Mistakes Have Been Made In California
The San Francisco Chronicle reports from California. “Four major subprime lenders promised to give a break to California homeowners who cannot afford escalating mortgage payments, under a plan announced Tuesday by the lenders and Gov. Arnold Schwarzenegger. To qualify, borrowers must occupy their homes, have made their payments on time and prove they cannot afford payments with the higher interest rate.”
“It was unclear for how long the loan servicers would freeze the interest rates.”
“‘The word that was chosen is it’s for a ’sustainable’ period of time,’ said Mark Leyes, a spokesman for the California Department of Corporations, which oversees nondepository lending institutions. ‘What does that mean? The answer is, it depends. It could be two years, five years, even seven years. The idea is until the housing market recovers. At that point, housing values would be restored; equity is restored, refinancing becomes an option. But nobody knows how long that’s going to be.’”
“‘With this type of cooperation from loan servicers, we can save tens of thousands of people from being added to the foreclosure lists,’ the governor said in a statement. ‘This common-sense approach does not involve a government subsidy or bailout.’”
The Sacramento bee. “Those homeowners who already have missed payments and who are threatened with foreclosure don’t appear to benefit from Tuesday’s agreement.”
“Regionally, 6,528 households have gone into foreclosure from January through September in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, DataQuick reported.”
“About 11 percent of all home loans in El Dorado, Sacramento, Placer and Yolo counties are subprime, according to First American Loan Performance.”
“First American Loan Performance says 12.3 percent of all California adjustable-rate loans are resetting during the last quarter of 2007. The number gradually slows next year, with 8 percent scheduled for resets in the first quarter and 6.4 percent in the second quarter. Another 7.29 percent will reset higher in the second half of 2008.”
The Times Delta. “Not only does the state lead the country in the highest number of foreclosures, at 51,259 in September, the governor said, but seven of the 16 metropolitan areas in the U.S. with the highest foreclosure rates are in California.”
“‘Mistakes have been made by both sides — by lenders and by borrowers — but this will minimize the pain for everybody,’ he said.”
“The interest rates would, after a period of between two and five years, eventually go up.”
“Michael Salierno, VP of Provident Mortgage in Visalia, said some lenders will feel it, although he didn’t think it would be a ‘devastating’ blow.”
“‘They were banking on the fact that they were going to receive [a higher rate down the road] and what they’ve been banking on is not going to happen,’ he said.”
“Bob Keenan, CEO of the Home Builders Association of Tulare/Kings Counties…wondered how long it will last.”
“‘The homeowners can’t end up never having to pay market interest rate, because what would that say to everyone else who does?’ he said. ‘There’s relief now but at the other end they’re going to pay.’”
From ABC 7 News. “The governor worked out an agreement with four of the major sub-prime mortgage lenders to stop those rates from adjusting, at least for a little while.”
“‘I have nowhere else to go.’ ‘Al’ didn’t want us to show his face on camera because the prospect of losing his home is just too embarrassing. The adjustable rate on his sub-prime mortgage will reset in January, spiking his monthly payments up by another $1,000.”
“‘They ballooned the rates so high that it’s incredibly hard for even two people that are working to afford their house payment,’ says ‘Al.’”
“‘Right now I have six foreclosures listed, but there are companies out there that … that’s all they deal with is foreclosures, and they’ll have 200, 300 listings of foreclosures,’ says Belinda Mills, a Stockton realtor.”
“‘Al’ doesn’t want to be part of that statistic and has already asked HomeEq not to raise his rate. Now, he’s crossing his fingers, waiting for approval. ‘The home represents the future for me and my family,’ says ‘Al.’ ‘I’m going to fight all the way.’”
The Orange County Register. “The folks at online house tracker Zillow have a fun new stat. Well, it’s really a sad, new stat: They’ve estimated, by major metro region, how many buyers in the past year (ended in September) that have no equity left in their homes.”
“Here’s a sampling: Nation’s worst? Merced, at 72% of past year’s buyers. SoCal (LA-OC-Ventura-Riverside-San Berdoo)? 35.4%. National average? 15.6%.”
“For the 22 business days ending November 8, sales for all types of Orange County home sales decreased 43.5 percent. The median sales price decreased 8.6 percent.”
“Delia DeYulia was recently forced to take her first retail job. For the holiday shopping season, DeYulia is working part-time at Kohl’s, placing clothes on racks and cleaning dressing rooms. She resorted to taking the temporary work after not finding other employment.”
“After 15 years with Fremont Investment and Loan, she lost her mortgage job in Anaheim Hills in March.”
“‘I’m used to sitting in an office,’ said DeYulia, who audited loans at Fremont. ‘Now, I’m on my feet all day. I’m carrying a lot of stuff and my body has to get used to it. It’s hard work for a minimum-wage job.’”
“DeYulia’s position was one of 3,800 mortgage jobs cut in Orange County from Oct. 2006 to Oct, 2007, according to the state’s Employment Development Department. Many of those laid off have reluctantly turned to retailers for jobs to help pay the bills.”
“Robert Harrington and Shad and Corinna Vickers, are looking for retail jobs. Harrington of Tustin, was let go in September from Bankers Mortgage in Santa Ana. As its loan originator, he made about $75,000 last year. More than half of that was from commissions.”
“That’s why he thinks his best bet is to find a commission-based job at a luxury retailer or a store that sells big-ticket items. ‘I just need a commission-driven job because it’s better than hourly,’ he said. ‘I need the benefit of being able to make more money.’”
“Corinna Vickers was let go a year ago from Secured Funding in Costa Mesa. Then two months ago, her husband Shad Vickers, lost his job at Lending Tree in Irvine.”
“Combined, they had been making $200,000 a year.”
“Now they’re both unemployed and have been hunting for work to pay their bills and help them save for retirement and college tuitions for their four daughters. They have not had any luck and now the Vickers are both willing to take on holiday retail work.”
“‘I need to stop thinking about a career and start looking for a job,’ said Shad Vickers of Tustin.”
“Rhonda Struman of Laguna Niguel is not waiting around to get hired full time. Last month, she began working as a part-time salesperson at Nordstrom at The Shops at Mission Viejo. It pays $8 an hour. Before she was laid off in August from her underwriting position at Paul Financial in Irvine, she was making about $70,000 a year.”
“Her husband also got laid off from the mortgage industry. He was pulling in about $130,000 a year. Now, he’s working for $11 an hour at a Costco in San Juan Capistrano.”
“Because of their huge pay cuts, they’re having a hard time paying their $3,400 monthly mortgage. They sold off their boat to get rid of the monthly payments. They will soon sell their furniture.”
“‘I cry all the time and I’m stressed all the time,’ Rhonda Struman said.”
“By February, she and her husband will leave Orange County for Colorado to look for mortgage jobs or work that pays better than their current employers. They’ll rent out their Laguna Niguel house to help pay the mortgage and then rent in Colorado.”
“‘We have no choice,’ said Struman. There’s too much competition in Orange County. ‘There are too many people out of jobs’ who are looking for new work.”
The Press Enterprise. “Riverside County property owners who believe the market value of their property has fallen below its assessed value have until the end of the year to file an application for changes in assessments on their tax bill.”
“County Assessor Larry Ward extended the Nov. 30 deadline for the application in the wake of plummeting home prices and a real estate market where the Inland region is experiencing the third-highest rate of foreclosure activity in the nation.”
“Ward said the precipitous slide in home prices began in the spring so many property owners won’t see a decrease in their tax bill until next year.”
“Earlier this year, Ward’s office reassessed 31,333 properties, which resulted in a $610 million reduction in their assessed value. Many of those properties were purchased during the height of a red-hot housing market in 2005 and 2006.”
“But John Green, a Temecula real estate agent and Menifee homeowner, said the system does not accurately reflect the property values of thousands of properties. Green said the county stands to reap tens of millions of dollars in overpayments from unsuspecting owners.”
“Green said many home prices have slipped by 25 percent or more. He has appealed the assessment on his own Menifee home.”
“And Green said there are a lot of great deals on the market for qualified buyers. ‘It’s just a shame so many people are being overassessed,’ Green said.”
‘Green said many home prices have slipped by 25 percent or more. He has appealed the assessment on his own Menifee home. And Green said there are a lot of great deals on the market for qualified buyers. ‘It’s just a shame so many people are being overassessed,’ Green said.’
Mr Green is clearly forgetting the wonderful tax advantages of being able to write off these over-assessments!
From a letter to the editor in the Desert Sun:
‘On Dec. 12, 2006, I read the annual Business Week predictions for the housing market. In short, their forecast included the following: Declines in home sales, lowering prices. Price decreases in 2008. Increases in foreclosures for many, shrinking net worth. Increased mortgage rates with a double-digit decline in housing starts.’
‘The sharpest decline since 1991, the worst year for housing starts on record.’
‘What is the driving force behind this rapidly deflating bubble? It isn’t difficult to pin the tail on this one; it is the ‘creative financing’ that drove this boom. First, for those who were unable to afford a higher mortgage payment, adjustable rate mortgages were created. One trillion dollars worth of those will hit the banking system in 2007!’
‘Next, they came up with interest-only loans, with even lower mortgage payments each month. How many of you are aware that 42 percent of the loans in the Coachella Valley during the past five years were interest-only?’
‘When the remaining pool of borrowers was still unable to find affordable housing, the industry created the most onerous of all, the pay-option mortgage. Here, the borrower may elect to pay nothing towards principle reduction and half of the monthly interest! Each month the borrower’s equity further vaporized and in five years, when he owes far more than the house is worth, the loan converts to a conventional, fixed-rate loan.’
‘At this point the owner has either found sudden new wealth by shooting up the corporate ladder, has won the lottery, or must walk away - defaulting on the loan he opted for, with the lender adding the home to his rapidly increasing inventory.’
‘What is startling about the pay-option loan is that in 2003, only eight out of 1,000 Californians buying or refinancing went for one. Last year, it soared to one in five! This year, one in three loan applicants have chosen them.’
‘What is startling about the pay-option loan is that in 2003, only eight out of 1,000 Californians buying or refinancing went for one. Last year, it soared to one in five! This year, one in three loan applicants have chosen them.’
This year’s pay-option loan share of one in three is indeed startling, and portends many years of unraveling ahead of us before the California housing market rights itself.
Is that the same thing as as the secure advantage loan that was being touted a couple years back?
