Real Estate Boom Turns To Bust In California
Reuters reports on California. “Colleen Moorhead knew exactly where to turn when she needed to harvest some cash. Between 2001 and 2006, the Moorheads refinanced their three-bedroom San Diego home at least nine times, county records show. Moorhead and her husband now owe $603,000, up from $196,000 when they started, and more than $10,000 over what their house is worth, according to one online estimate.”
“They’re likely to lose it soon if they can’t somehow make payments greater than their monthly income.”
“Their broker, Joyce DeAngelo, said she tried to save them from financial disaster, but her client kept wanting to refinance. ‘I told her every time that she can’t keep doing this, she’s going to lose her house,’ DeAngelo said. ‘She has no one else to blame.’”
“As the real estate boom of the last half-decade turns to bust, homeowners like Moorhead say they feel betrayed by brokers who profited from bad advice and saddled them with loans they couldn’t afford. ‘It seemed like she was a gift from God or something,’ Moorhead said. ‘But she’s a wolf in sheep’s clothing.’”
“Particularly problematic was the ’stated income’ loan. One lender checking a small sample of applications against federal tax forms found that almost 60 percent of loans had income exaggerated by more than 50 percent, according to an April 2006 Mortgage Asset Research Institute study.”
“One borrower who is confined to a wheelchair, Monica Wray, of Temecula, California, said she was surprised when she checked her loan application later that she owned a cleaning business. ‘I laughed, because I can’t even clean my own house,’ Wray said.”
“Brokerage Fidelity Capital Funding said the broker did not lie on the application. ‘He talked to her and she said she owned a cleaning service and made a certain amount of money, and that’s what he used to qualify her on,’ said sales manager Tom Calise, the supervisor of broker Nick Minielli, who declined to comment.”
The Wall Street Journal. “An auction of nearly 100 foreclosed homes here Saturday showed that mortgage lenders are having to accept huge discounts in some cases to unload such properties.”
“At the San Diego sale, houses and condos typically sold for about 30% below the previous sale or appraisal prices. In a few cases, the discounts were around 50%.”
“A four-bedroom home in Oceanside, Calif., attracted a high bid of $495,000 at the auction, 33% below the sale price recorded in November 2005 for the property. One condo in San Diego sold for $120,000, less than half of its previous value.”
Inside Bay Area. “A short sale may or may not be the right solution for a seller facing foreclosure or a buyer looking for a bargain. ‘Every bank is so different. It’s almost like walking a seller through what is the equivalent of a tax audit. The bank is not going to let you do a short sale because you want to get out. There has to be a hardship showing,’ said Realtor Elisa Uribe.”
“‘It’s tough to paint it with a broad brush,’ cautioned Dustin Hobbs, spokesman for the California Mortgage Bankers Association. ‘It’s a case-by-case issue and lender-to-lender. You can’t say 100 percent they will (approve a short sale), but the odds are a lot better than 15 years ago.’”
“Lenders are anxious to avoid a foreclosure because they typically lose anywhere from 20 percent to 40 percent of the loan’s value, he said.” “A home sold through a short-sale proceeding may not be in the best of shape, said Dave Konesky, a Realtor (in) Tracy. ‘I would be very careful. Even if a buyer gets 10 percent off the mortgage, it doesn’t mean he is getting a good deal in our market,’ he said.”
“Sellers, too, should be aware of the risks of short sales. Say the borrower owed $500,000 on the mortgage and that the home ended up being sold for $450,000 through a short sale. The borrower would actually owe taxes on $50,000.”
“‘The sellers are likely to end up with a tax on a short sale,’ said said Elizabeth Weintraub, a home-buying columnist. ‘Sometimes (real estate agents) don’t tell sellers that is a consequence.’”
The Sacramento Bee. “Thousands of unsold and empty houses in the Sacramento region are fast becoming breeding grounds for mosquitoes.”
“As the region’s housing slump creates more vacant houses and a growing excess of homes in transition between buyers and sellers, Culex mosquitoes that can spread the West Nile virus are thriving in uncared-for swimming pools, garden ponds and yards flooded by broken sprinklers, said David Brown, manager of the Sacramento-Yolo Mosquito and Vector Control District.”
“Sacramento Association of Realtors spokesman Greg Vlasek said there are 9,672 houses for sale in the mosquito district’s Sacramento and Yolo counties coverage area alone. Nearly 1,400 have swimming pools.”
“The district is calling in a new cavalry in its war on mosquitoes: real estate agents.”
“‘As you show homes for sale or visit unoccupied properties, please assist us by reporting unmaintained swimming pools, ponds, fountains etc. to the district,’ states a letter being e-mailed to 6,500 agents today by the district and the Sacramento Association of Realtors.”
“‘There’s a lot of houses for sale where the pool isn’t being maintained,’ said Sacramento-Yolo technician Lisa Fitzgerald. More and more houses she sees now (are) home to a murky backyard pool that eventually prompted complaints from neighbors.”
“‘I was at a pool at just a beautiful house. The backyard was just beautiful. Then there was the pool. It was in foreclosure,’ she said.”
“As real estate agents add mosquito patrol to their duties, there are more than 14,000 homes for sale in El Dorado, Placer, Sacramento and Yolo counties.”
“The rising number of foreclosures is also emptying out more houses in the capital region. More than 1,500 homeowners lost homes to banks the first three months of 2007 in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to DataQuick.”
“Add to that a large but unknown number of empty houses owned by investors. At the height of the region’s housing boom in 2004, more than one in four Sacramento County home sales were to investors, according to DataQuick.”
‘More one hundred hundred community and consumer organizations led by the California Reinvestment Coalition Monday called upon six of the largest mortgage lenders in the state to stem the tide of home foreclosures resulting from predatory loans.’
‘ California saw 31,434 foreclosures in March alone, nearly triple the number of foreclosures in March of last year, according to RealtyTrac.’
‘CRC warns that as housing prices decline, the foreclosure crisis will escalate. In 2006, 21 of California’s 26 metropolitan areas suffered housing price declines, which limit the ability of many borrowers to refinance loans.’
‘The influx of new American Canyon residents goes hand-in-hand with the the rapid growth of available housing in the city, said Heim, chief of demographic research. She said 273 new housing units were established last year.’
‘It’s primarily because it’s the glove in the real estate market right now with decreased prices and available housing,’ American Canyon land appraiser Daniel Sheya said.’
“The lenders were asked to declare a temporary moratorium and direct homeowners to financial solutions that will allow them to keep their homes.”
Like what solutions, getting a third job? Showing them how to rob a bank. Giving them the combination to the safe?
Where’ve you been, imploder? Missed you.
imploder has 5 jokes…. must rest them….
then oh so funny again…..
Yay, Imploder! I love your suggestions. How about hints on murdering rich family members for their inheritance or insurance?
Glad your back imploder….back to “wind talking.”
From the CRC,
“California is in the midst of a foreclosure crisis that could rob hundreds of thousands of homeowners of the American dream,” says Kevin Stein, associate director of CRC. “Many California homeowners are facing foreclosure because they were misled by unscrupulous mortgage brokers and lenders. We are asking the largest lenders in the state to take leadership so that families can keep their homes and California’s economy won’t suffer.”
You mean to tell me that All those Subprime purchasers, many if not most of them immigrants, were deliberately lied to by their Realtors amd Brokers? Did the entire REIC commit contractual fraud upon all those naive, conned ‘innocent’ first time buyers? If so then this may be the most gargantuan ripoff scam committed upon the largest group of naive duped suckers in history.
KISS MY ASS! I went chapter 13 in 1986, did not ask for a bailout, and suffered the consequences. The entire State can go belly-up in foreclosures and most folks will come out of it OK. Maybe move in with relatives for a few months, bad credit for several yrs, and get up off their feet and move on. The ones who will suffer the least will be immigrants, who are very mobile and can shift easly into renting or sharing an abode with another family. They also do quite well dealing cash only so that bad credit means S*it to them.
Come’on Pete you know it’s not about the immigrants… It’s about some a$$hat politicians realizing they are about too lose a lot of equity and value in there homes if this keeps up.
It doesn’t just affect the slums it affects everybody. There’s a redistribution of wealth going on. God forbid that someone who was actually priced out may be able to afford something in their exclusive neighborhood. My God they may have to live next to an accountant for chrissake or better a yard cutting illegal with 30 family members and a love of mariachi music at 2 AM if this keeps up LOL.
It’s not about the illegals it’s about a light bulb going off in someone’s head. If homes loose 50-60% of value or roll back to 3x affordability. Well that may get ugly for some high rollers.
yes….if this keeps up imploder will move next door to Mayor Viaragosa and play Zeppelin at 2am…
then all heck breaks loose
Did imploder just go third person on us?
Did imploder just go third person on us?
Yes, he pulled a Slim.
Just when we thought that imploder was posting in first person singular forever, he goes away and comes back as the narrator. Tricky chameleon imploder fools us again.
Peter, their efforts are futile to stop the market correction.
“…“The rising number of foreclosures is also emptying out more houses in the capital region. More than 1,500 homeowners lost homes to banks the first three months of 2007 in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to DataQuick.”
They probably sold 4500 homes in that market in the first quarter, while 1500 were foreclosed. The tide is turning. It is a rip tide. It is going to suck all the FB’s out to sea. There are not enough life guards in the CRC to save any of them.
My question is, could we get to a point where foreclsoures exceed sales for a quarter? Has that ever happened?
“…“The rising number of foreclosures is also emptying out more houses in the capital region. More than 1,500 homeowners lost homes to banks the first three months of 2007 in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to DataQuick.”
I tract foreclosures in LA County and We are at 3600+ and 13400 nod’s. That is 13-15 foreclosures per LA Zip. Lots of LA zips seeing 30-50 foreclosures. IMO the banks are simply hanging onto these REO’s and their zestmates still way too high, especially considering the dumps many of these REO’s are located in.
As far as certain vested interests attempting to maintain artificially high home prices,whether Sacto politicians, the NAR?CAR anf other high rollers, this is in itself a scam and an intrusion upon private business contracts. Not that I am a fan of the REIC, but the realtors and brokers are just like any business folks,:you have to have some experience in ferreting out the crooks and cons and false smiling faces just as in any other business contractual dealings. If you are a naive first time buyer and did not fine tooth your RE contract then what business is it of the state to get involved, except in cases of outright fraud and/or intentional misrepresentation.
IT is perhaps the case that the REIc has influence peddlers in the Capital to affect legistation in housing. This also hold true for that supposed peoples champion, Mayor Villaigosa, who is in the pockets of the big LA developers.
HAHAHAH, 30-50 foreclosures/zip in LA. Ha HaHA, LMAO here in Stockton in norcal we have between 300-600 in foreclosure/zip!!!!
The shit has hit the fan and borken it here allready and we are just getting started. In my worst forecast I never thought it would be so mang FB going down the drain so fast!!
“The San Francisco-based coalition, which advocates for equality in financial services for California consumers,….”
Hey….they’d give you a loan if you could blow a snot on the documents… how much more equal can it get?
Exactly, equal wasn’t the problem.
Actually, the best and most equitable financial solution would be for the government to refund to all these poor victims exactly the amount they invested in their houses - zero - and then then tell them to STFU. Fair enough?
Amen Steve, A effing men
crush
Love it, Steve!!!!!
