Real-Estate Speculation Now Driving Many Into Bankruptcy
The Miami Herald reports from Florida. “Horacio and Patsy Parra cashed out two retirement accounts last year to buy an Orlando condominium they couldn’t afford. The developer, Cay Clubs Resorts & Marinas, agreed to lease back the $307,000 unit for 15 percent of the sales price, enough cash to cover the mortgage for nearly two years. But the Parras now expect to lose their unit to foreclosure, they say, because Cay Clubs owes them about $40,000 in unpaid rent.”
“The nationwide real-estate downturn has brought a cash squeeze that forced Cay Clubs to lay off dozens of workers, slow redevelopment plans, and ask roughly 140 buyers like the Parras to wait for their rent checks.”
“The ‘money is just not available to make the necessary payments and continue to maintain Cay Clubs’ long-term viability during this down market,’ CEO Dave Clark in May wrote to condo buyers awaiting lease-back checks.”
“The troubles that the Clearwater company faces symbolize wider concerns about South Florida’s battered condominium market. Real-estate analysts say too many developers depended on investors who stretched their bankbooks buying condominiums during the housing boom on the assumption that others would buy or rent them only a year or two later.”
“Faced instead with anemic demand for real estate, those investors are left scrambling to pay the bills, said Jack Winston, a condominium analyst with Goodkin Consulting in Miami. ‘It’s the same people: ‘Hey, let’s invest in some real estate! We’ll flip it. Then, all of a sudden, they find they have to reach into their pocket every month to cover the mortgage. And it’s a shock.’”
“Ricky Stokes, a top seller for Cay Clubs, touted the lease-back arrangement in a May 2006 online presentation as providing ‘virtually two years of free appreciation’ because, for most buyers, it would cover ownership costs for 20 months. Stokes did not respond to interview requests.”
“Even with their large real-estate holdings in Colorado, Patsy Parra says she and her husband do not have the extra income to handle another mortgage payment.”
“They took out four loans to buy two Cay Clubs units: the one in Orlando and another in a planned Las Vegas hotel. They counted on 20 months of lease-back payments to cover the $4,500 in monthly costs for both. After that, the Parras needed appreciation gains to make the investment work.”
“‘I’d have to refinance to get the next five or six months of payments,’ Parra said. ‘They were supposed to be very valuable.’”
“Other buyers depended on the lease-back cash to pay their mortgages, too. ‘I have clients that are filing bankruptcy because they can’t afford their payments,’ said Gene Denton, president of a Colorado firm that sold Cay Club units through Internet presentations.”
“NAWREI wrote to Clark on June 7 that Cay Clubs owed members nearly $240,000 in back rent, leaving members ‘facing personal financial hardship including bankruptcy.’”
“Patsy Parra said Friday that she has no cash to pay the mortgage in July or August, a scenario she said she never anticipated. ‘When we first bought these condos, I thought everything was fine,’ she said. ‘I never in my wildest dreams thought something like this would go wrong.’”
The Orlando Sentinel. “The housing boom may seem a distant memory, but experts say the real-estate speculation and ‘creative’ financing it generated are now driving many investors and homeowners into bankruptcy, especially in Central Florida.”
“Personal bankruptcies in the Orlando area were up 80 percent during the first half of 2007, the biggest rate increase in the federal court system’s Middle District of Florida,. Orlando’s jump in bankruptcies also far outstripped the national rate, which was up 43 percent compared with the first six months of 2006.”
“Orlando bankruptcy lawyer Richard Heller is seeing a lot of people these days who thought they had placed a sure bet during the recent housing boom.”
“‘Some would buy land for, say, $750,000, then use all their 401(k) and other money to keep the mortgage paid,’ Heller said. ‘At the end, the best they could get for it was $550,000 — and they’d still owe $750,000. They didn’t understand the risk they were taking.’”
“Many of those with mortgage problems are trying to fend off bankruptcy by renegotiating their loan terms, downsizing their lifestyles, taking second jobs or and making other changes to save money, lawyers say.”
“‘We’re not talking just about people who are hardly making ends meet,” said Raymond Rotella, a partner in (a) Orlando law firm. ‘We’re talking about some people with a sizable net worth and income-earning potential who are facing a serious dilemma.’”
“Chapter 13 filings have surged the past two years and now comprise about 40 percent of all bankruptcies in the court’s Middle District of Florida, double their historic rate.”
“‘People are trying desperately to avoid filing,’ said Andrew Baron, a veteran consumer-bankruptcy lawyer in Orlando. ‘But for a lot of them, it’s going to be the only sensible way out. Too many have been tapping their home equity to pay other bills in the past. Now that avenue is blocked off.’”
From TC Palm. “The number of mortgage foreclosures filed in St. Lucie this summer has skyrocketed. Court officials say it’s a nationwide trend and there are themes running through many of the cases, such as home buyers taking on adjustable-rate mortgages that now carry higher interest rates and the rise in insurance and property taxes for some residents.”
“Others bought the homes as investment properties, but are now having trouble keeping up with payments.”
“Of the 550 civil cases filed in circuit court in July, nearly 80 percent were mortgage foreclosures, records show. There were four times as many foreclosures filed in July as there were during the same time period last year and it is likely more than 3,000 will have been filed by year’s end.”
“Clerk of Court Ed Fry and his office has been swamped with calls from the public. Fry hired an additional clerk earlier this year to deal with the growing demand and employees have begun working on Saturdays.”
“‘It’s a little disheartening actually to see that kind of volume,’ Fry said. ‘You hate to see this many foreclosures being filed in the county.’”
“The sinkhole in Jill Dienemann’s backyard, eroding away from the canal retaining wall put up by the builder of the empty house next door, isn’t technically the city’s problem.”
“But the owner, Todd Stolfi, is unreachable. His address on the property deed is a Post Office box and a listed phone number has been disconnected. So Dienemann, frustrated and fearing further erosion, demanded help from the city, and the city has promised to deliver.”
“‘Who else is going to fix it?’ City Manager Don Cooper said.”
“To make it easier to fix problems with the hundreds of empty homes in Port St. Lucie, Councilwoman Michelle Berger and City Attorney Roger Orr are looking into the legality of designating the homes as public nuisances.”
“‘There are a lot of empty houses and we have to get a handle on these issues,’ Berger said. ‘It’s not just high grass. It starts out with high grass and then the whole neighborhood begins to fall apart.’”
“The nuisance designation, if legal, would allow the city to make repairs to empty homes without the threat of losing cash because the home is in foreclosure. Foreclosures have quadrupled in St. Lucie County in the past year, and a foreclosure exempts an owner from repaying cash spent to fix it.”
“With a public nuisance designation, the city could put a lien on the home until any repair money was paid back.”
“Dienemann wants the city to find a way to get all the vacant homes, many of which were built by speculators who have turned into absentee-owners, under control. ‘All these people who live next door to these empty houses are being held hostage,’ Dienemann said. ‘This town has to be accountable.’”
“For 33 years I have been employed in the construction industry. Lake County, like the national economy, has an excess inventory of new and existing homes. In my neighborhood in Mount Plymouth, a subdivision called the Fairways has 23 homes for sale and four for rent. In the surrounding streets in Mount Plymouth, another 34 homes are for sale, and that covers only about a third of the community.”