“pay option ARM” gives FB three choices: (a) a payment that covers the interest and a conventional amortization of the principal, (b) a smaller payment that covers only the interest, (c) a still smaller payment that covers less than the interest, leading to an increased principal balance. In case (c), though, the borrower is not allowed to go on in this way forever: when his loan balance reaches some amt like maybe 115% of the original loan, his interest rate suddenly jumps AND he is required to start making real payments as in (a) above. (I don’t know what the “secure advantage” loan was.)
This so called fix is just window dressing. Very, very few will qualify. Will re-fis qualify? I think not. A lot of talk about pay option arms in this thread. They were not a sub-prime product. They are referring to 2-28s that are resetting. Almost all were 80-20s, stated, and the borrowers were hoping for the miracle of appreciation to put off judgement day. The key statement is “prove” they can’t afford the reset. 90% of the borrowers will not be able to prove they can afford the “pre-reset”, much less the post reset payment. This is good photo opportuntiy and nothing else. Tempest in a teapot. Next crisis please.
Yes, Paul. Anyone who misstated their income will be found out upon application to the program. I hope all these people are told to go rent a house like all the other fry cooks.
The governor is cluless on this agreement.Seems like they are just intent on keeping home prices artificially high.It is a shame the state gets involved like this.Let the market take care of these people.
And what about FB’s who are going to default from mortgages not originated from those four mortgage companies? This is patently unfair to them — to the point of starting a class-action lawsuit. (equal protection?)
What about responsible people that saved and bought with a conventional fixed rate loan!???! Talk about being punished for being responsible! They could have bought a much bigger house if they’d used an adjustable rate loan. The Governator is soooo clueless. Nothing new, I guess.
“Seems like they are just intent on keeping home prices artificially high”
Then they are intent on failure.
What about flippers, investors, 2nd homes, refiers, people who lied about it being a primary residence, people who lied about their income or have lost jobs? They all get rewarded? Won’t this also keep prices artificially high?
The idea of keeping housing price artificial high, so that the state and county can tax more and spend more.
“What about flippers, investors, 2nd homes, refiers, people who lied about it being a primary residence, people who lied about their income or have lost jobs? They all get rewarded? Won’t this also keep prices artificially high?”
You may want to re-read the thread…
“To qualify, borrowers must occupy their homes”
“To qualify, borrowers must occupy their homes”
Yeah, but is there a buyer out there who put anything but “owner occupied” on the docs the last 3 years?
All at a point where affordability is at a all time low of 5%. I dont think so homie… aint going to be sustainable.
He is taking the American Dream away from responsible people, who did not buy because of the inflated price and
fraud. What is it now, fix 1% rate for FB for the next 10 years? Who is paying for this?
Oops-you beat me! My bad!
Can someone explain this further? Seems to me the folks affected by this agreement will end up paying far too much in a monthly payment for a home they will eventually lose anyway…They would be better off being foreclosed and renting! So the real loser is the moron who accepts this deal! And the real affect is that it will cause foreclosures to be spread over more years, which will lead to longer recovery periods for the housing market in California. Am I incorrect? In my estimation, this won’t affect most of us responsible folks?
“And the real affect is that it will cause foreclosures to be spread over more years, which will lead to longer recovery peiods for the housing market in California. Am I incorrect?”
No, you are correct. And this longer recovery period will be a good thing.
A crash will be a disaster; a managed decline less so. If the financial machinery can be modified to slow the unwinding then the economy might be saved. If not then we are all hosed.
There are trillions of dollars destined to disappear. Better if they disappear slowly than all at once.
Recovery will take 15-20 years and therefore a 2 to 7 year program is useless for the borrowers. And you are right: It’s just to dupe people paying stupid mortgage rates a few years longer instead of walking away from something they can never afford in their lifetime anyway.
Another thing: Countrywide is already on the ropes. Assuming that Countrywide even has the legal right to cancel scheduled rate re-sets on loans it doesn’t itself own, but only services for secondary-market investors, won’t that further drive capital out of the already mostly-dead* secondary market?
Countrywide’s very existence is being wagered on a recovery in that market. How in the world is it going to restore investor confidence in mortgage securities, when investors are being put on notice that the back-loaded, increased payment streams they think they’re bargaining and paying for, in a mortgage securities transaction, are likely to be postponed or eliminated?
*Any closer to “all dead,” and it’ll be time to go through its pockets for loose change.
This bank bailout program won’t help people, because at the end of the program the recovery will be years away. Most of those borrowers will loose their homes anyway and the banks will have saved billions of interests, taxes and maintenance costs.
They are choosing the 20-yr deflationary route that Japan took. Instead of zombie companies, we will have zombie homedebtors. They might think that they own a house, but the house owns them.
But what about Arnie’s new plan with mtg co’s that will ” …”freeze” interest rates if you paid on time, but cannot afford the increases sand can PROVE it “…?
Is that seriously supposed to forestall continuing foreclosures ?
I am serious, is it?
I don’t see how, because it would seem onerous to prove in a timely manner that you won’t be able to Pay the mtg Hike and have it acted on by the powers that be and reflect that so homeowners can breath a sigh of relief.
Just my observation of mtg and gov entities NON performing in a timely manner.
And personal experience.
5 yrs After hard times a friend got a letter from County stating that IF they could show BK records and do it and have it recvd in 10 days or less (right before Christmas) that they MIGHT be able to get back over 5,000k that was overcharged by MTG co Five yrs prior and that the County had been holding for those yrs…
That is alot of IFs ANDs and MIGHTs if you ask me.
Luckily the guy was not out of town and hurriedly found such records and then after first of yr…VOILA he got lucky.
$5,000 K was Returned.
That is a true story of my neighbor.
How ironic. The people who didn’t have to have proof of income now get to use proof of LACK of income to save themselves?!
My head is spinning.
Damn, a $5 million refund is great.
This would be aimed at my SIL, IF her loan had not been resold.
She has a 2/28 sub-prime, I/O ARM that started at 8% will go to 12% next Oct, and is already upside down. NO WAY could they afford their loan if it resets.
They’d much rather continue to collet 8% than have her loan rest, her stop making payments, and then having to foreclose and then book the REO or sell for a mass loss.
This is going to hit a tiny fraction of loans…. What is the number so far.. 1%?
legal loophole
the check you get for a deposit is good for a felony if it bounces ,but the rent check is considered a contractual & continuing arrangement and requires civil court action…….some lawyer just ripped off my 80 year old mother
Ya’ll may or may not remember that two Thanksgivings ago, we were reading about a flipper in Sacramento who “bought” a house for like 800K(!) and then decided they didn’t want it. They were not able to sell it. To me that was the first shot across the bow that things might be turning to the downside.
Here in So Cal the shots were flying earlier than that …. you only had to see all of the illegal stucco / painters etc. buying homes for zero down and you knew it was the end for the house of cards.
For me, the realization that something is seriously wrong happened 3 years back. A friend of mine described how FOB Chinese students in Phonex were depositing checks for $5000 and collecting between $20,000 - $80,000 3 to 9 months later by signing purchase contracts for homes not yet built. Funny thing is, they didn’t have a damn clue what they were doing! Someone trustworthy told them about this scheme and they all jumped on “free money” like lemmings. I sold my home in San Diego a year later to move out of state.
For me, it was the March ‘05 purchase of a $450K house by an acquaintance whose income was about $40K/yr.
What a bunch of darelicts as I remember that story.Wasn’t that in west sac somewhere? I went to ikea down there the other day.Talk about a bunch of cheap crap.they make walmart look good.
It’s hard work for a minimum-wage job.’”
Oh theose are the hardest jobs of all. They treat you like sh!t too.
Yeah, I had a minimum wage job back in junior high… But then I went on to graduate high school, serve in the military, and put myself through college.
Oh wait, was I supposed to feel sorry for Delia?
I’ve had more than a few minimum wage jobs. For the most part, they sucked like 1,000 Hoovers.
But what’s a sucky job good for? It’s good for motivating you to find a better job, that’s what!
It’s good to have a low paying $hit job early in one’s life. It serves as a good point of reference to compare other good, well paying jobs to.
“Now, he’s working for $11 an hour at a Costco in San Juan Capistrano.”
“Last month, she began working as a part-time salesperson at Nordstrom at The Shops at Mission Viejo. It pays $8 an hour.”
“DeYulia is working part-time at Kohl’s, placing clothes on racks and cleaning dressing rooms.”
I remember that many people posting on this Blog last year were making jokes about Real Estate agents and Mortgage Brokers (who were making big-bucks at the time) being just one step away from the minimum wage jobs market.
Wow, just wow!
Too bad Starbucks is cutting back - think rebarristas.
So, what happens after Christmas when all of those temporary retail jobs go away?
Yeah imagine that…that the JOBS forecast of “growth” will suddenly decline after the holidays.
OOps
Part Time work for minimum wage = job growth?
The birth death adjustment will solve any problems in that department.
Some day there will be 95 people left working in America. But the labor force will be 100 so we’ll still have 5% unemployment.
I’m not sure Realtors are qualified to become baristas. Even at Starbuck’s, and relatively speaking, being a barista requires actual skills. (If you start w/ good coffee, the pleasure of the actual beverage depends on how it was made.)
“I have to quit thinking about my career and look for a (newly created) job.”
Former mortgage brokers & underwriters are finding their true level of employment value…Gotta love it !
“I remember that many people posting on this Blog last year were making jokes about Real Estate agents and Mortgage Brokers (who were making big-bucks at the time) being just one step away from the minimum wage jobs market.
Wow, just wow! “
It’s what an economist calls a flexible economy.
I wonder how many of them were boastful braggarts about ‘the free market’ and their exalted skills deserving of earning six figures.
Welcome to the other side of the market, beeyotch.
Yeah, it’s a good thing the gobmnt is closing the borders or the mexicans would get all these $8/hr jobs.
I hear the US Army is hiring.
there we go: you know how the army offers to pay college tuition? if they start offering to pay off your mortgage, maybe they can get some recruits.
Bwah-ha-ha! Best idea I’ve heard all year!
Sounds like a good place for these screwballs.Put them on the front lines looking for roadside bombs.
They’ve already bombed being Realtors, so it should be an easy transition…
“I hear the US Army is hiring.”
Something like 70% of draft age Americans don’t qualify due to lack of strength. Few now fit within the BMI charts, and many who do are afraid of heights and water, so flying, jumping, and diving are not an option.
Yeah, my I heard that the Army is actually one of the most selective jobs out there because of the physical standards and the educational standards.
It is most definitely not your father’s military.
Bob, it’s not clear that a college degree and military service will get a Californian anything better than a minimum-wage job at this time. My guess is that a lot of the laid-off loan originators have college degrees in something-or-other. But so do a lot of low-paid individuals in India, etc.
“It’s hard work for a minimum-wage job.’”
