There Is No Smart Money Buying Right Now
The Press Enterprise reports from California. “The California Association of Realtors is predicting that in 2008, the median price of a resale home in the state will decline 4 percent to $553,000 and sales will drop another 9 percent on top of a 23-percent plunge this year. Chapman University economist Esmael Adibi said the significance of the state Realtors association projection is that it reflects a growing pessimism among real estate experts.”
“Adibi said earlier this year that many experts were forecasting that sales might rebound and home prices might stabilize by 2008. He said it is the first time that Badagliacco’s group has acknowledged the downturn may continue for another year.”
“‘We haven’t seen any turnaround in sales, and the inventory of unsold homes keeps rising,’ Adibi noted. ‘For sure there will be no rebound.’”
“Scott Chappell, owner of a Riverside real estate agency, was at the Anaheim Convention Center on Wednesday. He said agents had flocked to the trade show in hopes of finding new ways to make a living. They were at seminars in foreclosures, marketing bank repossessions and using home auctions to attract buyers.”
“Chappell said since 2005 he has seen his business fall off by two-thirds, and he is expecting a two-year-downturn. ‘There is no smart money buying right now,’ he said.”
“Lenders siezed more than 1,000 homes in Riverside County in August and again in September. That’s more than five times as many repossessed homes as in July and almost 20 times as many as in September 2006, according to RealtyTrac.” “Just before the bank took possession of a home in northwestern Riverside County, its former owners attacked the walls with paintball guns and smashed gaping holes in them.”
“They ripped out stair railings, banisters and cabinet doors in the half-million-dollar Eastvale house. Then they turned on the upstairs bathroom sinks, put down the drain stoppers and fled as the bank’s locksmith arrived to rekey the doors.”
“‘You can walk into all kinds of things because the people are angry they are being evicted,’ said Lauren Rooney, a Corona agent who inspects homes just after lenders foreclose on them. ‘You get people who are really upset at the last minute, and they say, ‘We are going to make the bank pay!’”
The Daily Press. “The median home price in the Victor Valley has dropped to $285,614 at the end of September, according to the Victor Valley MLS compiled by Larry Trombley.”
“Overall, sales continued to fall, by 10.4 percent from August and 63.1 percent from September of last year. September prices were down 3.3 percent from August and 18.5 percent from September of last year.”
“‘It’s going to continue to go down a little bit more,’ Trombley said, citing the competition from foreclosures as well as new homes. ‘They keep adding incentives,’ he said.”
The Voice of San Diego. “Banks seized 14 times as many San Diego County homes last month as they did in September of last year. Market watchers say the ever-growing foreclosure inventory will drive down prices among the 23,000 homes on the resale market countywide.”
“The number of homes to make it all the way through the foreclosure process to become bank-owned properties in San Diego County soared to 866 homes, a 43 percent increase from August’s 602, according to RealtyTrac.”"Compared to many home sellers, lenders are dispassionate. They hire brokers or send properties to formal auctions with instructions to lower prices quickly to get the properties off their books. And the more properties lenders absorb, the more willing they are to lop off tens of thousands of dollars from their asking prices.”
“Ramsey Su is a retired REO broker who worked in the local market during the 1980s and 1990s who tracks the market extensively. Having attended both of the major home auctions in San Diego this year, Su estimated those auctioned homes have sold for about 30 percent less than the price the company listed as the homes’ previous values.”
“During Su’s career, an intake of 800-some REOs in a month was unheard of. ‘I don’t even remember months then that we even had 200,’ he said. ‘Two hundred would be ‘Wow, what a terrible month.’ I watch what is coming in the front door. If [banks] are in the process of acquiring 1,000 a month, the magnitude is so much.’”
“The U.S. House of Representatives passed H.R. 3648, a bill that will disallow the IRS from sending a tax bill to homeowners who negotiated short sales with their lenders. Su said the new measure could encourage others to give up, to default on their loans.”
“‘If I’m that homeowner, saying, ‘I refinanced and I bought my jet ski, I bought season tickets to the Chargers,’ what is my neighbor going to do, who’s working two jobs to make that same payment and he gets screwed? … He’s going to say, ‘I better default, too,’ Su said.”
The Orange County Register. “With all but two business days left uncounted, September is on pace to have been one of the worst home-buying months in the 20 years of O.C. market watching by DataQuick.”
“For the 22 business days ending Sept. 26, the median selling price was $585,000 — down almost 9 percent from August and the lowest since April 2005. The most recent price snapshot is 7.6% below the same period in ‘06.”
The Merced Sun Star. “”Merced finally ranks No. 1. Unfortunately, it’s the nationwide foreclosure rate. Merced posted 1,137 foreclosure-related filings last month. In September 2006, the county saw 126 such filings.”
“Sharon Mogliotti, a mortgage planning specialist with CTX Mortgage, called the skyrocketing foreclosure rate a ‘history-setting’ moment for Merced. ‘Our mortgage industry and the economy has never been through a market like this,’ she added. Mogliotti has worked in the mortgage industry for 40 years.”
“In one extreme instance, said Mogliotti, a Blockbuster clerk was given a mortgage after he wrote on his application that he earned $6,000 a month. The loan was later audited, and the loan officer was fired and fined $50,000, said Mogliotti.”
“Home prices have plummeted, leaving homeowners in over their heads with few options. ‘The bottom line is, there were a lot of people that wanted to buy a home and lenders got greedy and put them in stated income (and adjustable rate mortgages) and they just couldn’t afford it,’ said Mogliotti.”
The Mercury News. “Despite lenders announcing plans to help homeowners avoid foreclosure by increasing education or outreach, one local group says most lenders are not doing nearly enough.”
“Counselors at federally sponsored housing agencies reported foreclosure in 57 percent of cases and short sales at 33 percent as the most common outcomes for borrowers who can’t pay their mortgages, the San Francisco-based California Reinvestment Coalition reported Wednesday.”
“The report also said that lenders resisted modifying loans to fixed rates, offered only short-term solutions and didn’t reach out to consumers in trouble.”
“‘In my experience, the lender will offer repayment plans rather than loan modification,’ said Katrina Vizinau, a homeownership counselor. ‘They’re asking for unrealistic upfront money. If they had that kind of money, they would have made the payments.’”
The San Francisco Chronicle. “‘The most striking thing that came out of this (study) is that there is a huge chasm between what the lenders are stating, which very well may be their policies, and what’s happening on the ground,’ said Kevin Stein, associate director of the coalition.”
“Paul Howard, who has an adjustable-rate mortgage on his Sacramento home, said seeking a loan modification was frustrating.”
“Howard bought his house for $274,000 with 100 percent financing in April 2005. The in-law who arranged his adjustable mortgage told him it would stay at 5.75 percent for five years (a $1,400 monthly payment).”
“‘I was shocked when after just two years, it adjusted,’ he said. ‘I should probably have paid closer attention to details.’”
The Sacramento Bee. “Sacramento-area home builders are on track this year to sell the fewest number of new homes since 1997 following one of the toughest quarters yet in the ongoing housing slump.”
