Under-Exuberance In California
The Mercury News reports from California. “As foreclosures have soared in California, large auctions of bank-owned properties are becoming more frequent. Saturday’s is the third in the Bay Area in recent months, and similar auctions have occurred in Sacramento and Modesto. REDC executive Michael Schack said many properties the company has sold this year have gone for 20 to 30 percent less than the ‘previously valued to’ prices listed in the company’s catalog.”
“Lenders do have undisclosed ‘reserve’ prices below which they won’t sell, said Schack.”
“San Jose resident and real estate investor Sean Cervantes plans to attend and bid on a four-bedroom San Jose house he previously tried to buy from the lender-owner for $675,000 several weeks ago. Cervantes said it appeared the lender would agree, but then he was told the house would be sold at auction instead.”
“He’s curious to see whether he’ll be able to get the home for less at auction than he offered previously, and whether other properties get sold at a discount.”
“‘If it’s really going to be a legit thing where they’re going to cut them loose, I’ll be ready’ to buy more at auction in the future, he said.”
“There are many reasons homeowners wind up in foreclosure…but a more common reason these days is that the owners bought at the peak of the market a few years ago with an adjustable-rate mortgage and little money down, then couldn’t afford their rising payments and couldn’t refinance because they lacked sufficient equity or high enough credit scores.”
“Rob Roham, owner of ReMax Advisors in San Jose, who prepared the Weyburn Lane condo for the auction, said many potential bidders asked about the circumstances of the foreclosure. ‘All we know is that they didn’t make the payments,’ he said.”
The Sacramento Bee. “The housing market should start recovering in 2009, but that prediction could get pushed back a year or longer if the economy falls into recession, forecasters told a Sacramento audience Wednesday.”
“‘We’re in for another slow year in 2008,’ said Dean Wehrli, the Sullivan firm’s VP for the Sacramento area. ‘There’s no way to make a case for price increases in 2008.’”
“He said prices grew unrealistically high during the housing boom. Now, there’s a danger that the market could wither to a degree that isn’t warranted by the economic fundamentals. ‘In the same way there was over-exuberance in 2003 and 2004, there’s probably under-exuberance in 2007 and probably 2008,’ he said. ‘There’s a psychology at work here.’”
“One encouraging sign, Sullivan said, is that builders and developers have begun holding auctions to get rid of overstocked inventory of homes. ‘Auctions typically portend that we’re nearing the bottom,’ he said.”
“An executive from embattled Countrywide Financial Corp. suggested that Countrywide and other mortgage lenders are being unfairly blamed for the housing slump, liquidity squeeze and difficulties in the subprime loan market.”
“While he acknowledged that ‘there was some improper underwriting, there was some corner-cutting,’ executive VP Jack Haynes said lenders were simply meeting market demand.”
“‘To provide the American dream to more and more people, we came up with a lot of sexy products,’ he told the audience. ‘We were meeting demand. … We were in a position to give the American public exactly what they wanted.’”
“With mortgage foreclosures soaring, Gov. Arnold Schwarzenegger announced Wednesday that he will sign two bills to increase homeowner protections — but neither will solve the current crisis.”
“Senate Bills 223 and 385 target policies and procedures for future borrowing, not the subprime loans currently held by many Californians struggling to survive rising costs.”
“Sen. George Runner applauded SB 223 and SB 385 but said the state should reject any heavier-handed approach. ‘You’ve got extremists out there who want people to get bailed out of their bad loans,’ he said. ‘Some of those people are investors who knew perfectly what they were getting into.’”
The LA Times. “Shortly after the new year, John and Mona Breidenstein started to get anxious about their $427,000 adjustable-rate mortgage. The interest rate would reset this year, and the Santa Maria, Calif., couple feared they wouldn’t be able to afford the higher payments.”
“When they got the loan in 2005, a broker had assured them they’d be able to refinance before their payments jumped. But that was before home prices fell, loans became harder to get, foreclosure sale signs appeared down the block and John had to take five months off work to battle cancer.”
“‘Our loan adjusted this month — $800 more a month we are hit with,’ Mona said last month in an e-mail to The Times. ‘Why won’t they work with the homeowner? All we wanted was a fixed-rate loan.’”
“Countrywide agreed late last month to ease the Breidensteins’ loan terms, a change Mona attributed to The Times’ asking it to discuss the mortgage. Countrywide, said it was hard to modify loans when borrowers are unemployed and suggested that John’s return to work was the deciding factor.”
“Of the homeowners her group counseled this summer, Tracy Morgan said 22% were candidates for loan modifications because ‘they have a financial situation that could support a workout.’”
“An additional 18% were advised to consider selling their homes. The biggest group, 27% of those counseled, needed to get their spending and saving habits in line to be considered workout candidates, she said.”
“The Breidensteins…bought their house four years ago from Mona’s parents for $270,000, then refinanced twice, each time adding to their loan balance. The couple used the funds from refinancing to add on to the home, buy out her mother’s interest in the property and pay off a child-support claim from a previous marriage.”
“The Breidensteins, who together earned about $80,000 in 2006, kept making monthly mortgage payments of about $2,300 this year, even after John learned he had prostate cancer and took five months off for treatment and recuperation. But they fell behind on other bills, and their credit scores tumbled. Their home, appraised at $450,000 in 2005, is now worth $380,000, they say.”
“”The final mortgage, for 95% of the home’s appraised value, required them to pay only interest for the first two years at 6.25%, with the rate then rising every six months. To discourage refinancing, there was a $10,000 penalty for early payoff. But the couple said their broker assured them he would waive the penalty when they refinanced with him.”
“Late last month, Countrywide proposed raising their $2,300 monthly payment by $400 a month instead of $800 and keeping it level for three years by having them pay interest only during that period. Then it would rise $400 more but could go no higher.”
“Doctors have declared John cancer-free and the couple has cut back on expenses and taken in a renter. It’s a plan they can live with.”
The Bakersfield Californian. “A wide-ranging housing forum hosted by Sen. Dean Florez on Wednesday touched on everything from mortgage fraud to unscrupulous ‘rescue firms’ preying on borrowers in financial trouble to the confusion faced by homeowners at risk of entering foreclosure.”
“‘Those resets are starting to have a devastating effect,’ Florez said, calling Kern County, San Bernardino and Stockton ‘hotbeds’ of California’s mortgage meltdown.”
“Florez also hit back at District Attorney Ed Jagels, who Tuesday said he opposes the senator’s plan to combat real estate fraud by forming a specialized unit within the DA’s office.”
“He asked forum panelist Gary Crabtree, a Bakersfield appraiser who has publicly decried real estate fraud, to respond to Jagels. ‘If you do not believe mortgage fraud is taking place, it is,’ Crabtree said. He said he has uncovered 202 cases of local mortgage fraud in the past 18 months.”
“Crabtree offered some severe forecasts about Bakersfield’s real estate market, predicting 2,900 to 3,000 foreclosures in Kern by the end of the year. The 4,085 homes currently listed for sale in the city will eventually grow to 6,000, he said.”
“That kind of inventory could take 24 to 30 months to liquidate, Crabtree said.” “Frustrated homeowners were on hand as well. Dawn Kaw drove from Bear Valley Springs looking for help. ‘I’m stuck in two mortgages,’ Kaw said. ‘I’m finding myself buried in them.’”
From KFSN. “It’s a sign of the tough times in the Bay Area real estate market, where a Danville home seller feels compelled to throw a new Mercedes into the deal to attract scarce buyers. ‘My husband works for Mercedes. This is a brand new 2008, rare car, and this is a nice, rare home. So let’s market it together,’ said Lori Bates, homeowner.”
“So the $1,899,000 asking price for the home includes four bedrooms, three baths, lots of upgrades, a huge lot and a brand-new 2008 Mercedes c300, valued at $35,000.”
“It’s certainly not the only incentive sellers are offering buyers in Contra Costa County, where Dataquick reports home sales have dropped 36% in the past year. Some private sellers are throwing in pricey golf memberships, buying down interest rates, or even paying all the closing costs.”
“New home builders are trying to lure buyers with promises of free design packages or upgrades.”
“Of course, what most attracts buyers is a good home, at a good price, expensive incentives aside.”
“Dana Weiler has been selling real estate in Danville since the early 1990’s. ‘I’ve had quite a few buyers this year, and it has not been the things that might go with it. And if there’s something that goes with it, they still don’t want to pay too much for the house,’ said Weiler.”
“The bottom line is, in this market, the buyer is in the driver’s seat.”
OT
If I just heard correctly on the radio, the house of Rep. just passed legislation eliminating any tax consequence on loan over basis for people that have been foreclosed upon with subprime money…Someone that can data mine confirm this ??