Considering the amount of money and securities I have on deposit at Merrill Lynch, I certainly wouldn’t want them to comply with the “community-based organizations” seeking a six-month moratorium on foreclosures. ML may have scorched itself by lending to “Ownit” and other subprime outfits, but hey, sell the collateral and get on with it.
I am so tired of comments like this:
“California is in the midst of a foreclosure crisis that could rob hundreds of thousands of homeowners of the American dream”
Anyone else? The American dream for me was never leveraging myself into a box that I had no chance of ever repaying the loan on in my life. It was work hard, save money, live debt free, make good choices, be nice to people who deserve it…
“Colleen Moorhead knew exactly where to turn when she needed to harvest some cash.”
Where is “Craven” Morehead when we need him?
What did Colleen do with the $350K cash out money? Nose candy maybe?
If Colleen wants to send me the 350k she took from her house and doesn’t want to pay back, then maybe I could work up some sympathy for her.
I’d like somebody to hand me 350k as a freebie too.
Where did you get $350? I see $603-$196=$407. Is that net number?
Refi fees probably make up the difference.
i love that term “harvest some cash”. like you plant a money tree and after awhile you have dollar bills growing from it’s limbs. lol
Chance Gardner
“All is well…and all will be well…in the garden. “
“Colleen Moorhead knew exactly where to turn when she needed to harvest some cash.”
to continue harvesting cash, the answer may be found in her last name…
Imploder, I’m still laughing about that last one!
Friggin MORON’s. So many of these people are so friggin stupid that they don’t understand that drawing money out of their house equity is a LOAN and you pay it back. The only way the house “equity” is yours is when you sell the house. I hope Ms. Moorehead enjoyed all the money she spent, because now she will have NO house and NO money. Chances are she used a lot of it to speculate on other properties which are now underwater. These asshats all thought they were so clever, even though they didn’t have a clue as to the basics of personal finance.
How about the American dream of buying 10 flip homes and then selling them one year later for a $2m profit?
Well said. You can’t rob someone of something they never really possessed. Let all these screwed FBs go back to renting where they belong and should have stayed in the first place.
Bankruptcy/Forclosure=American Nightmare!
Gonna be a lot of sleepless nights for these FB’s.
The California Reinvestment Coalition. Sounds like a commie front organization to me.
Totally, and I’d really like to know what kind of cut these pinko nonprofit outfits are going to skim off whatever slimy bailout they can engineer.
nonsense
i’m sure they are every bit as honest as the united way
Now that was cold. Everyone know that they are an upstanding, downsitting bunch of thieves, don’t they?
That’s terribly, terribly cynical, la.
Well done.
My cynicism alarm goes on the minute I hear “we’re from/financed by the government, and we’re here to help you…”
“At the San Diego sale, houses and condos typically sold for about 30% below the previous sale or appraisal prices. In a few cases, the discounts were around 50%.”
Everyone repeat after me “Real Estate only goes UP!”
Do these results reset the comp prices at 30%-50% below 2005 levels?
And where does one find the auction price data? I am guessing DataQuick will systematically exclude these fire-sale auction results when they compile their “median sale price” statistics…
auction prices with large numbers of bidders are a joke. i worked with Bank of America in the late 70s / early 80s and we foreclosed on many foreclosures.
i remember going to some of these auctions, specifically one for condo units in a Langslet development in south Santa Ana, Ca.
it was amazing. the auctioneers provided so much BBQd chicken and beer to the bidders that most of the units went for prices much higher than anybody expected.
Those falling prices are the ‘New Comps’ for the lenders. Sweet. The sellers can play all the mind games that they want, but the new comps will be the new element of truth to contend with.
Not so fast. Deeply-discounted REO aution sales are invariably excluded from those oh-so-important “median price” stats and REIC comps. The fact that the people collating and reporting said statistics (NAR/CAR, etc.) also have a vested interest in making people think prices aren’t falling & the market is healthy is a total non-issue.
“Move along people, nothing to see here…”
“Pay no attention to that man behind the curtain.”
“These aren’t the droids you’re looking for.”
I’ve been thinking about the need to account for REO sales. Yes, the agents and appraisers get away with not including them in the comps data. What’s happening here in Northern VA, though, is that people are buying the foreclosures and letting the other stuff rot. So I imagine eventually it will have to affect neighborhood pricing. I’m thinking the foreclosures themselves would keep the handful of buyers satisfied, and the other resales are left out in the cold.
What would be very very useful would be monthly data on what percentage of listings and sales are lender owned. I think there was a brief national mention on Ben’s blog, but a local one would be appreciated. I don’t even know if our local MRIS includes the foreclosure sales in the monthly number of homes that were sold, even though they are listed on the MLS by the agents representing the banks.
My guess (hope) is that these prices will show up in the comps soon. I’ll bet a lot of the buyers of these REOs are planning on turning around and selling them. They probably bid ‘low’ so that they could rapidly sell them, by selling 30% down instead of the 40% below list that they paid.
AKRon,
Yes, I’ve seen REO flips already. The funny thing is, some of them are flopping badly.
ok, then every potential lookie-loo buyer should ask the for the lender REO comps in the area for comparable homes before considering making an offer. If we can’t rely on the statistical data operations to factor in important data into the stats they try and sell us, then we as consumers need to start asking for the relevant data and don’t play the game until we can play to win.
When lenders would carry their own paper for awhile they would note a area that had to many distressed sales ,(foreclosures ), and cut back the loan amounts . Usually the reason was put under health and safety concerns ,(boarded up houses ,declining value neighborhood ,to many vacant homes etc. ,) . Lenders had the right to turn down loans if the owner-occupied to investor/landlord ratio in a project didn’t meet the guidelines also . You can see how much of a higher risk loans are on condo projects/PUD’s that are now vacant or have a lot of speculators needing to dumb .
But foreclosures add to the supply of homes and a bunch of vacant homes/foreclosures scare buyers .Would you want to buy or pay top dollar for a project that has a bunch of lawns going dead or weeds growing or boards on windows ?
I’d gladly buy in a ‘hood with boarded up windows & dead lawns, but not for top dollar.
Not so fast indeed - the realtor no longer sets the price. In this market it will be the appraiser and he or she will look at county records. You would have to be living under a rock to not know that the high appraisal game is over. So those prices should show up.
“You would have to be living under a rock to not know that the high appraisal game is over.”
I wish this statement were true, but it’s not.
The realtor never set the price… WTF are you talking about the market has always set the price and always will up or down.
If I remember right, if a mortgage broker and realtor are in cahoots, they call an appraiser and push for a higher price so they get bigger commissions.
HARM (or anyone else) — can you comment on whether REO sales, auction sales etc. are available from any public source? I am thinking county assessors may keep this information on file, but I am not sure…
I’d love to know this as well.
Also - does anyone here know of a website that provides a consolidated list of bank-owned properties ONLY? I’m not interested in foreclosures, auctions, etc.
RealtyTrac provides all of the above, but not without considerable hassle and use of time. Thanks in advance.
Alot of Direct lenders use to have REO lists where the lender use to service or carry their own paper ,( you could just call the lender to get the list .) Some lenders like to market REO by the MLS . I don’t know how the MBS bagholders are going to market their REO’s.
All sales are registered on the country records . it use to be when a appraiser saw a low sale he would question the realtors or call the listing broker to fine out if it was a distressed sale . In fact ,alot of times realtors/rRE agents provide listing information on sales to the appraiser and meet them at the property .i don’t know what they are doing today .I guess alot of appraisers/lenders are using computer programs to get comp information these days also .
Eudemon
Here is one that was posted a few days ago.
http://countrywide-foreclosures.blogspot.com/
I can’t directly vouch for the quality of information, but here are some REO links, mostly for CA:
http://www.countrywide.com/purchase/f_reo.asp?lstState=CA
http://www.retran.net/
http://www.hud.gov/homes/homesforsale.cfm
http://www.realtytrac.com/pub/contact.html?a=b
http://www.all-foreclosure.com/
Check Downey Savings’ website. Used to be fewer than 10, on average. Now growing every day.
Thanks, guys (or ladies, if you are of the fairer sex). I’ve not been here for a week, so I missed that info.
Who’d have thought this would lead to pestilence? What’s next - plague?
What’s next - plague?
er, well - apparently the answer is “yes”
‘Black Death’ found in Denver squirrels
I lived in CoSpgs for a decade. Every year we had stories of bubonic plague wiping out prarie dogs or squirrels.
They put of feeders with cloth strips over the entrance, with flea killer on the cloth. Wipe out the fleas, and the disease spreads much more slowly. It is still there though.
“Brokerage Fidelity Capital Funding said the broker did not lie on the application. ‘He talked to her and she said she owned a cleaning service and made a certain amount of money, and that’s what he used to qualify her on,’ said sales manager Tom Calise, the supervisor of broker Nick Minielli, who declined to comment.”
Broker is lying, bigtime. But who’s going to prove him wrong? That’s the thing - the way it’s set up, you get away with it in this biz - for now at least.
Their might be one piece of paper in the file that could hose him, though. Almost all stated income loans that are for the self-employed want you to verify that the borrower has been self-employed for at least 2 years. You verify this, in most cases, by providing a letter from the borrowers CPA stating that they have been their preparer for X amount of years and can verify that the borrower has been self-employed for at least two years. Now, this little condition is a creative LO’s dream. Cut and paste, fabricate, you name it. If the letter exists in the file, find out first if the accountant exists. If he/she does, did he/she write the letter. You’ll probably find your bust right there.
Wrong Wray Minielli?
It still doesn’t prove whether it was the broker or the borrower who forged the document.
“The district is calling in a new cavalry in its war on mosquitoes: real estate agents.”
Ok you guys. NO posting on this subject. This is ,uh, serious!
On the theory of, one bloodsucker deserves another.
Never feed a realtor after midnight.
I suppose the agents will want another 1% for handling the paperwork.
Hey, maybe we can retrain all those “downsized” realtors and former subprime employees to be DDT sprayers.
Realtors hosed homebuyers, now they can hose mosquitoes.
Let me paint by the numbers for you, Dustin Hobbs-man…
Fraud was the rule, not the exception.
“‘It’s tough to paint it with a broad brush,’ cautioned Dustin Hobbs, spokesman for the California Mortgage Bankers Association. ‘It’s a case-by-case issue and lender-to-lender. You can’t say 100 percent they will (approve a short sale), but the odds are a lot better than 15 years ago.’”
“A four-bedroom home in Oceanside, Calif., attracted a high bid of $495,000 at the auction, 33% below the sale price recorded in November 2005 for the property.”
A new bag holder who will end in foreclosure in three years. It is still 50% over valued.
About 20 years ago, I stopped in oceanside to make a phone call @ a telephone booth and was on the phone for a minute, when an angry black woman demanded that I get off the phone, as she wanted to use it.
Haven’t been back since…
Was that you on PHONE booth?
I remember now. I saw that movie several years ago.
it’s gotten much better, trust me.
Yea right Oside by the beach is just a seedy as it’s always been. Oh but at least now you can completely get by without speaking english.
Oceanside is highly variable. There are some rough areas, such as the older beach neighborhoods and anything near Camp Pendleton Marine base (full of enlisted guys who are young and stupid, and their families.) But there are also some really beautiful neighborhoods.
At peak sold for $660k
Down to $495k Another 50% to go! $247k.
I think not. No way do prices go from $660k to $247k. Not going to happen. $350-375k maybe.
I’m betting $200k after the Great Capitulation ™happens. Housing prices fall down, go boom.
