A Sobering Reminder Of What’s Going On In California
The Union Tribune reports from California. “San Diego County median home prices dipped $1,000 from December to January to a four-year-low of $429,000, DataQuick reported Tuesday. Sales activity of 1,826 transactions was the second lowest for any month on record. The overall median was down 17.1 percent from the peak set in November 2005 of $517,500, while the monthly sales count was off 72.4 percent from the monthly peak of 6,605 set in August 2003.”
The New York Times. “An example of the spreading credit crisis is seen in Don Doyle, a computer engineer at Lockheed Martin who makes a six-figure income and had a stellar credit score in 2004, when he refinanced his home in Northern California to take cash out to pay for his daughter’s college tuition.”
“Mr. Doyle is now worried that he will have to file for bankruptcy, because he cannot afford to make the higher variable payments on his mortgage, and he cannot sell his home for more than his $740,000 mortgage.”
“‘The whole plan was to get out’ before his rate reset, he said. ‘Now I am caught. I can’t sell my house. I’m having a hard time refinancing. I’ve avoided bankruptcy for months trying to pull this out of my savings.’”
“Borrowers like Mr. Doyle say they are victims of their circumstances — housing prices collapsed and lending standards tightened just as they needed to sell or refinance.”
“The Doyles took advantage of the housing boom by refinancing their home nearly every year since they bought it in 1995 for $275,000. Until their most recent loan they never had a problem making their payments. They invested much of the money in shares of companies that subsequently went bankrupt.”
“Still, Mr. Doyle does not regret refinancing in 2004. ‘My goal was clear: I wanted to help my daughter go through college,’ he said. ‘It wasn’t like it was for us.’”
The San Francisco. Chronicle. “An analysis of home-price changes in Bay Area ZIP codes to be released Tuesday by www.zillow.com shows a map of the region as a virtual checkerboard of good news and bad news. Foreclosure-heavy, low-income areas such as east Contra Costa and southern Alameda counties had more dismal changes - many ZIPs there show home values down 5 to 10 percent, even more than 20 percent, in the space of a year.”
“The price volatility ‘is a sobering reminder of what’s going on,’ said Stan Humphries, VP of data and analytics for Seattle’s Zillow. ‘It’s pretty dramatic.’”
“For anyone considering selling or withdrawing equity, a lower value translates into immediate, real-world effects. Sue McCullough ‘Zillowed’ her home in Oakland’s Laurel District on Tuesday and was dismayed to see it valued at $417,000 - about a 16 percent drop from a couple of years ago.”
“‘It makes me very much more definite: I’m going to have our open, available line of home-equity (credit) shut down so we can’t get into trouble,’ she said.”
“McCullough and her husband had planned to tap home equity to convert their tumble-down garage into a home recording studio. They got as far as tearing down the garage and then realized that building a new structure would max out their home equity.”
“‘The last few years we used that home-equity line of credit for fun things, like vacations,’ she said. ‘That’s not going to happen anymore. We have not exceeded the value of our home, but I don’t want to go there. That scares me.’”
Bay Area Newsgroup. “The second-largest U.S. mortgage insurer announced Monday it would no longer insure home buyers with less than 10 percent down in California and other ‘distressed markets’ to protect the company from a wave of anticipated losses in the housing market.”
“PMI Group Inc., a Walnut Creek-based corporation, reported it would end underwriting mortgage insurance for those buying homes with less than 10 percent down in California, Florida and most of Arizona and Nevada starting March 1.”
“Spokeswoman Beth Haiken said the new policy may not be permanent. ‘But I also wouldn’t say it’s the last change we would be making,’ she said.”
The Fresno Bee. “A lawsuit filed by investors in the defunct Running Horse golf course and residential development has accused two real estate agents and a title company of illegal activities related to what the lawsuit called a ‘leveraged pyramid scheme’ set up by the original partners behind the project, Tom O’Meara and Scott Webb.”
“The lawsuit, while making allegations against O’Meara, Webb and Running Horse LLC, does not name them as defendants.”
“Instead, the lawsuit accuses Fresno real estate agents Kathy Gee and Linda Ann Ulm of negligence and unjust enrichment in their dealings with those Alameda County investors on behalf of Running Horse LLC. The lawsuit also accuses Stewart Title of California of negligence and misrepresentation in failing to monitor the transaction.”
“James Cai, the San Jose-based attorney bringing the lawsuit, said in a phone interview that his clients’ allegations indicate that O’Meara and Webb were ‘just in the business of taking people’s money and trying to cover up their scheme of developing some fancy golf club that will never materialize.’”
“Cai said he did not name O’Meara and Webb in the suit because both men have filed for bankruptcy protection. But Cai called the two men’s behavior ‘highly questionable.’”
“‘I’m wondering why the district attorney’s office is not involved in this case,’ he said.”
The Bakersfield Californian. “A former Crisp & Cole Real Estate employee who owes more than $4.2 million in outstanding mortgage payments and other unpaid bills has filed for bankruptcy. Zane Richards, a former worker for the defunct real estate firm, filed for Chapter 7 bankruptcy protection seeking forgiveness of a mound of debt, including unpaid property taxes, credit card bills and utilities charges, court records show.”
“One of his lawyers, Fresno-based Carl Faller, said his client’s situation was similar to that of several others who became involved with the Crisp & Cole agency, which is now the subject of a federal investigation.”
“Faller declined to state Richards’ job at Crisp & Cole, but said his situation was ‘basically collateral damages from the business practices Crisp & Cole were engaged in.’”
The Daily Press. “Prices of existing homes in the Victor Valley dropped 9 percent last month and 60 percent of homes sold in January were bank owned — double December’s rate, according to a report.”
“Since January 2007, prices of existing homes have fallen 32 percent, according to figures from the Victor Valley MLS compiled by agent Larry Trombley.”
“‘I really don’t know for sure, but I’m hoping we’re pretty close to the bottom,’ Trombley said. ‘It makes sense for buyers to buy now and the phones are ringing. But we still have a lot of inventory, so I don’t know where it’s going to end.’”
“With the declining prices, one out of 23 Victor Valley homes were sold in January. Industry experts say that’s about a 23-month inventory of homes for sale.”
The Guardian. “In the ballroom of a tourist hotel outside the gates of Los Angeles’ Disneyland resort, some 250 bank-owned properties were sold this weekend in rapid succession. The deals are noisy, no-nonsense and decisive - each takes barely three minutes.”
“For as little as $200,000, bidders were able to snap up three-bedroom homes. Many of those on the block were in the so-called ‘inland empire’- the canyons, creeks and arid semi-desert to the east of downtown Los Angeles where the city’s suburbs have crawled in search of space.”
“John Husing, an economist based in southern California, says 80,000 people were moving east annually in the first half of the decade. Property prices were rising by 8% annually in the Inland Empire and jobs were growing at 3.5% until, quite suddenly, the economy shuddered to a halt.”
“In part, he blames property speculators for the seizure. Lenders compounded the crisis, says Husing, by making ridiculous offers. He cites a copy of a 2006 advertisement which offered: ‘Buy a house - we’ll give you a Maserati.’”
“‘Folks didn’t get it. The public just said ‘I don’t get this’ and they stopped. What I call that is a buyers’ strike,’ he says. ‘It was almost overnight that it stopped.’”
“Checks on documentation were often minimal. The Hispanic community was particularly badly hit. Upwardly mobile immigrants, keen to buy homes of their own, were given loans far beyond their means. The Wall Street Journal recently found a Brazilian babysitter who was approved for a $495,000 loan and a housekeeper, married to a taxi driver, who secured a $713,000 sub-prime mortgage.”
“Not everybody in the property industry is willing to shoulder the blame. Standing on the fringes of the weekend’s auction, some property professionals felt like scapegoats.”
