There Are Prices To Pay In California
The Daily Bulletin reports from California. “New guidelines for federally regulated mortgage lenders announced Friday will make loans tougher to get, but those who follow the market disagree on how widespread their effect will be. ‘This is going to hurt the housing market dramatically,’ said Steve Johnson, director of the Southern California office of real-estate think tank MetroStudy. ‘It is probably going to add 12-14 months to the recovery from the current downturn.’”
“Regional economist John Husing of Redlands disagreed, calling it a classic example of ‘closing the barn door after the horse was stolen. ‘This does nothing for the problems that already exist; all it does is make sure that these mistakes will not occur again,’ he said.”
“‘A lot of those loans are loans that should not have been made,’ Husing said. ‘Anytime you have a speculatize boom with excesses, there are prices to pay. This time we have homeowners, we have people who were trying to flip properties and we have the enablers.’”
The Auburn Journal. “Some homeowners and DarkHorse officials are staying positive despite a planned foreclosure on the 1,046-acre luxury development in Nevada County.”
“Owens Mortgage Investment Fund, a lending company based in Walnut Creek, announced late last week that it would sell the land to the highest bidder on Aug. 17 if owners fail to make late payments on the loan of nearly $16.4 million.”
“DarkHorse developers, Chad and Ed Fralick, a father-and-son team from Lake of the Pines, are the principals in the defaulted loans.”
“‘I have no work out there,’ said said Michael Holland, owner of Masterpiece Construction of Auburn. ‘I basically wasted my time doing Street of Dreams and spent a lot of money on a home no one wants to buy.’”
“Terry Williams, DarkHorse sales director,…blames the development financial woes on the housing market. ‘The lots weren’t selling,’ Williams said. ‘The whole real estate market has dropped off tremendously over the past year and it is just now starting to recover.’”
“Williams said he is still receiving a lot of interest in the homes, but buyers in general are hesitating. ‘I think buyers are holding off to wait and see what happens,’ he said.”
The Sacramento Bee. “At its peak, just a couple of years ago, Rich Muma’s real estate and mortgage mini-empire employed 25 agents and other workers. Today the office in Elk Grove is closed and the business consists of one employee: Muma, who’s ‘doing an occasional deal’ while trying to land somewhere stable.”
“‘I’ve been trying to find other employment myself,’ said Muma.”
“California’s housing slump isn’t just bad news for homeowners looking to sell. It’s taking a worsening toll on those who depend on housing for their livelihoods, from Realtors to construction workers, and on the economy at large.”
“‘I don’t see a turnaround anytime soon,’ said Steve Benjamin, president of Production Framing Systems Inc. of Sacramento. The company, which constructs frames for new homes, has cut employment by half in two years, to about 500 workers, he said.”
“The white-collar end of the business seems to be suffering more. The mortgage industry is in deep trouble and has caused one Folsom company, Central Pacific Mortgage, to go out of business. Ameriquest Mortgage Co. laid off more than 300 workers in Rancho Cordova.”
“Times are tough for real estate agents, too. Mike Lyon, president of one of the most prominent firms in Sacramento, said he is deluged with calls from brokers attempting to sell their businesses to him. He’s passed on all the offers.”
“‘There’s no way for us to bail them out,’ Lyon said. ‘Their business is unrepairable.’ Most were started by novices ‘without a general history of the ups and downs of real estate,’ he added.”
“Things were going well, but by late 2005, Muma said, he could tell that business was slowing. As 2006 wound down, sales volume was down 40 percent, and Muma was having trouble justifying a monthly overhead of more than $25,000.”
“He closed the office last December; his agents and other employees scattered. Muma sold most of his office equipment. ‘I got about 10 cents on the dollar,’ he said. ‘There’s no real demand for that product right now; it’s like the market for foreclosed homes.’”
The San Francisco Chronicle. “The cream-colored rancher at 19131 Garrison Ave. in Castro Valley sold in about 11 minutes on a Friday afternoon in late July. But unlike the boom days, there was no staging, no standing-room only tours and the multiple offers were of a far different sort.”
“The owner, who struggled to sell the house for about six months, let it go to the highest bidder. That bid came in at $450,000 - well below the mid-$500,000 asking price earlier this year, but above the $350,000 or so owed on the house, according to the auction company.”
“Buyers, facing a fast-changing market that has been so unaffordable for so long, are taking the leap and praying for a discount. ‘Basically I drove up here … and 15 minutes later I owned a house,’ said Dane Andrew, winning bidder of the Castro Valley house. ‘I think I did pretty well.’”
“Centennial Homes, the developer of the Chanate Village townhome project in Santa Rosa, hopes the process works for new homes. The company is working with Beverly Hills’ Kennedy Wilson Auction group to sell off 22 new townhouses late this month.”
“Some of the properties have minimum bids of $200,000 below the seller’s original asking price. The builder is willing to take the price cut in order to get the homes off the books.”
“Owners of the 11 other homes in the development may not be happy with the lowered prices, but Kennedy Wilson President Rhett Winchell notes that empty townhomes lingering on the market for another year would be even more harmful to property values.”
“Andrew, the Castro Valley winner, hopes to translate any discount he received into quick cash. He plans on putting the Garrison Avenue house on the market almost as soon as escrow closes. But he doesn’t plan on using an auction. ‘I think we could do better on our own,’ Andrew said.”
The Times Delta. “In Tulare County, foreclosures are on the rise, dramatically, as homeowners who had mortgages with initially low payments are unable to meet the higher payments that kicked in after a few years. Notices of default, precursor to foreclosure, are running almost three times the rate of two years ago.”
“As homes are turned back to lenders and residents move out, many Visalia neighborhoods have been left with empty homes that no one cares about.”
“At 2008 E. La Vida Ave., there is an abandoned home in the South Pointe neighborhood, where most homes are less than 5 years old.”
“Neighbor Dena Brown wouldn’t mind buying the house next door. ‘It has just sat there empty for months,’ Brown said. If Brown doesn’t purchase it, she wishes someone else would because the dry grass is a safety hazard.”
“‘We stayed home on July Fourth because we weren’t sure if something would catch fire,’ Brown said.”
The Bakerfield Californian. “Gov. Arnold Schwarzenegger mentioned working with the real estate community to ensure standing water is emptied and pools are maintained in last week’s state-of-emergency proclamation.”
“‘It’s easy to say, ‘The Realtors can help us,’ said Ray Karpe, president of the Bakersfield Association of Realtors. ‘As concerned citizens, maybe we will, but is it our responsibility?’”
“‘We are in a state of emergency, and that means that folks need to make an extra effort,’ said Sen. Dean Florez, via e-mail. ‘It is fair to say that they are on the front lines of this epidemic for the mere fact that they probably have the most up-to-date information on homes that are for sale or in some cases in foreclosure.’”
“Karpe told The Californian his organization could send out an e-mail or letter to its members, urging them to be on the lookout for green, abandoned pools and to report them to the local mosquito abatement office.”
“‘I don’t know what else we can do,’ he said. ‘I can’t make anybody do anything.’”
“‘What we’re doing is urging everyone — homeowners, Realtors associations, brokers — to assist with efforts,’ said Suanne Buggy, spokeswoman for the state Department of Public Health. ‘(The stagnant pools) are just new this year because of the level of foreclosures.’”
“‘If you’re upset with somebody, maybe you should be upset with the deadbeat who didn’t make their payments,’ said broker Darrell Sparks.”
FYI, this blog will be off-line tonight for a few minutes in order to add another server and make other upgrades.
‘Los Angeles foreclosures increased from 4,243 foreclosures in June 2007 to 5,317 foreclosures in July of 2007. The foreclosure increase of 25 percent was felt the most in the cities of Los Angeles, Palmdale and Lancaster. There were 3,353 new Notices of Default filed and 1,964 new Notices of Trustees’ Sales filed in Los Angeles County. The zip codes hardest hit were:’
Just got my RE foreclosure auction booklet for LA, auction coming up on August 26. Lots of houses in Palmcaster, and some other areas like Murietta that I have no idea where they are, but a few in areas I’d consider a decent investment, such as N. Hollywood and South Central (no, I’m not kidding). There are so few such listings at this point, they’d probably be bid up too high to make it worth attending.
Please be safe - i suggest wearing a bullet-proof vest while looking at props in South Central.
I already know the drill, last Kennedy Wilson (probate) auction I attended, the son of the deceased came out in his crip slippers and cornrow hairdo, kind of scowled at all us bidders, then had his buddies kept driving by back and forth in an SUV to scare us away. The one after that, the house was vacant with screen door locked, door open, with pitbulls running around inside and barking whenever you went up to the door or a window to look inside. No shootings, although I suppose foreclosures can get a bit dicier than probates.
What a great life for a trustfunder in LA. blah!
Foreclosures are more than likely going to be empty. As soon as banks take ownership they typically send out unlawful detainers and start eviction proceedings.
followed up quickly with vandalism, just for kicks.
mrincomestream:
Why are some of these REDC houses still owner or tenant-occupied, when the auction is coming up so quickly?