Welcome to reality.
These REIC sob stories all reek of a peculiar elitism that I just can’t quite figure out. Even in their current shame these REIC fools ooze arrogance - as if they are above doing the things that large swaths of this population have had to do all their lives - but that their particular lot is a temporary and undeserved one. What “caste” are realtors in anyway?
“What “caste” are realtors in anyway?”
Cement Overshoes.
Sorry.
Remember, if your employer is paying you minimun wage, what he is saying to you is, ‘If I could pay you less, I would’.
Tell me how these former cheery Realators are taking that morale pill.
The`re are only 3 things that matter in a minium wage job. Location, location, location.
touche’
I liked the guy below her.
“That’s why he thinks his best bet is to find a commission-based job at a luxury retailer or a store that sells big-ticket items. ‘I just need a commission-driven job because it’s better than hourly,’ he said. ‘I need the benefit of being able to make more money.’”
What a genius!
Years ago my son wanted to do this and I threatened to break his legs! Mama don’t play!
Someone tell him that’s a really bad idea because people are BROKE!
Smiles,
Leigh
That’s what drove me crazy about this bubble - all the “luxury” house building. Most people are broke. (Heck, even they make a good income they are just as likely to be broke. ) Don’t build developments of 100’s “luxury” houses where you can hear your neighbor dust their furniture and expect to make money.
Yes, Leigh, I think your advice is good. Much better to have a steady salary at a time like this.
What do they do about loans that have been resold by the company that wrote them? Is the holder of the note liable for the discount, or will the company that wrote it bear the cost? If they haven’t figured that one out, then about 0.0001% of buyers will qualify under this great new agreement.
My understanding is that these loans have already been packaged and sold. The terms of these tranches can not be changed - they would not even know where to look to find them and the holders won’t agree to these changes…they are already worthless.
So Arnold is just jawboning? Implementing something that looks like he tried… but can’t be practically applyiedto more than a dozen or so FBs?
Bingo! picture Arnie in a monkey suit just workin’ the football.
Grey Davis had enron to deal with, and was tossed out because of Texas fraudsters…
Who is going to replace ahnold, when the good people of the Golden State find out what a fraud he is?
Dude, I sprayed beer on that one, not coffee mind you, but sweet nectar!
No. I won’t do that. Must…resist.
LILL:
Are you familiar with Arnie’s worker’s compensation reform? He reformed it so that employees with repetitive stress injuries have no right to be compensated.
Arnie is a rock head.
We know Arnie is a RINO. Wanted health insurance for the illegals. Signed to increase debt (read bonds) to pay off the deficit rather than reduce spending. He has no clue but in defense has a bunch of socialist dems in Sacramento to work with.
Can the people who is being foreclosed now sue to be eligible for 1% interest rate for the next 10 years? Equal housing opportunity, right?
No one is getting a 1% rate. Any rate that low was a teaser rate that is long gone. The rates we’re talking about freezing up are more than likely in the 5% - 8% range.
Attorneys across the country will be burning up their PCs to file lawsuits over this one. Why should it only apply to people who live in California ? Why shouldn’t it apply to wanta be FBs who would like a house for whatever they can afford to pay ? The “solutions” to the housing bust are getting way to silly for me.
Why should it only apply to people who live in California ?
Beacuse it was negotiated with a few lenders by the state of California.
Remember there are several levels of government? Federal, state, county, township, city….? Federal is not the same as State…… (Think 8th grade civics)
No lawsuit there.
It’s all talk and I’ll tell you why, the state of California has a smog program where they buy back old cars for $1000 bucks. Sounds easy but there are so many hoops you have to jump through to get it most people will just give up. I went through the hoops and the inspection and the test the paperwork the approval more paperwork then final approval before I got the check. There’s no way someone is going to show up and say carry my loan so I don’t get kicked out of my house, were talking Kalifornia here.
No lawsuit there.
Not so fast. The four lenders involved all do business in other states. IANAL, but wouldn’t this deal be a possible violation of Robinson-Patman Act? http://en.wikipedia.org/wiki/Robinson-Patman_Act
Any lawyers out there care to comment?
Saw my first mortgage fraud commercial tonight. I’m in the Midwest. It sounded like they reworked the mesothelioma ads.
My thinking is, the loans in C’wide’s portfolio are loans that they sold but that were “put” back to them because of too many defaults. Now C’wide kindly renegotiates w/ borrowers because the alternative is a mailbox full of house keys, which would be basically worthless to C’wide in the current situation.
From the SF Gate article: “To get help, borrowers must occupy their homes, have made their payments on time and prove they cannot afford the loan’s new rate.”
So what happens if the FBs’ “proof” that they can’t afford the new rate predictably doesn’t match the income stated on their liar’s loan application?
Now that I think about it, this program might turn out to be an excellent opportunity to conduct a huge mortgage fraud sting operation!
if you lied on the app or conditions you get 1 year on a road gang
that’s fair
I favor publicly televised 24×7 waterboarding as punishment. After a few weeks of that, we could expect the mortgage fraud rate to go to zero.
but I’m not getting reimbursed
2 years road work
road work.
Keeps them off the street, tired, and thankful for any other job.
Got popcorn?
Neil
Thanks, Bob for finding a silver lining. I’ve been grumpy all day, thinking about all those Californians who will postpone their days of reckoning.
I’ll go into cooking overdrive now. Dow will close down about 200 points. Thanks to Ben and HBBers whose wise words have encouraged me to save for the future and to make conservative investment decisions. Happy Thanksgiving to all of you.
Yes, Thank Ben and the HBBers for calming the nesting instinct in many of us. At least this way, I renegotiated a fairer/less rent for the time being as owner wanted to sell last yr, but was locked into a 2yr lease. And he would be without a renter as lots of homes/rentals are now coming onto the mkt.
He should Thank Me!
What crosses my mind is all of a sudden, people quit their already low income job……..just to prove they can’t afford the new rate. Although come to think of it — how many have paid on time anyway?
This is a joke, isn’t it? I’m feeling better now. Thanks Ben. I needed some commonsense from this site!
I feel as though the only people I’m comfortable with are on this blog. People who know me laugh at me and say I invest like an old man. In reality, I’m 60% in mutual funds and have lots of government securities and a significant amount of precious metal bullion coins. These people are still laughing. Maybe a year from now at this time they would no longer laugh. Since 2001 I have been worried about outsourcing, the end of the 2001 tax cuts (sunset in 2010), big spending programs, peak oil, and general cheating and incompetence in the American public and our elected officials. It adds up to bad times for America, and perhaps 2010 to 2019 will be the decade of American incompetence. The chickens will have to come home to roost. Incompetence in schools, incompetence at work, lying on loan applications, the whole gamut. Cheaters will eventually pay. Nature works that way. Just as the smart money is leaving the US dollar (another form of cheating - phoney value), the wealth will flow faster and faster out of the U.S.
My own rule of thumb is to estimate the salary I would have if I had to revert to the job I had back before 2000. I would probably be earning $79,000 per year now. I’m 48 and would not do more than a 15 year mortgage. Okay, 32 and a half times $79,000 is about $200,000. That is how much house I should afford. That can get me into Tucson, but what if I wanted to be on a hill overlooking San Simeon in California? I do not want to get a starter house. And what payments would I be making for a 15 year loan? $3000 per month? And if I lived in Tucson, I would depend on one company as a place to be employed where I could be earning $79,000.
So I’m better off renting and moving around the country doing engineering gigs.
People think I’m a pessimist. They are wrong. They are just too optimistic that they are in denial.
But I am proud because I hold myself responsible for my personal finance and don’t take a handout. I’m not counting on bailouts. What matters most is having my pride. The tens of thousands of Californians who will get those bailouts will not have pride. That is good punishment for them. They just cannot compete against responsible people such as us here on this blog. They lost their sanity and we come out strong.
Bill, who is hiring you for engineering gigs if you really think 32 and a half times $79K is $200K? Just kidding, I know the “3″ was a slip. Can we deduce you are right-handed?
Yeah I’m right handed and with a nervous twitch on my “2″ finger. It was a slip.
My guess is if your current income doesn’t match your loan application you had better have a good excuse such as change in employment and be able to prove it. Most true liar loan holders will see the jeopardy in this deal and probably end end up not coming forward. Unless they are really that stupid.
“That’s why he thinks his best bet is to find a commission-based job at a luxury retailer or a store that sells big-ticket items. ‘I just need a commission-driven job because it’s better than hourly,’ he said. ‘I need the benefit of being able to make more money.’”
Of course, you might also get the “benefit” of making less money.
“I need the benefit of being able to make more money.” And you think you’re the only one and the rest of us chose lower pay ? These ex-mortage worker bees are remarkably dim.
I need the benefit of making more money too. That’s why I’m prospecting for new business during each and every working day. It’s also why I seldom miss a chance to get out there and network, network, network.
It’s also why I’m constantly seeking ways to upgrade my skills and knowledge so that I’m more valuable to those I do business with.
And to think that these mortgage types are bee-atching about having to get a job at the mall. Sheesh. I know a local fellow who cleaned houses while he got his current business up and running.
I had a grad student here who did house cleaning. She went out, got bonded/insured, and marketed herself. She was making 3 times the money a GSR did. She had to stop taking new clients after a few months, everyone loved her. She did great work, spoke english, and people weren’t terrified that she was going to rip them off.
She is now a full-time post doc and got through her PhD debt-free. I had the pleasure of meeting and congratulating her parents when she walked (graduated) last June.
We have a friend that does house cleaning. She bids starting at $25 per hour.
My maid charges $57 for 3 hours. Pay’s not that high, and it’s dangerous to go into other people’s houses.
Your maid could do better. I wouldn’t tell her that if I were you :). I don’t know how dangerous it is to go into other peoples houses. I haven’t heard of a lot of maids being butchered on entry.
It’s hard to sell something when all the “easy” customers are GONE! I’m in sales and I get paid both Salary and Commissions. Let me tell ya. It’s hard work and to achieve maximum potential, you work your ass off. Nothing like the mortgage business of late.
if this guy wants to make money off selling things, why doent he join the Amway team! im sure they are always looking for quailified people.
Sounds like that guy might want to sell something big, like say, cars?
Good luck with that in 2008! BAWAHAAAAAA
I could see them exchanging their gold blazers for the icky plaid ones of the stereotypical sleazebag with the greasy comb-over associated with the buy-here-pay-here corner lots…
I think he’s imangining being a referee in a bidding war over a side-by-side refrigerator.
Nice!
