Willing To Wait In California
The LA Times reports from California. “Home values are expected to drop next year for the first time in more than a decade and sales will remain slow as California’s housing market continues to languish, the the California Assn. of Realtors predicted today. Leslie Appleton-Young, the state Realtors group chief economist, warned that even higher-priced markets, including Los Angeles, Orange County and the Bay Area…will start to show signs of stress, though to a lesser extent.”
“‘Higher-priced regions of the state will react more to affordability constraints,’ she said. Appleton-Young declined to offer any predictions for the state’s housing market beyond 2008.”
“In August, the Realtors group found that there were so many existing, single-family homes for sale in California that it would take 11.8 months to deplete the supply if no additional houses came on the market.”
“‘Now is not the time for homeowners to ‘test the waters.’ Only serious sellers should put their homes on the market in what will continue to be a challenging sales environment,’ said association President Colleen Badagliacco.”
The Orange County Register. “Many agents gathering Tuesday for the first California Association of Realtors convention in Orange County in eight years said their business has suffered.”
“‘Doubt,’ Corona broker Paul Catapang said describing the disposition of fellow agents. ‘Fear of the unknown. You don’t know what’s around the corner.’”
“Anaheim’s gathering isn’t as joyous as past conventions held during the heady days of the boom market, said Enrique Lizarazu of Lizarazu and Associates in Pasadena. ‘The party’s over,’ he said.”
The Orange County Business Journal. “Newport Beach-based savings and loan operator Downey Financial Corp. says bad loans will bring a $23 million loss for the quarter.”
“Downey said it would make an $82 million provision for credit losses. Downey said delinquencies and foreclosures were highest in Sacramento and Stockton and in San Diego County.”
The North County Times. “The number of single-family detached homes sold in North County declined from 613 in September 2006 to 398 last month, a drop of more than 35 percent.”
“The median for detached homes in San Diego County as a whole fell by 2.6 percent, to $550,000, compared with a year ago, according to the monthly North San Diego County HomeDex report.”
“In a softening market, changes in sales volume can sometimes foreshadow changes in price.”
“‘The median price doesn’t tell the whole story,’ said Robert Brown, an economics professor at Cal State San Marcos who compiles the report for the association. ‘Sales volume in the midrange has fallen dramatically, with some strength at the high and low ends.’”
“For example, sales of detached homes between $500,000 and $600,000 have been cut in half over the last year, he said.”
“Mark Oatman, president-elect of the North San Diego County Association of Realtors, said the report shows that there is some pressure on prices to fall further over the next few months.”
“‘Because of signs of lengthening time for a sale, people may be motivated to reduce their sales prices a bit,’ said Oatman.”
From MSNBC. “Delia Toothman once pursued the American dream of owning her own home. Now, she is living the American nightmare.”
“In just three years Toothman, a former Navy officer in San Diego, went from $18,000 in savings to $16,000 in credit-card debt. She once lived in a home she co-owned; now she lives in her father’s garage.”
“‘I feel like my life is ruined,’ she said in an interview, wiping away tears. ‘I only wanted a house. I wanted my own property.’”
“She left the Navy in 2004 and returned to San Diego at what turned out to be the peak of the city’s real estate boom. Fearful of missing out, she and her younger sister decided to buy a home together. ‘We just wanted to get a piece of land, something we could own, so we weren’t paying rent; we were buying,’ said Toothman.”
“Any talk of a housing bubble was dismissed.”
“‘I got pressure from the real estate agent and officer,’ Toothman said. ‘The loan officer was saying, ‘Oh, prices always rise on houses.’ … The thing, is get into the house and I can always refinance you after that into another loan.’”
“‘If you’re renting, you’re losing this much money, but the way housing prices are going up, it’s really a good investment and you get your money back in taxes,’ recalls Toothman. ‘I was convinced it was a good thing.’”
“In late 2005, Toothman decided to sell. But prices were already falling, and by early 2006, the condo was worth less than the outstanding balance of the mortgage, putting her ‘under water.’ Toothman’s real estate agent found a buyer who offered $350,000, $65,000 less than what was owed.”
“The only way she could sell was if the two lenders agreed to a ’short sale.’ The principal lender, Countrywide, agreed, but Wells Fargo, which held a second loan worth $82,000 rejected the terms because the lender would have gotten only $10,000.”
“Then the agent found another buyer, who also offered $350,000. This time, Countrywide said yes if Toothman would come up with another $10,000 to pay Wells Fargo more. But Wells Fargo declined the offer.”
“‘They figured I would make more money eventually, and they could take it out of me,’ said Toothman, ‘because if they agreed to a short sale, then they had no (legal) recourse to come after me for the $82,000.’”
From ABC 7. “Bay Area homeowners barely hanging on because of the mortgage crisis, turned-up on the doorstep of one of the country’s biggest lenders on Tuesday. The community activist group ACORN demonstrated outside Countrywide’s San Bruno office. Countrywide responded by locking its doors.”
“One of the protestors is Esthela Baldovinos who got her sub-prime loan through countrywide three years ago. ‘Nice opportunity to get a loan with no down payment,’ said Esthela Baldovinos.”
“She’s a single parent with nine children and she cleans homes for a living. Baldovinos bought her house with no money down and an adjustable rate loan starting at six and a half percent interest. It’s now up to almost 12 percent, making the monthly payments impossible. She’s called Countrywide for a loan modification.”
“‘They said I have no options. They want me to put the house for sale or short sell or just leave the house,’ said Baldovinos.”
The Santa Cruz Sentinel. “Has the bubble burst? That’s the question some people are asking, now that the Santa Cruz County median single-family home price dropped 8.8 percent in September, falling from $770,000 to $702,500.”
“Take a look at the other vital statistics for September, compiled by Gary Gangnes of Real Options Realty. Sales: 88 single-family homes — 11-year low. Listings: 1,337 — 11-year high. Unsold Inventory Index: 15 months. Of course, one month is hardly a trend. The drop could be an aberration. Could the market be poised for a rebound?”
“Gangnes isn’t sure. ‘Whether this month’s unsold inventory [index] is a trend or a spike remains to be seen,’ he said.”
“Watsonville repeats as the area with the highest index, 37 months, compared to 30 months in August. ‘Watsonville is getting hammered,’ said appraiser Bruce McGuire, calling it the fourth down cycle in his 32 years in business. ‘Every seven to 10 years, we go through a correction, then it starts up again.’”
“Foreclosure statistics show no letup as a steady stream of homeowners are missing mortgage payments and receiving default notices. According to the Santa Cruz Record, default notices have gone out this year to 664 homeowners in Santa Cruz County, 437 in San Benito County and 1,939 homeowners in Monterey County.”
“A total of 884 homes have been sold at foreclosure sales in the tri-county area, with the bulk of them in Monterey County.” “Michael Blomquist, formerly of Michael Scott Properties in Los Gatos, blames the rash of foreclosures on unconventional subprime loans, where interest rates adjust upward after two or three years.”
“The ‘most dangerous,’ Blomquist said, are the option ARMs, which have an introductory interest rate of 1 percent or 1.25 percent and an actual rate is 7.5 percent or 8 percent.”
“‘All sorts of sellers are in these products and their loan balance is growing $4,000 a month,’ he said.”
“Blomquist said he closed his mortgage office in 2004 rather than take the risk that lenders would require him to buy back loans made under false pretenses.”
“Aptos accountant Patricia Beckwith hailed the falling median. She had given up house-hunting in April because she felt asking prices were too high. ‘I decided my son and I deserve better than 800 square feet for $3,000 plus per month,’ she said.”
“‘Given the fallout of the mortgage industry, and the number of foreclosures, which I believe is just the tip of the iceberg, prices will adjust back to normal,’ she said. ‘I am willing to wait.’”
Interesting comments (with rate sheet imbedded). ex-nnmb, comments?
http://www.creditslips.org/creditslips/2007/10/hate-mail.html#comments
Yea, ex-nnvmtgbrkr touch that…I for one am having no part of it. But I will go as far as to say her analysis may be a touch off as in close but no cigar.
