd, with the Bush administration’s support, will propose some sort of government subsidy for the two companies to buy out some defaulted mortgages from their private investors, taking over the loans and refinancing their terms with borrowers so that borrowers can stay in their homes.”
http://www.city-journal.org/html/eon2007-03-16ng.html
wtf? god, he is such an idiot
I say that we make Dodd mud-wrestle Bernanke, since their ideas lead in the opposite directions- Bernanke wants to keep Freddie Mac and Fannie Mae out of risky lending…
http://www.usatoday.com/money/economy/housing/2007-03-06-bernanke-fannie_N.htm
the only bail-out will be for Wall Street & the banks!
“We the little people” will take the shaft and ask for more! Again!
The very people responsible for this mess will be asked for a solution!
Not because of intellegence, but through coersion, lies, and more stealing! Just as in past cycles.-likely to end with a consolidated Central banker similar to the “BIS”
BIS= Bank of international Settlements!
“bail-out will be for Wall Street & the banks!”
yea but I’m beginning to fear they see “the little people” as the conduit for said bail-out…
“The very people responsible for this mess will be asked for a solution!”
Good point. As evidence look at new BK laws and current Energy policy.
I’m just trying to figure out why this couple lost faith in a system that just stopped them from committing financial suicide. Of course this statement has been filtered through the RE Agent so I guess we don’t know the couple’s real thoughts. On the other hand, perhaps it is the RE Agent who is loosing faith in the system’s ability to generate easy commissions.
Now we wait while this rips through the economy, leading to an UGLY recession. Which of course causes lots more foreclosures and BK’s.
Of course, this had to happen right as the boomers were approaching retirement because that was always when the fat lady was going to sing.
And sing she will!
Yes Joe. This is a very needed correction so that prices will revert to affordable levels in which 15 and 30 year fixed rate mortgages can be used to buy a house. The trick is to wait 5 years before buying. And remember to save up 20 % for your down payment too. Then all will be well.
Good idea. Better deal will be to save 40% of your DP in savings bonds. Then in 5 years decide from there if you should get a 15 year loan instead of a 30 year loan on your house you buy in 2012.
What the F is a loan? Just save up to buy the sucker outright. My high school math teacher salary is enough to accomplish this when prices are in line with reality.
2007 is going to suck.
-Rent
Rebuttal on the Bakersfield story:
http://bakersfieldbubble.blogspot.com
The Bakersfield Californian has a front page news story on the lending mess. The following are a few items of note in the story:
(1) They claim that 6.5% of all loans in Bakersfield were from subprime. However, per Loan Performance our market was 36% subprime in 2006. Their report tracks 2006 estimates for average loan size by market and subprime’s share of all purchase lending dollars in these markets.
Good stuff. Thanks.
Agree. Crisp’s posts are always so informative about the southern Central Valley.
~Misstrial
Thanks!!!
Hi crispy..a suggestion for your website (and one of my favs)…could you change the brown wall paper to something lighter in tone? IMHO it makes the dark print difficult to read. Thanks for your wonderful website.
Now they need to follow this with a piece on average HELOC balances for the area and then follow that with a piece on the average CC debt being carried by the area residents.
One of the wild cards in all of this is just how many people will lose their houses because of their HELCOS. Some, most definitely, planned on selling the home to pay the thing off. Somehow, I suspect there was no plan B, other than an occasional trip to the quickie mart for a lottery ticket. Oops.
Help me out… the last home I owned was in Texas, and they didn’t allow HELOC’s until about the time I moved to SoCal. What are the usual terms??? % of equity, or total note? Payback period, and interest rate????
http://www.ocregister.com/ocregister/money/housing/article_1615833.php
For metro areas and subprime loan percents.
This one stuck out:
Market Median Loan % subprime
Salinas, CA $325,600 30%
Salinas is an ag town. The median loan amount is nearly the same as San Francisco or San Jose, and the percentage that are subprime is about 2X.
Bloodbath, film at 11.
Two thoughts strike me today:
1) The subprime meltdown has been really quick — and it seems to have particularly accelerated over the last two weeks. It shows what a house of cards these operations were to have them in fold/close/layoff/turn-off-the-spigot mode so quickly. I’m not particularly suprised it’s playing out this way — but the speed of it is breathtaking.
2) The collision of sleazy business practices against naive, unspohisticated and/or greedy folks really makes for a compelling, if troubling, saga. Wow.
When enron ripped off California, to the tune of $30 Billion, through the sleaziest of methods, 5 years ago…
I remember thinking what a veritable sh*tload of money that will be to pay off, (we Californians have paid and will continue to pay, for many years to come) almost too much to comprehend~
Now I see $10 and $20 Billion Dollar losses (always underestimate your losses, always overestimate your profits, as per our lax business standards) being tossed around, like they were an iceberg salad, nothing to watch, please move along.
I give it a week and then all hell is going to break loose.
It is going to take more than a week. The CDO’s are going to make this a slow bleed unto death for the economy.
My understanding is that the MBS is diced and sliced and added to the CDO’s by our good freinds(barf) at Bear Sterns, Lehman Brothers, Morgan Stanley, DB, etc.etc…
When they do this they have their sophisticated finance models that now transform CDO’s that have all sorts of stuff in them includeing BBB- into A paper…woohoo isn’t life grand. That is also why these Fianancial company’s have been upgradeing the paper lately, 1- to get rid of it and 2- their(flawed) Models are a screaming buy.
Everyone has these CDO’s, I mean everyone. If you think your 401K is safe check the changes on whatever mutual fund that they are in can now hold. Calpers is toast, course thats just history repeating itself.
As much as I wish the correction would be quick the reality will be a Tightening Credit cycle that will evolve slowly over a very long period of time and stay longer than anyone would think possible.
Recession?? Only if were lucky.
Any who are haveing a tough time really understanding “Collateralized debt obligation” need just read the Wikipedia definition.
http://en.wikipedia.org/wiki/Collateralized_debt_obligation
I should add that CDO’s that are not noted as heavy with MBS will lose there investment return value due to the small portions of bad MBS in them that have failing loans.
So those who think that only the Mortgage industry will feel the tightening are going to be mistaken.
My guess is that Business loans from Banks by 2009 are going to be as hard to get as they were in 1930.
California has been ripped off twice in five years by Wall Streets shills, scam artists and hucksters. Is the Governator just going to sit back and take it, or will he put up a fight?
California taxpayers have been ripped off by the California politicians too, don’t forget. I shed no tear for any California politician who has (ahem), served, in the last 33 years.