All right stick it to banks. way to go democrats. this good intention will tightened credit even further, making problem worse. does this mean that bank won’t be able to claim loss? because if banks can claim loss, then the treasury will take a hit.
no, they’ll stick it to the “rich” taxpayers
Here ya go Dave.
http://tinyurl.com/2t7phh
So we get to pay tax on gifts and real-estate speculators don’t? I want my inheritance tax-free, too.
Note to anyone holding off on a short sale due to the unpleasant prospect of taking a tax hit on the windfall income (in the form of a bad debt write off): You will not have to worry about that tax hit if this bill passes into law.
Does anyone else besides me anticipate a massive dumping of underwater properties on lenders if this bill passes into law? And who is the bag holder on this tax forgiveness?
Is Senator Dodd suggesting a metaphorical connection between underwater mortgages and underwater houses (in post-Katrina NOLA)?
Congress takes action on home loan crisis
Oct 4, 2007 02:15 PM
Tom Walker/Eyewitness News
…
“The crisis in my view is sort of the equivalent of a 50-state Katrina,” said Sen. Chris Dodd (D-Conn.)
Lawmakers in the House okayed a bill to help those hit twice in foreclosure. The part of the loan written off - still considered income by the IRS - would no longer be taxable. They say it will fix the “double whammy.”
http://www.wthr.com/Global/story.asp?S=7170592&nav=menu188_2
P’Bear…IMHO it will not get passed. Bush wants it to be temporary, and it’s a way to go.
Of course, I’ve been wrong before. Sounds like political posturing before the 08 elections. Just my couple of pennies.
Leigh
It could very well make the bubble pop faster.
I’m worried about it being permenant. Otherwise, I want my company to make half my salary giving me a mortgage and forgiving me the interest owed every month!
FB’s now will walk away, ‘en mass.
Holy jeebus, these f-kin clowns just torched off the massacre on FB Homestead.
That’s the way I see it, Ben. Note comment below…..
Chris Dodd is the biggest lazy a$$ pol around and has zero credibility with me. I can’t think why my state keeps electing him. Don’t they also see sleaze ooze when they look at him and hear him speak?
On the other hand, this all but destroys any presidential bid because nobody but the stupid FBs (and realtwhores and their ilk) think this it’s a good idea.
Is it possible for this idea to fly? It’s my understanding that the government is not allowed to change the rules retroactively. In other words, when the bank wrote the contract with the borrower, that was under certain legal conditions. You can’t change the legal conditions now and try to apply the new conditions to the old contract.
If the IRS wants to eat the loss on this one, then fine. But the government can’t demand that the bank pay taxes on the money because that was not the understanding at the time of contract signing.
It only applies to the homeowner.
Recall, Dodd is from the Hedge fund state. There is a bag holder bailout hidden in there.
Got popcorn?
Neil
and the treasury dept.
good thing those guys are on board.
thanks for coming out people….zero hour approaching.
This is just the icing on the cake, folks. Other bills are making their way through now which would force banks to restructure loans for FBs, basically extending the I/O periods or foregoing adjustments to let them stay in their homes. Dangerous times, the War on Savers is in full swing. Of course, eventually these costs get eaten up somewhere….
Ladies and Gentlemen,
Do not roll over. Represenatives read the letter/e-mails we send (although ancendotal) on the Captital floor, and they do…ahem…attempt to support their constituencies (you and I).
I e-mail them for fun! weeeeeeeeeee!
One person can make a difference, all voices can be heard!
Lawd, there I go again, cheerleading.
I’ll now remove myself to time out~
Curtsey,
Leigh
I would be very, very surprised if that passes…
This is just poorly thought out all around. There is a lot more to getting a short sale to go through then the tax forgiveness….
Often the primary will agree to the sale but the secondary and maybe even the third mortgage holder have to agree. as well. So getting 2 and possibly 3 lenders to decide on a write off amount has a ??% chance in hell of happening?
If we bail ourselves out like this, it will send a VERY Precise message to the rest of the world that Dollars are pond scum…
I’ll go out on a limb here… it might not speed up the process. This group is so dumb they didn’t know what was in the loan doc’s much less know that there would be tax consequences for the shortfall.
The final wording of the bill will be changed so that Friends of GWB are also excluded from paying taxes.
And towards the bottom, similar wordings to “tax exemptions will be in effect for all males born at 2:10am December 3, 1947 in such and such hospital in such and such town.” Not the first time, not the last.
That will also appease the wealthy Democrat donors.
Hoz,
Im still having problems wrapping my peanut sized brain around the overnight operations this morning by the FED.
the shock and awe campaign is working, but its not making me feel any better…….they got me thinking every friday a bank is gonna just get the website update to the FDIC crisis managment default page.
chicken little reporting from ORegon.
Most of the fed funds are rollovers. Don’t make the same mistake the street is that this is new moneys.
The shock and awe campaign is like a band-aid on Shotgun wound.
Corporate defaults are up 300% since July, commercial paper hit a record in September because they had to finance - no commercial paper had been sold in the previous 3 months. So they took a huge hit in September. There is still no home for $300B in LBO/ stock buyback that banks are sitting on, there is no market for CDO paper, CLO paper, ABC paper. Mortgage rates are higher now than before the discount rate cut. Credit card defaults are rising, foreclosures are rising and no reasonable person wishes to buy a home when they are worried if they will have a job at Christmas.
Now why do you think the shock and awe campaigns are working?
I forgot: Yes we shocked and awed the world.
The world is in shock that we had so little care for our currency that we jettisoned the dollar into the Styx.
why is the shock and awe working on me?
excellent question:
1. After I sold most of my positions in July, basically just wiping the slate clean of all my 5 yr holdings, I took care of some debt that was harassing me, started looking to put some short money to work.
2. Took a little nibble before the aug meltdown, rode it out, and now, not only am I back to good, but made a nice 20% in the 3rd quarter.
3. The banks look atractive, but the more I see the agencies, MBS, CDO, ABCP, and now TREASURIES? goin to to the window……its got me freaking out. That and the fact that almost a quarter of a trillion went to the window…
shock and awe……it works!
The PTB has me completely freaked out, scared of banks, and looking for shoe dropping and damage control every day.
Why is chicken little scared? Because the “shock and awe” is working.
Enjoy your deserved profits!
Remember all the Federal Reserve Board Members, most of Wall Street and many economists are to close to the problem to face it squarely. There is nothing the Federal Reserve can do about these problems. There is no miracle bailout.
The problem is a credit hangover. The only cure is time and savings.
What is PTB? Pounds per thousand barrels? (Thinking about the scotch again, eh laddie).
Do you mean the PPT (IMHO, a non active participant in market action)?
Nevertheless I have a small short position in US stocks, the 97% balance is outside of the US. How would you feel if you were a foreign investor in the US over the last year? In Euros the S&p500 is down 1.3%, the DJIA is up2.5%, and the average market growth around the world in Euros is 25%. Would you keep a shilling in the US? We will not know until the Fed Flow of funds comes out in 2 months.
From a historical perspective the P/E ratio is the highest or 2nd highest ever recorded (using Schiller’s methods to calculate - previous high was Nov 1999, current high is the same as Nov, 1999).
What me worry!
PTB= Powers that be.
heres the deal, I laid out my position papers to uncle multi-millionare, and he continues to tell me that I have scared him so bad, hes laying it all off in January, after the year end run up…..
he’s a glass half full, fully retired, no debt, 3 houses paid off kinda guy……and I scared him….
I also made a note on your comment this morning in the BIts Bucket, one of your sharpest momments…..
the derivative mountian is shaking….and Im not happy about it. the shock and awe is working.
laying off the long positions in the market, not the houses…. those are for the “fortunate” souls in his good graces after his demise… I aint a fortuinate soul……damn it.
People here are gonna ask themselves:
How do I get out of the way of the coming financial storm coming to the great USofA…..
what would you tell them as an action plan in the next 30 days?
I’ll have to start drinking earlier, I’m not allowed sharp moments. I was not sure I even wished to reply to your comment.
Voz, In my youth, there was a math professor, Tom Lehrer who wrote incredible satire poetry and songs. He stopped doing any writing in 1973 when Mr. Henry Kissinger received the Nobel Peace Prize. “Awarding the Nobel prize to Kissinger made political satire obsolete.” Essentially retired.
“The real issues I don’t think most people touch. The Clinton jokes are all about Monica Lewinsky and all that stuff and not about the important things, like the fact that he wouldn’t ban landmines… I’m not tempted to write a song about George W. Bush. I couldn’t figure out what sort of song I would write. That’s the problem: I don’t want to satirise George Bush and his puppeteers, I want to vaporise them.” Tom Lehrer
I feel that way about the US financial markets. I have made moneys from them, but in an age of innocence and then retired North while I could still golf. The corporate corruption (excessive compensation, opaque financials and inside trading among others) of the last 10 years is no more excusable than “smash and grab” theft.
This theft has left the US in an incredibly vulnerable financial position. We are dependent on foreign purchases of our treasuries to finance a massive debt, we are dependent on foreign manufacturers to supply our goods and we are dependent on foreign oil to survive. I know how Mr. Tom Lehrer must have felt when Mr. Kissinger was given the Nobel Peace Prize.
