“We Have To Pay The Price For The Great Gains”
The Press Enterprise reports from California. “Inland home foreclosures this year have increased more than ninefold over the same period a year ago, driven by flat appreciation and sagging home sales. Ana Ibarra and her husband, Guillermo Macias, adore their five-bedroom house in a new tract of executive-style homes in north Fontana.”
“But Ibarra said the couple doesn’t have enough money to furnish the house. Ibarra said she and Macias, a 30-year-old commercial plumber, together earn about $5,400 a month after taxes. Since moving into their new house in December, they have spent $4,000 a month of that on the house’s interest-only mortgage, property taxes and homeowner insurance.”
“They have wiped out their savings. What’s more, they are responsible for a $2,000-a-month mortgage payment on another house they own in south Fontana. They rent that three-bedroom house.”
“Ibarra said after they signed an agreement with Lennar Homes for the house in north Fontana and made a deposit, they learned their first house had not appreciated enough to help them pay for a second one. She said they tried to back out of the purchase but were reminded they had signed a contract.”
“‘We are really not buying. We are just paying interest and we are in debt for almost $1 million,’ Ibarra said.”
“Ibarra said while she and her husband are responsible for their predicament, so is Lennar’s lender. ‘It was their fault. They just wanted to sell. They should not have approved us,’ Ibarra said. ‘We just jumped at the opportunity because we thought it was going to be easy, as easy as getting the loan.’”
The Napa Valley Register. “Are the 88 notices of foreclosure in the first quarter of this year in Napa, nearly twice as many as a year ago. John Mourraille, a mortgage broker/owner in St. Helena, said any foreclosure in any neighborhood affects values of surrounding homes.”
“Mourraille predicts things will get worse before getting better. ‘In the past five years everything was going up in value in the 20 percent plus range, nothing like it in real estate history and now that’s over. We have to pay the price for the great gains,’ Mourraille said.”
“‘The next seven years will be a time of correction. We are just beginning the cycle. Real estate pretty much runs in a seven-year cycle,’ Mourraille said. ‘And the correction will be across the board, including the multi-million dollar estates.’”
The Record Spotlight. “The number of homes in some stage of foreclosure in Shasta County in the first quarter of 2007 more than doubled from a year ago.”
“‘The subprime market has all but gone away. We are in such an uproar right now,’ north state mortgage loan officer Sue Gabrielson in Redding said. ‘I don’t know what they (subprime lenders) thought was going to happen.’”
“The subprime meltdown means 100 percent financing is likely to be available only to borrowers who have excellent credit, Gabrielson said. ‘Depending on the severity of the rate of loan defaults, it may have a significant impact on our local housing valuations,’ Gabrielson said.”
The San Francisco Chronicle. “Business is brisk for lawyer Pamela Simmons. The number of calls from desperate homeowners has reached about 100 a month, she said, as the rapid appreciation that fueled the housing market in the early part of the decade has slowed to a crawl and the adjustable interest rates on loans taken out in those heady times are starting to rise.”
“‘I used to do one of these cases every three months,’ Simmons said. ‘Now, it’s all I do.’”
“Melissa Pacheco and her husband, Carlos, wanted to own their own home, so much so that they were willing to take a subprime loan at about 9 percent interest and make $6,000-per-month payments to buy a three-bedroom house in Soquel for $475,000 in 2004. They put no money down.”
“The Pachecos decided to refinance. The appraisal for the new loan put the house’s worth at $760,000, nearly $300,000 more than the Pachecos paid a year earlier. They also wanted to take some cash out of the house.”
“By the time the Pachecos’ statement arrived last month, the loan balance was $629,406.84. The interest rate, which began rising just 38 days after the loan was issued, had climbed to 8.375 percent.”
The Union Tribune. “According to the FBI, 80 percent of all reported fraud losses involve collaboration by industry insiders, such as brokers, appraisers and agents. The lender typically is a victim.”
“‘A year and two years ago we had unnaturally low foreclosure activity because we had unnaturally high appreciation,’ researcher John Karevoll of DataQuick said. ‘As the tide goes out now, we are seeing a lot of nastiness that was below the surface.’”
“‘Last year we saw a lot of it,’ said David Cabot, president of the San Diego Association of Realtors, who oversees more than 100 Prudential real estate offices in Southern California. ‘There were a dozen times when I was getting calls from managers or agents in my company. You know on the surface that (the loan) doesn’t seem legitimate.’”
“Cabot said his employees were reporting offers where ‘the buyer would get a hunk of money directly from the seller after the close of escrow to inflate the purchase price, then get an appraiser to appraise at the higher amount. None of it included informing the lender.’”
“C. Robert Simpson, an attorney who specializes in recovering mortgage fraud loss, said underwriting standards need to be much tighter. ‘We, as an industry, have ceased telling people, ‘You are not qualified.’ he said. ‘We will give loans to anyone for any purpose.’”
The Daily Bulletin. “What’s really happening in the housing market, particularly in the Inland Empire? Is it a good time to buy? A good time to sell? A good time to wait, or just a good time to weep?”
“Bruce Norris, a veteran observer of the scene, points out that every down cycle in California’s real estate market started when affordability dipped to 17 percent. It happened in 1980 and it happened again in 1989, but Norris thinks the problem is even greater this time.”
“‘It’s bad enough that we’ve reached the 17percent affordability rate,’ he writes. ‘The real problem is how we got there this time.’”
“In 1980, affordability dipped to where it did because mortgage rates climbed to 16 percent. In 1989, mortgages cost 10 percent. This time, interest rates were low enough that people were spending nine times their annual income on the price of a house.”
“‘Unsold inventory has grown by more than 100 percent in one year,’ Norris writes. ‘Thus far, there has been limited price damage because almost all of the properties for sale have been privately owned.’”
“‘In 2007, that will change. The new inventory for sale will consist of lender-owned properties, builder auctions and short sales. All of these sellers will be selling to a less-motivated, smaller group of less-able-to-qualify buyers,’ Norris said.”
“Why is it that the market can feel like it’s dropping, with homes for sale for longer stretches and the number of sold homes down significantly, yet published prices either remain the same or continue climbing?”