I just wrote a stinkin’ novel but the post vanished. My fingers are twisted. No way I’m going through that again. Hopefully it shows up.
And yeah, it’s more than a touch off. YSP used correctly can be a good thing. Like i said, hopefully the post shows up because I explain for those who scoff.
YSP is either a good thing, or it’s a bad thing. It all depends on who’s using or abusing it. Kinda like a handgun, if you will. It can be used to protect, or commit mass murder.
Rebate to the broker can save the borrower money if the broker is honest and is not out to give the borrower a reeming of a lifetime. Here’s how -
I felt a fair price for doing a deal was about a point and half. Now, if I charge that upfront to the borrower, on a 300K loan amount that’s $4500 tacked on top of the standard closing costs. Now what the writer in the article does is use a little exageration to fire people up. You don’t go from 6.5% to 9.5% just to get YSP. Take a look at this example from a rate sheet I got from a lender today. It’s rate quotes on a conforming 30yr fixed:
5.625% 2.000
5.750% 1.375
5.875% 0.750
6.000% 0.000
6.125% -0.500
6.250% -1.000
6.375% -1.625
6.500% -2.250
6.625% -2.625
6.750% -3.000
Now, obviously the numbers on the left are the interest rates, but the numbers on the right are the cost or YSP of that particular rate.
If you look at 5.625%, you’ll notice that it’s cost is 2 points. Now that’s 2 points charged to the broker. So if the broker was to give you, the borrower, 5.625% and still make a 1.5 points, he would have to charge the borrower 3.5 points up front (2 points going back to the lender, and 1.5 points in the brokers pocket.)
Now, look at 6%. You’ll see that it is at 0 points. That means no points charged by lender, and no points in YSP. This is what we call “par” pricing. In this event, in order to make the 1.5 points, the broker would have to charge 1.5 points up front in addition to the normal closing costs.
But let’s say my borrower wants to save himself $4500 from the 6% example. If you slide on down to the 6.375% rate you see it has a minus sign infront of it. That’s one of the ways the lender tells you that the points referred to are YSP. You see that at that rate the broker would recieve a rebate, or YSP, of 1.625 points, a little over 1.5. This might be advantageous for the borrower to consider. Why? The payment on 300K at 6% is $1798. The payment at 6.375% is $1871. That’s a difference of $73. So you would pay $73 a month more a month at 6.375%, but pocket $4500 that you would’ve spent at 6%. Now divide 4500 by 73, and you get 61. The reason I use this is that if you paid the $4500 for the 6% rate, it would take 61 months to pay for itself when compared the 6.375%. Using this kind of reasoning some borrwers opt for the higher rate with rebate.
Now, it doesn’t matter to me what route they take because I’ll make my point and a half regardless. The problem is that the dead-beat, Joshua tree deserving brokers will automatically charge as much upfront as they can as they try to make as much rebate as possible. This is an abuse of what it was intended to do, that is, give the borrower choices on how he/she wanted to spend their money. I’ve seen cases of brokers charging 2 points upfront and making 3 points on the “back” (YSP). That’s criminal! I’m sorry, and some here in the biz may disagree with me on this, there’s no friggin’ way anybody should make more than 2 points total on a deal, and I consider that a little high.
Greed and dishonesty…..that’s what killed the buisness.
Thanks, I’ll added that to my list of many things that I have learned from this blog.
Well written. I definitely learned from that post. Kudos to the wielder of the Joshua Tree!
Got popcorn?
Neil
I need to take time to proof read……my apologies to the Spelling Nazi.
I will likewise save and print out that post on YSP. I may shop for a loan sometime down the road and this post will aid me greatly.
Thanks Ex-Nnvmtgbrkr-you are a Godsend!
Someone posted a link to dishonest brokers looking foward to the bailout on a 2YSP with a back 3YSP.
I clearly remember the dishonest ones got clobbered, and I sent the memo off to several officials.
Good Job!
“‘I feel like my life is ruined,’ she said in an interview, wiping away tears. ‘I only wanted a house. I wanted my own property.’”
ROTFLMAO!!!!!
Toothman is exNavy. I have seeing servicemen and women get screwed by RE agents/and mortgage brokers. I bank with USAA, and they serve military and their families. i just wonder why she didn’t contact their mortgage folks…I can’t believe they wouldn’t have given her some straight advice and at least, better terms.
I agree. The strange thing is that military personnel are more likely to be preyed upon by the military. A few years ago there were congressional hearings on AEFES being more expensive than WalMart. Last year the military offered one of my sons a new car loan at 18%! His FICO was in the low 700’s with 50% down payment. Just greed with no additional benefits.
OMG Hoz! I can honestly say, but for one time, have I been exposed to the likes your son encountered. (Whole life insurance pandered by Non-Commissioned Officer’s Assoc–commander put a real quick stop to that nonsense!)
It’s true about AAFES. I found niche items to buy there. NO one can beat them on perfume. Most high end clothing is cheaper. Electronics use to be a steal, but that is not the case today.
Hoz,
Please tell your son about USAA. I cannot say a bad word about them. (Most don’t know about USAA, because they are not agressively marketed, another plus, for my couple of cents).
Best Always,
Leigh
If my father was a U.S. military officer, but was in the Naval Reserve, would that make me eligible for USAA? (I’ve never been in the military, but I am certified in civilian emergency response.)
Slim,
If pops had an account yes. I’m not sure about CER, but it’s free to ask! https://www.usaa.com/inet/ent_logon/Logon?redirectjsp=true
Also, open enrollment periods are not broadcasted. I’ll keep my eyes open, as we are there almost daily : )
Best,
Leigh
Hoz,
Composed an nice response, but to cyber heaven it went.
Main point–is your son aware of USAA (I have only the best to say about this institution)?
Best Always,
Leigh
Not sure, I will ask at the next Packers game. I called my local bank (posted minimum FICO for any loan consideration Trans Union 660), 4.95% no cosigner for son needed. Done.
Don ‘t know if this is still true, but USAA used to only be available to officers and dependents, not enlisted. I have it, as my ex-husband was an Army captain at some point in his career.
You are eligible for USAA if your parents have ever been USAA members or you are the child of USAA member now, if you are Active-duty (officers or enlisted personnel), National Guard or Selected Reserve (officers and enlisted personnel), recently retired or separated military personnel or an Officer candidate in a commissioning program (Academy, ROTC, OCS/OTS). Once you have been a member you are always eligible, I am pretty sure.
Me too Spike (and pray they’re safe).
You know what struck me as odd? The Air Force mandates financial councel at the first duty station (10 hours or so).
I assumed…ahem…this was a DoD policy.
Good night Irene!
Leigh
Sometimes I live in the city
sometimes I live in the town
sometimes I get a great notion
to jump in the river and drown
Irene, goodnight Irene
I’ll see you in my dreams
‘Tis my grams name : ) Her brothers would sing to her and make her blush.
Sorry for the lack of empathy. I got my schadenfreudelizer all tied in knots and momentarily forgot myself.
At least she wasn’t like a lot of other FBs.
“I don’t just want one, darling, I NEED one. My career is on a toboggan run of failure at the moment… I just need one. It’s the only thing that seems to mean ANYthing these days.”
Eddie (from Absolutely Fabulous)
A damn fine show! Too bad they are not making more episodes.
Have to agree M.B.A. Liked the show also.
Leave Her!
Ex’M,
My sympathy is soooooooo limited. Pulling the old “active duty b****s causes eyeballs to laser into hair flaming devices!
Do not want my nation to think this is the poster child for military service!
Curtsey,
Leigh
Hey ex,
happens to me as well, mostly because these sob stories are mostly just b.s. once you start looking at them more closely than a reporter.
But for servicemen and women, i do have a soft spot. They are serving their country in wartime (a lousy, unnecessary war, imo) and they deserve decent treatment. Many have high school educations, and may not be financially sophisticated.