“At the current pace, capital-area sales could dip below 8,000 this year, only slightly above the 7,455 registered 10 years ago, according to the Folsom-based Gregory Group.”
“‘It’s more of the same,’ said Gregory Group President Greg Paquin. ‘It’s continuing in the same path it’s been continuing.’”
“Home building giants and local family builders alike sold 1,592 homes from July through September in the six-county region, the Gregory Group said in a report scheduled to be released today. That’s 18.6 percent below sales in the same time last year. And it’s the lowest three-month tally since the fourth quarter of 2005 when a wild, profitable ride enjoyed by builders for years suddenly shut down.”
“‘It is tough. It’s tough up and down the state,’ said Chris Hanson, a Sacramento-area executive for Costa Mesa-based Warmington Homes. The firm recently laid off 15 Sacramento staffers and folded its capital operation into an East Bay division.”
“Sacramento builder John Leonard encountered roadblocks, too, after auctioning 22 West Sacramento town homes last month. ‘The homes we sold at auction were too low and didn’t meet the bank payoff requirement,’ Leonard said.”
“Leonard said his lender rejected all bids because they were at least $88,000 below minimum for each unit. He said negotiations are proceeding for investors to take over the River’s Side at Washington Square project.”
The Press Democrat. “Sonoma County foreclosure filings more than tripled in September as homeowners struggled to keep up with their mortgage payments, according to a study.”
“Foreclosure filings soared to 272 in Sonoma County last month, up from 75 a year ago, reflecting an accelerating housing downturn across California, according to RealtyTrac.”
“For would-be buyers who have been waiting to enter the market, the flood of foreclosure activity should be good news, but they may want to wait until early next year for prices to fall further in California, Florida, Nevada, Arizona and other once high-flying markets, said Pat McPherron, an economist at Moody’s Economy.com.”
“‘People have a tendency to try to catch the bottom of the trough and really ride it to the top,’ McPherron said. ‘If someone said, ‘is that now?’ my answer is no.’”
2008 would be a nice year to watch the housing prices crumble under selling pressure.
“For the 22 business days ending Sept. 26, the median selling price was $585,000 — down almost 9 percent from August and the lowest since April 2005. The most recent price snapshot is 7.6% below the same period in ‘06.”
the unthinkable just happened to the OC, CA. people here was just saying that it’s different here, well, just last week. ha. hum. enough said.
“down almost 9 percent from August”
Gary Watts, care to offer any comments?
10% is in the bag!
“down almost 9 percent from August”
So OC dropped 9% in one month! Amazing because i always thought that OC was a step above LA County as far as livability, better cleaner neighborhoods, better schools,higher mediam incomes,quality of road grids, ect. Of course parts of NW OC especially Anaheim, Santa Ana, buema park,westmonster, Garden grove, la palma,orange were in the declining stage already but South OC has always been cnsidered a superclean suburb of gated master-planned communities, lush clean parks, and the modern hi-tech Irvine industrial belt.
That 9% drop in one month should be a harbinger of whats in store for LA County come Sept dataquick figures, which will for the first time reflect the recent stiff lending standards and dissapearance of subprime lending, which should kill off the first time homebuyers in the lower ragged LA areas. Already saw some decent -10% yoy drops in prices in many lower-end zips in the August dataquick LA charts. Should be interesting for LA-hold your breath.
Note: much of the astounding yoy% increases in the lower-end LA burgs was driven by pure out and out fraud-i know this for a fact as i have been through these gang-infested gunshot ridden hoods where speculators/sellers were getting ignorant idiotic firstime buyers into 2/1 800 sq ft shacks in graffitted hoods for $500,000, with the connivance of lax lenders, lax lending standards, and much fraudulent appraisals, kickbacks ect.
That should all but disappear now and Prices in the lower-end LA crapholes such as Inglewood, Wilmington, Compton, Bell, Maywood(fraud central),South central LA, and the Northeast San Fernando Valley shitholes such as Pacoima(fraud central),panorama city, San fernando city, Sun Valley,Sylmar, and ragged parts of Burbank and Van Nuys should see dramatic YOY drops next several months as the fraud excrement layer is removed by the end of toxic lending, disappearance of expected YOY increases,
rampant foreclosures,ect.
but I think we could have a bottom on ‘09 if HR 3648 is written correctly. Congress should modify the “short sale forgiveness” act to a) have a limited time window (i.e., 180 days),
b) in the future make BANKS liable for the income tax on short sales,
and c) give banks 180 days to dump impaired assets on Fannie and Freddie (cause it’s gonna happen unless Ron “Barry Goldwater” Paul gets elected), but EXPLICITLY remove the guarantee behind Freddie.
Heck, a) and b) would solve the problem alone…
The new mantra would be “Send jingle mail now, or owe the IRS forever…”
Quick crash, followed by no future bubbles… tee hee hee
No future bubbles = no bubble profits to bubble profiteers. I don’t think anything so prudent could ever pass into law.
The article in last Sunday’s Real Estate section of the L.A. Times indicated that the debt forgiveness provision was to be “permanent.”
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“There Is No Smart Money Buying Right Now,” because…
Four Years of Stupid Buyers to be Followed by At Least Four Years of Stupid Sellers
2003-06 were definitely years of stupid buyers who bought into all kind of propaganda to be pushed into buying homes, at inflated prices, that many of them couldn’t really afford. 2007 ushered in the years of stupid sellers who can’t figure out why their homes sit on the market for 6 months, a year, even two years and more. Some of the stupid sellers are professionals, e.g., homebuilders. They need to get rid of the inventory at prices that the local market would bear. They all face increasing challenge from foreclosures and auctions. Even people are stopping buying foreclosures for the fear of falling prices!
No?
Jas
Time will tell as to when the stupid buyer period began. I walked away in Feb 2004 because I got spooked and have been a renter since then. I would put the odds at 50/50 that the price drops to that level before this ends. (It would be great if it did, but it doesn’t seem to me to be a foregone conclusion.)
We’ve already in large part hit ‘04 levels in San Diego if I recall…
You are hoping for prices to drop down to the Feb 2004 level?
I am waiting for the prices to drop to the Feb 1994 level. This crash has a long ways to go before housing is affordable, and the momentum will send prices 30% below the affordable level.
I was a stupid buyer in Oct 04, but not a stupid seller in June 06, when I accepted a price which (after renovation costs, commissions, etc) gave me next-to-no profit. Also, I did not try to avoid the (small) income tax hit on my next-to-no profit by insisting on holding the property 2 years. Pay the tax and get the hell out. Thanks to HBB and others.
The foreclosures in elay are still waaay to high. The banks still don’t get it.
“Howard bought his house for $274,000 with 100 percent financing in April 2005. The in-law who arranged his adjustable mortgage told him it would stay at 5.75 percent for five years (a $1,400 monthly payment).”
“‘I was shocked when after just two years, it adjusted,’ he said. ‘I should probably have paid closer attention to details.’”
So his wife’s parents screwed over this FB? What were they thinking/
The hate their son-in-law and want to bust up the marriage, and hey, picking up some juicy loan fees is just gravy?