“With all of these homes for sale in this tiny part of Lake County, can building new homes be justified? I think not. The events leading up to this excess in housing inventory include a developer-friendly County Commission that approved too many developments without sufficient infrastructure.”
“For Lake County to prosper, it must attract high-paying jobs in sustainable industries. Residential construction is not sustainable. The labor force, for example, is transient. The New York Times reported in April that one in five construction workers in California was an illegal immigrant. Does anyone think it is any different here?”
“Everyone’s home is losing value because there is an excess in the supply.”
“Forbes.com has just ranked Miami and Orlando as the two riskiest housing markets in the country. Obviously this isn’t a good thing. Talk of a Florida recession grows.”
“But common wisdom says not to worry. The real-estate Ponzi scheme that got us into this fix will be replaced by the next get-rich-quick gimmick.”
“There are disturbing reports of school enrollment declines and of moving companies moving more people out than in.”
“We are in a unique situation with the cost of property insurance often exceeding the cost of property taxes. Talk of leaving Florida has become a pastime, with the quality of life as big a complaint as the cost of life.”
‘ A St. Louis bank company is set to buy ailing Coast Financial Holdings Inc. for the low-ball price of $22 million - the first Southwest Florida banking casualty of the heated lending practices that marked the recent housing boom.’
‘Money issues will dominate the next several weeks as Florida lawmakers respond to economic forecasts that suggest the state, like local governments, is due for some serious belt-tightening.’
‘More troubling is that projects for next year are even worse as the state awaits its rebound from the post hurricane-building boom that pumped billions into the state’s economy. ‘The revisions to the forecast are primarily attributable to the deeper than expected downturn in the housing market and the resulting impacts on other sectors of the economy,’ said Amy Baker, head of the state’s Office of Economic and Demographic Research.’
‘When Boca Middle Principal Jack Thompson interviews prospective teachers, he’s been asking a question that has nothing to do with education: How do you feel about roommates? Despite the drop in real estate prices, many teachers remain priced out of the housing market, prompting some to leave.’
‘I pray they stay,’ Thompson said. ‘Palm Beach County offers everything a young person would want, the only problem we don’t have (affordable) housing.’ One in 10 teachers who worked in Palm Beach County schools last year won’t return next week when schools reopen. Though schools annually deal with turnover due to retirements, nearly 1,000 teachers are leaving for other reasons, including more than 200 who are relocating.’
‘Latitude One, the boxy, 24-story office-condominium built near the Miami River, is nearly finished. It starts closings with buyers this week. But many real estate professionals aren’t so sure it represents a new trend in office development as much as a temporary fad.’
‘When the housing boom heated up and people were binging on every kind of residential property they could, developers got the idea that more individuals and businesses of all stripes might want to buy their offices too.’
‘Industry experts now wonder: Has the office-condo craze peaked? A recent CB Richard Ellis report concluded ‘there are indications that the supply of office-condo projects may be greater than the anticipated demand.’
‘Peter Harrison has been a commercial real estate broker in Miami for more than 30 years. ‘It’s run its course. Typical of Miami, they have built too much of it. There is more than 5 million square feet of office-condo space being converted or built. But there is too much because the market is very limited. So much of what is being converted to office-condo will all come back on the market for rent.’
This last one cracks me up. The office condo market was always a joke and now the ‘experts’ wonder!
‘When Boca Middle Principal Jack Thompson interviews prospective teachers, he’s been asking a question that has nothing to do with education: How do you feel about roommates? Despite the drop in real estate prices, many teachers remain priced out of the housing market, prompting some to leave.’
And he thinks this is sustainable? Give it another 2-3 years Jack, this problem will correct itself. You will have more teachers then you can stomach with the persistent outmigration of families out of FL. Home prices will fall, and teachers will be able to afford to buy/rent again. Just stay the course.
People are pakcing up and leaving FL to the hurricanes for good. This recession will hit FL real hard.
I have a friend who works in HR for Broward County schools. She explained that her office is absolutely flooded with calls from people looking for teaching positions. Most of the applicants are ex-Realtors® and ex-mortgage brokers. Many are former teachers that want to come back after leaving a few years ago to jump on the real estate band wagon.
My friend said that they will have absolutely no problem meeting their quotas this year with the recent flood of resumes.
I surprised that PBC isn’t having the same experience.
They (realtors & mortgage brokers) haven’t had to live on a teacher’s salary during the boom and I think they’ll get a rude awakening when they try. They’re probably thinking they made it before, but that was before they contributed to housing price run up.
Can you imagine what ex realtors and mortgage brokers will do to their poor students minds as they struggle to live ” honestly”…I wouldn’t hire them for garbage collector. They are scumbags first and school teachers second. I want my kids with career teachers, not here today, gone tomorrow.
‘ A St. Louis bank company is set to buy ailing Coast Financial Holdings Inc. for the low-ball price of $22 million….
Does that qualify as an FDIC ‘managed’ workout?
“Patsy Parra said Friday that she has no cash to pay the mortgage in July or August, a scenario she said she never anticipated. ‘When we first bought these condos, I thought everything was fine,’ she said. ‘I never in my wildest dreams thought something like this would go wrong.’”
Well, your dreams weren’t wild enough BEEYOTCH. Now lick that dog scat off the sidewalk. Like some salt with that?
Spend your last $12 on a thong and sell yourself on the pier. At $307K your legs’ll break off before you get the title. Sorry….
gov workers actually working !
this will scare the fed gov workers
“Clerk of Court Ed Fry and his office has been swamped with calls from the public. Fry hired an additional clerk earlier this year to deal with the growing demand and employees have begun working on Saturdays.”
“‘It’s a little disheartening actually to see that kind of volume,’ Fry said. ‘You hate to see this many foreclosures being filed in the county.’”
Mr. Fry is going to have to hire more. The only sector that is expanding employment is da gov’mnt.
Never in her wildest dreams did she think a heavily-leveraged investment would lose her money!
I am reminded of a story a coworker told me a while back in which a guy (on a hot tip) bought options on a stock using cash advances of around $20,000 on credit cards. He spent the next couple of years paying them off.
Back then it was just 20k… and you could simply go bankrupt and now forget it.
Now I do expect bankrupcy laws to change and make a mortgage as hard to dispose of as a CC debt. Garanteeing a lifetime of servitude.
Do you think it is a coincidence that just as the era of easy credit was firing up, the bankruptcy laws were toughened up? The credit industry knew what would happen and prepared in advance. gordo
‘When we first bought these condos, I thought everything was fine,’ she said. ‘I never in my wildest dreams thought something like this would go wrong.’”
Hey Patsy, no worries…you just need to make sure that in future, your dreams are wilder! That’s how you’ll be able to protect yourself from your own stupidity.
UFB. Still can’t comprehend the numbers of people who cashed out retirement accts. to fund “opportunities” that smelled so scamtastic. I’ll bet somebody told Patsy she was getting in on the ground floor.
I bet Patsy reads Money magazine. It’s in every dentist’s office. And for the past few years, they’ve been running “Millionaires in the Making” articles, all about mini-Trumps with overleveraged bets in RE, and their purported gains on their holdings. Their cheerleading was totally irresponsible. With wages stagnant, and folks getting squeezed with inflation and rising health care costs, rags like Money made RE sound like the only way out.
Now the same mag is full of debt-reduction schemes, how to avoid foreclosure and the like. They’re still selling mags, but their readers are sucker-bait.