USAA does right by military folks and their families…others, I’m not sure about. Pentagon Federal Credit Union offers high cd rates and it’s easy to join, but they push car loans and mortgages as much as any lender…
With so many greedy FBs and knife catchers to scavenge, why prey on servicepeople??
I would think she might have been able to qualify for a Cal Vet loan. I remember while in the Army folks in my platoon would use those payday advance places alot.
“In just three years Toothman, a former Navy officer in San Diego, went from $18,000 in savings to $16,000 in credit-card debt. She once lived in a home she co-owned; now she lives in her father’s garage.”
With her sterling judgement, I just hope that her old job WASN’T a weapons missile officer in the Navy
Or in Naval Intelligence
Leslie Appleton-Young, the state Realtors group chief economist, warned that even higher-priced markets, including Los Angeles, Orange County and the Bay Area…will start to show signs of stress, though to a lesser extent.”
Idiot meant “though to a HIGHER extent” these areas are in for an a**pounding.
“…to a lesser extent.”
CLICK!
That “lesser extent” must be denoted in the context of:
“In August, the Realtors group found that there were so many existing, single-family homes for sale in California that it would take 11.8 months to deplete the supply if no additional houses came on the market.”
I’m sure that will only make our mortgage and employment markets healthier. One of the contractors I know, who made out like a bandit, just announced he is taking a year plus sabbatical. He’ll review floor plans while his wife does her business from Idaho.
In other words, the smart builders are done. They saved their profits and will enjoy some rest and relaxation. Nothing wrong with that. (This guy built some great custom homes around 90274. And “custom” by the old definition, not DR Horton’s.)
And yes, there is a comment about the high end market implied in there…
Got popcorn?
Neil
The pervasive presence of popcorn odor from Neil’s Popcorn will interfere with “tenants’ use and enjoyment of the property”.
If that odor is in Belmont, Ca you could be in for arrest, fine, Horse whip, and stocks.
We are working on some crazy custom homes in La Verne. Doing the engr work on them at least. Houses the size of a football field. Its just insane. I asked the boss if these were to sell or personal and he said the owners are going to be living in them, not for sale. I kept wondering what kinds of cars would be filling the garages. 2 guest houses as well. Oh my…
I don’t understand where the term custom home came from for any of these huge developments. Just because someone pics a countertop or floor doesn’t mean anything. I guess we all drive custom cars then? Now I feel much better about myself.
“…gathering isn’t as joyous as past conventions held during the heady days of the boom market, said Enrique Lizarazu of Lizarazu and Associates in Pasadena. ‘The party’s over,’ he said.”
“…and then…it went dark”
I wish I was rich instead of cute!
I’d buy transportation for each HB to crash that party!
Weeeeeeeeeeeeeeeeeeeeeeeeee.
Leigh
If you’re cute, I’m rich
I’m a cutey for my hubby!
Snort,
Leigh : )
If your looking to throw your money away, buy a house
“Unsold Inventory Index: 15 months. Of course, one month is hardly a trend. The drop could be an aberration. Could the market be poised for a rebound?””
…again, ROTFLMAO!!!……..oh the comedy…..
“Of course, one month is hardly a trend.”
Er, pardon me, mister Realtor propagandist, but unsold inventory in markets I watch has been pretty much steadily rising for almost four years now (since early 2004).
“Anaheim’s gathering isn’t as joyous as past conventions held during the heady days of the boom market, said Enrique Lizarazu of Lizarazu and Associates in Pasadena. ‘The party’s over,’ he said.”
Sounds like they aren’t having zip-a-de-do-dah days anymore.
From Ben’s link:
Outgoing CAR President Colleen Badagliacco urged members to use the market slowdown to bone up on technical skills.
Translation: You all don’t know squat.
Also from the article: “The party’s over,” he said. “The newer people who got into it in the past five to seven years are scared because their income isn’t what it was for the past five to six years.”
No DUH! I have an aunt who is very good at selling Real Estate. She knows that during every downturn there are “Two years of no income.”
Ok… that’s when she travels.
Everywhere! Then when she can find properties worth investing in… She jumps back in.
The Jonny come latelies are in for quite a lesson. “How’s that Lexus treating you?” “What will you do now that your BMW lease is running out?” “The wife left you for the plumber?”
Got popcorn?
Neil
I have a vision of a loan agent dancing around an empty office with the lights turned off and an out of business sign on the front door. Unfortunately he still has the lamp shade pulled down around his head. The party’s over!
“‘Now is not the time for homeowners to ‘test the waters.’ Only serious sellers should put their homes on the market in what will continue to be a challenging sales environment,’ said association President Colleen Badagliacco.”
Wow… To actually hear a statement from CAR that is based on actual economic conditions. It amazes me how much “crap” we’ve heard from these people over the years. It’s plain ridiculous…
“Now is not the time for homeowners to ‘test the waters.’”
I was looking at Zillow today. There was some pretty funny “Make Me Move” listings. Zillow Zestime..$650,000, make me move price $1,200,000. There were actually few like that. Now, I don’t put much stock in Zillow’s Zestimates, but WTF, pricing at 1.5 or 2 times their estimate is just plain idiotic. Meanwhile, the A-hole seller is probaly all P’d off, that the phone isn’t ringing.
Sort of on/off topic, I am surpised that the multiple listing services aren’t “policing” the listings at this point. One would think that they’d want all of those stale, over-priced, aren’t gonna sell listings cleared out. I realize that the RE industry would like to keep prices high, but I would think that by now they would happily trade pricing for volume.
I figure that we have a rolling 11 months of inventory here in MA at current volumes. I am seeing very few houses going to sale pending/sold. It certainly isn’t the kind of volume needed to support the large number of re folks in the associations. I would they’d all be pushing the “testing the water” sellers out of the picture, in order to help the stats.
I am a trained facilitator.
I’ve often thought of putting a talking paper together and showing up (with a friend in RE) to these cheerleading meetings. I would do it for FREE. Toss the idea around with my friend and hubby, and they decided it’s best for me to keep breathing in the nice flow of oxygen.
But seriously, facilitators, by definition, are not stakeholders in the process. I would facilitate (using the flow chart process) input=buyer + output=sold home. And all the steps used to get to the output. The RE’s would do the work on charting the process, I would ask the right questions and document said chart. I oversimplify because my brain hurts right now : )
I regarded the statement as pure crap! Anything to keep the listings from exploding. This is the same person that said “qualify the sellers”. She justs wants the easy commission without having to work.
I apologize for posting similar below, your post had not yet shown up.
Yes keep inventory as low as possible until all the Realtors unload their own Investment Homes.
Hear that homeloaners? Your very sales agents might be screwing you out of your chance to bail. Its best to beat them to the punch and cut and run - before they pull down your comps any further.
“…recalls Toothman. ‘I was convinced it was a good thing.’”
“…But Wells Fargo declined the offer.”
“…and then…it went dark”
Daffy: “that’s… Dissssssssssssssssssssssspiclible!”
Don’t take this the wrong way…Ok?
I love cartoons! Our son drops by on occassion, they ran a Tom and Jerry marathon a few weeks ago, and we had a great time as dad, mom and son : )
I love your humor! Cartoons are fun! Hey, Bugs sure did teach tons of music to the…er…me : )
Best,
Leigh
“One of the protestors is Esthela Baldovinos who got her sub-prime loan through countrywide three years ago. ‘Nice opportunity to get a loan with no down payment,’ said Esthela Baldovinos. She’s a single parent with nine children and she cleans homes for a living. Baldovinos bought her house with no money down and an adjustable rate loan starting at six and a half percent interest. It’s now up to almost 12 percent, making the monthly payments impossible. She’s called Countrywide for a loan modification.“‘They said I have no options. They want me to put the house for sale or short sell or just leave the house,’ said Baldovinos.”
WTF?. She earns minimum wage, she has NINE freakin’ children, (she’s probably here illegally too) and yet she went out to buy herself a house.
SEE the morons that SERIOUS buyers had to contend with these last few years?. DEADBEAT speculators like this Baldovinos character that only served to drive-up home prices INSANELY thanks to their access to “free” money, while realistic savers like myself had to drop out of the RE market ..unable and/or unwilling to compete against these penniless now-suddenly-entitled PAUPERS.