“‘Most buyers in the Hispanic market went to Hispanic mortgage brokers,’ said Jim Lisciandro, an estate agent from the San Fernando valley, who says it is a myth that immigrants were preyed upon because of their poor English. ‘I don’t believe there was miscommunication.’”
“Laura Pinelli, another local broker, is similarly sceptical. She says buyers and lenders share joint responsibility for unrealistic debt.”
“‘In California, people are caught up in materialistic things. It’s not just a vast home. They’ve got to have a flat-screen TV, fancy furniture. The boat, the motor home, the car. They’ve got to make repayments on all these things,’ she says. ‘If you’ve only got a Kmart budget, you ought to go to Kmart.’”
The Desert Sun. “The year-in-review data, to be released by the California Desert Association of Realtors this week, shows the local housing slump that began in the second quarter 2005 only worsened in 2007.”
“The number of homes sold in the Coachella Valley in 2007 fell 21.4 percent compared to 2006. ‘I’ve never seen (sales) plunge this fast,’ said Patrick Veling, president and founder of Real Data Strategies.”
“A total of 5,860 homes were sold in the nine desert cities, Bermuda Dunes and Thousand Palms. That’s roughly 1,600 fewer homes than were sold during 2006. And it’s a 46 percent tumble since 2005.”
“Experts say the first red flags of of the valley’s market problems came with the 2005-06 data: Sales slowed. Prices leveled. It quickly transformed from a seller’s dream to a buyer’s market. It only got worse in 2007, the numbers show.”
“And sellers aren’t budging on prices because they’re not motivated by need as much as their intent to get top price. It’s ‘absolutely opposite’ of traditional housing shifts, says Greg Berkemer, executive VP of the California Desert Association of Realtors.”
“Previous market corrections, triggered by economic recessions started at the top with high-priced homes. Entry-level purchases generally were not affected. This time, ‘the high-end kept selling and the low-end collapsed,’ Berkemer said.”
“That’s a big reason average sales prices have not dipped, and even gone up slightly. But until the sales prices go down, experts say the desert’s large inventory won’t diminish.”
“The valley ended 2007 with 9,186 homes on the market. That is 11.5 percent - or 950 more homes - than at the end of 2006. It’s also about three times greater than the end of 2004 when the housing market was booming.”
“And as more adjustable rate mortgages are about to reset, Veling said ‘one could argue’ that it will be late 2009 to early 2010 ‘before this begins to level off and improve.’”
“Buyers looking at homes under-$500,000 range have very different motivations and economic realities. In recent years, experts say this segment boomed when buyers were lured into the market by sub-prime lending and exotic financing deals.”
“Those have gone by the wayside. And prices for entry-level homes are now ‘out of whack’ with the income of those buyers, says Chapman University economic researcher Esmael Adibi.”
“Experts say sales prices in the Coachella Valley will inevitably drop from the pressure of all the homes on the market. At best, experts say, the desert market could stabilize by the end of 2008. Most say a more realistic timetable for an upswing is 2009 to 2010.”
“‘It will get better,’ said Greg Berkemer, of the California Desert Association of Realtors. ‘But just waiting for that to happen is not where you want to be. It’s always a good time to buy real estate - just not for the same people.’”
From the last article on this list:
“Entry-level homes, which are priced under $500,000″
This shows how absurd the CA real estate market is. Since when is $500K entry level? Is this guy telling us that a young couple with a new baby can afford a $500K house? Time for a reality check.
I live out there and with exotic loans it worked - at least for a while. Median income out here is about $50K. If you take away exotic loans, require down payments and documentation, housing sales have and will continue to come to a screeching halt. There are few people out here that can afford what’s for sale and there’s more for sale then I’ve ever seen in 16 years. On top of that, there’s still oodles of rentals at the peak of “season” - unheard of before.
On top of that, there’s still oodles of rentals at the peak of “season” - unheard of before.
I have never kept track of this, what do you mean “peak of season”?
Out here in the desert, we get huge influx of snowbirds (retirees) that show up from about mid November until about beginning of May.
Our population expands (in the past) to triple our reg population.Or more.
And, aretheycrazy, friends got a condo rental just last week. Owner owns 3 units, and lowered his asking rent from 1800 to 1500. HI Season , and you got it, unheard of. Never ever before Apr 30 would you have seen anything much less for a lower affordable price. Lots of stuff available now.
Crimey. I can remember about 15 years ago in the town I grew up in, population at the time about 60,000, I don’t think there was a single house that would have even been valued at this amount. For about $240k you could have bought anything you wanted. There are alot of people that make about $12 per hour, some more some less. I don’t even think there is anything short of a mobile in a park that they could even afford. Somethings gotta give.
Since when is $500K entry level?
Entry level for a senior partner at a major lawfirm sure, but even 200K is pushing it for most folks.
You can totally see how realtors have twisted language to try and sugarcoat today’s outrageous prices.
In terms of high prices, we were told in 2005 prices were high because there was a real shortage - not making more land etc… Today, all the missing homes have been found and it turns out there is more than enough homes. So exactly what justification is there for prices much over 2000 prices, given there is a glut of homes on the market.
Since when is $500K entry level?
Believe it or not, this is progress. I remember seeing $500K fixer-uppers in SJC.
$500K is entry level for knife catchers.
“So exactly what justification is there for prices much over 2000 prices?”
Mass stupidity.
DOC
We could. But then again, we’d be putting down 50%.
The douchebaggery of used home salesmen is only surpassed by their ass-hattery.
good to see the same words used on the west coast as east coast for realtors
douchebaggery and ass-hattery are 2 of my faves
Comment by sfbubblebuyer
2008-02-12 16:28:23
We could. But then again, we’d be putting down 50%.
The douchebaggery of used home salesmen is only surpassed by their ass-hattery.
AHAHhahhhhaaaa beautiful !!!!
“Sales activity of 1,826 transactions was the second lowest for any month on record. The overall median was down 17.1 percent from the peak set in November 2005 of $517,500, while the monthly sales count was off 72.4 percent from the monthly peak of 6,605 set in August 2003.”
- And the lowest month on record had ??? sales? And when?
- Sorry to say for would-be sellers, but a drop in sales is a leading indicator for future decline in prices.
Steep declines were concentrated in the resale house category, whose median dropped $19,500 from December to $451,500, the lowest since February 2004, and down 16.4 percent from the year-ago level of $540,000. The 995 sales recorded in January were the lowest since DataQuick began keeping records in 1988.
The Dec-Jan SFR price drop occurred at a 39.8 pct annualized rate of decline.
P.S. I am wondering to whose home purchases a GSE conforming loan limit north of $500K will apply, given that the median SFR price is now in the $450K neighborhood?
Usually dataquick trumpets the stability of resales since that is what most people care about.
Price declines seem pretty stable these days, although they appear to be accelerating.
lol pb
Currently ziprealty.com shows 12,006 SFRs, but that is an undercount as it excludes new never-lived in homes in 131 “New Home Communities” around SD county, plus Craig’s listings and FSBOs. A conservative estimate of the January sales pace would be
12,006/995 = 12 months worth of SFR inventory.
I also find it hard to believe, Professor, that the median house in SD is lower than the median price out here in the desert. We used to be the cheap place. In 2000 you could still get a nice 3/2 w/pool for under $200K.
Sounds like it might be a good time for desert dwellers to cash out and use their accumulated equity gains to buy in San Diego.
By about August, most of us wish we had!
Could someone please elucidate me on the concepts of “Notices of Default” and “Trustee’s Deeds”? I note that the latter category is running just behind the level of sales in SD county, and is steadily gaining, while “Notices of Default” are well in excess of the current sales rate. What happens when “Trustee’s Deeds” overtake sales?