Sunday dinner with the in-laws must be fun.
it’s time for a nasty divorce. this got to be another reason why one wants to kill the in-laws.
He is going to look at his wife and ask himself the following:
1) Is she intelligent? (if yes) His in-laws did him in.
(if no) what was I thinking following them.
2) Is she good in the sack?
3) What does she bring to the table?
4) How can I get even with my in-laws?
This bubble has messed up peoples lives at so many levels. I am surprised the outrage against politicans isn’t louder.
That is a really big problem in America right now. Appathy… There is no outrage about anything any more.
That is a really big problem in America right now. Appathy… There is no outrage about anything any more.
It’s the Great Depression all over again, except this time we’ve got Prozac.
and little to no self-sufficiency…
The dumbing down of America in its finest moment…
I would add CLUELESSNESS. Staggering amounts of people are clueless.
So i think you have to be Seriously Clueless first and then that breeds apathy.
“I would add CLUELESSNESS.”
I would say that the “cluelessness” is a direct result of propaganda. People believe what is verifiably false and that is less due to cluelessness than victimization by incessant propaganda. In our system victory, or success, goes to better propagandist. Hence, it is a systemic problem.
Jas
So is that why no student protests (like ‘Nam) about out involvement in Iraq, because they all volunteered, and its their fault for joining?
No student protest…
because the schools have systematically and successfully devolved the populace. The powers that be don’t want smart Americans, and learned lessons re: Nam were put into place beginning in public school education. The police today are not like the police in the late 60s and early 70s — now they are armed with military-style uniforms, weapons (including mind control devices) and humvees. When they ask intelligent questions, like the student who got tasered asking Kerry if he were a member of Skull and Bones, they are taken down. Scheeple are easier to control when they are too stupid to read a contract.
Sounds like MY LIFE everyday……..smart people used to be the first hired, not anymore. And forget it if you are old , I almost filed an age discrimination complaint against Dan Rather, all i asked is “Am i too old to be Dan Rather”s Production assistant”….well they hire a 23 year old girlie…so the wrong sex too.
So Now its The Lionel Show on Air America an Interns job i really need something on my resume in broadcasting and so far no response to my emails and i left 2 messages today… I think the guy reading them is 25 years old…and will hire his own age…..so much for progressive radio.
But then again Mark Green ran for Mayor against Bloomberg, so its possible he has a heart to help us old farts ….hey check out my link…..no kidding a 70 year old DJ in NYC….cool guy……
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Apathy, I believe, is one of the stages of democracy (attributed wrongly to Prof. Tyler) and the next is “bodgage.”
Jas
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Sorry, I meant to type bondage.
bodgage?
Sounds kinky
how many wetsuits are involved in bodgage?
This seems like as good a place as any to announce to Westerners that Congressman Ron Paul is tonight’s interviewee on Lehrer NewsHour’s continuing series of presidential candidate interviews. Many HBBer’s have pointed out the refreshing nature of Mr. Paul’s program which includes, among other things, eliminating the Federal Reserve Bank. Saving the dollar by eliminating most US military adventures. If the dollar is saved, my Forex strategy will be toast, but it would be worth it to have a libertarian in the White House.
So this guy gets screwed by his IN-LAWS and you are surprised there’s not more outrage against politicians?
What in the world did a politician do to get this guy to NOT DO ANYTHING resembling intelligence in buying property?
Is there anything, anywhere, where people actually have to be responsible for themselves or is the expectation now that, if anything goes wrong, the REAL reason must be political?
“What were they thinking?”
Real estate always goes up.
I was thinking Brother-In-Law.
With family like this, who needs enemies.
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‘We are going to make the bank pay!’
Sweet revenge!
Jas
In the context of that quote, it’s not so “sweet”. Vandals are scum, they should be prosecuted.
“Chappell said since 2005 he has seen his business fall off by two-thirds, and he is expecting a two-year-downturn. ‘There is no smart money buying right now,’ he said.”
This is what I have been saying. Which begs the question, given tightening of lending standards, what kind of dumb money is still qualifying for mortgage loans?
Follow-on thought: Given rampant mendacity in corporate reporting these days, I suppose it is possible that lenders are overstating their current levels of lending activity, despite reporting drastic reductions from earlier periods.
…what kind of dumb money is still qualifying for mortgage loans?
No kidding.
Does anybody have recent first hand experience with someone
who has bought any kind of real estate recently? I would love
to hear some details as to who/why/when/how etc.
What could possibly be the economic rational?
Even if mortgage money was available at 0% interest,
why in the wide wide world of sports would someone
pay for an overpriced and declining asset?
It makes no sense.
“…why in the wide wide world of sports would someone
pay for an overpriced and declining asset?”
Nesting instinct?
BAAWWHHHAAAAAHHHHHAAAAA
you got it.
Nesting instinct?
Even Howard Cosell would be speechless!
The only house that has sold near me was a somewhat boring house for 750k. The people that bought it drive a brand new 90k BMW, a brand new Volvo, anda HUGE big screen TV that we can see from our window down the block.
These people are more than likely as much as I hate to admit absolutely loaded. The thing is that yes- they are loaded and can likely afford the payments. Thing is that the house they bought was lived in for decades by a retired school teacher. So… rich people living in lower income housing…. classy. Not what I would define as ” Smart money”
That my friends is the story of the Bay Area: Rich people buying up Mr. Retired shoe salesman’s house and thinking that they’re well off.
They probably are, since retired shoe salesmen 20 years hence wouldn’t be able to afford that ordinary old house (at least under the bubble model).
Talk about falling expectations.
“Why would someone pay for an overpriced and declining asset”
As you say above, octal, no kidding!
The very last mortgage loan I made, in April 07, included a requirement (coming from me) that the buyer, who was making a 30% downpayment, must read HBB for a week before I would approve the loan. The buyer did that. The buyer’s response was “It’s different here.” My response was, “what the hell.” A 30% decline in Trailer Trash land is possible, but by the time the decline materializes, the loan will have been paid down considerably. It’s a 15-year note. So far, this buyer has performed perfectly. …
Many here in the Bay Area think that “real estate never goes down” (ask any Realtor and they will tell you this and add “It’s a great time to buy”)
“Chappell said since 2005 he has seen his business fall off by two-thirds, and he is expecting a two-year-downturn. ‘There is no smart money buying right now,’ he said
That is what Scott Chappell, Dave Chappell said:
http://youtube.com/watch?v=0amxfL3q50c
…what kind of dumb money is still qualifying for mortgage loans?
I don’t know, but those sleazy lenders are still around. I posted this earlier in the bits bucket, but it got lost. I got a flyer in the mail pushing “special mortgage rates for physicians and dentists”
4.375 fixed for 5 years!
No points, no fees, no prepayment penalty and NO INCOME DOCUMENTATION REQUIRED.
They start at $1,822 a month for 500K and go all the way to a 5M loan.
WTF? There is always some GF to screw.