Any chance the editors and writers want to step up and apologize for their lousy cheerleading tactics? Add Money to the local newspapers as the usual unreliable sources.
The media is a whore for advertisers. I stopped reading BusinessWeek 3 years back. Corporate media can really cloud your judgment.
same reason i no longer watch fox news…..
I’ve subscribed to BW for 10 years. The magazine now is very thin. Used to be a solid read that would take 4-5 hours, now I can read cover to cover in 1 hr. I’m going to write the editor and cancel my subscription if it doesn’t change back. Stupid cartoons as well.
I can get my satiation of news from the Economist and Newsweek.
Same reason I don’t watch CNN, CNBC, MSNBC or any of the Sunday morning news shows. Whores for lawyers and politicians.
“I can get my satiation of news from the Economist and Newsweek. ”
And HBB!
I would cancel Money magazine, but I bought a three year subscription in 2005. It will not be renewed next year. That magazine is worthless, the last issue had a couple in Clearwater (FL) with “$135k in home equity”, which is akin to saying I have “1 million dollar in future earnings”.
Moman
Congrats on seeing the light re BS magazines. Just a friendly tip on cancellation; they all have an ‘ automatic ‘ renewal now, so when the subscription runs out, you’ll still keep getting many magazines well past the renewal date. The clause states that you agreed to this when you enrolled, and the only way to end it is to WRITE them a cancellation request. (I’d send it certified)
If you don’t take any proactive methods youll be on the hook for more magazines after the renewal period.
Dont think its fair & wont pay? They’ll slam you into collections.
My father-in-law had at least 20 mags coming in when he passed away, and despite my best efforts, they will not cancel.
I just give the Audi Club magazine to my neighbor & throw the rest away in the recycle bin.
By the way, he deceased over 19 months ago ,,, but they are still coming in like a tidal wave !! ( Ignored the renewal cards, but it doesnt matter. they wont stop)
Good luck to you
My magazine subscriptions expire if I don’t renew.
Magazines are desperate to maintain an artificially high circulation number so they can keep their ad rates up. Same with newspapers. We dropped back to a Sunday-only subscription and now they want to give us the other six days for free.
Thanks, I will check into that. I know that I paid with a credit card that I no longer have, so they won’t be able to get anything from me on that front.
Generally - they stop sending renewals and magazines. I’ve never had anything go to collections, and I’ve pared my monthly magazines to three from nine just a couple years ago.
Spike66-Tell it like it is, bro!
You throw up some great pragmatic posts.
Regards.
Just saw this, many thanks.
Of course, everything I know about appraisal fraud, I learned from you…
The thing I have found with Money and some onf these other so-called financial mags, is that none of the writers have any business background. You click their bio’s and they have just gone from writing about gardening to retirement planning. WTF!
Same with Business 2.0, which is publishing their last issue this month.
They had this house flipper article last year right when the market was turning ugly. I was laughing so loud at Barnes and Noble, they told me to quiet down.
I saw the real estate show on Fine Living last night. This guy wanted to buy a loft in LA. They told him if he was going to live in it 20 years or more to go 30 yr fixed. If it was 3-10 years to go interest only. ( If you got a 15 year loan, that would be some serious equity you could have built up). Might as well rent and save HOA, taxes and insurance. The realtor figured two payments (30 fixed and interest only), and then she just sat there and watched him sqirm until he said he would do the 3% deposit on an old building that’s gutted and the renovations haven’t even started. At the end they said he decided to start a family and was no longer interested in a loft. This is why I got out of real estate, 75% of the agents are a bunch of sleezy used car salesmen who have no intention of looking out for the buyer’s best interest. Even though I watched carefully for my clients, I couldn’t guarantee what the sleezeball on the other side of the deal was doing. I turned a couple of them in and got their licenses suspended, but that alone could be a full time job.
Maybe this explains why doctors and dentists are among the worst investors.
Funny. BTW, in the remodeling industry it is common konowledge that doctors and dentists are people to be very wary of when it comes to contracts and paying their bills. They are hell to work for.
“UFB. Still can’t comprehend the numbers of people who cashed out retirement accts. to fund “opportunities” that smelled so scamtastic.”
No. No. No! We need to contain ourselves. Your response should be one of surprise. Let’s try that again, shall we. Memorize and repeat the following the next time you encounter a FB:
Oh my. I can’t believe it! I’m so sorry for your loss. It looked like a sure thing. What happened?
She evidently didn’t hear about having enough to cover the mortgage when the units aren’t rented. Can’t depend on 100% rental.
Thats a great price, who would have expected so much?
Book value is over $8, down from $12 but they had all those non performing scam loans…it would have probably wiped out all the remaining BK value….
>Horacio and Patsy Parra cashed out two retirement accounts
Own bleeding fault. Do people not understand what a retirement account is for? No, this was greed plain and simple. And therefore their own bleeding fault.
Yes. I feel like someone who had a ticket but missed the plane on United 93. I don’t owe anyone anything. At times I wondered if I was the idiot hanging back and not participating in this craziness but now that sanity is coming back, whew!
Ditto txchick.
I second TXchicks comment also. I just knew something wasnt right when housing skyrocketed up so quickly.
When It doubled in amt & didnt stop, I resolved to just build my own house, on my schedule, to avoid any pressure. And also my frame of mind is such that for a debt approaching half a mil, I want to guarantee the best possible house I can get, and the only way to do that is to oversee the project w/a microscope while controlling costs to the Nth degree !!
Sorry, but to me half a mil is still a large amount of money, which I will not squander recklessly !!!!!
During the early part of the madness, I thought I could handle a half-mil house, with a low LTV ratio. Not so — it just “felt” like I could in 2004 when “everyone else” could and most did. I balked like TxChick did and am grateful every day. Sort of “There but for the HBB go I.”
you should’ve played the Ponies!
I got a hot, can’t lose tip at 45 to 1.
See at least here it was in the realm of possibilities that they could lose. They would’ve been prepared……
They’re called “ripple filings” and they happen when larger companies overextend or overcommit and then file for bankruptcy. Lots of smaller suppliers, contractors, customers, etc. then get slammed with preference actions to return money they’ve already been paid, and in many cases, spent, so they either have to spend a small fortune fighting the action, cough up the dough, or file for bankrupty themselves. This happens while their receivables for the large company are suspended and usually discharged or unrecoverable, so they have no cash flow. Ripple bankruptcies happen as a matter of course.
Preference actions are pretty simple to defend unless there really is a clear violation.
“The nuisance designation, if legal, would allow the city to make repairs to empty homes without the threat of losing cash because the home is in foreclosure. Foreclosures have quadrupled in St. Lucie County in the past year, and a foreclosure exempts an owner from repaying cash spent to fix it.”
Someone predicted this here. Localities will not allow mortgage holders to skimp on maintenance — if they do, their towns are doomed. Once those fees start piling up (will the new liens be immediate write offs?), they’ll have to auction the units.
“I pray they stay,’ Thompson said. ‘Palm Beach County offers everything a young person would want, the only problem we don’t have (affordable) housing.”
They could go immediately from begging teachers to stay to laying them off, with class sizes of 40 for those who remain. Florida may end up duplicating the NYC education experience statewide.
NY sure taxes folks hard enough ,and has a super BS gov union machine ,especially for teachers
maybe teachers should work 50 weeks a year like the little folks
They do - just because they’re not in a classroom teaching doesn’t mean they’re not working.