Arnold? Are you kidding? His first job in office was to reduce the amount Enron and the others had to pay in the lawsuit. In an unrelated matter, Arnold cannot remember what Ken Lay and the others met him about shortly before he jumped into the circus to oust Gray Davis.
Could it be Enron and the boys bankrolled the recall so Arnold could help save them BILLIONS on the lawsuit?
Nah!
Jerry Brown should start prosecuting the Wall Street firms that
enabled this mess. If he does, 2012 is in the card.
“When enron ripped off California, to the tune of $30 Billion, through the sleaziest of methods, 5 years ago”
When Kaleefornhyah ripped off Enron….
A quote which best describes the subprime business from LOANS FROM HELL by Bill Bonner Editor, The Daily Reckoning March 16, 2007
“What bothered New Century Financial was that the people they lent money to could not pay them back. What now bothers Goldman, Merrill and the rest of the smarty-pants businesses is no different. Their credits are going bad. All the way up the financial food chain, they applied the same ‘low documentation’ standards to the mortgage-backed securities business that the New Century applied to the mortgage itself.
Now, for readers who may be as unfamiliar with mortgage backed securities (MBSs) and collateralized debt obligations (CDOs) as we are, we supply the following elucidation of these two life-enhancing inventions: Imagine the entire mortgage market as a giant pig and the financial industry as a rendering plant. After the best lenders have taken the AAA++ hams and ribs, there remain many body parts you might show to your daughter only if you wanted to see her make a face and hear her say ‘eeewwww.’ In the mortgage industry, as in the slaughterhouses, those cuts do not get the ‘prime’ label. In lending, they are known as ‘subprime.’
The low-priced stuff is too disgusting for most people to put directly on the table, so the unidentified scraps are typically run through the grinder. Then, they are packaged into old-fashioned, pure pork mortgage-backed sausages. Even at this level, the investors never met the borrowers (and often not even the lenders) and were never privy to the particular lies that coaxed the animal into the abattoir in the first place. Nevertheless, the markets are familiar with these things; they know more or less what is in them…and have some slim idea of what they are worth. “
Great description!
Alt-A = hamhocks?
“Regina Miller says she is tired of ‘throwing away $1,520 each month’ to rent the two-bedroom apartment in Long Beach, Calif. But at least for the foreseeable future, a house may be out of the question. ‘I thought for sure I could buy something,’ says Miller, who says her credit rating hovers around 580. ‘Everyone was getting loans. People with worse credit than me, even.’”
Regina:
A. You don’t qualify, so get over it, and..
B. Would you rather be paying $2,500 interest-only on a
depreciating asset? Now that’s throwing your money away.
I’ve believed for a long time that basic financial analysis skills are the most undervalued asset any person could have. The current affordability ratios in CA provide an existence proof that this is true. Her frustration/anger at lenders will subside very soon once she’s had a chance to watch the pain her “Owner” neighbors are about to go through…!
‘Everyone was getting loans. People with worse credit than me, even.’
This quote nicely sums up the past 7 years.
People with worse credit than me, even.’….
“and my FICO score is 300″
and she did not make it past 5th grade - check out the bad grammar
It’s amazing that’s it’s just been the last few weeks that the spigot has been closing on subprime borrowers. When you think about all those borrowers who were not subprime, but got exotic mortgages up to their monthly payment limit, through early 2007, as their mortgages adjust over the next few years, the foreclosure party has just started. The lending industry is going to come back to reality, that it’s debt to income that matters, not credit scores. Requireing most buyers to come up with a down payment and a mortgage of around 30% of income, worked well for many decades, for good reason.
It was just a few months ago that I was complaining on and on about how MBS investors were not requiring a risk premium on the cr*p loans they were buying. Now, mere months later, reality has finally bitch slapped them back to The Real World.
The irony is that these MBS buyers were chasing yield. Now it looks like that yield they were chasing is going to be far less than they thought.
The whole situation reminds me of Micheal Milken and the junk bond mess of the 80’s. He sold institutional investors a bill of goods. Now it’s looks like the institutions fell for it again.
The credit risk models used by brokers and investors in the MBS markets were biased as follows:
a. Real estate values always go up
b. Appraisals are accurate statements of valuation
c. Borrowers generally provide accurate information
d. A FICO score is an accurate representation of the borrowers ability to perform under the terms of the loan
Alt-A and Prime will soon collapse. Anyone who bought in the last 5 years, ATM’d or HELOC’d will more than likely be seriously underwater within 24 months. The entire mortgage market will be in full seizure by 4Q2007.
Can any of you smart Wall Street types tell us, with what you know now, if any of our conservative investments/savings are at risk from this? Any insight on who the final bagholders are? And how do we get out of the way?
Look at the list of assets held in your 401(k) plan. You may be shocked to find a heavy weighting in MBS. This is a natural final resting place for the toxic bonds that Wall Street’s leading investment banks forged out of subprime mortgage loans. As they say in the computing business, garbage in, garbage out.
And Wall Street pulled off another MASSIVE SCAM.
In Defnse of Milken, yes he was a crook, but he help create literally hundreds of thosands (Maybe a million or two) of new jobs….but getting people to invest in start ups like MCI, CNN etc.
But investing in home sub prime mortgages…no way is that going to create long lasting jobs or companies.
Sorry but the words…”In Defense of Milken” and…”yes he was a crook” should never be used in the same sentence.
The man was a crook. Period.
“The couple’s realtor, Diana Williams, said they should not have qualified for the loan in the first place. Instead, they should have been counseled to shore up their finances before attempting to buy. ‘They had their heart set (on) becoming homeowners,’ she said. ‘Now they’ve somewhat lost faith in the system.’”
Talk about play both sides of the fence !! it’s either “thanks for the check” or “that too bad you didn’t get the loan” slimey bitch. BEER ME !!
Isn’t a part of Diana’s job to steer these buyers to something they can afford? On the other hand, there was probably no telling these people. Once they saw the other sheep jump off the cliff, they just wanted to see what was at the bottom for themselves.
Isn’t a part of Diana’s job to steer these buyers to something they can afford?
Remember, the more money for the house, the BIGGER commission!
Just when I thought I’d seen it all. Visited an open house today of a tiny house built on an odd-shaped sliver of land. It was on the market last year, and failed to sell despite a newspaper business page article about how unusual it was. The realtor wrote “celebrity house” on the flier. Last night I drove past a sign on a construction site that said “Luxury Office Condominiums”. What are they?
Looks like nobody knows what they are, RE hobbyist. I sure don’t.
Maybe that’s the selling point they’re trying to go with now. A totally new product that nobody has ever heard of? Better than saying “house for sale”, ‘condo for sale”, etc.?