I have relatives that just bought a new house in Cave Creek (northern Phoenix) because they just had their first child, and they thought they were getting the deal of a lifetime because they bought for $360k (original list $450k). Both have good jobs at the Mayo Clinic and I assume can afford it.
They will soon find out they wont have enough $$$ for a nanny, or for one of them to quit their job.
Um Neddie could you babysit out little cortnee today?
In my experience, the lender will offer repayment plans rather than loan modification,’ said Katrina Vizinau, a homeownership counselor. ‘They’re asking for unrealistic upfront money. If they had that kind of money, they would have made the payments.
Seems like we first need to first send lenders to the “Kinder gentler school of the FB”
I should have READ what I typed. AH well, I am just grateful i’m not a FB
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“Mogliotti has worked in the mortgage industry for 40 years.”
And so has Mozilo. Both have seen nothing like this in 40 years. We need to go back to 1930s, folks.
Jas
Ah, the consequences of revisionist historians meeting up with society’s historical myopia.
“‘I was shocked when after just two years, it adjusted,’ he said. ‘I should probably have paid closer attention to details”
Uh, yes, details are a good idea for a $274,000 home purchase.
Reading the fine print is so 20th century, and hiring a compotent RE lawyer would have taken a bite out of this guy’s sweet (imagined) profits.
A small part of me says I should feel sorry for people like this. But every time I read that someone didn’t read the contract for the biggest purchase of their life, they deserve to go under.
People spend more time researching a car purchase than researching stocks, bonds or housing.
“Risk comes from not knowing what you’re doing.”
Mr. Warren Buffett
you can live in your car but you can drive neither a house nor a stock certificate
Also from Mr. Buffett:
“When you combine ignorance and borrowed money, the consequences can get interesting.”
So you’ve met my ex-boyfriend?
“The U.S. House of Representatives passed H.R. 3648, a bill that will disallow the IRS from sending a tax bill to homeowners who negotiated short sales with their lenders. Su said the new measure could encourage others to give up, to default on their loans.”
This sounds like an ill-conceived bill that would forgive the consumer debt racked up by serial refinancers who blew their home equity gains on jet skis and Chargers tickets. Is it still possible for the CIC to veto it?
“‘If I’m that homeowner, saying, ‘I refinanced and I bought my jet ski, I bought season tickets to the Chargers,’ what is my neighbor going to do, who’s working two jobs to make that same payment and he gets screwed? … He’s going to say, ‘I better default, too,’ Su said.”
And this is the worst part: The passage of this bill into law could have the unintended consequence of exacerbating the housing price crash, as short-sale fence-sitters are provided with just the incentive they need to walk away from their obligations in droves.
Exacerbate == getting lenders off their arse and pricing this merchandise to move
I think they need to modify the bill so that the IRS garnishes wages at a clip of $3K a year so that FBs don’t get hammered too hard with the one-time payment. Think of it as homey alimony.
Yep.
And the best way to encourage more debt in the future is to provide debt forgiveness now. So not only does it exacerbate this crash, it makes it more likely to have future crashes. What’s to discourage the same behavior 10-20 years down the road if you know you can just walk away scot-free, with only a credit score reduction?
just the opposite. all other things being equal, less money will be lent (at same rate and same terms) tomorrow than was lent yesterday because of the easier legal escape for the borrower.
similar to how the more restrictive bankruptcy provisions resulted in more money being lent.
Someone like I, who bought a long time ago, could refi to the hilt, use the money to buy gold coins - or whatever - then walk away free as a bird. I’ve heard of people who run up credit card debt before they declare BK. Nice.
On second read, maybe I got that wrong.
No you cant run up credit card debt before you file for BK…
you need to do that say 3-6 months before, then pay the minimums… anything big bought in the last 90-180 days on credit could be disallowed in BK.
It’s the prisoner’s dilemma….which is not really a dilemma at all. Make a deal and get out while you still can!!!
“The U.S. House of Representatives passed H.R. 3648, a bill that will disallow the IRS from sending a tax bill to homeowners who negotiated short sales with their lenders.”
Scary because that may put them at the head of the line to buy when things get closer to a bottom and then we’ll be playing the same game all over again. With such a large inventory banks will once again be lending to anyone who can fog a mirror.
Does the bill have a name? I suggest the Short Sale Acceleration Act of 2007.
“as short-sale fence-sitters are provided with just the incentive they need to walk away from their obligations in droves.”
Ah, but is walking away the akin to a short sale? I don’t think so. Let them walk and then foreclose and go after assets that were purchased with all that HELOC money! In the face of that bill I’d flip the bird to congress and make them all foreclosures.
“During Su’s career, an intake of 800-some REOs in a month was unheard of. ‘I don’t even remember months then that we even had 200,’ he said. ‘Two hundred would be ‘Wow, what a terrible month.’ I watch what is coming in the front door. If [banks] are in the process of acquiring 1,000 a month, the magnitude is so much.’”
On the path to be an order of magnitude greater than the worst previous case here in SD. Anyone still think this is going to take 5 years to adjust? The “unprecedented” nature of this bubble will make the southern california 90’s correction look like a rolling 5.5 earthquake. This one will DESTROY neighborhoods left and right and quite quickly too. I’m envisioning an 8.2
But will we see a mass exodus from SD?? (Please, please, please, please…)
Back into Mexico? Half of chula vista’s population may have to cross back over and start anew. The double whammy of housing and jobs has the potential to do the trick.
It looks as if the homebuilders built where they shouldn’t have, in Tijuana-adjacent…
Your slip is showing
So true, so true. We lived there (1999-2005) in EastLake (east Chula Vista) and we loved it. It was a great place to be a family with kids. It was like Mayberry, beautiful golf course, nice families, good schools and a real sense of community. Slowly though, it began to change and more and more Mexicans (with Baja plates) moved in. Many were super wealthy and paid cash (???) for million dollar homes. A good friend was a successful RE agent and handled many of these deals. With the rise in kidnappings in TJ, you couldn’t really blame them for wanting a safer life. But slowly things began to change. Everywhere you went everyone it seemed was speaking Spanish. My friends and I began to feel like we were no longer in the US. And what I noticed was that while my new neighbors were polite and waved, they weren’t neighborly. They stayed to themselves. There was little mixing. They seemed to be islands unto themselves. I was friendly with them and we’d do kids’ birthdays but I always felt that they were content with extended family and existing friends and not really interested in bringing in hueras or gringos. Maybe our cultures were too much to overcome. When we left and sold to a Mexican family at the height of the insanity, our street had undergone a significant shift in demographics. Many of our friends moved away too. I used to joke that the Navy was the only reason there were any white folks left in east Chula Vista/EastLake (due to its close proximity to 32nd St and Coronado). I’m not hatin’ just giving my observation.
Well I know of a couple who did just that. More will follow
The Orange County Register. “With all but two business days left uncounted, September is on pace to have been one of the worst home-buying months in the 20 years of O.C. market watching by DataQuick.” “For the 22 business days ending Sept. 26, the median selling price was $585,000 — down almost 9 percent from August and the lowest since April 2005. The most recent price snapshot is 7.6% below the same period in ‘06.”