Marking, lesson planning, refresher courses, after school classes, school trip supervision and endless pta/teacher meetings take up the rest of it.
The other two weeks are for getting sick - working with 30+ kids at a time gives you exposure to all sorts of lovely illnesses - nits, flu, whooping cough anyone?
Most teachers work 50-70 hours a week…fool!
That uneducated rhetoric is why nobody watches FoxNoise anymore.
Any teacher who’s working 50-70 hours a week must have a second job.
You folks that have never taught show your ignorance.
They do - its called grading papers and getting lessons ready. Not to mention a lot of other things.
Hey Bill how many hours a week do you work? Be truthful as many here on the blog are at work when then write their posts.
So between reading and writing some must spend 2 or more hours a day doing this while at work.
BIll in NC - Teachers work a great deal more than 40 hours a week, 40 weeks a year. Try 50-60 hours a week 48 weeks a year.
I like WAman says here - tho I think that poster may have underestimated it a bit. I’d wager that there’s 3-4 dozen regulars here who are supposed to give their boss eight hours a day but give them four. Better still, several of them often chastise Corporate America.
My mom was a 5th grade teacher, and she’d be grading or creating lesson plans several hours every night. And I think that a lot of teachers are like her: hard working.
But I recently talked to a guy in his 20s who is a teacher here in CA (it’s his second year). I said something about how much time it takes to grade and he said, “Naw, I just have the students do it, they grade one another’s assignments and tests.”
Teaching is just like any other profession - there are plenty of people who bust their butts doing it, and plenty of people who goof off and try to do as little as possible.
Alright, I’ve been reading this blog for a while, but I’ve never posted.
I’m a teacher in Florida. During the school year, I EASILY put in 50-70 hours per week. I made about 41k last year (with an MA).
I spend my non-class time sponsoring clubs, tutoring, contacting parents, attending school activities (mandantory and otherwise), grading papers, lesson planning, attending in-services/professional development workshops (spent two weeks last summer “vacation” attending a mandantory ESOL one), etc., etc. Oh, I’m also in charge of the Spring Break DC trip for our 8th graders–tons of planning, small fee, hectic trip, shortened vacation, stress of being in charge of other peoples’ children 24/7. (Always have a great time.)
I also have an MA (int’l affairs w/econ focus) and turned down govt. work to pursue teaching.
The pay’s not much, and I used to dream about what it would be like to have a job where you can do things like: use the bathroom when you want, not take your work home with you, spend work hours surfing the internet, have a lunchtime that is longer than 25 minutes, not have to monitor everything I say…things many others take for granted.
That said, I love my job.
I work in a poorer area, but we have good kids. Some of my students’ parents lost homes last year, and I’ve already heard of a few more former students whose families are facing foreclosure, due to job loss (many work in construction), ARMS, divorce. I’m sure the number is only going to increase.
Oh, just to add: last week, while I was at school (getting my room together early–more unpaid hours), a mortgage broker dropped by with his resume–looking for a Social Studies position, no less.
Floridian — thanks for your anecdote. You remind me that we should solicit more housing crash observations from teacher-readers, because they probably pick up a lot of on-the-ground information, however unhappy, about families losing their homes or at least being seriously underwater. I’d imagine kids blab a lot about what’s going on at home.
Maybe you have never had a teacher in the family. I teach at a high school. My paid hours are 7 a day in a 184 day year. My highest level of education is a Masters degree which my school did not pay 1 penny for. My salary 47k per year. My college GPA with 40 science credits 3.6
Now my unpaid hours at least 45 minutes Monday - Thursday helping kids after school. Planning lessons, grading papers etc is a minimum of 2 hours per day 7 days a week. Also there are meetings with parents, faculty, etc.
So add it all up and I work about 17-20 hours a week that I do not get paid for. Show me another job where someone does this much work for 47k per year.
Yes, and the rest of us got our higher education without any help too. Plus while you work 184 days a year with a week off for easter, two weeks off for Xmas holidays, take an abundance of sick time off the rest of use work out 5 day or more weeks (8 hour days plus if salaried) and then take work home every night and many a week end too. Hospital and safety members work 24/7 shifts which a teacher would snub their noses at and are constantly bombarded by people spreading their sickness. One big difference, the latter don’t sit around feeling sorry for themselves and touting their superiority.
Salinasron
You misunderstood my point about being sick 2 weeks of the year - ask any teacher (or ex-teacher, of which there are a lot, the burnout rate for teachers being very high) - you only have time to be sick during official school vacation time.
But the general public, such as yourself, only sees ‘184 days a year’ and thinks that the rest of the time we’re lounging around feeling sorry for ourselves and being superior. Actually, those 184 days a year are the only ones we get paid for.
Good point about the correlation between teachers and hospital workers - but two things to mention.
A) Hospitals are 24/7 places - you simply can’t teach kids 24/7 without either your head, or thiers, exploding.
They’re kids, not robots - anyone who’s tried teaching the last period before hometime on a friday can tell you that - they’re either alseep, or bouncing off the walls like little rubber balls - and, on ocasion, both at the same time.
Putting them on a shift schedule like a hopsital is both cruel and ineffective, as tempting as it would be for people, such as yourself, who think we’re all slackers.
B) Hospital workers are also notoriously overworked, underpaid and hugely unappreciated.
Hospice workers. They work for the patients. Someday the world will fair- teachers and nurses will live in mansions, and successfull realtors will need a second job to survive.
Yes, but when the taxes stop coming in how will Palm Beach County pay for these services?
The real question here is where the lein by the community will stand with relation to the mortgage. If the new lein takes precidence it will mean yet another hit for the mortgage holder. If the mortgage takes the lead it will be an out of pocket cost to the town when the property sells for less than the mortgage.
“Even with their large real-estate holdings in Colorado, Patsy Parra says she and her husband do not have the extra income to handle another mortgage payment.”
Translation: the Colorado properties are bleeding cash too.
God these people are brilliant.
“Talk of leaving Florida has become a pastime, with the quality of life as big a complaint as the cost of life.”
Not to worry. Have a friend who has a contract to sell his Maryland home. He has already moved to his retirement place in the Daytona Beach area.
Two problems. My friend’s purchaser has yet to sell his own house, and even though the contract doesn’t have an escape clause for that, the buyer still may be unable to go to settlement. Then my friend would have to sue to enforce performance. There’s an old saying with the words “blood” and “stone” that comes to mind. The second problem is that his FL place has already dropped about 20% in value since he bought it in Spring 2006.
I wonder how well he is sleeping these days.
And it’s not just bad luck, which is probably the way he and many others lie to themselves about it. He purposely bought the DB place first because he was speculating that the overall market would go up and that holding two properties for a short period of time would make him some money.
This raises a question. Is it possible today to purchase a home before selling the old one? Seems like the banks should be making sure the buyers qualify for both mortgages.
I know someone who is doing this and I think they’re crazy. The old place is in such a bad location, I can see this turning ugly. Yet they’re confident that someone will buy it.
It used to be called blanketing and yes the banks “used” to qualify people to make sure they could cover the cost. Of course that went out the window with qualifying income and credit rating.
“This raises a question. Is it possible today to purchase a home before selling the old one?”
I think it was — until last Friday.