Let ‘em all EAT SH@T now.
“these penniless now-suddenly-entitled PAUPERS.”
Amen, brothah. Amen. She had no downpayment, nada, so she has no skin in the game, and basically lived in a house and style she could never afford. Toss this broad a box of condoms and tell her to hit the road.
OMG…you guys are too much. Laughing so hard I’m in tears over here….
One has to assume the reporter had their tongue in their cheek while writing that. There’s no way in hell would anyone feel sympathy for that situation.
[We won't even go there about population growth!.............:-)]
But she’s doing a job that Americans just won’t do.
No, LOTS of Americans do that.
Oh, you probably meant cleaning…
You mean having enough kids to grow the population by a factor almost 100x in 3 generations?
This woman sounds familiar. I think she is the one in a story a week or so ago…9 children, 7 at home, husband left her because it was “too much to handle” or “couldn’t take it anymore” (same thing).
Ahhhh…I found it. Here you go. The original story:
http://www.smdailyjournal.com/article_preview.php?id=81097
BayQT~
Baldovinos; quoted from the link you supplied:
“I need time to work out a loan modification with my lender so that I can stay in my home. We want the South San Francisco City Council to do everything in their power to help people like me stay in our homes,” she said.”
Hey honey, that ALREADY exists. It’s called WELFARE.
Damn, that story is too funny. The press room must have had a good laugh when that story went to press. Nine kids, no skin in the game, the list goes on. Further evidence that there is a TON of fraud out there that has not yet come to the surface. I’ve been hearing some stories lately from people in the east bay, and they are not pretty. How much of the appreciation was a direct result of these unqualified fraudsters, and how much do prices have to fall now? My guess is that it was and still is a $hit load. Nine kids! Geez, I still can’t get past that idea. Who does that in these modern times? The marginal bay area cities will be hammered, and the prime ones will get hit as well. Lots of people of all income and credit stripes got in over their heads.
I’m a little surprised by these comments - OK it’s crazy to have nine kids. But, how does that lead to the assumptions she’s illegal, on welfare, on SSI, trashed the house, etc.?
I don’t see Muffy and Bitsy using their vajayjay as a clown car, do you?
BWWWAAAAHHHHHAAAAAA Nice M.B.A.
Hiya doin’ CA Guy!
Guess what? That condo conversion near me in Dublin (Village Park…used to be Cross Creek Apartments) used to have 5-6 for sale signs out on a regular basis….for several months even. One of the signs was one that all of a sudden grew a FORECLOSURE attached sign. It’s the only for sale sign standing now. Of course, that doesn’t mean that the others sold.
Background: These condos started up at $440k back in April, 2005. Quickly went to $560k. When the decline started, they went down to below $440k.
The one in foreclosure? $389,900
BayQT~
Hey, if Obama gets his way with Arnie, all 9 of her illegal kids will now get financial aid for college, too. Ain’t working hard grand??
http://www.news10.net/display_story.aspx?storyid=33725
If she dropped those kids while living in the US, doesn’t she get Aid for Dependent Children? I guess that’s motivation to keep dropping them. Claims she’s a house cleaner…I doubt that. With nine kids, and 7 at home, I bet the place is a wreck, and her income in whatever she hustles under the table and her ADC check.
She’s a real poster girl for ACORN.
I’m sure her and the kids are all on SSI…the biggest federal welfare racket imaginable. If so, she is probably making close to $8,000/month tax free.
“‘Nobody should lose their home, nobody,’ said Mayor Rich Garbarino.”
Great thinking, Mayor Garbarino. Why should people have to make those pesky mortgage payments every month? Let’s just let everyone own a home, whether they intend to pay for it or not.
What’s wrong with the elected officials in this country? he sounds like that moron in New York who wants to give licenses to illegal aliens. You should be able to recall these a$$hats by mailing in a suffcient number of postcards.
Once in awhile, I check Zaba, because some of these names seem unbelievable. If you care to peek @@
http://tinyurl.com/28p266
This chick has three addresses in the same area?
“The only way she could sell was if the two lenders agreed to a ’short sale.’ The principal lender, Countrywide, agreed, but Wells Fargo, which held a second loan worth $82,000 rejected the terms because the lender would have gotten only $10,000.”
The result of stupid lending. Looks like the “80’s” vs. the “20’s” are going to battle it out until everything goes to foreclosure.
Oh, the 20’s are screwed BIGTIME because the priority lien belongs to the 80’s holders. Whatever is left over from lienholder #1 THEN goes to lienholder #2.
This will be FUN.
they (WF) should have taken that 10k, it will be their best offer
How would that be the better choice. They can go after her in collections. Attach her wages, etc. They can also write off 83,000 against gains. Besides she said so herself that she dismissed all advice about the housing bubble.
So a question looms: who holds the most 20 paper? At one point I thought a I recalled WF. True?
Bank of America
Good. I’m looking forward to the day when BofA goes under (actually, I bet they will get bought out by someone, then keep the name, as had happened earlier).
in theory, I back you (I hate BoA), but in reality, not sure of the secondary ramifications of such a big bank w/that kind of problem.
ouch.
Do you have a source for that info?
Please don’t shoot the messenger…Humbly, Leigh
http://tinyurl.com/2yhrnb
Is this stuff papered together? What’s the current discount rate? If it’s selling for more than 10% it’s too high.
Alludes to commercial RE, but I suspect the same is true for residential.
WARNING: lots of terminology…snort!
http://tinyurl.com/29y62t
Leighsong: stop snorting!
or curtesying!
Smiles,
M.B.A.
Would you rather I beller?
Curtsey with a snort and…er…well, when one curtseys and snorts, er…other bodily functions may actually…er…bubble; yeah! bubble.
Er…ya just can’t make this stuff up!
Smiles, (that too can lead to…er…leaking eyeballs).
Leigh
“Downey said it would make an $82 million provision for credit losses. Downey said delinquencies and foreclosures were highest in Sacramento and Stockton and in San Diego County.”
from Assoc press
“Downey Financial relied heavily on originating option adjustable-rate mortgages — loans that allow borrowers to choose a payment option each month that includes a minimum payment, interest-only payment or fully amortizing payment. Downey Financial severely cut back on originating the loans early in 2006, and has yet to find new products to help grow its assets, Gast said.”
Considering how Option Arms are booked on statements, Downey had better hope for a Federal bailout. They may not be BK, but with only 83M in reserves they are not healthy. Their NLB is clearly negative.
Because of the info I found on this blog earlier in the year, I’ve been short Downey since March. I knew it would be an up-and-down ride, but it looks like Downey may be finally starting to unravel.
people often wonder why I have been so obtuse at work, some wondering why the “daze”….
the confusion is powerful and imbedded in the psyche, internals struggle with the reality of the programming, the old models just dont seem to work. Down is up, Bad is Good…..
sleeping in fits of frozen sweat, waking to the train horn through the rain in the dark of night……..
HOPE NOW…….this is not a cry for help, its a command. The federal government prefers inflation, yet it tells the sheeple, goldilocks……..a fable, written for the middle masses of debt laden consumers, wasteful days spent “working”…..
I cant shake the angry fear, and get back to “normalcy”….why?
“‘The loan officer was saying, ‘Oh, prices always rise on houses.’ … The thing, is get into the house and I can always refinance you after that into another loan.’”
This is probably the second most repeated line in HBB infamy. People are such idiots to believe it.
Especially people who got in with an I/0 payment option ARM w/ 1% teaser rate!
what I dont understand is, so what if I refinance 10 times, I still cant afford the house. didnt these people do any research or ask simple questions before a huge purchase like a house. unfreakin believable
yes, they asked the simplest question of all, “how much per month?”
:), your propably right, I wonder why they didnt ask if this payment would be the same for 30 years?
“‘Now is not the time for homeowners to ‘test the waters.’ Only serious sellers should put their homes on the market in what will continue to be a challenging sales environment,’ said association President Colleen Badagliacco.”
