It’s A Big Bust In California
The Modesto Bee reports from Caalifornia. “Gov. Schwarzenegger proclaimed ‘a very, very big victory for the people of California’ this week in getting lenders to help homeowners avoid foreclosure, but the deal he announced apparently isn’t new at all. The governor took credit Tuesday for negotiating an agreement with mortgage lenders Countrywide Financial, GMAC Financial Services, Litton Loan Servicing and HomEq Servicing to help keep subprime borrowers in their homes.”
“Those four lenders, however, told The Bee on Wednesday that their lending policies haven’t changed and the governor didn’t get them to agree to anything new.”
“‘The governor’s principles already are in alignment with what we already do,’ said Larry B. Litton Jr., who heads Litton Loan Servicing. ‘Nothing’s substantially changed.’”
“Homeowners expecting new assistance from those four lenders may be disappointed, however, because their foreclosure procedures haven’t changed. ‘This is nothing new for us. We’ve always tried to help our borrowers,’ said Kim Cohen, HomEq’s spokeswoman.”
“‘We’re already doing what he suggested,’ GMAC spokesman Stephen Dupont said. ‘No. Things really haven’t changed.’”
The Sacramento Bee. “As California’s housing slump punches through the state economy, it’s leaving bruises on the state budget. Four months into the 2007-08 budget year, state revenue is $1.1 billion below what was forecast. The decline can be seen in all major revenue streams.”
“While it’s not clear how much the state has lost in the collapse of the overheated real estate market and the subprime mortgage crisis, finance officials say the fallout is having a substantial impact on California’s treasury. Even a wealthy man like Gov. Arnold Schwarzenegger is worried about the high rate of foreclosures.”
“For some, government efforts come too late. Erin O’Hagan, a former escrow assistant, said that in January she will be moving out of a Foothill Farms duplex she purchased nearly three years ago with her son.”
“She and her daughter-in-law have lost their jobs, leaving the family unable to pay their adjustable-rate mortgage. Their payments jumped $1,000 a month when their interest rate was reset. ‘I am a 50-year-old widow, my credit is totally trashed, and for the first time in a long time, I’m going to be a renter,’ O’Hagan said.”
“O’Hagan isn’t the only homeowner affected by lax financing rules and high prices. DataQuick has reported a record 24,209 foreclosures in California in the third quarter of 2007, the most since the company began collecting data in 1998.”
“Sacramento County is already getting $15 million less in property taxes this year after the assessor reduced taxes on 50,000 properties. County assistant assessor Kathleen Kelleher said the office may lower assessments on another 25,000 properties next year. ‘We expected this,’ she said.”
The Mercury News. “Bay Area food banks have had a little less to be thankful for this year. Although many of the local charities are seeing a record need for basic food items, donations have been lagging. And food bank workers are nervous, with some calling this the worst season for hunger since the dot-com bust rocked the valley years ago.”
“Michael Bute, a former printer and truck driver now living at InnVision’s shelter, said the influx of needy residents could be blamed on too many folks counting on their homes for income.”
“‘Everyone is depending on the real estate to be a big boom, and it’s a big bust,’ said Bute, as he took a walk after a Thanksgiving meal at InnVision.”
The Recordnet. “New home sales throughout California remain sluggish, a state home-builders trade group said Wednesday.”
“A monthly sales report by the California Building Industry Association and Hanley Wood Market Intelligence showed that all new-home sales in September, including condominiums, were 45 percent below September 2006.”
“The median base price of homes sold dropped by 12.1 percent from the same period last year, falling from $452,990 to $398,060, the report said.”
“In San Joaquin County, sales fell by 77.1 percent from 328 in September 2006 to 75 this past September, the report said.”
“‘The problems relating to credit availability don’t seem like they will be resolving themselves in the near future,’ said Jonathan Dienhart, director of published research for Hanley Wood. ‘Until we have stabilization in the broader market of real estate-backed securities, access to financing will remain restrictive for many potential homebuyers.’”
“Dienhart said consumers seem very wary about home purchasing in general.”
“‘Many would-be home buyers have taken themselves out of the market because they see it as too risky, and until this perception improves, we will continue to experience a degree of paralysis in the new and existing home markets,’ he said.”
“A total of 105 home-building permits were meted out last month countywide, the lowest level by far for any October so far this decade, according to the Construction Industry Research Board, which tracks the building sector in California.”
“That was down from 188 in October 2006 and compares with the high for any October this decade of 638 in October 2002.”
“Statewide, just 12.6 percent of all the homes sold could be afforded by a median-income family, up from 11.7 percent in the second quarter, the group said. California accounted for nine of the 10 least affordable metro areas in the country: Napa, Los Angeles, Salinas, Anaheim, San Luis Obispo, San Francisco, Santa Cruz, Merced and Santa Barbara.”
The North County Times. “New-home sales dropped 67 percent in San Diego during September compared with the previous year, numbers reflected throughout the country as the real estate market continues to struggle, according to reports.”
“But real estate analysts said they can take some comfort in the fact that the market is not getting much worse, even if it is not getting any better.”