Two of my sons entered the military after 9/11. Do you imagine they have any respect for the US when they learned it was a “crusade” for oil? Is it possible for any enlisted military personnel to have respect for a government that lied? This is the same government that is lying about the economy and the wonders of Business America.
The shock and awe failed.
There is no stability in the markets, there is no paper, a small order of 100,000 shares is going to move the market. There is a palpable fear on the Street that the end game is at hand. And rightly so. Look at Finalternatives.com (Hedge fund news). Half the stories are about illegal fund activities.
I am not concerned for myself. But where I live there are farmers and day time workers. Farmers are self employed businesses. Some make moneys, some don’t. Bad things happen. The average daytime worker makes $8/hr up here with an unemployment rate of 10%. This is less than in 2000. I am concerned for them. There are no manufacturing jobs, mining jobs or logging jobs left. This is a recreational service job economy. The bills go up the same percentage as Milwaukee’s bills for gasoline, food entertainment. These are Americans and they have been given the shorts.
I remember walking down the Champs-Elysee in 1966 and feeling rich with 50 Francs in my wallet. That was wealth. I was a respected American.
I want to vaporize the current American financial situation.
Regarding your Uncle, it is better to pay taxes on a profit than to turn a profit into a loss. January may be to late.
Hoz said
“Now why do you think the shock and awe campaigns are working?”
Because the stock market always goes up — esp. on days like today when it seems set to drop by 500 pts.
Voz - I tried to respond to your post but it were ate by ghosts.
I’ll try to post my response again in Bits tomorrow.
As for you Prof G.S. Bear, the price of pork in China has a greater effect on the US economy than the US stock market does. China’s tail is enormous and this little itty bitty puppy cannot control the tail. If you consider a 2.5% increase in the DJIA an up move over the last year, that is less than what I use as stops on longs or shorts. The Bovespa was up 2.5%+ 2 trading days last week and once so far this week.
The stock market is drifting - no direction, no volume.
Who do you THINK the bagholder is? Same bagholder as in the S&L “crisis.”
As far as I see it this opens the flood gates for more price reductions. I have a couple of people I know unwilling lower their price and go the short sale route due to tax implications. Also, watch foreclosures go nuts as more folks throw in the towel and say screw it. It’s like the govt is almost daring them to do it.
do you think the polititions know what will happen when this goes thru?
Do they ever?!!
i guess not, im asking for a way too much.
“There’s no way we could have seen this coming ….. Maybe we should read a blog or something”
As far as I see it this opens the flood gates for more price reductions.
wait a minute.. if I am a buyer, making an investment that is less risky than before (in the event prices fall and i can’t carry it and will have to do a short sale myself), doesn’t the lack of a potential tax liability make this investment more valuable? And shouldn’t a seller charge me more for it?
so might not the price of homes go up due to less tax risk?
no. the investment is only valuable if it’s makes money.
this “tax cut” will only encourage dumping the investment without fear of tax consequences
here’s my thinking..
Lets say that you have the option of buying either one of two houses, identical in every way, at a price of $120K using a 100K loan.
The market is terrible and there’s a good chance prices will fall. If they do fall, you may face a short sale.
If you choose to buy house A, and prices fall to 75K , and you are stuck doing a short sale, you must pay tax on the (100-75K) difference…
If you buy house B, and the same situation occurs, you do not have to pay tax on that 25K.
But if market prices rise, prices on these otherwise identical homes will rise equally (assuming the market is efficient). So, profit potential is the same for A or B, while loss potential is greater with house A.
It seems obvious which house buyers would prefer to buy and which they would be reluctant to buy.
Risk certainly is factored into prices.. and a seller can reasonably demand a higher price for house B than for house A.
I’m not speaking from a distressed seller’s point of view.
Overall, this tax break favors certain properties over others and should raise prices on those.
Before Sarb-Ox, companies used to routinely give loans to executives and then forgive them. It was a way of making $$$ tax free. This was cracked down on after Enron
http://www.senate.gov/~levin/newsroom/release.cfm?id=210509
This new legislation is another way of screwing the middle. Irresponsible poor people get another handout. New loopholes are created so rich people can beat taxes. (Have the company fund their “mortgage” and then forgive it!) And you and I will pay for it all.
“We were meeting demand. … We were in a position to give the American public exactly what they wanted.’
Thank you Countrywide, who learned marketing from the street corner drug dealers…
–
Actually from Al Capone. He said something very similar.
Jas
according to a relatively short and fruitless search, i strongly suspect that “I give the public what the public wants” is likely to have come from a movie script..
but he certainly did say:
“You can go a long way with a smile. You can go a lot farther with a smile and a gun.”
People showed respect for guys like Al.. and maybe for Countrywide’s VP Jack Haynes as well.
“I am like any other man. All I do is supply a demand.”
Al Capone
“Success in any endeavor requires single-minded attention to detail and total concentration.”
Willie Sutton
that’s the one.. i missed it.
Here’s another in the same vein from the industrious American icon…
“I am going to St. Petersburg, Florida, tomorrow. Let the worthy citizens of Chicago get their liquor the best they can. I’m sick of the job-it’s a thankless one and full of grief. I’ve been spending the best years of my life as a public benefactor.”
‘Why won’t they work with the homeowner? All we wanted was a fixed-rate loan.’
I go:
Mom I’m okay, I’m just thinking.
She goes:
No you’re not thinking, you’re on drugs! Normal people don’t act that way!
I go:
Mom just give me a Pepsi please
All I want is a Pepsi, and she wouldn’t give it to me
All I wanted was a Pepsi, just one Pepsi, and she wouldn’t give it to me.
Just a Pepsi.
‘Why won’t they work with the homeowner? All we wanted was a fixed-rate loan.’”
No, all you wanted was an adjustable rate interest only loan with absurdly low payments so that you could avoid biting the bullet on all of your debts. Now that it has adjusted, now that you have had a few years of living it up on borrowed time, NOW you want a fixed rate loan.
Basically, Mona, you want to have your cake and eat it too and by crying to the newspaper you might have succeeded in at least delaying the day of reckoning for another couple of years.
Actually, they HAVE - and HAD a fixed-rate loan. What they wanted was interest-only - perhaps forever? Knowing what you know now, Mona, I have one suggestion: Sell and rent.
Jimmy,
your not crazy
institution
your not crazy
institution
LOL
“The American Dream of home ownership is an institution.”
heheh, been a while since I heard that song….
Me and your mom have been noticing lately that you’ve been having a lot of problems,
You’ve been going off for no reason and we’re afraid you’re gonna hurt somebody,
We’re afraid you’re gonna hurt yourself.
So we decided that it would be in your interest if we put you somewhere
Where you could get the help that you need…..
I got the help I needed on a bubble blog!
Jimmy Jazz: Are you inferring some FBs are having some Suicidal Tendencies ?
Suzanne researched my antidepressants!
oh my god you just made my day with the Suicidal Tendencies referencies! I love that song.
“This is a nice, rare home”
What the hell is a rare home?
‘Don’t know. Mine’s only medium rare.
I should imagine, like a steak, it oozes bloody juices when you cut it in half.
A c300 is a rare car? I’d have to seriously question her use of the word “rare”…
Agreed. An Aston Martin or a Lamborghini may both be rare cars, but a c class Mercedes. Not, its just a $20,000 car with a $15,000 emblem.
Deja Moo? (priceless comment from another poster a few days ago). Familiar Bullsh*t.
I’ll take credit for that one, but I stole it from my cousin David MacElree.
A Yugo and the AMC Pacer are rare cars and they both have more appeal to me than a POS Mercedes C.
I wonder if her husband was a car porter at the Mercedes dealership to qualify for the purchase.
C class looks like the “cloud” cars like the Cirrus/Stratus
“San Jose resident and real estate investor Sean Cervantes plans to attend and bid on a four-bedroom San Jose house he previously tried to buy from the lender-owner for $675,000 several weeks ago.”
Proof that this bust still has a way to go. There are still ‘investors’ in THIS market?
What is the percentage of homes now that are NOT going to actual end users?
Hmm… Cervantes and “tilting at windmills” goes together so naturally…
The way I see it, Sean inherited some money and he’s trying to figure out the fastest way to lose it.
LOL,
Bottom pickers do end up with stinky fingers, but Sean is an experienced real estate investor and ‘knows’ that the current market will reverse in a year. Suzanne told him.
Frankly, his story sounds like BS. If I ever choose to buy a large number of foreclosed houses (not ever likely), I would have my attorney call up the bank and arrange meetings with the head of the department in charge of the REOs and with one of the directors of the bank. After due diligence, I would put in a single bid for the properties and let the bank decide how they wish to price each property. If my bid was insufficient, no problem - walk away. Banks will always sell a lot of properties for less than an individual property. It gets rid of the banks head aches at once.