How in the HE!! are they going to freeze the rate increases on ARMs ? Those ARMs were purchased by investors and they expect a certain return. How are they going to get it ? Is the state of CA going to pay the interest for them ? And what about principle repayment, does that stay flat too ? IT CAN’T !
This doesn’t make any sense.
I don’t think too many will qualify, but it still stinks. Way to reward incompetence, Arnie!
But how are they going to do it ? Who is absorbing the interest that doesn’t get paid ?
They’ll just report it as “deferred income”.
Short term “solution” followed by longer term incompetence. Another way of rewarding irresponsibility.
Couldn’t they negatively amortize to make up the difference?
Wrote off as ‘goodwill’……………….hahahahahaha
Is Arnie really a Republican?
No. Arnie is really a rock head.
“This doesn’t make any sense.”
No, it doesn’t, on so many levels. This may be just another CYA move for the sheeple. My guess is there is so much fraud on these mortgages, AND the vast majority have been sold off to investors, that this just more talk-talk about doing “something.”
And all these sob stories about people facing foreclosure….of course the MSM will NOT ask the following: 1) What’s your income and how much did you pay for your house? 2) Did you make a down payment? 3) Did you have savings when you purchased? 4) Was your mortgage application a true picture of your finances?
“By February, she and her husband will leave Orange County for Colorado to look for mortgage jobs”
Somebody isn’t getting the message that the Mortgage party is over and the party isn’t still going in the next state over.
You got that right. Even here in TX where the market is still supposedly “rising” (ha!), the mortgage clowns are all over Craigslist begging every single day.
However, this is an excellent example of the CA outmigration due to economic hardship. This is textbook beautiful.
That’s right… but there are millions of folks that have no idea what’s heading their way, they have never been through a correction and are sure our Nanny Gubment will throw out a lifeline. Like someone else said… “These folks think “credit crunch” is a cereal!
Hey, wait a minute there, WMBZ, Credit Crunch is a cereal. There’s a box on display at Mike Larson’s Interest Rate Roundup.
Damn Slim I had no Idea, I just ordered a box! Thanks.
what a rude awakening these guys are in for, i wonder how many will try to move back home with their parents?
Yeah, but OC is oh so Republican. These folks would never ask for a handout from taxpayers. yeah, right.
Hey, I resemble that remark!
me too.
dammit
Think “Grapes of Wrath” and the migration from state to state looking for work and end up picking fruit.
I noticed in a newly refurbished Ralphs grocery store…all kinds of mature folks that suddenly were stocking shelves.
Nothing wrong with that at all, just that these new employees looked to me like they USED to be in suits or something else.
“Nothing wrong with that at all, just that these new employees looked to me like they USED to be in suits or something else.”
Nope, nothing wrong with that at all. And it sort of gives the lie to “jobs Americans won’t do”. Yes, an American would like a decent paying job. However, an American will also get out there and beat the bushes when they need to eat and they’ll take any job they can get. Retail, cleaning houses, stocking shelves, whatever.
“Nothing wrong with that at all, just that these new employees looked to me like they USED to be in suits or something else.”
They tend to move slow like a dinosaur in a 40’s loop, and all of them have cankles.
“all kinds of mature folks ”
Maybe it’s just me, but I love mature folks in retail/fast food/whatever. They are always helpful, they know their stock, they have zero attitude, and they seem to enjoy themselves. It’s always a plus.
“The folks at online house tracker Zillow have a fun new stat. Well, it’s really a sad, new stat: They’ve estimated, by major metro region, how many buyers in the past year (ended in September) that have no equity left in their homes.”
“Here’s a sampling: Nation’s worst? Merced, at 72% of past year’s buyers. SoCal (LA-OC-Ventura-Riverside-San Berdoo)? 35.4%. National average? 15.6%.”
Merced translated from Spanish to English, means “gift”
None this xmas, it would appear…
on the HGTV site there is some woman trying to go after Zillow because they won’t either inflate her value or remove her house from the DB. Turns out she’s trying to sell because she bough a new place without selling the old house… yada yada yada we’ve heard it a thousnad times before.
What is really funny is she’s trying to sell her “ordeal” to Fox. Someone laughed at her now she’s trying to force posters to declare their true identity because the scary posters from Zillow message boards are coming to get her.
So we have denial, fear, and bargaining all in one thread - fascinating in a Casey Serin on estrogen horrorshow sort of way.
http://tinyurl.com/29mtta
ps. which one of you is Eva?
Why do I love harrassing stupid FB so much?
bwhahahaha the reply by the FL realtor to your post was priceless >; )
Gwynster : I see you and Big V has had some fun on that board. Boy, she’d comes across as a fruitcake. Must have been the hippy parents. Of course, nothing to do with stress of possessing an illiquid assett that turns out to be a major financial liability.
Those estimates are waaaaaaaay too generous.
Hoz, your Dow 11K may come sooner than you think. Thngs are getting downright nasty now. It seems people buy in on the dips, but that the overall is a big giant wooshing sound each bidness day. Heck, i can only imagine we this thing would be right now if it wasn’t for the great injection and rate cut of several weeks ago.
Then again, I am one who thinks this might continue until we get to Dow 10K or lower or a flat out Great Depression II.
Yeah, things are volatile. I sold all my puts on CFC today for a tidy 60% profit in about 7 days. But the swings we experience make me only feel comfortable with reestablishing a position when the stock has swung wildly upwards for a good solid day or two. With the continued red days for DOW, I wonder if I’m going to see a big swing up in CFC again. I hope so!
I don’t know CCC. I think the genie is out on doublefried and it is only a matter of time before they go belly up. Didn’t BofA just lose something like 885 million on their 2 bil investment. It’s only a matter of time, imho, before the wood panels cover the windows over there at godzilla’s olde co.
i have some CFC 5 puts. I plan to hold them until CFC is at 0.10, then exercize them. then be short the cfc stock until it is declared worthless. Since there wont ever be a close-out transaction; i wont have to pay capital gains.
I sold all my CFC puts yesterday (hit the intraday high on my January 10s, which rarely happens). Also dumped some WaMU puts, all for a very nice profit. I’d like to buy back in, but everything looks way too expensive at the moment. Even though I think CFC will have a value of 0 sometime before June, the premiums are too high right now. I’m hoping everybody will think it’s oversold and pop it back up next week.
Talon/ Captain : I also sold out of my Jan 17.5 puts yesterday. I’d overpaid for them some months back, watched BOC drive price up to ~$21, then they’ve slowly drifted down. I made ~80% profit eventually but were worthless for a while. I’m going to sit back for a while and am looking for a vulnerable put that has room to drop. (Black and Decker, IYR or HOG come into mind).
God I LOVE reading about these spoiled crybaby whining footstomping tantrums. Thank you Ben for collating these comeuppances. It gives all of us frugal careful worker ants, (well me at least) satisfaction that there IS justice and a day of reckoning that the piper makes payment due.
If I knew exactly which store the poor little clothes lugger has to work, I’d invite her into a dressing room for a ‘ commissioned job ‘ to help her finances. Thats just me; always giving !
This is my first post although I have been a reader for over a year.
I am a renter-yes a lowly renter. The home I rent is in Bel-Air. It is under Los Angeles Rent Control. Back in June a “developer” purchased the property, gave me a non legal 60 day notice along with my sub tenant.
After the 60 days expired and we still were on the property he sued me for remaining on his property he intended to demo and flip. We went to court, he lost, and we still reside on the property and have never been served a LEGAL notice, stating our relocation fee/package required by law. Last Wednesday, without warning , while I was out of town, he came in with bulldozers and bobcats and demo-ed the exterior of the property. He bulldozed my sheds with tools and equipment as well as my personal property.For three days it continued. Police were called out 9 times over the last week. Because it is considered a civil matter not much was done to help. When I started digging out my belongings out of the rubble, he started up his bobcat and pushed it all back in. Can anyone help with ideas on how to stop him. We will sued for damages.Because I am dealing with a low life crowd our security is a big issue. One night we hired a security guard to sit my house for safety. Vandalism to trucks and cars has been ongoing. My security cameras have been bulldozed.
Man, that is AWFUL! I’m sorry to hear about that. Unfortunately, I have no authority on giving advice in your matter except that you should seek legal advice IMMEDIATELY.
Settle out of court and move on.
No way. Steve B has an excellent case.
Steve:
Call a lawyer who specializes in suing landlords. Do you have a place to stay in the meanwhile?
It costs about 200 dollars an hour to hire an L.A. lawyer and thats just to send them emails and photos. Its about 500.00 a letter. If you want to sue thats thousands.
Get your crap and find a place you love to live. This guy will run up your law fees so fast you will hurl! Otherwise try peoples court.
I’d agree with Ouro Verde. US doesn’t have a Justicial system but a legal system. You need money to play and be prepared to put a retainer down with some lawyer somewhere.
I’m not clear if you are saying, they’d bulldozed the exterior only but house is still standing.
As a long shot you could contact the media to see if they’d be interested in embarrasing the idjiot.
Not really, find a lawyer that will do it and take a cut off the earnings. The loser in a hands down case is the one that pays the legal fees. This is an open and shut case, so any lawyer worth his salt should pick it up for the easy money. Even if the guy doesn’t pay when you sue him, you can always put a lien against the house and he can’t sell it without paying you first.
Agreed. You need a lawyer ASAP.
Much as I abhor Legal Aid liberal do-gooders, maybe this time they can do good.
If the police won’t help, call the sheriff or whatever other county or state equivalent is available. If that doesn’t work, call the FBI. Call the local television stations, so they can get it all on camera and blast the story everywhere (media love this kind of story), and shame the owner. Also, get your lawyer to contact the judge in the original case and inform him of what’s happening. You have tons of potential remedies, but you need to be assertive.
Always be politite to officials and media representatives, because you want them on your side from the getgo. In fact, I would start with the local television stations, because one story can get the ball rolling.
RE: Call the local television stations, so they can get it all on camera and blast the story everywhere (media love this kind of story), and shame the owner.
The local news channel consumer activist should luv this story.
Rifle.
Some a$$holes just need shot in the face.
As others have said, get a lawyer immediately. Also, take pictures of everything and date them.
Steve, I commend you and yours for hanging in there. My only advice is what the others said - seek firm legal assitance immediately (assuming you haven’t already). I’m not sure the (worthless) local media would be interested unless there’s bloodshed or a car-chase involved, but it’s not a bad idea to at least contact them.
Let us know what happens.
Oh, the media would be interested if it were some illegal who took out a liar loan in 2005 and stated $200,000 incomes as strawberry pickers, and were now losing the house and were “victims.”