“‘August was the worst month we had seen, so September wasn’t better, but it was not greatly worse. So in a way, that’s a positive result in these dark days of the housing market,’ said Jonathan Dienhart, for Hanley Wood Market Intelligence.”
“Home sales throughout the state fell 45 percent during September compared with the previous year, according to Hanley Wood’s report.”
“September home sales in San Diego also took a 26 percent dive when compared with August numbers. San Diego’s market is slumping more severely than the state’s and the nation’s, in part, because a low inventory of housing and higher prices have contributed to a more volatile market, said Paul Tryon, CEO of San Diego’s Building Industry Association.”
“Perhaps even more significantly, consumers are wary of jumping into a slumping housing market. ‘When you start to hear bad news, people who have extended themselves to invest in California in the past start to take a breather. Everyone wonders, ‘How bad is it?’ and ‘How bad is it going to get?’ Tryon said.”
“Also, Dienhart said some Realtors are unwilling to slash prices on valuable coastal properties and would rather hold the homes until the market improves.”
“A return of a healthy real estate market will be greatly dependent on the general state of the national economy, Dienhart said. ‘If we’ve had this bad of a housing market with the economy doing relatively well, there’s no telling how bad it can go if economic conditions worsen,’ he said.”
The Tribune. “Dawn Curnes is closing The Waggin’ Tail Cafe & Barkery, a boutique for pets, in San Luis Obispo next Friday.”
“Curnes said earlier this month that she intended to stay in business at least long enough to get a boost from Christmas sales. But after getting advice from a business expert, she said, ‘it just was not in the books to continue.’”
“‘I’ve been losing money from March on,’ said Curnes, who never accrued any pay for herself in the two years she’s been open. ‘National predictions say retail will be very soft this Christmas, and there’s just no end in sight. Now I have to buy myself out of retail contracts and sell my equipment below market, just to get rid of it, so I anticipate losses around $35,000 to $50,000.’”
“Curnes said she believed her business closure may be one of many to come in the near future. ‘I had such high hopes, but this is a real tough town,’ she said. ‘Small businesses are really taking a hit here, what with the economy, gas prices — it’s a perfect storm.’”
“John Rossetti, Curnes’ landlord and co-owner of the property, estimated that he has seen 50 percent more vacancies than last year in the commercial properties he oversees. The lag time to fill those spaces is about six months.”
“‘I’m getting this strange vibe and am starting to wonder, with the housing market and all the trade that’s attached to it, could it be we are having a recession?’ Rossetti said.”
The Union Tribune. “Nearly 50 sign-waving demonstrators chanted and marched outside the Countrywide Financial office on Frazee Road yesterday to protest the way the firm has handled soaring foreclosure rates in San Diego County.”
“Leaders of the protest also questioned the importance of an agreement with lenders brokered this week by Gov. Arnold Schwarzenegger. ‘Is this really a new commitment?’ asked Orson Aguilar, associate director of Greenlining. ‘It appears to be the same old commitment that hasn’t been working. We’re hopeful, but we’re also very skeptical.’”
“As they marched along Frazee Road, protesters chanted ‘Fix our loans, save our homes.’ Some of the messages written on signs they carried said, ‘Got Turkey? Countrywide home loans’; ‘Keeping my home should not cost me an arm and a leg’; and ‘Would you give your mom a subprime loan?’”
The Associated Press. “Some of the participants held handwritten posters with slogans such as ‘Our lives are not adjustable,’ and ‘Mozilo, don’t be a Grinch’ — a reference to Countrywide Chairman and CEO Angelo Mozilo.”
“One of the protesters, Nanshi Ignacio, said she refinanced her home in San Diego earlier this year with a loan from Countrywide, but now she’s desperate for the lender to change the terms of her loan before it resets in a few weeks.”
“‘I need help to get my loan fixed so that at least I can get a fixed rate and have peace of mind,” said Ignacio. ‘I tried to talk to (Countrywide) but they were saying they can’t do anything because I haven’t defaulted.’”
“”At one point, the protesters walked up to the Countrywide office and slipped signs that read ‘Got Turkey? Countrywide Home Loans’ beneath the doors, which appeared locked.”
fix my loan, pay for my medical, let my 6 “family members” stay in country, give me food stamps.. get a job and learn to read.. then ask for something!
happy thanksgiving
arnnie has gone commie-gop should kick his assz out
RON PAUL write em in
“She and her daughter-in-law have lost their jobs, leaving the family unable to pay their adjustable-rate mortgage. Their payments jumped $1,000 a month when their interest rate was reset. ‘I am a 50-year-old widow, my credit is totally trashed, and for the first time in a long time, I’m going to be a renter,’ O’Hagan said.”
A renter..Oh..” The Horror..the Horror”
I am a renter who makes over 200k a year. It’s not such a bad thing to be these days. I hope this dumb ass doesnt move in next to me.
What a change from two years ago. The super-confident high wage earners are all renters (or bought their homes so cheap…). The buyers of 2003 through 2007 have gone from arrogant to worriers.
At my work I’m still seeing a lot of equity extraction.