Not bad - wait a month to buy, get a $58,000 discount. Now that has got to hurt. But there is no land to build on…we have great weather…wow.
“The California Association of Realtors is predicting that in 2008, the median price of a resale home in the state will decline 4 percent to $553,000 …
Such a bunk figure. Run the current YOY Case/Shiller rates out to the end of ‘08 and it looks more like 15%. Of course, CAR is speaking of median house prices, the most useless factiod in the empty space between their ears.
When NAR predicts sales prices will fall 4%, it’s predicting agent’s commissions will fall by only 4%… and sales commissions are the only dog they have in this fight.
Don’t eat the street comps, in Tijuana-adjacent
“Lenders siezed more than 1,000 homes in Riverside County in August and again in September.
- When peak resets hit next June, Riverside County should be seeing about 1000 foreclosures per week.
“Lenders siezed more than 1,000 homes in Riverside County in August and again in September.”
Riverside County is where you will see REO’s going at firesale prices of $100,000-$150,000 for large 4/3 2000+sq ft newly-built McMansions. Not 3 yrs from now but maybe end of 2007-early 2008. Developers built tons of new homes and tracts out there and will severly undercut-are in fact now undercutting- the distressed and now severely underwater earlier buyers who are defaulting like crazy.
Riverside County ranks among the top regions in US in foreclosure rates.
For a snapshot of a Riversde community in severe distress look at Lake Elsinore. I was through there recently and the hoards of specu-buyers noww underwater decided to rent out to Hispanic immigrants. Result-LE has a large impoverished Minority population of hZispanic renters and is now more like an LA inner city crapzone. Didn’t check prices of housing in LE but i bet that one can now get decent REO’s on large 4/3’s for around $200.000 in LE, which had 2005 peak median prices at well over $500,000.
“‘There is no smart money buying right now,’ he said.”
Well, then I know of at least 4 dumba$$es right now. Three co-workers (2 with 2 mortgages) are in the process of selling. One closed earlier this week, the others are set to close in the next week.
Several (5) houses in my neighborhood have gone pending or sold in the last 2 weeks. Maybe it’s a “get moved in before winter” thing, but man, things are still moving. I can’t believe it.
I’m happy for the co-workers but in the interest of the people who want and can afford housing at traditional multiples, I’m disgusted.
Sleepless, where abouts near Seattle do you live? I live in Auburn and saw some bubbleicious activity come home to roost the last couple of weeks….a couple of bank repo sales and lots and lots of price reduced signs.
I actually live in Portland. I saw an REO in my old neighborhood this week in SE Portland which put a smile on my face (after looking it up, I’d say there’s fraud involved and I may actually throw out a lowball - BTW, it’s owned by Countrywide, LOL).
Co-workers places are in Salem, OR; Denver; and Tacoma, WA. I realize there are still buyers in this market, but it seems like recently sales have ticked up a bit after being stagnant most of the summer. Something has clearly gotten people off the fence.
“‘The most striking thing that came out of this (study) is that there is a huge chasm between what the lenders are stating, which very well may be their policies, and what’s happening on the ground,’ said Kevin Stein, associate director of the coalition.”
“Fiction is obliged to stick to possibilities. Truth isn’t.”
Mark Twain
“a Blockbuster clerk was given a mortgage after he wrote on his application that he earned $6,000 a month.”
Even that’s only a $72K salary, which on the 3x rule buys next to nothing in California.
I thought with the new math they are teaching in school it was the 10x rule, which should allow him to get a $720K mortgage for that. No wonder so many did not even make their first payment.
“a Blockbuster clerk was given a mortgage after he wrote on his application that he earned $6,000 a month.”
Maybe he was getting a commission from all those overdue fines!
He’s probably a power seller on ebay, or at the local swap meet…
“Sharon Mogliotti, a mortgage planning specialist with CTX Mortgage, called the skyrocketing foreclosure rate a ‘history-setting’ moment for Merced. ‘Our mortgage industry and the economy has never been through a market like this,’
Funny. that quote applies to both the upside and the downside of this bubble.
‘Merced posted 1,137 foreclosure-related filings last month.’
And its best ever sales year (2005) was around 2500 houses. Maybe we should call it ‘Purchase Cancellation by Bank’. At this rate all the homes for sale in Merced County will be REO’s.
“Banks seized 14 times as many San Diego County homes last month as they did in September of last year. Market watchers say the ever-growing foreclosure inventory will drive down prices among the 23,000 homes on the resale market countywide.”
Why does ziprealty.com only show 20,600 or so if there are 23,000 homes on the MLS?
“The number of homes to make it all the way through the foreclosure process to become bank-owned properties in San Diego County soared to 866 homes, a 43 percent increase from August’s 602, according to RealtyTrac.””Compared to many home sellers, lenders are dispassionate. They hire brokers or send properties to formal auctions with instructions to lower prices quickly to get the properties off their books. And the more properties lenders absorb, the more willing they are to lop off tens of thousands of dollars from their asking prices.”
I am assuming these foreclosures never find their way on to the MLS (or do they)?
They are all over MLS take a look @ Zip realty and sort on price in a neighborhood. All of the cheapest homes are bank owned foreclosures and short sales.
Cool! I bet that to a reasonable approximation, those are the only ones that are selling as well.
Not sure about SD but in Sac they sometimes sell after yet more reductions. Servicers have been marking to myth.
sorry to be out of it but does the house resolution to relieve tax burden make this official? you can walk and not pay tax? If this is the case, it seems like a lot of people should stop paying anything immediately, save for rent, and prepare to walk. Making payments when you are gonna bail out makes no sense? Can anyone else clear me up on this one?
No. Has to go thru the senate and then the prez has to not veto it.
It passed the house 386-27. My hopes are not high for what the senate will do.
“…prez has to not veto it.”
A 2/3 majority override vote in both the House and the Senate would veto-proof the measure. Note the House majority for passage was over 14/15.
If the Congress overrides the veto by a two-thirds majority in each house, it becomes law without the President’s signature. Otherwise, the bill fails to become law unless it is presented to the President again and he chooses to sign it.
http://en.wikipedia.org/wiki/Veto#United_States
funny (not) thing about the bill is it’s tax-neutral. What it gives to FB’s it takes from others.
Here’s a one page synopsis. (PDF file)
Notice the estimated “costs” numbers from the first 3 provisions are replenished with the last provison.
Pass or fail.. Wrangle got his mug on the news.. so it’s mission accomplished.
http://tinyurl.com/2tlqy2
I think everyone in congress can find a reason to like this bill.
Republicans: Yay! Let’s cut taxes and help out our realtor/homebuilder/banking buddies!
Democrats: Yay! Let’s give free money to victimized poor people and help out the realtor/homebuilder/banking buddies who aren’t Republican!
Bush: Yay! Let’s promote the Ownership Society!
The alternative to an ownership society does not appeal to me.
“…help out our realtor/homebuilder/banking buddies!”
I am missing something. How does an increase in short sales help bankers?