REDC is a sham. You haven’t figured that out yet. Same type of thing went on last time. More than likely the notes are held by Mom and Pop investors. Banks I worked for would evict before the ink was dry on the Trustee sale.
mrincomestream :
I’m also getting daily e-mails from Indymac bank of REOs that meet my search parameters, but they’re also priced like basically full market value, how long can they keep doing this before they have to get serious and unload?
You’re going to see a dramatic change 1Q08, especially once these new lending parameters filter through and you have to wait for the end of the year meeting when the analyst’s are done and the lenders have a oh shit moment and give the R.E.O. manager their walking orders of liquidate or it’s your head.
Patience LAIG patience…
Okay, I’m not so familiar with foreclosures because during my last round of buying, everything was so cheap (although I didn’t think so at the time) I didn’t need to go through all this bureaucratic cr@p, I just dealt with motivated sellers dealing through RE agents.
I just saw where the rate bumped to 8 on Jumbos, it will probably hit the street at 8.5 to 8.75 unless you are squeaky and I mean squeaky clean. You may see 9 or 9.25 for non-owner occupied on the 2-4 units. The day of reckoning is here but it’s going to take a while to filter through. Those end of the quarter meetings are going to be hell. Taking an example from the article below where it said that with that rate increase a buyer would qualify for 10% less. As we speak someone in a R.E.O. department near you is having a oh shit moment. Everything above 417k is worth 10 % less then it was yesterday. It’s going to take awhile to convince the bosses, however. 1Q08 and you’re in.
Okay, 1Q08.
But in the meantime, I still get to look
Or when regulators come in and TELL them to liquidate non-performing assets…
True but it’s still a little early for that.
And technically the banks don’t actually “own” them like last time.
We know it took 6 years to bottom in late 80’s downturn in LA and that was a tiny bubble compared to this. Why would someone jump on anything as early as q108? you would only watch relative prices continue to decline until 2012.
“Why would someone jump on anything as early as q108?”
If it’s an investment, you put 20% down, and it cash flows with a fixed rate, why not?
It may cash flow initially, but as housing prices fall, often rents follow. You could easily start with positive CF, but longer term neg cash flow.
If it’s an investment, you put 20% down, and it cash flows with a fixed rate, why not?
Well, if the 1990s are any guide, the population actually declined during the ensuing recession, and that combined with the excess inventory caused rental prices to drop and the vacancy rate to rise. Landlords were making all sorts of concessions like “$99 moves you in!” and “3 months free rent.” In such a climate, a property that flowed cash on paper may not do so in practice, at least for a while.
You guys have left out rent control in your equations. Some properties still have 90’s rent associated with them. A lot of folks bought recently thinking they could grind the rents up and found out it wasn’t as easy as they thought. 4 unit buildings out here will be a grand opportunity out here in a few months.
The first auctions tend to go high then it mellows out later, as I’ve already found out here in Sac. When you get people laughing at the bids, you know the market is beginning to adjust.
Sorry, lainvestorgirl, the “Trend is Your Friend”. The absolute best time to buy is Dec/Jan, if you think there is something worth the risk. To me, this is way too early in a Market Trend that has no where to go but down.
Agreed. Maybe this time next year, like Mr Income stated…
Isn’t adding a server going to increase your RE requirement?
‘the cities of Los Angeles, Palmdale and Lancaster’
- Palmdale / Lancaster are as scary as hell. Only Compton and Marino Valley in San Bernadino are on equal footing as far as scary.
It is “Moreno” Valley and it’s in Riverside County, not San Bernardino. Murrietta is near Temecula in Riverside County also.
Moreno “Black” Valley is an amzaing place to live (LOL!). Might as well be Compton!
In my job I spend a lot of time all over the IE and the other local counties. If you think MoVal is anything like Compton then you don’t get out much! I wouldn;t even put it in the same boat as Palmcaster. It’s no Laguna Beach and I’m not waiting to buy a house there but there are lots worse places to live than MoVal. BTW (it’s way more Hispanic than black). It’s no worse than most other IE cities and better than quite a few of them.
You want scary, try tooling around Highland at night! Or Mead Valley, or Perris etc
Not sure what it’s gonna look like in a couple of years though. You could build a bridge to Catalina if you collected all the For Sale signs and on weekends there are enough sign spinners to staff an aircraft carrier. The IE is gonna Tank hard, the home prices are just STOOPID high. From Fontucky to Temecula to Blowmont home builders have erected (heheh he said erected) thousands of giagantic stucco crapholes only a few feet apart. And are trying to sell them for 500~800K or more. Now how many in the IE can afford a 800K home? Not to mention the high taxes (most are 1.8% + HOA and Mello roos). Then you get the first electric bill for that 4000sf monster……
McMansions will soon be 3 for a dollar out there….
“BTW (it’s way more Hispanic than black).”
That’s Moreno (brown — not black) valley.
They have mello roos in the IE????? Now thats insane.
“In my job I spend a lot of time all over the IE and the other local counties. If you think MoVal is anything like Compton then you don’t get out much! I wouldn;t even ”
I did quite a bit of traveling all over the IE back in 2004-2006. Yes. they were just putting up a tremendous amt of new home contruction, entire square miles worth, and in bad disgusting locations. No concern for IE ecology: just raze and build. The first decade of the 21st century should be noted as the period when the entire IE landscape was shredded and bulldozed for what: mass produced cookiecutter stuccoed tracts, vast seas of red-tiled brown two story pardee homes littering the parched IE landscape.
As far as bad parts of the IE, there are plenty to choose from. Pick one: roubidoux, Colton, inner San Berdoo metro, banning/beaumont off the 10, inner riverside city, Fontucky, rialto, parts of L elsinore, menifee. Perris, rialto, ontario,Moreno valley south of the 60 fwy. Parts of S Jacinto shabby as well. To rate the Scal counties as a whole: SanBerdoo is the worst, riverside right behind, then LA county third. San Diego, OC, Ventura better overall, though they do have Bad parts: just not as extensively bad as IE?LA.
Problems with the IE include bad nasty summer heat and smog, Gangs as bad as or worse than SCentral LA, incompleted fwy infrastructures, long commutes, limited hi-paying jobs sectors, ecomony too dependent upon logistic/warehousing and contruction.
I predicted two year ago THAT THE IE WOULD HAVE SERIOUS PROBLEMS IF THE RE/ECOMONY ever WENT SOUTH. THE MELTDOWN Is PROCEEDING AS if on CUE.
93552 in Palmdale reached 99 NODs for July, the largest monthly total since I started tracking, and 10X last years number. If monthly sales for July are equal to or less than June then there will have been 4 times as many NODs as sales.
test
“‘It’s easy to say, ‘The Realtors can help us,’ said Ray Karpe, president of the Bakersfield Association of Realtors. ‘As concerned citizens, maybe we will, but is it our responsibility?’”
But I thought y’all enjoyed “helping people.”
“As concerned citizens, maybe we will . . .”
WTF does that mean? You don’t sound very concerned to me, Ray. You all loved it when you were riding high, making a good commission selling houses to people who often couldn’t afford them, but now that it’s time to pay the community back, you say “maybe we will”? BURN IN HADES, YOU POS RE PUKE!!!!!
(ahem) Sorry, folks. Lost it there for a second…
That’s okay, Bob. I forgive you entirely. And if you want to go out and just sort of idly beat up some realtors that you may chance to encounter on the street, I’ll forgive you for that, too.
Heck, I’ll cheer him on . . .
It’s easy to say, ‘The Realtors can help us..
Uh, it is?
True story — a couple of years ago, when I was on our HOA Board, a resident who had just sold his condo emailed me to complain that he’d had a tough time getting a copy of our CC&Rs out of our management company. He defined a tough time as more than one phone call and more than a week’s wait, plus the $$ charged for copies. When I asked why his real estate agent didn’t take care of that (as ours had when we’d sold our apartment in NY), he had the agent email me with a long, drawn out explanation of how it wasn’t his legal responsibility, despite his $40K+ commission on the sale.
And despite the fact that — get this — the agent is an owner in our building and actually had a copy of the CC&Rs of his own he could have copied on behalf of his client for nothing on the Xerox machine at his own office.
One thing I am definitely looking forward to is seeing how these oh so fat and lazy agents are going to handle having to actually work for a living, as they did back in the late seventies when I was working summer jobs at my grandfather’s real estate office and listening to them bitch and moan about houses that sat and sat for months on the market.
Man oh Man, why not just put his picture on a billboard, have to love the bubbleheads.
why don’t you email the agent saying you know someone interested in buying in your complex, and need the CC&R and some other gunk stat! See his reaction time.
I dont think you are allowed to look at the CC&R’s before buying. If not I was lied to by a lot of realtors, because I have asked on condos that I was interested in, since most people don’t realize what you can and cannot do to a condo when you “own” it.
Say what? Not only are you allowed to, but you darn well better look at them! CC&R’s have a material impact on the value of the place - there’s no reason why you shouldn’t be able to look at them before buying. Yes you were lied to by realtors! I wouldn’t dare look at buying a home without looking at the CC&R’s first - I want to know what I’m getting into!
They’re usually recorded against the property in the public records and should show up in a simple title search.
Whenever I handle a real estate closing, I always insist that the seller produce the CC&R and the condominium association’s financial statement prior to closing. A few years ago the seller’s attorney forgot to produce this info, and we walked out of the closing. I once even interviewed the head of the condo association by phone. This was a PITA for all concerned but hey, I’ve got to look out for my clients.