“John Husing, a regional economist based in Redlands, says it’s possible home prices, at least in part of the market, might actually be declining.”
“‘We use the median to determine housing prices,’ Husing said. ‘There’s a feeling that averaging prices would distort things because of the high end of the market.’”
“‘What we have now is a market where the bottom half of the market is strong and the top half weaker,’ Husing said. ‘So the way we measure housing prices might actually be hiding a decline in the top end of the market.’”
‘ The spike in mortgage defaults and foreclosures has sent shudders through an Inland region that experienced another housing crisis more than a decade ago. The epicenter back then was Moreno Valley, a city that had been one of the fastest-growing communities in the United States during the 1980s.’
‘As many as 15 contractors hired by the defendants began inspecting homes Monday to see if the allegations of defects are viable. ‘I don’t think by any stretch Bennett set out to sell a bad home, but it’s a reality of boom-time construction in California,’ Jackson said, adding that a lack of construction workers may have forced subcontractors to use less-skilled labor.’
The chart says it all. We aren’t into recession, yet. Wonder what the default peak will be?
“defaults and foreclosures has sent shudders through an Inland region that experienced another housing crisis more than a decade ago”
Inland Empire is the poster child for ‘Mexi-math’ = 100% loans.
New Home Calculus of the past couple years: ($600k loan x 103% no doc loan)+($120k HELOC)+($750k refin)= plasma TV and new Chevy Tahoe with spinner wheels
Go to the first article and watch the video of this Ibarra chick: http://tinyurl.com/3yecxe
Are we supposed to feel sorry for this gambler? NO FREAKING WAY! She gambled and LOST, Too BAD!
If she wants any sympathy, she should not speak. I heard the 2 yr I/O comment and knew they were screwed. They need a lawyer.
Screw them!!!
She said IO like 15 times.
Refinanced their first home I0 and rents are $300/mo less than IO payments on that one =).
2 yr IO period on new house.. “plan to stay here for 2 years then sell and get a bigger house” LMAO =_).. They can’t afford this one and they expected to move into something more expensive in 2 years!!!
She keep ramblin on about their down payment (borrowed) and about savings!!!
These fools never had any savings or down paymnet!
I am very tired of these FB spewing about their loss when they have no skin in the game. The vast mojority of these fools are 100% financed or more.
Still amazes me that they felt entitled to a home they knew they couldn’t afford and planned to move to more luxurious digs in 2 years =)
All this bail out talk sickens me.
The bailout will ammount to a big fat wad of greasy money handed off to JPMorgan and friends. Not a dime will make it to these scrubs!
Right, they take home $60k a year and own more than $1m in homes? I feel so sorry for them.
The development is called “Shady Trails”
MWUAHAHAHAH
You cant make this stuff up.
One thing I noticed is that they had about $30 worth of furniture in there.
Here in Bozeman Montana, I asked a aquanance of mine how the roofing business was. He told me that the company that he worked for were was not doing roofs anymore, they were building condos. I have done enough construction work to know about the different trades, and the type of people that tend to end up in each. Roofers are at the bottom in about everything, including skill. On day a roofing company, the next building whole building. I don’t want to even think about the results. We have a joke around some contractors. They build meth-homes. That is, they hire meth addics for there crew. They are cheep, work like they are on overdrive(untill they collapse) and near by. West of Bozeman is Four Corners. There are sub-divisions like Elk Grove. There is also a dump trailer park which is a wide open drug market. A home to many a framer, roofer, dry waller. See how “quality” constuction happens.
My best friend is a painting contractor in NYC. She hires rock ‘n’ roll musicians for her crews. Not quite as bad as meth addicts, but still.
These people, given the opportunity to get a million dollars and invest it wisely, and be set for life, instead wasted it.
Here is comes, “America gave me too much money and opportunity. My civil rights got violated. I not stupid.”
or maybe,
“I make 6 figures as straw buyer. I go back to home, live like king with family. This stupid greater fool thank you, Mr. Warehouse Lender.”
The Pachecos should have cashed out the $300K in equity and left the lender holding the bag. This insanity will continue until the lenders and MBS investors lose so much money that they are forced to tighten their practices. We can’t count on the government to regulate anything. They are incompetent morons who will make things worse.
I agree Jerry. Dumb move on their part. The more I think about this, the more I think most of these people will be better off walking in the long run.
We read these relatively few stories about people “caring” that they are losing the house, but given the number of foreclosures there has to be other stories. For all the people crying about losing their house, there have to be some that just walk thinking it’s time to bail. I’d like to hear more stories about the buyers who got 100% financing, and say, “Hey, it didn’t work out, so we’re walking.” No fraud, no whining, no crying, just a relatively low-risk “opportunity” that didn’t pan out. Fraud a whole other story of course. Just bidness…
Or they could have lowered their payments with a new loan for the same original balance.
The article says that the Truth in Lending Act docs were done wrong, so they are trying to get the refi loan rescinded. I hope the Pachecos kept that money that they cashed out, because they owe it to the lender if they get it recinded. I personally hope that there are enough of these cases to make the lenders honest about the required disclosures, and that the turmoil that undoing these loans wreaks on the MBS market makes it that much harder for the FB to find another loan to get into. Having the loan rescinded will not be a blessing for either party. I wonder if they claimed the HMID, because that’s gonna be some more cash that they owe, this time to the IRS.
RIght. No way. It went for 2 new SUVs, a pool, jewelry, big screen TVs and probably some sent to a television evangelist.
They don’t call it Fontucky for nothing.
Makes me wonder if a good second career would be some sort of freelance Private Investigator/ independent appraiser for lenders (to flush out fraud and eggregious lending). Get paid for busting sleazy brokers and RE agents…
This is harder to do than perhaps the Pachecos realize: the court assume that if you sign something, you have read & understood it.Their (Pacheco) circumstances will be scrutinized. The best thing that could happen for them is that the bank will buy back the residence. I am seeing this occur in only a very small percentage of recent cases.
~Misstrial
I agree implosion. I also would like to read about someone who said, Hey it didnt work out so I hit the bail out button.”
That would be refreshing. Not woe is me. The evil lenders screwed me. I didnt read the contract. I didnt understand. The dog ate my homework. I didnt have cab fare. Locusts. etc.
maybe they can still max out some BofA credit cardozos and head for the borito
‘We just jumped at the opportunity because we thought it was going to be easy, as easy as getting the loan.’”