They’re not really investors. They’re just idiots who started flipping in 2001 and haven’t gone bankrupt yet. These are the geniuses who think they’re buying the dips right now. Most of them are out looking for work to hold them over until things straighten out.
In my opinion, you have to have been making money as an RE investor BEFORE the bubble hit to call your self an RE investor today.
“In my opinion, you have to have been making money as an RE investor BEFORE the bubble hit to call your self an RE investor today.”
Well said.
Exactly…
My home is being sold to an “investor”.
“So the $1,899,000 asking price for the home includes four bedrooms, three baths, lots of upgrades, a huge lot and a brand-new 2008 Mercedes c300, valued at $35,000.”
That seems a little cheap for a “rare” Mercedes.
At Edmunds car prices the MSRP on the c300 is $31,200. Is that considered a sale for the guy ?
I just have to interject here. The asking price includes nothing. It is the sales price that will determine what the buyer gets for the money.
Last week I did a search on AutoTrader for Mercedes and BMW models in the OC (using 25mi radius around an Irvine zip code). Let’s put it this way, if you really want to know how much a c class is worth, just do the search. Prices are crashing just like with homes, only faster… All of the wanna-be’s are trying to get out from under the payments as fast as possible. ANd just like with homes, they have to compete with the dealer finance and price incentives on new cars and pre-owned models as well.
“That kind of inventory could take 24 to 30 months to liquidate, Crabtree said.” “Frustrated homeowners were on hand as well. Dawn Kaw drove from Bear Valley Springs looking for help. ‘I’m stuck in two mortgages,’ Kaw said. ‘I’m finding myself buried in them.’”
buried alive! ha! ha! thats what happens when you spectulate!
St. Joseph getting his revenge. Buried alive AND upside down. Ha!
We all knew St. Joseph was getting ready to roll up his sleeves. Don’t mess with a guy who’s job includes the responsibility “to smite.”
Got popcorn?
Neil
St. Joshua tree?
““So the $1,899,000 asking price for the home includes four bedrooms, three baths, lots of upgrades, a huge lot and a brand-new 2008 Mercedes c300, valued at $35,000.””
Reading these just cracks me up!!
Reminds me of those nauseating reel-in-the-suckers “free set of steak knives with every purchase” you see on those late-night TV novelty ads. Same marketing to the dumbasses ploy above–except there’s five more zeros added on to the price tag.
Classic.
DOC
Hey that is MB is equivalent to a 2% cracker jack box prize. At a FB can sleep in the MB (Money Buster) if they bank takes the home back. By the way, BMW = Big Money Waster.
I was at Publix (grocerey) and I was behind this lady who was paying with a check, they asked for her drivers licence and she seemed set back that they would ask her. I bought my items and on the way out, she was drining a BMW - SUV thing.
Her entire purchase was ~47.00 of which was $20.00 cash. She mush have already used have maxed out the cc. But if you know you are going to use a check - Bring you frigin DL.
I was recently behind a woman in a convenience store. She was purchasing a variety of chips, snacks, sodas, cigs. Maybe a $20 purchase. To pay, she whips a 2″ stack of credit cards with a rubber band around them.
She hands the cashier the first card - denied 2nd - denied, and kept handing cards until one was accepted. Maybe half-way through the stack of cards.
She showed no emotion and casually walked out and drove off in a 500M series Beemer. Unfrigginbelievable!!!!!
No wonder she has no cash. Unbelievable.
There’s a reason Dave Ramsey keeps saying that a paid off home mortgage, not the BMW, is the status symbol of choice.
What does it mean, when it was bought with OPM?
Friend of my husband’s wife ran up a 100k in credit card debt and he was completely in the dark about it. She just taking loans on one card to pay another. Of course the snooty beeatch thinks none of us knows……….
Forgive my density, it has been a long day, but “my husband’s wife”? What does that make you? A second wife?
Excuse me, that wasn’t put well. This should be the wife of one of my husband’s friends. *bangs forehead* And nope, I am the first (and last) one.
Cousins?
She showed no emotion and casually walked out and drove off in a 500M series Beemer. Unfrigginbelievable!!!!!
Was there, but it was an E-class MB. At Bevmo for the nickel sale and a lady was buying a (non-sale) $135 gift set. CC was rejected. When the cashier ask to see the card and her ID, she walked out! Hmmm… I laughed at her and looked straight at the cashier and said “if my card strip is worn out, we’ll just call the company.”
Got popcorn?
Neil
I never see anything cool like that!
Usually its Lars asking the bartender for another beer, “I left m’wallet at home, ya see, hey didja see the big buck Ollie hit in his truck las nit, hey wher’ m’beer?”
I don’t know why this story in particular makes me really mad. This happened to my cousin too. His 20-something daughter ran up a huge credit card debt in his name, with his wife knowing about it, $50K+. He had to disown the daughter and divorce the wife to get out of paying the debt, which he couldn’t afford. I was shocked that a wife/daughter would do this to their husband/father. This happened at least 10 years ago I guess his so-called family was just ahead of the curve.
Ozarkian
Well, things weren’t that rough for them all things considered. The debts were discharged in bankruptcy and that was about it. They managed to keep the house and are still married. I feel pretty much like you do. I don’t understand how you could do that to your Dad or your spouse. I would have kicked that wench to the curb faster than you could say Visa but hey, it’s his life. I think the worst of it was the flack he got from his Mom. She felt he should pay the whole debt and was mad as hell at him for declaring bankruptcy.
Next they will include wife & kids. And advertise it as a entry level family. Just need a man to sign the deed.
Where’s the dog or cat ?
Jake: [fakes accent] How much for the little girl? How much for the women?
Father: What?
Jake: Your women. I want to buy your women. The little girl, your daughters… sell them to me. Sell me your children.
“We’re, uh, puttin the band back together.”
Consumed shortly after the Top Ramen ran out.
Hahahaha!! So funny it hurts.
Rentor:
I think women are allowed to sign deeds now too. It’s a recent change in the law.
Good one you stinker! (I read what I sign!)
Tooooo Fun-ey,
Leigh
What? We’re doomed!
Women have most of the moneys and now the power to execute.
We need the Equal Rights Amendment just to stay ‘evens’ with women. LOL
A rare $35K car in the Bay Area? Try again. Now, a $35K car for which a Bay Area resident paid CASH… a bit more rare.
I paid cash for my HHR bought in 2005 and also my suburban bought in 1997 (yeah, the suburban was a BIG mistake but we use it only for icy weather when we need the 4 wheel drive).
I have never bought a car on credit — always paid cash. Of course I kept my previous car, a 1986 Volvo, for 20 years
“‘To provide the American dream to more and more people, we came up with a lot of sexy products,’ he told the audience. ‘We were meeting demand. … We were in a position to give the American public exactly what they wanted.’”
____________________________________________
Don’t crack dealers use this same line?
“‘To provide the American dream to more and more people, we came up with a lot of sexy products,’ he told the audience.”
Sexy products? Of course! A dildo with every purchase so you can cram it up your ass when you realize how phuked you are.
Gross.
“New home builders are trying to lure buyers with promises of free design packages or upgrades.”
this is exactly what they are “all” doing is luring victims into overpriced crappy built homes.
I laugh ever time I hear “custom built home”. Unless you had an architect draw up plans that you wanted and a builder who actually performed work to your discression, then most of the current “custom homes” are spec homes. New “custom home” = spec home with some nicer stuff.
Agreed. Me, CAD certified, hubby and I (he sketched, I designed) home in FL 93.
Now that baby was custom right down to the lighting package, color of brick and each and ever light switch location.
I was there, in uniform, everyday at lunchtime! Drove the guys nuts, but hey! I wanted things done correctly and made sure they were!
Now that’s custom!
Leigh : )
The word “Estate” gets thrown around a lot, also these days. If it doesn’t have some serious acreage and require a full time staff to maintain it, I don’t think it’s an “Estate”.
Yeah, around here, these homes are “executives”. I guess, back in the day they were pretty swanky. Now they’re just termite-infested wind-tunnels.
when can the low balling begin? This thing is moving WAY TOO SLOW….I think I am going stop reading this site for a year and then come back.
LOL!!!!!!!!!111
If the savvy participants in the CME housing price futures market have it right, it looks like you can take four years off and not miss any serious low balling opportunities.
LOL, The CME goes out to 2012, where would the prices be if it extended to 2017 or 2020? another 20% lower.
Lowballing has begun in Las Vegas, and its the banks doing the blowout. 1 bedroom condo bank owned foreclosures were priced at market $133,000 on Sept 1, were repriced at $111,000 on Oct 1 and sold within 2 days. Another was listed at $138,000 and repriced at $118,000 and sold. You can get positive cash flow with 25% down and 6.5% interest rate. These are 2003 prices, but with the brutual winter months of Dec, Jan, Feb coming up, I expect these 1 bedroom bank owned foreclosure to be around $90,000. The banks have learned their lessons from the RTC days, and are ready to move their non performing assets
now.