That realtor had a fiscal obligation to counsel those buyers. She should have laid out on paper what they could afford and not afford before she ever sent them to a loan officer. She’s as much at fault as them. So you lose a sale. At least you can sleep at night.
Dominoes hitting each other: two purchases fail to fund last week. One purchase failing affected another purchase (seller buying another home with proceeds of sale). All ready to close and poof, lender pulled program. Loan officer shocked, agents shocked, seller shocked, buyer shocked. The buyers and sellers in the Domino chain having houses in boxes ready for movers next week. Delayed at best. At worst……
Multiply this scenario by hundreds, maybe thousands across the country over the last 4 weeks. The tide may be going out faster than what was first reported.
They’ll look back on this moment and think, “Wow. We really dodged a bullet”. Unless of course, the house they are trying to sell is also a bubble house. Then they’re frickin’ doomed!
A lot of people are going to be wringing their hands and whining about the good times. Poor bastards. My heart really aches for them. They did not get the easy money they deserved as a result the deal failed. Wawawa! Wawawa! Sniffle… Sniffle… NOT!
Yeah, we keep seeing stories about potential bagholders, I mean buyers, that were mad that their loan didn’t get funded. How about that seller? They had a pigeon on the other end and thought their dreams had been fulfilled. Suddenly the pigeon was put back into the coop. They were just left with a glob of pigeon Appleton-Young. How are they going to feel in a year when their house is worth $100,000 less and they are still holding it?
Oh so close to that windfall. But oh so far. Bwahahahahahahahaha.
CityBoy,
Know just how you feel. check this analogy out. You are out fishing, you get a real good one on the line. Youv’e been reeling him in. Actually get him coming up out of the water and then the line snaps and you have to watch him fall back into the water………knowing he was your only chance for dinner, and now you have to go hungry cause the lake is closing.
“The tide may be going out faster than what was first reported. ”
Ya think…
That’s what happens during a tsunami,
Head for high ground!!! And - if you need furniture, a flatscreen, a slightly used new car, or anything else, you’ll soon find plenty to choose from on Craiglist and ebay. I can’t wait till the media starts reporting on the giant leaps those two online classifieds lists will make in the coming months!
Happily RENTING in Long Beach!
It is times like this when I wish I was more materialistic. We’re heading to FB destruction and there is nothing I want. Damn!
It’s great how all the big-ticket items I’m interested in buying are all coming down in price: teevees, computers, peripherals, real estate. I spent a couple hours today wandering around best buy, citcuit city and compusa… I do this every couple months to see what prices are doing. Towards the end of the year it’s gonna be a great time to have money to spend.
I can think of a few toys, but I don’t have a house to keep them in… soooo, it keeps my eye on the ultimate prize.
My wife needs more space and we’re moving out of our 1,000sf rental into a 1,600sf space. Her concession was a new couch from Ikea (cheap) - and I get a flatscreen ($1,500???). This sure beats closing costs!!! And I get more space! I just hope our jobs hold on for a while longer…
I don’t need nothin’.
Got 10% down?
Since my roommate left Dec. 31, my living room is empty, but for a coffee table and a lamp. I’m not necessarily waiting for these big furniture / TV / SUV / Lexus sales, however I think there will be plenty of them slightly used in good condition at huge discounts. I’m waiting until at least May before I populate the living room of this apartment here in Phoenix. With all the overtime work I’m putting in, I have been adding to my T-bills and other government securities like crazy. I’ll be all set for these sales! Ha!
Items are already showing up in Craigslist.
Perhaps we’ll need another version of the “bits bucket” for killer craigslist and ebay listings from desperate FBs?
‘Their reps said they were walked outside, then their boss went back in and locked the doors. It was abrupt, quick, and my client’s loan was not funded. I think this will happen increasingly for a while.’”
Maybe he should’ve tried the old “can you check out those brake lights ” and then drove away. Beer Me !!
This is sounding more and more like F’d Company every day. And I know I’m not the only former FCer here.
Remember the thread on FC where they blogged a layoff live?
I think there were a few like that. The best was the day a company that did live “help chat” services announced a layoff. The board got into a chat session with a few employees there who were oblivious to the fact their jobs were going into the toilet.
The subject of the Ventura Star article was chastised in the comment section at the bottom of the article. The buyer, a Mr. Chavez, wasn’t a flipper. Rather, he is a self employed sign maker with a wife and two kids who got in over his head. Surprisingly, his response was also in the comments.
Dear Misty:
You build your commentary on only one line of the article. I pay all my taxes until the very last cent, but I don’t have a “W 2 form” because I am not in any payroll, that situation puts me in a different form that the most of the people, throw the eyes of the banks. But you are right, I am in the place that I deserved, due to the inexperience of young realtors. And I am not expecting that you or any other people feel sorry about me. If you want to fell sorry, that is a lot of many other facts that you can use to feel sorry, starting in first place with all the children that right now, every minute of today, will die because they don’t have anything to eat; you can feel sorry for all the people suffering the stupid wars around this crazy world, you can feel sorry also for the people that never experience a real love for anybody, for all the old people that is abandoned for their own families, etc. etc. etc. I am very glad that you do not feel sorry for me, I am at the end of a very large list, and finally a house or a car… those are material things, Thanks God I am blessed with a very nice family and friends.
Sincerely
Abraham Chavez
“I am in the place that I deserved, due to the inexperience of young realtors.”
Is he blaming the realtors for his situation?
Is he blaming the realtors for his situation?
It sounds like he is.
For some odd reason, the masses seem to think that realtors are competent, knowledgeable, savvy professionals. This is what I’ve learned since I started my home search. People think that realtors really know the housing market, for starters. Realtors are also able to predict the future and know when and by how much interest rates will fluctuate.
The trust that the public assigns to these nitwits astounds me.They take a two day community college course and get a RE license. It’s harder to get a driver’s license.
Mr. Chavez most likely believes he wouldn’t be in current predicament if he had dealt with a seasoned, more experienced realtor.
Realtors are SCUM! As they say, you know when a realtor is lying their lips are moving!! I would trust a used car salesman or lawyer before I’d trust a realtor!! Most of them are pompus pond scum!
No, no, if you read the article it is obvious that the guy is taking responsiblity himself. He is one of the good ones. The “inexperience of young realtors” remark is either an abberation or a failed attempt to sound erudite (English isn’t his first language.)
This guy isn’t whining or blaming the banks, re agents, or “medical problems” for his situation. He’s being a man about it.
