March 22, 2007

“We’re Not Doing Those Loans Anymore” In California

The Wall Street Journal reports on California. “Some mortgage companies such as New Century Financial are halting new loans to borrowers with blemished credit histories, while others are tightening lending standards. Some lenders are backing out of loan agreements, leaving borrowers scrambling for more expensive financing. Borrowers in the gray area between prime and subprime, a category known as Alt-A, are encountering tighter lending standards, as are buyers of investment properties.”

“‘Four or five months ago, I could get a loan for zero down,’ says Howard Shatsky of Los Angeles, who has been trying to secure financing for a real-estate investment. ‘It makes it hard for somebody without a very high credit score to get a loan,’ he says. ‘Right now, I’m a little nervous.’”

“‘If borrowers can’t afford to put any money down, they should stay out of the market,’ says Mitch Ohlbaum, a mortgage broker in Los Angeles. ‘You’re going to get so badly beat up on the rates and terms.’”

The New York Times. “Andrew D. Sobel in San Diego took out two mortgages to buy a $240,000 condominium in 2004 and is now facing its sale for $175,000. He could not afford higher monthly payments that took effect in September, when his loan was converted to a variable interest rate.”

“Countrywide, which services his loan, would not agree to modify the loan but was willing to accept the short sale. He could not refinance because the home is worth less than what he owes on the property. ‘There was never any effort to try to keep me in my home,’ he said.”

“‘If someone calls and says they want (to) do a 100 percent loan,’ said Jeff Jaye, a mortgage broker in San Jose, Calif., ‘my antenna goes up. My first question is ‘What’s your credit score?’”

The Contra Costa Times. “Realtor Christopher O’Brien is hoping the fifth time is a charm. His $449,950 listing in Pittsburg has been in escrow five times in the past three months after lenders canceled the subprime loans of four would-be buyers.”

“‘Most of the people, except the last buyer, had 100 percent financing,’ he said. ‘They had a pre-approved letter, but when they went back to the lender, they were told, ‘We’re not doing those loans anymore.’”

“‘Credit standards have been tightened,’ said Dustin Hobbs, spokesman for the California Mortgage Bankers Association. ‘There is going to be a lot more documentation required, with t’s crossed and i’s dotted.’”

“Although the East Bay has a relatively low rate of subprime loans because of higher housing costs that often push borderline borrowers to outlying areas, the rate was 10.6 percent as of December, significantly higher than San Francisco’s 5 percent.”

“California, as a whole, holds most, 22 percent, of the national subprime debt, said First American LoanPerfomance spokesman Bob Visini.”

“‘It’s essentially eliminating 15 (percent) to 20 percent of the market,’ said Ed Leamer, director of the UCLA Anderson Forecast. ‘What drove the California marketplace wasn’t foreign borrowers but entry-level buyers helped into the market by exotic loans.’”

“For Ezequiel Rojas, a bilingual loan consultant with Stellar Home Loans in Concord, the bust of subprime is a mixed blessing. ‘They were always coming in and being aggressive. ‘Hey, you got something for me?’ he said. ‘They would always come in here and want to talk to you about your files. It got to the point I would leave the office to avoid them.’”

“Rojas said they would ask what loan they were working on and say they could cut a better rate without any documentation or credit history. Around January, Rojas noticed that the salespeople stopped coming by, and that’s when the criteria began to become strict. The days of no proof of income and no documentation loans were gone.”

“‘It’s going to have a huge impact on the Hispanic market,’ said Rojas, president of the Contra Costa chapter of the National Association of Hispanic Real Estate Professionals. ‘Now the 100 percent financed loans are completely revolving around high credit scores.’”

“Rojas said he was aware that many of the problems came from unscrupulous brokers with loose requirements. Although he said he turned down people for loans, ‘There was always some subprime broker waiting in the wings.’”

“Now loans that are defaulting very quickly — within four months, according to LoanPerformance, could lead to large-scale foreclosures. The East Bay’s subprime loans that are late by 60 days or more rose from 2.1 percent in December 2004 to 12.4 in 2006, a sign of possible foreclosures to come, Visini said.”

“Economist Christopher Thornberg said the implosion was sped up by appreciation that stopped in mid-2006, but he said he doesn’t believe it’s a subprime issue. ‘It’s an adjustable-rate mortgage issue,’ he said. ‘Even in prime-rate ARMs you’re seeing spikes in foreclosures.’”

“‘We got a lot of people in a speculative mode, and that has huge consequences,’ he said.”

The Mercury News. “LoanCity, a wholesale mortgage lender based in San Jose, stopped funding loans as of Tuesday and will gradually lay off its approximately 350 employees, the company’s chief executive said Wednesday.”

“‘It’s just the tightening of the credit market,’ Rick Soukoulis, LoanCity’s founder and CEO said Wednesday. The company did not have enough working capital to adjust to the ‘warehouse’ banks’ new requirements, Soukoulis said.”

“Privately owned LoanCity, founded in 1999, funded about $6 billion in mortgages in 2006, Soukoulis said. It mostly loaned to borrowers with good credit - those known as ‘A’ and ‘Alt-A’ customers, he said.”

“Dennis Steinbach, owner of S&L Home Loans in San Jose, expects to see more wholesale lenders close or merge as banks tighten their lending criteria. ‘Every day this week I have gotten a notice from a lender who’s cutting off 100 percent financing programs of some kind,’ he said.”

From Bloomberg. “Some lenders say it’s high time that buyers are discouraged from buying real estate with no money down.”

“‘Could we have a little skin in the game from the borrower, please,’ said Rick Soukoulis, CEO at LoanCity, a San Jose, California-based lender that stopped making mortgages last week to customers who want to borrow more than 95 percent of the value of their house due to the shrinking secondary market. ‘Something to lose if you go into default?’

“LoanCity, which made about $6 billion in mortgages last year, went out of business on March 20.”

The Ventura County Star. “For the second year in a row, Ventura County’s population hardly grew at all, according to estimates released today by the U.S. Census Bureau.”

“Young families fleeing high home prices appear to be the biggest reason for the meager half-percentage-point increase in population between 2005 and 2006 to 799,720 people.”

The Union Tribune. “For the fourth year in a row, San Diego County saw thousands more people leave for other destinations than relocate here, cementing its position as one of the nation’s top 10 losers in that category, new census figures reveal.”

“That ranking is all the more stunning given that two of the counties ahead of San Diego – Orleans Parish and St. Bernard Parish in Louisiana – were devastated in 2005 by Hurricane Katrina.”

“Between July 2005 and July 2006, 42,034 more people moved from San Diego County to other places in the country than came here from elsewhere in the nation, according to county population estimates released today by the U.S. Census Bureau.”

“Since 2000, the net number of people who moved out of the county is even more staggering – 119,636, a figure greater than Carlsbad’s population.”

“Other California counties joining San Diego County in the top 10 counties with the greatest migration losses are Orange and Los Angeles.”

“The continued movement from San Diego during the last few years parallels a prolonged run-up in housing prices and lagging incomes that have propelled large numbers of aspiring homeowners to seek less expensive areas where they can afford to buy a home.”

“Lois Howard, who’s moving in a few days from her spacious mobile home in Santee to a new house she is buying in Desert Hot Springs, said she searched in vain for an affordable place to buy in San Diego County after deciding to downsize.”

“‘I kept going further out and out from San Diego to see where I could own the land and afford something on that land, and this is so close to Palm Springs,’ said Howard, 75, who is purchasing a two-year-old, 1,100-square-foot home with a two-car garage for $185,000. ‘I have friends who are in similar situations and want to follow suit and do this.’”

“‘We just had a friend who moved to Texas because it’s less expensive. It’s just so expensive to live here,’ Howard said.”

“‘Right now, we’re looking at a slowdown but we’re not going to always be this slow over the next 23 years because our economics are still good and we don’t see a giant recession coming,’ said demographer Ed Shafer of the San Diego Association of Governments. ‘There’s a problem now in the housing market and to some extent this problem will wash out and housing might become more affordable in the region.’”

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Comment by Ben Jones
2007-03-22 14:12:17

‘Santa Nella and the open expanse to its south are largely the territory of foxes and grazing cattle. But by 2035, if all goes as developers plan, the region’s low, grassy hills will give way to nearly 30,000 homes.’

‘With a new 3,500-home proposal just added to the list, four major housing developments are now in the works between the San Luis Reservoir and the city of Los Banos. County officials say Merced’s growth is inevitable.’

Comment by NYCityBoy
2007-03-22 15:25:01

Doesn’t Los Banos mean “the toilets”? Gee, that sounds like a place I would love to live. Was the name “$hitville” already spoken for? Oh, that’s right, they call that Los Angeles.

Comment by John
2007-03-22 15:33:45

Actually it means “the baths.”

If you’ve ever been there toilet is probably a better description.

Imagine an isolated small farm town in the large, smoggy, dusty, and incredibly hot CA Central Valley. Imagine 3-4 months a year of ground fog so bad that schools are cancelled (or start at 10 am) and you can taste the exhaust in the air. In the summer the heat bounces between 100-115F. The nearest decent job (not fast food, car sales, etc.) is a 1.5 hours away in San Jose.

Now, imagine $400K houses out there…filled with people who commute every day because they can’t afford the $700K houses in SJ, as SJ is “environmentally friendly” and blocks local growth.

Comment by NYCityBoy
2007-03-22 15:39:30

When can I sign the paperwork?

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Comment by Not Mssing It
2007-03-22 16:12:02

and incredibly hot CA Central Valley

Yes that is what it takes to grow crops. I guess one could always flock to say, New Orleans, or East coast of Florida for a change of [weather]

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Comment by REhobbyist
2007-03-22 16:43:01

Do they really commute from there? It’s a hundred miles from the Bay area and Sacramento.

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Comment by John
2007-03-22 16:55:29

Yes, they really do commute from Los Banos and Patterson. They use Highway 152 by the San Luis Dam — it cuts over the mountains and up through Gilroy on the way to San Jose.

They also commute to San Jose from waaaay south of Salinas in Soledad, Greenfield, and King City…they are also farm towns that permit a bit of growth.

The situation is similar in the East Bay with people commuting from Tracy to Oakland, but that’s about 100x more crowded.

Thank the “I’ve got mine–you go away” rich environmentalists of the Marin, San Francisco, and Monterey areas for all that unnecessary carbon dioxide in our atmosphere.

Comment by desmo
2007-03-22 19:34:10

Yes, they really do commute from Los Banos and Patterson. They use Highway 152 by the San Luis Dam — it cuts over the mountains and up through Gilroy on the way to San Jose.

Not so bad, Casa De Fruita is on the way!

Comment by Patricia
2007-03-22 22:25:12

Casa de Fruita, oh man, the memories you just brought back, good ones for me, thanks

Comment by pismoclam
2007-03-22 17:59:17

What’s so bad? You can commute to Hollister or San Juan Batista over Pacheco Pass. Great Basque food in Los Banos or Dona Ester’s in San Juan Batista for Mex food to die for. Good golf courses as well.—– Just kidding.

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Comment by rex
2007-03-22 18:16:23

At least it isn’t downwind from Harris Ranch feedlots.

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Comment by pressboardbox
2007-03-22 18:47:52

Now if I could just sell my overpriced ‘investment ‘condos in FL I would move there. Sounds like paradise! I’m in!!

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Comment by JTZ
2007-03-22 18:42:32

The Baths. ( translator)

The highway (152) between Gilory and Los Banos where the San Luis Reservoir is located, is designated a scenic route.

I’m not a fan of Los Banos city proper, too far from San Jose to commute and in the hot Central Valley but it’s located along a popular highway corridor between LA and SF/SJ and growth is inevitable.

Comment by sleepless_near_seattle
2007-03-22 16:15:47

Disgusting. I don’t know the area but is this more fertile, productive farmland being carved up to put consumers on?

Comment by PDXrenter
2007-03-22 16:25:54

Yes, that’s exactly right. The sprawl in the entire central valley from Chico to Bakersfield is at the expense of fertile farmland.

Comment by Chuck Ponzi
2007-03-22 16:35:15

Because, we all know, by god, we haven’t got enough of the fallow stuff in the midwest.

Trust me, we are not running out of fertile land anytime soon. We’re running out of it on the West coast so people will have to pay more for their beans.

Boo hoo.

Chuck Ponzi

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Comment by PDXrenter
2007-03-22 16:57:02


Even an infinite amount of fertile farmland available does not mean that the the sprawl is at the expense of fertile farmland. What you’re saying is besides the point.

Comment by PDXrenter
2007-03-22 16:57:50

…that the sprawl is NOT at the expense….

Comment by Chuck Ponzi
2007-03-22 20:57:59

it’s not besides the point. At one point, Coastal California was considered fertile farmland, but we hardly want to support the infrastructure needed for everyone to live on nonfertile land while we only raise crops on fertile ground.