With all due respect …
It would seem that positive cash flow should be irrespective of the down payment. Otherwise the argument could be made that 100% down payment “always” provides positive cash flow. Cash flow should include all aspects of the purchase, including lost use of capital, property taxes, upkeep, etc.
I think the lack of understanding of this issue has forced many individuals to wonder where their “positive cash flow” went after a year or so.
“The banks have learned their lessons from the RTC days”
You sound like David Lee
Wheeeee…let’s play math! Come on…it will be fun!
90K loan 30yrfix @6.5% 25%down $22,500=67k
Tax $1k/yr + 300 ins
PITI=$531.81 per month (disclaimer: does not include maint or HOA).
Since I’m horribly ignorant on tax and ins, adjust appropriately.
Additionally, I have no idea what rents are in this area…could be cash flow positive, but I admittedly do not have all the variables.
Curtsey,
Leigh
yeah, as a San Franciscan, I’ve had the same thought. I read this blog daily, and see more houses in my hood with for sale signs, but here in the city most houses are still selling within 30 days….waiting
ok - I’m not far from Joshua Tree Park and I’m considering a day trip. I’m getting really pissed. The Breidensteins refied and took a bunch of money and spent it and now they want the lender to ease their pain because they agreed to an adjustable mortgage. And courtesy of the legislature all those serial refi loons will get to keep their ill gotten gains tax free. Great job by MSM and RE industry in convincing people that everyone is a victim of subprime mortgages - no FB was irresponsible or greedy.
Don’t forget… they bought it from her mother!!! something smells fishy here
Anyone here a Ron Paul fan? (www.ronpaul2008.com)
I ask because most people here seem to have their financial head screwed on straight and so does he.
As far as I can tell, the actual subtitle of the HBB should be “We love Ron Paul”.
So, yes, you’ve come to the right place. 
Make sure you have the correct registration & general info for the primaries which are fast approaching.
http://www.ronpaul2008.com/primary-and-caucus-information/
“One encouraging sign, Sullivan said, is that builders and developers have begun holding auctions to get rid of overstocked inventory of homes. ‘Auctions typically portend that we’re nearing the bottom,’ he said.”
“Holding” auctions doesn’t portend anything. Let’s see the hard numbers from those “encouraging signs”. These so-called bargain auctions aren’t selling jacksh*t. They AREN”T getting rid of “overstocked inventory”.
What auctions portend is that the shit has hit the fan, *Sullivan*.
How can anyone get worked up about an auction with a reserve anyway?
I think the “work out” in the story will be the M.O. for lenders for the next few years.
Give someone that doesn’t have to sell right now a loan that pushes things out for a few years with hopes that the market will rebound with moderate increases in household income.
All of the lenders involved will do whatever it takes to NOT take back a property and sell for less than the loan amount and have to turn an “unrealized loss” into a “realized loss”.
In the mean time they will fine enough suckers/investors to buy stuff at 10-15% lower prices because that seems like a “deal”. It may be several years before we see major price declines in certain areas…..if ever.
Prices are determined by what current and future buyers are able and willing to pay. The demise of the current bagholders can push this a bit (avalanche of foreclosures surely will affect supply), but if there are no suicide loans, there will be lower prices. No way around it.
Hi John,
I be the first to admit I’ve been wrong before and will be wrong again!
Specifically (my teeny brain computes) the lenders, in many cases, are not in the drivers seat. They have already package/bundled loans into tranches sold in the secondary market.
If you ever worked in government or attended a corporate board room meeting, (any company meeting would work in this example), you may find that people ARE clueless!!
Without a highly skilled facilitator, these jackarses do NOT have the attention span of a 2 year old child (my appologies to the young one).
I have experienced, excruitating pain, at said meetings. Fortunatley, I am a facilitator. Agenda=efficiency. Getting these bozo’s to stick to an agenda takes great skill. And objectivity.
What are the odds? Don’t know…I’m retired, thank gawd (but still care).
Best,
Leigh
Yep!
It is very hard for me to imagine changes in contracts that do not pay off the secured holders in full.
I do not know about all service contracts, but the couple that I have read allow the servicer to renegotiate loans, rent the property, hold it or foreclose it immediately, as long as they are endeavoring to maximize funds flowing to the trust (i.e. bondholders). They need to get permission from the conduit (securitizer), but I think this would often be automatic. If a FB quits paying, do you think the bondholders want to micromanage the foreclosure? The protection for the holders is either (1) third party insurance, or (2) losses coming out of the equity tranche and lower tranches.
John:
If the bank sells the property (or allows the owner to short sell the property) for a 10-15% discount, it loses money and takes a realized loss. I’m not sure what you were trying to get at with that statement.
As far as the # of people who think they’re “buying the dips”, that # is quickly declining while the number of houses for sale is quickly increasing. That’s why prices are going down.
Oh, duh. Forgot to mention that banks will not be willing to extend another loan to the guy who can’t pay his current loan because they are no longer able to securitize the loan and sell it. They can’t keep more money on the books than what they have in deposits, see. Most banks are already carrying the maximum amount of debt on their books. Any new mortgages have to be sold.
I think it will take quite a long while. The MBS/REO will trickle in for several years.
For the South Bay in LA it will be even longer. Lots of strong hands but eventually the population will drop as people move away.
Then the price drops. Its going faster than I expected but not fast enough.
Last time there was enough wage inflation and price drops to restore things after a mere six year span. This time its worse so might be longer with a more difficult recovery.
Also have to figure a democrat will get elected and screw over investors to help out the FB. That might drag things out even longer. Investros have pretty long memories after they’ve been bent over.
If you were a bondholder, what would you rather do, take an immediate payoff of 75 cents on the dollar, or hold it for 20 years at (after ‘deals are made’) 5 percent interest. Looking at the future long term rates and devaluation, I would take the shave and run with my cash. Thus, the bondholders could prefer to take a foreclosure now instead of locking into a renegotiated (lower) income stream. The servicer might also prefer a foreclosure (they get extra fees to cover foreclosure costs). I’ll bet the bondholders REALLY want to liberate their principal at this time….
Quite right AKron. The banks would rather make more money by foreclosing on this stupid thing and writing a new (safe) loan than sit around collecting their percentage of whatever tiny amount the current owner is able to pay each month.
Bondholders would rather get this thing off their backs because they know that, even if everyone else holds on, then the value of their holdings will only stagnate. They can make more money elsewhere.
Even many FBs would probably be better off foreclosing. No point in paying excessive rent to the bank in the form of interest only every month. You’re better off paying much lower rent to a landlord.
“The housing market should start recovering in 2009, but that prediction could get pushed back a year or longer if the economy falls into recession, forecasters told a Sacramento audience Wednesday.”
I guess the CME traders have no clue, as information from the housing price futures market suggests no bottom before at least 2011.
P.S. Futures market have a much better track record of forecast accuracy than your typical RE shill…
Posted date: 10/4/2007
L.A. Home Prices Poised to Drop Further
The outlook for house prices is getting even gloomier as traders on the Chicago Mercantile Exchange bet on steep price declines and the number of homes for sale grows, the Wall Street Journal reports.
Traders on the CME expect home prices in 10 major cities to drop an average of about 10% from mid-2007 to November 2011, according to an analysis by Tradition Financial Services Inc., New York, of prices for housing futures traded on the exchange.
The contracts have been trading since May 2006 but last month were adapted so that traders could bet on prices as long as 60 months into the future. The trading is based on expected movements in the S&P/Case-Shiller house price indexes.
http://www.labusinessjournal.com/article.asp?aID=68928969.9626479.1535586.3805312.4329725.794&aID2=118113
Professor Bear,
are you the former GetStucco?
Yes. Answering for GetSutucco aka Professor Bear
Thanks, that is what I thought. They have very similar style and sharp comments.
Don’t forget, he’s also Jen Bones.
GetStucco is Jen Bones? No way. Jen Bones was coming around for a while telling pretty funny jokes. Haven’t heard from her in a while.
Just now noticed I misspelled GetStucco. My apologies Professor Bear.
Only 10% by 2011? Overly optimistic. Where do get this stuff?
Where do they get this stuff?
“Only 10% by 2011? Overly optimistic. Where do they get this stuff?”
Answer: They get it from JohnF ?
“Auctions typically portend that we’re nearing the bottom”
This would probably be true if REAL auctions were occuring but I haven’t seen one that hasn’t had a floor in place. That ain’t an auction, its sucker bait.
When the bidding starts at a dollar, yeah, your getting close to the bottom. Until then, these “auctions” are just marketing gimmicks. No different than throwing in the odd “rare” Mercedes at purchase.