You may very well be right!
Those who believe this is a relatively quick collapse and that it will be safe to buy a house in 2008 had better develop some patience.
We did not get here starting from 2001 or 2002, the bubble was first widely disseminated in 1999 (Robert Schiller). At that time it was the largest RE bubble in the US history. It is larger! It took us 14 years to get to these prices. RE is not the NASDAQ or NYSE - you cannot just sell. It will be sticky on the way down.
One of the reasons for the stickiness are bottom pickers. The individuals that bought at auction for $495,000 are bottom pickers looking to flip. (Why else would one buy in Oceanside)?
The next bottom (5 years) will be the 350 - 375K - a great buy - Not! RE transactions will seem to have disappeared.
The market will continue to drift lower until there is final capitulation - Real Estate never goes up.
So to calculate the present value of the house, take 1994 prices adjust for inflation subtract 10% of total value et voila - a safer investment.
Come on Oceanside 600K, ridiculous.
You are exactly correct, Hoz!
And I’m still trying to find those “nice areas” in O’side. Even the better areas are just a block or so from some very bad areas.
No trees, either. Seems everyone wants to cut them down for some reason.
Too funny. Think back 10 years when someone probably like you said “No way prices can go up from $274k to $660k. Not going to happen. $350k-$375k maybe.”
Exactly. I remember when $250K was a HUGE sum to pay. Now, $350-450K is the new black.
I also remember when a $10K change in price was a lot. In the last few years, jacking up the price by $50K without any major change to the property was seen as no big deal. It was as if buyers thought, “Well, it only costs me another $150 per month.”
“I think not. No way do prices go from $660k to $247k. Not going to happen. $350-375k maybe.”
The PITI on $360k is roughly $2880/month; what’s the median income there?
It’s sure not 105k.
Not going to happen
Never say “never”. Asset bubbles tend to overshoot on the way down, and this one was the Mother of all Asset Bubbles. As long as employment stays historically low and we stay out of recession, then I agree such huge price cuts would be unlikely. If the economy tanks, though, all bets are off. Of course, we need to look at this in terms of REAL, not nominal, pricing. If inflation runs at 20% for a few years, we’ll be there in no time –even if nominal prices were to hold perfectly steady.
“JDSU will NEVER go below $100/share.”
How about $10 a share? It hasn’t seen that in more than 5 years!
“NEW will never go under $10 a share.”
By the way, I don’t see how prices will hold their nominal value. Doesn’t inflation also imply salary inflation as well?
In light of tougher lending and zero salary growth, how can home values hold nominal value moving forward?
“Doesn’t inflation also imply salary inflation as well?”
It might - provided that you still HAVE a job.
Doesn’t inflation also imply salary inflation as well?
Ever hear of globalization? This isn’t the 70’s fella.
Oh BTW, if inflation were running at 20%, what do you think interest rates would be? What were they in 1980, with inflation much lower than that? What do you think that would do to nominal house prices?
NOTHING can save nominal house prices.
That was my point. Salaries are going nowhere and lending standards are getting tighter. Hence, I don’t see how nominal prices can just stay flat.
HARM…I believe you mean UNemployment…yes?
Oops - yes, thanks.
orange county’s bubble inflated most in 2003/2004 when average (mean) prices increased 38% in one year. wouldn’t bet that prices won’t go down quite a bit.
This works only if wages and rents are also inflated by 20%, which is almost impossible to imagine in this era of outsourcing and global competition.
“No way do prices go from $660k to $247k.”
Do you mean the real price or the nominal price? The answer matters a great deal when a War on Savers is underway…
big problem in Oceanside: Lotsa jarheads with Uncle Sam housing subsidy.
Screw the surf crowd, our killers need sun heavy duty sun tax, plus it keeps out the riff-raff.
insert and in there somewhere, and it makes a little sense
“Screw the surf crowd, our killers need…”
Don’t put a man, or woman, in harm’s way where they have to kill or be killed, and then brand them “a killer.” Very cowardly!
They put themselves where they are. Its called a career decision, not conscription. If the politicos would stay closer to the constitution, there would be far less job opportunities in the killing business.
Not sure but 50% over valued from 495 might mean 1.5X fundamental value of around 325-375K or he might be saying drops another 50%. So, you guys might have been in agreement.
Anyhow, what do incomes and rents say in that area?
I guess what is being said is that once the overshoot to the downside happens, the only thing that will cause purchases are the basics. The fundamentals of buying being cheaper (with a premium for control of the asset) renting.
Salaries and incomes (cash flow) are nowhere near able to support the current prices in most of California.
What everyone keeps forgetting is that in a few years we will be on the leading edge of the greatest retirement era ever witnessed in our demographics. Since the home is usually the biggest asset you will see a large migration or retiring workers moving to cheaper areas to (a) cut down on living expenses and (b) free up the equity in the house to pay for retirement. In 5 years when we have just barely recovered from the credit bubble the demographics of the aging population will kick in. This slide will bring real estate prices, on average, down in the more expensive areas.
New York City here i come
Questions: Where are they moving from? Where are they moving to?
RE- ONLY GOES..
Why or what basis do you have to think this?
Lowering of interest rates? {soon?}
An increase in average wages, resulting in 50-60% wage growth by when?
The number of months if inventory in Sand Diegp County dropping soon? {from 26 months currently?
The shrinking pool of sub-primes that aredue to reset?
I can’t believe anybody here is still making ridiculous statements like this.
“Their broker, Joyce DeAngelo, said she tried to save them from financial disaster, but her client kept wanting to refinance. ‘I told her every time that she can’t keep doing this, she’s going to lose her house,’ DeAngelo said. ‘She has no one else to blame.’”
I love watching FBs and their erstwhile “enablers” turning on each other like scorpions in a jar. The coming blizzard of lawsuits will be even more entertaining. It’ll be like watching the Iran-Iraq war - let ‘em both lose.
‘I told her every time that she can’t keep doing this, she’s going to lose her house,’ DeAngelo said.’
Just like a drug dealer, keeps giving them the product even though they know its going to harm them.
Moral decay in our society is the root cause of our pending financial crises.
moral decay the root of financial crisis?
how bout the alignment of Saturn and Venus…….The LEGISLATION of morality, and the infringement of liberty may have some negative effects as well.
I still think that a good way to dampen bubbles would be to make a law that a copy of all papers relating to any no-doc loan will be sent to the INS and IRS. Bet you wouldn’t see many no-docs after that…
You underestimate you gov’t and the industry you are speaking of…
don’t most lenders require that borrowers sign a document allowing the lender to obtain tax returns from the IRS if a loan goes bad?? It allows the lender to determine if the borrower committed fraud on a liar loan.
The form is a 4506 the answer to the other part of the question is no…
A new byproduct - mosquitoes from unmaintained yards. Too funny. But believable. I have a small fountain in my yard. I have to keep emptying it after it rains so that I don’t have the same problem. Hope that the agency can collect from the bagholder owners for ’services rendered’ when they do the cleanup.
Wow, if the mosquitoes are that bad in Cali, I can just imagine what Florida will be like shortly. I mean, we’re the HOME of the mosquito, it’s practically our state insect. I’m surprised this hasn’t become an issue here, the media must be sitting on it. I didn’t think Cali had much of a mosquito problem to begin with.
Better keep those mosquitoes under control. Florida used to have high rates of malaria and yellow fever. And now with the ‘benefits’ of globalization, we can have West Nile and Dengue, too…
http://muse.jhu.edu/journals/bulletin_of_the_history_of_medicine/v079/79.4daniel.html
A six dollar bottle of malathon concentrate and a simple spray bottle will wipe out the mosquitos in your yard as well as all other insects. Good for six months.
The real insect infestation in LA/Scal is the hidden, slient but inexorable chomping of termites thru older SFH’s built before the 60’s. 90 % of LA county SFH stock
is the unpretentious 3 bd/1-2 bath, 1000-1500 sq ft clapboard/stucco in some plain vanilla decliniing older burg such as Van Nuys, Whittier, Torrance, LB, and inner LA zips. These properties may look kept up and tidy on the surface but beneath that stucco coating the termite damage must be considerable, expecially in 50-100 yr old homes which may have undergone additions, upgrades, remodels using cheap untreated wood.
Much of the older SFH stock predating the 60’s may have used redwood/other hi-quality treated wood in the main beams, posts and pilings: these would hold up quite well especially in Scals mostly dry climate. That is why one still sees large tracts of these WWII- era smallish quaint homes all over the LA Metroregion, and virtually all of them built better than the new crap put up in the IE.
Thanks, peter. Malathon (malathion?) will become part of the Florida survival kit.
When I lived in Florida, county trucks sprayed malathion on every street about once a month. Usually in the middle of the night. They don’t do that now?
But please note the ‘and all other insects’ part of the post. Really, we’re doing plenty of damage to the necessary ones now. Kill all the honeybees and then……
Ok I am confused! Before *when* were houses better constructed??? You seem to be saying before the 60s but then also saying that houses built before then are usually damaged by termites!
Since I know the area pretty well, I’d guess that what you meant to say is that termites are a big problem in post WW2 through 1960s era housing, and I’d agree completely, but the houses built in the 1920s and before are holding up well. I’d also agree with that. “Craftsman” cottages were exactly that — built by people who knew and cared about quality work. There are also a fair number of Sears “kit homes” from the same era around LA, and they are also well-built.
My rule in general would be to never buy anything built during a housing boom (or during the start of the bust), because all that matters is getting the houses up as quickly as possible. I have friends renting a 3 1/2 BR condo built in 2006 (in Massachusetts) and you would not believe how quickly it’s falling apart.
“My rule in general would be to never buy anything built during a housing boom (or during the start of the bust), because all that matters is getting the houses up as quickly as possible.”
I agree. I think this is something we’ll be hearing more about over the next five years. Five years, because that’s when I think the major problems will show up. I think there will be money to be made on housing remediation.
Ok I am confused! Before *when* were houses better constructed??? You seem to be saying before the 60s but then also saying that houses built before then are usually damaged by termites!”
Maybe i need to go back a couple decades to the 1940,s, which was the decade my own property was put up( all redwood frames). I know also that any additions, alterations on any home, even 1920’s craftsmen, will get termite damage as the termites will go thru the untreated wood and start eating away at the adjacent good wood. Even a solidly built craftsman if it has openings and tears thru which water and moisture will seep thru and rot the interior frames can be subject to termite damage.
Overall though, one can go all over the inner parts of LA and see all those 80-100 yr old craftsmans /victorians still holding up quite well over almost a century, testament to the generally dry SCal climate which favors longetivity in homes IF THEY ARE SOLiDLY WELL BUILT.
The thing about Termite damage is that is is usually unnoticiable beneath the outer wood surfaces till you decide to knock out a frame of your home and see the entire wood was eaten out from the inside. This will be a feature of all those cheaply-built subdivision homes out in the IE, eaten out from within in less than 10 years from date of contruction.
I still have a stash of chlordane from before they pulled it off the market. Kills bugs like nothing else ever has. It got me out of a building on Inglewood Blvd. that was about to be carried away in pieces by bugs.
Not many mosquitoes along the coast; lots of them inland, especially in Sacramento area. Yuck.
Maybe the West Coast. Here in the east, a hundred yards is inland enough to get the mosquito national anthem:
“mmmmMMMMMMmmmmmMMMMMmmmmmMMMMMMMMmm”
(sung on some note like high C)
A friend of mine once told me that mosquitos in Alaska were so big they could b–tf–k an elk.