It’s not the young inexperienced realtors you have to watch out for. It’s the top producing, money grubbing, greedy ones that have gotten a taste of big money.
Gawd!
He’s a sign-maker who can’t even spell!
Lovely!
Oh, this is delicious. I’ve saved by beans for years and when the values tank, and everyone is broke I’m going to buy up houses and evict squatters.
Well why not?
Toddler: Why is the sheriff putting our furniture in the street?
Me: Because Mommy and Daddy mortgaged your future. They bought a house at a price they knew was too high, but they thought they’d be able to sell it for more. They thought they could get rich by doing very little work. Now they’ll be broke right into retirement and you’ll be paying 50% income taxes to support their Social Security and Medicare expenses. What do you think of that?
Toddler: Can I watch Sponge Bob?
So funny in a sick way…if only it wasn’t spot-on!
“The business boomed as housing prices soared. Orange County was a center of the action. ‘The culture around all of these sub-prime lenders has been ‘Hey, bring it to us. We’ll make it happen,’ said Philip Tirone, a Los Angeles mortgage broker. ‘If you have a client with a [low] credit score who only wants to put 5% down and had a bankruptcy not too long ago, that’s OK. Bring us that loan.’”
I have to wonder if he ever in his life saw a client with bad credit put 5% down on LA homes priced at $600K on up (= $30,000 down)? At any rate, I am fairly optimistic that this era of newfangled predatory (aka subprime) lending is coming to a close, given the sudden concern among regulators and lawmakers about the problem of lenders making loans that are never likely to be repaid.
“My mortgage pals assured me that they were going to be smarter this time around. World-class technology was making sure that a wave of novel loans for riskier homebuyers would be good bets.”
That has a familiar ring to it. Weren’t the builders supposed to be smarter this time around, as well? Maybe the top managers in both homebuilding and lending were smarter, anyway; it seems like lots of executives managed to cash out of the company stock before the rest of the world caught on to developing problems.
Yep. They cashed out big time. They kept the confidence game going while they cashed in their chips.
“My mortgage pals assured me that they were going to be smarter this time around…”
And they were… they kept this thing going WAY longer than probably even they thought possible! And the commission checks just a kept coming!.. ding-ding! ding-ding!
Nice to see Curt Thor mentioned,He is a good guy,and has been working hard to clean up the appraisal profession.he helpeped found reaa/nbay,and has the head of cal OREA,and its chief enforcement officer giving a seminar on the 22nd in petaluma.I have been to a few of these events,and these folks cut no one slack.I expect to enjoy seeing these two chewed on a bit,then encouraged to do more about cleaning up this foul mess.I think the realtora and loan brokers are beyond help,given the structural problems involved.
“‘They had their heart set (on) becoming homeowners,’ she said. ‘Now they’ve somewhat lost faith in the system.’”
Gimme break; they were saved. The system finally started working again.
You bet. The best thing that will have happened to them is losing faith in the system.
Imagine if they bought. 2 years from now they will be BK because they bought more househouse than they could afford (BMHTTCA). Faith in the system? GONE!
Or They are forced NOT to buy, and they watch their dream house lose 35% of its value. Faith in the system? GONE!
I lost my faith in the system several years ago, and have never been better off financially. The system is out to screw you.
I lost my faith in the system several years ago, and have never been better off financially. The system is out to screw you.
——————————-
Ditto. It’s like, all of a sudden, the lightbulb comes on and you can see what the system is all about.
From politicians to businessmen, their #1 goal is to take something away from you. The sooner the sheeple get this, the better off we will all be.
Little observations:
The first foreclosure in my NoVA neighborhood. He is going up for auction at the end of the month on the county court house steps.
It was an 8.9 ARM
Interesting reading on HOA blogs. (Cascades) Falling prices and up to 34% increase in tax assesments are freaking them out.
Starting to see nice deals on PC’s and plasmas. I waiting for guitars to start showing up. I want a top end PRS.
My wife is unemplyed now. A restructuring. Nothing out there for jobs in the middle income range.
Too many people I know measure sucess in how much sq. foot you have. That is going to change.
Sorry to hear about your wife’s job. Hopefully, it will not affect you too much. Best of luck with the job, house and guitar purchase!
“‘They’ve decided to go ahead and sell their home, and go rent for a while,’ Ramirez said. ‘They’re going to barely break even when everything is said and done.’”
———————————————————
really? they are assured of breaking even? now that the loan spigot has been turned to a trickle? they will not break even, and then the IRS will tax them on the short sale
“They’ve decided to go ahead and sell their home…..”
No ya don’t…… meet Mr. Illiquid Asset. Regardless of the price, you don’t decide when or if it sells, a potential buyer does.
Oh, and they also decide for how much it sell for.
I was just on the Hillary Clinton for President website and blog (www.hillaryclinton.com) and they are touting her proposal for subprime help.
Whether you support her or not, I’d suggest all of us leave a comment there. I haven’t had time to check out the other presidential candidates blogs to see what they are saying but I intend to check them all out repub, dem or otherwise.
Let yourselves be heard all!
I blasted her on there.
Hillary hates the middle-class. That is all you need to know. If you are too wealthy to get all of her handouts and not wealthy enough to be in her Chappaqua neighborhood, she hates you.
Hillary is a dimwitted simpleton that wants to bail out the greedy.
Why doesn’t she offer to let renters have a few months off from their rent? Because she hates all of us renters.
This will blow up in her face.
“Hillary is a dimwitted simpleton that wants to bail out the greedy.”
As opposed to Bush, who is a dimwitted simpleton that enables the criminals?
What is your point?
My point Joe is that they all are working against us. There isn’t a good one amongst them.
And I wouldn’t go absolving Hillary from any guilt when it comes to allowing the big boys to run wild. She is as corrupt as any politician ever has been. Or have you never heard of Whitewater or her fantastic commodities trading career?
She lost money on Whitewater. Don’t forget that. And I do remember she tried real hard in the early 90’s to get a reasonable health care plan passed. You may remember it. Newt and the boys killed it and slammed her for it. And there are millions of Americans that could use that plan today.
Nobody is perfect, and you have to play the game to even get to the level she is at. But to even attempt to compare what Hillary has done to the Bush Crime Family is insane.
There are people that make mistakes would good intentions. And then there are crime families.
You should know the difference.
I am holding everybody accountable. You never saw a good word about the Bushes in my post. You are the partisan in this conversation, not me.