Your point is well taken, but bidding starting at a dollar is meaningless if there is a reserve on the auction. You need both, a low opening bid, and no reserve to have what I would call a “real” auction. That would indicate capitulation and the willingness to take whatever they could get.
and so many auctions taking place that fake bidders are not present
TOT:
For the past few hours the Blue Angels have been practicing for the weekend show in San Francisco. Thrilling to see them fly by where I live. Woohoo!
….time to put the bong down.
The previous most stolen sign in Wisconsin
“Bong Recreation Area”
Now it is all spelled out, but great for camping as near to Chicago and Milwaukee.
http://tinyurl.com/2txnbx
Safety Break time…
Hoz!!!!!!
Wisconsin should market and sell this sign!!!!! $$$$$ Baby!
Great addition to the home basement bar!
Chuckles,
Leigh
(er…disclaimer…don’t bong but don’t mind those whom bong).
I was there a couple months ago the signs all read “Richard Bong State recreation Area”.
I have seen a few signs that were illicitly removed, you might check Ebay. :>)
$$$ Think of the cash we could raise in WI just by selling these ridiculous things to the public! $$$$ Baby…lower taxes!!!
GOoooo Wisconsin!
(Lawd, might even be more effective cheerleader than the NAR!)
Gasp!
Leigh
Nope don’t participate in the bong. Have seen them fly at Moffet Naval Air Base when the base was still open. Love the show.
Thanks for sharing your Taster’s Choice moment.
Hey no problem. Ugh, can’t stand that crap. Didn’t know you liked Taster’s Choice ex.
I’m a Peet’s man, ordered online and shipped UPS so I can get it a couple of days from roasting. Saeco automatic espresso machine is my weapon of choice. I keep the Taster’s Choice on hand in case I ingest poison.
Peets and Caffino are my two favorites. Just a fun fact, Anthony Head (Giles from Buffy the Vampire Slayer) was in those Taster Choice commericals
i used to sit on the roof and watch them go over.. couldn’t have been more than 200 feet overhead.. wave to the pilots.
Then i guess some old lady complained to Feinstein that her cats were having conniptions and peeing on the carpet, so she made them stop.. for a while, anyway.
Hey! Fun trivia…any US citizen can request a ride with the Blue Angels, Thunderbirds (forget the other two), through a written request to your state represenatives!
Some may already know this, but WE own the planes, and very few request a civilian seat in our great flyer jets!
Hollywood knows, that’s how many great movies were sponsored.
The whole idea is to allow anyone to experience the “sound of freedom”.
Remember, these babies pull some serious G’s and the pilots love to have a civilain to…er…loose their cookies. (eww…pardon).
weeeeeeeeee…for those who dream of flying!
Leigh
Leigh,
Thank you for this. I had no idea. I will put in my request for the next time they do a show in the Bay Area. Keeping my fingers crossed San Francisco Board of Supervisors doesn’t keep them from appearing next year.
SF’Gal,
You can google Blue Angel or Thunderbirds and they have a schedule! YOU can choose (er…request) date and time!
My son went up…oh so glorious (me, too many times to count).
I wish American’s knew how simple this is to accomplish!
E-mail Ben…who will give you my e-mail…and it’s a shoe in baby….wooooooooooohoooooooooo…now you’re flyin’!!
Best always,
Leigh
” … and the pilots love to have a civilian to … er …lose their cookies.”
The pilots don’t limit their antics to civilians.
Navy Seals are sometimes tasked to teach water survival skills to navy fighter pilots. Often the seals get carried away and wreak special torment on the pilots. Why? Because they can.
The gratitude displayed by the pilots toward the Seals for this extensive and special water survival training is often expressed by the offer to the Seal of a joy ride in the back seat of an F14 Tomcat. The ride lasts about forty-five minutes. Usually the Seal begins his puking at about two minutes into the ride, which goes on, and on, and on …
Hello combotechie!
The pilots don’t limit their antics to civilians.
You speak truth…but so many American’s have no idea they can ride with the eye of the tiger…er…pull x g’s!
Disclaimer: do NOT ever go with Navy Seal into a body of water. Likely outcome: death.
P.S. er…I’d rather lose…er…my cookies : )
Hey, I’ve never climbed Eversest either!
Grin,
Leigh
I swim at a pool used by Air Force Pararescue folks (another set of elite US troops). I would never want to fight them … but they are nice guys and are very polite in the pool. Not deadly at all. I’d enter a body of water with a SEAL any day of the week.
I imagine if a SEAL wanted to hurt me, staying on land would not help my odds of survival.
Feinstein…….what a bitch.
I’ve met her. Back when she was a lowly supervisor she lived in the neighborhood and a few of us were invited to her home.. some sort of neighborhood safety thing.. or was it about a growing teen pregnancy bubble..
Anyway, on the personal level I don’t recall her as a bitch.. or anything else for that matter.. didn’t make any lasting impression on me.
How are we pimping houses now?
American Dream: Check
Sexy Products: Check
Wants Serviced: Check
“‘To provide the American dream to more and more people, we came up with a lot of sexy products,’ he told the audience. ‘We were meeting demand. … We were in a position to give the American public exactly what they wanted.’”
er…I have a great commentary, but do to the family content on this board, er…fill in the blank!
Smiles,
Leigh
“That kind of inventory could take 24 to 30 months to liquidate, Crabtree said.”
if this is true, and the public officials know it, then why in the he11 are they still letting builders build thousands of homes here?
If they build, a bailout will come.
Is that from Fields of Brokeback Dreams?
You got me GS, I have to clean my KB.
P’Bear,
I have the utmost repect for your opinions/dead on calculations.
Puuuuleeez noooo.
Leigh
Is it against the law to be stupid? Is is a felony to build a house when there is too much inventory? Under what basis are you making this claim?
The only absolute law is the one of supply and demand. It will work absolutely wonderfully with out any interference for the “officials”….
my claim is they are the ones issuing the bldg permits and rezoneing the land, and letting those builders tear-up the farmland around here. i have a real problem with that!
Right. And the city council(s) simply ignore all protests from neighbors. Valid arguments like “there will not be enough parking”, “the proposed 100-unit studio condo complex will be directly adjacent to a single-family neighborhood, wich will disproportionately bring down our standard of living”, and “the roads are not sufficient to accomodate the traffic” are poo-pooed as backwards sentiment. Totally annoying and stupid.
OK Jingle…you brought out my silly bone!
If stupid were a crime, I’d have a cell under the jail : )
Leigh
“Against stupidity the gods themselves, contend in vain”
Friedrich Von Schiller
“‘To provide the American dream to more and more people, we came up with a lot of sexy products,’ he told the audience. ‘We were meeting demand. … We were in a position to give the American public exactly what they wanted.’”
Is he saying in so many words that CFC screwed lots of FBs?
P’Bear,
That’s a real gagger…WT Heck? Sexy products…er…as in Victoria Secret or er…fill in the blank. CFC is pimping now?
Shaking Head.
Leigh
They were probably into S&M. They are on a low budget The result: green rubber bands to snap when they think good thoughts.
I’m not sure CFC got what it paid for with its new image consultant. Describing yourself as basically a pimp doesn’t exactly seem like the thing to elevate your reputation.
“It is better to be thought as a pimp than to open your mouth and remove all doubt.”
“It’s a sign of the tough times in the Bay Area real estate market, where a Danville home seller feels compelled to throw a new Mercedes into the deal to attract scarce buyers.”
Tough times??? Giving up your Mercedes is tough?
I hope she ends up driving a John Deere lawnmower.
Used bicycle with a bent frame!
“With mortgage foreclosures soaring, Gov. Arnold Schwarzenegger announced Wednesday that he will sign two bills to increase homeowner protections — but neither will solve the current crisis.”
a seemingly unstoppable cyborg assassin who has been sent back from the year 2029 by a race of artificially intelligent computer-controlled machines bent on the foreclosures of mankind. The Terminator’s mission is to kill Sarah Connor, NAR decorated number one agent 2005-2006.
Somewhere, Grey Davis will be laughing soon…
Oh, I am sure he’s already laughing. All we did when we elected Schwartzenegger is exchange a big corporate wh@re for an even bigger one.
I never think of Gray Davis as a corporate whore, I think of him as a public-employee-union whore. In CA that might be worse than corporate whore.
Actually that’s “Suzanne” Connor.
Time travel gives me a headache
So i’m reading the el lay times business section today, and what gets front page news?
A fondue joint.
Anything of important news real estate-wise was hidden away deeper in the section…
Alad…I’m a cheesehead (Wisconsinite) and sad, sad, sad.
MSM…grrr.
Bah, never be sad about being in WI. (Unless you don’t like cold weather and snow.)
‘We were meeting demand. … We were in a position to give the American public exactly what they wanted.’”
We were in a position to make a Sh*tload of money so damn the torpedos and give the American public the shaft.