Month / Notices of Default / Trustee’s Deeds
Nov 07 / 1,600 / 535
Dec 07 / 2,784 / 1,285
Jan 08 / 3,299 / 1,461
Data source:
http://www.foreclosureforum.com/stats.html
There is a nice glossary on that web site. It sounds as though Trustee’s Deeds could come in handy for market value estimation purposes.
It is quite telling that as recently as 2004, Trustee’s Deeds were running at as low as 10 pct of Notices of Default; currently both are rapidly increasing, with NODs nearing 50 pct the number of Trustee’s Deeds.
NOTICE OF DEFAULT: The first phase of the two step foreclosure process in California. The notice, which is prepared and recorded by the foreclosing trustee, contains particulars regarding the default in payment, the affected deed of trust, etc. The default period runs a minimum of three months.
TRUSTEE’S DEED: The deed issued by a trustee to the highest bidder at a trustee’s sale. The deed discloses on its face what the opening or minimum bid was at the sale and what the final winning bid actually amounted to.
http://www.foreclosureforum.com/glossary.html
Noteworthy fact: Current level of Trustee’s Deeds (1,461) exceeds the highest rate Notices of Default reached during the previous 17 1/2 years (back to mid-1990, when Southern California was entering a bad recession).
What happens when “Trustee’s Deeds” overtake sales?
Ugly rush to the exit, worse than yelling fire in an Italian brothel.
“Area real estate agents and developers reported an increase over the weekend in buyer interest that they hope will end the decline in prices and reverse the slowdown in sales.”
My opinion: You will not see a reversal in the slowdown in sales without a further decline in prices. Even though it is different in San Diego, the laws of economics still apply.
Inflation or Deflation?
Deflation confirmed……..The Fed
http://www.ny.frb.org/markets/omo/omo2007.pdf
Glad it came from a source we can trust - hah!
Check the graph page 15
Did you mean p. 16 “TOTAL DOMESTIC PORTFOLIO AND NET AUTONOMOUS FACTORS (MAINTENANCE PERIOD AVERAGES)”?
Interesting detail: Currency Swap + TAF goes from nonexistent to $75 bn in a matter of one month. What does this signify?
yes…….sorry GS.
To my little brain it says draining, not pumping
Do TAF monies need to be repaid? And is it possible for the Fed to extend infinite-lived forbearance if necessary?
“…draining,…”
Draining the swa(m)p?
The correct lending term is “Evergreen”. TAF monies must be repaid, but a simultaneous ‘new loan’ can be issued to pay off the old loan. This is Federal Reserve rollover.
The current problem is the Federal Reserve has accepted debt at 75% of par that is now worth 30% of par. The Federal Reserve is correspondingly under capitalized and may be at risk.
Hoz or PB,
Could either of you please explain what it would mean if the FED were under capitalized..?
Zillow rewrites history. I’ve had ongoing discussion with a close friend, advised him to sell 2 years ago when comps where $750K. Things fell apart and the same model, better shape sold ACROSS the street for $590K. Zillow actually reflected reality and showed his house peaking at $730 and dropping to $580K.
I just checked, after Zillow revised their criteria, not only did they raise the current value almost 100K, they lowered the peak 30K! Now the Zillow “historical” graph show the house went up and is holding steady at the new “peak”. What a freakin’ joke. Any J6P idiot doing their complete research on Zillow will think prices are holding steady when in reality their in freefall. Is this another one of Bush’s strategies to fix the mortgage crisis by rewriting history?
Zillow has my house selling for 1.8 million instead of 180k, over time the spike on the historical graph keeps getting smaller and smaller. I think they use some sort of curve fitting rather than plotting actual datapoints. Eventually that error will wash out entirely. In my case it’s making their data more accurate even though they won’t correct the underlying error. Maybe it’s jut part of the data engine they use.
Zillow’s comp identification system is totally broken, at least for my area. When you look at the recent comps, they are for houses that are not even close to the same neighborhood. Their model doesn’t seem to work well at all when the market is frozen like it is here.
I noticed this too. Also the 2003 prices were magically increased about $50K which also helped smooth out that monster bubble plot. So what if history is rewritten. It’s all for your own protection don’t ya know.
Luckily I cached some of the old (real) Zillow plots as .jpegs so I can show you the difference side by side with the new “improved” charts.
To their credit: They made a big deal about changing the algorithm a few months ago, and issued statements saying that the histories would change.
In several of the areas I track, they lowered the historical values. (Parts of CT especially).
agree on Zillow….sold my place in Northern Calif. last April and they now show it up 20%, I’d guess it is really down 20% so the error is huge, also the “peak value” shown is now way up from a year ago….
How did you manage to get Bush into that piece of analysis?
Forget Zillow. Look at real sales for any street/block you choose.
http://www.homes.com/Content/Sold-Homes-Prices.cfm
Interesting. Obviously Zillow rewriting their historical data is not good. But blaming Bush for it has gotta be the height of tin hat paranoia.
Where even to start?! I’m finding it very hard to be a compassionate Buddhist when I read things like that the Doyles refinanced every year to take out “equity” thus running up the amount they owe by half a million dollars. Or the couple who used their HELOC to buy “fun things.”
They can get my understanding on the same day I can go to one of the local casinos, blow half a million dollars, and get it returned to me as I walk to my car. Until that happens, I’m a bad Buddhist.
Anyone who borrows to go on vacation is not deserving of my sympathy, only disdain.
hey mo just think of the beautiful framed photos of their vacation they will pack up in boxes on their way out the door
have a heart
Preach it Lili. I could understand refinancing to pay for college - I was with Doyle there, but then you see he paid $275K in 1995 and now 13 years later owes $740K and all empathy drained from my heart. I’d be beating my head against a wall if I was him thinking of how it could have been if he hadn’t done that. He could have sold last year, paid for kid’s college, rented a couple of years and picked up a nice little condo or retirement cottage with enough money left over to ensure a comfortable retirement.
You didn’t read carefully. He invested the funds, and lost them.
Clearly using the same financial acumen that he did in arranging his spending and mortgages.
‘I’m a bad Buddhist.’
You sure are! Where’s your pity and understanding for this poor jingle-jangling nitwit? You’ll probably get recycled as a dragonfly or a pebble or something because of it. Of course, I will be the dragonfly or pebble right next to you, because I got not a speck of pity or understanding either.
Weekend topic suggestion:
What will Used House Salesmen and Mortgage Fraudsters reincarnate as?
Joshua trees.
I was thinking more likely desert mice that feed the hawks. That way you also conserve IQ.
They could only hope to come back as a JT.
Got popcorn?
Neil
Eh, pity is free, give it away. Along with a few really, tiny violins. It helps to balance the Schadenfreude on your personal cosmic scale.
Somewhere Mr. Barnum is having a good chuckle and saying, I told you so.
These people are dumbasses. Both the father paying for his daughter’s college and the couple trying to make a recording studio. Ever heard of ” Working your way through college”? well, that’s what I did, my brother is doing, and what everyone else in my family did. I kind of feel sorry for this guy’s daughter. Looks like Daddy’s little girl bankrupted her parents. How’s for conscious thoughts?
A house is not an ATM people… now get out there and start saving and perhaps you’ll see why people decades ago didn’t act like adult children and buy worthless crap ( like recording studios) unless they actually had the money to do so.
Don’t agree totally Jetson. Daughter may not even know what dad did to pay for college. Also, I’m helping my daughter through college. I don’t see what’s wrong with that. Then again, I’m not going into debt to do so.
I find it hard to believe that all of the money went towards her college tuition. He borrowed almost 500K. Even Harvard isn’t that expensive.
Sue McCullough, a computer programmer with Wells Fargo, “Zillowed” her home in Oakland’s Laurel District on Tuesday and was dismayed to see it valued at $417,000 - about a 16 percent drop from a couple of years ago.
“It makes me very much more definite: I’m going to have our open, available line of home-equity (credit) shut down so we can’t get into trouble,” she said.