B-I-N-G-O!! That’s it in a nutshell, everything should be easy and painless, remember evryones a winner in our special society.
‘We just jumped at the opportunity because we thought it was going to be easy, as easy as getting the loan.’”
———————————–
free ticket on the Gravy Train
“our special society”
whole damn county’s on one huge short bus…..
…yeah, the “Magic Bus”.
…”But can I buy your Magic Bus? (Too much, Magic Bus)
Nooooooooo!
I don’t care how much I pay (Too much, Magic Bus)
I wanna drive my bus to my baby each day (Too much, Magic Bus)
I want it, I want it, I want it, I want it … (You can’t have it!)
Thruppence and sixpence every day
Just to drive to my baby
Thruppence and sixpence each day
‘Cause I drive my baby every way…”
Magic Bus, Magic Bus, Magic Bus …
“According to the FBI, 80 percent of all reported fraud losses involve collaboration by industry insiders, such as brokers, appraisers and agents. The lender typically is a victim.”
Waaah, waaah, waaah. Everyone is claiming to be a victim.
If FB’s and lawyers start winning cases against HB’s & MB’s will that put a stake through the heart of housing?
It seems the whole RE industry has become massively sleazy from top to bottom. Builders throwing up junky homes using illegal alien labor, RE agents lying about everything under the sun (multiple bids that don’t exist as an example), stats being manipulated and cooked, fake appraisals, bogus loans that buyers cannot possibly afford, greedy buyers and sellers trying to get rich quick any way they can and on and on. What a shame.
Anywhere loopholes exist, people will flock to exploit them.
The loophole here was “no documentation loans” and “piggy back loans”, ways to get around the Private Mortgage Insurance police. That hole turned out to be big enough to build a Freeway through.
We’re freakin’ doomed.
“Why is it, that market feels like it’s dropping, properties sit longer stretches, the number of sales down significantly, while market values remain high or rising?” Full employment, and low interest rates.
The law of supply and demand is suspended. Supply doubles and continues to grow to decade highs, while the demand side is washed away with slightly tighter lending practices, and NO{17%} affordability!
Ok so what do we do?
“Follow the yellowbrick road”, “Follow the yellow brick road,”
“Follow, follow,follow, Follow the yellow brick road.”
We are off to see the Wizard, what a wonderful Wizard he is!
Did someone mention a Wizard ?
Look ,I don’t know who started these no doc, low/no down loans,
but it was not fair to have unqualified people and speculators compete with the regular qualified homebuyers for homes . It was not fair to have property taxes increased based on a bogus RE mania .
Does the MSM ever talk about how this stupid sub-prime lending inflated the market demand and priced people out of the market ?How dare the industry simply just start putting unqualified people on loans so they could keep the party going .
2006 became the year of the fraud deals regarding the REIC . These people in the industry could not accept that the market was turning so they resorted to fraud to make deals work . Still to this very day I see signs on telephone poles regarding a investor looking for a apprentice for 20k a month (they are looking for a straw buyer ).
The RE industry is so corrupt and spoiled at this point that the REIC cannot be trusted .Lenders have to back off and get really tight for a long time . In fact ,if I was a lender I would be double checking every appraisal/borrower at this point . Sorry ,but there is no easy way out of the situation of the needed market correction .No bailouts for these lending crimes .
Indeed, we have a name for this.
Crony Capitalism
It ain’t just for slanty eyes, folks.
For starters:
Cheney shoots attorney on ranch of Halliburton board member.
Cheney’s daughter influential in State Dept Iraq policy.
Cheny’s son-in-law is chief counsel for Homeland Security.
Dan Quayle - Cerberus officer - 51% owner of GMAC; Cerberus also in charge of “privatizing” Walter Reed (300 staff in 1 department to 50)
Whose slanty eyes did you have in mind?
“‘We are really not buying. We are just paying interest and we are in debt for almost $1 million,’ Ibarra said.”
I’m sorry but anyone foolish enough to fall $1 million in the whole on Fontana property should be put away for life. There’s absolutely no excuse for that. And since when did Fontana become worthy enough to be segmented into “south” and “north” labels?
“segmented into “south” and “north” labels?”
what do you mean?
south side fontucky crips, north side fontucky crips
“And since when did Fontana become worthy enough to be segmented into “south” and “north”
Fontana Zip 92336 is the northern part of Fontana which lies along the new 210 fwy east of the 15. This part of Fontana is the newest most recently developed area, with all new cookie-cutter tracts and malls. The older wasted industrial sections, zip 92335-92337. along the 10 fwy, must be the southern ‘rotten’ half. which folks think of when they conjure up wasted fontucky cracker shacks, gritty truck yards and grimy industrial tracts.
The four cities of Fontana,Rialto,Colton and San Bernardino Metro which lie along the 10 freeway between the 15 and the 215 collectively are the four ugly ducklings of the IE. Talk about industrial scarred/sooted landscapes. Lots of raw footage for The Anti-capitalists.
Once I tried to take a short cut to the 215 freeway thru Fontucky … it scared the hell out of me. Very nasty looking.
Why did you leave out Rubidoux and Mira Loma? Just because they are unincorporated? They are just as hideous as anything you will find in the Inland Empire.
Actually that entire IE pocket from the 15 east to the 215 and from the 10 south to the 91, which includes the 4 ugly ducklings plus rubidoux, Mira loma,Glen Avon, Jurupa,North Riverside,Belltown,Norco,ect is one gigantic IE gritty slum pocket, one of the ass-end regions of the IE, though there are plenty of others.
I thought Fontana was aka “Felony Flats.”
~Misstrial
North Fontana has nicer homes, but it is STILL Fontana. Don’t bother planting a tree there. It will just be swept away in the wind.
South Fontana is one of the armpits of the IE.
Most who live in Fontana don’t do it because they want to, it’s because they HAVE to.
The “walk aways” in Fontana should be numerous for those who bought over the last few years.
buy a three-bedroom house in Soquel for $475,000 in 2004. They put no money down.”