Send your buddy and bottle of Jack Daniels and repeat the following:
Oh my. I can’t believe it!
Coming:
“Horacio and Patsy Parra cashed out two retirement accounts last year to buy an Orlando condominium they couldn’t afford.
And Going
People will do anything to save their homes, and it’s a one way Wall Street now, i’d imagine. A steady stream of people selling off their 401K retirement jewels…
A visual of the sellers @ the phone
http://www.ohiohistory.org/resource/audiovis/munroe/images/phonboth.jpg
Robert Shiller, the Princeton Economist is on WBUR - a NPR station out of Boston. Go to WBUR.org
He’s from Yale. (And he happens to be the author of Irrational Exuberance, highly recommended.)
Opps - Yale (I get them all Ivy League Schools confused)
Also opps is not oops - Need A Teacher?
“With all of these homes for sale in this tiny part of Lake County, can building new homes be justified? I think not. The events leading up to this excess in housing inventory include a developer-friendly County Commission that approved too many developments without sufficient infrastructure.”
A friend of my brothers has a house in a development in Lake county. Reallllllly nice place. Bought 5 years ago. He took a much better job up north right as the market went in the crapper. He priced the house 25% below the lowest price in the same development.
In six months he has not had a single person look at the house.
Think about that…6 months and not a single person even did a walk thru.
How bad does the market have to suck for this to happen ???
Here is another one.
My brother is a helicopter pilot. For two weeks last month he flew some bank execs around the Orlando area. They were looking at unfinished developments they had provided loans for. These guys got taken so bad a few of the developments were nothing more than bare land. The bare land was supposed to have 30-50 homes on em…
Again how much of this is just being found out about ???
My head hurts thinkin about it…
Chris
When the tide goes out, you see who was swimming naked.
These guys I have no sympathy for. They were too busy counting their commission checks and buying stuff they really didn’t need, to go out there and actually makre sure that the property securing their loans - was actually securing their loans.
“A friend of my brothers has a house in a development in Lake county. Reallllllly nice place. Bought 5 years ago. He took a much better job up north right as the market went in the crapper. He priced the house 25% below the lowest price in the same development.”
He is still over priced. If the other homes in the sub are 2-3x what a willing buyer will pay then a 25% cut is not enough.
True value = 200,000
Sub value = 400,00
Your friend’s 25% cut = $300,000
In this example he is still overpriced by $100,000. The numbers for your friend may not be so bad but if no lookers, too high a price.
“The housing boom may seem a distant memory, but experts say the real-estate speculation and ‘creative’ financing it generated are now driving many investors and homeowners into bankruptcy, especially in Central Florida.”
God I am tiered of that euphamism!
Creative financing should be renamed to “Psychotic Lending”. That’s what it was. That’s like saying selling crack was a “Creative Marketing Program”. WTF?? This finacing was a HORRIBLE thing for everyone who touched it (well, with the exception of those who got out early). This was not/is not a good thing, we need to stop playing it up as an affordability instrument or a “help the little guy get into his first home”. That’s not what this was at all. It is an instrument of speculation that was offered to unsophisticated investors for the benefit of the Wall St crowd. That’s not something to applaud, but something to be disgusted at. It’s like marveling at the genius of the Nigerian scam e-mails..
This was not/is not a good thing, we need to stop playing it up as an affordability instrument or a “help the little guy get into his first home”.
Completely agree. However, the pain would be far less if these were only used to help the little guy get into his first home. Unfortunately too many people (including the little guys) got greedy and decided to get-rich-quick buying multiple properties. I can’t wait until homes are once again viewed primarily as a place to live and not as a super lucrative investment.
“The housing boom may seem a distant memory”…
Excuse me, distant?? It was only this spring that things began to unravel and predicitions made on this blog and others became visible to everyone and suddenly four or five months later it’s all a distant memory?
What happened to :
There is no housing bubble.
A little air is leaking.
It’s a souffle.
The underlying economy is very strong.
Unemployment is very low.
It’s just subprime.
Subprime is contained.
The containment will not affect Goldilocks.
It’s just Alt-A and other creative muck.
It’s contained, there will be no spillover.
We are working off a totally-new paradigm.
And now the “experts” say there’s a problem?
First thing, let’s round up all the “experts” and the “economists” and hang ‘em, before they continue to rewrite history.
Little guys buy $100k houses, not $700k houses.
That’s true. In the bubble, a lot of little guys bought $100k houses. The problem is that that paid $700k for them.
LOL.
“The money is just not available to make the necessary payments and continue to maintain” Cay Clubs’ long-term viability during this down market, CEO Dave Clark in May wrote to condo buyers awaiting lease-back checks.
Hah…try that explanation to your creditor next time you’re a tight making payments. “Sorry, the money is just not available.”
Classic Ponzi scheme unwinding. Their ability to continue the payments back to buyers was predicated on acquiring new suckers, er, buyers into the scheme.
I’ve just read another BAD sign for the future of real estate for those who bought during the boom. It seems the lenders are now going to use a way of ensuring the loan applicant is capable of paying the mortgage, as opposed to accepting loan applications which are just stated income (usually fake) that isn’t verified which has been the case in the vast majority of loans over the last several years. It’s called PFA. PFA stands for PRE FUNDING AUDIT. Not sure if this term (PFA) was used any time in the past but it now means loan applications are going to be examined under a microscope and that means, as a CPA told me when I mentioned the term PFA, that the majority of loan applications will be rejected. As this mess unwinds, which is a event waaaaay past due, I would not be surprised at all to see property prices fall back to 1998 values over the next 5 years. That means those $700,000 condo’s in places like Los Angeles (condo’s ALWAYS get hit worse than SFH) will end up at the $250,000 1998 price. We have to remember that even in the depression, it took about 3 years before the fallout stopped and then led to stagnation for several years after that and THIS situation (created by Greenspan’s loose credit) is far worse for several reasons.
That means those $700,000 condo’s in places like Los Angeles (condo’s ALWAYS get hit worse than SFH) will end up at the $250,000 1998 price.
This is quite plausible - they may not be making any more land, but if you buy a condo, you’re not getting any land anyway, just a piece of a deteriorating building with carrying costs nearly guaranteed to increase substantially over time. Terrible investment in most cases.
Correct. However, those who were “savvy” in the old days when there was common sense in the financial world, used condo’s to move up the property ladder. First time buyers bought a condo, stayed long enough to the point where valuations increased in a normal market (as opposed to a boom and bust market) over a few years, then sold and bought a SFH or took the profits and moved to a less expensive location where they could buy a SFH.
People should take note: Condo’s are a VERY BAD long term investment and, those purchased in the last 5 years are going to become a financial horror story with those purchased since 2004 being the mother of all financial horror stories and throw in a nightmare. If I owned a condo which I has purchased in the last 3 years - I’d get out so fast smoke would be coming out of my a**.
And even in today’s lousy market your “sacrifice” price would still be somewhere between 120-150 X monthly rent, a level completely unsustainable over the long haul. What with taxes and condo fees - not to mention deteriorating physical conditions, and neighborhoods - I see sales prices at 80 X rent in a couple more years.
Paul, what would a 900 square foot condo in St. Augustine beach that was $350,000 2 years ago go for now?