Good health care program? It was a government run HMO-enriching joke. She stated from the outset that no single-payer plan (the only kind that could work) would be considered: only something that involved HMOS, some of which she was financially invested in. Her “secret” commission was entirely rigged with insurance lobbyists. Ralph Nader, no right-wing fanatic, and many other advocates of REAL universal health care, blasted her program as an unworkable fraud. They still do. It would have made insurance companies (and Hillary Clinton) even wealthier, and cost a fortune because of it.
For a good universal health plan, all our government has to do is look at Japan, France, Australia, Italy, Germany, and other countries that have excellent universal health care. American doctors don’t want it, because it would limit their incomes, and insurance companies don’t want it because it would cut out the Middle Man (them). As for the alleged horror stories of Canada’s health plan, each province has its own (there is not one health plan for all of Canada), and some work very well, while others don’t. But, Canadian doctors are limited in how much money they can earn on the plan, and Canadian insurance companies are more or less cut out (though they can still sell private health policies). But, the anti-universal health care people ALWAYS cite the worst examples, never the good ones, and completely ignore the fact that MOST Americans do not get first-class health care, even with insurance. Yes, if you want a new heart and have tons of money, you’ll be taken care of, but if you want modern medicine, untainted by marketing and drug-company promotions, forget it. I got so tired of doctors trying to sell me products and writing prescriptions for rubbish I didn’t need, I started going to a university health group, where huge profits were not an issue, and no product-sales were permitted. And, the doctors were infinitely better.
Amen!
Insurance companies do nothing but suck money from the system.
Drug companies spend too much money on marketing and not enough on drugs we **really** need — notice how they come up with all kinds of “ailments” that we never knew existed until one of their useless drugs comes on-line.
Oh, yeah - my current favourite is the drug for “Restless Leg Syndrome”. I mean, wtf?
Its on a par with the drug that apparently helps with reducing yelowness of toenails - by dosing you with low-level antibiotics for about 10 months - no mention of how your immmune system will deal with that, or the more important question of “hmm… a monthly pedicure by a qualified professional, or a year on Penicillin??…choices, choices’.
I don’t think our politicians are going to let the economy crash so a minority of people can get cheaper housing. They will protect the economy at all costs. So they are going to try to save it.
But don’t worry. It won’t make any difference in the end. It never does!
So they’ll try hyperinflation and lose reserve currency status to “save the economy”? Please, spare me the nonsense…there will be no helicopter drops.
Let’s just blast each and every candidate with the no bailout message. It’s the fastest way to get the message out. I do know a few congress people and believe me, the mail that they get matters.
Be heard!!!!
Do you expect our politicians to do nothing? Are they going to just sit back and ignore the problem while millions of families are impacted? Come on! They are going to try something. And while there will be a minority of people crying “no bailout” the vast majority, from big business to consumer groups, will be begging for a bail out.
And like I said…But don’t worry. It won’t make any difference in the end. It never does!
I just think writing your Congressman to ask them not to help other (voting) Americans (even though they were stupid!) is DOA.
They will try. They will do something, even to keep up appearances.
But by all means write those emails!
O.k. Joe.
Do nothing. Even if it won’t work you might have said your peace.
Then f us all. I don’t think you are right. Wedge getting elected against the interests of big business you bafoon. The little people do matter if they speak up. Believe me, I do know. I’ve been in politics for a number of years and it does make a difference.
But o.k. Joe. Don’t do anything. That will work. Keep bitching and doing nothing. Yeah right, that will work.
My experience proves otherwise. Politics is a tricky business and it takes perseverance, even when you think you don’t matter.
So go ahead Joe, bitch away. Don’t do anything.
Those emails matter more than you think, especially when you are trying to win a primary candidate election.
Continue being a dolt Joe.
Sorry Ben but this is just so stupid I have to go barf. As far as a bailout is concerned and as to the future well being of our economy I’m just not going to tolerate that kind of BS. It’s stupid.
I do know in my profession that pressure at the right moment works. Given the upcoming federal elections and the extent to which this issues crosses both party lines there is the potential to have an impact.
For those of you who wish to sit back and think that ‘big business’ (revealing too much here but that is from both sides of the political spectrum) will control this, it will if you let it.
I’ve seen this on various levels but volume of response means a lot. Usually it is from one side or the other, politically. But this issue crosses party lines and has the ability to influence, you all decide.
Great post, Nova.
Thanks for the kind words! lol
BTW, go ahead and write those emails! Don’t let me stop ya!
Good luck! You are going to need it!
Sub-prime meltdown will be history when the election comes arouund. Either it will go away, or become a huge financial mess of which sub-prime is a small part.
All the talk is just window dressing. But I agree that we need to write to all our political leaders and wannabes. Tell them ‘No Bailout.’
No they won’t listen to you. But they will listen to a thousant yous.
novasold, thanks. I just left a comment in the comment section where the subprime mortgage article was. I voiced my opinion that there should be absolutely no bailouts of real estate buyers or mortgage bankers.
Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, Skadden Apps are among her top 10 contributors:
http://www.opensecrets.org/politicians/contrib.asp?CID=N00000019&cycle=2006
All her friends were making a bundle of money the past few years. She was never curious where all that money was coming from?
Give me a break
Looks a bit like Sen. Dodd’s list of contributors.
Like many have said…Dems or Repubs…nobody has our best interests in mind. We need to stand up for ourselves.
Here is what I posted to Hillary’s blog:
Wendy,
First off, let me say I will vote for Hillary or Obama, whoever wins the primary. They are both good candidates. Now, on with the main issue at hand:
There are many parties responsible for the epic run-up in housing prices over the last 5-6 years. Mortgage lenders / Real Estate Agents played a big role, of course, but so did borrowers.
Once upon a time it was standard advice to buy a home that was 3x your yearly salary. Prices have gone way above this level nationwide in the past 5-6 years. People got into loans that they sometimes could not really afford before resets which are now (or will be in 1-2 years time) killing them.
You have to take personal responsibility for the biggest financial decision you will ever make. To those that signed papers without reading the fine print, they deserve what they have coming to them.
To people that were truly “scammed”, there are remedies in the court of law that can be pursued. What is not needed is a huge bailout for the subprime market. Like it or not, subprime is just the beginning of the housing meltdown. Alt-A is next, and then A (or “prime”) will be hit. They will be hit hard.
If a bailout is at hand for subprime, one will be necessary for Alt-A and later the prime markets. Prices are headed down (mean-reverting) to their long term trend, and nothing can stop this, unless the gov’t wants to step in and buy massive amounts of mortgages. Doing so would drive inflation to possibly their highest levels ever, as we as a nation are already deeply in debt (more than we have ever been), and a number of large bailouts would severely exacerbate this problem.