“The Pachecos decided to refinance. The appraisal for the new loan put the house’s worth at $760,000, nearly $300,000 more than the Pachecos paid a year earlier. They also wanted to take some cash out of the house.”
————————————–
No money down purchase
Cash out refi
Free ticket on the Gravy Train
repeat scene all over the U.S.
never before have so many received so much for contributing so little
Obviously these people need a bailout.
Just two years ago, these people were financial geniuses—the financial Luddites where renters who did not jump on the easy money train to riches. RE was only going to go up—it was the new stock market. Land production had ceased and all of the baby boomers were retiring and were going to buy second and third houses. The truly enlightened ones recognized this situation.
Well, the money train has derailed and the RE robber barons are pointing there fingers at each other. They noticed that Phoenix, Las Vegas, and Reno were surrounded by wide open desert—maybe the land would not run out. Janitors, Teachers, and other ordinary people on the money train saw that $50k a year salary will not afford them a $700k house….
I was in Soquel on Thursday shopping. I went to three antique malls (each with about 50 individual sellers) and, every time, I was the only person in the entire place. There was no business AT ALL. I eavesdropped on the sellers and heard them talking about how now, when you go to the local Salvation Army or Goodwill, there are 100 people there, lined up at the opening, to pick through the goods. One of the local charity stores even charges $5 for people who want to come in early to pick. Because so many people are looking for new ways to make $$$ off of other people’s discarded junk.
“Ibarra said while she and her husband are responsible for their predicament, so is Lennar’s lender. ‘It was their fault. They just wanted to sell. They should not have approved us,’….they then forced our hand to the pen and forced us to sign the papers. They held a gun to my wife’s head and told me they would kill my family if I did not take the loan. It was horrible! I was too scared to call the police—they would find out. They said they have agents everywhere—appraisers, real estate agents, and brokers. They are all part of the “organization”.
Yes, I have heard quite a few stories about the secret mortgage police and their ruthless tactics, but thought they were exerated.
True victims, would someone on this blog be good enough to step up and bail out these poor victims with a tax increase?
Well, nobody can claim Ben Jones is biased toward negativity. The Press Enterprise article is even worse than the quotes he selected indicated. The wife has an entry-level EE job in El Segundo. That means she might get enough in raises to offset the plumber losing his job, but no way will she have time to get the second job. Fontana to El Segundo is a brutal commute. Plus, the article mentions “In late 2004, the couple bought the south Fontana house for $285,000. Their plan was to remodel it and then sell it in two years to make a down payment on a bigger house for their growing children and Ibarra’s mother, who lives with them.”
Flippers. Flippers turned into landlords because they couldn’t eat the deposit on the new home. Or rather, they wanted the new home so bad that they couldn’t go back to the other home. These people deserve to lose both homes. She’s an EE, so she has no excuse for being that much of a dummy.
Fontana is hideous and that commute is hideous. I truly would not pay 10,000 for any house in that place…why? I would not live there at any price, including free…
woah that commute by car must be over 2 hours if leaving at 5am!!!!!! I used to do a 25 mile commute through part of that and it took over 1 hour at 6am. Is this a 80+ mile commute through traffic the entire way???? How do people afford the gas everyday?
How do people afford the gas everyday?
With increasing difficulty.
Ibarra said ” … It was their fault. They just wanted to sell. They should not have approved us…’ …We just jumped at the opportunity because we thought it was going to be easy, as easy as getting the loan.’”
Ibarras are greedy but they deserved to die
just for shifting blame on some one else.
Oh, and before you think I’m ranting, I live in the Inland Empire, well I live in Lake Arrowhead but I work and shop in the Inland Empire.
Close to 60,000 homes for sale in the metro Phoenix area. Can you say POP???
I flew into Phoenix on a connecting flight and must of counted at least 8 golf courses. Cool, those folks must be doing great.
Gotta love these quotes:
——————
The two-story house is loaded with amenities, including granite kitchen countertops, crown molding, recessed lighting, a spacious loft and a cavernous master bathroom with a whirlpool tub.
But Ibarra said the couple doesn’t have enough money to furnish the house.
…
Their budget is excruciatingly tight. The backyard of the new house is still dirt because they can’t afford to landscape, and what furniture they have is second hand
——————
$5400/month after taxes would be pretty good, if not for that $6K/month mortgage payment. Living expenses, smiving expenses.
They were so busy floating on the cloud imagining themselves living there they they forgot they had no money to furnish it. Duh! They couldn’t even afford the house! Imagine THAT.
A lot of this is going on, though. I recall reading several stories about folks in there brand new Mc Mansions and no furniture…kids riding their bikes and skating through the halls. Related article attached…Don’t forget to check out some of the real life stories in the comments that follow.
http://www.businessweek.com/the_thread/hotproperty/archives/2005/07/all_house_no_fu.html
BayQT~
$5400/month would pay for a pretty nice hotel room, and it would be furnished and even have maid service! Plus no worries if you decide you don’t want it anymore.
I’ve been out around Henderson, Nevada, all weekend looking at homes, new and resale. I own a home here, but want something smaller, easier to maintain and less expensive on utilities.
What has struck me is the amazing number of developments going up, in all stages of construction. Housing has slowed here in the Vegas area market, it’s not unusual to see homes up for sale for a year or more. Prices are not really appreciating. What I can’t understand is who is going to buy all of these new places? And the prices are still, to my mind, insane for Nevada. 300, 400, 500 and more, some advertised for over a million dollars. The mountains at the south end of Henderson are being stripped and terraced, some almost to their peaks. I can’t imagine what those places will be. Even townhomes and condos are expensive. Looked at one townhome today, really very bland at just under $300K with fees and special assessments starting at $200 a month plus. Most looked like apartment complexes, no “at home” feel, the kind of places where you really couldn’t even take a walk comfortably.
I saw a great place in the Del Webb Anthem area, a perfect place, decent price, right size house, restricted to 55+, greenbelt areas, a lot of the natural hills left undisturbed. They’ll offer a 3% discount on the total for a cash payment. I’m really debating on what to do. I’d rather live “back home” in Southern California but I wouldn’t feel completely sane spending a small fortune to live in a shack in a ghetto slum there. The only drawback was the city planner who uses a Sim City game to lay out streets and zoning has made it a one way in and out street for hundreds and hundreds of homes in the area.
