An Interesting Problem In California
The Press Democrat reports from California. “A total of 47 cases were scheduled for hearings Thursday in Judge Alan Jaroslovsky’s Santa Rosa bankruptcy court, each involving a creditor seeking permission to seize a debtor’s property. The vast majority involved lenders attempting to foreclose on homeowners who had sought safe haven in the courts from the fallout of the subprime mortgage crisis. Instead of fighting for their homes, however, most didn’t even bother.”
“In case after case, homeowners simply let lenders begin foreclosing on homes that are now worth less than the mortgages owed on them. ‘I’ve never seen anything like this before,’ Jaroslovsky said before the hearing. ‘I’ve never seen so many people care so little about losing their homes.’”
“In previous periods of economic hardship, homeowners typically fought like hell to save their homes, Jaroslovsky said. Today, however, it’s a very different story. Bankruptcy courts are seeing a sharp increase in cases filed by homeowners unable to make payments on houses whose values are plummeting.”
“‘What you’re seeing is the fallout from the mortgage crisis,’ said David Chandler, a bankruptcy attorney in Santa Rosa. ‘In case after case after case, there’s just no hope.’”
“‘People have been living off the equity in their houses and their credit cards. Now, both of those things are ending,’ said Doug Provencher, a Santa Rosa bankruptcy attorney. ‘It’s going to create an interesting problem.’”
“Paul Jamond, a Santa Rosa bankruptcy attorney, said he believes this year will prove to be a massive one for bankruptcies in the county because ‘people are beaten.’ ‘It’s like a tsunami,’ Jamond said. ‘The water recedes from the shore. Oh, well, that’s nice. Well, what’s coming?’”
The Sacramento Bee. “Thelma Pugh of North Highlands came to rely on home equity as a cushion. She and her husband took out a $25,000 line of credit a year and a half ago from Countrywide Financial Corp. They’ve used about $9,000, mostly to pay for home repairs and – when her husband was hospitalized recently – to pay some bills.”
“‘It was like a lifeline,’ she said. ‘If I couldn’t make ends meet, I had this.’”
“That lifeline was just cut off. The Pughs were among 122,000 Countrywide customers recently notified that, because of vanishing equity, they no longer can tap into their lines of credit.”
“In the fourth quarter of 2006, so-called equity extractions – from refinancing, home-equity loans or outright sales – accounted for about 17 percent of Californians’ disposable income, according to Scott Hoyt, the director of consumer economics at Economy.com.”
“That was about twice the U.S. average. Only in Arizona and Nevada did homeowners depend more on home equity for cash.”
The Ventura County Star. “The median sales price of new and existing homes and condominiums in Ventura County dropped from a high of $630,000 in 2005 to $525,000 at the end of 2007.”
“‘If we can’t sell, we’ll just walk away,’ said Maria Ambriz, who with her husband, Jack, has watched the monthly payments on the Camarillo home they bought in the spring of 2006 soar from $2,500 to $4,700. They’re spending about 85 percent of their monthly income just to cover the payments.”
“The couple said they didn’t understand the rate increase that came with their adjustable-rate mortgage loan. While the couple said they are partly to blame, they think their Realtor and mortgage broker should share some responsibility.”
“‘No one ever explained that to us; they sort of smoothed things over and said we could do it,’ Ambriz said.”
“A friend of hers who cleans houses is facing similar problems after being coaxed into buying a $400,000 home. ‘It makes no sense that she got a loan, and now she’s like $30,000 in debt because she was using a credit card to try and cover her payments,’ said Ambriz.”
“John Kaspar is not as big a risk-taker. Ventura County’s high-priced market has kept him on the sidelines. Kaspar is hesitant to leap in and buy. Married with three children, Kaspar watched prices even in middle-class parts of Camarillo nudge up past $540,000 two years ago when he began looking.”
“By traditional lending standards, a family would have to earn $150,000 a year to afford a home in the range of $511,000 to $612,000, according to some estimates. ‘We prequalified for $500,000, but there was no way I was going to do that,’ he said.”
“Kaspar didn’t want to overextend his family. He’s seen booms and busts before. He felt the ‘bubble was about to pop.’”
“But it has been difficult to sit and watch. ‘I have a friend who refied’ five times and mostly for silly things,’ he said.”
The Tribune. “The Central Coast is suffering as the housing market slumps, but it may be in better shape than many other California regions, said Leslie Appleton-Young, chief economist for the California Association of Realtors.”
“‘One of my key messages is that real estate is local,’ said Appleton- Young, who spoke at a conference Thursday called ‘Special Weapons and Tactics to Survive a Down Market.’”
The Daily Breeze. “The monthly New Home Sales and Pricing Report issued by CBIA/Hanley Wood Market Intelligence, said 61,861 new homes were sold last year, compared with 89,773 in 2006. Single-family-home sales fell 29.7 percent. Condos took the biggest hit, with sales falling 38.6 percent. And sales nose-dived 67 percent in December.”