Be real. Bush promoted the FB society.
This law is a new front in the War on Savers and Taxpayers.
We now have the hey, get yourself hundreads of thousands of dollars to spend with no money down on a house…if it appreciates, it’sa all good…the profits are yours.
If it tanks…it’s all good…let the taxpayers bail out the lenders.
This bill makes people who own two homes pay the income taxes for FBs who do short sales.. Bush opposes the provision that does this. He will be flamed for opposing tax relief. Welcome to politics.
as far as Bush’s proposed “ownership society” and what it actually is.. many people seem to have a very peculiar and somewhat mistaken idea.
http://en.wikipedia.org/wiki/Ownership_society
Hey Joey,
why not go to the horse’s mouth…here’s the official white house version of the American Dream Ownership scam.
http://www.whitehouse.gov/infocus/homeownership/homeownership-policy-book-ch1.html
How do you guys interpret that last provision?
Looks like they are trying to protect buyers of second homes who are actually just in the process of moving but got caught in the price crash before they got around to selling the first home (like my sister
). Flippers and other buyers of second homes for investment purposes (not as principle residences) are not protected.
As someone else said elsewhere, it’s a little too Robin-Hood-esque for my taste. I get the feeling it’ll get tabled or vetoed before it gets out (otherwise, you’re going to have some very angry investors). I read about the change to the capital gains tax exemption on NuWire first, and… man. That’s just…. crummy for people who are managing their money well…
This forgives the tax on short sales. A foreclosure is not a short sale. As far as I can tell, those who stop making payments and walk get all the consequences they get now.
Exactly. It seems to me that one intent of this bill is to put unemployed REIC back to work, negotiating short sales.
What would be so cool, it would be super-duper-uber cool, is if the guy negotiating the short sale would be required to be the same guy who sold the FB the loan in the first place!
Famous Last Loan Words
“‘I was shocked when after just two years, it adjusted,’ he said. ‘I should probably have paid closer attention to details.’”
whoa!!!! Bay Area foreclosures have tripled! this is no surprise as the housing here has to be one of the most expensive in the country.
http://tinyurl.com/2d5nnf
You know… one thing I was thinking about on the way to work today was the fact that buying a house period really doesn’t do much for you financially. In reality, buying a home is more like life insurance. It is only worth money if you sell, and if you do, then what would you do with the money? Buy another house of equal value or leave the state?
So I figured that as long as rent is so much more inexpensive to owning, then why even bother buying period? Look at it this way: you can invest all your money into stocks, IRA’s, 401k’s, and so on and you will get around 10% annually, which is consistent with the annual returns over the last 100 years. Houses only appreciate around 4% per year, given the boom and bust cycles combined.
So by simple mathematics, one can easily see that by saving and renting, you could actually retire around 10-15 years earlier than a homeowner who poured all their money into a mortgage.
Just something to think about…
“Just something to think about…”
Think about it again the next time homes are selling for under 120 X rents on comparable properties.
I don’t think that’s happened in the Bay Area in decades, unfortunately.
Bought there in 1996 — $127K for a place that would have rented for $1100/mo… (P/R ratio = 115)
I rent a whole 4 bedroom house with a yard, garage, garden, and so on in a safe, semi-affluent neighborhood for $1,400. That’s roughly 1/4th the cost of what it would be if I were to pay the mortgage. I’d find it very hard to believe that rents would either go up to $4,500 a month, or that houses will soon be 175k here.
I too want nothing more than a good ole’ fashioned crash here, but unfortunately as much as I want to believe that prices will come down in the double-digits, the prices still remain in the stratosphere. I will never buy here at anything close to what the prices are now- even at their ever so slightly reduced price. If everyone else who makes a dual 6-figure income thought like I do, then prices would come down. But they don’t.
My one hope is the fact that the house down the block from me just got foreclosed upon. One rotten apple spoils the lot. Foreclosures in the heart of the Bay Area are very indicative in my opinion despite what everyone might say about apple and google employees.
Where are you Jetson?
I am thinking your rental is underpriced, so rents are likely to hit $4,500 before properties hit $175k.
Just one man’s opinion.
has the stock market annually returned 10 points over the real rate of inflation for the last 25 years, the biggest stock market bull run in history? How about the last 40 years? how about the last 78 years (going all the way back to September 1929)?
or is that “the stock market always returns 10%” supposed to mean that if inflation is 10%, the stock market will go up 11%?
Again, there must be a metric to measure the future rent payments eliminated after paying off your mortgage. Such metric might suggest that a 23-year-old is better off buying in 2005, and a 70-year-old would have been better off renting since 1996 (even assuming the greatest real estate bull run in the subsequent 10 years.)
Just remember, every time you hear a flushing toilet this year another ARM has reset.
“… foreclosures were the most common outcome for agency clients overall, according to the survey by the California Reinvestment Coalition, a statewide alliance that promotes access to credit. The second-most-common result was a short sale, selling a home for less than is owed on the mortgage.”
Did it ever occur to these liberal coalitions that their success in promoting access to credit may well have had the unintended consequence of helping to put the folks they ‘helped’ in the path of a future foreclosure or short sale?
are you suggesting the illuminati are not illuminated?
Did it ever occur to these conservative banks and mortgage brokers that their success in promoting access to credit may well have had the unintended consequence of helping to put the folks they ‘helped’ in the path of a future foreclosure or short sale?
Well yeah, but did the banks and lenders ever say they were trying to ‘help’ the FBs? (OK, you got me…)
“Your dream house with little or no downpayment … quick and easy process”
http://my.countrywide.com/
The Bernie Ebbers of the housing bubble.’
http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-countrywide_12bus.State.Edition1.1b2272a.html
In his defense, many other REIC CEOs did exactly the same thing…
Federal regulators are being urged to investigate stock trading by Countrywide Financial Inc. chief executive Angelo Mozilo following disclosures that he took steps that allowed him to ramp up his sales before the company’s stock went into a tailspin.
“While Countrywide shareholders have faced massive losses, Mr. Mozilo has been stuffing his pockets,” North Carolina Treasurer Richard Moore said in a news release Thursday.
REIC members knew the offal things they were doing, for the home-land…
I somehow get the feeling that Mozilo is too slick to get caught doing anything which might expose him to a perp walk. He’s seen the Bernie Ebbers, Kenneth Lay, etc, etc, etc, etc, etc, etc, CEO’s get caught during the tech bubble/bust. Moziloa slick operator. He might look like a slimy scumbag but I get the feeling he’s had an army of accountants and lawyers vetting every move he made when cashing in his ill-gotten gains. It might not be morally right - but I think we will find he’s made sure it’s legal. Hopefully I’m wrong.
I dunno, Mike, hubris is an interesting thing. These guys (and gals, remember Leona Helmsley) always tend to slip up somewhere, because they become blinded by their own “genius”. They actually do get to the point where they think they are bullet-proof and that’s when they make their fatal mistake, like stepping on an underling who knows too much.