Less, that’s all I can say. The same condo in Ponte Vedra Beach off the beach near A1A has gone from about $200-220K to about $150-160K. Worth no more than $100K, IMO. The gap between cautious buyer and cautious seller is still huge. If you must sell, you really have to come down. If you must buy, you have to overpay. I see a lot of distress in the South Ponte Vedra/Vilano Beach area. Most people seem to be trying to rent - can’t face the reality (impossibility!) of losing money at the beach. Also south of St. Aug. into Flagler County there’s a lot of high-end stuff that never got filled. St. Aug. Beach proper - probably less, though prices are softening. We’re still a long way from prices that makes sense, though.
You mean you think this is a bad investment (sorry for the repeition, this is my fav building, the million dollar condos in the mall parking lot, please just skip it if you have seen it before):
http://landmarkatthegardens.com/index.shtml
From the 800’s to 3M dollars. I will be suprised if these are selling (top floor penthouse) for more then 1M in 3 years. Shocked actually; I don’t think there is a market at all for this kind of building; why on EARTH would someone spending 1M dollars on condo rather live in the mall parking lot then 2 miles east in a direct beachfront building?? Could anyone really be that stupid?
I’d pay $250/hr for some ‘quality time’ with the blond.
I thought a lot of stores were going broke in that mall….?
I noticed the website shows no actual photos of the completed building; only artist’s sketches. I wonder why. It might spoil the illusion of a “pampered lifestyle”.
They’ll be a lot lower than $250,000. More like $65,000. How many people are going to be going to LV to gamble with money they don’t have. They’ll be $65,000 and bought as timeshares for $2,500 a slot spread amongst 40 owners. $35,000 will go to the scam artist that put the deal together.
Who in the h*** would lend money to someone without verifying income. This society as had some serious dumbing down over the last 3-6 years.
“I would not be surprised at all to see property prices fall back to 1998 values over the next 5 years.”
That is what many of us have been predicting pretty much since Ben began the blog — prices retreating to 1997-99 levels. Can’t remember anyone calling higher than 2001. The city and county budgeteers need to drag out the budgets from those years and propose cuts that will get back to those amounts, in order to match up with the “new” property tax base.
Real-Estate Speculation Now Driving Many Into Bankruptcy
At least their driving Hummers. (Albeit Heloc’ed Hummers)
“Even with their large real-estate holdings in Colorado, Patsy Parra says she and her husband do not have the extra income to handle another mortgage payment.”
If you don’t know who the Patsy is, it’s you!
LOL
Let the Tsunami roll in, baby! Bulls are going to be drowned and bears are watching on the high ground.
I was out in time. Moved from Florida at the peak back up north where it was cheap, and now have a mini-mortgage and lots of spending money.
With that said, couldn’t the Fed lower interest rates 2 percentage points in order to help all these people get out trouble? Sure, it won’t help everyone, but it would give many people a 2nd chance. Sure, many were stupid, but also many just wanted the American Dream of owning a home.
Anyone taking a 2-28 home loan was stupid. No question. Most were just trying to keep up with the neighbors and friends…..Timing is everything in life.
Fed won’t do it, ‘cos it would cause inflation. And it wouldn’t help that much. Remember, a 2/28 loan has prepayment penalties for the first 3 years. And they came with unusually low rates. Giving someone a fixed 5% won’t be cheaper than the 3% teaser that they got, it would only delay the inevitable.
This is going to have to shake itself out. Lower interest rates won’t solve the problem.
As much as I am against it, I wouldn’t rule out a rate drop by the Fed. If this thing gets bad enough, and spills over into the wider economy (which seems likley), the Fed will do whatever the Powers tell them to. The big banks are starting to take on water–just like the millions of little people–and you know that’s a situation that won’t go unaddressed. Some one, somewhere, with some money, right now is talking to Uncle Ben, saying “Okay, with a drop to 1%, we’d take a 10% inflationary loss, but keep the nominal value of our holdings steady.”
That’s our democracy for you…
Oh, I agree. But it won’t be tomorrow. Unless Helicopter Ben saw Cramer and took him seriously!
The Federal Reserve is a private company, wholly owned by its member BANKS. The Fed will do whatever it can to protect the interest of its owners.
I just see helping these people by lowering the rates temporarily and allowing them a 1 time refinance option (without penalty) a better answer than having millions of stupid people forclose on their houses.
The funny thing about the 2-28 with a pre-payment penalty is that, these stupid flippers only intended to hold it for a year or two. Were they even factoring in the pre-payment penalty into their ‘profit’? About as insightful as a parakeet with a new shiny object in it’s cage.
I agree with Cynical and with a regular on another thread — maybe GS or Neil — it does not matter if the Fed drops the rate 100 basis points (as Cramer requested) because the FBs cannot pay the re-set loans even with a percentage point knocked off. A huge number of those folks are leaving their homes one way or the other — by selling it at market price or by being foreclosed on. Nothing will save them and we need to get on with it.
Nope, it’s time to pay the piper. The only way through this thing is let the market correct. Lowering rates would only reward the stupid actions of many. Gravity needs to take over.
Nooooo….
the same people will see it has a sign to go on margin again.
Stupidity has a tendency to stay the same, just using different modes of display.
“but also many just wanted the American Dream of owning a home”
That “dream” is a marketing ploy put on by the hucksters in real estate, as is the word “home.”
It’s a house with a nightmare mortgage attached.
“but also many just wanted the American Dream of owning a home”
That “dream” is a marketing ploy put on by the hucksters in real estate, as is the word “home.”
It’s a house with a nightmare mortgage attached. ”
I would say “It’s a wood-framed, plastic-sided, underinsulated, energy hogging sh1tbox with a lifetime of indentured servitude chained to it. The devil’s trojan horse for shattered dreams”. No one will remember your dreams as the jackals lick the blood off your hardwood floors as the vultures chew on your bones.”.
The American Dream–personal freedom in a Constitutional Republic.
If your American Dream is nothing but a mortgaged box, then you have allowed yourself to become very, very small.
NO - because many of these loans have negative amortization. So the 400k house is now only worth 390k, but they owe 417k. How would they qualify? Also many of these loans have prepayment penalties of 3-5% which is another big hit.
Obviously it couldn’t be 1 size fits all. But it would definitely help a lot of these folks.
Many of these people heloc’d themselves into a $500k mortgage and have a $300k property. Can’t mortgage negative value.
I think that people like Barney Frank might try to void the prepayment penalties, but that is not enough to save the FBs — it will just make good press.
A great collection of vignettes of the Great Depression, seen through Canadian eyes…
http://www.amazon.com/Ten-Lost-Years-1929-1939-Depression/dp/0771016522
Used intelligence from just 1 Cent (plus shipping)
So much for the “Millionaires in the Making” crowd featured in ‘04-’05 on money.cnn.com The majority of these people were holding multiple residential properties in some of the “hottest” markets.
“Then, all of a sudden, they find they have to reach into their pocket every month to cover the mortgage. And it’s a shock.”
——————————————————————————
Imagine that…
Actually having to actually pay back a mortgage loan. Who woulda thunk it?
“There are disturbing reports of school enrollment declines and of moving companies moving more people out than in.”
“We are in a unique situation with the cost of property insurance often exceeding the cost of property taxes. Talk of leaving Florida has become a pastime, with the quality of life as big a complaint as the cost of life.”