“The last few years we used that home-equity line of credit for fun things, like vacations,” she said. “That’s not going to happen anymore. We have not exceeded the value of our home, but I don’t want to go there. That scares me.”
____________
What a complete and utter moron! She mortgaged her home to take a vacation!!! 1-2 weeks of fun paid off over 20-30 years so they end up paying double the cost because of the interest.
They did NOT “withdraw equity’ - they took out a loan that they have to pay back with interest. You can withraw money from your own savings account and not have to pay it back but a loan has to be paid back.
If they couldn’t afford to pay for a vacation out of their income, they could NOT afford a vacation.
It is people like the vacationers and the one who ran the morgage up to nearly double spending on a lot of things other than the kid’s college tuition who deserve to lose their houses in foreclosure.
There are lots of these boneheads that think it’s their equity to take - some are even shocked they have to pay it back at all. They don’t get they have NO equity until they sell and have a profit.
“double the cost”
More like 5 times, I’d wager. Sure hope they had a good time.
STOP THE BUS!!!!!!!
A “computer programmer” at Wells Fargo is using Zillow as a comp tool?
Last time I checked all of Wells Fargo’s finacial transactions were done by computers. And she is programming these computers??????
Ladies and Gentlemen we have found the cause of all our problems in real estate.
Wells Fargo would be better off having a thousand monkeys bashing on keyboards if this is who they depend on to program their financial software.
Most programmers don’t have access to the live data. We are given sample data sets and such.
For live system the data is tracked with audit records and such, so if the data is stolen, they can track who accessed it. As programmers, we can crack the audits, delete them… or just look at the data right in the tables.
About the only place I’ve worked where I got access to live customer data was MCI. That is because there wasn’t much info in there that you couldn’t get from the phone book. (except unlisted numbers).
I’m so laughing at the visual of the monkeys pounding on keyboards. Fabulous line. Thanks.
“What a complete and utter moron! She mortgaged her home to take a vacation!!!”
She was cleverly taking advantage of financial innovation which enabled her to tap into her home equity wealth gains. How can you be so cruel as to ridicule her current stroke of bad luck?
The guy wants to pretend like he ONLY refinanced for a noble cause–paying for a college education.
I think he really believes it too…
Well, he’s an engineer. What do you expect?
Sorry, as a math major I couldn’t resist.
Did you hear the one about the engineer and the mathematician who both saw a naked lady across the room?
No.
My thoughts exactly…these boo-boos pulled an average of 40k per year from their home… I’m supposed to feel sorry for a guy who TRIPLED his original debt obligation?
“Still, Mr. Doyle does not regret refinancing in 2004. ‘My goal was clear: I wanted to help my daughter go through college,’ he said. ‘It wasn’t like it was for us.’”
Yeah…Right Dad!….Bettert tell her to forget about college and get a real JOB before they send you to the poorhouse or the insane asylum
Dumb loans for dumb people spills over into the Auto Market
http://cbs5.com/local/auto.loan.defaults.2.645976.html
I guess all auto loans are all stated-income? Verifying or proving income is a relic of the past? I know when I apply for credit cards I no longer even list a job since it has no affect on the outcome, I’m always approved. It’s scarey to consider how much outstanding debt was issued the past 5 years with no income verification whatsoever (and continues to be for that matter).
Oh man you guys have to read this story! This lady is freaking unbelievable. I swear this has to be fiction!
I applied for my very first credit card last week and got a follow-up phone call this afternoon from the company issuing the card to confirm my employment and salary information that I provided when I applied online…..don’t know if this was common before, or just a sign of the times…?
From the article:
…
Vivian Snyder has strong credit and is not classified as subprime, but she is one of many consumers who can’t afford the car she leased. Snyder drives a brand new convertible BMW with a MSRP listed at approximately $100,000.
Most consumers can’t afford it, and neither can Vivian. That’s because the monthly lease payment is $1,300. It eats up half her income which is a $2,500 disability check.
Yet, she got it at BMW of Fremont without showing a drivers license, pay stub, or any proof of income.
How did this happen? Apparently, her income was inflated by nearly 150%.
According to consumer advocate Rosemary Shahan with Consumers for Auto Reliability and Safety the practice is common.
…
that article was posted on here a few weeks ago and i am just as repulsed now as i was when i originally read it
$1300 a month for a car? i don’t care if she was getting 10k a month that is just complete stupidity
No kidding, I would like a BMW too, but that is really selling your soul…
Yea…
A coworker just HELOC’d to buy a similar BMW. Sweet ride! In my opinion he was smart. I should mention he bought in Palmdale in 2006 and this one of the few ways he’ll be able to keep *any* of his equity.
Got popcorn?
Neil
Another indication that this supposedly fundamentally strong economy is a mirage, a massive pyramid scheme built on a foundation of dodgy debt. This does not bode well for the economy for the next several years.
She spent her entire (pathetic) $30K retirement savings as down payment on a car when she’s on disability. Just complete idiocy piled on top of stupidity.
But used BMW prices always go up!
It doesn’t matter what used BMW prices do, the stupid a$$ LEASED the car. Amazing. Give them 30k, pay $1,300 a month for three years and then give them the keys and go to the bus stop to get home.
she knew exactly what to do to get this deal approved: flash the 30K downpayment. simple as that. cash - right away. those salescrew/managers were drooling to get her deal approved then pass it off as someone elses problem. notice how the dealer states ‘ it was the FINANCE companies responsibility to review the deal and blah blah yadda yadda … ”
typical. just like mortgage industry. keep all generated comish but spread the blame if/when it goes bad. and you hafta know that this crew KNEW FOR A FACT this would blow up sooner or later. but so what? most sales people are long gone, just like, gasp, mortgage professionals, so whats the buyer going to do to a vanished scapegoated employee? a bankrupt builder? a closed bank?? hmmm ….. not a whole lot.
“she knew exactly what to do to get this deal approved: flash the 30K downpayment. simple as that. cash - right away.”
Very good, Grasshopper!
Hey at least she pays 30% down payment!
For a car that really worth the price!
If that is her dream then so be it, why it must be stupidity. The poor soul has no money and is disabled. So what if she is flat broke and 30k poorer, the taxpayers will take care of her, now she can qualify for more subsidies.
She had $30,000 for retirement and she used it as a down payment on a BMW? She lives off a disability check AND she inflated her income on the application?
OMG! What is wrong with people?
She needs a guardian appointed by the court. Obviously she is not comptent to manage her affairs.
BTW, that is probably a private insurer disability plan. No way does Social Security Disability (SSDI) pay anywhere near that much - average is $900.
No she needs to go bankrupt and be homeless for a while. She is either too stupid to live or she will get smarter. Time will tell which one.
Brainwashed.
You only live once, you deserve it, live for today, eat dessert first, etc. - it’s ingrained into our psyches.
Pawns. Toadies. Debt slaves. Wage slaves.
Brainwashed? Yes. How about brain-damaged? Shame on BMW!!!
Times ain’t changing.
Like a King of England once put it about the common morons that make up most of society, after not respecting an agreement he made with London’s insurgents wanting more freedom:
“Villains you are, villains you will be!”
=> Give them the impression to get what they want, but they will remain slaves and lower class the same.
Uh, mental disability perhaps?
I laughed when I read this! A friend once told me ‘anyone can buy a Mercedes’. The other day as I walked thru the garage where I park for work I looked, and sure enough every other car was a MBZ, BMW, or Acura. Where is the status in that? I climbed into my lifted 2001 Toyota Tacoma Prerunner (which I bought used), and from on high smiled that I had the only one like that in the garage…..now THAT is status!!!
Yeah, I’m pretty much the same way. I could “afford” pretty much any mass-market (MB, BMW, Acura, etc) auto but when I look around at stoplights and see those everywhere, I am pleased I bought a much cheaper brand. I enjoy my reverse-snob status.