Upton Sinclair was a champion of the concept of land tax so that land is used for its most economically valuable purpose… making people live in barren wastelands so that we save a few thousand acres of farmland is laughable. You do realize that we have some 300Million acres of the stuff, and 40 Million additional acres of previously fertile farmland have reverted to forest over the past 80 years due to advances in farming, right? We have enough land to feed the entire world in just a few “flyover” states. I know, I grew up there. There is absolutely no reason that California needs to have farmland… that’s exactly the reason that we have high land prices, because California arbitrarily decided to protect farmers by ensuring it takes 7 years to convert previously agricultural land to residential property; so this decision wasn’t made yesterday due to the bubble… it was planned long before that. One of the last things we need here in California is more farmland.

Chuck Ponzi

Comment by Troy
2007-03-22 21:07:49

Interesting factoid: the crops grown with Federal irrigation district water deliveries produced more wealth for California than all the gold dug/washed out of the hills. The Fed water projects were financed by land value taxes in the early 20th century.

Comment by Matt_in_TX
2007-03-22 17:56:08

It’s pretty funny that some of these companies were making loans that the current (today’s) market can no longer support up until a week ago and are now out of business a week later, laying off their 350 employees. (LoanCity, from two reports above.)

I guess it is unclear whether this company went bankrupt due to loan buy backs like some of the subprime companies. If they did, I can only laugh at their market forecasting abilities. At least some of the companies tried to pull back 6 months to a year ago. (NEW?)

If they just stopped writing loans and are on their way toward retirement in Burmuda, then I can only say… good timing!
(Of course, if they are stopping trying to avoid already contracted obligations, then they are back to scum again.)

Comment by ex-nnvmtgbrkr
2007-03-22 14:24:00

“‘If someone calls and says they want (to) do a 100 percent loan,’

Who doesn’t call that wants a 100% loan. I nearly fell out of my chair over the last couple of years the few times we would actually find someone with funds available for a downpayment.

Comment by arizonadude
2007-03-22 14:32:06

I am very surprised to hear how bad credit standards got.I thought it was kind of a joke about the phrase, fog a mirror and you can get a loan, but it is really true.How do you loan these people 500k w/ bad credit? I certainly wouldn’t loan a person with a bad history anything.The system is so screwed up.The lenders knowingly have been makeing bad loans and selling them to some pretty ballsey investors in my mind.

Comment by GetStucco
2007-03-22 14:35:50

“The lenders knowingly have been makeing bad loans and selling them to some pretty ballsey investors in my mind.”

The situation makes me wonder whether said ballsey investors assumed a bailout would eventually make them whole?

Comment by Red Pill
2007-03-22 14:47:10

“The lenders knowingly have been makeing bad loans and selling them to some pretty ballsey investors in my mind.”

The investors may not have been so ballsey. Aren’t the rating agencies getting some heat now for misrepresenting risk? Maybe dupe investors. Dupes on both ends of the great housing boom intestinal tract!

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Comment by arizonadude
2007-03-22 15:26:03

I certainly would not invest in any mortgage backed security of any sort right now.These investors must of had their heads in the sand to not know what was going on.

Comment by tj & the bear
2007-03-22 16:35:05

Just read that someone created an MBS ETF. Sounds like an obvious short target.

Comment by death_spiral
2007-03-22 20:20:51

MBB=Mortgage Backed Bombshell?

Comment by NYCityBoy
2007-03-22 15:27:16

I don’t think so, Stucco. That would have required far more thought than any of these daredevils could muster. I think they had been caught hook, line and sinker that “prices will always go up”.

Even now, I don’t think these people can fathom a falling market, let alone an outright crash.

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Comment by ex-nnvmtgbrkr
2007-03-22 14:42:52

Actually, in this market, a 5% minimum down is insane because the borrower is immediately up-side-down. Considering that if a person is forced to sell, you take out 6% realtor fees plus another 1% - 2% for title split, and you gat a guy who is already in the hole. You throw in a little depreciation on top of it, the dude is really hosed. No, I’d say 10% minimum if it was my money, and that would be pushing it.

Comment by Housing Wizard
2007-03-22 15:12:14

No question about it ex-nnvntgbrkr 5% is not enough . Anything over under a 20% down loan needs to be insured IMO and you know that means good credit and solid proof of income .
IMO the bagholder investors somehow did not know the real risk of the loans . Wait until we hear their side of the story .
By the way, your funny as hell since your exit from the business .

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Comment by ex-nnvmtgbrkr
2007-03-22 15:26:21

It’s interesting how the mortgage biz can steal your sense of humor. Food tastes better too. I no longer try to run down stray animals. I stopped having angry sex with the wife, although I think she misses it.

Comment by Housing Wizard
2007-03-22 15:36:15


Comment by Joe Momma
2007-03-22 15:38:42


Comment by sleepless_near_seattle
2007-03-22 15:45:34

Priceless, ex-brkr, priceless.

Comment by HarryD
2007-03-22 15:50:17

that is too funny

Comment by Darth Toll
2007-03-22 16:33:57

Wait, I thought you were a chick.

Comment by WaitingInOC
2007-03-22 17:50:36


Don’t worry, I’m sure your wife will get you angry just so that she can have some that angry sex again.

Comment by sfv_hopeful
2007-03-22 18:17:45

That was the funniest thing I’ve read on this blog in a LONG time..!

Comment by AZ_BubblePopper
2007-03-22 15:32:27

What differentiates a subprime buyer from an AltA or higher credit score based loan? A few FICO points, that’s it. What happens once an AltA buyer hits reset and misses a few mortgage payments or other bills for that matter. Yep, that AltA loan all of a sudden joins the subprime ranks. Eventually every foreclosure will be attributed to a subprime borrower, instead of what the real cause is - A LOAN THE BORROWER COULD NOT AFFORD ON THE BASIS OF PRICE.

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Comment by GetStucco
2007-03-22 14:34:41

I guess that explains why builders are (reportedly) adding the required 3% downpayment on FHA loans to the loan balance (which would, btw, make it a 0% downpayment requirement). And there are still downpayment assistance programs around as well. Have Senator Dodd and his politician buddies figured out yet that no downpayment requirement reduces the chance that a loan will ever be repaid?

Comment by NYCityBoy
2007-03-22 15:38:20

Careful, Stucco. You will offend Joe Momma. Next he will regale you with the tale of how Al “if your baby had a fever” Gore funded the Internet. He won’t mention the fact that Gore has probably funded a million failed projects and just happened to stumble upon one good idea. Even a blind squirrel finds an acorn once in a while. I love when people use Gore’s Internet accomplishments to boost him. This guy would be hard pressed to tell the difference between an IP address and a telephone pole. I bet if you gave good old Al a computer router he would probably eat it.

On a housing topic, these lenders are obviously still out of control. They will try to skirt the downpayment guidelines. People should only be able to lend out money as if it is their own money they are lending out. When the lender has no potential consequences to face, there is nothing to keep the faucet in the off position.

Comment by sleepless_near_seattle
2007-03-22 15:50:47

C’mon, give him some credit. At least he’s never called it the “internets.”

Oh yeah, housing: Lenders, realtors, David Lereah bad. Renters, savers good.

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Comment by GetStucco
2007-03-22 15:59:17

“People should only be able to lend out money as if it is their own money they are lending out.”

Personally I have no problem with investors losing millions on MBS investments that helped lenders to lose millions by loaning money to buyers so they could purchase homes they could not afford and who are now getting foreclosed — UNLESS somebody (like Senator Dodd) asks me to pay for the cleanup.

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Comment by NYCityBoy
2007-03-22 16:02:41

That’s the problem. Some grandstanding piece of Lereah politician will always squeeze the teat of the honest man to pay for all the liars.

Comment by az_lender
2007-03-22 18:07:49

Caveat emptor. I agree with Stucco that the idiots who buy bad notes are as undeserving as the leeches who originated the bad notes and the borrowers who signed the bad notes. Personally, although I seem to hold only good notes (for now), I will not expect a bail-out if I have miscalculated about my clients’ ability to repay.

Comment by Carlsbad Renter
2007-03-22 16:59:30

Ummm…Al might have thought he funded it, but it started out as a DARPA project (ARPANET anyone?). Then, corporate America took it and ran (L3 anyone?). I guess we can clap for companies like Global Crossing who way overbuilt the bandwidth (even in some stupid locations) and went bankrupt doing it.

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Comment by NYCityBoy
2007-03-22 17:19:21

Yeah, I’ve never stopped to find out the truth behind Gore’s claims. It wasn’t worth my effort. I always thought even this funding notion sounded phony. The genesis for Darpanet was Sputnik. That convinced the government to develop a communications network that could survive a nuclear war. I just thought maybe old Al had done some funding way down the line. It sounds like even that is B.S.

There was a rumor that Big Al misstook a patch panel for a plate of fettucine and finished the entire thing in one sitting. You could access Google from his a$$.

Comment by mort_fin
2007-03-22 17:03:17

Sen. Dodd’s investigators told him all about it a year and a half ago.

Comment by GetStucco
2007-03-22 19:36:25

But he waited until he was in the running for the White House to make political hay. Next time he rags on regulators for waiting three years to take action, I hope someone throws this back in his face…

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Comment by az_lender
2007-03-22 18:10:59

“If someone calls and says they want a 100 percent loan” my policy is Just Say No.
If someone calls and says they want a 90 percent loan my policy is still Just Say No.
If someone calls and says they want an 80 percent loan, my new policy is Just Say No.
Today I have given someone a 70 percent loan. Maybe not a good idea…time will tell. I always feel I have the first year’s interest as an extra cushion: i.e., if the borrower defaults before my 2007 income taxes are due, I’ll report all of the first few payments as principal pay-down, and report no income at all on the loan (unless I can be made whole in the re-po process).

Comment by North GA Dave
2007-03-22 14:24:24

“‘If borrowers can’t afford to put any money down, they should stay out of the market,’ says Mitch Ohlbaum, a mortgage broker in Los Angeles. ‘You’re going to get so badly beat up on the rates and terms.’”

I liked the quote, until he gave the reason as because of high rates. This type of buyer should “stay out of the maket” because he is not qualified to be a homeowner, not because the rate is high.

Comment by GetStucco
2007-03-22 14:24:41

British schadenfreude has kicked in. But just wait — they will not emerge unscathed…
Housing markets
The trouble with the housing market
Mar 22nd 2007
From The Economist print edition

After the great global housing binge, the hangover is kicking in. Especially in America
James Fryer

JUNE is National Homeownership Month in America. National Foreclosure Month would be more apt. Some corners of the mortgage market—notably “subprime” loans aimed at those with poor credit records—have a nasty case of dry rot. One subprime borrower in eight is behind with the payments. As the introductory “teaser” rates on more loans expire and monthly payments outrun the means of more borrowers, hundreds of thousands of Americans are set to be thrown onto the street.

Only a few weeks ago you could find voices claiming that the worst was over for America’s sagging housing market (actually, a few minutes ago). That is harder now. Although it is too soon to be truly gloomy about the broader economy, any structural surveyor would spot tightening credit and a glut of housing supply. The foundations are not much better: falling house prices are no good for consumer spending, which has been propping the economy up.

Comment by lainvestorgirl
2007-03-22 14:27:25

Kudlow on CNBC now, minimizing subprime meltdown, saying it’s only like 1% of all mortgages…

Comment by GetStucco
2007-03-22 14:31:39

Downplaying the magnitude of the problem will come back to bite the cheerleaders, in much the same way as falling housing prices are currently calling into question the credibility of those who until recently insisted “California real estate always goes up” (Watts, Lereah, Leslie Appleton-Young, etc.).

Comment by Louie Louie
2007-03-22 20:50:18

Myth #2: Silicon Valley House Prices Never Go Down

Check out the chart

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Comment by arizonadude
2007-03-22 14:33:54

He is on coke today.He is argueing with some other dude right now about personal responsibility.I hate listening to his bullsh@t about the goldilocks economy.

Comment by aNYCdj
2007-03-22 15:06:50

I am PROOF that employers REFUSE to hire Smart people today

Hundreds of resumes, and nothing…….

Yet i get bombarded by 40-50 60 Unlimited income scams a week….when i post a resume on Craigslist or Yahoo,

Goldilocks…yes if you want to commit Mortgage fraud…i could have had many many jobs offers…

Sh*t why did i keep my standards high…..I’m tired of bill collectors calling me.

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Comment by arizonadude
2007-03-22 15:23:09

Start your own business somehow.Look toward something on the internet.The thought of actually putting together a resume seems more of a hassle than being creative and starting a business.

2007-03-22 15:36:35

A resume is a dead letter. You have to get on the grapevine. Have you joined LinkedIn ?

Comment by Joe Schmoe
2007-03-22 15:40:01

Dude, hang in there. You are sounding bitter lately. Don’t be bitter. I know it’s hard not to be bitter when you are out of a job, vicious cycle and all, but you’ve got to stay on an even keel.