Cars… trips… the usual. We aren’t done tightening credit. Let’s put it this way, people who earn $70k to $80k a year shouldn’t be driving $80k cars… The ones that earn $100k to $200k? Most are still driving their low end ’splurge cars’ of ten to fifteen years ago.
Got popcorn?
Neil
Hit the nail on the head. I drive a 99 Honda Accord.
You extravagant fool! I’m still driving the ‘87 Accord my mom bought new, and gave to me when she upgraded to a Lexis! (this is by the way, a great car. I won’t sell or trade it for anything!)
The last new car I bought was a 1987 Honda Accord LX. Sold it about 3 years ago with 200k miles on it, and it’s still going (que the energizer bunny).
I fall in the 100K to 200K range and I have a 95 Honda. 170,000 miles on it. Will drive it until it dies.
Okay your car ties our two. I did one of my “what if” routines about 4-5 years ago and kept insisting that one day gas was going to hit $3-5 a gallon and that I wanted a super-fuel efficent car NOW. We looked at the Prius but (a) I need a wagon for my giant breed dogs weighing 110 -120 and (b) I figured out the cost of buying and running a Prius as compared to what we did buy. The rius came out badly - I would have to drive one 1,000,000 miles to break even on fuel and purchase cost but not including the $4800 a pop to replace the batteries periodically.
We have matching his ‘n her Escort wagons - one is a 92, absolutely mint with about 150,000 now and the other is a 96, perfect inside and out, with now 139,000. Being extremely good at being very cheap (some peole try to be and call me ‘frugal’ but lets be honest here - it is ‘cheap’ as in ‘Scrooge’), I did the Ebay thing, both cars were within 250 miles of me and, combined, cost less than $2000. We only put about 8000 a year total on the 2 cars so I figure they are good to go for quite awhile.
My husband bought a Prius, used, about 3 years ago for $13,000. Loves it! (and he’s a big guy, and it’s plenty roomy). And don’t believe the hype about the batteries needing replacement every couple years. His Prius is 7 years old, almost 100k miles and still going strong. We crack up when the auto mags (and their gas guzzler advertisers) constantly slag the Prius. Me thinks they do protest too much.
I’m being put to shame here on car frugality.
323i, 162k miles
17 year old Honda for the wife, 217k miles and we’ll replace it next year (it will need more work than its worth, she deserves another car).
But the point is made. If you’re toasting income on cars, you aren’t in a good place financially right now.
As to the hybrids, my coworkers love the civic hybrid… paying for the sportiness and enjoying the fuel efficiency.
Got popcorn?
Neil
Nobody I know is frugal with the cars, Audis, Bimmers, etc. but then again, I doubt they make $150k.
You bein’ a high-flyin’ hedge fund analyst and all, I’m surprised you can even SPELL “frugal”.
Frugality - a traditional value, life style, or belief system, in which individuals practice both restraint in the acquiring of and resourceful use of economic goods and services in order to achieve lasting and more fulfilling goals.
Salary >500K
Previous Luxury and Performance Autos Driven - Many
Best Car Ever Owned - 2006 Honda Civic Hybrid
‘I’m still seeing a lot of equity extraction.’
- My brother is a loan broker in Orange County CA, he told me they are going to close 15 loans this month and most are home equity loans.
One purchase had a credit score of 700, had 5% down, used a conforming jumbo and a second of 135k!
If your credit is a least 690 he can get you product.
Yep, I make about $200K and drive my 2001 Explorer with almost 100K miles on it. Resale price is about $6K.
I also rent and am saving a boatload of cash.
It’s good to be solvent.
I drive a ‘96 Jetta - first car I ever bought. Looks like with the ot of this year, I will finish at about $165k this year.
I don’t want / need a car payment.
You are Absolutely correct. My wife and I make over $175K per year and drive an 03 Honda Pilot.,Paid for and rent in Irvine. Saw this mess coming over 4 years ago!
Income (including wife’s), approx. $350K
My car - 14 yrs old w 163K miles
Her Car - 7 yrs old w 72K miles
Monthly Rent - $1100
No debt, plenty of savings.
My kind of guy!
What are you talking about? I am in a country with an effective tax rate of 50% and people making 50 k are driving (leased, of course) 50K cars!
Anecdotally, my rich friends OWN everything they have AND COULD BUY MUCH, MUCH MORE WITHOUT CREDIT. Everybody else is broke (little to no net worth) or a credit slave.
I travel internationally a lot and can tell you it is the same in every Western democratic nation, without exception.
Three vehicles in our family:
1. 2001 Maxima, bought new, about 85K miles.
2. 1995 Dodge Dakota, bought in 1998, about 90K miles.
3. 1990 Maxima, bought new, almost 180K miles. I drive it to work every day, 3 miles one way.
I’m a lot more of a spendthrift than some of the others on this thread, as I’m thinking about getting rid of the 1990 Maxima next year in favor of a new Acura TL.