“As foreclosures have soared in California, large auctions of bank-owned properties are becoming more frequent. Saturday’s is the third in the Bay Area in recent months, and similar auctions have occurred in Sacramento and Modesto. REDC executive Michael Schack said many properties the company has sold this year have gone for 20 to 30 percent less than the ‘previously valued to’ prices listed in the company’s catalog.”
“Lenders do have undisclosed ‘reserve’ prices below which they won’t sell, said Schack.”
My favorite of the larger bombers, the B-52’s…
If you see a faded market sign, at the side of the market that says
Beware of reserves… Loan Schack! Loan Schack yeayeah
I’m headin’ down the auction highway, looking for a home giveaway
Heading for the loan giveaway, home giveaway
I got me debt and it’s as big as a whale and we’re headin’ on down
To the Loan Schack
I got me a ‘previously valued to’, Discounted about 20
So hurry up and bring your mortgage money
Well the Loan Schack is a little old place where auction fever comes together
Loan Schack baby! Loan Schack bay bee!
Loan Schack, baby Loan Schack, Loan Schack, baby Loan Schack
http://www.youtube.com/watch?v=T8NhJNpQlsY
Luv shack baaa.be. (moving shoulders…may the gawds have this song playing in your head as long as mine!)
Luv shack,
Leigh
Aladinsane’s master piece!
You should perform it at the next HBB party, which should be held at the fondue joint mentioned above.
Received this most recent response to letters I’ve sent to our politicians. This is an excerpt from Congressman Brian Bilbray (San Diego area):
“In response, on September 10, 2007 , Sen. Charles E. Schumer (D-NY) introduced S. 2036, the Protecting Access to Safe Mortgages Act. This bill would provide funds to individuals with subprime loans to allow them to refinance their loan to a new loan at a prime rate. While the bill is well intentioned, unfortunately this legislation is premised on rescuing financially irresponsible borrowers. In our market economy individuals are expected to manage their finances responsibly. By devoting resources to rescuing those who knowingly accepted high risk loans, a dangerous precedent would be created that the federal government will serve as a safety net for financial actors who choose to undertake extreme risk in the market. Furthermore, this approach would also perversely punish people who acted responsibly by waiting until they had the financial means to purchase a home. This bill has been referred to the Senate Committee on Banking, Housing and Urban Affairs. If this bill or similar legislation comes before the House of Representatives for consideration, I will be sure to keep your views in mind.
Again, thank you for contacting me. If you have further questions please call me or my office at (202) 225-0508.”
————————-
Glad somebody seems to get it!!!
BTW, I wrote to him a while ago (1-2 months or so) and just got the response today. It’s canned, but the time lag makes me think someone from his office might have actually read it??? One can only hope.
I’ve always liked Bilbray. Back in the day when he was the Mayor of IB, he commandeered a bulldozer and started shoveling sewage back into Mexico. It was freakin’ hilarious.
Great news, CA renter. Thanks for sharing it with us.
I can’t imagine what “funds” would allow an FB to refinance, though. Certainly, the state of CA is not planning on becoming a mortgage lender, is it? Very disturbing.
I liked his term Financial actors. We have heard on this thread of several “D” list actors driving cars they can’t afford and would need two credit cards to get a drink at Starbucks.
No recession? Here is something I got from someone I know.
True, why stay? #1 reason it’s money now.
I work in the staffing Industry, the other shoe is dropping NOW! When hiring skids all bets are off about the economy and it is happening for the last 2 months. Gov’t indicators are 3 months behind this is what’s happening right now.
please keep us updated OCInvestor
Bloomberg Radio said today jobs report is the mother of all financial indicators
Mellow Yellow is a much more honest indicator, as it’s incapable of being dishonest…
Jenie in a bottle, Alad.
…and that’s why I expect it will be completely inaccurate.
Anybody else have problems with strongmen expat Austrians for leaders, historically?
“With mortgage foreclosures soaring, Gov. Arnold Schwarzenegger announced Wednesday that he will sign two bills to increase homeowner protections — but neither will solve the current crisis.”
There was a sweet letter to the editor in the el lay times, in defense of the dermatologically damaged dude…
Here’s part of the sweet and sticky, he’s an old man pablum~
“His plans reflect his intention to diversify his investment portfolio as he approaches retirement. Still, he remains Countrywide’s largest individual shareholder, by far.”
“Lenders do have undisclosed ‘reserve’ prices below which they won’t sell, said Schack.”
Is this actually allowed? I thought I read here in the past that there is some regulation that disallows banks from owning foreclosed real estate indefinitely. If true, then eventually they’ll have to lower the price.
Does anyone know how long they are allowed to hold before they’re forced to dump it at whatever price the market will bear?
Does anyone know how long they are allowed to hold before they’re forced to dump it at whatever price the market will bear?
That would be due to the FDIC coming in and enforcing that provision about banks not allowed to be real estate investors… It usually takes them two years to wake up to the fact that the provision has been violated.
Got popcorn?
Neil
Neil - I remember reading that reo’s could be held and liquidated in an orderly fashion as an investment. Banks cannot hold REO’s as speculation. There was no time frame as I recall.
I found these posts on a blog.
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I worked at a mortgage company during the mortgage “boom” and it was terrible. The owner/manager was the worst I had and everyone was concerned about making as much money as possible with zero regard to the customre they were selling mortgages to. It was a hostile enviornment to say the least. Glad I got out…
Posted By Robert, Wakefield RI : September 25, 2007 7:52 am
——————————————————————————–
After 8 years, tomorrow is my last day at a real estate office that is run by the dementors of Azkaban. The atmosphere is toxic & demoralizing. After being personally attacked by ongoing emails (in response to work related questions) I gave notice. It was the best thing I could have done for my mental health.
Posted By Darlene, New York, NY : September 27, 2007 2:54 pm
Long Beach short sale. Only 30% off previous sale.
4372 BOYAR AVENUE, Long Beach, CA 90807**
List Price: $400,000
Short-sale, price to sell. Bank wants to sell now.
Sale History
04/14/2006: $572,000
05/20/1999: $205,000
Long Beach short sale. Only 30% off previous sale.
Still nearly double the 1999 price, which I predict is what it will be worth again in 2013 or so. Anyone who buys it now will nick his fingers!
‘In the same way there was over-exuberance in 2003 and 2004, there’s probably under-exuberance in 2007 and probably 2008,’ he said. ‘There’s a psychology at work here.’
Another variation on the tired “house prices tripled over the past 7 years, so now they’ll correct by 10% and we’ll be back at equilibrium” riff.
In our old neighborhood, prices more than quadrupled.
They’re down by a good 25-30% already, though.
“‘Those resets are starting to have a devastating effect,’ Florez said, calling Kern County, San Bernardino and Stockton ‘hotbeds’ of California’s mortgage meltdown.”
Be really careful driving a Hummer in the Greater Inland Empire…
They attract i.e.d.’s like crazy
Inland Empire Defaults, that is.
Larger Inland Empire (LIE)
“‘Those resets are starting to have a devastating effect,’ Florez said, calling Kern County, San Bernardino and Stockton ‘hotbeds’ of California’s mortgage meltdown.”
What the American public wants, exactly, is a free lunch, and you are now learning, along with the American public, that there’s no such thing. The teacher is the market itself, which doesn’t care about your self esteem and still believes, old-fashioned bully that it is, that there ARE right and wrong answers. It’s not afraid to use a paddle on the most willfully ignorant, either, as Countrywide is almost certainly going to find out over the next year or less.
Weird, it ate the quoted text and “giving the American public exactly what it wants” and left me stuck in Italian mode!
But I think I fixed it.
The Sacramento Bee. “The housing market should start recovering in 2009, but that prediction could get pushed back a year or longer if the economy falls into recession, forecasters told a Sacramento audience Wednesday.”
Here we go again. The specific reasons for housing market recovery in 2009? Nope - just bs en masse!
Gas Tax Hike, Mortgage Deduction Cut To Be Proposed in Greenhouse Gas Reduction Plan: Click on link below………
http://www.reuters.com/article/blogBurst/politics?type=politicsNews&w1=B7ovpm21IaDoL40ZFnNfGe&w2=B7tmRCRJt2YFzDsa7MJ1CblL&src=blogBurst_politicsNews&bbPostId=CzE2rGvjNPnS7B34tM5LtnMUCCzDYTCIw2hubxB9DNCZf7aRG7&bbParentWidgetId=B953VllswRgXzDFRfXf2MNiS
I’m all f or the gas tax despite it being regressive as long as the $ gets returned to the tax payer in the form of a payroll tax deduction or credits for energy saving items. It’s time quit supporting our good friends in Saudi Arabia, Iran Venezuela and Russia.
Getting rid of mortgage deduction is a nice hit to the middle class. Due to AMT most of the rich benefit very little from this. Should be a nice nail in the coffin for housing.