Just chill. Keep sending out resumes and find something fun to do. You have vacation time now. It’s an involuntary vacation, but the fact remains that you’ve got lots of spare time to do whatever you want. Go for walks, see areas of the city you’re not familiar with, visit museums, get into shape.

Just keep sending out those resumes and find something to do in your spare time and you will get through this. We’ve all been there.

Comment by sleepless_near_seattle
2007-03-22 16:13:46


I was where you are a year ago. I’d send resumes or apply online and hear NOTHING. Hell, if you don’t want to hire me, just TELL me so I’ll quit hoping. I’m still sporadically receiving rejections for jobs I applied for online over 6 months ago! Gee, thanks.

I got lucky and a former employer got wind I was looking and hired me back. Wasn’t my first choice, but I had bills to pay.

Sounds like you have a few bills to pay already, but is there any room/interest in learning a new skill like software dev?
Only reason I use that as an example is that former acquaintances of mine in your industry had interests in tech/software and did it as well as dj, sound, etc.

Looking for a job is more work than actually having one, especially now. Low unemployment, my a$$.

Comment by cassiopeia
2007-03-22 17:06:28

Keep looking, dj. I was there too. It sucks. I got laid off and it was four months before I found another job (which paid about 70% of my previous salary, but I took it anyway). The day I started the new job I had to pay penalties for breaking a CD, because I had no more money in my checking acct. Those were my savings from my first 5 years as a professional and I felt terrible. It sure taught me to keep saving money for a rainy day. But it’s hard to save if you are not making any money, and that’s where you are at right now. Hang on. Look everywhere. Something will come up, even if it’s only temporary. Good luck.

Comment by pismoclam
2007-03-22 18:18:46

Same thing has happened to alot of people. Laid off, worked out, became a bartender for six months, got down to a two handicap, then became a fly fishing guide, cleared the sinuses at eight thousand feet with dudes who didn’t know the back from the front of a horse.Good for your mind but not for the pocket book but ok while young. Will probably live an extra ten years.Have lasted as a RE investor for over 40 years now. When the market comes back in five or six years will strike again! Shorting KB and WM at present.

Comment by txchick57
2007-03-22 14:27:33

Love the British way of putting things:

Some corners of the mortgage market—notably “subprime” loans aimed at those with poor credit records—have a nasty case of dry rot:

How about a case of crotch crabs?

Comment by ex-nnvmtgbrkr
2007-03-22 14:36:52

How ’bout crotch rot. Crabs are easily eradicated.

Comment by NYCityBoy
2007-03-22 15:43:22

Is anybody else wondering how nnv knows that?

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Comment by SD_FotBotD
2007-03-22 16:00:06


Comment by imploder
2007-03-22 20:54:29

“I’ve got termites in me tenderloins!”

Comment by GetStucco
2007-03-22 14:29:08

The economic consequences may yet be large; so may the political ones. Most of the gains from America’s recent economic success have been scooped by those at the top of the pile—not least in the financial industry (aka Senator Dodd’s constituents). Now many lower down face unpayable debts and the loss of their homes.

Populist politicians may well make much of the contrast between a second house in the Hamptons and no house at all. Instead, they should stop making a fetish of homeownership. That people are free to borrow to buy their own home, should they wish, is fine. That politicians should encourage homeownership for its own sake is not. That they foster it with tax breaks, as they do in America, is daft.

Comment by sf jack
2007-03-22 15:01:54

I love “The Economist” cover titled “The trouble with the housing market”

A red, white and blue house, with an arrow pointing downward from it underwater.


I’ve been waiting for this cover about two years now…

Comment by sf jack
2007-03-22 15:05:26

“I just don’t think we have what it takes to prick the bubble… I don’t think prices are going to fall, and I don’t think they’re even going to be flat. ”

Diane C. Swonk, chief economist at Mesirow Financial in Chicago

New York Times, “Trading Places: Real Estate Instead of Dot-Coms”, 3/25/05

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Comment by Brian in Chicago
2007-03-22 15:51:02

I said this last week (I think) but Mesirow Financial has skin in the game - they’re providing financing for a condo project in Chicago that has been nothing but a hole in the ground for the past 5 months (I can see it out of my rental window). They tore down a historic building to create that hole in the ground too.

Don’t listen to anything from them. They’re trying to save a dead project.

Comment by GetStucco
2007-03-22 15:08:09

Makes a rather nice contrast to the July 13, 2005 Time magazine cover (”Home $weet Home”), neh?,16641,20050613,00.html

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Comment by HarryD
2007-03-22 15:40:33

Time and Newsweek - when they start praising something on the cover -get ready for the downturn

Same thing with dotcoms

Comment by Neil
2007-03-22 16:56:41

I have to buy a copy of this economist. Too good!

Got popcorn?

Comment by bubbleglum
2007-03-22 15:24:41

Cover would have been more effective if the house had been part of the Titanic superstructure as it plunged downward.

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Comment by pressboardbox
2007-03-22 18:53:47

No, Titanic floated for a while as it sank and found the bottom relatively quickly. Not so for RE>

Comment by NYCityBoy
2007-03-22 15:47:10

Stucco, the “ownership” society has never been stronger. We have more people than ever that are wholly and totally owned by the banking industry. I guess they forgot to read the fine print. Mission accomplished!

Comment by GetStucco
2007-03-22 16:10:09

We are, more than ever, a renter society at this point. But the thing that is rented is money, and many “money renters” are paying a very high “rent,” especially when you consider the likely prospect of future foreclosure.

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Comment by cassiopeia
2007-03-22 17:16:58

GetStucco, I don’t think I’ve seen anyone put it better. It’s just missing a headline: the death of the American Dream.

Comment by txchick57
2007-03-22 14:26:15

I don’t know how people sign the papers for these loans. I’d have a panic attack and run from the room. I can’t even borrow money for a used car!

Comment by seattle price drop
2007-03-22 16:15:29

It’s because you’re going in with the belief that you have to REPAY the loan, TXck. That IS scary.

Now if you just go in not caring whether it ever gets repaid- it’s a snap!

Little attitude adjustment will get you in the door and out with a 600K Mcmansion to call your own.

Comment by PDXrenter
2007-03-22 16:36:14

Where I grew up, debt was considered worse than living with a terminal illness.

Comment by We Rent!
2007-03-22 19:32:45

You from Japan, too? :mrgreen:

2007 is going to suck.

Comment by waaahoo
2007-03-22 14:26:43

“Andrew D. Sobel in San Diego took out two mortgages to buy a $240,000 condominium in 2004 and is now facing its sale for $175,000.

25% below 2004 prices and falling.

Comment by arizonadude
2007-03-22 14:35:14

He better stock up on lube.

Comment by ex-nnvmtgbrkr
2007-03-22 14:45:37

And invest in a good butt-plug.

Comment by imploder
2007-03-22 20:36:03

“There was never any effort to try to keep me in my home,’ he said.”

Ummmmm…. Andrew, I think that’s called making the payments…..

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Comment by crispy&cole
2007-03-22 14:47:44

Where is Auger-In:

How about a round of…

Comment by ex-nnvmtgbrkr
2007-03-22 18:02:23

He got shot down a couple of months back by a “keep-our-blog-sodomy-free” zealot. I’m guessing he’s a little gun shy now.

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Comment by imploder
2007-03-22 20:32:13

no, he’s a little “bum” shy now….

Comment by GetStucco
2007-03-22 14:37:54

That sounds typical; for example, condos in my zip code (92127) that sold for as high as $648,000 in summer 2005 have recently been listed at $489,000 (25% off sale).

Comment by crispy&cole
2007-03-22 14:39:31

But I thought real estate only went up?

Oh I guess that was wrong!??!

Comment by NYCityBoy
2007-03-22 15:49:23

“Prices have fallen and I can’t get ‘em up.”

Comment by az_lender
2007-03-22 18:17:17

prices need viagra?

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Comment by MBRenter
2007-03-22 14:40:30

“‘There was never any effort to try to keep me in my home,’ he said.”

…and what effort did you put forth, Andrew?

Comment by SDJen
2007-03-22 14:49:11

Which one of your multiple homes would that be, Andrew?

Comment by Blackbox
2007-03-22 14:50:48

Yep, i guess he was looking for someone to save him from he’s own stupidity!
Well, sorry genius, no bailout for you!

Comment by phillygal
2007-03-22 16:49:08

Well, sorry genius, no bailout for you!

this needs a sad face: :-(

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Comment by passthebubbly
2007-03-22 15:12:57

He should be FORCED to stay in his home and to come up with the money to make the payments, whether from working 110 hrs/week, eBaying his personal possessions, selling his bodily fluids or whatever.

Comment by Norcal Ray
2007-03-22 15:09:03

Wow, that is a bad hit from 2004 prices. It seems the SFR prices are doing better in SD. Is that right GetStucco?

Comment by GetStucco
2007-03-22 15:36:47

DataQuick’s most recent release suggested small YOY price declines, but those medians hide a lot of local variation, and also do not capture the value of homes that sit on the market forever because the seller will not drop the price.

The median SFR list price on SD is between $599,000 and $600,000 (there are over 200 homes currently listed on that range). I don’t think most of these sellers will have any luck attracting a buyer if downpayment requirements and income documentation are reinstituted.

Comment by crispy&cole
2007-03-22 14:29:54

Realtor in deep do-do with a FLOP, I exposed him:

Comment by P'cola Popper
2007-03-22 14:40:30

Dude!!!!! You busted that shyster big time! Way to go Crispy!

Comment by crispy&cole
2007-03-22 14:48:20


Comment by Blackbox
2007-03-22 14:59:04

Another real estate genius!
Before it literally was a no brainer, and now you need a brain. Well, timing is everything, haha

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Comment by subsonic22
2007-03-22 15:12:51

I checked, guy did 100% financing with Fremont no less! I didn’t check this part, but he must have stated it was a principal residence to get 100%. That will have a pretty hefty PPP. My guess at least $15k.

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Comment by crispy&cole
2007-03-22 15:21:53


Comment by diemos
2007-03-22 16:07:46

And how does one check what loans there are against a property?

Comment by 85249 is Toast
2007-03-22 16:50:59

Check the county recorder’s website. Usually, you can search by name of trustor or trustee. Some counties allow free access to this information. Others require a fee of some sort.

If you don’t know the name of the property owner, you may be able to do a parcel search on your county assessor’s site.

Comment by MBRenter
2007-03-22 14:54:00

“Instant equity” is the biggest sham of the market, and anyone who falls for that deserves to get their ass handed to them.

Comment by CardboardBox
2007-03-22 17:08:29

I was in the Carmel Mountain Claim Jumper a few weeks ago. A group at the table next to us were talking about it being a good time to buy in San Diego. One of the women said something about prices being down 10% or so, then followed that comment by saying “instant equity”. Huh?

No one else disputed it, so they must have agreed with her.

Comment by pressboardbox
2007-03-22 19:45:33

Instant mistake. Ask any stock trader about that logic.

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Comment by Arwen U.
2007-03-22 18:38:54

It depends on what the meaning of instant is.

Got Oatmeal?

Comment by captain jack sparrow
2007-03-22 15:10:26

Great Job Crispy. Keep up the good work. You are great. Thanks.

Comment by tarvos
2007-03-22 15:11:16

Oh man, that Jason character wasn’t expecting that. LMAO, Crispy

Comment by Neil
2007-03-22 17:02:11

Well done Crispy.

I’m tired of their games.

We’ll have months and months of this fun. ;)

Got popcorn?

Comment by simi.uber.alles
2007-03-22 15:20:15

Shady realtor story of the day:

A friend is trying to buy a townhouse. He paid for his own appraisal, and it came in significantly under the asking price (my guess is 6-8%). Bank doesn’t like this since it increases the LTV, so he told the realtor that he would not offer more than the appraised value.

Realtor comes back to him and says, “Why don’t you just increase the size of your down payment?” Doesn’t even mention the inflated value of the house, only concerned about reducing the LTV and making the sale.

Comment by NYCityBoy
2007-03-22 15:55:34

They saw a bunch of realtors running around in one of our local Taco Bells here. They immediately closed the doors and demolished the building. That type of infestation can’t be treated.

Comment by sleepless_near_seattle
2007-03-22 16:41:48

Nice work, Crispy! I always think of how the market will affect realtors income but I always forget how many of these people also have “investment” properties.

Complete conflict of interest and oh the horror their lives must be.

Comment by Rich
2007-03-22 17:21:30

Loved it Crispy. I have been an agent since 92′ and never a realtor. I hate that realtors have ethics crap.

From dipshits site…
“I am held to a high standard of Code of Ethics that a non-REALTOR® does not have to be held to.”

Not only is he a stupid hypocrite, but he is a stupid illirerate one.