I’d debated on selling (own my home outright) and sitting on the cash and renting, but don’t want to stay here and rent (I truly think southern Nevada is the anus of the planet.) And I don’t want to pay the outrageous rents they’re getting in the part of SoCal I want to return to, the Anthem place seemed far enough removed from the Vegas atmosphere to be worth consideration. But then I’d be stuck here until I die, and I can think of no worse way to go than in Las Vegas.
It’s a real confusing situation, don’t quite know what to do. But, I did want to comment on the huge number of developments and master planned communities still going up here in this area. If it’s going to get so bad, what will happen to these homes, the builders, and the people who buy into them at a half million dollars.
DON’T DO IT. The cost of A/C in the summertime will consume any saving$ you achieve by buying/renting in a less costly area. ALSO - the medical care in these outlying areas is questionable (at least it is here in NM). There are less costly yet safer alternatives than Anaheim. Nearby Yorba Linda and Anaheim Hills have good rentals - you just have to look for them. Try looking in the Register early in the week - say, Monday & Tuesdays as opposed to the weekend. Good landlords will wait until good tenants come along. They will even lower the rent on the spot for you ($100/mo for us).
All the best to you.
~Misstrial
“I’d debated on selling (own my home outright) and sitting on the cash and renting, but don’t want to stay here and rent (I truly think southern Nevada is the anus of the planet.).”
If you hate the area that much, why are you even considering buying again? Sell your place. Let the interest on the money pay your rent. And take your time figuring out what you want to do. When your ready you’ll have the money sitting there, without having to sell a house first. JMO.
My inlaws live in the Carson valley, Minden. It is amazing to see the huge, HUGE homes going up behind them! I am talking 15-20,000sqft. monsters with 10+ car garages!!! The most telling is when I get the scoop on these they are spec homes that the builder is moving into because they couldn’t sell them! There have to be about 20 of the huge monster homes built or nearing completion with ground broke on several more.
Seems like all the local builders got rich during the boom and decided to let it ride one last time and bet it all on the one home. Much eaiser to build one big one than 10 McMansions.
Seriously, when I get the story on them they are all spec homes that the builders now call home.
Who the hell can really afford the upkeep, taxes, utilities and other cost associated with such a huge home? They just passed some RE property tax program their that seems to really screw them all (as compared to here in CA, I know-I know—but at least you know what you taxes are here). These cost have to run well over $6,000/mo. This doesn’t even take the purchase price into consideration! Could you imagine the utility bill on a 20,000sqft home!!!!! I bet the utilities on them is more than most people spen on their entire housing nut.
Cold cold weather; I remember noticing that some of the newer construction out there doesn’t look very energy efficient.
Jeez, why would you even consider living in a place you hate? I don’t get it.
When there are so many nice places in the world. Don’t do it!
You can find a decent rental in Sun City Anthem for around 1300-1500.
I rent in 7 Hills and have been renting since we sold our house here in Vegas two years ago.
We also want out of Vegas and back to So. Cal. and that will never happen if I get stuck in a house now.
Prices here in Henderson have moved down, but there is still a long way to go.
If you buy now you are either going to be stuck in it, or have to bring a big chunk of money to close to move.
That’s my next plan, seeing what I can find there for rent and wait for awhile. The unit I was looking at I’d pay cash for, with still a bit left over. It’s in the Solera development. I’m wondering if the builders are open to any negotiation on price? Things can’t be moving that well even there in Anthem. I’ve got a home in Henderson that’s paid off, but don’t like my area anymore (Paradise Hills - rezoned more than once and overbuilt), and I’ve grown tired of neighbors on each side constantly telling us how we are supposed to live. We’re nice, quiet, clean, responsible people, but the neighbors don’t like when I water, don’t like our trees, don’t like when we run the air conditioner, you name it and they’re complaining. We’ve got the best looking house on the street, nicely landscaped, I don’t know what their problem is. It’s either move or I end up in jail for punching out two old lesbians and one greedy b***h. We’ve had it up to our necks here in lousy neighbors. I’ve even had them come into the house and proceed to complain that I smoke in my own house! I’ve never encountered people like that. It’s like living between twin Hitlers.
I’ll check the rentals in Anthem, however, that may still give us the option of returning “home” when it becomes more reasonably priced there in So Cal.
There was a death in the family recently and I am in a very unusual situation in that if I don’t sell, a lien will be placed on the deceased’s portion of the house (even though it joint tenancy with right of survivorship and was homesteaded.) If I sell, there will be no lien and, even if there was a lien, it would have to be removed by the states involved so I can sell and the liens would not be enforced. Sounds crazy, but that’s what the lawyer says.
Thanks for your comment.
Why don’t you move to Missouri or Arkansas or something. It’s beautiful there compared to the desert.
I remember I was interviewing with a company in LA (transamerica) who were moving to North Carolina. The guy was dejected that he had to move there. NC is paradise compared to LA…green, not that much traffic, plenty of WATER no smog. Houses out here are on an acre and probably much cheaper than Vegas.
A nice house on an acre in NC will run $550K.
I sold my house and moved to MO. I’m renting now. Still doing business in LA — traveling there regularly.
Although I can’t imagine selling or even trying to sell at this time, I can see how where you are now is becoming uncomfortable and encroaches on your peace of mind.
That said, I think I would put the “For Sale” sign out as soon as possible. There is no telling how long it will take to sell…but absolutely price it to sell. When you get to Solera, go in there confident. No long faces or “woe is me” attitudes or the sales people there will sense it and will try to eat you alive. You have options….they don’t have the only units out there that will satisfy your requirements so don’t allow them to think that you don’t want to look anywhere else. And, yes, I would haggle with them. Don’t let them intimidate you. One of the rules I use is to “always have a plan B”. Seriously. Have a plan B or Solera will work you instead of you working them.
Good luck to you.
BayQT~
question. When the NAR comes out with its sales figures for resale homes, how come it has decreased, while new home sales from the Commerce dept. has? Just don’t understand? BTW, I’m not trying to infer that the resale market is better, but just want to understand. Thanks
I assume you mean “hasn’t” decreased. Either way, remember that the Commerce department has HUGE error margin in their data. I think it’s typically +/-15% or something like that. Realtors only have MLS resale data, and that is flawed by relying on agent input for the data entry. Dataquick uses tax data, which is delayed, and flawed by fraud in its own way, but I think it is more impartial.