Anyone who buys a condo is going to have to deal with officious condo association officials and neighbors who fall behind on their fees; that’s a given. But if you are not careful, you can buy into a building that doesn’t have enough money to fund normal monthly expenses, or find yourself on the hook for a special assessment to pay for the new roof that went in last month.
My clients’ experiences with condos have sort of soured me on the whole idea. Even if the condo association is in good financial shape, dealing with busybody neighbors just seems like too much of a pain. But if you get a good deal on a condo and are willing to put up with the headaches, at least get a copy of the condo declaration and financial statement before you close so you know what you are getting into.
While your busy talking about the agents don’t forget the mortgage brokers who were in on it as well…they made just as much money as the realtor when you consider the spread…and they “faked” the numbers so that the realtor could sell the “buyer” a bigger McMansion.
the agent was acting responsibly when he had the management company provide the cc&r’s concerning the HOA. If the cc&rs had any changes and the agents copy did not reflect those he would be liable .
As a former President of an association, this is correct.
Another reason NEVER to own a condo!!
I think you’re right about that — my point was that in light of his big, honking commission that agent should have at least have been willing to make the calls to the management company himself. God knows it probably took him as long to email everyone who got complained to by his client about this as it would have to have made a couple of phone calls and made sure the buyer got the complete package. In a downtown, and with everyone re-thinking the real estate industry as a whole, it’s this kind of service that’s going to distinguish the agents who keep their jobs and those who go back to acting and waiting tables.
I’m betting this guy is the latter.
Not only should new owners get all the financials, a year’s worth of minutes and the CC&Rs, imho, they also should get a full physical inspection of the property (it amazed me how many new buyers didn’t in the past few years). I was always willing, as a Board member, to chat with any prospective buyers and answer any questions I could, too.
Also, CC&Rs barely ever get changed — changes require a vote of the majority of homeowners — and when they do, every owner in the complex should get a copy of the newest version.
Wow. A dimly lit, 1000sf 1BR condo with low ceilings for over $500K. Oy.
LOL! [Reading the description] Yeah, imagine waking up and thinking “OH F***! I JUST PAID $537K FOR ONE BEDROOM!! AAAAAGGGGGHHHHHHH”
Here is the phone number for the Hillary Clinton for President (gosh it hurts to write those words) campaign, should you wish to voice your opinion, tomorrow, about her $1 billion dollar FB bailout plan:
703-469-2008
I fear that the bailout is unavoidable, most people have made very poor decisions this go around. We prudent ones who have sat out this madness may ultimately be forced to pay for the ignorance of others.
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.
Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage. ”
Attributed to Alexander Tytler
Astonishing how very true that is today more than 150 years later
If you agree with this quote, do some research on Ron Paul.
Read up on him, re-read this quote and decide in 08.
ron has my vote
Funny you should mention the US slipping into dictatorship, we’ve just had two different CA politicians, Dianne Feinstein and Gil Garcetti, bemoan the fact that they couldn’t take two completely different, highly unpopular actions that they wanted to take, whereas the government in China was able to carry out those same policies without public outcry. One of them was to charge a toll to drive in congested areas, the other one was some stupid socialist hairbrained scheme Feinstein wanted to strong arm through the democratic process.
I disagree that most people made poor decisions. I personally don’t know of any FB’s. How many people do you know that are FB’s? If every responsible person would just call or email their representatives and demand no bailout, then we can stop it.
Half my neighbors are good candidates for FB status, most bought years ago but have been pulling more and more money out.
Bailout? Fine. What are they going to do get Fannie to buy these mortgages and extend them to 50 years? 60 years? If they make the person actually pay the loan that person is going to be sitting there with an 800,000 dollar loan on a 400,000 dollar house. Is this really helping that family? Draining their resources on a hopeless cause? Please. Foreclose, get them out now before they waste any more money.
I agree. And don’t let them buy another house for 15 years.
Wow…I just went to Hillary’s website and am shocked. This is her big initiative on the homepage of her site. Unbelieveable! I would have voted for her…she just lost my vote.
this literally hurts my stomach,
expand the foolish accounting liars ability to sham more cashola out of the system…..and the Morgan Stanleys out there can shut the F-ck up as well…. the system aint broke…..
Make check payable to “Cramer & friends” they sounded even more desperate than FB’s.
Cramer’s job is to act like a freak so people will watch him. Friday was his best day ever. His employers who advertise on his program must be thrilled at the huge free bonus.
is she kickin in her 30 million ?
What’s a billion dollars going to do? Kinda like tryng to put out a forest fire with your weiner.
LOL
Depends on if you use depends. And the usual disclaimer about size of bladder and weiner.
“What’s a billion dollars going to do? Kinda like tryng to put out a forest fire with your weiner.”
What are you gonna do, beat the fire out with it?
say this like Beavis: My girlfriend had a fire in her pants once….I put it out with my wiener…he heh heh heh
It’s just the start… you can’t give the full price in the beginning. See you won’t have a fit if was “only” 1 bill. Later on, when it becomes 50 billion, you’ll care but it will be too late.
A billion won’t even cover the interest for 1 year. This is just a feel good plan that will go nowhere, fast.
It’s the principle, man.
Exactly.
Well, I’ve never had much against Hillary. No charisma, but smart enough. Seems like a straight A student might be a pleasant surprise after W, if we did not have to have Mr. ” libido loco” along.
But now I have an axe to grind. This is senseless pandering. Let’s hope Obama has more sense..
mr f - check out ron paul. obama would be adding another mistake on top of W
agree. Enough with amateur hour.
We don’t need brains, Bill was smart, and it got us nowhere, we need someone who is consistent philosophically.
Yea… nowhere.
Let’s keep this to housing please, the Ron Paul love makes me discount the judgment of too many…
don’t do that! it will be a true dilemma again. we will have to choose the best from a bad lot. they all suck. always do. it is disheartening
“Let’s hope Obama has more sense”
Obama lost my consideration when he mentioned moving against Pakistan w/o Musharef’s input was ok. They have a nuclear weapon and Musharef is already on weak ground. Do we really want to pull the cowboy act on them?
Plus his exclamation that he would not use nukes against our enemies shows he lacks experience. (ya gotta stay vague, dude!)
Sorry he lost my (potential) vote that day.
I agree with uptown and ex-nnv. A billion dollars is nothing. “Feel good” for FBs and bleeding hearts. “Feel bad” for HBBers and other savers, who are a tiny minority.
those who control fed control both political parties - the transfer of wealth from middle class, wage earners, savers to the Few bankers will continue. the system is setup to steal money via inflation, debasing currency, taxes etc. instead of using tax payers money why not freeze accounts of lenders, underwriters who were the actual culprits. we need revolution to stop this stealing of hard earned money.
“we need revolution to stop this stealing of hard earned money”
it may come when things get really bad for the sheeple and they cant eat, have no home, etc.
Billion dollar bailout? There are probably 1 million FB’s in California alone, so they’ll each get what, $1000 each? That won’t even cover one month’s interest. Total waste of money.
“Andrew, the Castro Valley winner, hopes to translate any discount he received into quick cash. He plans on putting the Garrison Avenue house on the market almost as soon as escrow closes. But he doesn’t plan on using an auction. ‘I think we could do better on our own,’ Andrew said.”
So, at least some of these houses will be right back on the market.
Andrew is a dumbass.
Andy is a pioneer into the unknown realm of f-kin stupid dip-sh-t land of foreclosure flipping.
But just imagine the golden age ushered in by a lack of idiots with money. No more Hummers in suburbs, no more lazy parents spoiling their children, no more Casey Serins outbidding families for homes, no more talented people wasting their lives in the RE industry simply because it pays well, no more middle income families moving to the ghetto simply to afford a home.
The death of the housing bubble will probably help the economy in the long run. Though it’ll be a bumpy ride for the next few years.
“no more talented people wasting their lives in the RE industry simply because it pays well”
Racking my brain on that one. I’ve met quite a few people in the RE “industry” and recalled a dozen or so to mind without thinking of one I would call talented. And I’m not a RE basher. Just don’t think talented people seek that out - they’re much more likely to be underemployed wandering around in the woods, like a lost in utah or aladinsane.
Paul,
You read my resume! I’m blushing.
From somewhere (I’m not quite sure where) in Utah,
Jen
personally, i’d rather be in the woods than hawking mc crapboxes
lol too funny,
RE will once again become a profitable venture; however, now is not the time
Actually, I view Andrew as comedic relief…
I had a flash back to that commercial where the guy bids on an artwork then asks the barker to immediately sell it again.
19131 Garrison Ave. in Castro Valley. Remember that address! Bets to see if it goes into foreclosure the second time!
Knife catcher. The last guy couldnt’ sell it 6 months ago before the mortgage implosion. And now you’re going to sell it? Sucker!!!!!
Yep, last guy could not sell and how is he going to sell with RE conditions even worse. What is he smoking?!!
Geez… this is like watching cattle going to the slaughter
no it is not. cattle are innocent and would run if they had the chance. these people deserve what they get and are complcit in their demise.
How about “lemmings running off a cliff”?