The realtor badge is such a crock of shit, you show me any important real estate issue that the board of realtors helped a buyer or seller with and I will kiss your ass.

The Department of Real Estate news letters are filled with actions taken by the state against bad agents that the boards realtors never did a thing about. I have seen countless actions taken (by the state) against shitbag agents and the realtors never said a thing to them. It is all about getting paid over $1,000/year by each dipshit so he can say “I am ethical realtor!”.

In well over 10 years I can not point to one client that had a problem with me not being a realtor. That all these brokers make their agents become realtors is beyond me. Being a realtor has no advantage at all, just more scumbags parting fools and their money.

Comment by sleepless_near_seattle
2007-03-22 18:53:57

As an agent do you have to disclose yourself as such if selling your own home? Thx

Comment by Brian in Chicago
2007-03-23 06:46:46

It is required here, but by state law. You can’t assume that all states have this requirement.

The NAR Code of ethics also requires it, so yes, the agent should have disclosed it. After all they are held to a “higher standard,” right?

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Comment by TokyoRenter (Ex Culver City Resident)
2007-03-22 20:20:51

They should have something like the CFA or CPA certification. CHP ?

Comment by ex-nnvmtgbrkr
2007-03-22 14:33:16

LoanCity, a wholesale mortgage lender based in San Jose, stopped funding loans as of Tuesday and will gradually lay off its approximately 350 employees, the company’s chief executive said Wednesday.”

Gradually my ass. They candy-coat it everytime. Hey LoanCity employees, don’t drink the KoolAid. Better line up a job right now.

Comment by crispy&cole
2007-03-22 14:40:12

Alt-A and A. No problems with these loans?!??!

Comment by subsonic22
2007-03-22 14:55:30

Here is an e-mail I got from one of our lenders that primarily finances alt-a loans. I think I am going deaf by the various LO’s jaw’s hitting the floor when they found out there will be no back points on their 100% deals. This will definitely leave a mark.

Due to continued price instability and deteriorating market conditions, effective with all rate locks as of March 23, 2007 we are temporarily suspending above par (premium) pricing on all Alt-A Primary Residence and Second Home loans with LTV/CLTV > 95% and all Investment Properties with LTV/CLTV > 90%. This applies to all doc types and prepayment penalty options.

Comment by ex-nnvmtgbrkr
2007-03-22 15:01:27

Really? You mind saying who this is? If this becomes standard, it’s huge. Now the borrower will have to come up with and document another 5K - 10K in closing costs.

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Comment by subsonic22
2007-03-22 15:14:00

Tri-Star Lending group, aka Pinnacle Financial

Comment by Neil
2007-03-22 17:04:55

Wow is right…

Having to pay closing costs. Of course, snigger, if they cannot come up with 5% down, where the heck are they going to find another $5k to pay the mortgage broker?

Oh… this just gets better and better…

Got popcorn?

Comment by imploder
2007-03-22 21:01:26

“no back points on their 100% deals. This will definitely leave a mark.”

imploder knows this “mark” well…. this mark is known as “skid mark”…..

TXchick, … time to go “long” on Hanes.

Comment by crispy&cole
2007-03-22 15:11:51


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Comment by Catherine
2007-03-22 16:00:27

god, I love it when you mortgage guys freak out!

Comment by WaitingInOC
2007-03-22 17:47:27

Can someone please explain what “above par (premium) pricing” means (both literally and what effect it has on loan officers)? I don’t know enough about the loan broker biz to understand this, but it obviously seems important. TIA.

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Comment by Subsonic22
2007-03-22 19:58:45

I would say the majority of loan officers are paid on a commission basis. Our income is determined by how much a loan generates in revenue for the company. When a mortgage broker, or a direct lender for that matter, closes a loan, fees are generated from the loan itself. A broker/company can generate fees in three ways. They can charge front points, a percentage of the loan amount. They can charge junk fees, charges paid to the lender/broker for specific services performed with the loan such as processing, underwriting, administration, admittedly these can be pretty rapacious. They can also get paid with back points, or charging an above market rate. These loans are more profitable for the end buyer, who in turn pay the originator more money upfront. Therefore, if the higher the rate I charge, the more profitable the loan, the more I get paid in “the back”.

Let’s say we have a loan of $200,000 that closes. I am the LO on the deal. Just for kicks we’ll say it’s an alt-A deal. If I close a loan with no back points, I can only generate income “in the front”. This means I would have to charge a percentage of the loan amount in order to make the loan worthwhile for myself and my company. Let’s say I charge the borrower 2 “points” upfront. The origination fee would be $4,000. I can also collect junk fees as well. If I am an honest mortgage broker, I might charge a nominal fee to cover any processing charges, or maybe I don’t charge it and have the mortgage company take the processing charge out of the origination fee. The problem with getting revenue with front points is that they make closing costs more expensive. By charging “back points”, I don’t have to charge or I can offer lower “front points” or lower closing fees. On Alt-A and subprime loans, back points are usually limited and make the interest rate much higher than a conforming loan. For example, to make the maximum back points (2.00) on an alt-a or subprime loan, the rate would have to be at least 1.25% over par. On a conforming loan, it is much easier to make back points. On a 30 year fixed rate, I could make 2.00 back points by charging a rate maybe .375 or .50% over par. In these cases, I usually don’t charge “front points”. This is why it’s important to get several quotes from mortgage lenders, even the “direct” lenders, because they ultimately get paid on the rate you end up paying. It is a joke to read the paper on some the loans that are being quoted to potential borrowers. We all sell to the same sources. You know if these lenders were telling the truth about the rates they are offering, they would lose money. They most likely cover themselves by stating the rates were only for the previous week and, by golly, the market had changed since then.

What makes the Tri-Star/Pinnacle deal important, is that if you want to originate a 100% alt-a loan, is that no matter what rate is charged, the secondary mortgage market doesn’t care. To Wall St. or whomever are buying these loans, whether it’s a 7% or 8% interest rate, it is no more profitable to the investor due to the default risk. A lot of folks on these boards have been complaining, and rightfully so, that these type of higher risk loans haven’t been priced high enough to cover the inherent risks. Well, that is changing for the forseeable future. As a loan officer/mortgage company, if you want to make these loans, whatever you make will be made on the front which have to be passed on to the borrower or seller if they are paying closing costs. These loans just got a lot more expensive to make.

Comment by tg
2007-03-22 20:54:11


Comment by tarvos
2007-03-22 14:34:13

“‘If someone calls and says they want (to) do a 100 percent loan,’ said Jeff Jaye, a mortgage broker in San Jose, Calif., ‘my antenna goes up. My first question is ‘What’s your credit score?’”

Jeff’s first question should be “What’s your income?” There they are, looking at Fico scores…

Comment by Joe Momma
2007-03-22 15:44:08

Jeff’s antenna has been broke for a long time.

Comment by az_lender
2007-03-22 18:23:25

As indicated above, my first question would be, “Who in the world led you to think that I ever lend 90% or 100% of anything?”

Comment by hd74man
2007-03-22 14:34:30

“‘Credit standards have been tightened,’ said Dustin Hobbs, spokesman for the California Mortgage Bankers Association. ‘There is going to be a lot more documentation required, with t’s crossed and i’s dotted.’”

Wait’ll everybody see’s the crackdown on appraiser’s…

There will be no more slick Willie, “check the average box” shit on POS depreciated garbage and grab your comp’s from a superior neighborhood to support your rubber stamp value.

The loan documentation will be the easy part.

Comment by NYCityBoy
2007-03-22 16:01:30

Fraud starts with the appraisal and the crash starts with the appraisal. Poetic!

Comment by seattle price drop
2007-03-22 16:26:37

Yes, I too am eagerly awaiting the appraisal crackdown.

A couple years ago, the stories were mainly overbuilding, DOMs, slight price drops. Then we moved to mortgage horror stories to the extent that now it’s a majority of the articles.

Next stop: A deluge of Appraisal tightening stories.

Oh man, THAT is going to be sweet.

Comment by TRich
2007-03-22 14:35:00

“Economist Christopher Thornberg said the implosion was sped up by appreciation that stopped in mid-2006, but he said he doesn’t believe it’s a subprime issue. ‘It’s an adjustable-rate mortgage issue,’ he said. ‘Even in prime-rate ARMs you’re seeing spikes in foreclosures.’”


I think there will be more correlation between foreclosure and the type of loan than between foreclosure and the type of borrower. There are plenty of people out there that have always made their payments on time on whatever debt they had, had high credit scores, and then got in way WAY over their heads with an interest only or option ARM in order “buy so they wouldn’t be priced out forever.” And declining values and a complete halt to sales means these people are SCREWED no matter what they do, unless they magically start making a heck of a lot more money to cover a REAL payment that includes all the interest and some principal (not bloody happening). How bad would it suck to have to come up with 10ks or 100ks in order to get out of house that’s eating you alive?

Comment by GetStucco
2007-03-22 14:40:34

‘It’s an adjustable-rate mortgage issue,’

There are two main problems, IMO:

1) Loans were routinely made that traditional lending standards would have ruled out, due to the low probability they would ever be repaid.

2) The loans were facilitated by backloading the repayment schedule: using low initial payments with a high risk of a future reset that would result in future foreclosure.

Subprime versus Alt-A is a red-herring distinction.

Comment by az_lender
2007-03-22 18:27:29

Exactly right. I have still not really understood why the banks were not making the (apparently safe) 9%-10% loans that I make. Too small potatoes, I suppose. High cost of processing relative to actual cash flow from interest. I don’t have to pay myself a salary to make little marks when someone sends in $358/mo.

Comment by SF Bay
2007-03-22 19:04:28

But wait - if you’re only originating loans and selling them off immediately, or better yet, never putting them on your balance sheet (co-issue?) your risk is limited to the put-back probability, right? So you get the origination fee, and you might keep the servicing, but someone else gets the privilege of holding the bag - errr, the principal.

The traditional lending standards were valid, but by the late ’70s early ’80s, the term “velocity shop” was used to describe the originator who would pass-through (remember that term?) as many mortgages as quickly as possible to MBS buyers. Not only would this velocity maximize revenue, it would also neutralize capital requirements because the loans would not stay on the balance sheet. Then temptation to lower standards in order to increase the volume flowing through became irresistible, it seems.

Comment by GetStucco
2007-03-22 19:33:53

“…if you’re only originating loans and selling them off immediately, or better yet, never putting them on your balance sheet…”

But now the big Wall Street kingpins are going to make the subprime companies eat those risky loans gone bad. Oops — no subprime lender — they just went belly-up…

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Comment by turnoutthelights
2007-03-22 16:08:07

I swear Thornberg posts here on a very regular basis.

Comment by sleepless_near_seattle
2007-03-22 21:12:50

‘It’s an adjustable-rate mortgage issue,’

Wait a second! It’s not even an ARM issue yet. A lot of the recent FC’s aren’t from resets, they’re from an inability to make the monthly payment.

“What we’re seeing, I believe, is a runaway train that is only starting to gather speed. These recent foreclosures reflect large numbers of early payment defaults — that is, homeowners defaulting before the fixed-rate periods on their loans expire and the adjustments kick in.”

Comment by mikey
2007-03-22 14:38:15

“‘Could we have a little skin in the game from the borrower, please,’ said Rick Soukoulis, CEO at LoanCity, a San Jose, California-based lender that stopped making mortgages last week to customers who want to borrow more than 95 percent of the value of their house due to the shrinking secondary market. ‘Something to lose if you go into default?’

Ha ha ha… about 4 years too late in ASKING that question NOW that the Lenders and Flippers are about to have ALL of the Hides Tacked to the WALL !

Comment by BanteringBear
2007-03-22 15:35:51

“‘Could we have a little skin in the game from the borrower, please,’ said Rick Soukoulis…Something to lose if you go into default?’”

Sure, there’s skin, as long as the buyer just sold a home. Otherwise, good luck finding someone with 10% down at todays prices. Say goodbye to your customers!

Comment by Reno Girl
2007-03-22 15:53:35

Bantering, I tracked down the story - apparently a family duped by a local realtor and broker and then ended up in a foreclosure situation. According to the letter, there were multiple violations committed. There is no follow up, so I don’t know if any government agencies ever responded to their pleas for help. Scroll to the comments, there are 2 lists of local realtors that are suspected of being involved in fraudulent deals in the area. Check it out here:

Comment by Joe Momma
2007-03-22 15:47:39

Didn’t Rick’s company go bust because he didn’t require this “skin” years ago? Who put a gun to your head, Rick?

Comment by JRinUT
2007-03-22 14:38:21

“‘Four or five months ago, I could get a loan for zero down,’ says Howard Shatsky of Los Angeles, who has been trying to secure financing for a real-estate investment. ‘It makes it hard for somebody without a very high credit score to get a loan,’ he says. ‘Right now, I’m a little nervous.’”