‘What say the bretheren ?’ ‘Satisfactory!’ Be all that you can be.—be a renter. hehehehehehe loser
Tim. I’m a renter too (in a house that probably could have been sold for 900K a few years ago) and I too make over 200K a year. So, instead of living in a stucco hell and adding 60 minutes to my commute every day, I live on a tree lined street, travel lots, and send my kids to the best private school in the bay area. I save save save save save too…
The horror, the horror
Well I am in the 100 - 200K range, but on a single income in Texas.
Few years back when I finally got out of school bought a Chevy, new about $7000.00 below market on a loan. Guess after being in school for what it seems like an eternity and driving a 91 Ford (gift from my in-laws to wife) figured needed some thing we can rely on. Has 60000 miles now, has been good to us and most probably keep it as long as it still runs fine.
Did buy a used Lexus SUV last year, though I would have preferred to buy a Highlander for much cheaper. It was my wifes dream car, never though we could ever afford one when we were in college in an apartment with a roof caving in. Figured since she gave up her currier to become a stay at home mom (her choice with no objections from mine) I should not object.
Thankfully this June when we are done with Malibu payments no payments at all.
200k/yr
2003 Civic hybrid 110k replaced my ford escort
10 oil changes
2 air filters
2200 gallons of gas
that’s it.
My guess is the brakes will last the life of the car as I use the electric motor to slow.
Buying a fuel efficient car is a hedge against the falling dollar, and rising oil prices. Where will gas be in 5years?
A Renter who owns 7 cars
1) 1971 850 Spider paid $1200 mint with 38,000 miles
2) 1995 Saab Convertible SE 80,000 Miles perfect car 89,000 miles paid $5500
3) 1999 Saab 9-3 45,000 miles SE paid $9800
4) 1999 Intrepid 120000 miles –Bought New
5) 2000 Intrepid 122,000 miles – paid $4500
6) 1998 Sebring convertible 82.000 miles – paid $4000
7) 2000 Saab convertible 61,000 miles.- Paid $9500
We drive the intrepid during winters and for work. The other cars are for fun. I can get all the money out of these cars after even driving them for a couple of years. I will sell these every 2 year and the price I set is the cost of the car plus repairs and fuel I might have burned. I find eager lemmings glad to pay my price.
Btw I am a millionaire renter with ZERO debt.
I am a renter who makes over 200k a year. It’s not such a bad thing to be these days. I hope this dumb ass doesnt move in next to me.
I fit the same description. I love the apartment I rent in Maryland and the apartment I rent in Phoenix. The neighbors are peaceful (so far) and the apartments are quiet. I prefer living with good quality neighbors in a place built specifically for renting than to live where some fast food restaurant employee speculated on the house next door.
Santas bringing a new gift this yr. A NOD thru the chimney…lol
“Dawn Curnes is closing The Waggin’ Tail Cafe & Barkery, a boutique for pets, in San Luis Obispo next Friday.
‘…I anticipate losses around $35,000 to $50,000.’
John Rossetti, Curnes’ landlord and co-owner of the property, estimated that he has seen 50 percent more vacancies than last year in the commercial properties he oversees. ‘I’m getting this strange vibe and am starting to wonder, with the housing market and all the trade that’s attached to it, could it be we are having a recession?’ Rossetti said.”
I was discussing recession with a co-worker earlier, and we concluded that recessions were fundamental to shaking out useless businesses such as this one. When you can open a barkery/boutique for pets as an honest-to gosh concern, you just know the frothy economic tide has lifted not only all boats but some bird nests from trees as well.
Yeah this dumb idea was destined to fail. The slumping economy just accelerated its demise.
My cat is addicted to Whiskas Temptations treats
I bought a few bags this week, and the new packaging points out that each treat is under 2 calories~
yikes!
When folks resort to eating catfood, the calorie count will be good to know.
tee hee…and you’re right.
At this rate, it’s “when, not “if”.
Funny, but my cat loves Temptation treats also. Apparently so do other cats as the store runs out of them every week.
“‘This is nothing new for us. We’ve always tried to help our borrowers,’ said Kim Cohen, HomEq’s spokeswoman.”
As a former HomEq borrower, all I can say about Kim Cohen’s remark is “BULLSHIT!”
I never try to “help my borrowers.” I do look for outcomes that serve our mutual interest, if such outcomes are conceivable. For the most part, I serve myself … by making loans that can be repaid. (I don’t lend in CA, of course.)
You mean to tell me the freaking terminator could not resolve the mortgage crisis? I am shocked. Ppl just bought more then they could afford and the banks encouraged them to do it. There is nothing really to fix. Those ppl need to be kicked out, and the Bank’s have to accept lowball offers on the shortsale side. To help only prolongs the pain, and renters should never be asked to help foot the bill for greedy speculation. NOTE: almost anyone who brought a home since 2004 is a speculator since anyone with common sense could see they were overpriced and it was just a fools game, especially if they put less than 5% down or bought with an ARM. The end game has begun.
The terminator always had the advantage of an endless supply of bullets, to off bad news, in the movies…
This situation bears no resemblance to the silver screen.
“…Dawn Curnes is closing the Waggin’ Tail Cafe & Barkery, a boutique for pets, in San Luis Obispo, next Friday..”