You can shear a sheep forever, you can skin him only once.
Andy will soon be Castro Valley’s poster boy for Hilbil’s ‘Stop me before I buy again’ program. He was lied to. Foreclosure flipping for fun and profit. Maroon.
LOL… Man oh Man… Why even bother…
Amen. These pud-whackers are ten times more pathetic than yesteryears specuvestors.
“pud-whackers”
Beautiful!!!
doH!
Actually, he has a good chance of selling it to a family member I would think.
Stan, why dont you go out and get yourself a foreclosure flip, and pawn it off on you kin. Makes you feel good, real good…
bagholding your family, now that Love American style
yup, same IQ level (shoe size)
The story of Andrew was my favorite part of Ben’s post today. As some of you have noted before, we need the Andrews of this world to get the comps started down the slope.
Agreed. The faster the Adnrews of the world “go all in” on r.e., and the prices finish going down, the faster the rest of us can get about to making some money…
‘Los Angeles foreclosures increased from 4,243 foreclosures in June 2007 to 5,317 foreclosures in July of 2007. The foreclosure increase of 25 percent was felt the most in the cities of Los Angeles, Palmdale and Lancaster. There were 3,353 new Notices of Default filed and 1,964 new Notices of Trustees’ Sales filed in Los Angeles County.
Wow, a 25% rise in foreclosures in one month…
In the city of lost angles
http://www.youtube.com/watch?v=Z4eKXlul_dk
I’m wondering if the nice areas of LA will be like last time.
Nothing… (1990)
Nothing… (1991)
Not much… (1992)
Not much… (1993)
Holy cow! (1994)
Still falling (1995)
Sliding toward the bottom (1996)
40% drop, almost all of it in 1994/1995.
With those Jumbo loans suddenly getting tougher…
I’m not expecting to have to wait five years.
Got popcorn?
Neil
‘It is probably going to add 12-14 months to the recovery from the current downturn.’
Pushing back the estimate of recovery time from 2015 to 2016, then?
Sounds reasonable. It really had a big delay in the last bust. The graphs are very deceiving because every thinks it all went down in a nice even distribution.
I think the recovery lagged in LA for a long time because it dropped later.
How long until she loses it all and is forced to work in the porn industry.
LAinvestorgirl is going on a buying binge. How long till we see fingers on the ground from all the knife catching.
Yeah brother I was there when the houses in West LA crashed 40%. It happens. It happened. It’s true and that bubble was nothing compared to this latest one. Nothing.
Here is the phone number for the Hillary Clinton for President (gosh it hurts to write those words) campaign, should you wish to voice your opinion (tomorrow) about her $1 billion FB bailout plan:
703-469-2008.
By the way, everyone answering her lines sounds Indian, I wonder if it’s a call center, what a scandal that would be, LOL.
She couldn’t possibly be that stupid could she?
“With the U.S. mortgage market in turmoil, Democratic presidential front-runner Sen. Hillary Clinton on Tuesday proposed clamping down on lending abuses and providing more aid to families who face losing their homes.”
Her proposals were a sign that America’s brewing housing crisis has become an issue facing candidates in the November 2008 election, with thousands facing the prospect of losing their homes because they accepted mortgages that are now too expensive.
The New York senator, on the campaign trail in New Hampshire, also proposed a $1 billion fund to supplement state programs that help homeowners catch up on mortgage payments, renegotiate loan terms or provide financial counseling.”
classic puke politician
Yea, Imploder I knew about that. I was moreso curious about the Indian call center. The Indian business arrangements are one more arrow in the Clinton archilles heel.
Steps proposed by Hillary’s billion-dollar bailout:
1 - help homeowners catch up on mortgage payments (too late for that, stanching the bleeding when someone has a mortal wound will just end up wasting band-aids and surgical gauze)
2 - renegotiate loan terms (what, provide teaser rates for the life of the loan? Akin to drinking a thimble of Stoli every 24 hours and hoping to get drunk)
3 - provide financial counseling (if they haven’t learned by now not to buy stuff they can’t afford, isn’t this too little, too late?)
We’re talking about people who are stupid enough to consider voting for her to begin with, mind you.
incredulous re:2
that would make me flip my fvcking lid. we all want 1% 30 yr fixed but can’t get it. why should THEY???
I HATE HILLARY
It doesn’t take a billion dollars to set up a hotline that tells people they shouldn’t have bought. Or if they haven’t bought, then don’t buy.
Or throw up a cable channel that has 24-hour nonstop repeats of Cramer’s “Walk Away vid…
“I’m looking for a 100% default rate on the 2/28″
“We need to plow over the Inland Empire”
“Almost everything that was written from May 2006 til the end of the year is worthless.”
“If your home declines 20% in value, sell it or walk away from it”
Reporter: ‘You’re someone who invests in real estate a lot…’
Cramer: ‘No, I’ve sold all my real estate.’”
Way cheaper.
ajas,
when you get rolling,you’re a funny as imploder.
I hope all this vague chit chat from Hillary is all lip service. I can’t believe Cramer is sympathetic to idiots who bit off more than they could chew (hoping to get rich I might add). Cramer is a rather emotional guy so maybe he just got caught up in hearing his poor rich friends whining about the fact they’ll have to sell one of their 10 houses in the Hamptons. PSSST. Here’s a clue. Tell them next time they get a 600,000 bonus (average bonus given to each Goldman Sachs employee) they should put some aside for a rainy day.
Hilary loves Wypro, an Indian outsourcing firm. She has made several pro-outsourcing statements.
At least Mrs Clinton acts likeshe has a plan. Gov Schwarzneggers only plan is to keep the pools empty. Is this guys brain empty. That’s our Governor’s biggest concern. Mowing the lawns and keeping the pools clean. (That’s almost a good enuff reason to legalize all the illegals) They could keep the pools clean and the lawns mowed
You keep the pools dry to cut down on the mosquitos, which spread the West Nile Virus, which is probably a good idea, No?
Terrible idea. The pools, empty, will often self-destruct.
Just pour a quart of motor oil in and call it good.
I think Schwarzenneger’s plan is far superior, protect the public from West Nile virus but otherwise stay out of it. Now that’s a good governor.
I love it when the Clinton haters come out. Not a damn word out of any of them about the Bush Crime Family - aka the enablers to this entire debacle. Nope. They save it all for Democrats.
Hysterical.
I, for one, hate them both.
dont hate….its means you actually have feelings for republicrats……apathy.
Add me to the list, hate the bushes, hate the clintons, hate the cheney’s, bored by the gores et. al.
But Hilbil’s bailout is such a cheezy non-starter,coupled with that hectoring nannyism, that I am repulsed anew.
You’d think a girl who made her first big money betting in commodities would respect the markets. Oops, maybe it wasn’t her grasp of the markets that made her so much money first time out.
No, todays comments weren’t about hating Hillary (even though I can’t figure out why people would want to do Bush-Clinton-Bush-Clinton, and as far as experience if I recall correctly it seems someone named Monica spent more time in then Oval Office getting experience then she did… ah but I digress) It’s about the stupid bailout plan she’s proposing. Although given enough time the Hillary haters will come out.
W may be the dumbest man alive, but that is no reason to elect a communist..there are other choices
“I love it when the Clinton haters come out. Not a damn word out of any of them about the Bush Crime Family - aka the enablers to this entire debacle. Nope. They save it all for Democrats.”
So, your saying that since Hilary proposes a bailout, because she’s a Democrat, it’s a good thing? Kind of lock step thinking IMHO.
PS I’m no Bush supporter….
There was a great line at the very end of “Lost Boys”. The grandpa character, who’d seemed kind of oblivious to the obvious vampire infestation of the town, revealed that he thought the town would be a great place “if it weren’t for all the damn vampires”.
That’s kind of how I feel about HBB, at time.
I have never had anyone complain when I bit their neck!
But the Bush bashing has happened. I think it’s timing - Bush comes out with a plan to keep prices artificially high by subsidizing the financially illiterate we’ll be all over him too.
Personally, I wrote H.C. a message in her “send us your story” area about how I could not buy a home for years and the damages of the housing/credit bubble. Politicians react to what they hear - she is hearing some very sad stories right now as we all have. But she isn’t getting much articulate education from the financially astute. I think it’s much more productive to calmly explain our side than to scream. It may be the first time she’s heard it!
It’s more hatred of her pandering to Wall St. I thought the Republicans were supposed to be the lapdogs of the rich? Now the Democrats want a taxpayer funded bailout for the lenders and hedge funds. I guess you support it since it’s coming from Clinton. No hypocrisy there, eh?
I think it is just in LA.
It’s a VA number.
Hill’s campaign website has a place for FB’s to spin their tales of woe. So I told mine:
“My story is a painful one, especially how it ends. Although I have a healthy income, it is far below what would be necessary to own a home in my county, forcing me to rent. I have this quaint notion that if you buy a home, you ought to be able to service the loan. Obviously, I’m old-fashioned. Millions of borrowers agreed to loans with low introductory rates, counting on eternal double-digit appreciation to bail them out and make them rich. They lied on their loan applications, exaggerating their incomes shamelessly. (It seems every recent stated-income borrower in southern California recently has a $10,000/month construction, cleaning, or landscaping business on the side.)