That’s probably why we don’t have any elk.
(Elk are girlie deer. Alaska has moose.)
Not many mosquitoes along the coast;…
Really? Go to Watsonville (ugh) on one of its very rare warm summer evenings, walk around a bit, and count how many times you get bitten. Come to think of it, they’ll still bite even if it’s a little foggy, just not as many of them doing the biting.
Casey had this issue with one of his last properties. He tried to handle it in classic Casey fashion: he grabbed a pool net and stared at it for about 30 minutes then walked away.
And then he asked the neighbor why she stopped mowing his lawn.
LOL I missed that! Has his wife left him yet?
Gwynster,
Almost! Here’s a new one from CNET News:
Casey Serin: The world’s most hated blogger?
http://tinyurl.com/2anj6w
“A new byproduct - mosquitoes from unmaintained yards.”
Something just tells me that this will be the new coin phrase that the NAR will adapt for slow sales.
NAR: New epidemic causes slow sales, not weather.
‘Global dimming resulting from an excess of mosquitoes in CA caused the weather to become unseasonably cold which caused sales to soften in May.’
Read in national Geographic that misquitos helped win the Revolutionary war. The Patriots were mostly immune to the malaria they carried and the British were not.
get some mosquito fish.
Bugs are another reason why vacant houses and foreclosures and overbuilding are a bad thing . Houses have to be maintained . Eventually all kinds of wildlife get into vacant houses . Somehow the birds, bugs, rats, spiders and mammals know a place is vacant ,and what about the humans that can invade .
LOL, Housing Wizard, that reminds me of seven years ago when the ex and I were looking for a place in a town in Pinellas County on Florida’s West Coast. The realtor was showing us a place that had been in foreclosure and taken back by the bank. The ex was checking out the bedrooms and thought one of the doors was sticky and just pushed until it opened and “Voila!”, there was a naked couple on a mattress on the floor, enjoying a little connubial bliss along with a crack pipe. Ex ran out white as a sheet. Needless to say, we never put in an offer…
LOL , see what I mean .
Hobos. I foresee the rise of the high tech hobo. Find an abandoned house, you know, bank owned, flipper owned, languishing on the market because price too high, rent too high. Move in with bedroll and laptop. Plug into power, tap into someone elses WiFi and boom, high tech hobo time.
“Their dealer, Joyce “Paco” DeAngelo, said she tried to save them from drug addiction, but her client kept wanting another hit. ‘I told the beyatch, that she can’t keep hitting the pipe, she’s going to become a crackhead,’ DeAngelo said. ‘Man, she’s got no one else to blame.’”
Their dealer
Right on! Credit has strong drug-like effects: a temporary high that postpones the inevitable crash.
LOL
“Thousands of unsold and empty houses in the Sacramento region are fast becoming breeding grounds for mosquitoes.”
Mosquitoes breeding grounds sound preferable to meth labs.
“Mosquitoes breeding grounds sound preferable to meth labs.”
You say that like they’re mutually exclusive…although that would be funny if part of maintaining a good, low-profile, meth operation required doing pool maintenance to avoid arousing the suspicion of the “mosquito nazis” :-).
You all know, of course, that it’s only the female mosquito that sucks blood?
Remember that book I beleive called “silent spring” about the spraying of ddt back in the day.Raised hell on the ecosystem.All this misquito spraying is kind of strange I think.I do think it is pathetic that pools are left unattended forming breeding grounds for all sorts of stuff.
Rachel Carson and that atrocious book she wrote is responsible for more deaths than just about any other person alive today.
http://www.capmag.com/article.asp?ID=3785
Amen! Rachael Carson was an environmental fraudster who used sensationalism and junk science to peddle an agenda. And the gullible dupes of the “peace and love” generation bought it hook, line, and sinker.
You forgot that she was a communist, too, or, at least, that’s what her corporate enemies wanted us to believe.
Ben, are you going to allow garbage like this posted on your sight?
Since when is the truth “garbage?”
Actually, I know the answer. It’s when the truth doesn’t conform to the complainer’s world view.
I doubt Ben has a problem with the truth.
Let me just point out that both India and China still produce DDT. Given that, if someone cannot figure out how to acquire DDT they are not competent enough to run an effective anti-malaria program.
“Let me just point out that both India and China still produce DDT. ”
but don’t worry, cause they’d NEVER spray it on anything they’d sell to US
Ben, are you going to allow garbage like this posted on your sight?
Let me guess: You’re one of the ’60s fossils who preaches the virtues of brotherhood and tolerance, but is about as tolerant as Stalin when someone challenges your sacred cows or dogmas. Rather than try to defend your position or debunk mine through reason and peer-reviewed science, in the spirit of a five- or six year-old child you run sniveling to Ben and ask him to intervene before your feelings get hurt. Sadly for you, most in here are ardent defenders of FREE THOUGHT and FREE SPEECH, so perhaps you should braid some flowers in your thinning gray hair, fire up a Tijuana torpedo, and go walk your poodle.
Now Sammy that my friend has to be the best post I have seen here… Doesn’t even matter if I agree or disagree…
Sammy, Sammy, Sammy,
Nice rant. But how can a ban on DDT be responsible for millions of deaths when, in fact, DDT is not banned for disease control purposes?
Love your wit, Sammy!
There you go reading from an economist - What do they know? That is the trouble with this country so many stupid people who know nothing about science. DDT weaked the shells of many bird eggs. We almost lost the American Eagle and many other birds. Since DDT has been banned these birds have made a comeback. If it can weaken egg shells what would it do to us? And please do not think nothing.
I plead guilty to valuing human lives more than the lives of bald eagles. DDT has saved the lives of an estimated HALF BILLION people worldwide. In terms of science, maybe only antibiotics have as good a record - maybe.
http://query.nytimes.com/gst/fullpage.html?sec=health&res=9F0DEEDA1738F932A25757C0A9629C8B63
Hi 85249. The NY Times article shows all of the complexities of the problem. We’re very fortunate to live in a great country where we can control diseases pretty well with less problematic pesticides than DDT. The third world is not so lucky - the catalog of parasites is truly frightening. But malaria could re-emerge in the U.S. - especially given all of the vacant homes. And it’s not just pools - any receptacle left in a yard can breed mosquitoes. West Nile is already a problem for the same reason - but it only kills the weak. Malaria is a dramatic killer.
Toast - DDT was great..for a while.
Like with penicillin, after a few generations, all you have left of the original pest population are the ones that are resistant to it.
DDT used sparingly is effective, as long as you switch it with other methods after a while.
Problem in the 50’s and 60’s is that they didn’t know (or want to know) that DDT wasn’t working properly anymore, so they just used more of it.
Plus, DDT is an indifferent killer - it will kill all insects both harmful and beneficial. You may go ‘meh’ about the Bald Eagle, but if the insects that fertilise the crops you eat go belly up, then we’re all $crewed.
We are but one of Mother Nature’s many clients…
Flame me if you will, but barring a radical new energy source this planet may be at least 4 billion people over capacity anyway.
Even more, tj. Have I posted this before (probably) — on a geophysical research cruise 2005, a dozen of us scientists in different disciplines with four nationalities and every kind of politics agreed on one thing: the planet could be saved if a giant volcanic eruption would create a nuclear-winter-like effect and wipe out 99% of the human population. The surviving species would have a chance, and the surviving humans would have a chance if they remembered the population problems.
It took us human beans 39,900 years to get to a Billion of us, and just one hundred more years to get to over 6 Billion of us.
Somethings gotta give…
lad - surely you meant 3.9 million years to get to 1 billion???
Our flava of humanity is around 40,000 years old…
My 1965 Time magazine outlining pollution says different. If you are being facetious, OK, but if not, I suggest you do your homework. I was there.
I get criticized for citing an economist and you’re quoting TIME magazine?
I give up.
LOL
Citing an economist as proof of anything? You picked the wrong blog.
Where do you folks think all of the cancers come from? Why do so many people today have allergies? If chemicals can kill any type of life they will affect us as well. Our DNA is not that much different than other organisms.
water is a poison and will kill you…. IF you drink enough of it at one time…
Where do you folks think all of the cancers come from? Why do so many people today have allergies? If chemicals can kill any type of life they will affect us as well. Our DNA is not that much different than other organisms.
True. But the problem is not so simple.
Speaking as someone who has allergies I’d speculate that part of the problem might simply be we’ve forgotten to eat like human beings. Our mostly grain based food supply is an over processed and poor substitutesfor real food.
Humans “in the wild” ate what they could kill or gather. My personal allergies are all to things that are products of civilization (dairy, wheat, peanuts). When I eat fresh food, limited hunt/gather type foods, my allergies and health problems disappear.
*Head shake* - chemicals probably do cause part of the problem but I’ve stopped thinking of the causes of those complex issues as simple.
Good point Vermonter - a large number of adults, especially in Asian and African populations don’t retain the enzymes neccessary to break down lactose from childhood. And lots of people are allergic to gluten, but don’t know it.
Another factor, especially in kids in the developed world, is that they don’t get ‘dirty’. They get very little exposure to flora/fauna in their early years which helps them build up immunity to allergies - hence the skyrocketing numbers of allergies/excema/asthma in younger people.
Not to say, of course, that parents shouldn’t keep their kids hygenic - but wiping down everything with ’sanitised’ wipes stops them from building up normal imminities to things.
On the contrary. Banning DDT has been phenomenally good for birds. DDT exposure caused their shells to thin so much that they couldn’t reproduce. Shell-thinning due to DDT decimated the Brown Pelican, Peregrine falcon, Bald Eagle, Golden Eagle, and many other birds. Banning DDT caused these bird populations to recover.
http://tinyurl.com/yvda7u
That was an essay out of Stanford published in 1988, without any references.
My fantasy is to somehow rid the world of mosquitoes forever. But probably that would cause some unknown ecological damage that would kill off sperm whales or something.
same here Arwen.
Our mosquito population is part of why the new builds with no yards are attractive to me. Spending any time outside just means I’m going to end up scratching myself bloody that evening.
http://www.mosquitomagnet.com/
“Thousands of unsold and empty houses in the Sacramento region are fast becoming breeding grounds for mosquitoes.”
Blood sucking lenders…lead to blood sucking skeeters…I tell ya, it’s scary around here…
Well I guess the old saying “can’t get blood from a turnip” that has worked so well for the short-sale crowd, may indeed be proven wrong…
“‘I was at a pool at just a beautiful house. The backyard was just beautiful. Then there was the pool. It was in foreclosure,’ she said.”
Is it possible for only the pool to be in foreclosure?
Sounds more like a “risk pool” to me…
If so, who ya gonna call?
Why, Casey from ScumBusters–the foreclosed pool scum-sucking specialist! If it looks too much like real work he’ll take his pump and run . . .
(sorry, his site is down so I can’t link to the picture of him next to the green pool at one of the houses he lost)
Casey Serin Casey Serin Casey Serin
I’m glad that I wasn’t the only one that questioned that.
I assumed from the comment that the house didn’t look like it was neglected, but that the pool apparently did.
“Colleen Moorhead knew exactly where to turn when she needed to harvest some cash…. Moorhead and her husband now owe $603,000, up from $196,000 when they started, and more than $10,000 over what their house is worth, according to one online estimate.”