Perhaps this guy (you know, the one with the not so high credit score) should avoid real-estate “investing”. He obviously isn’t that great with money matters. This all makes me a ‘little nervous’.

Comment by BubbleViewer
2007-03-22 14:55:39

I nearly fell off my chair when I read this one. Where do these people come from? Is there an endless supply of stupid people out there?
No money down, for a real estate “investment”. WTF?! And he’s nervous! Nervous you won’t be able to destroy your life? Jeez, if you have money, sure there are many places where you can lose it, but typically in the past, as I think Bob Dylan sang, “If you ain’t got nothin’, you got nothin’ to lose.” Only in the housing bubble could idiots find a way to lose money they didn’t have in the first place.
Oh, lord, we are in deep trouble.

Comment by BanteringBear
2007-03-22 15:42:20

“…says Howard Shatsky of Los Angeles, who has been trying to secure financing for a real-estate investment…”

“…Heard the sound of a clown who cried in the alley…And it’s a hard rain’s a-gonna fall.”

Comment by desmo
2007-03-22 15:49:05

Only in the housing bubble could idiots find a way to lose money they didn’t have in the first place

I nominate this for “Best Statement of the Year”.

Comment by NYCityBoy
2007-03-22 16:17:02

I think Bob Dylan sang, “If you ain’t got nothin’, you got nothin’ to lose.”

It was actually
“when you ain’t got nothin’
you got nothin’ to lose
You’re invisible now
You got no secrets to conceal”

“Nobody’s ever taught you
How to live out on the street
But now you’re going to have to get used to it”

Even more appropriate from the same song.
“Princess on the steeple
And all the pretty people
They’re all drinkin’, thinkin’ that they’ve got it made
Exchangin’ all precious gifts
But you better take a diamond ring
You better pawn it babe”

I think Mr. Zimmerman foretold the fate of the flippers.

“Once upon a time you dressed so fine. Threw the bums a dime in your prime.” Now the bums will have to feed dimes to the flippers. Beautiful!

Comment by seattle price drop
2007-03-22 16:40:19


thanks for the reminder about “Like a Rolling Stone”. I dug it out and listened and it literally sent chills down my spine.

This has got to end up being the theme song for the mid 2000’s.

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Comment by passthebubbly
2007-03-22 15:15:59

‘It makes it hard for somebody without a very high credit score to get a loan,’

yeah, that’s kind of the point of having credit scores in the first place.

Comment by NYCityBoy
2007-03-22 16:18:49

How do these frigging idiots that say such stupid things ever get a job, doing anything, anywhere?

Comment by JWM in SD
2007-03-22 20:02:02

It’s Clownifornia, what do you expect? When I moved here I couldn’t believe how many stupid people I encountered here.

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Comment by Lisa
2007-03-22 14:39:04

“‘It’s essentially eliminating 15 (percent) to 20 percent of the market,’ said Ed Leamer, director of the UCLA Anderson Forecast. ‘What drove the California marketplace wasn’t foreign borrowers but entry-level buyers helped into the market by exotic loans.’”

Without entry level buyers, the whole chain freezes up. If exotic financing really is on its way out, there’s no way prices won’t fall pretty dramatically. It’s the only thing that “enabled” people to pay these insane prices. How many buyers can afford them, really afford them? How many will qualify under stricter lending standards? Not enough to absorb all that inventory, that’s for sure.

Comment by GetStucco
2007-03-22 14:42:16

“foreign borrowers”

Does he include recently arrived immigrants with no residency papers in his definition of foreign? Because I believe they were disproportionately targeted for liar loans, especially around LA (look outside your window, Ed!).

Comment by cassiopeia
2007-03-22 17:23:17

It’s the only thing that “enabled” people to pay these insane prices.

It’s the only thing that pumped up the prices too…

Comment by Curt
2007-03-22 14:39:55


They should have gone with AAble Loans; that way they get listed first in the Yellow pages!

Comment by subsonic22
2007-03-22 14:57:17

Sorry, AAAA Mortgage comes first.

Comment by ex-nnvmtgbrkr
2007-03-22 15:06:20

They first came out as In the late 90’s they were on the cutting edge of the whole automated thing, with everything being done online (submissions, locks, pricing, guidelines) Everyone soon followed suit.

Comment by Norcal Ray
2007-03-22 15:19:49

what happened to your ex-coworkers? I would think a lot of them quit the RE field.

Comment by ex-nnvmtgbrkr
2007-03-22 17:53:50

I had 3 LO’s left by the end of last year. I’d kinda been hinting over the previous months that I was going to bail, but I made sure they had places to go and didn’t leave them high and dry. They went to work for other brokers, but I think their incomes are coming from the second jobs they had to pick up. No one is making money in the biz right now, at least not enough to pay the bills.

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Comment by stockmarketguru
2007-03-22 14:43:49

Has anyone been to downtown San Diego lately? Nothing but condos coming up….10k in 08 expected. How can the SD economy handle this with all the people wanting out? Who can afford a 500k tin box with out the 100% financing now?

Comment by GetStucco
2007-03-22 14:51:29

There is the downtown condo glut, and then there is also a McMansion glut not too far away from downtown:

If you look closely at the photo on this web site, just above the photo of homes in the foreground and below the mountains in the background you will notice what looks like farm plots. In fact, those are building lots for future McMansion construction. There are many more new McMansions in this area than the photo suggests, and I don’t know where the end users who will buy them will come from, given the displacement of wealthier SD households by immigrant families of lesser means since 2000…

Comment by hd74man
2007-03-22 15:19:24

RE: Santaluz…

Great soundtrack…

I thought I was watching the “Battle for the Alamo”.

Comment by sigalarm
2007-03-22 15:22:26

GS is dead on. The vast and un-explainable sea of McMansions is truely a horror to behold. It is as if everyone decided to try and get the ultimate house, no matter what the cost. I have no idea who they are going to sell them too.

What is even more unreal is that in spite of the net population outflow, the freeways are more clogged than ever. I have to wonder just how many “guest workers” there are in this area. Those are the people who are going to get it the hardest.

Comment by GetStucco
2007-03-22 16:06:49

It is as if everyone builder decided to try and get construct the ultimate house,…

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Comment by BanteringBear
2007-03-22 19:54:09

You couldn’t be more dead on GS. I’ve been all around Northern NV, Northern CA, Oregon, and WA and the overbuilding is absolutely horrendous. But the fact that they chose the wrong product is even more troubling. Those dark developments we talk about are readily burning through many builders cash. This is going to end really, really badly for these guys. There is simply little, if any, market for these monstrosities now. It’s hard to come up with the right words to put this dire situation into perspective.

Comment by GetStucco
2007-03-22 16:13:15

“What is even more unreal is that in spite of the net population outflow, the freeways are more clogged than ever.”

Cause and effect. When people commute from Murietta to downtown San Diego while $1m McMansions in Santaluz sit unoccupied, you end up having much more aggregate commuting miles than if folks live close to work. The I-15 freeway is consequently a parking lot from Escondido to the north every weekday morning and evening.

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Comment by Blackbox
2007-03-22 15:05:43

Only a tiny percent of the population in the whole San Diego County can afford a $500K mortgage with at least 5% down and good credit record for a first home. More Credit scores will be demolished with all the foreclosure, and those whole get out with some or any gains will be snakebit for years to come. Realestate investing will be a bad word for years to come. Prices are going down….today, tomorrow, and for the next 5 to 7 years. Geez, end of story!

Comment by GetStucco
2007-03-22 15:20:57

“Realestate investing will be a bad word for years to come.”

Eventually, yes, but the consensus or even awareness is not yet there on Main Street. And what if Senator Dodd ends up succeeding in his efforts to bail out the Casey Serins of the world?

Comment by sigalarm
2007-03-22 15:29:33

There are more than a few people in San Diego county with good incomes, savings and are sitting it out in rentals or in homes purchased 10+ years ago with mortgages below rent.

This must drive the RE zombies mad, to have this un-tapped customer base who refuses to engage because they do in fact have a clue and insist on staying out of the abbitior.

Oddly enough, houses in my area (92026) are in fact moving. At least the RE folks are hanging “sold” and “in escrow” signs out. The temptation to liquidate and go to renting is huge, but Mrs. Alarm is not quite ready to execute the “California Evacuation Plan”.

Comment by tarvos
2007-03-22 14:44:04

“Although he said he turned down people for loans, ‘There was always some subprime broker waiting in the wings.’””

Wow, suddenly an increasing number of righteous mortgage brokers invade the airwaves. Sure buddy, we believe that you turned down people seeking fuzzy loans.

Comment by NYCityBoy
2007-03-22 16:25:11

“I was just following orders,” they all responded.

Comment by P'cola Popper
2007-03-22 14:51:55

Don’t know if this has been posted but Blackstone files to go public. The end is near my friends…

Comment by GetStucco
2007-03-22 15:04:54

“The end is near”

Please elaborate for those of us who are not following this situation.

Comment by HarryD
2007-03-22 15:47:23

BLACKSTONE is a major private equity firm and for years has been managed by individuals very vocal about the benefit of private debt over publicly held companies -and its widely believed BLACKSTONE’s attempt to monetize their reputation - is the sign of a market top for these deal companies

Comment by GetStucco
2007-03-22 15:50:20

A public offering by Blackstone is a significant event in the world of private finance. Firms such as Apollo Investment Corp. (AINV21.19, -0.26, -1.2% ) and Kohlberg Kravis Roberts & Co. have offered bits and pieces of investments to the public, but Blackstone is offering access to a powerhouse that small investors have rarely enjoyed.

Is this your point? Time to suck in the small investors right before the hard landing (as usual)?

Comment by seattle price drop
2007-03-22 16:53:40

“Time to suck the small investors in before the hard landing”. Yup. They even said that out loud on CNBC.

Seems like anyone who’s buying *anything* right now, is buying at the top.

Except for food! I’m stocking up. I feel a burst of inflation coming.

Comment by GetStucco
2007-03-22 19:31:06

I guess it is dangerous to store gasoline around the house, or that might be something else to stock up on…

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Comment by Palisades Park
2007-03-22 14:54:14

Here are how the 50 states are ranked with respect to being dangerous. Funny how some of the most RE bubbly areas are near the top. Maybe frustrated RE agents resorting to a life of crime???

1 Nevada
2 New Mexico
3 Arizona
4 Maryland
5 Tennessee
6 South Carolina
7 Alaska
8 Florida
9 California
10 Louisiana
11 Michigan
12 Texas
13 Arkansas
14 Washington
15 Oklahoma
16 North Carolina
17 Alabama
18 Delaware
19 Missouri
20 Georgia
21 Illinois
22 Colorado
23 Ohio
24 Mississippi
25 Indiana
26 Pennsylvania
27 Kansas
28 Hawaii
29 Oregon
30 Massachusetts
31 New York
32 Minnesota
33 New Jersey
34 Kentucky
35 Rhode Island
36 Virginia
37 Nebraska
38 Utah
39 Idaho
40 Connecticut
41 West Virginia
42 Wisconsin
43 Iowa
44 Montana
45 South Dakota
46 Wyoming
47 New Hampshire
48 Maine
49 Vermont
50 North Dakota

Comment by passthebubbly
2007-03-22 15:17:39

North Dakota has no one to kill, nothing to steal, and in all likelihood, nobody you’d want to rape.

Comment by sf jack
2007-03-22 15:58:29

I don’t know anything about stealing or raping.

But the taxes will kill you in the Socialist Paradise of Vermont - ranked # 1 in individual tax burden!

Comment by Billy Boney and Ma
2007-03-22 16:27:42

But about 10 times as nice as most of California.

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Comment by sf jack
2007-03-22 22:07:42

I lived in both places and can confirm both are nice.

But Vermont 10x as most of California?

You must be joking.

Comment by NYCityBoy
2007-03-22 16:27:49

“North Dakota has no one to kill, nothing to steal, and in all likelihood, nobody you’d want to rape.”

But there is a good chance that you will die of boredom.

Comment by Housing Wizard
2007-03-22 21:28:59

LOL……. New York City Boy…Your killing me , have you ever noticed that North Dakota is never in the news . I just wonder sometimes what goes on in North Dakota and was it’s last big news story Custers Last Stand ?

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Comment by a-POP-ka gurl
2007-03-22 17:27:15

Wow…be nice, I was born in ND and most of my relatives live there, there is plenty of money there, earned by respectable hard working NICE people. I used to be Cinderella at Disney so I’d also say it’s safe to assume not all NDakians have an ice pick in their forehead either…

Comment by Lex Talionis
2007-03-22 19:23:52

I will second that many many nice scandinavian and germanic type girls in ND—unless you don’t like unspoiled blond,blue eyed bombshells.

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Comment by a-POP-ka gurl
2007-03-23 07:46:04

Thanks Lex.

Housing Wisard..Custer’s Last Stand…Little Big Horn (Montana…not ND)

As for entertainment up North, I’d take watching the natural spectacle of fire flies and actually being able to see millions of stars over inhaling smog any day.