All of the major moving companies were reporting more people moving out than moving into Florida. It used to be more costly to move into Florida than to move out. It is now the opposite. The quality and cost of living has been turned upside down. The cost of living in the Tampa Bay area has greatly exceeded local wages and the incomes of those on fixed incomes. There are numerous 1,500 sq. ft. homes listed for $249,000. The payment alone for the $249,000 home would exceed the majority of the local incomes, not to mention the fixed retirement incomes. However, when you add on taxes, insurance and HOA fees, it now almost doubles your mortgage payment. I sold my 2100 sq ft. home in Setpt 2005. The taxes, insurance and HOA costs were nearly $1,100 per month without the cost of the mortgage added on. I now pay $1,195 per month to rent a simular size house in the same location as where I owned the former house.
You fool, your missing all that appreciation on your property!
.
It’s all about apprecation, price/rent ratios don’t matter anymore!!
It’s all about apprecation, price/rent ratios don’t matter anymore!!
The house I sold is now worth 100K less than what I sold it for in 2005. Seems to me that appreciation is working well for the purchaser!!!
With the deterioration of sub-prime and alt-a lending markets, the rating agencies have taken heat for giving near-junk mortgage-linked securities (CDOs, etc.) “AA” and “AAA” ratings. We’ve learned that one reason for this miss-labeling is the absence (denial?) of the possibility of falling house prices (negative “HPA” [House Price Appreciation]) in their credit rating models:
CFA SOCIETY OF CHICAGO SPEECH
June 28, 2007
Absence of Fear, by Robert L. Rodriguez,CFA
http://www.fpafunds.com/news_070703_absense_of_fear.asp
“We were on the March 22 call with Fitch regarding the sub-prime securitization market’s difficulties. In their talk, they were highly confident regarding their models and their ratings. My associate asked several questions. ‘What are the key drivers of your rating model?’ They responded, FICO scores and home price appreciation (HPA) of low single digit (LSD) or mid single digit (MSD), as HPA has been for the past 50 years. My associate then asked, ‘What if HPA was flat for an extended period of time?’ They responded that their model would start to break down. He then asked, ‘What if HPA were to decline 1% to 2% for an extended period of time?’ They responded that their models would break down completely. He then asked, ‘With 2% depreciation, how far up the rating’s scale would it harm?’ They responded that it might go as high as the AA or AAA tranches.”
However, we have no way of knowing how accurate this conversation was…how much was the denial of the possibility of declining house prices a factor in miss-rating these mortgage based investments?
Well, if we set the way-back machine to early 2005, we can get the story right from the horse’s mouth:
Fitch: Performance of SF CDOs Inextricably Linked to U.S. Subprime RMBS
Business Wire, April 18, 2005
http://tinyurl.com/368deq
“While consensus among SF CDO investors is that U.S. RMBS remains one of the safest collateral asset classes, rising interest rates coupled with a potential slowdown in home price appreciation could put stress on leveraged subprime borrowers.”
“Fitch’s approach to rating subprime RMBS incorporates multiple stress scenarios that simultaneously include reduced home price appreciation and rising interest rates.”
Possible ’stress’: SLOWDOWN IN HOME PRICE APPRECIATION
Stress scenario: REDUCED HOME PRICE APPRECIATION
Ummmm, guys, I don’t think that the phrase “stress test” means what you think it means. Are you saying that you (the a financial rating service) never thought that declining house prices was even a POSSIBILITY?
Well, it just goes to show that there are as many clowns at the rating agencies as there were among the hedgies and banker Pig Men.
Apparently, they and their Excel spreadsheets can cause a lot of problems.
“Ummmm, guys, I don’t think that the phrase “stress test” means what you think it means. ”
LOL It’s INCONCEIVABLE!
Can’t decide which quote better sums up this housing bust. Both make me lol tho.
“They were supposed to be very valuable.”
or
“I never in my wildest dreams thought something like this would go wrong.”
“I never in my wildest dreams thought something like this would go wrong.”
Reminds me of:
As God as my witness, I thought turkeys could fly.
http://tinyurl.com/39f6ra
wild turkeys can fly.
“wild turkeys can fly.”
The sure can, and they’re darned hard to hunt. ‘Bout the wiliest thing out there.
“But common wisdom says not to worry. The real-estate Ponzi scheme that got us into this fix will be replaced by the next get-rich-quick gimmick.”
This my concern, what will be the next bubble? A government guaranteed equity market? The RE, Stock Market and Bond markets are toast; the damage crews will be working on cleaning up the mess for a decade. What is next?
The One World Government Bubble
It may not be a bubble, but the next major scam will be colored green- scams involving such things as carbon offsets and alternative energy projects. I think the carbon offset scam is already well under way.
So this couple not only bought a place they couldn’t afford, I suspect they couldn’t even afford the teaser rates on the loan. They were guaranteed both a lease to cover the loans and appreciation…. Wow!
Multiple this by hundreds of thousands and you start to see why we have this bubble.
What gets me is that the economists with all their sophisticated mathematical models assure us that prices will be sticky and only decline slightly. We had an unfathomable speculation creating an unsustainable market yet somehow we’ll just cruise along this high plateau.
Either I am insane or these economists are insane….
“‘Some would buy land for, say, $750,000, then use all their 401(k) and other money to keep the mortgage paid,’ Heller said. ‘At the end, the best they could get for it was $550,000 — and they’d still owe $750,000. They didn’t understand the risk they were taking.’”
Oh come on, they knew damn well what they were doing. There just can’t be that many retards running around out there. This lame excuse holds no water. I just don’t want to see these people getting away with walking away. The debt needs to follow them and be paid, they gambled and lost.
The words are true when they say “history is doomed to repeat itself..” As with the dot com era, the stock boom era, the stupid beanie babies and so on…consumers are media driven and are driven to make the same mistakes..risk is risk..I remember when everyone was buing dot com and what did the idiots do run and buy every stupid company and as usual only a handful really survived through it..same with beanie babies..people thinking they were going to fund their kids college on stupid stuff animals..
The answer is think for yourself and ask yourself if this “investment” goes bad can I walk away and not be financially broken..if the answer is no..well then simply don’t do it..Risking money you can walk away from is one thing..financial crippling is another..
Annette
you posted: ” . . . The answer is think for yourself and ask yourself if this “investment” goes bad can I walk away and not be financially broken..if the answer is no..well then simply don’t do it..Risking money you can walk away from is one thing..financial crippling is another” ..
Beautiful summary. Absolutely BEAUTIFUL !! Been my motto after a few financial shellackings. Now I’m debt free & love the freedom to tell anyone, anywhere to piss-off (or shake his hand) without fear of causing unstoppable damage in a career, as I can do almost anything to earn a buck, and if I dont like it, can & will give notice.
Financial freedom = ability to tell the system to piss off !!!!!!!
You better d@mn believe it! There’s nothing better than having stacks of freedom chips in your possession.
To be obligated to a job or boss because you aren’t in a financial position to walk away = a horrendous life.
Congrats, Aquis. If you’re the traveling sort, treat yourself to that someday. I set a $35K budget, quit my job outright, and then spent 7 months traversing Europe, doing what I felt like doing when I felt like doing it. It was great!
I had no problem what-so-ever finding a good paying job when I returned.
That is the way I live. People always say, “How do you do it?” Simple..I do for myself and not do for $$. You can live a great life so long as you don’t give a damn about what others think..The only person I keep up with is myself not the “neighbors.” That’s why they can’t figure out why I am always smiling and their stressed out to the max!