“‘Most buyers in the Hispanic market went to Hispanic mortgage brokers,’ said Jim Lisciandro, an estate agent from the San Fernando valley, who says it is a myth that immigrants were preyed upon because of their poor English. ‘I don’t believe there was miscommunication.’”
True here in Salinas and the south bay.
“‘The last few years we used that home-equity line of credit for fun things, like vacations,’ she said. ‘That’s not going to happen anymore. We have not exceeded the value of our home, but I don’t want to go there. That scares me.’”
Yeah baby, just hunker down in the hall closet, I’ll just pass you by! It’s people like this that scare the hell out of me.
“A lawsuit filed by investors in the defunct Running Horse golf course and residential development has accused two real estate agents and a title company of illegal activities related to what the lawsuit called a ‘leveraged pyramid scheme’ set up by the original partners behind the project, Tom O’Meara and Scott Webb.”
Correct me if I’m wrong but the ‘Donald’ was supposed to be looking into the property or connected somehow.
I’m sure Trump merely rented his name to the marketing of the property, without truly being involved. I’m sure it’s his way of appearing to be a real-estate mogul without any of the risk. (He gets his money up front, then if/when it goes south, he can say it’s because the project was mismanaged by others. He then plasters his face on the advertising for the next project…)
Yup. You got it!!!
The man has an ego (and hairdo) the size of Texas, but he’s not exactly stupid either. He knows how to keep the greenbacks in his own pocket.
He knows how to keep the greenbacks in his own pocket.
How many times has he bankrupted?
To be more specific I believe Trump has never personally claimed bankruptcy (although he has come close). His companies have claimed Bankruptcy on various occasions… so redmondjp’s comment is right on, he knows how to keep the greenback in his own pocket
I recall even recently going to the primarily Mexican flea market near my place in Oakland and there were 10 Hispanic real estate agents selling homes out of tents. Mostly Ghetto-licious houses. There’s no way in hell that Jose working as a Janitor can afford one of these 350-400k wrought iron protected beauties, but boy they were almost lining up to look at them.
ROTFLMAO!
“‘Most buyers in the Hispanic market went to Hispanic mortgage brokers,’ said Jim Lisciandro, an estate agent from the San Fernando valley, who says it is a myth that immigrants were preyed upon because of their poor English. ‘I don’t believe there was miscommunication.’”
Makes sense, much easier for a hispanic to prey on another hispanic.
How do you say F**k you in Yiddish? Trust me.
So funny - I had forgotten that one. Thanks.
how do you say FU in spanish?
” I got an uncle . .. ”
if yer black it’s ” I got a cuzin . . ”
yeah yeah flame away … but most yiddish are white so its all goes to the same pot. jeez, lighten up francis!
Yiddisher Kop Hoz Baaaaaaaaaaaaby!
(Hoping ExMort’Brk isn’t lurking! (GET A ROOM! Har!)
Gutte Neshome,
Leigh
I could have done that math. I wonder how much being an expert pays?
Yes, and it even took more than one industry expert to draw that conclusion, one industry expert alone couldn’t muster the brainpower. The collective intellect of this country is falling fast..
just spent 2 days helping my spouses friend(s) move . . . for the 3rd time in 2 years. this same person was all worked up about our inherited mortgage free house and was badgering us to ” pull out the money ” years ago, like it was some kind of magic piggy bank!
these type of short-term thinking, illogical, emotionally unstable people really, really annoy me. if we had listened to her advice then we would have been so financially effed up by now that you’d probably been reading about us in the paper as a typical casualty. I had to restrain the spouse & relay all the info discussed here to get her to back off the kool aid juice. I swear, women are so easily brainwashed into the herd mentality. men are not exempt either, but women just seem to go over the cliff in larger numbers, especially to be part of any fashionable current fad. just look at the haircut of the moment; I dont know what it’s called but its some version of the 60’s twiggy with the back cut shorter than the sides. it doesnt look good on all females but lordy they ALLLLLL have to rush out & get em. like the ‘jennifer’ (anniston) haircut in the 80’s.
geezuz people. THINK FOR YOURSELF! in all things. houses, styles, etc. stop being a lemming. when EVERYONE is doing it, it’s not cool or unique anymore, you just end up … LOOKING LIKE A COPYCAT WANNABEE!
rant off - for now
Aquis, you don’t know my mother. If it involves any form of financial silliness, she wants no part of it. Ditto for my father.
az slim
I wish yer mother had a wider gene pool from which we could all use a dip in the deep end of common sense. I bet they try not to be & won’t be a burden to you in their golden years also. parents like that are what made this country great. I fear it is a vanishing resource.
I had to hold my husband off from cashing out our equity to buy coastal properties a few years ago as an “investment”, so don’t be so quick to make it a gender thing. Often depends on how you were raised.
ok sure, saladSd but I ask how many men do see wearing those midriff showing tops with flab hangin out? exactly! way way wayyy more outta shape fatazzed teens, young adults, and middleaged delusional women than the 1% of females whom it actually complements the figure. I dont make the trends, I just observe what parades by me in real life.
thank god the men mostly stuck to mullets.
Harsh and untrue IMHO.
There are so many incredibly beautiful women in the US, particularly women in the over 40 group. These young women seem to have a care for their appearance and health. This is the trend I notice
thats right. there are a lot of incredibly beautiful women over 40, and most of em have the sense to NOT WEAR the wife beater midriff showing their less than prime bodies. they have class. I’m referring to the other half of the equation. maybe here in Cali & the southern states I see it more because of the moderate weather. longer warm seasons = less clothing. nothing harsh about stating the truth. whats harsh is the self denial from the people wearing these clothes that have no business in em in the first place.
No upper class woman - no matter how good her body - would wear a wife beater midriff. Only the lower classes dress like that - no matter how they look.
Dude, if you knew how brain dad my father was with money you wouldn’t be saying this (”Sure, investing in a racetrack in the middle of nowhere sounds like a GREAT idea! How much do you need?”)
it is an equal opp situation
both men and women can be terrible with money
“those midriff showing tops with flab hangin out”
affectionately known as a Muffintop.
muffintop? MUFFINTOP !?? AHAAhahahahahhahaaa thats just effin hilaryarious!!!
best line all day, thanks
Really?
I’m a lot closer to 60 that 50 and STILL wear a size 0 or size 2.
I heard some amazing news - that there are companies other than Brooks Brothers and Lilly Pulitzer and Ferragamo that make clothes and shoes. Is that true?
I dunno… I shop at Ross.
Ma’am,
You just made the top ten list! My wife
does Nordstrom’s two or three times a year, I call it her “fix” as we’re ranching folks who are comfortable in levis. She is pure class
who dresses with that comfortable flare of one who knows she’s special. I’ve always said that I have great taste and she’s the proof……
Brooks Bros - my fave!
I don’t see guys bearing their midriffs, they seem more intent on bearing their underwear and butt crack. Sheesh when is this idiotic falling down pant fashion trend for guys going to end??! I hope they all feel the need to burn every picture of themselves later in life. That would be payback.
I don’t think this is a gender thing, with the possible exception that women tend to be more sociable and the networks of a loan broker or a RE tend to run to their social networks. In general their close social bonds helps women weather bad times and emotional lows (see greater happiness of divorced women vs. divorced men, for example), but if I’m going to grant your misogynist gender theory any seriousness, it would be on the point of getting taken advantage of by their networks. No network, less chance of getting taken advantage of.
My parents were both raised in the depression. My dad, turns out, was the silly one who let some slick talking shister talk him into giving him his investment money (he didn’t lose it all, but it sure was invested stupidly). I would not in a million years have imagined it. My dad is honest to a fault and expects the same of others. My mom, oh, not in the least.
This is such a complicated issue, I think you’re arguments would go down better leaving gender out. But you float your own boat. Maybe you’d be happier married to a guy?