Crap, there goes the economy of California. First the pet boutiques, then the porn industry.
No way. Pet excesses are a luxury. Porn is necessity. It’s the only true relationship many of us have with other ppl besides blogging.
ROTFL,
Low cost sin will be a high profit business the next few years. It was through the 1930’s. Pet’s will continue to be pandered, but I don’t think 10% as many people will be able to afford to continue to do so.
as to porn… its what helped VHS defeat Beta. Its what will drive HD-DVD over blue ray. Necessity? No. But we’re entering an era where a greater fraction of the economy will be spent on ’sin’. Do I like this? No. I’d rather it be on transportation infrastructure. But I accept facts.
People will rediscover the garage sink and cheap shampoo. Not to mention feeding fido with leftovers.
Got popcorn?
Neil
True, Neil, but bad economic times are also usually boom times for high culture. People start thinking of the important things in life, good writers find a public, good movies become blockbusters, etc. There is a rush to quality too, not only a debasing of culture.
So true. Grandfather was biggest music publisher in the country and made huge amounts of money during the depression. Dad said when times are tough, people want to escape reality and would save their pennies for entertainment. In those days, it was mostly sheet music.
It will be interesting to see what people resort to for escape this time. So much of popular culture reminds me of Alex’s aversion therapy treatment in A Clockwork Orange - hopefully we will see people start reading or playing their own music again, but I’m not optimistic. They’ll probably end up strapped to their couches with their eyes propped open to properly absorb the latest urging to consume mass quantities of goods.
Maybe the government will sell “Consumer Bonds” to pay down credit card lines so that people can continue to consume.
Oh, wait… Is that like collateralized debt obligations?
I shouldn’t have neglected the high arts. Good point! Don’t worry, you won’t find me heading to the XXX palace, but rather a museum.
Since a lot of medicine must be consumed… its going to be interesting.
Got popcorn?
Neil
I wash my dogs in the driveway with a hose & sprayer….Just like a car wash…They love it….
You would get a ticket for that around here - for wasting water. We have water police now, to make sure that you patronize your local pet spa, where they probably have to recycle their wash water.
A couple of years ago, I got fined because a gardener hosed down the driveway in front of an apartment building. The city sent me a picture of the wet driveway along with the notice. It was dated December 24th - the all-seeing eye never sleeps…
Au contraire. Pet excesses are a necessity. (It’s the only true relationship many of us have with others, besides blogging.) Porn is a luxury.
One of the pet boutiques here in Boone charges ten bucks to wash your dog. They weren’t amused when I said that what I would do if my dog needs a bath, would be to hold her out the window while I drove my car through the car wash. It would be a lot cheaper that way (not to mention the fact that I could kill two birds with one stone — a clean dog AND a clean car!)
This is getting scary folks. First the do it yourself candle shop going under and now the Waggin Tail Cafe and Barkery!
Where will it end with CitiGroup? Countrywide? Where dang it…Where?
‘ The governor took credit Tuesday for negotiating an agreement with mortgage lenders’
Governator: So…..whats wrong with this, that, and the other? No beeg deel.
This was good for my laugh of the day. Silly Governator…
Hey…Clownfornia VOTED for Mr. Beachmuscle exSteroidonaire and WILL get exactly what they deserve for their Sins
As a Californian, I can safely say that he was (and is) better than the clown he replaced, Gray Davis. Is he everything we hoped for? No. Is he the worst California governor I’ve seen this decade? Again, no.
Like you said..he was(and is) a better clown. It’s your Circus
Where else can you see a 3D show at a theme park starring the incumbent governor?
The real circus is the Ninth Circus court of appeals. Overturned more by the supremes than any other circus.
“Hey…Clownfornia VOTED for Mr. Beachmuscle exSteroidonaire and WILL get exactly what they deserve for their Sins ”
LOL. IMO few contemplate Arny probably would not have made it to where he is without roids and anti-cromag cosmetic surgery. The guy stuck needles in himself for years to “juice up” in order to get comically huge.
Bottom-line? Without roids…
No juice = No Mr. Universe = No Terminator = No Governator
DOC
Governator: Don’t worry….be happy……only thing i worry about is the liquid man.
Made a thanksgiving journey south through LA and out the San Bernardino and then south to the border. Saw many amazing things:
98% of the billboards were for buiders
Occasionally I would see billboards that encouraged people to turn in people for stealing copper wire (presumably from empty subdivisions)
Thousands of acres of bland new boxes.
Near the Salton Sea (middle of blasted desert nowhere) A cluster of spec homes “In the 200’s”. With nice big dirt yards.
I’ve been reading about it all, but it was still pretty shocking.
Incredible to see it. Masses of newly built and partly built property stuck in the middle of nowhere. Worse, who the hell is going to buy in these desolate sh*t holes?
My SIL teaches at the high school in Salton Sea. Very poor immigrant (NOTE: NO, NOT MOSTLY ILLEGALS) families mostly - like they could afford those homes in the “low $200s. It’s at least 30 min drive to Indio which is closest place with any level of employment and with the cost of gas out here, not really practical. Besides the smell, the sea is dying and when funds are short, all the brouhaha about saving the sea will disappear.