There is also the myopia-inducing perception that they are doing nothing different than anyone else in their position is doing…
“Adibi said earlier this year that many experts were forecasting that sales might rebound and home prices might stabilize by 2008. He said it is the first time that Badagliacco’s group has acknowledged the downturn may continue for another year.”
There’s experts and then there’s ‘experts’. The first give unbiased, impartial and objective forecasts, the second group are simply SpinMasters whose sole job is to support the completely biased projections of the particular interest group they represent or work for.
There are VERY FEW real experts left nowadays. No one in this country will subsidize any expert that’s not willing to comply with their sponsers underlying motivations or viewpoints. In fact, the whole purpose nowadays of having ‘experts’ emit their alledgely ‘professional’ opinions is just to prop-up and further the official corporate agenda at hand, whatever that may be at the time.
I myself am no RE expert, yet when faced with the reality of the current housing bubble I already knew YEARS AGO that the RE market was being artificially fueled and that this crash was inevitable, DESPITE what the ‘experts’ where saying at the time.
Without being an ‘expert’ militarily, I knew from the moment of its inception that the invasion of Iraq was an exercise doomed to failure, DESPITE the opinions of the ‘experts’.
Without being an political ‘expert’, I already knew long ago that going after Saddam -after being attacked by Osama Bin Laden- would generate more antagonism than appeasement on behalf of those who hate this country, DESPITE the ‘experts’ opinions.
Without being an ‘expert’, I knew the GW Bush administration policies would prove to be more economically and politically damaging to our country than anything Bin Laden could ever have hoped to achieve even in his wildest dreams, DESPITE what the ‘experts’ were saying (and some still say).
What does this mean?. Am I a friggin’ genius?. Well, short answer; yes I am. But what helps to make me look so smart is the simple fact that I’m currently living in a nation governed, supervised (and apparently populated as well) by MORONS.
And that, my friends, is my EXPERT opinion.
Truly Excellent Rant!
I know many will not agree with me but I feel kind of sorry for the people who are seeing their (turns out only temporary) homes being seized by the banks and, before the locks can be changed, seriously damage the property by flooding, ripping out fixtures and smashing holes in the walls.
Of course, it’s negative behaviour and not to be condoned but I think we should remember, many of these FB’s were not finance savvy and many are ordinary working people blinded by the one chance they might ever get of future riches. To the majority, $50,000 cash in the bank and no debt is a dream. That’s an option very few have over their life time.
Worse, many haven’t the brain capacity to ever become financially savvy. Many were cajoled, smooth talked, lied to, tricked, told it was okay to commit fraud and write down false information, “Because everybody does it.” by the army of carpet baggers, used car dealers, telemarketing sales people who swarmed into the brokerage business or became realtorwhores when the banks started handing out free money thanks to Mr. Magoo.
I know it probably isn’t right to let your anger get the better of you when you see the locksmith turn up to announce, “The time has come. Get out.” but for many it’s hard to hold back those feelings of frustration and anger knowing you’ve been taken to the cleaners by a bunch of well dressed, smooth talking, teeth whitened, BMW driving low life scumbags who had no interest in the eventual outcome or how you and your family would deal with it when the “dream”, as most of these scumbag realtors and brokers knew, it would started to fall apart. All these realtorwhores and brokers could see was something like that upcoming vacation at an expensive, exotic location where they could brag about how much money they were making.
Of course, those who bought 2, 3, 4 or 5 properties, the flippers, the speculators, etc, I have NO sympathy for but when you put yourself in the shoes of some poor schmoe who just made a grab at the brass ring, thinking a new home would make life more pleasent for his family, it’s difficult not to feel sorry for him when you see him trying to find alernative living quarters or trying to hold his family together.
Actually, it makes it harder to take when you see that teeth whitened, sun-tanned low life CEO of CountryWide, cashing in millions of $$$$ in profits because he IS financially savvy but, like the rest of the broker and realtorwhores, who were out there peddling the “impossible dream”, has made out like a bandit at the expense of the non-financially savvy and will suffer no consequences.
Welcome to America where, as a character in Mario Puzo’s novel, “The Godfather” remarks, “It’s easier to steal with a briefcase than a gun.” How true.
Perfectly said, Mike. A year ago I was amused by the whole housing bubble madness. Now it just makes me plain sick. I usually consider myself an optimist, but things are getting really, really scary now…
…and to think that hardly anyone in the REIC will pay for their actions. Ugh!
The homes are not theirs to trash; they belong to the lender.
People who trash homes that they don’t own should go to jail.
Dang, Mike, I do enjoy your posts. Yep, I was discussing this exact thing with my sis. There were people in her area who fell for the Ponzi scheme and for one moment they felt like “Pinch me, I’ve got a house!” And many did indeed take pride and try to improve their neighborhood. They believed because they wanted to believe and many felt that if the banks said they could own a home, it must be true. And then they find out they that they were swindled and made fools of. Next follows the rage and frustration. I actually don’t blame some of them for trashing the homes. But I, too, felt a certain amount of rage and frustration as I saw many of these FBs with false arrogance upend the community, so some, no matter how dumb and how swindled, I just can’t feel sorry for.
Give me a break…they didn’t OWN anything! They were renting it from the bank for a period of 30 or more years.
Whether they lost the house due to stupidity or irresponsibility, they have no right to that house. “How DARE that friggin’ bank expect me to actually pay for the house I promised to!” It’s a prime example of how people in this country have no concept of personal accountability.
When the banks wouldn’t loan to uneducated, poor people, they were labeled as bigots. When they did, they were faulted for preying on the little guys. Make up your mind.
“When the banks wouldn’t loan to uneducated, poor people”
Banks are not in business to loan money to poor people. The are in business to loan money to those who are in a position to repay the loan. Banks are not charities. Nor should they be tax-payer funded American Dream Machines.
“Banks are not in business to loan money to poor people.”
Ah, contrar’! In theory yes, but then how do you explain the CC lending business.
jjinla:
““How DARE that friggin’ bank expect me to actually pay for the house I promised to!”
“How DARE those friggin’ workers expect me to actually pay for the health care and pensions I promised to!”
“How DARE those friggin’ voters expect me to actually keep a campaign promise!”
They became what they beheld.
“some poor schmoe who just made a grab at the brass ring”
I reject this. These “poor schmoe’s” knew they couldn’t afford the house, and they planned on accelerating prices and serial refis to keep from actually having to budget and live below their means.
That would be hard.
That would mean they would have to practice some self-restraint.
That would mean they would have to admit they are middle class or less and adjust their spending and expectations accordingly.
That would be reasonable behavior.
But noooo, they all wanted a quick trip to easy street, with phantom money floating them all the way.
Now they have endangered the financial future for all of us.
There are no victims in this story…just greedy bastards…some of them are lenders, some REIC, some politicians and some are schmoes. All of them volunteered for this nightmare and they are taking the rest of us with them, if they can.
Great post Spike. Furthermore, why stop at taking “their anger and frustration” out on the bank. They should also be “taking their anger and frsutration out on the RE agent, the mortgage broker, the appraiser, etc.