Now that it finally looks as if rationality is returning, with the promise that prices will return to a reasonable ratio with incomes, along comes a politician proposing to give a billion dollars of my money to bail out the stupid people who’ve been calling me a “bitter renter” for pointing out the obvious for three years. She doesn’t seem to understand that this will keep prices propped up at their oppressive levels. For every overextended borrower she helps, she’ll perpetuate a first-time buyer family’s lockout from homeownership.
If imprudent homebuyers are to be bailed out, could you at least have the courtesy to bail prudent would-be homebuyers in? I’ve got my eye on a nice 3-bedroom in Rancho Santa Margarita, with a backyard — perfect for kids to run amok in. At $642,000, it’s one of the lower-priced houses in the county — but still too rich for my blood. As long as you’re giving money away, could you possibly spot me $100,000 for the down payment?
If not, please keep your bailout the hell away from this pig of a market. Propping it up, however good your intentions, will only perpetuate the present unsustainable situation. Liquidate overextended borrowers, liquidate brokers, liquidate lenders, liquidate construction, and purge the rottenness from the economy.
As for the poor imprudent borrowers — let them eat rental agreements. Really, it’s not so bad. I’ve had to do it for quite some time now. “
Thanks for HRC website info. I just gave her a piece of my mind on her bailout proprosal. No way Jose!
I just went there and posted a similar rant. I am disgusted, as I too have been renting, waiting out this bubble. But why are we surprised at the idea of a bailout? If the screw-up is big enough to affect the economy the Govt will jump in. Remember the Chrsyler bailout, and didn’t they prop-up some of those involved inthe S & L debacle of the 1980’s? Recently there was talk of bailing out the car companies again because of their orgy on producing SUVs and no one wants them now. Toyota’s doing fine. Every decade has its greed and the ensuing talk of a bailout.
Amen Brotha
“New guidelines for federally regulated mortgage lenders announced Friday will make loans tougher to get”
Translation: The real estate Ponzi Scheme is coming to a very quick end.
““‘If you’re upset with somebody, maybe you should be upset with the deadbeat who didn’t make their payments,’ said broker Darrell Sparks.””
How about the broker who put the deadbeat into a suicide loan that the deadbeat had no hope of repaying if housing prices stayed flat?
How about the servicer that bought the toxic loan from the broker, packaged it as a MBS, then repackaed it as a CDO, then sold it off to a pension fund? Or, how about the pension fund manager that was looking for unrealistic gains and bought repackaged toxic waste? Let’s not forget about the realtor that steered the deadbeat to a house he couldn’t afford? And not to be left out, the appraiser that inflated the value of the home to ensure the deal went through so he could get more work from the broker in the future? How about the media that raked in huge ad revenues from the RE machine while running nothing but positive hype fluff bits?
Oh….there is no end to who we can blame for the disaster!
All the more reason for not bailing out all the game players .
I cant wait to get a bailout for my depreciating car. I hope that comes next. Why should I have to ever lose money anyways?
Ah yes..it was a friendly little daisy-chain.
All participants had their lips firmly locked on the next one’s genitals.
Since a circle has no beginning, it’s safe to place the blame on whomever you prefer.
You forgot to mention that the broker got on average 2% of the loan amount! Perhaps the broker should be legally ACCOUNTABLE for fraud.
Landlord Update:
my miserable landlord has two san diego condos for sale this week. one in oceanside 268k and one in carlsbad 339K. 40k off last comps.
even though i truly am a bitter renter, i am gracious enough to tidy up this place to show to the realtors i am not terribly fond of. i sold my soul by giving LL one more month’s rent to get out of my lease. creeped out but relieved.
i mentioned to the realtor that i predict this place will sell for 335k. that’s what i posted once and i stick to the quote.
thank you for the funny letters to rob my landlord. he was a former loan processor, but since he’s a pitbull he would make a great corrections officer.
i made up a word to describe myself, since i never unpacked when i moved in here i am an unpack rat, but i prefer pack squirrel. im thinking of changing my postname to ann gogh.
Are you sure you are getting your deposit back? or are you using for last months rent?
As a paralegal i would BEG you to get it in writing the bastard just might sue you and claim you moved out early to the judge….and you owe back rent.
I wouldn’t waste my time on agitated in sd. I took the time to look up, post the information she needed and the link to the CA Landlord-Tenant Handbook. She has the upperhand in this stituation but I think she enjoys playing the victim and likes the drama.
i got the same feeling.. aside from the lack of response something stunk about the whole thing.. thinkin we got trolled.
Agreed.
I agree. Drama queen and annoying child. Look back at her other posts for a perfect example of signing a legal document then trying to “weasel” out of it. (Her term not mine.)
“Terry Williams, DarkHorse sales director,…blames the development financial woes on the housing market. ‘The lots weren’t selling,’ Williams said. ‘The whole real estate market has dropped off tremendously over the past year and it is just now starting to recover.”
Another twilight zoner, what is starting to recover?? He went to happy talk school, that’s all you have to do to become a house salesman.
Did anyone see what Hillary said on CNBC?
She did say Homeboners but meant homeowners….
Maybe she has been hanging around with Bill lately.
LOL.
Hilary ain’t got a snowball’s chance of being president.
I disagree (unfortunately). However, she ain’t got a snowball’s chance of getting boned, especially by Bill. That, I think we can agree on.
we used to call her ilk: triple baggers
that gives all the double baggers a bad name
ya never know..
In bad economic times Marxists have a distinct advantage.. and hillary is in a position to leverage it..
Hilary Clinton is so not a Marxist - you guys need to get out more
Ken Livingstone, now there’s a Marxist!
“‘What we’re doing is urging everyone — homeowners, Realtors associations, brokers — to assist with efforts,’ said Suanne Buggy, spokeswoman for the state Department of Public Health.
Love it, Ms. Buggy… You just can’t make this stuff up.
I brought this up at Patrick several times: this whole mess would make for a fantastic black humor novel.
- Ms. Buggy
- the strawberry picker
- the Brits
- some boomer from Wisconsin
- estates in Montana
- Florida style real estate preachers, “Jesus wants me to occupy this domicile!”
- condos in Buffalo
- HGTV
- Bin Laden’s niece
- a bunch of boomers from Ohio
- Exurbs/Modesto
- Casey
- Russian mob
- Trump
Seriously, this could easily be a franchise.
Wonder if Carl Hiaasen reads this blog?
Ms Buggy crawls to work every day to better CA for us all. Have some respect.
We’ve gone from “feed the squirrels” to “hey, maybe all you people standing around can clean the pool…”
Sure, I didn’t make a million, but I sleep really, really well.
“Buyers, facing a fast-changing market that has been so unaffordable for so long, are taking the leap and praying for a discount. ‘Basically I drove up here … and 15 minutes later I owned a house,’ said Dane Andrew, winning bidder of the Castro Valley house. ‘I think I did pretty well.’”
Wait….did she just say think?
I do not think that word means what you think it means.
Got popcorn?
Neil
Correcting some typos? –
“and 15 minutes later I donned a noose. I sink my haid in a pretty well.”
“‘It’s easy to say, ‘The Realtors can help us,’ said Ray Karpe, president of the Bakersfield Association of Realtors. ‘As concerned citizens, maybe we will, but is it our responsibility?’”
Like he has anything better to do and cant spare a minute. What a greedy dirtbag!
I enjoy this blog, but not the casual racist attitude of the embittered LA residents.
If you want to know what “ghetto” means - spend an afternoon in the Museum of Tolerance. If you want to know what South Central is like - DRIVE DOWN THERE - don’t watch Good Day LA.
Yes, your Saab allowed is go that far east of La Cienaga and south of the 10.
Geez a Saab… A Saab is so middle class sheeesh.
*snicker*
“If you want to know what South Central is like - DRIVE DOWN THERE - don’t watch Good Day LA.”
I try to avoid LA period. I was up there once in 1992 just before the riots in fact and did the *cough, choke* scenic cruise of South Central LA. And I can tell you without a doubt South Central is a $hithole. My sister - “if Knit King is here we are not getting out of the car” and ” I’m glad this car has air-conditioning.” Me - ” I told you there are no good reasons to visit LA.” Oh and after we sat in LA traffic for 3 hours, ” I told you never to go to LA on Friday.”
BTW I grew in perfectly nice neighborhood here in SD where whites are the minority.
You owe me a keyboard…
puhleeze. most of us who live(d) in l.a. have done both. big deal
the place sucks the big one, in general, and i am going to laugh listening to the sob stories of these fools
I accidentally decided to try driving back from work (Torrance back to Glendale) by taking side streets through what I later realize was South Central. I couldn’t believe that I was seeing drugs being sold and prostitutes on many many corners of the main street (Figueroa). It is a pretty horrible area which I can’t believe people who own property there did not cash out and leave this stupid state for better.
I used to drive up to USC via Hoover Street to avoid the gridlock on the 110. Maybe that’s a particularly nasty part of South Central, but … damn. Compton is Newport bleepin’ Beach compared to that place. The only buildings that weren’t boarded up were (1) liquor stores; (2) shabby motels; and (3) storefront churches with handlettered signs offering cheap grace to offset the consequences of items (1) and (2).