On Hwy 15, from Glen Helen Regional Park to the border…
There is nothing but wretched excess, in the form of houses that are far far away from anything and either not occupied, or soon to be foreclosed on and vandalized.
And the lion’s share of the investors, are from el lay and Tijuana-adjacent…
I have a problem with the CW protesters. I think the tan man ripped off his company and shareholders, but that doesn’t appear to be what they are protesting. They screwed up in so many ways and now they want it all fixed for them. So many bought more house than they could afford or they were flippers and investors, or they lied on their applications that it was a primary residence, or inflated their income, or extracted all their equity. Only way I know to fix them is to undue their self-inflicted lobotomy.
Arnold Schwrazenegger is pure 100% show biz. I was in the entertainment industry for 40 years and the first thing you learn when talking to ANYONE - is don’t believe ANYONE. The second thing you learn is not to take anything said at face value. If someone tells you he has already raised a big portion of the $2 million budget for his movie, that means his sister has loaned him $50.
I will give Schwarzenegger credit though - he’s a fast learner and he knows all the tricks. He knows how to spin. He knows how to smile ALL THE TIME because you cannot put a positive spin on something with a sour puss.
So let us look at reality as opposed to Schwazenegger’s show biz hype, adapted to politics which shows us why Schwaznegger, even though he cannot because he’s foreign born, should be President.
California prices are still waaaaay out of whack. However, the lenders don’t need any lessons on finance from Schwazenegger. They don’t need Schwazenegger to tell them that if a FB looks like he/she has a chance to keep up the mortgage payments, then the lender will agree to cut him/her some slack. The reality is, however, that isn’t the case where the MAJORITY of FB’s are concerned. They cannot afford the mortgage payments even if they can cut a deal with the lender. It only works for the lender if they don’t have an empty, decaying property and some of the principal is being paid off and (most important) they are not losing money. Why shouldn’t they be “lenient”.
However, and this is the reality behind Schwazenegger’s b.s, in most cases even if the lenders dropped the payments to 5% interest, the person who took out the mortgage couldn’t make it work because the property they bought is waaaaay out of their price range in the first place.
Only three things matter (in a normal market) where property is concerned. Location, location, location. In a bust like this, the likes of which we have never seen before, those three things are pushed far to one side for three other things. Affordability, affordabilty, affordability.
However, keep up the b.s Arnie. 99% of the population have no idea how it all works and if you appear on Show Biz Tonite with a big smile and tell us “Kindergarten Cop” is the greatest film you’ve ever been involved in (before it comes out and bombs) then, of course we believe you (lol).
I loved kindergarden kop, especially where he shoots the bad guys.
I have soft spot in my heart for Terminator, but it would have been better had OJ been cast as the cyborg, as first planned.
But Arnie gives the FBs Hope and Hope is what the FBs are clinging to.
With Hope the FBs will be stimulated to somehow find a way to keep making the payments.
This Hope will spawn Belief, Belief that all will work out in the end IF the FBs can hold on until the market turns around next year, or the year after (or the year after that).
Hope and Belief will keep money pouring in to support these lost causes of transforming the unaffordable into the affordable, of postponing the Day Of Reckoning (Wreckoning?) both for them and for the FLs (F**ked lenders).
‘Would you give your mom a subprime loan?’
One mortgage broker I know told me rather matter-of-factly that said broker had put Mom into a very subprime loan. I/O neg am.
I think one mom just learned the penalty for not teaching a child morals and a work ethic.
snicker… Karma’s a bitch.
Got popcorn?
Neil
It was probably a 105% LTV cashback flipping scam with a fraudulent appraisal
…with a pre-payment penalty… LOL
OT — Priced-out Santa Barbara working stiffs have traditionally looked either north (to Buellton, Lompoc, or Santa Maria) or south (to Ventura or Carpinteria) for comparatively affordable home prices. This week at the Santa Barbara Housing Bubble Blog: One Carpinteria townhome developer hopes to cash in on tradition. (I know…I’m such a tease.) Thanks for indulging me, Ben.
Saint Barbara
“The Modesto Bee reports from Caalifornia”
LMAO!
A bit OT. Chatted up a tow truck driver looking for 3 repo’s on Wed in Marin. One a PT Cruiser in our lot. Wonder if its the newer 6 banger ’cause I’d be interested in one of them.
personally have noticed a lot more repo trucks (bland, no name on side) with vehicles attached, around town. In broad daylight too.
Usually these trucks have to cruise around in early A.M. to grab the late payers, and they are painted black to blend-in & not tipoff their prey. Interesting times indeed.
PT Cruiser has never had a 6 cylinder.
“Those four lenders, however, told The Bee on Wednesday that their lending policies haven’t changed and the governor didn’t get them to agree to anything new.”
You mean he was “acting”?
I had thought the writers were on strike.
“‘I’ve been losing money from March on,’ said Curnes, who never accrued any pay for herself in the two years she’s been open.”