Quick, call Hillary, Dodd, et all…. Alert the media. We must all pull together and save these people with an immediate tax financed bail out.
Conspiracy theorist!
Her real problem is that the house is probably worth tens of thousands less. Like 75-100k less.
Remember, we were all stunned at how big this bubble got. And we will all be equally stunned at how much it bursts.
Just think of how pissed you will be to buy today only to be able to get a much nicer home far cheaper 1-2 years from now. Nothing but overpriced crap boxes now. But soon there will be awesome deals and all your patience will pay off.
It is only just starting.
3-5 years. see Credit Suisse ARM reset chart
“Their broker, Joyce DeAngelo, said she tried to save them from financial disaster, but her client kept wanting to refinance. ‘I told her every time that she can’t keep doing this, she’s going to lose her house,’ DeAngelo said. ‘She has no one else to blame.’”
Sure you did, Joyce. You’re completely innocent here. Of course, if you knew she was digging her own grave and handed her a new shovel every time her last one broke, you helped her commit financial suicide. I guess ethics don’t count for much as long as you’re getting your cut.
Joyce, you ignorant misguided $lut. You gave the suicidal FB just enough rope to take a life.
Isn’t it interesting how the loan payments are going to exceed the borrowers income . Come on mortgage broker ,you didn’t know the loan would take them down and it looks like it was a liar loan that you were willing to process ? Giving borrowers 400k in cash out chunks by 9 refinances in the course of 5 years really just makes me think you did not do your job to protect the lenders interest and your certainly didn’t care about these borrowers .You knew borrowers were at risk of foreclosure and you made the loan anyway . You should of advised them to sell immediately .
This raises a great question. Is it a realtors job to tell a person what they can or can’t afford?Is it a lenders job to give financial advice?I think you have a conflict of interest here my friends.The industry has become so shaddy that “closers” are the only people that matter here.If you are going to kill a deal and lose thousands because you think they cannot afford the house what are you going to do? We know what happened. Last I checked it is up to the buyer to determine wht they can afford based upon the principle of a balanced budget.
Nope , I disagree arizonadude . According to Realtors codes of ethics and doing the job for the seller ,RE agents are suppose to pre-qualify buyers,(or have them pre-qualified with a lender , or screen them in order to show them the right price range property ). This way it doesn’t waste the sellers time or perhaps tie up a seller with a transactions in which the buyers don’t know what they are doing .Time is of the essence in a real estate transaction and it can be costly if sellers go into escrow with unqualified jerks that waste time with escrow cancellation fees and costs for inspections etc. Also realtors are not suppose to try to influence appraisers or bribe them or do anything to inflate a property above its true value at the time ,loan originators are not suppose to influence appraisals to be inflated .
Lenders are suppose to qualify a buyer ,otherwise why would borrowers have to fill out a application ? All loans have guidelines for every sort of loan that the borrowers apply for and appliciants have to come within the guidelines . Also the property has to appraise out and meet the conditions of the lender . If a home didn’t have heating a federal Lender would require that heating be installed before they could fund the loan based on health and safety .
The buyer just makes a application for a loan, under penalty of perjury that the facts stated are correct . Lenders also require back-up proof of the statements on the loan application to prevent fraud (if they are doing their job.)
Buyers might think they know what they qualify for, and some might ,but the lender/underwriter is the one that approves the loan .
Getting a loan is a privilege , not a right ,just like you have to prove you can drive before they will give you a drivers license to drive.
More important the funds that are used to make loans are the deposits of America , pension funds , Insurance funds ,MBS’s etc. and the people who invest are entitled to know the risk of any loan and what the yield for that risk should be (or the interest rate .
If appraisals are bogus and loans are fraudulent ,or you just give a borrower whatever they think they can pay-back you put the funds at undue risk for loss . Investers that put up money don’t like to lose money . That is why the shit is going to hit the fan with all this fraud and approving liar loans and bogus appraisals If lenders and borrowers give a punch of bogus packages to loan funders from the secondary market or even funders from saving accounts from the bank and they lose money because of that fraud , or a inflated appraisal or a cash back scheme ,they don’t like to be deceived . The funders want correct ratings on their risk . A 70% loan is less risk than a 100% loan . Investors will accepts less yield if they know the loan is less likely to default ,so that is why you get a better rate when you are a good borrower .
it doesn’t matter what a buyer thinks a balanced budget is , what matters is what the risk taker who funds the loan thinks a balanced budget is .
If the lenders let a bunch of unqualified liar buyers and speculators buy real estate the property get inflated because of that demand but the borrowers are not really willing able borrowers . So it created a false market that will crash . RE market value is based on long term stability and borrowers ability to afford and maintain property and not default . RE values are based on accurate values , not cash-back schemes to inflate purchase prices to give cash back to the buyer . Also property taxes are based on market values so any undue influence that would raise that charge such as fraud on appraisal comps would be cheating the taxpapers .
According to Realtors codes of ethics and doing the job for the seller ,RE agents are suppose to pre-qualify buyers
What? RE agents are just f*cking salespeople, and my financial affairs are none of their business. I’ve never had an RE agent ask me about my finances, and I’d tell them where to go if they did. It is the business of whoever is fronting up the money for the purchase. IOW the lender. Or in the case of my next purchase, just me
Something clicked when I read this post. Been lurking for a long time here, but I must speak up and applaud this one, Housing Wiz.
Well said, Wiz.
Yogurt, you nailed it. Ask one of these ‘ethical’ folks to show you a fisbo. I’m planning on buying a 2-4 unit in the south bay in a year or two and I will use RedFin or the like as a buying agent for the legal shield only. I would never elicit financial advise from a salesperson. This is all quite rediculous. Housing Wizard spelled out some basic interrelations in the securitization process etc. but I fail to see what that has to do with one’s own responsibility in taking on obligations.
Agreed. I have purchased 2 homes, sold one and have done a few refi’s (shorter term… no cash out) and was a mortgage banker in the early 90’s in LA. The idea that I would use a Realtor / lender for anything other than access to MLS and a legal shield is unthinkable. They are all just sales people.
San Diego, Bay Area, Sacramento, IE, stories from everywhere except… well, my suspicions are correct… The city of Los Angeles is apparently not in California.
Patience, my friend.
One of the long standing analogies on this blog is that of a train wreck. LA’s just a little behind the rest on the track and will be derailing too in good time.
Don’t you worry ’bout a thing…
They didn’t build much in the city of angles, but most of it’s see me-dig me residents made regular withdrawls from their piggy banks, mostly to impress others that were doing the very same thing…
I like the train wreck analogy.
LA is the biggest baddest train out there. It has dozens of locamotives pulling it along. The problem is that the breaks haven’t been serviced in years… and who loads alternating cars of liquid Chlorine, Gasoline, Benzine, 90% Peroxide (rocket fuel), liquid Ammonia, and a dozen other liquids that are platered with warning labels. Oh… did I also mention its an overcrowded speeding passanger train too?
Its approaching the interesection where the other trains are.
Its not going to stop…
Got popcorn?
Neil
Nice analogy!
I gotta admit, I’ve stopped constantly checking prices/inventory, don’t go to open houses anymore, and have given up trying to argue with the bulls. A watched pot never boils right? It *is* starting to simmer, but the heat needs to be cranked up a few notches. Guess I’ll have to just let nature take its course.
Yea… same here.
But I’m getting married.
(Bit busy)
Got popcorn?
Neil
Hope you are serving popcorn at yr wedding reception, Neil.
IRS sale in Mahattan Beach
http://www.treas.gov/auctions/irs/mbca_real_2120.htm
There was a San Jose sale too on the site.
Yeah, we’ll just have to wait it out. Folks in LA have very deep pockets, business is kicking ass right now with the summer movies, everyone is too busy raking it in to worry about real estate.
So, you inviting us to your wedding, Neil?
Whenever it is, I wish you both a fun day & (more importantly) a wonderful life with your best friend and partner. Enjoy!
Well, LA has been flat for about a year and a half. The inventory inSFV(where I track it) isn’t very impressive….
I have definately been watching that pot and it aint boiling yet….strumming my fingers…twiddling my thumbs.
No, plysat, at least not yet.
I think the phrase, “American Dream” where housing is concerned needs to be changed to, “American Government Cash Cow Plan.” Under all the facts, that’s the bottom line. Millions of Joe Sixpacks (many more than a few years ago) stuck in crappy, badly built, overpriced properties, putting money into state and federal government offers. Because they are stable (read stuck) they are easy to track and easy to milk. Or maybe everyone thinks government had the interests of Joe Sixpack at heart when they began throwing dollars out of the Fed helicopters a few years ago. Nothing to do with future planning of course - just government being generous. Oh, yeah! I forgot. The Fed is a private bank and has nothing to do with government.
I’ve had to change the way I teach my kids about money nowdays. Trees are now more consistent in their value than money.
Of course, government didn’t have the interest of the homeowners at hand, but they want votes for a more capitalist policy. Homeowners traditionally don’t vote socialist, but renters often do, because homeowners have a lot of property to loose and renters don’t. We will see if that voting behavior remains so in the current situation where homedebtors don’t have much to loose either.
“Colleen Moorhead knew exactly where to turn when she needed to harvest some cash. Between 2001 and 2006, the Moorheads refinanced their three-bedroom San Diego home at least nine times, county records show. Moorhead and her husband now owe $603,000, up from $196,000 when they started, and more than $10,000 over what their house is worth, according to one online estimate.”
What in God’s name did the Moorheads need an extra 400K for (in a 5 year period)? I think I have a healthy imagination and I’d have a hard time even figuring out what to spend all that on.
America really screwed the pooch here the last few years. Absolutely disgusting. We are all going to be paying for this for a long time.
“America really screwed the pooch here the last few years. Absolutely disgusting. We are all going to be paying for this for a long time.”
Testify, Brothah! I’m trying to persuade Brothah Dimedroppped to go in on a wrecking business with me here in Flala land. Want to get up a coupla bulldozers and enjoy us a little dozer derby action in one of those godforsaken pressboard developments. After that, a little fishing sojourn on one of the lakes. A recipe for Heaven!
“America really screwed the pooch here the last few years. ”
Well, at least one bit of sunshine for the FB of Seattle. When they finally screw the pooch, they won’t go to jail for it…
“Jury acquits first man charged under bestiality law”
http://seattlepi.nwsource.com/local/6420AP_WA_Bestiality_Charge.html
I’m beating heloc money for other properties.
LOL betting
“beating heloc money” **spank** bad money, bad
LOL betting
“beating heloc money” **spank** bad money, bad”
you meant “monkey” not “money”…. right?
monkey is always stealing football….
Took me a while to see you meant “betting”. Right. These people were themselves gamblers. I agree they likely “own” a whole bunch of heavily-mortgaged specuvestments.
Let’s see….
A couple of 80K cars
Several 10K vacations
All new (and expensive furniture for the house). Say 50K
A pool (say 20K)
A boat (20K)
A new kitchen and baths (40K?)
New flooring (10K?)
Lots of restaurant meals
Lots of new clothes
Poof! $400K has dissappeared!
Don’t forget the fees and interest
Sure, their HELOC balance is up $400k in 5 years, but they may have had to pay a sizeable portion of that in fees/interest
Some of this stuff I’ve been reading about is FRAUGHT with fees. An early refinance fee, a fee to refinance, a surcharge for this, surcharge for that. In some cases, the fees are higher than the cash withdrawn. but the crack addicts do it anyway.