“Yes, your Saab allowed is go that far east of La Cienaga and south of the 10. ”
If you don’t know how to spell La Cienega, you are not allowed to comment about Los Angeles……
If you don’t know how to spell La Cienega, you are not allowed to comment about Los Angeles……
I believe Cienega is actually a misspelling of the Spanish word Cienaga (accent on the e, don’t know how to type it here) so technically the other poster’s spelling is right. Once the non-Latinos in LA start pronouncing “Los Angeles” correctly maybe they’ll be a more unimpeachable reference on such matters.
“Broker Darrell Sparks is “almost laughing” at the idea of these pools being at the root of Kern’s West Nile cases.”
“If you’re upset with somebody, maybe you should be upset with the deadbeat who didn’t make their payments,” Sparks said.
Maybe if he comes down with West Nile virus, he’ll then draw the connection between abandoned pools and mosquito growth.
It might also give him time to ponder whether he should have helped put people in homes they couldn’t afford just to get his commission. Is he getting a little testy as his income evaporates?
You won’t believe this . Right now I’m taking care of a vacant house down the street from me . I’m taking care of newspapers that are piling up and I’m watering the plants so bad people don’t know its vacant .
Business plan! Business plan!
Australia’s official interest rates rise .25% it has just been announced……………now stands at 6.50%.
http://www.rba.gov.au:80/
“….That is pretty much what’s happened with the IMF outlook as well. If you hear someone trot out that tired old cliche, “when the US sneezes, the world catches a cold”, tell them it’s a tired old cliche.
It is utterly unprecedented for the IMF - or anyone else - to lift their global growth forecast by 30 basis while cutting US growth by 20 per cent. Only a couple of years ago, it would have been totally unthinkable.
But the international economy is now supported by a much more broad array of activity than just the good ol’ USA - “the consumer of last resort”.
The IMF’s forecast of 5.2 per cent means the world is really rocketing along despite the US running a bit slow. Any number around about 5 per cent means the very globalised Australian economy should be growing strongly too.
And it is - maybe a little too strongly. Yesterday’s credit growth figures just increase the already odds-on bet that the Reserve Bank will increase interest rates next week.”
Aug 1, 2007
Michael Pascoe
Yahoo7 - Australia
http://tinyurl.com/2jlfve
I basically wasted my time doing Street of Dreams and spent a lot of money on a home no one wants to buy.’”
Pretty good summary. Maybe Juan the Strawberry Picker from Hollister can move up to Lake of da Pines (near Grass Valley CA), get the $1.6M loan on his whoppin’ $1500/mo salary, and get foreclosed again in another year. But he might want to buy.
In the coming weeks and months mosquitoes will be the least of their worries in CA.
Mosquitoes will be the least of the worries in CA.
So this is far from over, as some idiots are buying foreclosures to FLIP. After all, they have ‘instant equity’, don’t they?
The trouble with housing, is that you have to eventually have an end user, someone willling to live in the house for some time. And when I read about these foreclosure auctions, there is always a clown who figured out that the market has hit bottom and now they can flip their new ‘investment’ for a lot of money.
This game has still plenty of time to go, as these homes are NOT removed from inventory (the big problem), but merely removed temporarily from the MLS.
“This game has still plenty of time to go, as these homes are NOT removed from inventory (the big problem), but merely removed temporarily from the MLS.”
You’re right, SMF, except that this time the dumb lending is almost dead. Idiots like this greedy flipper will have to come up with at least 5% down pmt, won’t be able to HELOC or refi, and will eventually lose his down payment and future mortgage installments, taxes, etc. Game over when he runs out of cash. But the end of the dumb lending means the bottom is about 2-4 years away. 2/28 ARMs resetting over the next 2 years will almost all become REOs in about 3-4 years. Then we go sideways for who knows how long.
got diversified assets??
19131 Garrison in Castro Valley is less than a mile from where I lived before leaving CA. Wish I was there to check on the ‘resale’ and watch this knife catcher go down the tubes. Most of the homes in this area are very small and were $hit. Some have been enlarged, and most were originally 2bd, 1b 900 sq ft POS’s. Wish I knew what this fool bought. There is great variation of type of house going from street to street. Area is OK though.
Zillow Public Facts:
Single family 3 beds 1.0 bath 1,165 sqft Lot: 5,096 sqft Built in 1949
The 4 comp houses listed sold for +/- 535K since 10/1/06, I guess justifing Zillow’s 529K estimate. (cough)
The most interesting factoid is the $24,579 assessed value for the home. This is very pre-Prop 13 home, with a initial Prop 13 value at about +/-15K. The article related an outstanding mortgage around $350,000. Somebody HELOC’d it to death or used a reverse mortgage - either way they bailed it to a willing FB. Neat trick.
How many home descriptions are there like this in CA. It seems to me that many Californians have a very low standard of living.
here’s a link to the story: enjoy
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/08/07/BUNLRE4JA2.DTL
Hey Melvin -
Below is a quote about your beloved Berkeley market here in the Alt-A Bay Area (San Francisco Chronicle article in Ben’s post):
“Even those sellers who choose to set certain price parameters find obstacles. Jain Wager has just relisted a historic Berkeley hills home for $3.65 million. She and a business partner purchased the house in 2005 for $1.23 million and put more than $1 million into renovating it. But after trying to sell the house for $5 million earlier this year, Wager attempted to “try to create some excitement and try something unique” by auctioning it with a starting bid of $2.249 million. Wager also reserved the right to accept or reject any offer.
Wager said she received a strong bid in the ’round robin’ style phone auction, but the deal fell out of escrow.
‘I think we came out of the gate a little high (on price), and it would have been better to lower it and have people bring it up to the market,’ Wager said. ‘I don’t know if this system works for luxury homes or not. I think the jury is still out on that.’”
“Wager said she received a strong bid in the ’round robin’ style phone auction, but the deal fell out of escrow.”
And right after that the rates for jumbos went up, up, up.
And the bids went down, down down.
Thgen she went broke, broke, broke.
Yeah, I heard during that KCBS radio (San Francisco) interview today that jumbo rates went from 6.5% to 7.4% in the last six weeks - is that right?
Jumbo is over 400K which means all of CA.
jumbo is over $1 million, the Fannie limit is 437k
From comments on Ben’s post “The 2nd Year Of What Is Likely To Be A Multiyear Downturn”:
Comment by OB_Tom
2007-08-07 14:36:52
Another nail in the coffin:
http://money.cnn.com/2007/08/07/real_estate/jumbo_jam/index.htm?postversion=2007080711
“The cost of financing an expensive home purchase is jumping, making high-end buyers the latest victims of the mortgage meltdown.”
“Wells Fargo, one of the nation’s biggest mortgage lenders, raised the interest rates on it 30-year, fixed-rate, non-conforming (AKA jumbo) loan to 8 percent last week, up from 6.875 percent. Other lenders followed suit and more are likely to join them.”
“Why should jumbos, whose borrowers often boast high incomes and assets, cost more than conforming loans? It’s because Wall Street has stopped buying the loans.
Conforming mortgages, or loans below $417,000, carry much lower risk, because Freddie Mac and Fannie Mae guarantee a market for them. In a tighter credit market, lenders are charging more for jumbos because of the extra risk of not being able to sell them to the investment community.
Allen Hardester, a mortgage broker in Maryland, said that jumbos have lost their appeal for investors. “[Lenders] are having trouble unloading even prime, fully documented, 20 percent down jumbos. Nobody has any faith in real estate,” he said.”
Can you blame them? In good times it is hard to sell a Million dollar home..who want to deal with that McMansion today with all the loan changes….banks could have that property for YEARS on their books..!! Especially if that Million Dollar home is now worth..$700K
“For example, late last week, Wells Fargo upped its interest rate for large 30-year fixed rate home loans made through mortgage brokers to 8 percent from 6.875 percent.”
The above was from the story in the Houston Chronicle earlier today in one of Ben’s posts:
http://tinyurl.com/2bpygf
The half point rise in long term rates in June seemed to really slow the California market. What will a greater than one point rise in jumbo rates do in combination with tightening lending standards?
truly do love berkeley but it has become more yuppy than i care to say. i like the poorer parts o’ town. homogenization and materialism have made this place a little too ‘granite countertop’ for my taste. . luckily berkeley wont’ allow walmarts here. wouldn’t want to destroy the neighborhood. as for 3 million dollar homes and ‘creating excitement’ i get more excitement going to the dance club or sitting at a coffee shop reading a good book.
I once loved Berkeley, now it is much too crowded and the whites are a tiny minority. The Cheeseboard still rocks if you can park.
park? not in berkeley, i lock me bike on a parking meter in front of the cheesboard.. but truly a great store for bread and cheese at reasonable prices. if y’all get to berkeley make sure you get to the Cheesboard! Best Pizza on the Left Coast.
http://cheeseboardcollective.coop/
hmmm whites a tiny minority? whatever. i like being a minority white and I love the intermix of races and classes here. it’s what makes America a most interesting place. its our strength.
ah berkeley. best weather in the nation. kookiest in the nation. mad people roam the streets here in flocks. if i was homeless i would definately settle here. housing prices high soooo high and seems not to be going any lower. like with everything, there is good and bad.