Talk about two pears in a pod. Thanks for responding, annette. Sometimes I feel alone in the universe.
I hear “How did you do it?” all the time! For example, right now, I’m in the midst of finishing a Post-Bacc degree in Elementary Education (yeah, I’m going to go teach after 17 years in the corporate world. I don’t like the propanganda that is being taught in today’s classroom, so I’m going to do my bit to curb it.) Anyhow, I haven’t worked in two years. Throughout, I’ve been paying for the degree and my day-to-day expenses (about $3500 a month total) with cash. I have yet NOT to get a look of surprise when I tell people that. Well, with the exception of immediate family and close friends who have known me for years.
When I’m asked how I do it, I tell people that 15 years ago, I opted out of the career-ladder, gotta impress everyone else lifestyle. Then their mouths really drop open!
Long ago I stopped explaining to people how it’s possible to do what you really want to do and have the money you need. They’d ask….then wouldn’t listen to any of it once I opened my mouth. I guess they are too busy answering their cell phones to pay much attention.
you posted: ” . . . The answer is think for yourself and ask yourself if this “investment” goes bad can I walk away and not be financially broken..if the answer is no..well then simply don’t do it..Risking money you can walk away from is one thing..financial crippling is another” ..
Excellent Advice!!! Unfortunatly, greed often overcomes such excellent advice and those who do not heed this advice often fail.
Very nice post.
Unfortunately, annette, most people aren’t too bright. I suspect an IQ of 76 for the lot.
Lots of self-appointed geniuses lost big money in the tech mania, many more are now losing money now with the collapse of the real estate mania. A fair number of people have not been served crow for their unintelligent participation in BOTH manias. (Fools are slow to learn).
If history does repeat itself, we have a third mania yet to go, and it will be the most severe of the three. I don’t know what it will be, but I’m starting to suspect it’ll be insurance products of some sort (i.e., long-term care).
After two periods of considerable losses and exaggerated statements of doom and Armageddon, I think millions of people could be suckers for investment products that promise them that their asses will be covered in the event of the Collapse of the United States and World Economy. With millions running scared (obidiently, on their treadmills at the office), it seems the ideal time for the nefarious to take more sucker money.
“There just can’t be that many retards running around out there.”
Wmbz,
The evidence is mounting daily that there are that many retards out there. And they get to vote too.
FicoRico
“Personal bankruptcies in the Orlando area were up 80 percent during the first half of 2007,
“THE SUB-PRIME MORTGAGE ISSUE IS CONTAINED!”
Famous last words.
Faced instead with anemic demand for real estate, those investors are left scrambling to pay the bills, said Jack Winston, a condominium analyst with Goodkin Consulting in Miami. ‘It’s the same people: ‘Hey, let’s invest in some real estate! We’ll flip it. Then, all of a sudden, they find they have to reach into their pocket every month to cover the mortgage. And it’s a shock.’
“No one could have predicted that these
leveesreal estate markets would fail.”Ho Chi Minh caught a lot of criticism for liquidating the petty bourgeousie landlord class in the North in the 1950s, but reading about the poor Parras owning lots of land in Colorado and trying to glom onto multiple residential units for more sweet passive income, I’m starting to get where they were coming from.
And Ho’s successor’s like the Chinese model so much, they’re turning Vietnam into a slave-wage production center for Western goods, undercutting even the Chinese. Uncle Ho must be so pleased.
“liquidating”, as in murder, is a pretty harsh way to trim the sails of teh landlords. Since Ho was a good commie, he simply had to take their land and they’d have nothing to be landlord of.
Anyone traveling to Phnom Penh should visit both the Toul Slang Prison and the killing fields. That kind of solution should never be “understandable” as a solution to anything, IMO.
Alright, nobody panic. David Lereah predicts this will all turn around in 2008. You’ll be fine, don’t worry.
From MSNBC, http://www.msnbc.msn.com/id/20145724/
For a minute there, I thought I was reading the Ben Jones’ blog, but it was a MSM headline article. It is getting ugly, out there! Board up your windows and load your guns and leave extra ammo next to you!
WTF? Okay, so the couple in that article makes about 3x median income for my area, yet they can’t get approved for $550K? Then how the hell are all these single stiffs buying SOHO condos for $400K, when I know darn well that they make about $50K and that C230 they drive was leased from the local Mercedes dealership for $199/mo (can we say gap insurance, anyone?). Oh yeah, fundamentals!
I called my bank last week, you know, for fun, to see how much house my husband and I could afford. We were approved for approx. $425K, which at current prices will buy a 1600 Sq. ft. SFH in a good area of S. Tampa, or a larger townhome, without water views. Earlier in the year, we were told we could afford up to $1M. (Which I laughed at, or course, since that’s a a bit more than 3.5x income!) I’m waiting until my $400K buys me 2600 sq ft.
Why stop there? If you’re patient enough I bet that $400K will soon buy you 4000sqft–or larger.
I remember when FL and Ohio were similar price wise. $425k here would buy 3500-5000sf today. Boy how times have changed.
Best quote from article:
“We are so broke.”
‘This town has to be accountable.’”
Yes dear, we’ll jump right on that. Oh, you don’t mind higher taxes to pay for all this do you ?
Did anyone see that show on TV this weekend of the couple in Orlando (Lake Nona). They made some minor improvements to their house. They bought it in 2003 for $209K. They are hoping it was worth $450K.
The realtor told them it was worth $400K (A $181K profit). The homeowners were appaulled. They were shocked and upset. The husband says, “A house down the street with none of these upgrades went for $390K 6 months ago!!!” Hey, they usually saw $30K appreciation every 6 months, right? They were acting like they were entitled to the money. I bet they took out a huge equity loan to pay for their lifestyle…
Well, I just looked at their zip code on realtor.com, they would be lucky to get $300K for it right now. Man, they were so greedy they couldn’t even see how lucky they were.
People do not get that appraisals and sales comps are only good for days. A toxic hole could open in the neighborhood today and your house could be worth zero tomorrow. Or, god forbid, another hurricane could go through and half the value of your house might not be covered.
Very true. Appraisers should be required to print an expiration date on the top of the appraisal.
or the distressed house next store finally sells…
People are just out of their minds. Had a guy I know who swore his house is worth 1 million dollars.. Well, price is reduced and still for sale. A little over a million he is asking when for $600 you can get into his community. Why would anyone want to be the white elephant in that community? He already moved and tax bills are getting ready to come out..OUCH..
“said Jack Winston, a condominium analyst .”
Sounds like a fascinating “job.” Wonder what he’ll be doing this time next year?
Analyst = Anal Cyst
oops! this is in the Poconos…
http://poconos.craigslist.org/rfs/389495373.html
$3100/month for the poconos for just the mortgage??? This guy is so toast.
“QUALIFYING FOR LOANS
Cay Clubs executives question how buyers unable to pay mortgages out of their pockets could have qualified for loans in the first place. A Cay Clubs spokesman noted that the Parras’ mortgages bar putting their Orlando condo into a rental program.
Looks like the Parras are involved in a little ’second home’ mortgage fraud.
Cramer didn’t get his rate cut
Fed votes to keep rates stable.
I am begining to like this BB guy. Agree? Disagree?
BTW
Can we expect yet another video meltdown from Cramer?