Not to mention NegAm. They might not have taken the cash out, the loan balances might have been building through the magic of compounded interest on non-paid for principal (at subprime rates of course)
Fees and interest? Oh, those silly things probably got rolled right into the new payment as well.
All I could come up with was plastic surgery and noone can be ugly enough to need 400k worth.
I suppose you’re right. I just can’t imagine running up a tab like that. I bought a new car last Dec and I thought 23k was a huge splurge.
I lived in Tahoe for a year, way back when, in my gambling days and as my car was equipted with casino cruise control, (it would pull into casino parking lots, on it’s own) I spent entirely too much time @ Harvey’s…
There was this Vietnamese mad gambler woman that had about $30,000 too much worth of plastic surgery, on her mugg, and she was always there, betting a few thou a hand on blackjack…
It was hard to tell if she was 32 or 72?
No boob-job?
My step-daughter wanted me to co-sign for a boob-job last fall She said it was only a 100$ a month for 5 years, I said no-thanks.
She went ahead and got herself a boob-job, she is now living in San Deigo with her boy friend in a condo. Her housing decorations now consist of two rocks a bean bag and a box for her bills, but boy does she like that mirror and her reflection.
It never ceases to amaze me what people are capable of convincing themselves of, be it real estate or boob-jobs or any other kind of nonsense.
Her housing decorations now consists of two rocks ….
Now that’s funny (in the context of a boob job)
Not to criticize, but I would add implants, botox, and satellite TV (with NHL Sunday ticket) to that list.
~Misstrial
400k would buy a lot of Jimmy Choos.
How much are those jimmy choos? Didn’t sarah jessica parker where them in sex in the city.Coach bags are bad enough but lets get real here.
About 600. Carrie was a big Manolo Blahnik fan which are in the same piece point.
Being a girl is expensive. Being a well dressed girl is crazy expensive.
its not the 80s anymore, but if they dabbled in coke, 400k could go up the nose real quick.
If coke on the street sold for $100 a gram, which I believe to be a generous price, lets see…..28g to an oz,..ah.. 16oz to a lb, divided into $400k..you’d only have to do 9 POUNDS real quick. Oh my!
“Do you have any idea what the street value of this mountain is?”
No Sea-Doos?
> Heroine/crack habit - $ 50K every six months.
$400K gone in four years. Like magic. I wonder how many drug rehab facilities will soon be as booked as many a local and state clink.
How? Well, I’m sure a lot of it was pure idiotic spending. But a lot of these folks couldn’t make it month to month without cannibalizing their home through MEW. So many of these screwed saps have monthly expenses that far exceed their incomes. Trust me, I’ve seen it first hand. You could almost figure out the day and the month they were going to call back for another dose of equity. They can’t continue without it. Lately we’ve been seeing a surge in credit card debt. Again, while some of this is surely frivolous spending, I’ll bet a lot of it is being used to make ends meet for these over-extended, soon to be a statistic, homeowners. It only gets worse from here.
Crack costs money man!
Maybe they gave it all to charity?
LOL
Isn’t the title of this thread a copyright infringement? I seem to remember a book called something like: “Why the Real Estate Boom Will Not Bust - And How You Can Profit from It: How to Build Wealth in Today’s Expanding Real Estate Market”
A book has to be read by at least one person before the copyright kicks in. It’s like consummating a marriage and we all know that book is a virgin.
That cannot be, we’ve all had a shot at it
If David squirts Liarrhea on a page and no one looks, does it still smell bad?
These stories just keep getting better.
Right now the Moorheads and DeAngelo are engaged in a bunch of he said/she said. Same for Wray (the cleaning lady) and her broker.
You just know that a few months ago both were complicit in this:
Broker: “Oh, you don’t have any income. Well, we could say you own your own business!”
Wray: “I do HATE to clean the house, so let’s say I own my own cleaning business! That’ll be a real hoot!”
Broker: “That is a scream! Now, if you’ll just sign right here.”
I’m really starting to enjoy these battles! Neil, we’re low on popcorn over here…..
Hilarious.
Emergency popcorn refil on its way.
Oh… soon I get married. You guys will have to supply your own popcorn until mid June.
Neil
Enjoy, Neil!
Mazel Tov
That’s very thoughtless of you.
Seriously, congrats!
“An auction of nearly 100 foreclosed homes here Saturday showed that mortgage lenders are having to accept huge discounts in some cases to unload such properties.”
“At the San Diego sale, houses and condos typically sold for about 30% below the previous sale or appraisal prices. In a few cases, the discounts were around 50%.”
the media is trying to get the masses excited about buying foreclosures which for the most part have excessive loan balances that no longer represent the value of the property.
I wonder if many of these foreclosures have excessively high 1st loan balances because they have been refied several times. Most of those loans had a consolidation feature so piling on a new car, pay off the boat activities was a great way to lower your monthly overhead. the down side is bad for both the home owner and the bank, both are stuck with a huge 1st loan balance.
Colleen Moorhead knew exactly where to turn when she needed to harvest some cash. Between 2001 and 2006, the Moorheads refinanced their three-bedroom San Diego home at least nine times, county records show. “Their broker, Joyce DeAngelo,”…blah, blah blah.
This really sounds like…
Joyce DeAngelo = crack dealer/pusher
Colleen Moorhead = crack addict
“Don’t push me cause I’m close to the edge, I’m trying not to lose my house”. - a little Grandmaster Flash for ya’all.
I waiting for the stories of FBs with dirty jeans holding greasy bags of cheeseburgers in back alleys…
Call it ‘Debtness II Society’…
It’s already a sequel, no?
Wow, so houses become overvalued by 100%, so buyers just lie to the banks and inflate their incomes by 100%! How could even the dumbest person think they would win that game?
And no, I don’t consider getting a couple of months free “rent” while waiting to be evicted to be some major boon.
In my area, floating for 3 months means another 10k in the bank.
They can then verify large savings account balances as they go shopping for rentals. Then get the secured credit card and work the system back up. They’ll have a 620 credit score in no time.
Stated loans are huge in Sacramento where home prices outran wages by a long shot. It became a pride issue too. If your friend bought a house and you knew their salary to be roughly inline with yours, then you had to go out and get a house to prove you weren’t a looser.
Oh come on Catherine surely a few months rent tickles your fancy…
I just got hit by a dusy….
An RE insider said he’s not advertising in the AZ Republic anymore because of their blog. I misunderstood, assuming he was saying that the paper was causing the crash….. I pointed out how they are spinning EVERYTHING as positively as possible and gave several revent examples.
Here was his reply.
“Darrell- I never said the Republic was causing the RE slump…I did not say anything close to that. I said they run a blog every week(at least) where people get on and trash everybody and everything real estate related. As a result, they no longer get my advertising dollars. If you read anything more than that in my post, you need to read again.(stevegar, May 14, 2007 02:28PM)”
So, he isn’t saying that there isn’t a crash.
He isn’t saying that the paper is causing the crash.
He isn’t even arguing that they are spinning everything as positively as possible.
He’s mad that they still let people like me reply to their “BS” stories.
Holy crapola. Mad that the paper’s reporters’ positive spin are allowed to be countered in a pubic manner.
Blood in the water indeed.
Here in Tucson, the Arizona Daily Star only allows comments on certain stories. However, the Star’s sister paper, the Tucson Citizen, allows comments on all stories.
How the heck did everyone spend their weekend?
First Gwynster talks about spanking monkeys and now Darrell in PHX posts: Holy crapola. Mad that the paper’s reporters’ positive spin are allowed to be countered in a “pubic” manner.
Methinks this is one horny bubble-sitting crowd.
I know many people think we’re still in the denial phase but I have to shamelessly cross-post this from Landers site.
——-
I think we’ve moved into anger. I think it happened at 7:25 am pst.
I received a call this morning in response to a CL ad I have.
The woman says she has a home for rent 3/2 with a workshop in the older part of West Sacramento. I say that I’m probably not interested because that’s the bad part of West Sac.
She goes on to tell me that I must be mistaken since she lived there for 45 yrs (she’s calling me from NY).
I mention the gang problems and she flies off the handle! According to her there are no gangs in her part of West Sac, that I’m thinking of Bryte and Broderick, and that the real problems are in Southport since everyone there is upside down on homes and renting them out.
I agree with the last part and cant’s get a word in edgwise. She’s ranting a mile a minute at me - at 7:30am I might add.
I ask her to please slow down and let’s discuss it. “what is the address?” to which she relies in that agreesive NY way, “I don’t think I want to rent to you now because….”
I hung up on her. It seemed like the only natural response.
I’m sure the home is listed on CL, I just can’t find it.
——-
I did find the house
http://sacramento.craigslist.org/apa/330919240.html
It was listed on CL at $1175 and the crazy woman just raised the rent.
Seems cheap for Sacramento… then again, walking distance to downtown? Why so cheap? And I see a lot of empty lots there on a satellite view, and it seems maybe semi-light-industrial. Hmmm… almost perfect for gangs, though maybe there aren’t as many since it’s far less densely populated than Broderick, which is a good several blocks away!
It’s right by the I street bridge. A few weeks ago, a few of the pictureque local youth almost beat a Union Pacific conductor to death for fun.
http://www.sacbee.com/257/story/158779.html
This area has always been trouble.
I’m sure the AZ republic is really going to miss the business of one “real estate insider”.
The market is tough, you need any advantage possible to sell your overpriced products, and you decide not to advertise in the largest paper in the state. Good idea.
Throw the SWITCH..Throw the SWITCH…The Southbound RE GRAVY TRAIN is a Highballing RUNAWAY and she’s Picking UP Steam ha ha ha
Yup, we are winning. i think.
“‘The sellers are likely to end up with a tax on a short sale,’ said said Elizabeth Weintraub, a home-buying columnist. ‘Sometimes (real estate agents) don’t tell sellers that is a consequence.’”
Most of these people have a choice between short sale and foreclosure. Either way their screwed.
“Add to that a large but unknown number of empty houses owned by investors. At the height of the region’s housing boom in 2004, more than one in four Sacramento County home sales were to investors, according to DataQuick.”
I believe when the dust is settled, the shocking revelation will come out that some homes in the 130 New Home Communities in San Diego County are actually vacant. This problem is not somehow unique to Sacramento.
While things look a little dim for these FBs, they COULD get JOBS as “Strawberry Pickers” and START Over AGAIN with a little $750k shack. THIS is still Ameri$A.
ANOTHER Loan Please….I SAID…HIT ME AGAIN !
make it 3 fingers of TOXIC HELOC NEG AM…….with a teaser rate
“As the region’s housing slump creates more vacant houses and a growing excess of homes in transition between buyers and sellers, Culex mosquitoes that can spread the West Nile virus are thriving in uncared-for swimming pools, garden ponds and yards flooded by broken sprinklers, said David Brown, manager of the Sacramento-Yolo Mosquito and Vector Control District.”
Mosquito’s…big fookin’ deal.
Wait until the winter when the heating pipes and plumbing sytems burst in all the north country REO’s which have not been winterized because the removed mortgage holder doesn’t have a clue what’s goin’ on in his REO portfolio.
Can we say “mold”!!!!!!!!!!
Good time to buy Caterpiller stock.
Gonna be a need for lots of bulldozers before this disaster has run it’s course.
How many “Moorhead’s” exist in the SF Bay Area?