As a commercial insurance broker, personally and nationally, it would appear that everyone needs a real job. I do not mean management, finance, banking, computers or real estate. Does anyone know how you can get training as a plumber?
This may be important!
Funny you should say this just when I’ve started taking money for giving some old ladies lessons in how to play the piano by ear. This is definitely not a “real” job, and yet it does seem much more “real” than any of the occupations you just named. At least it does not form part of the “outscheme thy neighbor” culture. Of course my major income continues to derive from the unreal world of lending to govts and to trailer-park residents.
Bottom line: unless you have good credit, a down payment and can document your income, you aren’t going to get a decent interest rate on your loan. So plan on buying a lot less.
This market is completely toast.
I am sorry, I’m not prejudiced or anything. But I wouldn’t trust somebody named Suanne Buggy to be public health commissioner.
I am sorry, I’m not prejudiced or anything. But I wouldn’t trust somebody named Suanne Buggy to be public health commissioner.
truly do love berkeley but it has become more yuppy than i care to say. homogenization and materialism. . luckily berkeley wont’ allow walmarts here. wouldn’t want to destroy the neighborhood. as for 3 million dollar homes and ‘creating excitement’ i get more excitement going to the dance club
I remember my days at Berkeley in the 70″s, drugs, parties and beautiful brownstone homes. Back then, All I wanted was a single large room with a fireplace and a view of the bay. O’ those were the days of my youth. Hell, it wasn’t a bad goal, and maybe, just maybe, I will give it all up for that dream!
hey, I was there then, too! Remember the Cambodia riots?
We’re all of an age. While you were in the “Cambodia riots” in Berkeley, I was in the reflecting pool in DC (Cambo. demo.) jumping up and down shouting “One two three four we don’t want your f***ing war” - not a new saying, even then, but I remember it well ’cause it was such a hot day we actually needed the reflecting pool to cool off.
Hey, were you that guy yelling at Forrest Gump?
No, because at that particular time I was in DaNang, Vietnam.
glad you made it back soldier!
Anyone catch the drudge report headline about China threatening to dump treasuries?
Dump to who??
Folks flying to quality.
Yes, here:
http://piggington.com/china_threatens_nuclear_option_of_dollar_sales
~Misstrial
oh sure, i believe it.. And where are they planning on parking that trillion bucks? Maybe they’ll just buy some small european country.
..aint no where as safe as where it’s at now.
Go ahead and sell .. drive the price down.. i’m looking to buy some.
$1T = 170 days of world oil production. I think they could just start buying all the oil they need with their stored dollars. Inflation anyone?
I was just thinking of something… Hank Paulson goes over to China and asks them to buy our MBS securities. Then he asks (as always) to relieve some of the controls on the yuan.
Isn’t that a little strange? To ask the Chinese banks to buy MBS denoted in US dollars, and then to help devalue those dollars?
LOL
“They did not fall for that trick did they! Mr. Paulson go over to China and sell them all of the over priced houses in the US to save our borrowers and keep those workers making goods for us,” said President Bush ‘coolly’
(apologies to Mr. Tom Swift)
This is a headline! Think the market will be down tomorrow?
China threatens ‘nuclear option’ of dollar sales
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/07/bcnchina107a.xml
The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.
Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies.
Described as China’s “nuclear option” in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.
It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.
“China has accumulated a large sum of US dollars. Such a big sum, of which a considerable portion is in US treasury bonds, contributes a great deal to maintaining the position of the dollar as a reserve currency. Russia, Switzerland, and several other countries have reduced the their dollar holdings.
“China is unlikely to follow suit as long as the yuan’s exchange rate is stable against the dollar. The Chinese central bank will be forced to sell dollars once the yuan appreciated dramatically, which might lead to a mass depreciation of the dollar,” he told China Daily.
The threats play into the presidential electoral campaign of Hillary Clinton, who has called for restrictive legislation to prevent America being “held hostage to economic decicions being made in Beijing, Shanghai, or Tokyo”.
She said foreign control over 44pc of the US national debt had left America acutely vulnerable.
Simon Derrick, a currency strategist at the Bank of New York Mellon, said the comments were a message to the US Senate as Capitol Hill prepares legislation for the Autumn session.
“The words are alarming and unambiguous. This carries a clear political threat and could have very serious consequences at a time when the credit markets are already afraid of contagion from the subprime troubles,” he said.
A bill drafted by a group of US senators, and backed by the Senate Finance Committee, calls for trade tariffs against Chinese goods as retaliation for alleged currency manipulation.
The yuan has appreciated 9pc against the dollar over the last two years under a crawling peg but it has failed to halt the rise of China’s trade surplus, which reached $26.9bn in June.
Isn’t floating the yuan (which we keep asking them to do) about the same as dumping USD on the market? From what I understand, their yuan peg is maintained by the Chinese bank soaking up dollars (to raise the dollar’s value) while exchanging them for yuan currency (to lower the yuan’s value).
I am not sure that the Chinese government did not already diversify enormous amounts of dollars into the Yen. While hedge funds were borrowing Yen and buying dollars (”Carry Trade”), a lot of Chinese traders were on the other side. Without the Sellers of dollars, it is possible that the Yen would have gone to 130 to the dollar. The Yen appeared to be pegged at 123.5 - 124.5 until the trade started to unwind. The Yen has since rallied to 118.9 with less than 3% of the trade unwound.
The Japanese government has “no idea how much was borrowed for the Yen Carry Trade, but believes it was less than one Trillion dollars”. It would have been very easy during that period for the Chinese government to have gone into the strongest currency in the world without disrupting any foreign currency markets. IMHO the Yen is the strongest currency in the world.
Ms. Buggy?
Beat this: during my complex lit paralegal days we had a deponent named Ms. Hobitch. I kid you not.
Reason 1,299,000 why it’s good to be a renter:
Neighbor suddenly sold her house. On the market for over a year. Nice lady. The price was atleast 20k under 500k (I didn’t get the exact figure out of her) in Falls Church inside the Beltway in DC which is sort of a big deal. It’s a nice house too. I’m happy for her.
Anyway, today she tells me that parents bought the house for their sons the youngest of which is 17 (four of them.) I’m assuming the oldest isn’t older than 30. The parents will be there sometimes when they are not abroad. My now ex-neighbor tells me that during the walk-through the mother asked about parking and hoped the neighbors wouldn’t complain when her son’s friends visited.
This is not going to end well. There are LOTS of older people who live in this neighborhood. Otherwise it’s younger families with kids.
I’m trying to think of something intimidating to say to them when I meet them on Thursday. Suggestions? I am a girl so be inventive.
If it gets ugly I can move. Thank God I’m a renter.
tell ‘em your b/friend / significant other is a meter-maid who’s a little too enthusiastic about the job.. scans the block for violations when visiting.. even ticketed you a couple times.
Hmmm, this may not turn out well. An understatement.
My next door neighbor bought a house at the beach (50 miles away) and rented his house to his 21 year-old son. Who promptly turned the place into a crack house. The neighbors finally formed a committee, took pictures/videos of visitors, the police spent a couple of nights with close-by families viewing the situarion.
Finally one Friday night with maybe 20 cars outside the house, the police closed off both ends of the street, raided, arrested everyone. We finally nailed the owner after getting the board of health to rule on his not cleaning the swimming pool for 4 years or mowing the back yard (grass was 6-8 feet high). It really helped that a church and a school were directly behind his house who participated in the complaint.
Shortly afterwards the owner sold the place to a nice couple who have essentially cleaned the place up - has taken them more than a year but it is beginning to look really nice now.
i bought one of those party houses. i am still cleaning it up years later. my neighbors love me though. they saw hell and now see salvation. that said, ppl like described above really trash a place
Sounds just like San Luis Obispo: students who’s parents dump them on the community for us to babysit.
You may wish to let them know that a criminal record will most certainly ruin chances of getting professional employment and that you will call the police when appropriate. Most parents are terrified at the idea of a continuously dependent dependant.
If you are in CA, the Superior Court has held that a homeowner (who keeps a meticulous diary of police calls, parties/noise, public nudity, assault/battery, etc) can sue the property owner of the offensive residents in Small Claims court for damages (Private Nuisance). Currently, the amount ceiling is $7000.00
If you have small children who could be threatened at any illegal conduct - all the better. You may wish to drop the term “Megan’s Law” and “neighbors picketing” - that sort of thing.
I do not have my legal docs in my possession at present, but there is a Superior Court case where the Plaintiffs sued the property owners (one is an atty, lol) of a “party property” for wrongful death and negligence (among other torts) here in San Luis Obispo. Lots of fun.
All the best to you,
~Misstrial
Check out the sons before you say anything.
Yes. Obvious to do this, but a good reminder nonetheless.
~Misstrial
Hi nova,
I don’t think you are in a crack house neighbor situation yet! I’ve dealt with neighbors like this, and while annoying, it can actually be really fun. I learned very quickly, when you are a neighbor walking up in PJs and pissed off at 1am, you are in complete control.
Conversations shut up, you are an enigma, you have the focus. And you don’t need to negotiate, you don’t need to threaten to call the cops (that’s implicit), if you have a little bit of doubt you can always leave with the parting shot “Is anyone here underage?” ZAP!