’serious seller’ = one who is willing to ‘test the waters’ by dropping the list price to a level where a buyer is forthcoming
“Any talk of a housing bubble was dismissed.”
Words that should live in infamy.
munch munch munch
(Talking to an ex-FB/REIC). “So you thought I was an idiot talking about the bubble, eh?”
“Well Mister, Who would have thought…”
“You didn’t think! AND don’t shine my sock! I have an event tonight and these shoes must shine like a mirror.”
Got popcorn?
Neil
ps
tangent, the shoe shine booth at DIA, concourse A is pretty good.
“‘They figured I would make more money eventually, and they could take it out of me,’ said Toothman, ‘because if they agreed to a short sale, then they had no (legal) recourse to come after me for the $82,000.’”
Exactly! Banks aren’t going to be to quick to just forgive and forget. Also, they may not be able to due to the loan agreements, docs, etc.
I have to believe that the banks are thinking that many people are just looking for a parachute/easy way out. ShortSale, Deed-in-lieu, etc. I also doubt that the lenders want to have to go to the investors and “explain” all this crap, which would just do wonders for trying to sell them more crap in the future.
“I have to believe that the banks are thinking that many people are just looking for a parachute/easy way out.”
They looked for an easy way in…now they are looking for an easy way out.
Exactly. EZ in, but no way out. “Come into my parlor” said the lending spider to the FB fly.
NAR confession,
“a little to late, tens of thousands will loose their homes”
California Association of Realtor chief economist Leslie Appleton-Young had a confession to make at the annual forecast lunch, or as she put it “an apology of sorts.”
Two years ago, amid a red-hot market, her forecast dismissed fears of a bursting California real estate bubble and called for only modest sales declines.
Two years later, the state’s seen a dramatic sales drop. In August 2005, the cyclical peak, sales ran at an annualized rate of 650,000 homes. By year end 2007, Appleton-Young foresees the sales rate under 300,000.
“We’ve had a fundamental change in the mindset of the buyer,” she says. “There is no reason (for a buyer) to act.”
Especially, deep-pocketed buyers. This year to date in California, sales of homes above $1 million are about flat vs. 2006. Sales under that mark are off roughly 24 percent.
That trend is why the statewide median price is still showing slight gains, as pricier homes pull up the mid-point of all sales prices. CAR expects statewide prices to fall 4 percent in 2008, the worst since 1993.
“This was more fun three years ago,” Appleton-Young told the group as her forecast ended. “But we need to deal with reality.”
ocregister.com
It’s just further proof of this country’s decline into 3rd Worldship status. All the ‘experts’ here LIE to us thru their teeth with abosolutely no remorse. The NAR has been BS’ing the public about the RE situation for YEARS now. Anyone tuned into REALITY (yes, the whole 32 of us) noticed it right away, what with the doctored stats, the skewed self-serving market forecasts etc.
Greenspan also said one thing while in office yet NOW is touring the globe, giving conferences where he CONTRADICTS all his previous policies, comments and forecasts.
Wall Street is manipulating the stock market & US economy so BLATANTLY that one has to wonder if the whole Ponzi scheme isn’t about to blow-out at any moment, driving the US economy -along with the dollar- to SUBMARINE depths.
Even our president is constantly BS’ing the public on his reasons for going into Iraq, the cataclismic spending of his administration and his apparent disregard for democratic institutions.
I sometimes wonder if the next home I buy shouldn’t be ..in ANOTHER country.
Dan: your comments ROCK! Right on, 100% correct. Don’t get me started on Bush and Greed-scam. The realtors are a joke. Charles Ponzi would be so, so proud of the work they have done during the last decade. Submarine depths: the perfect descriptor for where the dollar is headed. I spent four years serving in the military, and today I am ashamed of what we are fast becoming. You said it, 3rd world status.
Amen buddy!
amazing…
why are so many people feeling these things…..are they
(ill describe myself, who has the same feelings)
Caucasion American Indian
College Educated (Masters)
Business Owner
Low debt to Income
Moderate Assets
Children
Scared
Angry
“This was more fun three years ago,” …and Les, old girl, that’s the reason so many people are being financially gutted today. You thought a home purchase should be, could be fun. And like any 16 year old playing wrestle games in the back seat, that fun has enormous consequences.
Home buying should be as serious as death and taxes, and you saw ‘fun’. Does it really help to know you’re not legally liable for useless, dangerous spin you handed out? Or do you wonder why you blinded so many for so long?
“She’s a single parent with nine children and she cleans homes for a living. Baldovinos bought her house with no money down and an adjustable rate loan starting at six and a half percent interest.”
She got the loan from Countrywide. Nice work Mozilo. If it wasn’t for your leadership at Countrywide, single moms with nine kids could never own homes. The community owes you one.
“The community activist group ACORN demonstrated outside Countrywide’s San Bruno office. Countrywide responded by locking its doors”……….and laughing, pointing and displaying various fingers at the demonstrators, saying na na na na na and other explicits, and lounging in the indoor tanning booths.
Just wait until Countrywide responds by going out of business
I’m a law librarian at a law school in southern california. I just checked the messages on our reference desk voice mail and found this one: “Hi, this is X, I’m a real estate broker and I’m trying to meet the needs of a couple who are moving to the area. We were wondering if you might consider selling your house.” (Or words along that line.)
This really puzzled me. I mean, our outgoing message identifies who they’ve called. The only person I thought it could possibly be for was our director, but he was busy at the moment. Then I thought, how the hell could they need to be asking people to sell their houses with the glut of houses on the market? So I decided to call them back.
He wasn’t in, but I spoke to the secretary and she said it was an auto-dialer (it sure didn’t sound like one!) and she would take our number off the list. I said, “I can’t imagine you have to cold call people to find sellers with the glut of houses on the market.” She said, “Oh yeah, we do.”
I mean, shouldn’t he be out there trying to drum up buyers, not sellers???
If you get 1 sale for every 15 listings and all you had to do was put it on the MLS, it would be prudent to get as many listings as possible. Let the buyers realtors work. As the selling realtor, 50% commission is outrageous.
..but that means that they’d have to bake cookies for all fifteen open houses each Sunday..or they could serve stale cookies to go with the stale listings.
$30K (50% comm on $1M) buys a lot of Oreos (admittedly not as much chocolate chip cookies due to chip inflation).
They could put up a “Sunday Salesman” (mannequin with a notepad - fill in your name and contact number) as at Wisconsin auto dealers (no cars allowed to be sold on Sunday). Certainly no less intelligent and possibly more attractive. LOL
He’s looking for rational sellers. Not the ones who believe yesterdays prices are still the norm. That’s whats mostly on the market now. With all the MSM reporting the chances of a seller being beaten up a little bit in regards to price expectations makes his job a little easier.
“Has the bubble burst? That’s the question some people are asking, now that the Santa Cruz County median single-family home price dropped 8.8 percent in September, falling from $770,000 to $702,500.”
********
The answer is “oh, yes”.
And there’s more of that to come in Santa Cruz County over the next several years. For some inland places there it may get as ugly as the situation will be in the Central Valley.
“Now is not the time for homeowners to ‘test the waters’.”
That is right Ms. Colleen Badagliacco, let ‘em go into foreclosure first. Anything to try to keep inventory from exploding. You are just late to the party. “The bigger the bubble, the bigger the bang will be.” Mr. Marc Faber
She’s a Bad Act.
“test the waters”…Look …Dolphins ..hee hee
a little JAWS music in the background please
“But the two agreed to split the monthly payments of $2,400.
For a year, Toothman struggled with her half of the payment. Her monthly take-home pay was $2,000. She started eating at her savings to pay the mortgage.”
Here’s all you need to know about the Navy girl story. Her half of the mortgage was approx. 60% of her take home pay. This left her with 800 per mo… Gas, Food and Utilities… She didn’t qualify for the 360k she was quoted. The most this lady qualified for was somewhere between 100 to 130k if that. How did she figure she was going to pay that note before signing up for it? She was in the Navy for pete’s sake. So I know she’s at least familliar with basic math. No one’s fault but her own. Why do they waste space with these kind of idiotic sob stories.