And why ND’s not in the news…becuase they’re NICE UP THERE :-)

Comment by Arizona Slim
2007-03-22 16:11:09

The top three states have significant populations of illegal aliens. And some of them come here to commit crimes that Americans just won’t do.

Comment by NYCityBoy
2007-03-22 16:28:21

Now, that is funny stuff.

Comment by phillygal
2007-03-22 16:58:13

when my roommates’ boyfriend got busted I was certain he was going to jump bail and head back south of the border. (he’s illegal). Nope. He’s currently doing time in the county jail but they let him out on weekends when he works.

Wondering if this means illegals prefer life in the slam to going back to Mexico? Maybe he just doesn’t want to face the mothers of his children. Or his children even.

I guess in his mind jail is a better choice than facing his baby-mamas.

Comment by Lionel
2007-03-22 19:39:58

I’m guessing weather plays some role in this too. Lots of chilly states at the bottom: takes extra motivation on the part of a criminal to actually get out and commit a crime. Lots of warm states at the top: oppsosite probably true. Alaska scares me. Cold and near the top. Must be lots of criminal activity once it thaws.

Comment by rentor
2007-03-22 14:56:45

Why did Kudlow & Kreamer split up?

Comment by Home_a_Loan
2007-03-22 15:11:44

Probably an issue with “performance in the sack”…

Comment by rentor
2007-03-22 15:15:51

One like booyah
And the other liked goldilocks

Comment by arizonadude
2007-03-22 15:32:28

Kramer got tired of kudblows bullsh@t and got wanted his own show.

2007-03-22 15:38:18

It is obvious, Cramer is an egomaniac… he wouldn’t share a show with anyone.

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Comment by Lionel
2007-03-22 19:41:50

I have this horrible image of Kramer - he’s at home, and he’s got those same noise machines set up all over his house - and his wife and kids, who are forced to say “booyah” all the time, have to listen to this constant barrage of sound effects. Can’t shake it. He scares me.

Comment by BanteringBear
2007-03-22 20:09:49

Cramers BO was too much.

Comment by tarvos
2007-03-22 15:01:08

Nothing brings more value than buying a home in America’s most dangerous states:

NEW YORK ( — For the fourth year in a row, Nevada has earned the dubious distinction of being the most dangerous state in America, according to a survey published Thursday.

Based on annual statistics, Nevada had the highest crime rate among the 50 states across the country, according to Morgan Quitno Press, an independent researcher in Lawrence, Kansas, which publishes the rankings annually.

Top 10

1. Nevada
2. New Mexico
3. Arizona
4. Maryland
5. Tennessee
6. South Carolina
7. Alaska
8. Florida
9. California
10. Louisiana

Comment by palmetto
2007-03-22 15:28:25

Wow, I thought South Carolina was a sort of peaceful souther state and it is ranked worse than FLA? I’m shocked, I tell you, shocked!

Florida slightly more dangerous than CA? An interesting list.

Comment by tarvos
2007-03-22 15:36:31

oops, Palisades, it seems that we posted together.

Comment by rentor
2007-03-22 15:51:57

Top 3 dangerous states have lot of illegals.

Unlike Bush I believe the Mexican thugs come along with the regular families across the border. What them thugs gonna let the regular folks have a free pass. Hell if they are smart we’ll never know the criminals are?

Comment by Catherine
2007-03-22 16:10:09

As a pissed off resident of AZ, I can tell you there are more gang members per capita in Phx than LA. That’s a fact, from a top dog in law enforcement. And, there is more road rage than anywhere else (um..that was reported here a couple of months ago). Phx is a clearning house of huge groups of illegals and their “coyotes” are always shooting up a dozen people at a time. It’s a mess.

Comment by Arizona Slim
2007-03-22 16:13:14

And, Catherine, a lot of those illegals come through Tucson first. In fact, I’m convinced that one of my neighbors (who has one of those one-van shuttle companies plying the Nogales-Phoenix route) makes his money in the people-trafficking business. Perhaps in drug trafficking as well.

Comment by palmetto
2007-03-22 18:58:22

The HBB was promoted by a poster over on Dan Stein’s (FAIR) website. I sometimes lurk over there to see the latest on illegal immigration. They had a story on subprime and illegal immigrants. One of the posters over there wrote about our comments on the Spanish speaking only janitor lady who bought a $500,000 home and felt “discriminated against” when she had trouble getting her loan. We’re famous!

Illegals are never going to assimilate, bet on it. Heck, Gonzo was two generations removed from anchor baby-dom, graduated from Harvard Law and is completely unable to grasp simple Constitutional law concepts such as habeas corpus. Perversion of the law is a way of life for illegals, that’s why they are called illegals. They’re also professional victims and in the long run, victimhood will be the downfall. Victims are always victims, they’re always being taken advantage of, always having problems, always panhandling one way or another. It’s how they get by, for a while, but in the end a victim is nothing but a loser.

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Comment by simi.uber.alles
2007-03-22 16:35:01

For those who might not be aware, roughly 70% of Nevada lives in the Las Vegas metro. The #1 “state” should really read “Las Vegas.”

Comment by Arwen U.
2007-03-22 19:09:06

Virginia is misleading too - Richmond is tops for danger and murders.

Comment by Mr Vincent
2007-03-22 15:01:54

“What drove the California marketplace wasn’t foreign borrowers but entry-level buyers helped into the market by exotic loans.”

No, really?

You mean that 500k dump in Compton behind prison bars wasn’t really worth that much afterall?

We here knew this a long time ago!

Comment by Housing Wizard
2007-03-22 15:35:25

Correction …Entry level speculators not entry level home buyers .

I just don’t like it when they call these gamblers entry-level homebuyers when half of them never intended to even move into the place or wanted to sell within 2 years .

You would have hear how the REIC sold homes and loans in recent years to see that it wasn’t about home ownership at all but rather home appreciation and easy money .

Comment by HarryD
2007-03-22 15:02:09

IMAGINE if either interest rates actually spike at some point or there is in fact a legitimate recession - consider the hit on real estate then

Meanwhile in New England most sellers are still in the Land of Oz with prices within 5% of peak 2005/06 highs

Comment by NYCityBoy
2007-03-22 16:31:50

There will be a lot of people in MA screwing the pooch by the end of this summer. I sure hope little Toto can take the pounding.

Comment by WaitingInOC
2007-03-22 18:05:01

LOL. Too funny.

Comment by tj & the bear
2007-03-22 16:49:54

You’re in luck — we’ll get both!!!

Comment by GetStucco
2007-03-22 15:03:11

“Some lenders say it’s high time that buyers are discouraged from buying real estate with no money down. ‘Could we have a little skin in the game from the borrower, please,’ said Rick Soukoulis, CEO at LoanCity, a San Jose, California-based lender that stopped making mortgages last week to customers who want to borrow more than 95 percent of the value of their house due to the shrinking secondary market. ‘Something to lose if you go into default?’

Where did this idea that no downpayment was good lending practice come from, anyway?

Comment by Housing Wizard
2007-03-22 15:47:41

I believe the REIC ran out of people with down payments so somehow those so-call no down sub-prime loans came down the pike . How no down loans sub-prime loans got a a pass is the question and why the investors would of bought those loans is the other pressing question .

Comment by GetStucco
2007-03-22 15:51:43

Wizard — Did you click on the link? The policy came straight from HUD (signed into law by the CIC himself).

Comment by Housing Wizard
2007-03-22 16:05:19

But did Hud have such a low qualifying standard or is that something that the industry move into on their own pursuant to fraud .

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Comment by GetStucco
2007-03-22 16:14:14

Dunno. MrIncomeStream?

Comment by Housing Wizard
2007-03-22 17:21:00

Boy , I did just sound like him . My theory is that the guidelines were there but they were ignored and massive fraud by the front line loan agents/borrowers and appraisal rubber stamping became the name of the game because the secondary did not have defaults to know they were getting junk packages . A failure of regulation and check and balance but mania behavior driven by greed also .

Comment by combotechie
2007-03-22 20:59:45

Supposidly derivities were set up to insure the ultimate buyers for any defaults, thus minimizing the perception of risk.

Comment by mrktMaven FL
2007-03-22 15:05:29

Bailout? Right…. Credit and public policy is tightening and as it does people are going to get buried not bailed.

Comment by mrktMaven FL
2007-03-22 15:17:32

Editor is on the blink. Credit and public policy are tightening; as a result, people are going to get buried not bailed.

Comment by HarryD
2007-03-22 15:06:20

Asian savers awash in american dollars - a major major factor in making this credit bubble which fueled this real estate super-bubble -actually take place

Consider that as little as a year ago, there were still people in the real estate business saying “THERE WAS NO BUBBLE anywhere because not all areas in the country had experienced upswings” - which was an amazing bit of twisted logic that required all bubbles to hit all areas of the country (e.g even north dakota or omaha, ne) to then be deemed a true bubble - which of course is absolute nonsense

Comment by NYCityBoy
2007-03-22 16:34:45

“Logic and “the housing market” have had no place being in the same sentence for the past 5 years. Even now it is incomprehensible how anybody can’t see how f-cking stupid this whole thing was. There are a lot of dip$hits walking around this world. Too bad many of them are running the damn show.

Comment by Casa$Loco
2007-03-22 15:32:50

With house prices falling as fast as they are, 20% down is going to soon be the norm ….

Comment by Neil
2007-03-22 17:15:02

I restate, we’re going to overshoot back to 1970’s standards where 25% down on homes priced above “starter homes” will be required for those with good FICO scores. A previous thread noted that low FICO buyers are now being told to bring 40% down payments to the table. Pretty soon, they’ll be locked out and 40% down will be for mid/low-FICO scores (640 to 700).

Its only which month this year, not if.

Got popcorn?

Comment by plysat
2007-03-22 17:47:45

Oh I don’t know… That is probably true in some cases. But I troll the mkg broker forums, and people are still doing these loans.

Not as bad as it was, you need over 600-620 FICO, but there are still lenders willing to do %100, hell I even saw one that would do %125. Sure, some of the subprime only brokers are freaking out… But these toxic things are still out there. It’s frickin stupid!

Comment by tarvos
2007-03-22 22:25:16

“but there are still lenders willing to do %100, hell I even saw one that would do %125.”

Apparently these borrowers will go to their graves without grasping the concept of Net Worth.

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Comment by agentjmf
2007-03-22 18:24:21

This fascinates me. Was that really the norm in the 1970’s? If that’s really the case….good gawd.

on a sidenote, i watch the sfv everyday. inventory is exploding this week. i gotta believe VERY little is going off the market for the inventory to rise this fast.

Comment by Wickedheart
2007-03-22 15:39:29

If this Sobel dude had a brain, he’d be thanking his lucky stars he’s being liberated of his ghetto condo on Dandridge Ln in 92115 right next to the infamous Bates St. The slumlord who converted those nasty apartments to condos must have laughed himself silly all the way to the bank.

Comment by HarryD
2007-03-22 15:44:29

many of us in new england, having been through the mess in the early 1990’s prepared for years and are ready for any storm - so we are in great shape in terms of riding it out, but I can tell you this is going to be a huge mess in this region as these people w/o cash reserves and with huge loans along with thes (land of oz) sellers with asking at peak prices - are going to be in for a big shock

Comment by seattle price drop
2007-03-22 15:56:54

I love all this bad news about loans gone bad, loans that were available last month being unavailable this month, people defaulting on their stupid loans, homes falling out of escrow, everything.

Confession time: I had my eye on a home last year (coveting really) that was on the market for over 9 months. It went off the Zip a couple times but would always reappear about a month later. I guess it fell out of escrow a couple times. Price always stayed the same.

The third time it went off the list, it never came back. I’m hoping these people default while the market’s really falling. Sick huh?

As to the people in these stories who are now being denied loans, they do not know how lucky they are. They may be too stupid to save themselves, but Providence is stepping in to do the job for them.

Comment by Catherine
2007-03-22 16:17:27

Keep watching. They’re probably waiting for “spring selling season”. I’ve seen so many houses bounce on and off, trying to time “seasons”. Lots of realtors tell clients to wait until Easter or until school’s out, when families have time to look.

Comment by Housing Wizard
2007-03-22 15:58:57

A tighter money market is actually shocking people but hell did they think this aberration in lending could go on forever . I’m shocked that this sort of bogus sub-prime lending lasted as long as it did .