You be sick, Aquis, yo homey.
Wow Aquis,
What woman did you wrong.
My experience with the female gene pool has been just the opposite. Most of my friends and sisters have to hide the checkbook and credit cards to keep their male significant from buying the next big man toy. You know the big plasma or LCD tv that all their male friends have.
SFBAYGAL
I see yer plasma tv, atv, & monster truck … and raise you a multi-carat diamond ring(DeBeers says its “only 3-4 months salary”), dining out many times a WEEK, and a 3/4 of a million dollar mortgage. WITH all the latest Pottery Barn, Restoration Hardware, and Drexel Heritage furnishings. none of that IKEA or Lowes crap thankyouverymuch will do for our little homemaker.
call ?
Wow Aquis,
None of the women I know can even get close to your stereotyping.
Babe you really need to get out and meet other people.
sfbayareagalie
now why would I want to get out when I can meet people like you right here on this here blog? cmon now, I know you bay area peoples look down on us cowtown sacramentans but sometimes some o’ us’n really did travel to other parts of the state/world, and that would really shock you as to how the other 80% of the average people live/work/recreate/procreate. most of the N.O.W. type females responding to my comments dont fall into the trailer park lifestyle category stated above, but seem to want to include themselves just to be contrarian.(ista)
Aquisboy,
I am just amazed, totally amazed how you arrived at the conclusion I would look down on cowtown Sacramentans. Also amazed that I wouldn’t know how the other 80% of the average people live/work/recreate/procreate. Don’t believe I ever said that. Never looked down my nose at anyone. Well there is always a first time. Congratulations Aquis you are my first one.
Also why do you stereotype people that live in trailer parks?
Geeze Aquis are you sure you’re not a closet snotty bay area person?
I’m having fun are you? Pinkie up.
If you had sold the property and invested the money from a couple of years ago you’d be pretty happy right about now.
OMG! Thanks for saving me from getting that haircut!
This part of the original post bopped me over the head:
“‘In California, people are caught up in materialistic things. It’s not just a vast home. They’ve got to have a flat-screen TV, fancy furniture. The boat, the motor home, the car. They’ve got to make repayments on all these things,’ she says. ‘If you’ve only got a Kmart budget, you ought to go to Kmart.’”
Spoken by a real estate agent, no less.
I’ve seen the same in Arkansas, Florida and Georgia first hand. California isn’t unique, we’re just on television………
Blue light specials!
Ya just can’t make this up!
Leigh - ya know I love ya baaaaaaaaaaaaaaby!
Opps…that’s to you, Sir Hoz.
Leigh
“The Doyles took advantage of the housing boom by refinancing their home nearly every year since they bought it in 1995 for $275,000. Until their most recent loan they never had a problem making their payments. They invested much of the money in shares of companies that subsequently went bankrupt.”
The very living, breathing definition of a “serial refinancer”. Should be a self-help group for these people, ‘Refi-Anon’ or some such.
Weekend Topic:
What are the twelve steps for debt addicts?
“What are the twelve steps for debt addicts?”
It’s the number of steps up the gallows.
They already took 12 steps….yearly since 1995!!!!
“For anyone considering selling or withdrawing equity, a lower value translates into immediate, real-world effects. Sue McCullough ‘Zillowed’ her home in Oakland’s Laurel District on Tuesday and was dismayed to see it valued at $417,000 - about a 16 percent drop from a couple of years ago.”
Notch effect: GSE conforming limit just so happens to currently be $417,000. I wonder if there is a preponderance of homes currently valued by Zillow at $417K?
“The Doyles took advantage of the housing boom by refinancing their home nearly every year since they bought it in 1995 for $275,000. Until their most recent loan they never had a problem making their payments. They invested much of the money in shares of companies that subsequently went bankrupt.”
Mom always used to say, “Most people are morons.”
Just like the kids playing with gasoline. Up until the “accident” no one gets hurt. Same story it’s amazing they just don’t get it even after being burned. As an “engineer” this jerk should have been able to run the what-if scenarios to know that his finances were prone to instability. Positive feedback is the bane of most control loops - this guy is obviously pretty week in his control theory.
Yup, his phase shift exceeded 90 degrees.
And it was a high-gain circuit.
Resulting in large losses very quickly.
“Yup, his phase shift exceeded 90 degrees.”
And a period of about one year.
Mom still says most people are morons.
“‘The whole plan was to get out’ before his rate reset, he said. ‘Now I am caught. I can’t sell my house. I’m having a hard time refinancing. I’ve avoided bankruptcy for months trying to pull this out of my savings.’”
Can we spell H O T P O T A T O loser? Get in, get out, let someone else hold the bag. Oh, I am left holding the bag now.
To buy for $275K and now owe $740K. Brilliant. I think he sold the house to whatever turkey of a company gave him the $740K at the top of the market. The fact he thought it was monopoly money and blew it is irrelevant. In my wildest dreams wouldn’t think of wasting $500K from my home and now have nothing to show for it, except worthless stock papers and a bunch of useless crap. Hope daughter got a great education so she can make a ton of bucks. She is going to need to use it to support her moron dad.
He received and pissed away $500,000. He’s got nothing to complain about. Just because his scheme didn’t work out in the long run, he still reaped the benefits.
And what does it really calc out to considering the IRS will excuse his stupidity and greed? Anyone that gets that sort of money for doing nothing and complains should be ___________ fill in the blank - have at it folks.
As I understand it, the IRS is supposed to only forgive tax on difference of sale vs original purchase price plus improvements. 500K for college and loosing investiments he should still be on the hook for tax and stupidity. CA has no forgiveness
In 80s I refi’d my house and got 20k.
After I ran through that in a NY MINUTE,
I was flabbergasted and really had nada to show for it.
After that moment, I realized I had alot to learn about money.
Still learning, thanks ya’ll.
Another coworker beat that.
Bought for $70k, owes $550k. This guy doesn’t earn $100k/year either…
I kind of hope the daughter doesn’t breed…
Got popcorn?
Neil
Rumor that a $9B bank about to be shut down. Which one?
Wilmington Trust Company 9,896,328
Cathay Bank 9,617,516
Mellon Trust of New England 9,488,305
Bank Hapoalim 9,397,131
Arvest Bank 9,259,903
Israel Discount Bank of New York 9,111,754
Banco Santander 9,055,917
Corus Bank 9,019,234
International Bank of Commerce 8,942,788
Trustmark National Bank 8,768,502
Fremont Investment & Loan 8,727,553
First National Bank of Omaha 8,646,516
Texas State Bank 8,495,245
Umpqua Bank 8,211,618
NewAlliance Bank 8,169,964
Capmark Bank 8,119,633
First Niagara Bank 8,098,818
Patience! All good things come to those that prepare.
I note the bank of Sealy is not on the list
I am switching to Mitsubishi. You found me once….
Do you remember when having a checking account at Morgan Guaranty Trust required a minimum balance of $25K? I wonder how many people can do that now.
Going to Tx for niece grad.
You’r not off the hook Mr.!
Leigh
I have now seen this rumor 4 times - I sure hope it is true. I want to get this credit crisis over so we can move on to other things.
I wish the banks future failures were not true, but whether it is today or in June it is going to happen.
It is a solvency crisis.
I guess I also wish it were not true, however, it is inevitable.
I just want to find out where the bodies are buried and move on.
Unfortunately, banking regulations require quarterly writedowns based on estimated losses. The write downs will last for the next 3 years. We aren’t through the top half of the third inning.
There is no easy quick release then return to profit for most of the banks.
Something other is happening…will not be the banks returning to profit.
(Nothing against/for bankers).
Noting a % of (x) possible runs.
Pinpointing capitulation…er…not an easy one for me.
Hopes of mergers…
Private equity funds…
And my favorite…Warren Buffett to the rescue plans.