Agreed Mr. Income. This is what galls me. I am no Einstein, but come on. A little math please. Generally speaking, figure the loan and 2X the loan for 30 years’ interest. Ergo, 300K home will cost you 900K over 30 years.
Now take that 900K and divide by 360. You could also take 300K and divide by 120, which gives you 2500/month, just on the P&I.
People just don’t get it. ARGHHHHHHHHHHHHHHHHHHH!
I think it is safe to say that this housing (Credit Bubble) was/is the largest snake oil scam of all time. Everyone, well almost everyone, thought this was the quickest, most massive, get-the most-rich scheme of all time.
Too bad it isn’t working out that way now. Time to pay the piper, or in amny cases the mortgage and/or HELOC!
“I think it is safe to say that this housing (Credit Bubble) was/is the largest snake oil scam of all time.”
Absolutely, just like the amortization schedule that goes with a 30yr fixed is like indentured servitude. Sure, it allows you to get in now, but it is almost impossible to pay it down quickly if you get in at over 20% or so of gross.
Ms. Toothman did not get out by the skin of her teeth.
Gretchen Morgenstern excellent on subprime on Terry Gross right now…
Aw, dang. I missed it. (I was out for some cycle-therapy. Had a good ride too.)
“you get your money back in taxes ”
Huh ? Then you’d be getting free housing AND a free ATM/bank account.
Old mantra: Don’t trust anybody over 30
New mantra: Don’t trust anybody under 30
“Trust everybody, but cut the cards.”
Finley Peter Dunne
“Trust in Allah… but tie up your camel”
LA Times: “The city of Los Angeles and homeless advocates announced today that they had reached a legal settlement in which the city conceded that it cannot enforce a 1968 law that prohibits people from sleeping on sidewalks.
The deal means that homeless people across the city will be allowed to sleep on sidewalks from 9 p.m. to 6 a.m. as long as they do not block access to doorways or vehicle access to driveways.”
Yeah…..this should help keep those prices up in LA……..BAHahahahah
Egad I can see it now mass shopping carts in Beverly Hills on Rodeo Rd. I’ll be looking for the day.
Good. That means that evicted FB’s will still be able to see their foreclosed homes from the comfort of the sidewalk right in front of it.
Dan,
If I buy their foreclosed home, I’m also purchasing a large dog that will get to play on the sidewalk too.
Bwaa haaa haa!
Neil
Geez you guys, this thread isn’t even funny. Honestly, every day I see more and more elderly, clearly not “deranged” (although I have empathy for them too), working joes on the street. Our country is becoming third world so for all your jokes about the homeless, here’s hoping the smart savers amoung us here don’t meet the same fate in 40 years. Sorry for the rant….but come on.
Disclaimer…this is not a joke.
Sad, true, and the worst part:
drum roll……………………
Many acted irresponsibly. (Sorry, even elderly, bless my grams soul…never trusted a bank and talk with her 90 yo person daily! er…almost).
Point is many mean people exist in all age groups. Please don’t tell me that older are vulnerable vs younger are inexperienced?
That is a grey area, and undefinable. Back to the bubble, oh, bubble.
Yes, victems are as they do…a few sweeties…far and few.
Admittedly clueless,
Leigh
P.S. Sometimes bad things happen to good people, and sometimes good people step up : )
No need to purchase, Neil. Just come on over to the rescue and we’ll set you up with a nice big dog with shiny white teeth.
homeless advocates
When did this become a career choice??
there is only a handful of “worthy” occupations for crunchy granola super-lefties. I think that is one in their minds.
Liberal arts degrees at work - paid for with (y)our tax money.
JimAtLaw - seeing any increase downtown?
Hollywood Walk of Fame should be popular…..surrounding cities will be busing em in by the truckloads…..Hmmmm….which star should I sleep on tonight?
“Downey Financial relied heavily on originating option adjustable-rate mortgages — loans that allow borrowers to choose a payment option each month that includes a minimum payment, interest-only payment or fully amortizing payment. Downey Financial severely cut back on originating the loans early in 2006, and has yet to find new products to help grow its assets, Gast said.”
Assets = Loans that pay
I think 80% of Downey was Option Arms.
If they are losing money on Option Arms with current accounting rules, they are toast.
“If they are losing money on Option Arms with current accounting rules, they are toast.”
If they kept the mortgages. Probably they sold them to a conduit, or, more likely, to a lender like Countrywide who, in turn, sold them to a conduit. Probably dying from lack of cash flow instead of loan losses.
Hey, anyone know whatever happened to those 40 and 50-year mortgage plans that where being offered towards the end of the RE frenzy ..in an obvious attempt to stretch out the bubbly a little longer?. I remember seeing some ads for these ridiculous loans but never learned if they ever became popular or successful.
Have you ever looked at the AMORT schedule for a 30yr fixed? I did one in Excel and plopped in $100k, $200k, $300k, etc. Once you get past $200k, the numbers get really ugly. If you stay between 20% - 25% of gross, there is some decent money available for pre-payments. At 30% plus, forget pre-paying much.
I can’t imagine what the 40 or 50 year schedule would look like. Maybe that’s why Microsoft allows for 16,000 rows….
The nice thing about this crash is that if you want to buy and you are saving your money, and your future home is modest and energy efficient, you might be able to just pay cash.
Cash…now you’re talking my language.
A home is an abode dang it!!
What’s this investment thingy?
Ya just can’t make this stuff up! : )
Leigh
WARNING: Property taxes, and imminent domain laws.
Anybody suffer thru watching ABC’s “Caveman” last night? The caveman were talking about buying instead of “throwing away money on rent”. “Carpoolers” was even worse.
Leslie Appleton-Young, the state Realtors group chief economist, warned that even higher-priced markets, including Los Angeles, Orange County and the Bay Area…will start to show signs of stress, though to a lesser extent.”
when has this shill ever been right?
Show signs of stress? How about a crash!!!!!!!
I’m seeing homes in the nicest areas of north OC for RENT in neighborhoods that traditionally had almost 0% rentals, like Sunny Hills, Coyote Hills, Placentia and Yorba Linda. The rental fee?. Oh, they’re asking anywhere from $3500/MO up to $5500. Basically in other words, whatever the NEW adjusted mortgage payment is on the POS right now.
Where’s Neil?. I’m making more popcorn.
OMG!
Please (praying to baby Jeebus) let me rent my POS to cover PITI + HOA!!
Appologies to the baby.
Leigh
munch munch munch
It was a busy day. But I’m finally catching up on my blog reading.
If the CAR is admitting stress… the dam is near breaking. Oh… it is isn’t it. Sadly, this downturn will still take years.
Got popcorn?
Neil
“‘Because of signs of lengthening time for a sale, people may be motivated to reduce their sales prices a bit,’ said Oatman.”
A bit? Ha. Oatman then good luck selling. HOW ABOUT ALOT!
“Mark Oatman, president-elect of the North San Diego County Association of Realtors, said the report shows that there is some pressure on prices to fall further over the next few months.”
“‘Because of signs of lengthening time for a sale, people may be motivated to reduce their sales prices a bit,’ said Oatman.”
“Surfs up a bit,” Oatman said, as the Tsunami rolled in.
And I’m not missing a thing
Watching the full moon crossing the range
Riding the storm out
Riding the storm out
The unplugged version: http://tinyurl.com/ywu9ct
mrktMaven: very nice on M-Audio speakers! REO “Riding the Storm Out”
Got an email from a Utah acquaintance today. Not a friend, per se, she’s too religious and cheery AND she became a realtor a few years ago. Gaaah! You are dead to me, dead, I say!
Anyhow, she said she is looking for a new job, said things are really slow, of her last three closings, two sets of those buyers couldn’t get loans when they came to the table. The thing is, this person is the most insanely optimistic, Pollyanna- on-Ecstasy, denial prone human I know, and if SHE says real estate is getting slow, then, wow–Utah is toast. All of it. Better start praying that Baby Jeebus will just teleport the whole state to Heaven, ’cause otherwise they’re doomed.