Comment by GetStucco
2007-03-22 16:04:13

Judging from the Wall Street and Washington banter, they are either in full denial, or else expecting to restart the underwriting-free lending debauchery later this year — it is hard to say which. The writer quoted below may have been heavily influenced by Christopher “No problemo” Cagan’s expert opinion…

Goodbye easy mortgage money
Subprime woes forcing borrowers to deal with tighter lending standards
By Amy Hoak, MarketWatch
Last Update: 5:01 PM ET Mar 21, 2007

CHICAGO (MarketWatch) — The era of easy mortgage money has disappeared in the wake of problems in loans made to some of the riskiest borrowers at the height of the housing boom, with lenders now asking for more financial documents, bigger down payments and proof of greater credit responsibility from would-be borrowers.
The tougher underwriting standards won’t prevent most mortgage applicants from getting a loan and they aren’t likely to remain in place for long, especially if the housing market regains its footing later this year.

Comment by Lisa
2007-03-22 20:36:39

“Judging from the Wall Street and Washington banter, they are either in full denial, or else expecting to restart the underwriting-free lending debauchery later this year…”

So many people are SO vested in this mania. People haven’t been saving for retirement (or saving for anything for that matter) because their house has been doing the saving “for them.” People will be very slow to realize all this paper wealth is dwindling by the month. And what do they have to bail them out? Negative Savings?? They’ll grasp at any straw that hints the party may restart some time soon.

Comment by NYCityBoy
2007-03-22 16:36:31

“but hell did they think this aberration in lending could go on forever ”


Comment by denverKen
2007-03-22 16:19:41

“‘It makes it hard for somebody without a very high credit score to get a loan,’ he says. ”

gee…imagine that! with crappy credit you mean you can’t just, like, get a loan!?

people have taken complete leave from reality…they think good credit isn’t even worth worrying about…anyone can get a loan…right?

we need a good severe recession with a few hundred thousand people living in their cars..whoops, car got repo’d too…living with their parents…whoops, parents sucked all the equity out of their almost paid for home and now they’re out on the street too

also: I want Alan Greenspan and George W Bush in jail for implementing policies that have basically emptied the pockets of the middle class and given it to the PigMen of the super rich…Goldman Sachs, The Carlyle Group, Halliburton, etc, etc

we need the return of consequences for your actions

sorry for the rant, but this sh*t’s gotta stop or regular hard working, saving, responsible individuals aren’t going to have anything left

Comment by tj & the bear
2007-03-22 16:59:42

To be absolutely fair, gotta throw in the Clinton administration too. Robert Rubin, in particular, came from Goldman Sachs and left to CitiGroup.

IMO, they’re all corrupt. We’re already starting into the ‘08 campaigns and the leading candidates from both parties are making personal presentations to all the large financial firms.

Comment by GetStucco
2007-03-22 20:37:42

It seems like there is a two-way street between the Treasury Secretary post and Wall Street. It is very hard to imagine that rampant manipulation of markets to favor Wall Street investment bankers would not accompany the situation.

Comment by MacAttack
2007-03-22 16:30:27

Stuff is starting to hit fan. Read the LAST LINE of this story.

CINCINNATI, Ohio (Reuters) — Until last year, financial counselors at the Home Ownership Center of Greater Cincinnati spent most of their time teaching Americans how to buy a first home. Now, they’re deluged by broken and bereft homeowners facing foreclosure.

“Oh Lord, there is no way we can keep up with these calls,” said Kaye Britton, a foreclosure counselor at the downtown nonprofit group that promotes home ownership to minority Americans, among others.

Britton has been helping clients reach the American dream of owning a home since 2002. Handmade wall signs urge would-be buyers to “sweat the small stuff” and note the lender’s golden rule: “They have the gold, they make the rules.”

Foreclosures were formerly rare, caused mostly by the loss of job, divorce or medical bills.

But when rising interest rates began driving up mortgage payments last year, homeowners started to feel the pain. Phones at credit counselors across the country are now ringing off the hook.

The industrial heartland has been particularly hard-hit. Ohio had the highest number of home foreclosures in 2006, while neighboring Michigan and Indiana — all sideswiped by the faltering U.S. auto industry — were close behind.

Housing analysts predict between 1 million and 3 million U.S. homes will be foreclosed upon in 2007. Already a wave of defaults on subprime mortgages held by those with poor credit have caused a crisis in parts of the industry, and some economists believe a recession could result.

“We knew it was going to be bad, but we didn’t think it would be this bad,” said Britton, echoing many who warned that increasingly exotic mortgage programs — including those that required no down payment on home purchases — would come back to haunt home buyers.

Predatory lending
Subprime loans allowed many Americans with spotty credit to buy into the housing boom, driving home ownership to nearly 69 percent nationwide in 2006, up from 65.4 percent a decade earlier. But teaser rates that kept interest payments low for two or three years have begun to expire, driving monthly payments through the roof.

Shanna Smith, chief executive of the National Fair Housing Alliance, said lenders often targeted the most vulnerable borrowers for subprime loans, even if they were eligible for loans with lower rates. More often than not, the borrowers had little understanding of mortgages.

“All the predatory lending that has gone on, all of the pushing of exotic loans on people of color, female-headed households, families with children, people with disabilities — it’s all coming home to roost,” Smith said.

Britton said borrowers and lenders share the blame for the crisis. She sees many borrowers who simply didn’t understand their interest rate was only fixed for two or three years, then could rise along with market rates.

“That’s all they hear — that it’s fixed, not that it’s only fixed for the first two years,” Britton said. “They don’t know their payment’s gone up until they get the notice in the mail. And then they don’t have the money.”

Not all of the problem is in the subprime market. Many Americans with good credit but low income or no savings signed up for adjustable rate mortgages or interest-only loans to get into the market. As rates rise, they too feel the pinch.

At the nonprofit Consumer Credit Counseling Service in suburban Cincinnati, counselor Darcy Blankenship sees a steady stream of people who knew their payments would be going up, but signed the loan anyway because they just wanted a house.

“People are so excited about wanting that house, they don’t look at the whole picture. They just want the keys,” she said.

Credit counseling
Demand for counseling appointments at CCCS’s Cincinnati offices has risen 87 percent from a year earlier.

Blankenship said one client started out with a 3.9 percent interest rate on his 30-year mortgage. Now it’s rising to 11 percent — and he can’t meet the higher payments because once he bought the home he piled up debt furnishing the home.

“Now he can’t refinance either, because of the debt. He just said, ‘There’s no way,”‘ she recalled.

Once borrowers fall 90 days behind on payments, lenders can start the foreclosure process, which can take up to a year. Owners can try to sell the house, but with prices falling and foreclosed homes flooding the market, borrowers often end up still owing more than they can get for the house.

Britton said people should call a reputable credit counselor as soon as they’re in trouble. Loans can be restructured, and emergency funding may be available. But she admits the counseling industry is already overwhelmed.

“If I stop answering calls to actually talk to a client and help them, the messages pile up, and there’s no time to call them all back,” Britton said. “It’s only going to get worse.”

Comment by GetStucco
2007-03-22 16:35:27

I have a suggestion for Senator Dodd: Tax the investment banking industry, the hedge fund industry and the lending industry, which all made a killing off subprime lending, to pay for credit counseling services. This could morph into a consumer advice service to help prospective homebuyers make a wise borrowing decision in the brave new deregulated lending market.

Comment by Matt_in_TX
2007-03-22 19:19:41

ROFL. Loan “mitigation”.

Comment by NYCityBoy
2007-03-22 16:41:30

“That’s all they hear — that it’s fixed, not that it’s only fixed for the first two years,” Britton said.

Too bad more of these borrowers aren’t fixed.

Comment by tj & the bear
2007-03-22 17:02:18

“They have the gold, they make the rules.”

Comment by spike66
2007-03-22 20:30:26

“..people of color, female-headed households, families with children, people with disabilities…”

Ah, give me a break. If these people are too incompetent to be trusted with a mortgage, then they are too incompetent to be issued a drivers’ license or the right to vote. Either these people are functional adults or they are not. If not, then strip them of their right to drive and to vote. If they want to participate in American life, they can own their mistakes and pick up the costs involved.

Comment by lainvestorgirl
2007-03-22 20:46:10

Translation: women, minorities and the disabled are too stupid to figure out loan terms. What a racist crock of crap.

Comment by foreclose_me
2007-03-23 01:22:43

You’re right… someone should put those racist credit counselors out of biz!

They’re insulting people by claiming they need help!

(Comments wont nest below this level)
Comment by Joe G
2007-03-22 16:36:30

Posted this on Lanser’s blog a couple of days ago. Maybe you’d enjoy it.

Come on Jon. It’s about time we start thinking instead of trusting what insider’s say about their businesses. It doesn’t matter whether it’s a Realtor, Morgan Stanley, or Blackstone.

Take today’s Study du Jour published in the WSJ. Apparently First American Core Logic published a study indicating that everything will be okay because we can handle the foreclosures that are likely to occur over the next six to seven years. Of course, First American is one of the largest title insurers and mortgage related companies in America. No conflict of interest there, huh? Oh, and the foreclosure assumptions were based upon home prices staying level with year-end 2006 prices. Good luck.

We now know that lenders went nuts. We should realize that this contributed to huge run-ups in home prices. We also know that some of these lenders are in major trouble and are now withdrawing credit by market forces (Morgan Stanley won’t renew my credit line) or government edict (FDIC issues cease and desist to Fremont). Think back to 2005. Home prices skyrocketed 40-50% in a single year in Compton, Inglewood, Lynwood and other fine parts of Los Angeles County. My guess is that this was due to New Century and others extending credit to anyone that could breathe. Do we really think that those price increases are going to flat line as the foreclosures continue to mount? Does anyone (including the CEOs of Wells Fargo, Countrywide, and BankAmerica) really believe that homes in those areas should command $400,000 -$600,000?

Hardly mentioned is the complete lack of affordability. Yes it’s mentioned on these blogs, but nobody in the mainstream media analyzes how a family should be able to make ends meet buying a home at ten times income. Again, median home prices in California are about $550,000 and median income is probably approaching $60,000. Take out payroll, Federal and State taxes and how much is leftover? Deduct food, car payments and utility payments and what is leftover to pay the mortgage? Surely not much and that is why so many new homeowners are in trouble. The problem is the trouble has just started and affordability hasn’t changed enough to brake the real estate fall.

Of course homes in California have been unaffordable before. They were unaffordable in 1980-81. Why? Well interest rates were sky high and Paul Volcker clamped down on the money supply growth which put us into a recession which was needed to end the 1970’s inflationary problems. As a result, interest rates came down and affordability improved.

Homes were again unaffordable in the late 1980s. Home prices were out of whack relative to incomes and mortgage rates were somewhat high. Over the ensuing years home prices AND mortgage rates declined increasing affordability.

The problem now is that home price to income ratios are at all-time highs. This has been aptly illustrated by the bloggers you interviewed. Mortgage rates are still very low by historical standards. Wall Street and the media would like us to think that we can solve the problem by getting everyone to refinance into a fixed rate loan. How does it help the home buyer from 2004-06 to take his teaser or interest only payment and lock it in at rates that may be 50-100% higher? Quite likely these buyers were qualified at these lower rates and that is all they could afford. How can they afford higher fixed rate payments? Who is going to make these loans? How does bringing rates down solve the problem? The only reason rates would approach the levels of 2003-04 would be because we are suffering from major deflation. And the only reason that would happen is due to significant price declines in housing. If rates were reduced 1% overnight, it wouldn’t help. The folks in trouble have mortgages based upon rates from the generational lows of those years. It still will not help them to refinance a teaser or negative amortization loan at any rate higher than their initial rate. The sensible homeowner refinanced his mortgage into a fixed rate mortgage in 2004-05. Any interest rate changes from here are not going to cause him to save any money by refinancing.

There have been several posters on your blog that believe that median incomes don’t matter because the median income family (or those below that threshold) doesn’t buy homes. Thus median incomes don’t determine median prices. But those people do rent homes and those rents do factor into the prices that a “reasonable” investor would use in calculating the price to pay. Rents determine the cash flow that any property throws off. Capitalization rates are calculated from these cash flows and the prevailing price structure and financing costs to determine whether there is economic merit in that investment. Just because capitalization rates have been driven to ridiculously low levels doesn’t mean that they are not a factor in determining what a rental property is worth. It doesn’t detract from the fact that rents need to come out of renters’ income streams. So yes, those below average income households do have some bearing on what the price of the rental stock is. And those units do impact the median home price.

The fact is not everyone goes to college and marries someone who did. For every household with two college educated earners, there are households with everyday jobs that don’t pay much: maids, fast food workers, gardeners, retail workers, etc… As alluded to in the previous paragraph, these people need to live somewhere and their incomes go to pay rent and those rents impact the price of those rental units which in turn affect the median home price in the State. Maybe Orange County is so special that there needs to be no lower income homes or apartments. Maybe all the below average workers can commute from Los Angeles County to clean the homes of all the wealthy Orange County homeowners. Still doesn’t explain the price of Los Angeles County homes being ten times incomes.