Yawn - get over taking every issue and turning it into an anti immigrant rant. This had nothing to do with illegals. You’re polluting the blog and wasting Ben’s bandwidth.
Get a lawyer, document everything, and alert the media.
And then find a new place to live. The guy obviously doesn’t care who or what he destroys and in the long run he’s going to demolish the building. For your own peace of mind, just step out of the way.
Go hire a lawyer and file for an emergency TRO and permanent injunction plus damages.
Police are wrong - destruction of property is a criminal offense even if he is the landlord.
That’s the other thing I was gonna say. After you’ve sued this POS “landlord”, you should sue the cops for not protecting your property against violence. You need them on your side for now, but sue them next. What a bunch of jerks.
May be a long shot, but do you have renter’s insurance? If so, maybe you could talk to them about filing a claim against it and see if they will appoint one of their lawyers to the case — like when you get in a car accident that goes to court. Although, I don’t know how good of a lawyer it will be, but if you can’t afford one on your own, worth a shot?
A ten minute search on Google provided the following info:
Contact the Los Angeles Housing Department. They are responsible for enforcing the Rent Stabilization codes in LA. Their website is http://www.lacity.org/LAHD/ Their phone number is 1-866-557-7368.
The form you want is “Rent Stabilization Ordinance Tenant Service Request Form”.
Good luck.
“Her husband also got laid off from the mortgage industry. He was pulling in about $130,000 a year. Now, he’s working for $11 an hour at a Costco in San Juan Capistrano.”
“Because of their huge pay cuts, they’re having a hard time paying their $3,400 monthly mortgage. They sold off their boat to get rid of the monthly payments. They will soon sell their furniture.”
- If you don’t live in CA, you can’t understand the shortsightedness that most people have.
It is all about ME, TODAY. They are seduced by the media of ‘have it all now, you deserve / earned it.’
-To save money means to ‘defer todays pleasure for security tomorrow.’ Trust me, Californian’s can’t even think of that if it’s not on TV to tell them.
Well this state hasn’t earned the nickname, Clownifornia, for nothing.
I have just made a reservation for a vacation rental in Morro Bay again this winter. This really is all about ME, TODAY too. The difference between me and the Clownifornian FB’s, though, is that I understand the difference between paying for a consumable good (my occupancy of the unit) and speculating on the future value of that good to others. I can’t say I won’t be looking at properties that are for sale, I can only say that the likelihood of my buying any of them soon is small, and the likelihood of my buying any of them with borrowed money is zero.
“”I have just made a reservation for a vacation rental in Morro Bay again this winter”
Tell us when…we’ll do a central coast “drink to the housing bubble” get-together.
didn’t we say all the boats and other toys were going to go on sale?
Yes, we did. I wonder if it’s time to start shopping for boats yet?
A couple of quotes about boats:
1. “The day a man buys a boat is the second-happiest day of his life. The happiest day is the day he sells it.”
and
2. (On yachting) “It’s like standing in a cold shower, ripping up hundred dollar bills into tiny pieces and casting them overboard.”
But I do miss having a boat. Maybe I should take a look and… (thwack, thwack, bad landlord, Bad!)
Well, on the boat topic, one of my favorite quotes is: “If flies, floats, or f*cks, rent it.”
I got a killer violin for a cheap price a couple months ago.
Big V — Where did you get it? Was it modern or old?
I may be in the violin market at some point next year…
Check out Craigslist.. and garage sales everywhere.
Do your christmas shopping the cheap way..
If you need to get a jetski or a workout station or ??..now is the time. Even Rocky’s is not giving out high $ for goods. Too many to choose from.
So together this couple makes $19/hour. If my salary is broken down to the hour, I make about $23/hour. I bring in about $3700 after tx. A $3400 mortgage would leave me with $300 for groceries, food, car insurance. Wow, at least they have their savings from when they were bringing in six figures, right? Right?
“They will soon sell their furniture.”
That’s foolish. What if they have to heat their place?
RE: That’s foolish. What if they have to heat their place?
(snickering)
Selling furniture is like selling a timeshare. Even if it’s new you might be able to get a little out of it, but you might have to pay people to take it off your hands.
Speaking of ‘ all about me Now in CA ‘ and other locales..just saw a woman I knew in the early 90s married to a Mtg broker in Coachella Valley, high fallutin, youngest kids in prvt school /hence the uniforms, Escalade, putting groceries away to drive home..License Vanity Plate states.. PVT MNY
She didn’t look to happy. Was a snob..maybe still is.
Used to be in Amway, making big bucks.
(during early 90’s housing depression in the desert).
Those snobs are still all over the desert. They are so self absorbed the walk and drive wherever they want and will just run you over. I just say “excuse you” and stand in their way. The returning old folks aren’t much better - they truly are the “I’ve got mine FU crowd. Even with the heat, summer is so much more civilized out here.
“…this will minimize the pain for everybody.” Why does this statement make me really really angry.
Maybe because they forgot to include, um, YOU as a part of “everybody”.
recently just got back from driving in the area here in a suburb of Sacramento; took me a freakin HALF HOUR just to drive a few miles past the normally smooth traffic flowing Sunrise Mall via Sunrise Blvd North/South.
What the bloody hell is up with that?! A normal 10 minute drive taking 30 minutes due to numerous stop lights with much shorter signals makes me suspect a concerted underhanded effort by the City Of Of Citrus Heights to MAKE people slow down & be captives in their cars from light to light, and gosh darn maybe they’ll see the ‘ol mall right there n just pull in in for some holiday shopping. Especially if yer stuck in the FIVE TRAFFIC LIGHTS IN FRONT OF THE EFFIN MALL !!!!
(Oh yes, there is actually a much lighter volume of vehicles on the roads, so it should be quicker, not slower)
Citrus Heights City Leaders = CONNIVING AZZHOLES.
OMG no one drive along Sunrise voluntarily! The Sac core traffic is the worst. It reminds me of driving surface streets in LA.
It may be lite by you, but this the worst day of year to be driving anywhere in my neck of the woods. On my favorite (end sarcasm) expressway in Chicago, the Eisenhower, it was 95 minutes to go 14 miles. Some days I do wish for just a mini-recession, you know, one that would take half the cars off the road at rush hour…
But I’m home now. Happy Thanksgiving to Ben and all the bubblers out there.
RE: FIVE TRAFFIC LIGHTS IN FRONT OF THE EFFIN MALL !!!!
Great for gaz mileage and pollution too!
“‘Al’ doesn’t want to be part of that statistic and has already asked HomeEq not to raise his rate. Now, he’s crossing his fingers, waiting for approval.
‘The home represents the future for me and my family,’ says ‘Al.’ ‘I’m going to fight all the way.’”
Wow! Al you have it all wrong, a house should not represent your families future! My lord, my folks are 80 and we grew up in the house they still live in and not one time in my life did my father ever elude to our house being our future. We are screwed for a long while with folks running around with that foolish thought.
‘The home represents the future for me and my family,’ says ‘Al.’ ‘I’m going to fight all the way.’”
thats the ATM mentality talking!
Damn it, house!!……get off your a$$ and start workin’ again!!
The problem is that the house ain’t lounging, it’s dead.
“Turn those machines back on, turn those machines BACK back on!!!”
“‘With this type of cooperation from loan servicers, we can save tens of thousands of people from being added to the foreclosure lists,’ the governor said in a statement. ‘This common-sense approach does not involve a government subsidy or bailout.’”
Wrong. Any appearance that the “government” is “freezing” interest rates on mortgages for some will instantly make mortgages more expensive for all. No lender will accept the additional risk of governmental imposition of freezes rollbacks or caps without increasing their rates to compensate. Additionally, as soon as the general population gets the notion that the government is invalidating mortgage terms, there will be many who simply STOP PAYING. A seemingly innocuous “help the strapped” program may just convince many that it’s time to go on a mortgage, car payment, student loan, and credit card payment STRIKE. Just keep checking the old mood-o-meter out there Arnie. Once you tell the masses that some of the old rules don’t apply, they may start thinking NO rules apply.
About the California Plan:
How can the banks do this? They sold the bonds to investors whom are expecting regular payments. The bond holders aren’t expecting part of a payment and I doubt Arnold’s understudies went to every bond holder and asked to modify the terms. This makes no sense.
Even if the banks are just working with the mortgages on their own books, this still does not make sense. They would end up burning cash at fantastic rates just when they need money to shore up their balance sheets. I doubt the banks can subsidize home owners for long periods of time especially with the teaser rates - the banks borrowed at higher rates then they are collecting. Maybe interest only rates but eventually, someone is going to want their principal back.
It seems like a great idea but the numbers just don’t add up. More than likely it’ll be a token plan to help a few people or it will have a million loop holes.
Does anyone know the precise terms and conditions of
these reworked loans?
I will speculate that the lenders just tacked the reset
interest differential onto the backend of the loan.
As noted in previous postings, all the reworks will really
do is prolong the freeze and/or tighten credit availability
even further.
Further, based on reported numbers of “tens of thousands”
it appears the lenders and Arnold most benefit via PR as a
stunt value.
Not that Arnold would ever get involved in any stunt work {grin}
I suspect what being offered is a conversion to a option arm from a regular arm. They get to book the differed interest as payments short term so its all good. Its basically a scam to cook the books for a bit longer. And they are probably setting themselves up for lawsuites from people that did not qualify if its not outright illegal. I bet on average minorities will be declined more than whites simply because I suspect they are digging for how much you lied on the loan not if your current.
I though one of the rules was that you had to be current…?
I bet they figure out some to defer the payments or wrap them into the loan amount.
As I said before, I can definitely see the lenders trying to sneak some kind of recourse clause into this rework, sealing the fate of these equity serf down the road…
“sneak some kind of recourse clause”
Smart thinking, I am sure you are right…probably part of the deal to get the lenders to agree to this. Folks being “helped” who accept this are screwed again.
“More than likely it’ll be a token plan to help a few people”
As I posted before, they estimate 1/2 million in sub prime resets in Cali in the next two years, and this plan “may” help “tens of thousands” of them…which means they plan on only helping out between 4% and 18% of them.
I don’t know what to make of this California loan plan to bail out FB’s .
I guess the lenders thought they were going to be refinancing borrowers every 2 to 5 years and socking it to them in refinance fees as real estate always went up . A loan market built on short term speculator demand was assurance of high turn over on these toxic loans with a big pre-pay penalty to add to the yield .Of course the model was not based on real estate going down and a flat market was the worst these greedy loan makers saw on the down side .
Now these loan makers are faced with just trying to stop foreclosures and accepting a lower yield for years, or they are trying to make the borrower pay for a reduced interest break now at a later time down the road .