Ya just can’t make this stuff up!
Best,
Leigh
Hemet Valley Hospital is in bankruptcy.
HVH.
How is that possible? Hospitals IMHO should never be for profit anyway, as geeze looeez, what other hospitals are so mismanaged by the corporations that own them. Gosh. Wth
Mostly this happens because hospitals are required by law to treat all comers at emergency rooms regardless of ability to pay. And many can’t.
This is a particular problem in inner cities where income is low and in areas with large populations of illegals.
I’ll take Corus. Those idiots are up to their eyeballs in bad construction deals in all the now “red lined” states like Cali, FL, and AZ. I’ve heard they’ve got some major issues on their books.
My guess is Corus…commercial real estate lender and not much else.
“What I call that is a buyers’ strike,”
Yeah and its not just in houses.
Its in everything.
Thank you housing industry.
“‘The whole plan was to get out’ before his rate reset, he said. ‘Now I am caught. I can’t sell my house. I’m having a hard time refinancing. I’ve avoided bankruptcy for months trying to pull this out of my savings.’”
wow i bet he was the only guy who had that plan of action
follow the herd and get burned
just think he is priced in
i thought we were priced out, funny how things change
“Borrowers like Mr. Doyle say they are victims of their circumstances — housing prices collapsed and lending standards tightened just as they needed to sell or refinance.”
Wrong, Mr. Doyle. You and your ilk are victims of your own greed and stupidity. You CREATED your circumstances.
Somebody hand me a TASER.
“A lawsuit filed by investors in the defunct Running Horse golf course and residential development has accused two real estate agents and a title company of illegal activities related to what the lawsuit called a ‘leveraged pyramid scheme’ set up by the original partners behind the project, Tom O’Meara and Scott Webb.”
It seems oddly fitting that a horse is the only animal that can run and poop at the same time.
“Horse sense is the thing a horse has which keeps it from betting on people.”
W.C. Fields
Now that’s a keeper
Pure schadenfreude…
SPREWELL IN FINANCIAL TROUBLE. Former NBA star Latrell Sprewell’s home is up for foreclosure and his yacht was sold at auction to help pay off the $1.3 million he owes on the boat, according to court filings.
Sprewell, who once turned down a three-year, $21-million contract extension, saying, “I’ve got my family to feed,” has apparently fallen on tough times. Citizens Bank filed a foreclosure suit last week in Milwaukee County for the $405,000 home Sprewell bought in 1994. Court documents claimed he owed $295,138 in outstanding payments plus interest.
Sprewell, 37, hasn’t played pro basketball since turning down the $21-million extension from the Timberwolves during the 2004-05 season. He was making $14.6 million at the time.
http://www.newsday.com/sports/baseball/yankees/ny-spbriefs125573785feb12,0,4211669.story
Agree! This made my day - I guess he wasn’t lying about not being able to feed his babies and his baby mama.
Couldn’t happen to a nicer guy. I look forward to the day when Latrell is begging for change on the subway.
“SPREWELL IN FINANCIAL TROUBLE. Former NBA star Latrell Sprewell’s home is up for foreclosure and his yacht was sold at auction to help pay off the $1.3 million he owes on the boat, according to court filings”.
He a complete knucklehead. I follow NBA/ college basketball pretty closely and he had a reputation for meaness and was considered basically off kilter like Ron Artest & Dennis Rodman. Once attacked and punched His coach when he was at Oakland. IMHO most if the NBA big bucks players even the mega- stars lack basic common financial sense and fritter away their big salaries on gambling. woman, fancy jewels and lifestyles. They have agents, lawyers and financial advisors guiding them and probably divesting them of their assets. I think that Dennis Rodman will end up like Latrell one day.
Hank Paulson “The Worst is Just Beginning” in Housing
http://www.youtube.com/watch?v=E…h? v=ETQj3a221EQ
Check the URL Spike. Link?
Here ya go Hoz.
http://www.youtube.com/watch?v=ETQj3a221EQ
Confession season comes to Washington D.C.
Notice he concluded the news conference after those remarks.
I love the way he lies: the stutter, the eyes, buzz words -housing correction and stimulus checks in may, etc.
Just another mope.
Worst poker player EVER. You couldn’t do a worse bluffjob if you tried.
On the other hand, he is the first politician/establishment economist type that has really begun to tell the truth: “The worst is just the beginning.”
Let’s hear that from the FED, the WH, Congress-critters, or anyone else!
So, is this the end of the beginning?
Nope……….contained.
From the same source
Is Bank of America going to write down loans by 30%
http://tinyurl.com/2uxpek
Youtube
“‘The last few years we used that home-equity line of credit for fun things, like vacations,’ she said. ‘That’s not going to happen anymore. We have not exceeded the value of our home, but I don’t want to go there.”
——
Oh, don’t worry! - you will…
“Borrowers like Mr. Doyle say they are victims of their circumstances — housing prices collapsed and lending standards tightened just as they needed to sell or refinance.”
—————————————————————————
No, Mr. Doyle you’re a victim of your own stupidity! Wow - how does one serial refinance and extract $ 465 k and then com eoff with the “I’m a victim” spiel? That must have been one expensive college the daughter attended.
She also would have to have been in college for many years because he said they refied every year.
” It’s always a good time to buy real estate - just not for the SAME people.”
I’m sure this is a typo. What he actually said is, ” It’s always a good time to buy real estate - just not for the SANE people.’”
I couldn’t quite figure out that comment either, but I like your interpretation. I have no respect for anyone who proclaims “It’s always a good time to buy” anything. Typical salesman BS.
The Doyles took advantage of the housing boom by refinancing their home nearly every year since they bought it in 1995 for $275,000. Until their most recent loan they never had a problem making their payments. They invested much of the money in shares of companies that subsequently went bankrupt.”
“Still, Mr. Doyle does not regret refinancing in 2004. ‘My goal was clear: I wanted to help my daughter go through college,’ he said. ‘It wasn’t like it was for us.’”
Ain’t the Ownership Society great!
Did I hear the term food shortage today?
I must have died of starvation in another life.
I’m craving Costco triple packs of everything today.
Maybe I still have time when I shop next week.
What is a food shortage Hoz?
No donuts!
What no donuts? OMG, I need to run out and buy them all up quick. Did Kramer recommend a buy
Classic! If you haven’t seen it, it is a must–Gary Watts Forecast for ‘08. http://www.impactre.com. While reading his forecost, I can’t help but think of the Iraqi information minister.
Typical Gary Watts garbage (but fun to read, nonetheless, just to see that he is still a fool). I noticed though that he didn’t actually make a prediction for house prices for 2008. Hmmm, I wonder why that is? Could it be because he missed badly the last two years? Or he knows it’s going to be bad (despite his wishful “analysis”) and just can’t get himself to show that prices are going to continue dropping? Or, is he just trying to buy time so that he can make his prediction later in the year so he has a better shot at being right?
““‘The last few years we used that home-equity line of credit for fun things, like vacations,’ she said.”
Jesus. They borrowed against their home for “fun things?” And then wanted to borrow more to build a recording studio out of their garage? Just how big was that blunt you were smokin’ lady? Christ!!
DOC
I can’t stop laughing at that
San Diego condos down 30% and counting! I’m guessing “50% down is in the bag”. Thank you Gary Watts!
Refi and raze the garage to make a recording studio? Pffft! My homepage has professionally composed pieces I did with about $2K worth of digital composing gear and an iMac. And, uhh, no blunts here.
Brentwood City Council
Brentwood, CA
Fallout from the slumping housing industry landed directly on city hall in Brentwood on Friday with the announcement of the city’s first employee layoffs on record. Seven positions in building-related departments are being eliminated. The housing and construction downturn has hit the city harder than expected, and a lack of work has forced the decision to make the layoffs. The city of around 50,000 residents has seen building permits, once a strong point, decline drastically in the past few years.