“Nothing to see here. Move along now…”
GOOD Lord!… If ONE of those mosquitos BITES a Real Estate Agent, we’ll have another Epidemic of “David Lereah FEVER”
Hello…CDC ???
“Colleen Moorhead knew exactly where to turn when she needed to harvest some cash.”
Harvest? That’s funny.
I wonder how these people figure they can “reap” a harvest out of nothing. Never mind, I know that answer. I just think these metaphors are hilarious.
What’s next…counting on the lottery to get cash? Robberies? Exhortion? Prostitution? (wait, that’s too much work).
“Money for nothing and the chicks are free”
Someday people will be saying things like “Moorhead exactly where to turn when harvesting some cash. She started paying down her mortgage faster, removing future interest payments and shortening the time until she could ‘harvest’ the profits of her home by living a mortgage and rent free life!”
Yeah, a client phoned me in February saying she needed to “harvest” $10K-$12K of her “equity” … she argued that her place (on which she owed me about $35K) was really “worth” $115K. Well, I don’t think so, but it seemed safe enough to lend her an additional $12K, as she has always been regular in her payments. She’s been paying long enough that it wasn’t necessary to increase her monthly payment, just extend the term of the mortgage into her 70’s. (Sigh, why do they want to?)
A little OT, but are ya like me, folks, do you feel the world has just gone mad with scamsters and fraudsters and spin? Do you feel like you just can’t trust practically anything or anyone anymore? It’s not just the REIC, but media, “investment advisers”, government statistics, the banks, your Congresscritters, etc., etc. The crap that comes from China might poison you and your prescriptions might end up killing you. Even…THEM…the people you walk amongst every day. I was just out food shopping and I swear, it looked to me as if everyone around me had suddenly grown a huge fat butt and fangs. I even looked around at my own posterior to be sure I hadn’t become one of THEM. And then I read these reports and start to feel like I’m in the movie “Night of the Living Dead”.
Sigh. If only this were some process of natural selection and those of us who are halfway sane would end up still standing and be able to start a new civilization. First thing I’d do, I’d outlaw the NAR and mortgage brokers.
No I am not like you. I think you’ve been reading too many blogs and need a time-out to regain your sanity.
“I was just out food shopping and I swear, it looked to me as if everyone around me had suddenly grown a huge fat butt and fangs.”
Sounds like you got some bad mushrooms. I don’t think human nature shifted, I just think circumstances are temporarily bringing out the worst in it. Yeah, it’s getting tough to get by but I think we needed a collective kick in the arse if we were ever going to compete globally. I doubt many people who survived the depression were speculating on Florida real estate, even though they probably live there.
“I don’t think human nature shifted, I just think circumstances are temporarily bringing out the worst in it. Yeah, it’s getting tough to get by but I think we needed a collective kick in the arse if we were ever going to compete globally.”
I do think human nature has shifted and not for the better. I don’t know why we have to compete globally, either. Globalization is a REALLY bad idea, and clearly it is not working out for the majority of people. We have enough to deal with our own brand of crime and scamming, I’m just not up for dealing with vicious jerks from other countries as well.
Of course, my view is, at this time, colored by the fact that I had a Nigerian dickoff scamster screw up one of my internet deals today. No, I didn’t fall for it, it’s just that if you sell on line at all, any one of these creepos can click on your stuff and then you have to go through all the nuisance work to handle the situation.
I see it. Americans - as a whole - are the ugliest people on earth. Fat, drooling, shiftless with bloated faces and vacant eyes…
It’s not that human nature has changed, it’s that in times past we were encouraged to keep our lower emotions/aspects (greed, stupidity, laziness, gluttony) in check and/or hidden for fear of condemnation.
Once worthless no-nothings were worshipped (for example - lying, stealing ceo’s or Paris Hilton types) for their net worth, everyone (with few exceptions) thought it okay to be a fat a$$ lazy lying cheating POS - as long as you have ‘bank.’
What you are on the inside manifests itself on the outside. If in doubt (because of plastic surgery, botox, etc.) - look in the eyes - they tell all.
Don’t worry. Peak Oil and the coming Greater Depression will do wonders in this regard.
Agreed on both points….Peak Oil and a Depression will clean out a lot of this stupidity.
Hipness, Cool and slackerism will be a thing of the past….life will get more real and local.
Yeah, I had a similar experience trying to sell a few items on CL. Got hits on 2 items that were about 1K each. Turns out both hits were scammers…out of town…guaranteed checks…Will I ship?…NO I DON’T THINK SO…cash only and face to face,if you please.Bummer…and on Mothers Day to boot
Dude, ya gotta get out of FLA. That’s yer problem. There ARE a lot of weirdos and scary-looking folks. And it IS alternate reality central here. Rude people, bad drivers (made top city for road rage second year in a row-woo hoo!) expensive, bad schools, hot muggy smokey weather, hurricanes… but no, they tell you it’s “paradise. Everyone wishes they lived here.” Y’all can have it. “Paradise,” my ass
“Sounds like you got some bad mushrooms.”
Maybe the fangs part was a bit much, but I swear, it was Morbid Obesity Day at Publix (Florida based supermarket chain, quite good actually, it is employee owned and the employees outclass the customers big time). People with the type of buttocks that look like two hogs fighting under a spandex blanket.
Phisst..Phisst..palmetto. Don’t LQQK now but I THINK Ed..is ONE of THEM !
These “Home Owners” are beginning to LQQK like Wile E. Coyote doing his Edge of the Cliff Shuffle and I’m NOT eating Mushrooms.
LOL, mikey, I think so, too. THEY don’t know who they are, but we do, LMAO.
Now I understand why so many people are on meds. I guess it makes it easier to tolerate the intolerable. Aldous Huxley’s Brave New World has arrived!
You can get Soma with a prescription. The naming of the drug was not lost on me.
God is an Iron.
No, no! God is the Dog of aixelsyD !
Turn off your television. You’ll be more optimistic in 1-2 weeks.
Everything you need to know about this country can be learned by watching Glengary Glen Ross, Boiler Room and Wall Street.
Palmetto, I hope you’re joking for your sake. If you’re not, then you are right - you’re only halfway sane.
But seriously, you do have to mistrust people, or you will spend ‘way more of your money than you need to. People are really good at rationalizing their unethical behavior so you have to be alert to it. Including friends and family!
“But seriously, you do have to mistrust people, or you will spend ‘way more of your money than you need to. People are really good at rationalizing their unethical behavior so you have to be alert to it.”
LOL, that reminds me of Robert DeNiro’s “Circle of Trust” in “Meet the Fokkers”. I can certainly say my personal “Circle of Trust” is narrowing.
I was just out food shopping and I swear, it looked to me as if everyone around me had suddenly grown a huge fat butt and fangs
LOL
palmento….I’m not going to suggest that you read Atlas Shrugs ,might tip you over the edge . No really , I was feeling the way your feeling yesterday . I was thinking that I don’t recognize America anymore . I have never seen so many people willing to commit fraud .Maybe they didn’t know it was fraud . Maybe some people can live a whole life and never know they are not a asset to their race . Maybe we need some speeches like, “Ask not what your County can do for you ,but what you can do for your country .”
“I’m not going to suggest that you read Atlas Shrugs ,might tip you over the edge .”
I first read Atlas Shrugged and The Fountainhead when I was a pup (parents had those books in their library) and then again at times over the years. I’d love to be the one to jam every frequency and internet site with the “This is John Galt” speech.
I don’t want my country to do another thing for me. It has done far too much, and done it very badly, since 9/11.
Housing Wizard, if you can, try to get ahold of a book called “Alas, Babylon”, by Pat Frank. From the late 1950s. Awesome book. It was another one I found in the parents’ library. Then I found a copy at the local Goodwill a couple of years ago and read it every once in a while.
Thanks , I will be sure to read the book .
I’m also noticing how stressed out people are . It puts one on the defense when you get around people who are stressed because it feels like they are ready to blow any second . More car accidents because of worry and stress over money .
Anyway , thanks for your posts I always enjoy them .
Alas Babylon is still one of the best post-war survival novels you can read.
What happens when the lights go out, refrigeration, money and gasoline stops.
Weirdly forward looking novel that was written in the 50’s like Atlas Shrugged.
There are indeed very few persons of integrity and honor left. Most will sell their mother’s, even on mother’s day, to make an extra commission.
Palmetto, you are right. But fraud and scams have been going on for decades in America. Nothing new. Just more notoriety. Internet is a very fast way of getting information out, isn’t it? I’ve been the victim of fraud once - $20,000 stolen from me. My father was a victim of fraud a few decades ago. I apologize, but I do not trust most people. You have to be a victim of a scam first before you judge me as being overcautious. I do trust having everything in writing and seeking the advice of an attorney these days if you do not understand an agreement or the legal issues that occur in a relationship you are about to make with someone else.
Taoism has a concept that rich people should hide their wealth from the poor. No good can come of showing you are better off, but it is very damaging to the poor to see they have less.
Our society is built on doing the exact opposite of this. We are bombarded nearly every minute of every day with advertisements telling us that we can not possibly be happy unless we have…. Whatever it is the advitisor wants us to buy from them.
Almost a new word there: Advertor.
defined as an evil being that you would want to avoid.
I like to say: I’d rather be rich and look poor than be poor and look rich.
Amen!
You know, sometimes I read this blog and get depressed and fearful for the future and my children’s future. Talk of recession and depression and it seems like it’s going to get pretty bleak. But an upside has appeared to me: what if in the coming years when everyone has to belt tighten and do more with less, we see a return to a culture that values thriftiness, hard work, good citizenship and sacrifice for others. What if ostentation and label whoredom became shameful? So many of my peers are ruining their children IMO by giving them limo rides for fifth birthday parties and Coach handbags to 12 year olds etc. Maybe a forced downgrade in descretionary spending would be the best thing that ever happened to folks. Afterall, isn’t surviving the Great Depression part of what made those the “greatest generation?” Thoughts anyone?
I agree with you…but you are my wife (this is kind of weird). I should have never got you hooked on Ben’s blog, though you are 100% more savy now than several months ago and that is awesome!
Hey, you’re at the office! Get back to work and quit wasting time blogging! You are soooo busted!
Love ya, honey!
Out of San Diego’s”
You two just put a big smile on my face…and it wasn’t that great a day here! Thx!
See similar things with the night of the living dead cellphone users, tub o’ lard white people gang wannabe kids, and others in the shops.
It ain’t your imagination, Palmetto.
In the land of soon to be 5-10 gasoline, what will the FB’s buy/strapped homeowner buy….a new bigger V-8 or V-10 or Hemi equipped truck with DVD, Ipod and the rest of the crap.
Mental illness or its evil equivalent is in the land and the cold bath of a Depression will make these people snap….when they snap…watch out!!
I blame a lot of the perceptions of things being worse now on modern mass communication. When I was a kid, if some guy across the country molested a child or shot up a school, it simply didn’t get broadcast or printed in the local newspaper. News was either local or the big national headlines. Now, if someone farts in a grocery store and offends someone it will be broadcast 24/7 on CNN, FOX, etc. if it is a slow news day. We are bombarded with crap that really doesn’t affect our lives, but often makes things seem terrible. As far as crooks and swindlers, they have always been with us. It is just easier for them to do their work with modern communications (internet, etc.) and reach out (rip off) to more people.
Speaking of pools needing maintenance, Casey Seringas had a house in Modesto with a pool/mosquito farm that the neighbors complained about to the city. I’d show you, but his site appears to be down again.