It’s just so amazing how evil the greed was in the real estate business .These stupid lenders thought they were going to be able to make ongoing money off a no down buyers ,who couldn’t afford the real payment, by using the real estate appreciation .The greedy/fearfull borrowers thought they were going to use the stupid lenders to make money by leverage on loans they could not afford .
Now the borrower and the lender are stuck with each other.
“Now the borrower and the lender are stuck with each other.”
Kind of funny if it weren’t so sad.
“Robert Harrington and Shad and Corinna Vickers, are looking for retail jobs. Harrington of Tustin, was let go in September from Bankers Mortgage in Santa Ana. As its loan originator, he made about $75,000 last year. More than half of that was from commissions.”
“That’s why he thinks his best bet is to find a commission-based job at a luxury retailer or a store that sells big-ticket items. ‘I just need a commission-driven job because it’s better than hourly,’ he said. ‘I need the benefit of being able to make more money.’”
oh, i cant wait to see how this one turns out!!!! good luck pal!!!
Yikes, mortgage brokers married to each other. Let’s hope the breeding rate is low.
I’m off for thanksgiving. In the meantime, the story from SF is un-#@*king believable. At the same time, I’m not surprised either. This area is rank in whiny-sheep measures that sound fruity and friendly but eventually cause decades of pain for those having to come afterwards. Perfect examples: Prop 13, and the myriad anti-growth measures existent in places like Marin, SF, and Berkeley.
I remember hearing about early plans to help “those poor mortage-debters” almost as soon as the market started to sour, so in some ways I shouldn’t be at all shocked. Just throw it on top of the rest of this state’s totally unproductive roster of laws that only serve to drive more and more people with any kind of intelligence from the state in droves. Of course there will be tons of old boomer hippies and homeless people who can serve as fillers, but seriously- if the state keeps right on churning out measures that keeps housing permanently unaffordable, then what reasons are left to stay here?
Hang in there, JB. The intelligent will prevail. This measure will help far fewer than Arnie claims because he didn’t factor in the fraud effect, and he’s probably not even aware of the legal restrictions on these 4, count them, 4 banks.
Thank god for Prop 13. Has kept many seniors in their homes and kept money away from the idiots in government who misspend it on their own benefits and salaries. The worse is the SEIU terrorists who brow beat the idiots for more mone. Remember OPM. Other peoples money.
the mortgage mess hits in some weird areas.
Norway probes big investment losses by four towns
http://www.reuters.com/article/marketsNews/idUKL2110334420071121?rpc=44&pageNumber=1&virtualBrandChannel=0
Confirmed Dow Theory Sell Signal today! The bull is dead and the reign of the Bear begins!
the bear has reigned since 2000, he was just resting from 2003-2007.
“There’s a growing feeling that the problems are unknowable and unquantifiable, and that there’s no way of dealing with it except through the passage of time.”
From the Bloomberg story on they day’s stock market action.
The financial markets have entered the twilight zone of Rummy’s unknown unknowns.
“Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know.”
– Donald Rumsfeld –
P.S. Rummy’s report about something that hasn’t happened is in regard to a black swan.
The bear may not be back quite yet. If we don’t see a strong rally next week he probably is.
Right. Exactly. I’m long right now and okay with it but if the March/Aug lows don’t hold, forget it.
I’m long energy, mining, a little tech, and some TIPS right now, but I’m getting vewy, vewy, newvous, as Elmer Fudd used to say.
As posted this a.m., some of this is hedge fund or forced selling. When you get those limit down moves at day’s end that is usually what you’re looking at. Hedge fund blowouts are usually decent trading opportunities on the long side.
TXchick:
Do you still believe that a convincing move past 1420 on the S&P signals a long ride down?
Yes but not before it rallies up first.
I would expect to see some type of intervention, this is getting too ugly.
Agreed, there will be some action soon, it might not have lasting effects, but there will be some spike before we really go boldly where no man has gone before.
Richard Russel saying this ?
So California has proposed the mother of all cram downs, as I suggested. Except that as other posters pointed out, if the loans have been securitized, that is virtually impossible, even if most parties would agree to it. For one thing, the lowest tranches would be agreeing to get wiped out.
What would work? Foreclosure, followed by a resale at lower prices with Countrywide providing a convetional loan to the original borrower (ignoring the prior default), allowing him to bid. It could then sell the loan to Fan or Fred.
Or could they?
“It could then sell the loan to Fan or Fred.” …”Or could they?”
Magic Eight Ball say: Chances not so good.
“They ballooned the rates so high that it’s incredibly hard for even two people that are working to afford their house payment,” says “Al.”
Al, What were you thinking when you signed the papers ? Did you ever not think ” Wait a sec, how would i pay the mortgage if they go up by 1000 bucks ?”. Unfortunately, you only have yourself to blame.
Instead of the Govt bailing out these irresponsible idiots, they should reward people who chose to hold off buying a house at these astronomical prices for their fiscal responsibilities. But alas, the govt “is, by and for” people like Al. Can’t expect much.
And good old Al drove up prices so that people who aren’t stupid enough to sign a suicide loan can’t afford the house at all.
I tell you what, Arnold, just keep digging, soon you’ll hit China. Suspend mortgage payments, and see how much investment money flows into the state! What happens when Al wants to sell his overpriced albatross? How is the next guy going to get a mortgage?
It sure looks like steroids can permanently damage your brain.
“Delia DeYulia was recently forced to take her first retail job. For the holiday shopping season, DeYulia is working part-time at Kohl’s, placing clothes on racks and cleaning dressing rooms. She resorted to taking the temporary work after not finding other employment.”
“DeYulia’s position was one of 3,800 mortgage jobs cut in Orange County from Oct. 2006 to Oct, 2007, according to the state’s Employment Development Department. Many of those laid off have reluctantly turned to retailers for jobs to help pay the bills.”
“Robert Harrington and Shad and Corinna Vickers, are looking for retail jobs. Harrington of Tustin, was let go in September from Bankers Mortgage in Santa Ana. As its loan originator, he made about $75,000 last year. More than half of that was from commissions.”
“That’s why he thinks his best bet is to find a commission-based job at a luxury retailer or a store that sells big-ticket items. ‘I just need a commission-driven job because it’s better than hourly,’ he said. ‘I need the benefit of being able to make more money.’”
“Corinna Vickers was let go a year ago from Secured Funding in Costa Mesa. Then two months ago, her husband Shad Vickers, lost his job at Lending Tree in Irvine.”
“Combined, they had been making $200,000 a year.”
“Now they’re both unemployed and have been hunting for work to pay their bills and help them save for retirement and college tuitions for their four daughters. They have not had any luck and now the Vickers are both willing to take on holiday retail work.”
“‘I need to stop thinking about a career and start looking for a job,’ said Shad Vickers of Tustin.”
“Rhonda Struman of Laguna Niguel is not waiting around to get hired full time. Last month, she began working as a part-time salesperson at Nordstrom at The Shops at Mission Viejo. It pays $8 an hour. Before she was laid off in August from her underwriting position at Paul Financial in Irvine, she was making about $70,000 a year.”
“Her husband also got laid off from the mortgage industry. He was pulling in about $130,000 a year. Now, he’s working for $11 an hour at a Costco in San Juan Capistrano.”
“Because of their huge pay cuts, they’re having a hard time paying their $3,400 monthly mortgage. They sold off their boat to get rid of the monthly payments. They will soon sell their furniture.”
“‘I cry all the time and I’m stressed all the time,’ Rhonda Struman said.”
______________________________________________________________
Not to be insentive, but, uhhh . . . whatever happened to saving? Why is that the minute these people lose their $200k household incomes their whole financial lives fall apart?
Oh, I’m sure she “saved” 30% at that last Nordstrom sale.
“Combined, they had been making $200,000 a year.”
“Now they’re both unemployed and have been hunting for work to pay their bills and help them save for retirement and college tuitions for their four daughters. They have not had any luck and now the Vickers are both willing to take on holiday retail work.”
“‘I need to stop thinking about a career and start looking for a job,’ said Shad Vickers of Tustin.”
“Rhonda Struman of Laguna Niguel is not waiting around to get hired full time. Last month, she began working as a part-time salesperson at Nordstrom at The Shops at Mission Viejo. It pays $8 an hour. Before she was laid off in August from her underwriting position at Paul Financial in Irvine, she was making about $70,000 a year.”
“Her husband also got laid off from the mortgage industry. He was pulling in about $130,000 a year. Now, he’s working for $11 an hour at a Costco in San Juan Capistrano.”
So MUCH money for pushing paper. Now, at least, they actually do something productive. Wonder how many more 6 figure salaries are going to $11/hour…
“Freezing the payment rate makes economic sense for the investors who own the mortgages as well as for the homeowners, Litton said. Studies have shown that each foreclosure costs lenders tens of thousands of dollars.”
Let’s assume that the house was sold for $600K, that it was 100% financed (a good assumption in modern times), that the teaser rate was 2%, and that the “actual” rate is 7%…that’s a loss of interest of 5% per year for the investors for each year they keep the rate at the teaser rate…$30,000 a year that they are “giving” to the homeowner in exchange for not defaulting. That’s $150,000 over five years.
I hope it’s worth it to them.
“I hope it’s worth it to them.”
How could it be? Could it possibly cost the lender more than $30K to process a foreclosure? Would they be better off riding it all the way down, foreclosing in a year or two when prices are lower and selling will be even harder?
This whole thing really looks like a Hail Mary to me - as though the lenders are just trying to find a way to get out of this quarter with their jobs. But what happens next quarter? And the quarter after that? They can’t possibly be that stupid, can they? Or am I missing something here?
I predict that the enrollment for nursing programs will go way up this next year IF folks get off their ‘waitandsees’.
Only career option that is For SURE.
Should be interesting times.
It buys them time to sell the loans off to unsuspecting MBS suck– er, “investors”, and to dump company stock before it goes to zero.
If it makes economic sense for the investors why are they afraid to give them a say in the matter. I haven’t heard any investors propose this solution.
“To qualify, borrowers must occupy their homes, have made their payments on time and prove they cannot afford payments with the higher interest rate.”
Does anyone else foresee quitting jobs to meet the last criterion?
Suggestion: Quit your job and become a real estate investor. Buy lots of houses on option ARMs, then later on, use your lack of a day job to prove you cannot afford payment resets.
That is funny! Tip o’ cap to PB.
“‘Al’ doesn’t want to be part of that statistic and has already asked HomeEq not to raise his rate. Now, he’s crossing his fingers, waiting for approval. ‘The home represents the future for me and my family,’ says ‘Al.’ ‘I’m going to fight all the way.’”