Actually, I’ve been praying for that for years, just because I’d as soon as not have that annoying Utah hanging around. But not when I’m visiting there, of course. After.
Lol. Let’s pray He takes Arkansas along with it.
and Tennessee
WTF? These are beautiful states to hike in.
I know someone who bought 20 Arkansas properties early last year who would, by now, no doubt agree with that..
20? Are you serious?
i am serious… the plan was to put together a set of similar rental/investment homes, take a slight negative cash flow but retire on the huge appreciation in 5 years or so.. guaranteed.
vacancies/loss of income reared it’s ugly head almost immediately since this person had almost no experience in the landlord game, and none at all with Arkansas, being from a state a thousand miles away.
I have heard nothing since last year. Assuming it’s not “different” in Arkansas, a saving grace may be that it was all arranged as an LLC and personal bankruptcy may be avoided… depending.
wow. just wow.
casey serin-like in foolishness…
I would shoot myself if I had the courage! (I lie).
Everything to live for, except the stupidity of the ignorant! Alas, I take comfort in the sanity : )
Gawd, let the law(yers) divide fools.
grrr. Rather be swallowed alive by (fill in your favorite carnivoire) by an alligator!
“In a softening market, changes in sales volume can sometimes foreshadow changes in price.”
I believe what we are seeing is the consequence of demand falling off the cliff (due to tightening credit standards, credit crunch, subprime implosion, etc) juxtaposed against myriad clueless sellers who still think they can get 2005 prices for their used castles. This is why the steep decline in sales shows up before the big drop off in price.
I agree. There used to be a game when I was a kid, “Crack the Camels Back” …or something. It was a little plastic camel with a backpack and players took turns piling ‘logs’ onto it until its back ‘broke’ under the accumulated weight.
THAT’S exactly where we are right now. Loading on the last few logs.
which gets me thinking..
Right now, declining sales is due only to genuine economic pressures while there exists a continued willingness to buy.. basically, credit is tight. This stage will last quite a while.
Stage 2 will not be due to economics but to a socio-psychological aversion to investing and/or owning real estate.
One of the first “expressions” I heard when I moved to the USA from the UK was, “There is no such thing as a free lunch.” I suppose the “expression” comes from all the so-called give-aways you hear about in the USA. Like a free t.v if you just come and look at a time share plan or a Hawaiian vacation if you come and look at the RV’s on a RV lot or a $100 radio (which was made in China and cost $2) just for checking out the latest auto, etc.
Anyway, I had never heard the expression before because in europe/UK there never was a “free lunch!” When I left, there was no such thing as an “All You Can Eat” restuarant either!
The phrase really stuck in my mind after someone (American) explained to me that if some business entity offers a free lunch you can be sure it’s going to cost you more than the free lunch at some point.
Now a bunch of protesters turn up at CountryWide’s offices in the Bay area to cry over the stupid mistakes they made. One of the protesters is Esthela Baldovinos, who states to the tv camera, “It was a nice opportunity to get a loan (for buying a property) with no downpayment.”
Forgive me if I’m wrong, but isn’t that a “free lunch”? And it seems that these people who accepted the free lunch are no paying the consequences. She has a foreign sounding name so I suppose, if she IS foreign, she didn’t have an American friend to clue her in concerning the hazzards of accepting a “free lunch”. If she lived in the USA for longer than a year and she had heard the “No free lunch” expression, I have zero sympathy for her predicament - or anyone else who took out a 100% + loan
“…before because in europe/UK there never was a “free lunch!” When I left, there was no such thing as an “All You Can Eat” restuarant either!
I can only assume that in the UK…you’re country doesn’t have anything that resembles… “Wall Street”… in the US of A
LOL.
London has replaced Wall Street.
When I left, nearly 35 years ago, hardly ANYONE invested in stocks except the upper middle class so the workings of “The City” (as they now call it) was known only to a limited few. So the answer is, NO, There was no Wall Street. However, as Hoz pointed out, that’s changed a lot. I know hear Brits with working class British accents on the British financial t.v shows who seem to be in top positions in, “The City.”
Also, as Hoz pointed out, London is the major financial money center these days. Not New York. Money from all kinds of sources (some not legit) pours into the UK. However, the property bubble there is as bad (maybe worse) than here and the Brits are in debt even more than Americans. The difference where property is concerned, is the UK doesn’t have the land mass (for building) which the USA does so property will always be expensive now that the world has become global and the oil sheiks, Russian mafia, Chinese and Japanese businessmen, etc, like to be based in London.
Another thing happened to the UK. It’s now taken the title of the world’s melting pot away from the USA. You can go into areas of London and think you were in Iraq or Pakistan. I don’t like it and I much prefered the way it used to be - but that’s the way it is.
Mike reading your posts I imagine I am hearing you talk in an (I assume) impeccable British accent. Of all the bloggers, you are the one with the most distinct written voice that flows as if unasked into spoken voice. I love it. Thank you.
PS: Are you some kind of lecturer?
She is a single mom with nine children. Mozilo needs to go to hell for that one. Preying on single moms is inexcusable.
IMHO ,at some point during the housing boom ,boiler rooms were working overtime getting anybody and everybody to buy real estate . The investment pitch of leverage was sold along with the “just refinance later ,real estate always goes up “.The talking points of the ponzi scheme were used Nationwide and the MSM and advertisers endorsed the real estate myths .At some point the fraud in lending skyrocketed when it was getting harder and harder to find qualified buyers for the good old real estate ponzi scheme .
There was no excuse for lenders to breach their duty to prevent fraud regarding commissioned salespeople and their borrower cohorts .
Preying on anyone that really didn’t qualify for the loan was a great evil . The single mother with the nine kids didn’t qualify for the loan and the lady who bought the condo with her sister didn’t qualify .Was it right for the REIC to lie to their fellow man/women and lure them into committing fraud for a perceived gain in the future with all the real estate myths and leverage con games . The NAR had DL being the biggest cheerleader of them all ,getting free press all the time .Every bit of feed back the public was getting was a brainwashing .People were walking around like drones repeating the REIC real estate investment cheerleading myths .The housing boom was the biggest mass brainwashing of a public that I have ever witnessed .
The United States of Subprime
Data Show Bad Loans
Permeate the Nation;
Pain Could Last Years
Today’s WSJ: http://tinyurl.com/yntm9t
i think the phrase simply proposes a basic universal law. Nothing is free.
Some things may seem to be free from some point of view.. but perhaps payment is only delayed..
Or, perhaps and more often payment is not “in kind”. The thief who steals money may never be caught, but he must look over his shoulder for the rest of his life, and perhaps lose sleep over worrying about being caught, etc.
And so somehow, somewhere, at sometime the universe collects it’s due payment for everything.
No free lunch…mum use to say, “Do unto others as they do unto you”.
I remember crying, little pathetic Catholic girl, her mocking gawd. “Mum”, I’d say, “Do unto others, as you would have them do unto you”.
My mum was a teaser and did not bow before any gawd, though she brought her children up to follow commen sense. Religion, back in the day, was just good common sense for education.
Laughing at the memory…thank you!
Leigh
–
“Only serious sellers should put their homes on the market in what will continue to be a challenging sales environment…”
Yeah, 2/3 of home listed locally have been on the market for more than a year! State-wide, I would guess 1/2 have been on the market for more than a year. Some kind of “serious sellers.”
They should start charging a monthly fee for the listing! That may be the only way for 75%+ of the Realt-Whores to survive in the business.
Jas
Wow! Jas, I’m speechless.
Thank you for the timing…I wasn’t sipping water at the time, or I’d need to change my shirt AGAIN!
WOW!
Leigh
Well, we all know how much people like to casually put their home on the market. Bake cookies, and invite over lookie-loo neighbors to peak in all of your closets.