You also have to realize what subprime is composed of, in addition to innocent borrowers with less than stellar credit:
- Flippers buying investment properties with subprime loans, properties that have now gone bad
- People who have blatantly lied on stated income loans for something they could never afford
- Illegal immigrants who if their mortgage goes sour might, along with recent & future job losses in the construction industry (and many more to come in the service and retail industries), leave the US.
Realize that most subprime borrowers, despite their intentions, also borrowed 100% or more (in some cases) of the value of a depreciating asset. They are also paying huge portions of their income for the mortgage payment. Even if the government subsidizes their loans, many (and my guess is most) of these borrowers will be foreclosed on.
If this is the case, what will happen is the bailout will only help the large investment banks, individual investors, and pension funds, as well as foreign governments, that hold mortgage backed securities. At least it will help them long enough to turn around and sell this paper (which the investment banks will do the quickest). Hence the bailout may well turn out to be a giant subsidy for the large investment banks.
Is this what America needs?
According to research by Robert Shiller in _Irrational Exuberance_, the inflation adjusted prices of existing houses over the past 100+ years has increased at less than 1% annually. The last 5-6 years has been a massive anomaly, and with all financial bubbles, reversion to the mean will happen, it just a question of how fast. Deflating bubbles are never successfully re-flated (at least in real, ie inflation adjusted, terms), so a subprime mortgage bailout will not work for the people who ‘need’ the help.
Ask yourself this: if you owned a mortgage on a home that was larger than its market value and this price continued to decline over several years, would you continue to hold onto it? How about if the mortgage payment, after subsidies from the gov’t, still took up 50% of your income? And how about if you could rent for a whole lot less? This is the situation most subprime borrowers find themselves in.
For the sake of our country, please do not do a subprime bailout. Do not open Pandora’s box.
you know besides all that bad stuff, hope came out of pandoras box, but for recent buyers I think you are right they need to abandon hope of ever making money on thier condos and houses. In this case hanging onto hope is more of a vice than a virtue.
Abandon hope.
In December 2000, I paid $210,000 for a 2000-sq ft home in Natomas Park in Sacramento. Currently probably going (define that how you want) for about $450,000-$500-000.
I wonder if Peter Schiff is right about going back to 2000 prices.
2000 sqft homes in Natomas are currently selling for about 420K. Believe me, there’s about 15 within 10 blocks of me.
June 2000 - 2200 sqft 4/3 in Folsom for $258K (options, etc.). Sold in July 2002 for $355. They’re going for the same 450K-500K now. I’d guess that prices will fall down into the lower 300s when all is said and done - about 2009. People that bought 2004 or after are underwater for the next decade.
Santa Clara Valley 2000 sq TH same complex tracked for price.. very similar with other homes/TH/Condos for delta %
1998 181K
2000 500K
2006 660K
50% aint going to do it. Inflation has been very low over the past 10 years. Price today shoule be around 225-250K
Yes, and even that is generous when you consider how little incomes have moved since then.
As I stated elsewhere, prices will likely overshoot to the downside. I wouldn’t be surprised to see these TH’s in the 100’s someday.
Off topic trivia…
The Coachella Valley was originally named “Conchella” Valley (Spanish for: little shells) and is spelled the way it is now, because of a spelling error, long ago and they just let it stick.
“‘I think there were two groups that really got into trouble,’ said Greg ‘There were the people who used interest-only or adjustable-rate mortgages as a tool to purchase more of a home than they could realistically afford.’”
OMG. Doesn’t this statement pretty much cover off anyone who bought in the last few years?? Does anyone on this blog know of a first time buyer who put 20% down and did conventional financing??
Gustavo Ramirez, broker in Oxnard, says that 20% of his customers were subprime customers.
Yooooooooooou idiot. You were getting every gangbang vato in Ventura County into suicide loans. You better get out of Dodge pronto. Once those murderers find out how fu#ked they are they’re going to trim your fingernails with a chainsaw. Ever see the movie “Scarface”?
My God this Ramirez guy is the dumbest realtor I’ve ever read about.
LOL
I see a lot of drive-bys in Oxnard’s future. Beer Me !!
Lke I said, Oxnard is burnt toast….
BubbleViewer: the 64K question is when. prices are very sticky going down which we all know and have heard over and over. What I look at is the historical turnover rate for SFH occuplied housing which during the past 35 years has averaged 6%. During the 05 runup it was 9.5%.
This tells me that we will probably have significant inventory far into the future based on the traditional low demand turnover rate in RE. This doesn’t mean that a hunter can’t find good values in the market but the combination of slow demand combined with normal CPI tends to hold prices up for several years. Maybe it will be different this time and prices will fall quickly, but inventory would still be sky high. No crystal ball here.
more people calling for a government bailout! This is gonna suck if the gov bails these morons out.
“John Taylor, president and chief executive officer of the National Community Reinvestment Coalition, said foreclosure not only devastates the homeowner’s credit rating, but also tends to lower the value of properties nearby.
“We’re not anti-subprime. There’s a role for them. They’re important. But these exotic, nontraditional mortgages that are designed to strip wealth need to be eliminated,” Taylor said.
He wants lenders to restructure loans to help people stay in their homes, and has called on the Bush administration and Congress to amend rules governing the Federal Housing Administration so that the agency could refinance subprime borrowers’ loans that are in default.”
http://biz.yahoo.com/rb/070318/usa_subprime_dream.html?.v=4
‘“We’re not anti-subprime. There’s a role for them. They’re important. But these exotic, nontraditional mortgages that are designed to strip wealth need to be eliminated,” Taylor said.’
They had a huge role in the bubble, but that is ending now that it is no longer fashionable to hand out money to people with no financial means to buy the house the loan enabled them to purchase. Why liberals thought this was a good affordable housing strategy will forever baffle me.
“Why liberals thought this was a good affordable housing strategy will forever baffle me….”
Even more baffling is thinking this was anything but supporting the ownership society (that would be the group that were denied their rightful gains from the 80’s and 90’s busts).
“Sorry kids, if our Ponzi housing scam will place a hardship on your lives, but we have our own futures to worry about”. Damn those Libs !!!
Oxnard is toast. There will be a nasty spiral of drugs, gangs, crime, and bankruptcy and it will become dangerous to stop at red lights there by this time next year. It is horribly overbuilt by very low quality tract housing and now those construction workers who were making $15/hour are back to $3-5/hour fruit picking jobs. The schools are poor, the air quality is poor (even though it’s coastal), agricultural chemicals are everywhere, gangs are worse south of Saviors Rd than they are in East LA, and anybody with real job prospects will likely move elsewhere. Prices there will decline 50% if not more.