Sorry, meant to say that NAR numbers have increased, while Commerce numbers of new homes has decreased
“But Ibarra said the couple doesn’t have enough money to furnish the house. Ibarra said she and Macias, a 30-year-old commercial plumber, together earn about $5,400 a month after taxes. Since moving into their new house in December, they have spent $4,000 a month of that on the house’s interest-only mortgage, property taxes and homeowner insurance.”
This reminds me of all the stories we read a while back about how the 30-and-under set were blessed with some kind of special financial savvy that the over-30 set just couldn’t quite grasp; I guess the Ibarras were similarly blessed?
That $4000 worth of monthly payments would be 74% of income, assuming the property taxes and insurance were in escrow. I thought that 30% was supposed to be the prudent lending rule-of-thumb ceiling on the ratio of monthly payments to income?
It also seems quite crazy that a commercial plumber would have qualified for a purchase of a five bedroom “executive-style” home. Now I am feeling house envy, especially considering the Ibarras could eventually wind up on the receiving end of a Demo-rat bailout to “save our homes” that is funded in part by priced-out renters like us.
Het GetStucco, no need to experience house envy a minute longer. You too can have your very own stucco box with 4000 payments. Since prices are falling you can even get a biger house while not having to reduce your payments at all.
Thanks for the tip. I will go out and buy one tomorrow.
i’ve had house envy for years. i had a great apartment near the beach but i lived above smokers and it made my place stink.
so i moved to a big house owned by two flippers who sold while i was still there.
so i moved to a nightmare condo near a golf course. the houses on that street are so gorgeous i took photos just so i can look at them and dream. can i put them on my website if they are owner occupied? these are glass homes with views.
Quit the $hit with the dem bashing, politicians suck, all of them. There is a crew in the White House now which sucks beyond belief. This board is for real estate not politics.
Remember it was GW and his band of fools in control when Greenspan lowered rates and kept them at 1% for a year and a half. Do you think they had nothing to do with that attempt to “stimulate” the economy that got us into this mess. Don’t tell me that the Fed is independent either, Greenspan spent more time in the White House under GW than under any other Prez.
Enough, let’s keep this what it should be and what it is, a real estate blog, with the caveat that ALL politicians suck…except…Ron Paul.
” ALL politicians suck…except…Ron Paul. ”
Testify, Brothah!
Word to the Ron Paul reference. The only honest man in Washington.
“Don’t tell me that the Fed is independent either, Greenspan spent more time in the White House under GW than under any other Prez.”
The Federal Reserve is independent - it is a private corporation. The Federal Reserve banks are private corps owned by the member banks.
Bush is told who to nominate by those who own and run the country.
The only one on his knees was Bush.
“Quit the $hit with the dem bashing, politicians suck, all of them.”
Point taken, but my professional training predisposes me to look for patterns, and I see a pattern of bailout proposals coming strictly from one of the parties in our two-party system, and feel compelled to point that out.
Yes Karl, we know all about it.
I am so glad that I am not the only one thinking “executive” home = plumber/entry EE??? Here I am making $124k and *I* cannot afford an “executive” home much less a *5* bedroom.
The asshats created a false demand and drove up the cost of RE pricing out the real buyers. I hope their credit is ruined and that they NEVER are able to buy a home (other than in a trailer park!).
~Misstrial
“Ibarra said the couple doesn’t have enough money to furnish the house. Nor do they know how they can afford to buy gifts for their two young children on their next birthdays or to turn on the air conditioning when summer comes.”
“‘What we have now is a market where the bottom half of the market is strong and the top half weaker,’ Husing said. ‘So the way we measure housing prices might actually be hiding a decline in the top end of the market.’”
Bottom half is strong? After 50+ subprime lenders just folded shop in the last three months? What bottom half is he talking about? Certainly not the bottom half of the income distribution, who are currently priced out forever from the California market by a combination of unaffordable listing prices based on what homes sold for back in 2005, with a sudden dearth of subprime financing opportunities.
“According to the FBI, 80 percent of all reported fraud losses involve collaboration by industry insiders, such as brokers, appraisers and agents. The lender typically is a victim.”
I propose that Senators Dodd, Schumer, Clinton and Obama all take a close look at who the real victims are — it is not homeowners facing foreclosure, but the poor, victimized lenders. Never mind that they burned and buried the underwriting rule book over the course of the past decade, including the abandonment of income verification.
Snort!
That’s the point of the “bailout”. The “”"”victimized”"”" lenders who contributed to Schumer’s campaign. Just like a million banana republics: loot the treasury for the benefit of the rich and powerful while pretending to be on the side of the poor.
There is plenty of blame. They went balls-to-the-wall in insane underwriting standards in quest for more quarterly profits and repackaged securities fees, and now they claim to be the poor widdle innocent victims? The difference between the sleazy mortgage brokers doing illegal stuff and alot of the big banks doing sleazy stuff is that they have enough power to make sure that what they do is deemed to be legal!
No, the only victims are the last remaining prudent middle class workers who wanted a lifestyle no worse than 20-25% below what their 1960’s parents had.
(My father was a university professor and on 1.25 incomes bought a home in Brentwood, Los Angeles. That wasn’t abnormal—then.)
…loot the treasury for the benefit of the rich and powerful while pretending to be on the side of the poor.
This is why I am 99% likely to vote Republican in the next election. I would rather vote for a party which is right up front in its support of the top 0.5% of the wealth distribution, than to vote for hypocrites like Dodd or Clinton. These Demo-rats pander to numbskulled bleeding heart liberals with proposals that are supposed to protect the needy and the oppressed, but whose true purposes are to funnel more loot into the hands of the super rich.
You have to remember; One foreclosure in California is like Three foreclosures, almost everywhere else in the country. 11,000 foreclosures for the 1st quarter in California, as far as dollar amount is concerned, is like 33,000 foreclosures in almost any other state in the country.