These people are losers plain and simple. And whoever said they should be prosecuted as criminals is 100% right on. Most of the people who are quickly becoming a foreclosure statistic are costing us tax-paying, law abiding, fiscally responsible US citizens much hard earned money. Absolutely NO sypmathy from me.
“‘You can walk into all kinds of things because the people are angry they are being evicted,’ said Lauren Rooney, a Corona agent who inspects homes just after lenders foreclose on them. ‘You get people who are really upset at the last minute, and they say, ‘We are going to make the bank pay!’”
I read that article, and I’ve got to say, I fear for the safety of REO agents (Iknow, I know).
Seriously, there are some angry folks out there (most are nice enough). I would not want to be the messenger! Sounds like a job for a hired gun, chuckles.
Leigh
Leigh, I’ve been trying to come up for a term that would describe this, something similar to road rage. REO rage?
You win, I love it! REO rage!
Chuckles,
Leigh
Jealous Bitter Retards
Riding the REO storm out…
http://www.guntheranderson.com/v/data/ridingth.htm
Most folks won’t bother you, they may try to make a case as to why they should stay, but once you tell them it’s out of your hands, they began telling you the story. If you stand there and listen and let them get it off their chests you’ll never have a problem. A lot of times however, folks are long gone and the damage is done. People can get real creative when they are pissed.
Agreed. The link to the story illustrates that many people are nice. I just think about the ones who are…er…a bit touch (I could be describing myself…snort).
As this continues to play out (short of a bail out), I really do worry for the safety of REO agents. Exponentially, the large the foreclosures, the angrier the croud? Let’s hope I’m wrong!
Leigh
er…large = larger
“Paul Howard, who has an adjustable-rate mortgage on his Sacramento home, said seeking a loan modification was frustrating.”
“Howard bought his house for $274,000 with 100 percent financing in April 2005. The in-law who arranged his adjustable mortgage told him it would stay at 5.75 percent for five years (a $1,400 monthly payment).
“‘I was shocked when after just two years, it adjusted,’ he said. ‘I should probably have paid closer attention to details.’”
Ode to Hank Williams…
Here, the loansome adjustable
Howard sounds too broke to try
The housing game is winding low
He’s so loansome he could cry
He’d never seen a loan doc, so long
When the time came to sign
The mood to scrawl came over he
To own a place, no lie
Did you ever see a A.R.M.’d one weep
When loans begin to die
That means he’s lost the will to give
He’s so loansome he could cry
The silence of a falling market
Lights up the usual denial
And he wonders where it went
He’s so loansome, he could cry
http://www.youtube.com/watch?v=e8fY7_Tif80
When tears come down like falling rain
You’ll toss around and call my name
You’ll walk the floor the way
I do, your lyin loan will tell on you
Have a great weekend.
Oh give me a loan
where the Realtors roam
and the bankers and scam artists play…
Where seldom is heard
a discouraging word
and the stock market’s higher each day.
“In one extreme instance a Blockbuster clerk was given a mortgage after he wrote on his application that he earned $6,000 a month.”
Seen him before…
“fifty bucks says the Smail’s kid eats it!.” (Caddyshack)
DOC
“are you gonna eat your fat?”
Hi All,
The bubble just struck home for today here in S. Oregon. Just got an e-mail. My Mortgage Broker tells us all he will now be now starting a new career selling Hondas! Well, at least a good product to work with….!
“Lenders siezed more than 1,000 homes in Riverside County in August and again in September. That’s more than five times as many repossessed homes as in July and almost 20 times as many as in September 2006, according to RealtyTrac.”
Just a few months ago we were discussing that 300 weren’t a lot. Funny how fast this is moving along. 1000 a month is not bad. But we still have a little ways to go before it’s ugly.
The Spiteful State of America, version 2.007
“Just before the bank took possession of a home in northwestern Riverside County, its former owners attacked the walls with paintball guns and smashed gaping holes in them.”
“They ripped out stair railings, banisters and cabinet doors in the half-million-dollar Eastvale house. Then they turned on the upstairs bathroom sinks, put down the drain stoppers and fled as the bank’s locksmith arrived to rekey the doors.”
“‘You can walk into all kinds of things because the people are angry they are being evicted,’ said Lauren Rooney, a Corona agent who inspects homes just after lenders foreclose on them. ‘You get people who are really upset at the last minute, and they say, ‘We are going to make the bank pay!’”
“Just before the bank took possession of a home in northwestern Riverside County, its former owners attacked the walls with paintball guns and smashed gaping holes in them.”
What is the legal status of ownership during the foreclosure process? Did the “former owners” destroy their own house (presumably legal), or did they criminally vandalize the bank’s property on a massive scale? If the latter is the case, I hope they end up doing some time in prison AND end up with a judgment against them for the costs incurred, plus punitive penalties.
Great, looks like the a@@holes -both FB’s & their Lenders- are at each other throats already.
I LOVE IT.
“Then they turned on the upstairs bathroom sinks, put down the drain stoppers and fled”
Yikes that could be expensive
So is it always the sheriff that shows up for foreclosures?
Never a repo man?
“So is it always the sheriff that shows up for foreclosures?”
Yes, along with Agony, Regret, Despair and the gnashing of teeth.
Along with
“The report also said that lenders resisted modifying loans to fixed rates, offered only short-term solutions and didn’t reach out to consumers in trouble.”
Isn’t the main problem that many borrowers can’t actually afford fixed-rate or any other full-amortization loans? There’s really no way to polish that turd - foreclosure is the only option.
A strange story of revenge.
(story from a small community east of Portland OR). A man lost his home in Molalla OR. When his house reverted back to the bank he went on a rampage at his former home.
He went back several nights in a row, tearing off huge sections of the roof. Rain started pouring in and caused damage to the plasterboard in the walls. He tore out cabinets and fixtures, did an enormous amount of damage.
Lastly, the finishing touch. He found to large sized pigs and turned them loose in the house. He tore off both front & back porches, so the teen-age pigs were trapped in the house.
After about 1 week of roaming in the house, the pigs were finally rescued by the fire department.
The house was a complete shambles, and the local residents got a good laugh at the “revenge”.
The house was a complete shambles, and the local residents got a good laugh at the “revenge”.
Until they reflected for a few minutes and realized what impact it had on their own property values.
“The U.S. House of Representatives passed H.R. 3648, a bill that will disallow the IRS from sending a tax bill to homeowners who negotiated short sales with their lenders. Su said the new measure could encourage others to give up, to default on their loans.”
“‘If I’m that homeowner, saying, ‘I refinanced and I bought my jet ski, I bought season tickets to the Chargers,’ what is my neighbor going to do, who’s working two jobs to make that same payment and he gets screwed? … He’s going to say, ‘I better default, too,’ Su said.”
Not to mention the fact that they’re paying for this by screwing over investors, or rather… changing the capital gains tax exemption in a Robin Hood-esque move to fund it (I read about HR 3648 on NuWire.) … I hope the bill gets vetoed or tabled- I’m all for getting rid of that phantom income tax, but not if they’re paying for it by taking money from those who are investing wisely.