Awaiting bubble rubble: On Google maps Saviors Rd runs North South, do you mean east of Saviors Rd?
‘do you mean east of Saviors Rd?’
Oops, I meant as you go south on Saviers, around Channel Islands Blvd you’ll be in serious gang territory. Port Hueneme has got some pretty severe social issues as well.
When these stats were recorded Oxnard was not too bad, check back in 3 years: http://oxnard.areaconnect.com/crime1.htm
“Regina Miller says she is tired of ‘throwing away $1,520 each month’ to rent the two-bedroom apartment in Long Beach, Calif. But at least for the foreseeable future, a house may be out of the question. ‘
——————————————
Well as soon as i can buy a house that is slighly more then what i am throwing away on rent, then i’m in the game
but since owning here in NYC is easily double the rent i am paying, and yes you can find great deals in 2 family homes owned by old people for 40 years…..i am so gald to toss away a lot less money each month then to a corporate apartment house or a vastly expensive kondough!
I just wrote to hillary Clinton on the subject of bailing out subprime.
Thanks! She approached me and asked what I thought the market was doing… My wife was upset since she thought I brought it up. I’m LONG past trying to convince anyone about anything - it’s a complete waste of energy, but my Sister-in-law is an attorney and couldn’t tell you the difference between a stock and a bond, much less why it would matter that the fed changes rates or lenders tighten standards (this was the focus of our discussion). I can’t wait to visit and grab a take-one or two in six months!!!
I’m posting this on the bottom but responded above as well.
One of the easiest ways to blunt this entire bail-out thing is for anyone reading this blog to email their congress people but also hit the presidential candidate blogs.
I know a few congress people and have met two presidents. This kind of feedback does matter so hit all of their blogs and email them.
I’m betting that this blog has a massive readership. Volume of response matters on these issues so go for it!!
NYCityboy posted a letter he wrote earlier. Good on him. But we all need to hit all of their blogs plus the individual candidates blogs.
Be heard!!
nova
try this
http://fcta.org
be heard locally too
Thank you, NOVA. I’ve written Sen. Dodd, and will continue to write to all the candidates & current representatives.
Agree that we ALL need to do this. Numbers do count.
“Regina Miller says she is tired of ‘throwing away $1,520 each month’ to rent the two-bedroom apartment in Long Beach, Calif. But at least for the foreseeable future, a house may be out of the question.
So is throwing $1520+ interest payments away to the mortgage banker any better than $1520 per month to a landlord?
I’ve never written a politician in my life but I have strong feelings about this topic. Here is what I wrote
Dear Mrs Hillary Clinton,
I’d like to comment on the subrime crisis and your concern over bailout of the industry and the people effected by it. First I’d like to tell you a little about myself, because I think it may shed some light on this topic. I am a proud father of 2 beautiful children and my wife of 11 years xxxxxxxx.
I am not only an electrician with xxxxxx in Boston but I own a very successful wedding business. My wife runs the business during the week, so I can commute over 1 hour to Boston every day. Im not looking for any sympathy all I mean to convey to you is that my wife and I work extremely hard to net the $125,000 a year that we pay taxes on.
I consider that to be an upper middle class income, and you would think that should afford me a fairly decent home. However, the average colonial in my area is well over 400,000 where the average family income in our area is around 60,000 a year, nationally its 42,000 or so. In years past there was a traditional method for calculating ones ability to pay for a mortgage, that figure was approximately 2.5 to 3x income. At 60,000 a year most families should only qualify to buy a home for 180,000 with the standard tried and true method of the fiscally sound past. So how is it that the average home in my area is over $300,000 ?
The reason for this run up in prices and the ability to make payments on these mortgages at least initially are due entirely to Subprime and Alt-A mortgages.
These suprime loans have made it easy for people to become reckless, and fiscally irresponsible to buy homes. Thus creating a shortage in supply and running prices up for people like myself who try to save to put money down on a home. At 40 years old, I could not realistically pay off a mortgage at the current prices with the traditional 15 or 30 fixed mortgage today before I retire.
I’ve been watching this real estate bubble take place over 4 or 5 years now, when I came to the conclusion prices were rediculous. When you can rent a whole house for 1/2 the price of ownership, it doesnt make much mathematical sense. That is exactly what i do currently, I rent a home.
The reason this happened is simple, its emotion. People are emotionally attracted and attached to homes. After all its the american dream to own your own home. However, everyone is not entitled to a home. Some people lack the financial discipline and responsibilty of home ownership. These people have always rented in years past and if they wanted a home they had to work hard and contribute to society. People had to live within their means.
The reason people got in over their heads is simple, they wanted to make easy money by buying and selling their house, subprime lending was the means to do it. They even have several TV shows, explaining how easy it is “Flip that house”, and “Flip this House”, perhaps you’ve seen them. I’ve read several stories in the media which are easily found on the internet how some people with modest incomes were buying 4 or 5 homes and quickly selling them.
Now that homes prices have stagnated for much of the country over the past year or so and the real estate party has ended everyone is pointing fingers. From Lenders to fiscally irresponsible individuals, now everyone is looking to be bailed out and crying fowl.
All bailing out this mess does, is make it harder for people like myself who are hard working and fiscally responsible, to own a home.
I’m going to watch carefully the political fallout ,what is sure to become a crisis in the upcoming months. I want to know what i should teach my children. Its also a learning lesson for my wife and I, whether i should have bought a 500,000 home with 0 down, and a teaser rate of $1500.00 and expected the government to bail me out with tax payers money or did we do the right thing by acting rational in an irrational time.
Honestly Mrs Clinton, I believe this country is at a great turning point. We consume whatever we want, without thinking about the outcome. We need someone like yourself to say enough already. We have to take responsibilty for our actions, we are not entitled to whatever we want. We can not spend our way into prosperity.
In closing I would just like to add that losing your house do to a loss of job is tragic and I feel sorry for people like this. However, currently the jobless rate in America is at an all time low currently under 5% if I’m not mistaken. Perhaps the reason they are losing their home is because they were living beyond their means. If they simply rented an apartment or house, which contrary to the media is not a dirty word, they would have a roof over their head and be able to save for the future.
That is an excellent letter which deserves to be treated with complete consideration.
I in turn will be writing my own letters to every single presidential candidate who is advocating any form of bailout.
I am truly sickened now each time I read one of the sob stories about how “they were talked into” getting in over their heads. Where is the accountability?
What about us???? We are going to end up being the true victims in all of this.
SKB
When writing a letter to an elected official, you need to do the following: 1) Keep it short 2) state clearly what you want and 3) tell them that your vote is dependant on this issue, if true.