If you get foreclosed on, it means that the price you paid for the house you bought, was too much, in almost every case. I thought American shoppers, were the best value shoppers in the world. Apparently, I’m mistaken.
Anna Ibarra. It isn’t your fault. It’s that nasty builder Lennar homes who should have warned you that you’re taking on too much debt. If you’re fat it’s not your fault. It’s the chocolate makers and donut shops. If you drive drunk and kill or maim someone it’s not your fault it’s the fault of the booze makers. If you become addicted to meth or crack or any other drug it’s not your fault it’s the people who made the drugs. You’re just a poor innocent fb who saw $$$ signs in her greedy little mind and is now crying, “I’m a victim!” Give me a break. However, not to worry. The government will bail you.
And if Anna is a bad person it’s… her parents’ fault, right?
‘Course, if her kids are bad, it must be their father’s fault.
The best lessons are sometimes the most painful…personal finance 101…don’t buy home without it.
“It was their fault. They just wanted to sell. They should not have approved us,” Ibarra said
Agree, idiots should not get loans
“‘The next seven years will be a time of correction. We are just beginning the cycle. Real estate pretty much runs in a seven-year cycle,’ Mourraille said. ‘And the correction will be across the board, including the multi-million dollar estates.’”
Perhaps some of our top policymakers who are blithely prosecuting the War on Savers ought to take a little time to ponder the meaning of this passage from the Old Testament:
Genesis 41:25
Then Joseph said to Pharaoh, “Pharaoh’s dreams are one and the same; God has revealed to Pharaoh what he is about to do. The seven good cows are seven years, and the seven good ears are seven years; the dreams are one. The seven lean and ugly cows that came up after them are seven years, as are the seven empty ears blighted by the east wind. They are seven years of famine. It is as I told Pharaoh; God has shown to Pharaoh what he is about to do. There will come seven years of great plenty throughout all the land of Egypt. After them there will arise seven years of famine, and all the plenty will be forgotten in the land of Egypt; the famine will consume the land. The plenty will no longer be known in the land because of the famine that will follow, for it will be very grievous. And the doubling of Pharaoh’s dream means that the thing is fixed by God, and God will shortly bring it about. Now therefore let Pharaoh select a man who is discerning and wise, and set him over the land of Egypt. Let Pharaoh proceed to appoint overseers over the land, and take one-fifth of the produce of the land of Egypt during the seven plenteous years. Let them gather all the food of these good years that are coming, and lay up grain under the authority of Pharaoh for food in the cities, and let them keep it. That food shall be a reserve for the land against the seven years of famine that are to befall the land of Egypt, so that the land may not perish through the famine.”
I’ve thought of that biblical metaphor many times.
People think the feast goes on forever. It’s different now. Then the famine hits. I can’t wait.
The credit bubble in effect was a Ponzi scheme, and like any Ponzi scheme when it comes apart - it gets very ugly very fast
No purported government subsidy, fix, or bailout is going to put a dent in this disaster
The mere fact that bailouts are being proposed will only hasten the pace of shutting off the credit spigot - as lenders will now have to add another risk factor to the equation
“We are really not buying. We are just paying interest and we are in debt for almost $1 million,’ Ibarra said.”
Yeah, sign a contract here, take out some cash there and before you know it you’re 1 million in debt without any fault of your own. Oh the injustice in this world!
“‘We are really not buying. We are just paying interest and we are in debt for almost $1 million,’ Ibarra said.”
Tell IT to the that idiot Dodd and the Repo Man. I’m CERTAIN they will have MORE SYMPATHY for you assclowns than me
Check out last sentence. This is a price reduction from 1,599,000 to 1,549,000 and home is not more than 100 feet from Rolling hills road a short cut from PVnorth to Crenshaw.
GREAT REDUCTION IN PRICE!! Beautiful and very UNIQUE Type of property. Located on highly desirable “Palomino Ranchos” secluded and leading to cul de sac. Extensively remodeled and freshly painted with new recessed lighting, crown moldings, new baseboards, New “Jacuzzi” Tub travertine floors and shower wall in Master Bath, new Carpeting, wall coverings, Granite Tiled Kitchen Counters, new appliances and much more. Must see this HUGE 23,900 Sq. Ft two tier newly fenced FLAT LOt. Great to ride and train horses. Your children will love you for it. Elementary school, church and Post Office at Kelly’s Corner a few hundred feet away! Greatly reduced price for a quick sale. OWNERS MOTIVATED. BOUGHT ANOTHER HOME..
BOUGHT ANOTHER HOME..
$50k off and they know they’re screwed.
Bwaaa haaa ha!
I’d love to live in that neighborhood, but am I the only one to notice it never mentions the house size?!?
Gotta love this stuff.
Got popcorn?
Neil
OT…but this is from an earlier topic today. It was part of a New Jersey Times article:
“He took out a $226,500 adjustable-rate mortgage on his A-frame home in Allentown with a 1.8 percent interest rate and monthly payments that were not applied to either the principal or the interest.”
Question: Where does the money go if it was not applied to the principal or interest? In the related article, it was called a “creative loan”. That sounds beyond creativity. More like chronic stupidity.
http://www.nj.com/news/times/index.ssf?/base/news-2/117721477183860.xml&coll=5
BayQT~
Victimology…
————————————————————————————
Who’s the real victim in the subprime mortgage debacle?
By Michael Lewis
BLOOMBERG NEWS
04/22/2007
…
The moral of the story is also clear: No matter how much the government might try to help the poor, the rich people who run financial markets will find a way to shaft them.
…
Why in this new drama is it so easy to imagine borrowers in a different role, other than the one in which they are currently cast: the victim?
Moving is never pleasant or cheap, but that is the main cost to the subprime defaulter: He hands back the house, whose value has presumably plummeted, to the people who lent the money to buy it, and walks away. He rents. (Shrewdly!) In effect he bought a very cheap call option on the U.S. housing market. While he waited to see if his call option made him richer, he lived in a much nicer house than he could otherwise afford and probably wondered why rich people had become so recklessly open-handed. His behavior was irresponsible, but the markets let him do it and so it’s hard to blame him.
Am I the only one who wonders how a person who borrows money he can’t repay, buys a house he can’t afford, and then stiffs his creditors, is allowed to play the victim?