Hey Al, get a clue. Your home does indeed represent your future. Start packing up the belongings and head on out the door.
The Merc is now posting “Harney: Senate rejects attempts to help financially strapped homeowners”. Given Arnie, that’s a relief, isn’t it?
http://www.mercurynews.com/realestatenews/ci_7524575
“a small group of Republicans who are not sympathetic to vigorous federal involvement in the mortgage market, even if it’s designed to assist borrowers ravaged by private-sector subprime lenders.”
Ravaged?
It was written this way because they are not allowed to write:
“a small group of Evil Republicans, for reasons we cannot fathom but probably has to due with being spawned directly from the devil, are against kind hearted, competent (we hope) civil servants saving people like this journalist from evil lenders who have the audacity to be much better at understanding money and contract law better than me.”
Oh please. These people are patriots IMO.
“private-sector subprime lenders”
I get the feeling they’re trying to set us up for some stupid differentiation between “private-sector” and “government” subprime.
An election is coming up!
http://youtube.com/watch?v=ExuuycfXwF4
Paul will win - um, not Ron Paul, but the “Paul” as in the guy who was paid by the Hillarys and Gores of American Politics as they robbed Peter.
This is just too precious to not share:
A record 30,000 real estate agents and brokers were sent home from their annual convention in Las Vegas last week with one important message:
Go forth upon this great land — members of the National Association of Realtors can never be accused of not being patriotic — and set the record straight. Tell one and all, but especially their local media, that the housing market isn’t so bad.
Certainly not as bad as the rip-and-read television networks and the national wire services portray it to be, at least not in their neck of the woods, where NAR contends that local newspapers and TV stations run with unbalanced wire reports of a dying real estate market without checking sources or looking at what’s actually going on in their own particular towns and cities.
“Real estate is alive and well,” proclaimed outgoing President Pat V. Combs in an amateurish, convention-opening skit that was a take-off on the popular CSI (Crime Scene Investigation) television shows and purported to uncover why housing was getting such a bad rap when, in fact, 2007 should go down as the fifth best year ever for existing home sales and 2008 should be an even better year.
The conclusion: The national media has been “seduced by a few vocal but misinformed analysts,” the politically powerful trade group believes.
To the 1.36 million member NAR, it’s all about perspective. The group wants reporters to go behind the national numbers and cover both sides of the story. Yes, for example, inventories of unsold homes are higher than they’ve ever been. But that’s on a national level. In some places, houses are popping off the shelves as soon as listing agents can stack them.
And so Combs, a broker from Grand Rapids, implored the Realtor congregation to “return home and refute reports” that the sky is falling.
“Reports of real estate’s demise are greatly exaggerated,” she said, advising her minions to warn their local media to “steer clear of unverified sources claiming to be experts.”
“There are plenty of opportunities for consumers and Realtors in the current market,” she said.
NAR’s new President, Long Beach, Calif., broker Richard Gaylord, picked up the torch, saying that one of his goals for 2008 is for NAR to become a comprehensive source of real estate information to help local media as well as buyers and sellers understand why their home markets may be different from what the national trends suggest.
“You stories influence whether people buy or sell homes,” Gaylord said during a press briefing. “And we need to do a better job of presenting information based on facts.”
Some would say NAR is looking at the market through the proverbial rose-colored glasses. But on a point-by-point basis, new chief economist Lawrence Yun makes a good case.
The high number of foreclosures and the credit crunch “are real problems,” he said in his role as a lab technician during the CSI sketch. “But the market fundamentals are still strong — interest rates are low, the economy is growing and the number of jobs is on the upswing.”
Later, in an hour-long, power-point presentation that included nearly 75 slides, Yun told a room packed with the Realtor faithful that today’s market is nothing like previous downturns when the economy was slumping, there were significant job losses and/or interest rates were couched in two digits, not one.
Now, he pointed out, the economy is humming right along, two million jobs have been added in the last two years, and mortgage rates are still at affordable levels and near their all-time lows.
Published: November 21, 2007
Now, he pointed out, the economy is humming right along, two million jobs have been added in the last two years, and mortgage rates are still at affordable levels and near their all-time lows.
And yet foreclosures are at a record and consumer sentiment has sounded the dive alarm. Good it be people see the writing on the wall? Could it be they see employers *trying* to cut inventories, hours, and anything else to cut costs? Could it be that people are seeing pay cuts? Lets face it, $200k year for a couple might be $50/hour. That going to $11/hour doesn’t pay for many lattes.
Fasten seat belts… the ride is about to start.
Oh, on my blog I updated my real estate emotions. We’re stuck in fear (overall). sigh…
Got popcorn?
Neil
Just bought a ‘Senior’ coffee at mickey d’s in Kettleman City for 38 cents. Number one in Consumer’s coffee rating.
Even if this were a credible plan to save people from foreclosure, it does not address the problem of the horriblly overcosts of homes. If this plan was for the life of the mortgage, at least people could make the monthly stroke, and perhaps their homes would be a good investment for the longterm. However, until the developers start significantly lowering their asking prices, people are crazy to get locked into a $500K or greater contract.
Hey, !#$%& FB suck-ing GoberMORONator, I rent, I made my payments on time and I can prove I cannot afford payments @ the current prices.
Do I get the same rotten deal as your beloved FB’s, you effin’ re’tard.
Please, don’t hold back - how do you really feel about the California “mortgage freeze” plan?
Wow, usually when you apply for loans you have to prove that you can afford the payments ,but now in order to get a loan you have to prove you can’t afford the payments . What is this world coming to ?
Last month taxes were going to be waived to wiggle out mortgages. Then they bailed out banks. Now its help with resets. What if some of these people have multiple homes?
In the early 80’s I interupted my theatre career to work at Bullocks. My condo loan didn’t go up but the assessments sure did. I even took in a room mate in a one bedroom off melrose. Never ever bought again.
My girlfriend, who owns a furniture store in Encinitas just got a grave yard job at Target. Husband laid off and bought 450k house in ‘06. 3100.00 a month plus kids.
I figured out why someone suggested small bills for stashing for emergency:
If there is a run on the banks, people will follow you home if you flash 100’s and 50’s.
“I figured out why someone suggested small bills for stashing for emergency: If there is a run on the banks, people will follow you home if you flash 100’s and 50’s.”
Hahahaha! And all you ‘ballaz’ wit da mouth jewerly and gold teeth, ‘best not smile at me or I’ll be rippin’ it out yo face!
Note to self, small bills. (Dang, should have thought of that one!)
Thanks!
Leigh
Happy Thanksgiving Everyone!
No worries.. Soon 50s and 100s WILL be small bills..
“If you have a mortgage through Countrywide, GMAC, Litton or HomeEq, you might qualify to have your introductory interest rate temporarily frozen. To get help, borrowers must occupy their homes, have made their payments on time and prove they cannot afford the loan’s new rate. If this fits your situation, contact your loan servicer to apply.”
Cool, I will by a home which meets the criteria above and then in 3..7 years (when the market recovers) I will walk away.
The “rescue” plan for FB’s in California is a joke. First, if the FB property owners use their brain, they will be best served by walking away. Even if the interest rates are “frozen”, they will still be paying the mortgage on a piece of greatly over-priced crap. Besides which, where is the evidence to show that the prices will be back up at the current level in 3, 5 or 7 years? When (and that’s a big WHEN) the value of these properties reach the level of 2005/6, it could take 15 years. This has been no ordinary bubble. It’s the mother of all bubbles which is still in the throes of doing immense damage to the economy. If I were living in one of those properties, I would ignore the “rescue” b.s, pack my stuff into storage and wait for them to boot me out via the sheriff. In 10 years, after my bankruptcy has cleared, I might by another house. Probably at 50% of what it’s fake value is now.
But, but, it is “their home”. They are entitled to be there! I can’t think of any better punishment for these FBs (and banks) than to forced into living in and paying for their mistake.
The only (obvious) thing I would add to the above strategy is to acumulate all the cash I could before getting booted out into the storage shed.(lol)
mike
what you suggested is exactly what I did; drop out of the system & let it reset years later. After buying a supposedly great used honda civic at a large automall dealer, then finding out later that it was falling apart,
after 8 months of slipping transmission, check engine lights, and more, I called the finance co and told em to come pick it up. (voluntary repo)
the rep on the phone was pissed off , confused, didnt know what to do with me, kept telling me I couldnt do that ….to which I replied ” what, I cant give you back YOUR car you own? Ha. HA HA ” !!
That was the proverbial last straw that broke the consumers back. I was really upset and determined to never buy anything on credit again if possible.
That was about 7-8yrs ago. During that time I just bought progressively better & better junker used cars, until now I own a pretty good ‘96 Corolla, Previa, ‘96 Rodeo & a 77 Dodge beater truck for trash runs. all paid for in cash. The credit industry / car dealer assn dirty dealings have me holding a grudge & dropping out of their rigged system. I guess my experience with the mom n pop crooks made me leery when the housing bubble took off later. No thanks to huge debt / lifetime serfdom.
credit? a convenience, not a necessity. If people would stop freaking out over their credit scores, the industry would be castrated. Besides, the system is so rigged that even a tiny ding like a forgotten $30 medical bill knocks you down in rating from prime to less than, with the excuse to make you pay more interest as a so-called risk, which is JUST the point of this rigged game.
just my 2 ameros worth
“if the FB property owners use their brain”
That is exactly what they won’t do, demonstrated by years of examples posted by Ben. They will do what is easiest or causes them the least social embarassment. They will not do a cost/benefit analysis, they will not run the numbers, they will not consider consulting with a lawyer to learn their options, they will not voluntarily bite the bullet and make big changes now in their lives to accrue advantages later. Exactly how many examples have we seen of people making informed, financially shrewd moves when faced with the reality of disastrous mortgages?
Damn few.
I have a very hard time feeling sorry for these ex-lending people that were making big bucks and now are having hard times. These people worked for a company that in many cases totally screwed a lot of people.
Screw them. It’s called KARMA.
Oh yeah, Happy Thanksgiving.