But Not one of these thigs…the NAR, Lereah, Mozilo, Sub-Prime mtg execs, appraisors, HBer execs Alan Greenspan, The Federal banking regulators, The Fed Reserve could see thisa disastwer 3-4 years ago. The only ones were the BITTER RENTERS.
Now I am a hapy renter who is going to pounce on something at a 50% discount to those insnae prices!!!!!!!!!!!!!1
Again…..
“It is difficult to get a man to understand something when his salary depends on his not understanding it.”
Wow, haven’t heard the term ‘bitter renter’ in, like, 6 months.
Ah, good times….
People who laughed at me for selling my waterview house last summer just sent me an email saying, “You called the housing bust.” Nope, I didn’t, I was already reading hbb.
“At the San Diego sale, houses and condos typically sold for about 30% below the previous sale or appraisal prices. In a few cases, the discounts were around 50%.”
YIKES!!!!!!!!!!!!!!!!!!
“Moorhead and her husband now owe $603,000, up from $196,000″
——————————————
spending that $400K created a multiplier effect which created 4 new jobs. Those 4 jobs will now be lost. The reverse multiplier effect in action
While looking for an update from “Jeff”, I see this speaker is advertised on SDCIA home page.
Gee, what do you think the secret was that he told everybody?
“Invest in Salt Lake, Portland, Seattle, and Boise.” Can you say a little late to the party?
Are Jeff and Casey AWOL now?
I take it back. Casey’s site is coming up again. But I don’t see Jeff on SDCIA….
A high-flying company loses
American Home Mortgage hit by industry trouble (mortgage)
http://www.newsday.com/business/ny-bzloser145211047may14,0,4057382.story?coll=ny-business-print
You are all worried for nothing. Just look at #2 on ziprealty’s “10 Tips for Savvy Home Buyers”. All will be well.
“Explore creative financing options. During the home loan pre-approval process, ask about ways to get creative with your financing. Low down payment options, first and second mortgage combinations and first time buyer programs might help you afford more funding. Many lenders are now offering interest-only home mortgages; just make sure you thoroughly evaluate the terms for this type of home loan. Down payment grants are also available in some instances and might be worth investigating or discussing with your realtor. “
“10 Tips for Savvy Home Buyers”
Now you know where things with names like “Smart Loan” come from. Smokescreen borrowers into thinking they’re financial geniuses.
Low down payment options, first and second mortgage combinations and first time buyer programs might help you afford more funding.
———————-
Glad to see it phrased like this instead of “…help you afford more house.”
I get tired of hearing about how people bought “more house than they could afford” when the truth is that they took on more **debt** than they could afford.
People were looking to buy houses which they could have qualified for just 6 years ago. It’s not the houses which are too grand; it’s the price people were paying for them.
Just think about the multiplier effect of debt bozos making $14,000 - $20,000 a year adding $500,000 to $720,000 to the economy when they got phoney toxic loans.
Yes and where do you that money went?? Look around SoCal at all the Dbags driving Mercedes and BMWs with realtor magnet signs and Mortgage Broker signs. That’s where the money went all at the expense your hard earned savings and salaried compensation not keeping up with inflation because it was filtered through M3.
Legalized Theft.
I believe mtg debt went from 11 trillion in 1999 to about 22 trillion in 2005.
Parabolic move up in mtg debt. All this phoney money went into the economy from dopes that in some cases can’t even read or speak english.
The trial lawyers must be lining up the class actions suits against every major reic organization.
Looking forward to it.
Man, this blog is hilliarious today…
‘Wray and her husband are 10 months behind on their mortgage payments, but they won’t lose their house as long as her husband remains in Okinawa with the Marine Corps, thanks to a law that shields active-duty military members from foreclosure.
When he returns, they’ll have three months to come up with more than $38,000.
“It’s really sad when you’re going, ‘I love you but I don’t want you to come back,”‘ she said.’
Is there a way to keep him in Okinawa another 10 years or so ?
Tough luck Mr. Banker.
The collapse has started in San Jose, CA. But sites like zillows.com keep hiding the fact that distressed sales are occuring by bumping sold properties by upto a 100K after thay were apparently sold in a hurry. The old “V” price. Before collapse, during collapse, and current price.
Zillow will be the last one to get the news that the housing bust has occurred. They still live in lalaland. I am actually beginning to like zillow’s ignorance of reality because it will keep the more knife catchers in place for the dagger to score right on the mark. I’m sore not a few BFs look at zillow and feel reassured that all is well. Mean while, the knife getting closer and closer. Can they spell foreclosure?
I totally agree. I have been following Zillow and Ziprealty for a while now for San Jose homes and several homes are listed for sale atleast 100K less than the zestimate and still not selling. The tide is turning and it is going to get much worse. The change in the past month or so for the San Jose market is unbelievable. I never expected it to tank so fast like this.
I don’t see a lot of inventory on the market. And I still see POS 2700 sqft boxes packed like sardines with 3ft space on either side and a railroad 100yds away being “offered” at 1.3M. I do see some foreclosures happening. And I have noticed the construction of the condos down the street being dragged out. But I wouldn’t call it “tanking” yet here in San Jose.
I don’t understand what you are saying. Zillow.com lists sales prices of the properties and comps. It also gives a history of sales prices. Those are the facts. You can draw your own conclusions as to the value of a property by similar properties, sold recently nearby.
In the best case, I think zillow is at least terribly out of date. I’ve seen new home tracks that have been completed for over a year and zillow still shows an empty lot. Some of these houses are starting to go into foreclosure and zillow knows nothing about that. It happilly lists older homes nearby at prices higher than what these will foreclose for.
I don’t know about San Jose, but in Las Vegas zillow shows all sales including short sales, bankruptcy sales, etc.
This thread has been one of the most entertaining. It is now ‘harvesting’ instead of ‘liberating’ equity? 400K in 5 years, easy for an idiot to go through. Especially in close proximity to a ton of casinos, and an area where you have to show off everything from the boob job to the car. Now that squirrels are going away, no more need to promise to feed them? Or that Black Disease isn’t in San Francisco. Mosquitos and mold. That ‘will’ have an effect on homes all over. I looked at and offered on a home in Elk Grove CA about 4 yrs ago, and backed out because of the mold (should have bought it and dumped it for a $200K profit if I had known at the time). Sometimes, truth outdoes what the imagination could only try to come up with. I need some of Neil’s popcorn.
“It is now ‘harvesting’ instead of ‘liberating’ equity?”
‘burying’ equity?
What point are we at in this housing bust?
Could this be it?
http://www.blownmortgage.com/.shared/image.html?/photos/uncategorized/2007/05/13/13lenders1_lg.jpg
At least the market appears to still be afloat…
good one(s) fellas
crush
geez - those refi loans have to be paid back??
But mortgage broker DeAngelo didn’t work for free. Each new loan carried up to $13,000 in fees, along with prepayment penalties, and the Moorheads fell deeper in debt.
What a stupid remark. Even if there were no fees or prepayment penalties, OF COURSE they fell deeper into debt. That’s what the euphemism “tap into your home equity” means - increase the balance of your mortgage! Anyone who doesn’t recognize this has no business having a mortgage in the first place.
From the Inside Bay Area article:
Short sales also require a lot of organization by the seller, who has to provide tax returns, pay stubs and other financial statements the bank will want to see, she said.
So in other words, it takes more documentation to get rid of a mortgage than to obtain one in the first place!
That is hillarious. How much documentation does a foreclosure require?
Lenders are anxious to avoid a foreclosure because they typically lose anywhere from 20 percent to 40 percent of the loan’s value, he said.
What ever happened to “lenders won’t get stuck with the house because they sell the mortgages to the Chinese”?
Well, they lose 6% to the Realtor on the resell.
They also have to pay all the costs of the foreclosure, upkeep, back taxes, HOA fees, etc.
Oh, don’t forget writing off all that interest that they’ve already booked as profit, in anticipation of it happening, but isn’t really going to be there.
Checked out the Countrywide site. Reckon these units are close to one another? Perhaps some digging is in order…..
Countrywide REO’s for sale:
CHULA VISTA, CA.
1330 CAMINITO FABRIZIO #61, $420,900.00
1331 CAMINITO FABRIZIO #67, $403,900.00
1411 CAMINITO BORREGO, $339,900.00
1468 CAMINITO SARDINIA, $489,900.00
759 CAMINITO FRANCISCO #6, $359,900.00
“Particularly problematic was the ’stated income’ loan. One lender checking a small sample of applications against federal tax forms found that almost 60 percent of loans had income exaggerated by more than 50 percent, according to an April 2006 Mortgage Asset Research Institute study.”
It appears to me that this simple issue combined with the even bigger issue of lenders qualifying appliants on the teaser payment - subprime, alt-a or otherwise is the undoing of the current bubble. In fact, without this the bubble would never have become the vast monster it did. Prices in bubble areas are set to fal a huge amount as this shakes out.
BOO HOO!!!
Lenders urged to suspend foreclosures for six months
BY ALEX VEIGA, Associated Press
Article Last Updated: 05/14/2007 09:25:57 PM PDT
A coalition of California consumer groups sent letters Monday urging six major mortgage lenders to suspend foreclosures on home loans for the next six months and find ways to keep borrowers at risk of default from losing their homes.
If the mortgage lenders don’t act, hundreds of thousands of Californians who took on risky loans could lose their homes, according to the letter sent to the CEOs of Countrywide Financial Corp., Wells Fargo & Co., Citigroup Inc., Washington Mutual Inc., Bank of America Corp. and Merrill Lynch.
More than 100 organizations, including legal aid groups, housing counseling services, economic rights advocates and other consumer groups signed off on the letters.
“We are asking the largest lenders in the state to take leadership so that families can keep their homes and California’s economy won’t suffer,” said Kevin Stein, associate director of San Francisco-based California Reinvestment Coalition, which coordinated the campaign.
A call to the Mortgage Bankers Association, the industry’s trade group, was not immediately returned.
Foreclosures have been rising for months as the housing market slowdown has left many borrowers unable to refinance or sell their homes.
Advertisement
More than 80,000 homes went into foreclosure in the first quarter in California, or more than double the figure from the year-ago quarter, according to Irvine-based RealtyTrac Inc.
Many of the borrowers who have defaulted had subprime loans, which in many cases led to higher monthly payments when their interest rates adjusted higher.
Dozens of subprime lenders have gone out of business in recent months because they lost funding and were pressed to buy back defaulted loans.
In California, black and Hispanic neighborhoods were almost four times as likely as white neighborhoods to have borrowers with subprime mortgages, according to a study by Stein’s organization.
Stein said the mortgage industry bears some responsibility for the foreclosure problems because loose underwriting standards helped push many borrowers into loans they couldn’t afford.
“Large profits were made over the last few years on the backs of consumers who got loans that really were not suitable for them,” Stein said. “This is a crisis that is not of the borrowers’ making.”
“Large profits were made over the last few years on the backs of consumers who got loans that really were not suitable for them,” Stein said. “This is a crisis that is not of the borrowers’ making.”
Ugh I smell more laws made and more new government to protect us.
No way, I live in California, and I’m not getting penalized because I was smart and sat out the madness. Anyone with half a brain knew these people were overpaying for these houses. Where is OUR letter to keep the foreclosures rolling, affordable housing is more important than letting some gamblers and equity leeches in their homes. “Life is hard, life is harder if you’re stupid” John Wayne.