———-
I have posted this opinion before, I think there are a ton of marginal at best mom and pop businesses that were originally financed by HELOCs and only kept alive as long as the heloc flowed. Home equity was the big chance to be your own boss for a lot of people. The bubble also provided a lot of liquidity for their customers, but now the whole process is reversing. Look for a lot of small storefronts to be sporting “available” signs.
I see businesses like that coming and going here in Santa Monica all the time. I have always suspected they were a way to keep unemployed spouses out of trouble, and it makes sense that many were funded by HELOC money over the last seven to ten years. It will interesting to see what survives a year from now. How many boutiquey baby clothes and dress shops do we really need? Not to mention dog walking services, pet spas, etc.
Bay Area food banks out of food it’s supposed to be different here. Go Figure?
AZ food banks have half the normal inventory, and are tapping into cash reserves.
And we’re just at the start of this thing.
Jonathan Dienhart said “consumers seem very wary about home purchasing in general.”
“‘Many would-be home buyers have taken themselves out of the market because they see it as too risky, and until this perception improves, we will continue to experience a degree of paralysis in the new and existing home markets,’ he said.”
- Sorry Johnny, you and our govenor have it wrong as usual. These ‘buyers’ are on the sideline because they can not qualify for a fully amortized loans and its payments.
While access to credit is a significant obstacle, consumer confidence is also a factor. The portion of the Conference Board’s Consumer Confidence Release that looks into home purchase plans as well as the component of the University of Michigan Consumer Survey which asks respondents whether it is a good time to buy a home have both been taking a beating. There are more factors involved in consumer behavior during this downturn than just access to credit as the decline in sales activity began before the credit problem really hit the market. But certainly the current credit crunch is a significant obstacle to recovery in the future, and the sooner the world of mortgage-backed securities stabilizes the better chance the housing market has of regaining its footing.
Hey, it’s Black Friday, why aren’t all of you out shopping!!!
Took a short trip to a popular Electronics store in the Bay Area because my kid wanted to buy a specific video game.. It was a mad house. I tried to park but after 5 minutes of driving around, I drove off to a local Best Buy which wasn’t too busy.
As I was driving off the parking lot (near the entrance) to go to Best Buy I noticed that every other cart had a Flat screen TV. I was amazed! It’s the “got to have it”, “we must buy it”, “whatever the cost” mentality that will destroy the consumer. Anyways, my kid bought his video game ($9.00) and I bought a 2GB USB drive for (9.99). That’s my contribution for Black Friday.
So you went to Frys?
FWIW flat screens aren’t that expensive anymore (unless one insists on a Sony or some other pricey brand). I have seen planty of 42 inch models under 1 grand. The problem for me is that I have noticed that the satellite HD channels look lousy. Too much lossy compression and the result is a ton of artifacts of busy images (like sporting events).
I was at the local Wall Mart at 4:30. I’d guess about 2x as many people as last year. When the doors opened, we headed for the loss leaders.
$600 COMPAQ computer for $400. (my current computer is 5+ years old) $200 digital camera for $150. (broke my last one) For the kids we got a $400 trampoline for $200. Some little stuff like 2G sd card and 2G flash drive for $18 each, and Shrek 3 DVD for $12. We did pick up star wars transformers for $27… only thing we picked up that wasn’t on mega disocunt. Oh.. and Nintendo DS at $149, but that is the Nintendo set price that everyone has it for.
We then went over to the mall. Went into Disney Store. Their special was 20% everythng in the store, but their normal iscount stuff is better than that. There was a line to get in. Lots of people shopping, but not much buying. Lots of toys for the 5 and under crowd.
We then walked across the mall to Game Stop. Bought one Nintendo DS game for $10 off, and picked up a bunch of used games and an extra xbox controller that the 13 y/o son wanted. He’s more of a casual gamer so enjoys the games that are 3-4 years old for 1/3rd the price.
Stores like Abercrombie, Holister, etc. were deserted. Our general impression was that there were lots of shoppers, but VERY few people with lots of bags. The bags we did see were pretty empty.
On the way home we went ahead and stopped at K-Mart. Long lines with carts full of loss leaders and other cheap stuff.
We’ve spent a grand total of about 2/3rds of 1 week’s gross income. We’re about 80% done. Something for FIL. SIL and her family. I have to buy for the wife, and a few more small things for the kids. We’ll be under 1 week’s income when totally complete.
Thanks for the report, Darrell. Good for you.
I will perform my usual Xmas ritual. I will wander aimlessly through the mall on December 24th in a panic, along with 2000 other desperate men, searching for anything that is still hanging on a hook. And then, at the last minute, I’ll buy 10 “Merry Christmas” cards, stuff $50 bills in ‘em, and call it a night.
Went to Target this am. A lot of shoppers, but not an unmanageable crowd. Bought items on sale, a few stocking stuffers and was out the door. Cashier said that it was the slowest she’d seen it on Black Friday in 12 years. Headed over to Kohls. This store had shoppers, but it wasn’t busy. There was no line to the register. Purchases totaled under $200. Went to the used book store and had a great time. Lots of shoppers, very relaxed atmosphere. Bought cook books, recent best sellers, classic rock CDs, books on tape, and a few games. Total for the day: under $400, and I’m done. yeah!