The two published letters in this thread fail that test. Great letter to the editor material, but remember who reads these! A staffer, who marks a talley about the topic, and whether its for or against, and whether its a vote-influencing decision.
Be concise.
Here’s a suggested letter:
Dear elected so-and-so,
I’m outraged that you would propose a bailout for greedy, stupid people who borrowed more than they could repay. Do not, under any conditions, offer my tax dollars to help people who cannot add or read stay in a home they can not afford. I know this sounds harsh, but since *I* was a responsible adult, and did not borrow more than I can repay, I fail to see why I should pay more taxes to help those who did. They did it of their own free will.
I, and many others, have wisely chosen to rent. We will be watching for this bailout, and we will never forgive you, or vote for you, if we see you do this.
Signed,
A voter
The worst part about this bubble is prices could decline 50% and they would STILL be no bargain. Better, but no bargain.
Everyone wants to be hedgy and throw out figures like 20 - 50%
Considering prices skyrocked some 400% in many bubble areas a 50% decrease would still leave 100% increase in just 7 years. I would venture the amount prices fall will be directly proportional to the amount they increased 100% increase - 30% decrease - 400% increase - 70% decrease. This will put prices back on the 6% annual track and still leave a very healthy 40% increase over 7 years - (My math is VERY off the top of my head and may well be off, so don’t run out to grab your calculators)
GH i totally agree with your numbers.. I ran the same figures and it makes totaly sense.
Sorry, but you’re way too optimistic.
Every action has an equal and opposite reaction, right? Coming off abnormally high prices we should see abnormally LOW prices. IMO expect everything to be given back and more.
I’m not saying prices that reached 4x norms will suddenly go to 1/4x norms; it may just mean 1/2x to 3/4x for an extended period. Regardless, the scales have to be balanced.
I have to ask Joe Mamma to forgive me. I’m sorry I got so hot under he collar above. I think I misunderstood you. Please forgive me.
All I’m trying to say is that this issue transcends party lines. Both parties are beholden to big business.
But if enough people speak up it will result in alot of votes lost, if this an issue important to you.
My political contacts cross party lines so speak up,I KNOW that does matter.
Don’t think for a minute that if we cause a fuss it won’t register with the candidate, because it will.
We don’t need no stinking bail outs. The investors for all these sub-prime loans can restructure the loans on some of this sub-prime junk . Now the real truth is that when the investors/bagholders find out that Wall Street rated this MBS junk higher than it should of been ,the bagholders are going to want to sue . I think that Wall Street should work this out with their pissed investors .
Yes, Wall Street is the cause of this credit bubble (and a complicit govt???). WS benefitted greatly from the bubble. They knew the risks, and should be the only ones to pay for it.
I was listening to the traffic report this weekend of the anti-war protest.
Should we have an anti-bailout protest?
At least I know with this blogroll it would be fun.
When will someone explain basic math to these people? If you’re interest payment on a mortgage (tax effected) is higher than your rent, you’re not “throwing away” your rent money by not buying — you’re actually saving money.
When will someone explain basic math to these people? If you’re interest payment on a mortgage (tax effected) is higher than your rent, you’re not “throwing away” your rent money by not buying — you’re actually saving money.
This needed to be said twice. I have one degree in that subject (very cold in my house), and it is sad that people have difficulty in letting go of the “housing appreciation” aspect of the puzzle. We can all foretell the future of what should happen, but what is happening now, leaves it easy to do the simple math.
Allow me to summarize the current situation with this statement:
NATIONWIDE REAL ESTATE PONZI SCHEME COLLAPSES!
A local market update for Amerige Heights in Fullerton, CA;
For Sale signs are sprouting up all over like dandelions on an untended field. Every week I walk thru this development I notice more. These are all very nice homes that sold for around $500-600k originally and where finished less than 2 years ago. Current askings are $800+. Apparently tho, they’re not selling much. At least not fast enough to avoid piling-up like they are.
I seriously don’t think I can take HC on the heels of W. I don’t know what I’ll do. I’m a conservative republican of 25 years, and the current occupant sickens me - makes me ashamed. The thought of her taking the helm keeps me up at night. I know for a fact an entire lifetime of financial planning and prudence would be jeopardized by her socialist redistribution agenda. We need Ronald Reagan and all we’re getting are the Groucho Brothers. For crying out loud, bring back Bill - but please, not that floundering husband of his
dd
Your so right… fiscal and monetary responsibility
I’d say first we need Volcker back, then we split the White House and Congress between the two parties. I’d love to see some good old gridlock again!
I want a Democrat as president and I want a Republican congress full of Repubs of the fiscal conservative calibre of Jon Kyl, Jeff Flake, John Shadegg, and Ron Paul.
If HC is elected, that means that this is not a democracy, it is an oligarchy. We would have been ‘ruled’ by only two families since 1989 - (that would be 24 years if she’s a one-termer). Who wants that?
Don’t forget the elder Bush as Veep under Reagan.
Too many great comments. No bailout. Neither party has taken any real responsibility. I am disgusted by the current Repubs (W and Cronies) and sickened by the Dems (HC and Co.to steal from the responsible and give to the irresponsible). The letter to HC was outstanding (but run through spell check). Lets tell em’ - no bailout. This whole thing chased my out of CA, and is the main culprit in it becoming a true sewer pit state, from San Diego to Weed, and from Needles to Cresent City, and from SF to LA.
from the boston herald monday morning:
“The subprime-mortgage sector’s sudden implosion is putting some frost into forecasts for the Bay State housing market’s crucial spring season.
“I was looking for a recovery - or at least stabilization - in Massachusetts home prices this spring, but now I think we might see a little more deterioration,” said economist John Bitner of Boston-based Eastern Bank.
Word of major problems in the subprime-mortgage industry emerged last week just as Massachusetts moved toward spring, the No. 1 home-selling season.
LA will begin soon. Anyone dumb enough to buy during this deserves what is coming.
Wow. Made it through the entire thread, and nobody noticed that one of our own was quoted in the Union Tribune article.
Congratualtions to Mark Miller (a very long-time poster here) for the mention in the UT!!!
Another HBB’er in the MSM.
Damn! Just heard on the radio a sign spinner in so cal was gunned down today!
http://abclocal.go.com/kabc/story?section=local&id=5132708
I say if they are up for re-election, no matter the party, they need to go. If they’ve been in there, they’ve contributed to the mess. It’ll never happen, but I’d like to see people in there that are middle class without tons of money. Maybe then they could relate to normal everyday people and problems.