Roubini’s Global EconoMonitor
“Generalised Systemic Financial Meltdown”
I now see the risk of a severe and worsening liquidity and credit crunch leading to a generalized meltdown of the financial system of a severity and magnitude like we have never observed before. In this extreme scenario whose likelihood is increasing we could see a generalized run on some banks; and runs on a couple of weaker (non-bank) broker dealers that may go bankrupt with severe and systemic ripple effects on a mass of highly leveraged derivative instruments that will lead to a seizure of the derivatives markets (think of LTCM to the power of three); a collapse of the ABCP market and a disorderly collapse of the SIVs and conduits; massive losses on money market funds with a run on both those sponsored by banks and those not sponsored by banks (with the latter at even more severe risk as the recent effective bailout of the formers’ losses by theirs sponsoring banks is not available to those not being backed by banks); ever growing defaults and losses ($500 billion plus) in subprime, near prime and prime mortgages with severe known-on effect on the RMBS and CDOs market; massive losses in consumer credit (auto loans, credit cards); severe problems and losses in commercial real estate and related CMBS; the drying up of liquidity and credit in a variety of asset backed securities putting the entire model of securitization at risk; runs on hedge funds and other financial institutions that do not have access to the Fed’s lender of last resort support; a sharp increase in corporate defaults and credit spreads; and a massive process of re-intermediation into the banking system of activities that were until now altogether securitized.
Or in other words, a “generalized systemic financial meltdown.”
and from this will emerge a new world order.
And I, for one, welcome our new Chinese overlords.
Our arty ex-pat Austrian strongman for a leader is making similar promises as another arty ex-pat Austrian strongman leader did in the 1930’s…
Undeliverable
Just watch “Pumping Iron” - and it will make perfect sense.
I’m watching this place with amusement. I posted it here about a month ago for you all to laugh at. It was 30K higher at that time. He’s now dropping the price $5k per day. Yeah, no bubble in Austin.
http://dallas.craigslist.org/rfs/485932703.html
Jeez! That place would cost you $1.5 million in West Hollywood, ca…..even without the view! BTW, by the look of his photograph, that realtor looks like he would really like West Hollywood!
LOL The pic of the seller is just too funny!!!
Wow, immediate CASH EQUITY!!! LOL!
Tx!
Don’t you dare go condo on us!
Trout to head!
(She is purty though).
Smiles,
Leigh
Luvd da’ gangbanga friendly courtyard - relaxing hoop sounds 24×7!!!
Mwhahahahahaaa!!!
I was reading the Penny Saver for fun last night, and I saw the following items for sale:
-kitchen sink
-set of 6 door knobs
-bathroom sink
-French door
-drapes
-lace curtains
-ceiling fan
-chandelier
What do you guys think? FB at work?
Sounds like someone out there reached the “bargining” stage a little early.
I’m thinking foreclosure, and he’s trying to screw the bank.
If so, it’ll backfire (if the bank cares) and he’ll be in very very deep doo.
“Rhonda Struman of Laguna Niguel is not waiting around to get hired full time. Last month, she began working as a part-time salesperson at Nordstrom at The Shops at Mission Viejo. It pays $8 an hour. Before she was laid off in August from her underwriting position at Paul Financial in Irvine, she was making about $70,000 a year.”
“Her husband also got laid off from the mortgage industry. He was pulling in about $130,000 a year. Now, he’s working for $11 an hour at a Costco in San Juan Capistrano.”
An all too typical California real estate employment saga…
The combined income of this couple went from $200,000 to less than $40,000.
80% cut in pay…
Wonder how many houses they “own”?
But at least the unemployment rate is up. As long as people can find jobs there will be no recession… yeah, right.
First and foremost, these lenders/servicers can and will freeze and or/modify original loan terms, regardless of whether they are holding the paper or have sold it off into RMBS oblivion. The pooling & servicing agreements allow them to do so regarding the loans that have been sold into the market. It’s already happening and it’s going to happen in greater volume next year.
The question of whether a homeowner should walk on the mortgage can’t be answered with a sweep of the hand. If a rate freeze or modification keeps payments close to rental costs after calculating tax benefits of ownership, they save no money by walking. the only benefit in walking then is to get your foreclosure out of the way and start rebuilding credit right away and get set up for the bottom in about 4 years. But it’s a tough sell to walk away when the payments aren’t going up, you can afford them, you won’t be spending much more than a rental, you preserve your credit, etc.
Your argument has merits, but it depends on rational behavior, and as a student of history, the concept of rational behavior is repulsive to me.
During the Great Depression the lenders would freeze the mortgage and let the borrowers rent . The reason the Banks/lenders would rent was because nobody was buying real estate, so it didn’t pay to foreclose. Still alot of people lost their home during the Great Depression; and I know a person who had a parent who lost the family farm because her husband died in a car accident and she couldn’t even come up with rent .
Right now the real estate markets are really dead and the lenders can sell without a major loss ,……so yes freezing loans or delaying payments is their best option . The lenders might end up freezing mortgages and renting to borrowers at fair market so they can get some cash flow while allowing the borrowers the option of remaining in the property . The situation is so bad that survival is the keyword now as a possible Great Depression II hangs over the heads of the lenders .
I can see how it might work to some degree, and even have some limited effect along the lines of dragging out the correction and perhaps even lessening it. That being said I think the more important issue is Government interfering in supposed free markets. This kind of wealth distribution is fairly unprecidented in the avenue of Asset class’s. It appears that the Govinator is attempting to do all he can to prop up House prices and keep FB’s in their homes because of the Tax Revenue. The number of households who can take advantage of this vs. the number of households who could take advantage of the lower home prices that would occur probablly cancel eachother out. The premise of helping the FB is just that a premise, it’s Property Tax Revenue for the State. It makes for a nice headline though.
The last leg of Democracy is when the majority figures out they can vote themselves the money. Heck we were suppose to be a Republic anywho.
if you can afford the payments you don’t qualify
You’re going to have to explain how a mortgage servicer can freeze the terms of mortgages they do not own. They just a get a fee for collecting the mortgage. Their only loss after a forclosure is done and settled is not being able to collect their service fee in the future. Its the orginal investors of the sliced and diced MBS who bear the foreclosure risk.
This is mainly a political photo op for the Guvintor and these banks so they can look like they’re doing something. The minority of loans that qualify are loans the banks would have done something about on their own. They’re just getting credit for something they would have done anyway.
I’m sure this has prob been posted, but husband heard it on the radio tonight..
“Aerial surveillance spotted 200 algae-blackened pools this summer, three times as many as 2006. West Nile Virus cases were up in all of California by 40 percent this year. The San Jose pools were quickly treated, but the conditions attract mosquitoes, which carry the disease.
Housing woes are not just undermining the economy, they are unraveling the social fabric of the nation.”
http://realtytimes.com/rtcpages/20071109_foreclosureundercut.htm
Housing woes are not just undermining the economy, they are unraveling the social fabric of the nation.”
Only if that fabric is greed and an utter lack of responsibility.
Imagine what will happen once homeownership and stability are tied back together… alas, that will take years.
Got popcorn?
Neil
don’t mean to hijack a California thread but how many times have I had to endure this BS that Dallas prices were not going down but going up! Oops!
http://www.dallasnews.com/sharedcontent/dws/bus/stories/112207dnbusdfwhomeprices.258a9b84.html
D-FW area home prices were down 3 percent from a year ago in the National Association of Realtors’ city-by-city survey released Wednesday.
Median down?!? Ouch. I see Case-Shiller peaked in June… that implies that the downturn is speeding up… in Dallas. Its rather taken hold in other areas…
Got popcorn?
Neil
There isn’t going to be any justice with this real estate crash because it’s to big ,just like the Stock Market Crash of 1929 was to big and it took everybody down with it .
How Wall Street figured out how to create a buying on margin scheme that would equate to the 1920’s ,in terms of risk to the lenders/borrowers , is just mindblowing . All the laws that were set up to prevent such a repeat of 1929 ,and what followed ,but somehow the greedy money people created a risk situation just as bad as the 1929 mania in stock buying on margin ,but its 2007 .
Was it the government? With massive debt we need constant GDP growth to pay taxes on the ever increaseing interest payments…. even if the growth is on a false, bubble economy.
Iraq and Afganistan war? Bush tax cuts?
Or just a government asleep at the wheel. Deregualtion helped the economy, so there was more deregulation which fed the economy, so more deregulation… Deregulation with no monitoring.
Or, is it the fault of the population that became one issue voters demanding easy and positve answers to every problem.
Was it the pension funds, desperate to generate unrealistic returns because they were given an impossible charter… to provide too good of a retirement for too many people with too little funding.
Was it the pig men on Wall Street that knew they were creating financial toxic waste, but didn’t care as long as they got their cut up front.
Was it a population that forgot the value of hard work and living frugally? A population that as a crazed mob decided it could get rich without working simply by throwing caution to the wind and jumping on the latest financial fad.
Was it the press that has become the ho’s of the corporate pimps? Or is this too the fault of the population that chooses to watch tabloids and sound bites instead of taking the time to read a full article or investigate beyond the blurb reported by the spokesmodels on the evening news.
I think the answer is, yes. It is the fault of the poeple, and the government, and the financial insiders, and the press and….
There is no shortage of blame….
“There is no shortage of blame….”
Nice report D in P.
Sounds like a weekend topic to me.
My two cents…Its those damn female realtors driving around in fancy cars acting better than anybody. You hate watching them drive around but you wish you could be one. You want the blond hair the foreign car and the big kitchens!
Its like when modonna shaved her damn eyebrows.
Its a fashion thing.
You missed a couple after the ‘Bush tax cuts’. Welfare to dead beats, earned income tax credit to non-workers, food stamps, free healthcare and education to illegals, and over paid bureacrats, firemen and police at ALL levels. Did I leave out any? Please add.
You’re right HW, the financial fallout is just too widespread.
Delia the former auditor at Fremont. I am puzzled. They actually had auditors at Fremont? Well, Delia maybe if you had been doing your job and properly auditing loans with real standards. You might still have a job!
I think we should all stop worrying about the credit crisis we are all just visiting on this planet, the only thing we can take with us when we die is our souls. All you mortage loan people who preyed on borrowers giving and persuaded them to buy homes they could not afford you all drop dead.
Some of you wanted to know how my offer that I wrote about the other day worked out.
After making a million dollar offer, 15 day escrow and only a financing contingency, we did not get the property. It had six offers all together. (The original price was $999,000).
This was the house that needed around 4to500,000 work to make it nice and around $100,000 to make it livable. (only 2808 sq. ft. and no pool.)
I must say though, last year there would have been at least 15 offers on it.
I don’t know what it sold for yet.
Midnight aquisitions in the cattle rustling and deer poaching businesses should pick up shortly with these layoffs in the RE Industry.
NOW…”I SMELL a Recession”… Mr Bush
“Her husband also got laid off from the mortgage industry. He was pulling in about $130,000 a year. Now, he’s working for $11 an hour at a Costco in San Juan Capistrano.”
Scary.