(confirmed)
Source: Contra Costa Times - February 2, 2008
Shea Homes
Brentwood, CA
Builder Shea Homes, developer of Brentwood’s upscale Trilogy at the Vineyards neighborhood, confirmed it had announced layoffs Friday. Shea is cutting 22 of its 27 positions in Brentwood. The moves were made to help the company weather the housing downturn and to protect the value of its existing homes.
(confirmed)
Contra Costa Times - February 2, 2008
me likey confirmations…the mass layoffs and wage freezes begin.
Global wage arbitrage really is a bitch.
Im pondering the days of 14 dollar an hour GM auto workers desire to have a home on the lake…A strong 401k account, a couple of bright youngsters they are saving college money for, eating pork chops twice a week, watcin the new bitchin show on the tube, texting the boys regarding tomorows run on the line, and looking forward to getting a bike ride in on the weekend to catch fish…..in a nice home….in an established neighborhood full of life and prosperity.
“‘Most buyers in the Hispanic market went to Hispanic mortgage brokers,’ said Jim Lisciandro, an estate agent from the San Fernando valley, who says it is a myth that immigrants were preyed upon because of their poor English. ‘I don’t believe there was miscommunication.’”
Exactly; they were preyed upon because they were dealing with a realtor.
A rattlesnake is a type of snake and a “Hispanic” realtor is a type of realtor.
Be advised.
“The public just said ‘I don’t get this’ ”
Actually, what they said was “I can’t afford this,” which isn’t the same thing.
‘If you’ve only got a Kmart budget, you ought to go to Kmart.’
It would have been great if someone in a position of influence had mentioned this four years ago.
He may not be what you consider a someone in a position of influence, but Steve Martin said it years ago - Don’t buy stuff you can’t afford.
Again, Greenspand said in 2004 that ARMS were a good thing.
“The Doyles took advantage of the housing boom by refinancing their home nearly every year since they bought it in 1995 for $275,000″
If an aerospace engineer, whom one would presume to have higher than average intelligence, has sucked out nearly half a million $$ from his house via HELOC’s and now has nothing to show for it, then we really are f***ed.
and he’s a Rocket Scientist
That’s why NASA is in the dumps and the Chinese will soon colonize the Moon and Mars.
lets see them put a man on the moon first
welll……I hope he’s a better designer than an investor and even if he is that still ain’t saying a whole lot.
“And as more adjustable rate mortgages are about to reset, Veling said ‘one could argue’ that it will be late 2009 to early 2010 ‘before this begins to level off and improve.’”
One could argue that, if one wants to be laughed at as hilariously optimistic by the time 2010 actually hits
“‘The last few years we used that home-equity line of credit for fun things, like vacations,” she said.
The Doyles took advantage of the housing boom by refinancing their home nearly every year since they bought it in 1995 for $275,000.
We truly are a nation of idiots.
Oh sorry I forgot, “people are smart”.
I wonder if these people know how truly stupid they are. If only they could read the comments on blogs like these. And to ad insult to their injury they let themselves be interviewed for publicly published articles.
“They invested much of the money in shares of companies that subsequently went bankrupt.”
Another dumb a@@ 6 figure Engineer who can’t pick stocks.
Does anyone here think that Hillary is getting her butt kicked by Obama because she is the one pushing hardest for a bailout and mortgage rate freeze?
Note to Hillary, you might want to go back and get a new campaign strategist.
Ben,
Have you stopped posting the international bits and buckets?
Thank God they interviewed some RE agents! Otherwise I would have thought it was a bad time to buy.
I was musing about the proposed 15 year teaser freeze with a colleague. What happens if the “owner” wants to sell? Since the bank (or hedge fund or whoever) is holding the mortgage at full value on their books, what happens when the house is sold at half price? Who makes up the difference? And what rate does the new buyer get for the house?
House prices are simply still too high. All the BS about freezes, stabilization, recovery, etc, is pointless. We are in a recession. The consumer, in case no one realizes this, is tapped out. House prices will correct to about 2.5 times income. Forget about waiters with half million salaries on twenty-five thousand a year salaries. Think more like $200k homes for engineers earning $75k a year. And that assumes they even have a 20% downpayment.
The value of homes in the US is about $20 trillion (? give or take five trillion). It is going to drop by $7 to $9 trillion. If you can actually visualize that number or conceive on its impact on the economy you are a stinkin’s genius. But, you say, it doesn’t matter since people don’t have to sell. Ah, yes, that was the old argument used before the market started coming off and we realized that lots and lots of people need to sell. And before we realized that the inflated valuations were propping up a world-wide web of dodgy financial instruments.
We are in big, big trouble. Anecdotes about a few stupid owners, moronic agents, and broke developers are amusing, but nothing compared to the meltdown that is on the way.
Stay tuned for higher taxes or massive inflation to pay for this.
Makes you sick when you really think about it.
To you on this board who are still under the delusion that you’re ‘going to buy when the market hits bottom’ - you will be lucky to be alive at that point.
This is no ordinary $hit storm - this is the MOTHER of all $hit storms - and it’s BUILDING…
Cris, here’s a paper bag for you to inhale and exhale into. It will help get you over the hyperventilation.
Thanks! Do you happen to have a couple shots of tequila on you?
Here you go cris. Bottoms up.
Cris — I keep thinking along the same lines. I felt similarly a couple of days before Katrina hit NOLA, upon seeing the giant swirling satellite image heading inexorably from the Gulf into the heart of the Mississippi delta. I have to go by CostCo this weekend to stock up on hand lotion…
“The value of homes in the US is about $20 trillion (? give or take five trillion). It is going to drop by $7 to $9 trillion. If you can actually visualize that number or conceive on its impact on the economy you are a stinkin’s genius”
Try to visualize a stack of one dollar bills 542,928 miles high? (8 trillion dollars). That’s a round trip to the Moon and back.
“Contained to Planet Earth”… yeah.
“Still, Mr. Doyle does not regret refinancing in 2004. ‘My goal was clear: I wanted to help my daughter go through college,’ he said. ‘It wasn’t like it was for us.’”
What a great father! He failed to save for his daughter’s education and now that he drove himself into bankruptcy (through debt and stupid investments) - blames her.
Saying his daughter’s education was his motivation isn’t exactly placing blame here.
Awwwwwwwwwwwwww.. How is Amber going to make her BMW payment?
http://www.youtube.com/watch?v=-4KrxX5WaFc&feature=related
“How a family of seven is able to live on $35,000 a year after taxes.”
This family paid off their house in 9 years even as their income averaged $33,000 a year.
http://www.thedigeratilife.com/blog/index.php/2007/10/01/8-lessons-i-learned-from-the-cheapest-family-in-the-nation&articlefrom=rss
“The Doyles took advantage of the housing boom by refinancing their home nearly every year since they bought it in 1995 for $275,000. Until their most recent loan they never had a problem making their payments. They invested much of the money in shares of companies that subsequently went bankrupt.”
“Still, Mr. Doyle does not regret refinancing in 2004. ‘My goal was clear: I wanted to help my daughter go through college,’ he said. ‘It wasn’t like it was for us.’”
Hmmm. Sounds too familiar. Kind of like staying married (when divorce is the logical decision), but saying that we stayed married because of the kids.
We refi’d because of the kids SO we did the right thing. DUDE! you deserve the situation you are in. What the hell did you do with $500,000. Okay. a top notch school would fetch $100,000+ what happened to the rest of the $400,000. Did you lose at the dot com bubble too!?
It’s dangerous to keep up with the Joneses in Silicon Valley. You’ll lose. Stupid Lockheed Engineer.
Bradford and Bingly report profits down due to subprime impact
http://news.bbc.co.uk/1/hi/business/7242205.stm
Nice to see the old used to be building societies getting into the act, ain’t no loan too risky for them