Its definitely denial extreme. Charge them for monthly listings! That will get the prices marching down. Heck, charge all sellers a monthly rate. That’s fair in the long run!
Got popcorn?
Neil
Outrageous and insanely stoooopid:
“‘All sorts of sellers are in these products and their loan balance is growing $4,000 a month,’ he said.”
A TRUE VISIONARY:
“Blomquist said he closed his mortgage office in 2004 rather than take the risk that lenders would require him to buy back loans made under false pretenses.”
“‘All sorts of sellers are in these products and their loan balance is growing $4,000 a month,’ he said.”
I guess this qualifies under the heading of: When Less Is More!
4 grand growth per month, ouch!
Just shoot me.
Somebody might enjoy this…
A lady called me today inquiring about my car for sale. She willingly divulged that she couldn’t buy a new car due to poor credit and her inability to pull MORE equity out of her house.
Well, well, well…
Welcome back to planet Earth
Oh, by the way, not one of three other interested parties had any cash to put towards the sale. Looks like I’ll have to drive my paid off “beater” for a while longer. How will I possibly survive?!
So, how were they planning to pay for the car?
Clue these folks in, if you haven’t got any money, you are not in the market to buy anything.
You’ll like this one…
http://losangeles.craigslist.org/sfv/apa/445585797.html
cats are OK- purrr
dogs are OK- wooof
snakes? Sure! OK! hissss
how ’bout my pet tiger? OK! growl..
he’s discriminating against my gerbils! flag him!
seriously, anyone WANT TO LIVE WITH AN FB? Can’t imagine anything worse. What a fool. btw - I don’t see a stick of furniture there… hmmm…
right about now s/he probably lays awake in bed at night (or on the floor in a sleeping bag) and thinks.. “I wonder what the going price is on recycled carpet padding.. there’s gotta be at least 1000 square yards of it in this joint.. Or the patio bricks.. i heard used brick wholesales for like 90 cents each or so.. lets see.. 20×30 is 600 square feet.. about 2.5 bricks per foot.. it’ll take me all day to pull those up..
What sort of sound do alligators make?
Munch, munch…
(swiping hand with long natural nails through air)
Meeooow.
a loan signing with the average new home owner..
Hit me! you’ve got 20 showing! Hit me! you’ve got 20 showing..
name the movie! first one gets one of my left over open house cookies.. the kind ones
$353million derivatives loss by “golden child” trader, aged 26…
Oct. 10 (Bloomberg) — The Calyon trader fired last month for alleged unauthorized trading that led to 250 million euros ($353 million) of losses said his bosses knew what he was doing and considered him a “golden child” of the New York office.
“There was nothing deceptive or rogue,” Richard “Chip” Bierbaum, 26, said in an interview. “My positions were reported on a daily basis. It did not blow up. I expect there were some losses but nowhere near the amounts they are discussing. I was the golden child of credit trading in New York.”
Calyon, the investment banking unit of Paris-based Credit Agricole SA, France’s second-largest bank, said on Sept. 18 that it had an “unusually large market position” that was “above the authorized limit” and would cause third-quarter profit to fall “sharply.” While Calyon didn’t identify the people involved, Bierbaum, whose stepfather is a descendent of John Jay, the first chief justice of the U.S., said he was fired and blamed for the trades on indexes linked to derivatives.
Bierbaum, whose stepfather is a descendent of John Jay, the first chief justice of the U.S., said he was fired and blamed for the trades on indexes linked to derivatives.
You can’t fire me! Do you know who my stepfather is descended from?
100 billion in bad loans and government bailout in the works.
Oct. 11 (Bloomberg) — Agricultural Bank of China, saddled with $100 billion of bad loans, may move some of its 14,500 rural branches to independent companies to speed up a government bailout and sell shares for the first time.
The nation’s fourth-largest bank, established in 1979 to serve China’s 800 million farmers, plans to reduce its ownership in unprofitable offices to trim delinquent debt, according to a draft of a government proposal obtained by Bloomberg News.
China has spent about $500 billion bailing out its biggest lenders over the past decade. The three largest — Industrial & Commercial Bank of China Ltd., Bank of China Ltd., and China Construction Bank Corp. — raised a combined $53 billion selling shares in the past two years. Agricultural Bank’s cleanup has been delayed because 23 percent of its loans aren’t getting paid, according to its latest annual report.
There are a lot of sad stories reported in the press. I think its unfortunate that there aren’t more stories about people like my neighbor. I think it would bring a little more reality to the public. He bought his 1600 sq.ft. home here in Southern Cal for $499,000, about $30-$40,000 more than he should have. He’s definitely an unsophisticated buyer. He got two loans at the time of purchase, so he didn’t need to come up with any down payment. He told me in his barely comprehensible English, that he works at Jack in the Box. I’m thinking there is no way he can afford this home. But, he proved me wrong. He immediately brought in about 8 or 9 renters in his little 4 bedroom house. I’ve tried to talk to some of them, but haven’t found any who speak English yet. Ordinance enforcement tells me they haven’t found any to speak English to either.
I noticed his home came up for sale on the MLS (even though no sign in front) as a short sale. So, I checked it out and he’s in default.
This nightmare to my neighborhood needs to run its course. He bought a house he couldn’t afford with nothing down. Then he brought in an illegal amount of renters so his payments were less than rent. Oh, did I mention that he took another $50,000 out before defaulting. Now he is collecting rent on a house that he isn’t paying for. The house is not completely trashed, but it looks much worse than when he bought it. I would say his house with $550,000 in loans is now worth about $380,000., if that. All this in about 2 years. This story is more common that is being reported, I believe because no one wants to take the heat for poor lending regulations. He definitely shouldn’t be bailed out.
Derrick
Yes, I see this all over Sacramento. The Realtor sells a new FB a house and using mortgage fraud, gets him $50,000 cash back or more. The 100% + financing is with EquiFirst (funny name for a lender with no equity). Sold on April 1, 2007. Six months later the house is listed for sale at $410,000. Lender takes a $140,000 hit, plus costs of another $50,000. Realtor gets a sale, mortgage broker gets a fee, FB gets to live free and adds $50,000 cash in his pocket.
There is only one entity getting screwed: The taxpayer who will pay for the bailout of the foreclosure.
The house? 1203 Hillwood Loop, Lincoln, CA.
The problem is many taxpayers are moving swiftly down the income bracket so I suspect our tax base is shrinking and of course for local/state gov’s a lot is property taxes. I think you may see a VAT in the US soon.
Foreclosures are starting to pop up in significant numbers in Ventura County. Today Amgen began the mass layoffs in earnest. There will be many more over the next year.
I just read that there are currently 5 million homes for sale in the U.S.
Another 2 million homes are about to be put on the market. Is there any truth to this? I’m not sure if this includes condos, or if it’s just free standing houses.
Either way, that’s a catastrophe. How much percent is that, of the total number of houses / condos ? 30% ?
That’s not a “buyer’s market”. It’s a bloodbath.
Single parent with 9 children and takes out a subprime loan! She had to make the 10 perfect decisions in her life!!!
“He bought a house he couldn’t afford with nothing down. Then he brought in an illegal amount of renters so his payments were less than rent. Oh, did I mention that he took another $50,000 out before defaulting.”
Is his name Ben Bernanke? I think I know that guy.
Sounds like the same RE stupidity in these articles. This is just an example of the infantile lack of responsability in the USA. Let them fall on their @$$.
“Whether this month’s inventory is a trend or a spike remains to be seen” (said a realtor)
Remains to be seen by him. We already know the answer here.
Cal good area’s will suffer to a “lesser extent”???, that is wishful thinking i don’t think so, if you bought a 1.5 million dollar house that is really worth 750k of course you are hoping for the scenairo that only people with blinders and no computer will come buy your home the gut check is that people well off or not so well off don’t matter anymore they are all phi betta cappa today with the internet and blog sites like this leading the way.
The wool can’t be pulled over the eyes anymore, no matter where you think you leave or you have some sort of imunity from the meltdown you don’t surprize surprize this is touching or going to tousch rich and poor sorry to report?