Forgive me if this was already posted, but I opened up Yahoo today and this was one of the headlines:
“10 Cities Ready to Rebound”
http://promo.realestate.yahoo.com/ten_cities_ready_to_bounce_back.html
That’s nice. When we were all Chiken Littling, the RE holes could not stop with their compulsive “You don’t have crystal ball, so stop predicting gloom and doom”-ing. Now, all the sudden, every RE hole in the US has a crystal ball predicting a quick snap back to the glory days of the bubble. Here’s a little logic for ya:
If these 10 cities missed out on the bubble, but their prices are decreasing now anyway regardless of a strong economy, then WHY ARE PRICES DECREASING? It seems obvious to me that any city with a good economy and decreasing house prices must not have “missed out on the bubble”.
It’s interesting that all the cities they list are bad areas with mostly poor economies, which never had bubbles in the FIRST PLACE, so of course they’re doing great compared with the crashing bubble markets.
You could always take in overnight guests to make the nut…
Who wouldn’t want to stay at the Bates Motel?
“It’s a sign of the tough times in the Bay Area real estate market, where a Danville home seller feels compelled to throw a new Mercedes into the deal to attract scarce buyers. ‘My husband works for Mercedes. This is a brand new 2008, rare car, and this is a nice, rare home. So let’s market it together,’ said Lori Bates, homeowner.”
No CA homes on this list. Could it be that the South is rising again, or is this just an aberration?
Ten Cities Ready To Bounce Back
http://tinyurl.com/2gfjpk
Anybody know where to get the number of short sales in Florida –Brevard county?
Dan
Maybe need to rework the tinfoil hat, but it’s looking more and more to me that somehow the fix is in. He homeowners that serial refied the flippers, and all the way up the line have found someway to beat the system. Homeowners get to abscond with the fruits of their refis with no consequence really - not even taxes, the fed keeps futzing with the money supplie and devaluing the dollar. They (who the hell knows anymore) will just keep maipulating things because it’s an election year.
“The housing market should start recovering in 2009, but that prediction could get pushed back a year or longer if the economy falls into recession, forecasters told a Sacramento audience Wednesday.”
Er, do these clowns mean they think prices will start rising again ? I’d like to see the rationale for that please because all the fundamentals I see point to falling prices for quite some time followed by sales prices that reflect the inflation rate.
“… The biggest group, 27% of those counseled, needed to get their spending and saving habits in line to be considered workout candidates, she said.”
Kind of like shutting the barn door after the horses have gone. Shouldn’t this advice have come BEFORE these folks were loaned any money?
this new bill when it passes will be the start of the third inning.. still a perfect game… has there ever been a perfect game pitched by both teams.. not possible unless we are speaking about the real estate game.. wake me at the 7th inning..
once this thing is over are we going to have a party.. what am I going to do with all the time once I don’t have to read this blog?
PS3 is coming out with some cool games.
“Lenders do have undisclosed ‘reserve’ prices below which they won’t sell, said Schack.”
You “reserve” the price ..I’ll just “reserve” from buying your POS. I have NO hurry to act now, unlike sellers and lenders.
Bleed babies, bleed.
San Francisco Countrywide employees get a memo from Mozilo.
ROFLMAO!!!! That was great!
Hey, that image was faked.
Just read testimony of Robert Kuttner before the Committee on Financial Services. It’s very good read.
http://www.prospect.org/cs/articles?article=the_alarming_parallels_between_1929_and_2007
Lengthy, but good read. Thanks for posting that!
Bottom line of Ben’s post:
“The bottom line is, in this market, the buyer is in the driver’s seat.”
- Dana Weiler, real estate salesperson
My bottom line:
In this market, prices are still too high to warrant buying any RE.
just got a offer from a lender for 12 months no payments at 8.99 bk and forclosure ok.. no credit score all stated products at 80% Ltv.. targeting the bay area. NUTS
Ah, the elusive 80% LTV. Come now. You were recently foreclosued upon and filed bankrupcy. You can not afford to make any monthly house payments. You are also a moron who thinks the value of a Bay Area house is going to increase by more than 9% over the year.
Do you have 20% of $700,000? I didn’t think so.
Even this late in the game, Bank of America is still trying to lure suckers. I just today received a junk mail from them offering me a $40k home equity loan for $283/month (fine print on reverse side: this assumes interest-only payment and no more than 80% LTV). Gosh, where do I sign up?
P.S. I’m a renter.
P.P.S. I’m also subprime at the moment! (670 credit score). Didn’t these guys get the memo that this crap is supposed to be over and done with?
The reason I’m subprime is that a medical center generated a $65 bill several months after providing me a service, and long after I had left my temporary address where I had been working as a consultant. So the bills never got to me, and I never discovered anyone wanted money until I pulled my credit report two weeks ago. Fortunately, the collection agency was cool about it, and requested the entire item to be deleted from my credit report and sent me a letter confirming same.
But holy crap, a single collection account dropped my otherwise perfect credit (820 FICO score) all the way down to subprime without passing go! I doubt it would be any lower if I had a foreclosure on my record. We have a very screwy credit scoring system in this country!
Wow, sorry to hear about that.
You’re right. The credit scoring system seems out of whack.
No worries, it should all be fine by next month. Of course the inconvenient thing is that you usually discover things like this when you pull your credit report for a reason, in my case looking for a new apartment. So I’m facing the annoyance of having to explain the situation as part of my spiel to each landlord whose place I’m interested in.
I’m finding that it’s not uncommon - several landlords have nodded their heads in agreement and proceeded to tell me of a similar credit headache they’ve had in the past.
I’m just lucky that the collection agency turned out to be extremely polite and reasonable, in direct contrast to the horror stories I’ve read about in the past. Of course, the real test of their integrity will be whether the item does in fact disappear from my credit report as promised.
It is designed as a punitive measure, rather than a predictive measure. Obviously, as a predictive measure is sucks, but as a punitive measure even as you pointed out it is quite effective.
Absolutely - it serves as an enormous incentive for all responsible people who value their credit scores. It may not have any effect at all on the rest (the majority?) but then again it probably costs the collection agency little or nothing to issue the negative report, so why not shoot first and ask questions later?
I do recognize that they had trouble finding me because of the temporary address thing, but no one ever explained to me why I wasn’t contacted by phone (I provided my cell number to the medical center) or for that matter why they didn’t just charge my card, which they also had on file. But no, far easier to just wreck my credit and let me clean up the mess!
I don’t mean to be a jerk but to me this is what I would say to Credit Score Rating and its affect on my life: “F*CK Credit Score”. I pay everything with cash and my house will be paid off in 12/2007 (That is 8 years 5 months out of a 15 yrs fixed at 7.65% int. rate). It will be a long while, and I mean a long-ASS while before I buy another house so credit score is less important to me than having a date with a hooker. Like someone in this blog used to say: “CASH IS KING…”. The HECK with credit score. That’s for CHUMPS…
Poor credit can have an adverse effect on such things as car insurance rates, or even your ability to obtain a job in certain sectors.
As for housing, it has an enormous impact on your ability to rent a house or apartment (even more so in a tight rental market such as in the Bay Area), and with the exception of the past few years, an even greater influence on your ability to obtain a mortgage. Sure, maybe your house is paid off, but what if you have to move for some reason?
In short, your credit score may have little impact on your life until you need it, but then it’s all-important. It’s a lot like insurance in that respect.
Solution to many of the these problems is simple — just vote out the entire House of Representatives — that’ right, the entire House — everyone in the House is up for election in 2008 — when each of us pulls that lever in ‘08, let’s pick anyone except the incumbent — since the US Government is dysfunctional, and the House is arguably the most poweful part of the govenment, the results should be meaningful and dramatic.
Housing slump forces temporary closure of Weyerhaeuser mills
FEDERAL WAY, Wash. - Weyerhaeuser Co. said Thursday it plans to close seven saw mills in Washington and Oregon for two weeks because of low demand in the national housing market.
Mills in Aberdeen, Green Mountain and Longview, Wash.; and Dallas, Warrenton, Boardman and Coburg, Ore., will be closed from Nov. 19-23 and Dec. 24-28, Shawn Watson, spokesman for the Federal Way-based lumber and paper producer, told The Daily World of Aberdeen.
Watson could not immediately confirm how many workers would be affected or whether they would be paid for those weeks.
http://tinyurl.com/2cuyyj
I know you all are in bed right now, but I’ll post this just in case. Here is a link to a story about a man who killed himself because his City Council would not rezone his property, making it impossible for him to get a loan to help pay his debt. Very sad.
http://www.cnn.com/2007/US/10/05/owner.suicide.ap/index.html
wtf .. carrying a gun into a meeting? locked and loaded..
i think this guy had been thinking about it for a while but didn’t have the balls.. and was just aching to find someone else to blame it on, and deliberately set up an excuse to do it.
jeeze.. i read what i wrote and my assumption sounds so hard-hearted.. oh well, it’s not mine to judge.. he will be charged with taking a life and will appear before the Ultimate Judge who knows all the facts,