Getstucco,
Oh, we all seethe with thee.
I love the analogy of the call option… I’m going to use that one… a LOT!
Got popcorn?
Neil
Am I the only one who wonders how a person who borrows money he can’t repay, buys a house he can’t afford, and then stiffs his creditors, is allowed to play the victim?
Ever heard of “straw buyers”? That’s when a real estate specuvestor finds someone, ANYONE, to sell the house to, EVEN IF THEY CAN’T AFFORD IT? Why should they care about if they can afford the house or not? It’s not like they’e loaning someone THEIR $$$. Hey, if the borrower couldn’t afford the loan, the mortgage broker would catch it, right (and they’re NEVER blinded by the FAT yield point spread commission, and know the loan risks will be diffused via CDOs to many unknown investors on Wall Street: it would NEVER come back to HIM, right?).
So the investor sells an over-priced house at a 2006 price to some sucker with little awareness if they can afford it or not (they’re qualified on the intro “teaser” rate, after all), and their mortgage broker buddy gets an appraiser to “hit the numbers” to make the inflated price for the loan “work”. The mortgage broker is happy, as he gets his commiss, as does the real estate agent. The specuvestor is happy as a clam, enjoying his HUGE profit on the home ($100-500k profit is not unusual).
The seller worked the system, finding a “magic bean bag-holder” who effectively “bails them out” and is left with only ruined credit as a result. So in effect, the bank is left holding the bag when the “straw buyer” forecloses: all they’ve done is ruined their credit score (which usually doesn’t matter, anyway: the banks were lending to anyone with a pulse before this melted down, and the “bag holder’s” loan often didn’t require the applicant to even HAVE a job, for the most part).
In a nutshell, THIS is what caused the sub-prime (and now Alt-A, and now prime) meltdown. It wasn’t that hard to pull off, and yes, it’s illegal. This is the dying gasps of a scam. Once it starts to fall, then look-out below!
Ana Ibarra and her husband, Guillermo Macias, adore their five-bedroom house in a new tract of executive-style homes
Idea: don’t buy a five-bedroom house unless you ARE an executive.
“‘What we have now is a market where the bottom half of the market is strong and the top half weaker,’ Husing said. ‘So the way we measure housing prices might actually be hiding a decline in the top end of the market.’”
How freaking hard would it be to publish all ten percentiles, or at least the 25th, 50th and 75th? That would avoid this pointless speculation and guessing. Better yet, just give us a histogram.
“‘We just jumped at the opportunity because we thought it was going to be easy, as easy as getting the loan.’”
EASY?!? They spend 75% of their take home pay on their mortgage. Is she out of her freaking mind? What did she think would be “easy”? I can only assume she means appreciation.
wow - why even bother getting a deposit
Gross new order revenue 43,844,872 25,137,043 10,751,446 7,956,383
Cancellation revenue 27,772,668 23,076,414 2,569,624 2,126,630
Net new order revenue 16,072,204 2,060,629 8,181,822 5,829,753
We are really not buying. We are just paying interest and we are in debt for almost $1 million,’ Ibarra said.”
Dipshit of the Year comment? What a sense of entitlement that wasn’t earned. And, Fontucky sucks - and most all of the area around it. How much of it is in the floodplain that will wipe out a bunch of these ‘executive’ houses? And I am sure they didn’t budget for flood insurance.
Huey Lewis performed in Albuquerque last night. He said (as a joke) he wanted to move here. Wouldn’t take 2 hrs to go 15 miles like it does in No Cal (or So Cal). It is beautiful here in the Duke City.
I used to sell real estate. I know. I know. However I got out because of the other sleazy people in the profession. I reported any agent who attempted fraud and believe me there were a lot. I got one loan officer fired for false statements to one of my clients. I also would not deal with a client who wanted to use a mortgage co. I told them if they didn’t want to go through a regular bank, they would have to find another agent. There’s just too many opportunites for fraud. I could sleep at night and I still get Christmas cards from tons of my clients. I knew what it took to qualify for a home and sometimes I would counsel people for a year or two on their finances and straightening them out before they would find a house. I never made a lot of money, but it paid my kids college tuition each semester. Real estate companies want people who have to scrape to eat. Sometimes this is not good for clients, because those kinds of agents will sell anything to anyone just to make a buck. Top producers are the worst. Usually they pass a client through the system so fast to make a sale and stay on top, that there is no personal service or financial accountability to the client. The best agents you will find are the ones who do it to make a little extra money and do not need it to survive or live on. I got out because I couldn’t stand the corruption and the legal ramifications of dealing with an unscrupulous agent on the other side of a deal. Pick your agents carefully (best by referral from someone you personally know who’s dealt with them before), stay away from mortgage companies, and be leary of appraisers who work for a lending institution. Sometimes it’s not best to call the agent who has the most signs out. Chances are they fly from one deal to next with no time to really service the client. No one should be buying a house unless they’ve gone to the library and read several books on buying an selling. They need to know as much about the process as agents, loans officers and appraisers. Just some advise from someone who’s seen it from the inside.
From all the thousands of houses that I’ve toured and shown, it is true that many, many of the more expensive ones have absolutely nothing but a bed, a sofa and a TV. There is no money, just heavily financed debt-burdened owners.
We notice here in the Minneapolis-St. Paul area as much as a 12% foreclosure rate on sub-prime loans and it is increasing. The $250,000 housing is just sitting for sale with no buyers. The $100-125,000 properties still seem to move and sell. The biggest insanity I have seen is six executive townhouses built across from Oakdale City hall and have been on the market for 2 years with no buyers at $320,000 apiece. They are vacant and the property has been “flipped” at least once that I know….the insane part is that the six have not sold and now they are building SIX more that will not sell.
Whole system is process driven and we are driving it to the poorhouse as soon as we can. I am expected on the average a 30-40% loss in equity nationwide over the next several years.
Ben, I hope that the realtive anonymity of this forum will allow to call out the truth when you see it–
Borrowers, “It was their fault. They just wanted to sell. They should not have approved us”
This is BS. Where was this sense of responsibility when they were lying on their mortgage app. How dare they act like they’re a victim. The victim is the end-investor who’s going to lose hundreds of thousands of dollars at short sale.