Wow. Sounds like California is going to get the big one soon, and not on earthquakes. That’s a shame because I think CA has some cool places. Kind of stuffy but I can see why some of the prices have always been higher than in most parts of the USA. Man, I don’t know how these people are gonna get up from a $300K whammy. Is Google gonna rescue them? I don’t know. Maybe Apple can. Both companies stocks are grossly overpriced. Seriously, how can anyone afford a house in CA even with the weird financing? Does gold grow on the trees?
I’m in Petaluma today. For the first time, visiting a sister who has lived up and down the California coast for a couple decades. Nice little northern town in Sonoma county. Great being in wine country. I would not mind investigating real estate in this area post-crash. My heart is set on the South Bay (Redondo Beach) and in Phoenix though.
Remember to keep building up reserves to make the big buys in a few years. There are more media folks thinking the “tony” places will see real estate prices fall every year the next 5 years.
I live in Los Angeles and here’s what I see:
A lot of people driving brand new cars and SUVs
A lot of really overpriced homes ($500,000 for a small 2 + 1 with additions)
I am making a big assumption here, but it seems like a lot of people here must be borrowing on their homes equity. Otherwise, I can’t see how average folks (even working couples with 2 incomes) can afford very much, let alone their mortgages. I do see a lot of people living in extended family type situations. That is, two families sharing a house, or with aunts, cousins, kids, etc. Many of those are latino families. I’m not sure if it’s cultural or necessity? Anyway as a side note, I’m sure immigration is driving up real estate prices here, especially with the subprime fiasco. I remember seeing adds for “No money down, bad credit OK” home loans…
“A return of a healthy real estate market will be greatly dependent on the general state of the national economy, Dienhart said. ‘If we’ve had this bad of a housing market with the economy doing relatively well, there’s no telling how bad it can go if economic conditions worsen,’ he said.”
It must be Obvious Day on Planet Stupid…
SubKommander Dred
“Dawn Curnes is closing The Waggin’ Tail Cafe & Barkery, a boutique for pets, in San Luis Obispo next Friday.”
Where do some of these people come up with their business models? The business end of a crack pipe?
SubKommander Dred
We know where Arnie stands but where is George? Still at Camp David.
“‘I’m getting this strange vibe and am starting to wonder, with the housing market and all the trade that’s attached to it, could it be we are having a recession?’ Rossetti said.”
Could it be he’s a totally clueless cretin who’ll be lucky not to be living in a cardboard box by this time next year?
SubKommander Dred
“One of the protesters, Nanshi Ignacio, said she refinanced her home in San Diego earlier this year with a loan from Countrywide, but now she’s desperate for the lender to change the terms of her loan before it resets in a few weeks.”
HMMM. Why did she refinance? You guys know the answer to this one. How did she spend the money? You just got bit by a loan shark! LOL!
When are they going to do stories on people like us? My wife and I moved to LA a few years ago when this madness was in high gear, so buying wasn’t an option unless we wanted to spend $800k on a stucco box. We make about $200k/year, our cars are more than five years old and we rent in a great neighborhood in central LA for $1300/month. With high gas prices, child care and everything else, we’re happy just to save as much as we can. In no way are we “buyers” waiting on the sidelines. Unless sanity returns we won’t be that or many years.
Remember, it’s a youth culture. Anything resembling adult behavior is way too scarey to contemplate. Everything is designed to forestall reality, be it fast money or plastic surgery. And the MSM are happy to be our enablers.
“Bay Area food banks have had a little less to be thankful for this year. Although many of the local charities are seeing a record need for basic food items, donations have been lagging. And food bank workers are nervous, with some calling this the worst season for hunger since the dot-com bust rocked the valley years ago.”
San Francisco area real estate is arguably the most valuable, in the country…
Sounds as if many are knee deep in very slow quicksand, financially.
I posted this in the Bits Bucket but it probably should have gone here instead, since the author lives in CA:
http://tinyurl.com/2xdyab
I know most of you probably do not read the NYTimes Style section, but I thought this was interesting in terms of the way subprime is spreading into mass culture. Michelle Slatalla, the author, is the online shopping columnist for the Times. Usually her column is light and funny. Not today.
The NYT columnist mentions using Mint.com to organize/analyze her household budget. Anyone else have experience using this internet service? How does it compare to Quicken?
i believe this article was an advertisement.
regards
evil
That was not what I intended when I posted the article. I was actually quite shocked (shocked!) that someone (a columnist for the newspaper of record) who had moved from NYC to California with great fanfare a couple of years back had, as it transpired, done the deed with an ARM that was about to reset.
‘Keeping my home should not cost me an arm and a leg’?? How about do not buy a house with your arm and a leg? Buy what you can afford. Don’t try to use my tax money to bail you out.
I agree. We shouldn’t reward speculators. What happened to working hard and saving for the house? Now, it seems people want the house, the car, the trips, the gadgets, everything all at once. Stangely, they want it all with a sense of entitlement to boot. Maybe it’s always been this way… I don’t get it?