The fact is that the values of homes in California are just too high in relation to incomes. That credit standards were so thoroughly ignored is a testament to this. Credit standards were butchered to make home prices seem affordable. Teaser rates, stated income, option ARMs were sold to make one think that they could afford an unreasonably priced home. It’s not the actual loan product that is the problem. It’s the unaffordability that’s the problem. If prices were reasonable (or incomes higher) the resets wouldn’t be a problem. Maybe incomes will skyrocket in the next few years to close the gap. Or maybe home prices will come down. I think it is reasonable to say that thirty year fixed rate mortgages are not going to approach teaser rates from the 2004-06 period. And even if they did prices are still too rich relative to incomes.

The Sandler’s sold Golden West to Wachovia because they knew that these problems would occur. Sure they didn’t go on CNBC and say, “Hey everyone, we are selling at the top. Woohoo.” But sell they did.

Sam Zell sold to Blackstone. Again, he didn’t go on top of one of his buildings and wave a flag touting the sale. But sell he did.

Blackstone plays a different game. They play with “other people’s money.” Or more appropriately with “other people’s pension money.” Just think about the increase in fee income that Blackstone is seeing from the Equity Office deal. They are now contemplating going public to capitalize on the “growth” in fee income. And a huge increment of this growth was buying an overvalued portfolio of office buildings from a man known as a grave dancer. Great deal for Zell! Great deal for Schwartzman! Great deal for “other people’s pension money?”

Do we ever learn?

Comment by Houstonstan
2007-03-22 19:09:06

Joe - Good post.

Comment by spike66
2007-03-22 20:23:16

Agreed. Thanks.

Comment by lainvestorgirl
2007-03-22 20:43:32

Especially liked the part about how rental income influences property values. Well thought out.

Comment by bubbleglum
2007-03-22 16:42:08

I got an investment promo in the mail today called “Ignore China: Lose Money.”

In the article, a young couple was spotlighted as up-and-coming Asian yuppies. They had just bought a 750 sq. ft. apt. for $100K, with monthly payments taking 40% of their joint income.

“When you buy an apartment in China, it’s just a concrete box. You have to install everything–even sinks and lighting–so you’ve got to pay carpenters from the countryside to make your new home livable. So add another $8000 to move in.”

That might have discouraged a few FBs if they did that here! Building codes be damned!

Comment by dan
2007-03-22 16:54:18


To think that just a few months ago Ben’s and SoCalMtgGuy’s blogs registered so little activity!. It was Deadsville, man. Great theories & predictions about the bubble yes, but meanwhile home prices kept climbing and climbing. I remember following & reading along for long months at a time and the news was always the same ol’ same ol’. The seller’s were having their heyday.
Then all of a sudden it was as if something snapped.

Now I can barely keep up with the excellent comments and discussions here!. There’s so much happening all over!. All the theories and predictions presented on these blogs have now started to come true. A time of reckoning has come. Just as I read here.

Sniiifff …I LOVE you guys.

Comment by M Nair
2007-03-22 16:57:20

Whats FB?

Comment by PDXrenter
2007-03-22 17:01:40

F’d buyer/borrower. See more here.

Comment by luvs_footie
2007-03-22 17:05:49
Comment by dan
2007-03-22 17:22:07

Sooo, it appears their REALLY was a Housing Bubble after all?. I wonder why the CAR, NAR and other official spokespeople never mentioned the topic. Anyhow it turns out it was not only real, it’s now going to drag the rest of the economy down into a recession.

Who woulda guessed?.

Comment by joesixpack
2007-03-22 18:19:18

The Fed kind of reminds me of my grandson right after he has set out a load in his diaper. I ask him if he pooped, and he says, no! I say, but I smell it, and he still says no!

Comment by pressboardbox
2007-03-22 19:49:12

That is hysterical!! Big smug Bernanke with a fresh load in his tightie whities! “No, did someone fart? I can’t smell it. Must be your imagination. No, no, no, keep the presses printing, Dammit!!”

Comment by GetStucco
2007-03-22 20:42:47

I love that look on kids faces when they hold a load in their diapers and they know everyone else within shouting distance can smell it. I am wondering how many of the wonks at the Fed have that look on their faces now that even the Financial Times is pointing fingers at them. Bernanke cannot be held directly accountable for the mess, but note that he never made even the slightest token effort to separate his policy regime from his predecessor’s.
Fed accused of subprime ‘perfect storm’
By Eoin Callan, Edward Luce and Krishna Guha in Washington
Published: March 22 2007 18:50 | Last updated: March 23 2007 00:33

The Federal Reserve helped create a “perfect storm” in the US subprime mortgage market that could expose up to 2.2m more Americans to the threat of home foreclosure, Chris Dodd, chairman of the Senate Banking committee, said on Thursday.

Mr Dodd, who is also a Democratic Party candidate for the 2008 presidential nomination, alleged the Fed had failed in its oversight role when the growth in high-risk “adjustable rate mortgages (ARM)” to risky borrowers was exploding.

While questioning leading mortgage lenders and federal banking regulators, Mr Dodd also promised legislation to crack down on predatory lending in the US mortgage market, where a rising level of repayment delinquency has caused global market jitters during the past month.

Mr Dodd said that US regulators had relaxed guidelines on mortgage lending at precisely the point in 2004 and 2005 when the riskiest ARM loans – which impose initially light monthly payments that escalate quickly at a later date – were increasing most rapidly. That also coincided with the start of the Fed’s consecutive 17-stage rise in rates.

“Despite those warning signals the leadership of the Federal Reserve seemed to encourage the development and use of ARMs that, today, are defaulting and going into foreclosure at record rates,” he said.

Comment by catspit1
2007-03-22 17:11:05

Months? more like years…

Comment by mrktMaven FL
2007-03-22 17:18:31


The Congressional hearings.

Comment by Annata
2007-03-22 17:24:54

“Andrew D. Sobel in San Diego took out two mortgages to buy a $240,000 condominium in 2004 and is now facing its sale for $175,000.”

Nice. 27% haircut, negating 37% of previous appreciation. It’s a good thing the economy is strong and that everyone wants to live in San Diego. Otherwise, he might be in trouble!

Comment by plysat
2007-03-22 18:12:28

I love hearing all the stories of the bubble popping. The problem is, and I’m specifically talking about the city of LA, average people, and people who are invested in RE, just don’t see the magnitude of the problem. We do. Most people don’t.

LA Times says prices are still rising. j6p doesn’t know how a median is calculated. He/she hears “up”

My newlywed neighbor is closing on a house in the valley next week. Got it for 10k under list, thinks he got a deal. There are many people still out there like this.

Heard an anecdote here or on another blog (can’t remember where), about a nicely attended westside open house last weekend full of flippers wielding their clipboards. There are a lot of people still out there like this.

Passed on a rental about 6 mo’s ago on crescent heights. House had been on the market for almost a year. Someone (an LLC) bought it for about %10 under list. It’s gutted. I doubt they’re planning on moving in… it’s a flip. These people still are still out there.

I troll the broker boards. People are still making stupidly high LTV loans to low FICO, cash poor borrowers.

When all this goes away for real… then I’ll be happy. But the masses don’t get, or can’t believe, that the party is over. :-(

Comment by pressboardbox
2007-03-22 18:38:45

“‘If someone calls and says they want (to) do a 100 percent loan,’ said Jeff Jaye, a mortgage broker in San Jose, Calif., ‘my antenna goes up. My first question is ‘What’s your credit score?’”

I guess he never used to ask… wtf???

Comment by Houstonstan
2007-03-22 19:16:52

More on “The Economist” lead article. It closes with

“The economic consequences may yet be large; so may the political ones. Most of the gains from America’s recent economic success have been scooped by those at the top of the pile—not least in the financial industry. Now many lower down face unpayable debts and the loss of their homes.

Populist politicians may well make much of the contrast between a second house in the Hamptons and no house at all. Instead, they should stop making a fetish of homeownership. That people are free to borrow to buy their own home, should they wish, is fine. That politicians should encourage homeownership for its own sake is not. That they foster it with tax breaks, as they do in America, is daft.”

There is no link as it is behind the subscriber firewall. The opening to the article also cracked me up: “JUNE is National Homeownership Month in America. National Foreclosure Month would be more apt.”

Comment by GetStucco
2007-03-22 19:40:59

LEND got a subprime loan, NEW gets a shortsale… and subprime will be back in play later in 2007???
Mar 22, 2007 6:51 pm US/Pacific
Irvine Subprime Mortgage Lender Saved By Deal

(AP) LOS ANGELES New Century Financial says it has reached a deal with Barclays Bank PLC that would effectively release the troubled subprime mortgage lender from having to buy back about $900 million in mortgage loans.

Barclays had demanded last week that New Century comply with an obligation to repurchase outstanding mortgage loans financed by the bank.

Barclays had alleged the company defaulted on its financial obligations.

According to a filing with the Securities and Exchange Commission, Barclays and Sheffield Receivables agreed to release New Century and its subsidiaries from the obligation. In turn, New Century gave up its rights to the loans financed by the bank.

The deal is dependent upon New Century transferring to Barclay an unspecified amount of money relating to the home loans.

Comment by lainvestorgirl
2007-03-22 19:56:19

Nightly Business Report did a nice subprime meltdown segment. It’s all over the news now. MSM still treating it mostly like a compartmentalized, small segment of the market. And so it starts.

Comment by spike66
2007-03-22 20:45:08

From NY, has anyone else seen the ads attacking Spitzer for wanting to cut a lot of fat from the state healthcare budget? Among other things, he wants to shut down some state nursing homes. Latest one features a 96 year old lady repeating over and over in close up , “you owe me a home, I am a part of this society and you owe me a home.” She never says why anyone owes her anything, just keeps whining and insisting that “we” owe her a home.
I have nothing against old ladies, but I don’t owe this old bat anything.
She has SS and Medicare, and if disabled, SSI, and any pensions she earned while working. None of this is mentioned, just this irritating mantra of “you owe me”. So irritating I’d like to offer her a cardboard box and some sidewalk space.

Comment by foreclose_me
2007-03-23 01:35:36

How about just a box? The measurements are probably already done.

Comment by GetStucco
2007-03-22 20:49:20

Several posters have commented on the relationship between falling home prices and lender downpayment requirements. Now it fully dawns on me why the REIC works so hard to cover up evidence that prices are falling — because the lender’s best response of requiring higher downpayments to cover their risk of foreclosing on an underwater house results in a drop in demand, which results in further price declines, further tightening, a vicious deflationary cycle at its worst.

No matter how hard REIC spokesmen try to hide it, the evidence that prices are dropping is now too big to ignore. Even the cover story of The Economist suggests the U.S. housing market is collectively under water. Wake up and smell the koolaide.

Comment by Housing Wizard
2007-03-22 21:07:39

The REIC and builders knew the game would be over with sub-prime and the no down payments if real estate went down .No down payments were keeping the party going . You can’t get speculators and unqualified buyers to invest if they have some skin in the game , it was all based on Real Estate going up .

Comment by Awaiting bubble rubble
2007-03-22 21:11:15

Neither of the pieces on out-migration really mentioned specifics about who is leaving and who is staying, i.e., how the demographic mix is changing in coastal California. The SD piece has

“Immigrants and births are now the sole contributors to the region’s population growth”

but the Ventura Star piece is very PC, as noted by comments posted by readers of my local noosepaper.

I wonder if someone can find some real data on shifting demographics in coastal California. There is a huge number of ads in my local throwaway regarding “rooms for rent” in $900K houses because the FBs need an extra $600/month now to just make their payments, but there are certain demographics that don’t want high density living when they’re over 30 and other communities that do.

Comment by Rob Dawg
2007-03-22 22:05:23

The Star is getting really lame at any indepth reporting. VenCo is hollowing out. The city that grew the most (2.3%), Camarillo, also closed 3 schools yesterday. Old and white and rich. Young and brown and needy. The demographics and land use issues are totally divorced from what the residents want and need. The planning elite has stolen the process and at the same time turned a blind eye to the abuses that they secretly support.

Comment by Housing Wizard
2007-03-22 21:42:22

If homeowners ever really perceive what really inflated this real estate market beyond reason they are not going to be very happy about it .My guess it the new spin begins .

Comment by Bots
2007-03-22 22:39:12

My head hurts! I just had the misfortune of watching Are You Smarter Than a Fifth Grader
The question was “Density equals mass divided by _____” and the bimbo answers “air”.
Next question… which of the 7 continents is also a country?
After some serious brainwork, the hamster in her melon spits out “all of them”. So of course they give her 50 grand for her exceptional natural capacity of intellect.
I know it has nothing to do with housing, but stay away from that show or your brain will melt.

Comment by dan
2007-03-23 08:57:53

Just wait til “Are You Smarter Than a FB” comes out!.

Sample question: “How many days do you have in order to vacate the premises after the Sheriff notifies you of eviction?”.

Comment by smfc
2007-03-23 10:53:11

it has everything to do with housing. she is (hold your breath) a realtor!!

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