Of course, it happens again a couple weeks later. Kids are kids. At first I was pissed, but I think I learned what Kindergarten teachers feel like seating that first class of the day… “*Ruler THWACK*. Kids take your seats.” Open eyes, shut mouths.
As for meeting for the first time. Be cordial, you know what’s coming… “Haha, Should I call your parents or the cops first, haha. Better hope there’s no one underage, haha.”
Here are some figures I got from the Brokers Out post…..
Thank god it’s all contained.
“Here is the amount of loans resetting through 2008 (source: JP Morgan). This is frightening. These numbers are approximate. It will be a hairy 2008! There is still an incredible amount of business out there even if only 25% of these can refinance.
March 07 = 6 billion $
April 07 = 7 billion $
May 07 = 9.8 billion $
June 07 = 10 billion $
July 07 = 12 billion $
Aug 07 = 17.5 billion $
Sept 07 = 18 billion $
Oct 07 = 20 billion $
Nov 07 = 23 billion $
Dec 07 = 22.5 billion $
Jan 08 = 25 billion $
Feb 08 = 25 billion $
March 08 = 23 billion $
April 08 = 22.5 billion $
May 08 = 24 billion $
June 08 = 18 billion $
July 08 = 20 billion $
Aug 08 = 25 billion $
Sept 08 = 23 billion $
Oct 08 = 23 billion $
Nov 08 = 23 billion $
Dec 08 = 20 billion $
Sorry………here’s the page.
http://forum.brokeroutpost.com/loans/forum/2/150686.htm
Did I read somewhere that Hil is asking for a $1b foreclosure-avoidance fund? Sounds a bit like trying to stop a tsunami with a sun umbrella…
This is how programs start. You start small (Iraq war will pay for itself). Then once you’ve committed to the idea, say oops, its gonna cost more, we are in too deep now. Not to count the billions that FNM and FRE will spend like drunken sailors.
that is what i am concerned about - not $1B. that is alot, but nothing compared to what it will be once it gets rolling
I don’t understand the relationship between these numbers and the Credit Suisse chart, which shows $25B/mo for the first four months of 2007 and amounts rising to $50B/mo at the end of 2007, then falling off sharply into the middle of 2008. The numbers you have just posted accord with something John Mauldin sent out a few days ago, probably from the same source. It would help if either CS or JPM would clearly identify “reset” as meaning (a) the annual reset or (b) the initial reset from teaser.
John Mauldin had a similar list, but with WAY bigger numbers on his website/e-messages this past week…. these numbers are, in many cases, less than half what he listed. Typically, I forget where he got his figures. I’ll look for it.
Those are excellent suggestions. Especially the Megan’s law etc. Also my landlord (no secret) works with the US gov’t to fight terrorism in Africa. I think I’ll mention that also. He’s pretty intimidating and is coming back to the states soon so hopefully I can get him to knock on their door. He’s one of those guys who is big and so nice that you are afraid of pissing him off.
I might also mention starting a neighborhood watch.
Currently I have no intimidating bf but I do work in law enforcment — sort of — so I think I’ll mention that with a dead in the eye look.
The house is also on a cul-de-sac so no easy escape route.
I’ve also got a dog that scares the sh!t out of people (a male, black, standard poodle) (really, he’s 75 pounds with big teeth) so maybe that will help.
I’m feeling better now. Thank you!! Keep the suggestions coming!
well, whats the trouble? All you mentioned was parking.. you have any idea about the character of these younguns? 30 years old is probably a family man.. while the 17 yo has a 4.0 GPA and dances in the local ballet? who knows.
meanwhile, you are the one with the scary looking dog..
We had problems with a neighbor once; our LL at the time wrote her a letter letting her know that should she continue to harass us, she would not only receive a letter from his attorney, but also a complaint for interfering with his right to conduct business (landlording).
She stopped.
I would rec that, if need be, your LL write a letter (citing specific problems) as opposed to any personal contact. Reason being is that the other party could lie to authorities re the nature/conduct of his visit and that could mean some sort of criminal investigation against your LL.
If I were in your position, I would start a neighborhood watch ASAP and LEAVE THEM OUT of the loop, so to speak, so that the Watch does not become a power tool by them against you.
~Misstrial
http://www.sddt.com/Finance/EconomicIndicators.cfm?Report_ID=1
San Diego Trustee Deeds dropped slightly in July to 686 from June’s 738. Can’t wait to see the spin on that from the Realtors…
(The most likely cause is that the banks are swamped with foreclosures)
Could you please explain what banks getting swamped with foreclosures might have to do with a drop in Trustee Deeds?
Trustee Deeds means the bank takes over the house. Lots of (paper-) work. Notices of default and the other early stages of forclosure are relatively easy to deal with for the bank. The banks didn’t have excess staff sitting idle, ready to deal with this (unexpected!) workload.
I am of the opinion all politicians now are a bunch of blowhards. None worth much weight (a few exceptions). Doesn’t matter, Dem or Rep. Can’t stand W, Arnold, Hillary, Obama, Feinstein, Boxer, Dodd, or any other of the a$$hats out there. All self serving, and not trying to help the people (again, a few exceptions).
“‘A lot of those loans are loans that should not have been made,’ Husing said. ‘Anytime you have a speculatize boom with excesses, there are prices to pay. This time we have homeowners, we have people who were trying to flip properties and we have the enablers.’”
AND NEXT, WE WILL HAVE THE TAXPAYERS BACKING UP FANNIE’S UNBOUNDED BLACK HOLE OF A BALANCE SHEET, IF DEMO-RATS DODD, SCHUMER AND CLINTON GET THEIR WAY… I AM DEFINITELY VOTING REPUBLICAN IN THE NEXT PRESIDENTIAL ELECTION IF THIS BAILOUT GOES THROUGH!!!
Democrats call for action on mortgage crisis
By Andrew Ward and Stephanie Kirchgaessner in Washington
Published: August 7 2007 20:18 | Last updated: August 8 2007 00:31
Influential Democratic senators on Tuesday called for Fannie Mae and Freddie Mac, the government-sponsored mortgage companies, to be given a bigger role in efforts to stabilise the troubled US mortgage market.
Chris Dodd, chairman of the Senate banking committee, and Chuck Schumer, chairman of the Senate subcommittee on housing, supported the lifting of investment caps on the companies.
Hillary Clinton, the New York senator and Democratic presidential frontrunner, also urged expansion of the mortgage groups.
The comments added to growing hope among investors that Fannie and Freddie would be freed to buy more mortgages from struggling lenders, easing the crisis in the subprime sector.
Federal regulators are understood to be reviewing the portfolio caps imposed on Fannie and Freddie last year after a probe found flaws in their accounting, corporate governance and risk management practices.
“It may be appropriate, consistent with safe and sound practices as determined by the regulator, to ease the temporary regulatory cap on Fannie and Freddie’s mortgage portfolio,” said Mr Dodd.
http://www.ft.com/cms/s/2842ea82-450f-11dc-82f5-0000779fd2ac.html
People have been warning about the overvaluation of residential RE for years, people have been expressing serious angst about the mispricing of risk in mortgages and lax lending standards for just as long, people have been bemoaning the high fraud levels that come from such periods of lax lending and crazy valuations…
This great blog and others, as well as the likes of Warren Buffet, Robert Shiller, Peter Schiff, and many more have warned about it…
And now everyone is “stunned” by the repricing of risk in the mortgage market, and the new insistence on reasonable “standards” and having “skin in the game” when making a mortgage loan. Stunned. Stunned, despite being repeatedly warned about it by many smart people. STUNNED!
I say all those “stunned” individuals should be hung out to dry, as their state of “stunnedness” clearly indicates they were part of the mob psychology that got us into this mess.
“Meet the new lending guidelines, same as the old lending guidelines.”
Some are already sorely missing the good old days of crazy credit…
Sen. Dodd calls for lifting Fannie, Freddie mortgage caps
By Robert Schroeder
Last Update: 3:16 PM ET Aug 7, 2007
WASHINGTON (MarketWatch) — Mortgage-buying giants Fannie Mae (FNM: Last: 64.43+1.93+3.09%) and Freddie Mac
(FRE :Last: 61.64+1.64+2.73%) should be allowed to buy more mortgages for their investment portfolios as a way to inject liquidity into the struggling mortgage market, Sen. Christopher Dodd, D-Conn., said Tuesday. “There are contradictions in the flow of mortgage credit,” Dodd said in a statement, noting the companies were created in part to make that credit available to middle- and lower-income Americans. Fannie Mae has reportedly asked its regulator to allow it to buy more mortgages; the company is recovering from an accounting scandal and its purchases are now capped.
http://www.marketwatch.com/news/story/sen-dodd-calls-lifting-fannie/story.aspx?guid=%7BD67032A9-87FD-4AAC-8E0B-F48892649627%7D&dist=hplatest
I recall a conversation with a CA State Fire Marshall (1990 or so), who mentioned tha the Fire Marshall’s office has a chart showing “structure fires of suspicious origin” moving in correlation with interest rates…rates up-fires up. Could this be a reason why (was it State Farm or Allstate?) quit writing homeowners insurance in CA early last spring?
…I believe they termed them “mortgage rate friction fires”..