“Jonathan Dienhart, director of published research for Hanley Wood, suggests we may be nearing the bottom of this cycle in the new-home market. ‘The 30 percent decline in sales for 2007 is likely the largest annual decrease we will see during this downturn,’ he said.”
“So far, there is no sign that’s about to happen. ‘We’re trying to find more things to disqualify you now than qualify you,’ said a Countrywide Financial Corp. manager whom I bumped into while running errands.”
“Two big homebuilders are offering deep discounts to attract buyers. D.R. Horton will hold the final session of what it calls an ‘UnAuction’ on Saturday at developments from Bakersfield to Imperial County.”
“The company is offering discounts up to 50 percent. And a company spokesman said nine hopeful buyers were camped out Friday at the Port Marluna project in Oxnard, where an auction was scheduled the following day.”
“‘It’s not like they are auctioning off dogs. They are auctioning off very nice homes,’ he said.”
The Napa Valley Register. “Because of declining residential values and adjustable mortgages resetting to higher rates, the city of Napa’s affordable housing program is losing two single-family homes.”
“Both owners got in over their heads when their adjustable mortgages reset to higher rates. They couldn’t afford the increased monthly payments, said Jan Maurer-Watkins, manager of the city’s housing authority.”
“Making matters worse, each house had lost more than $100,000 in value. The mortgages exceeded what the houses are now worth, Maurer-Watkins said.”
“‘The fundamental question is, will the real estate market turn around next year?’ Maurer-Watkins said. ‘If it does, we’ll see less of these. If it doesn’t, we’ll see more.’”
The Union Tribune. “Home loan failures in San Diego County continued their steady climb in January, setting records for both foreclosures and the notices of default that are the first step in reclaiming mortgaged properties.”
“Marc Carpenter, a San Diego real estate agent who specializes in defaults, says sometimes it’s better for consumers to go into foreclosure than to keep sinking into debt.”
“‘A lot of people are starting to look at it like a business decision,’ he said. Most distressed homeowners are ‘your normal, hard-working families. They got caught up in the frenzy of the market and kept expecting it to appreciate.’”
“One of those people is Dave Pierce, a veteran real estate agent who recently went into default on a five-bedroom, 3,864-square-foot Torrey Highlands home, which he bought for about $1 million 3½ years ago.”
“Despite his 30 years in the real estate business, Pierce says he misjudged the market, getting in over his head with financing much like thousands of other San Diegans. He can’t refinance his loan because his home is now worth far less than he paid for it.”
“Pierce, who has Parkinson’s disease, lives with two adult children, who had been helping him with his $6,000 monthly mortgage payments. He is seeking permission from his lender to do a short sale, selling the home for $790,000 and repaying less than the full amount of his loan.”
“‘I know about a dozen people who are losing their houses,’ Pierce said. ‘All are in real estate. This business is really hurting.’”
“In the late 1990s, the last time Lisa Richards’ catering business was hit by a recession, she came up with a new ‘Value Menu’ for her corporate clients. This year, there’s a new offering – dubbed the ‘Recession Menu.’”
“‘I could call it the value menu or the discount menu, but I’m just tired of playing semantics,’ said Richards. ‘It is what it is.’”
“Richards said she started noticing a ’softening’ in the catering business in April, as it became apparent that the housing boom had gone bust. ‘The contraction was quick. Companies – particularly the real estate developers and brokers, anything related to real estate – just quit having events,’ Richards said.”
The Recordnet. “Starting out in September 2003 with five employees, Shaheem Ali’s All-America Funding grew quickly. By last August he operated three offices with 42 employees, 16 of them in Stockton.”
“Then it all came crashing down. Expecting to fund 19 home loans that month, All-America only funded two after Ali’s major national backer suffered its own huge losses and changed guidelines in midstream. ‘The business just fell off the cliff,’ Ali said.”
“Ali’s story is not unique. But Central Valley Association of Realtors interim chief Cliff Coler said a lot of people got into business for themselves believing there was easy money to be made quickly, comparing it with shooting fish in a barrel.”
“‘With more people getting in, you’re going to have a bigger fallout. What we just witnessed was historic in nature,’ he said.”
The Press Enterprise. “In San Bernardino and Riverside counties, the preliminary indications are the area lost jobs in 2007 for the first time since records have been kept.”
“Chapman University does a quarterly survey on Californians’ consumer sentiment, and its fourth-quarter reading was sharply lower, economist Esmael Adibi said.”
“‘Even someone who pays his mortgage and has been in the same home for 10 years can look around the neighborhood. He sees his neighbor’s homes that used to be worth $700,000 or $800,000 and are now worth $400,000 or $500,000,’ Adibi said. ‘And when you see that, you just don’t feel as wealthy.’”
“Norco is sharing in the nationwide problem of home foreclosures, with about 9 percent of homes in one development there believed to be abandoned.”
“An informal survey by Norco Fire Chief Jack Frye found that 53 of the 588 homes in Norco Ridge Ranch, a newer development, appeared to be vacant, City Manager Jeff Allred said.”
“‘We wanted to find out how prevalent the problem is here,’ Allred said. ‘It’s comparable to other places in the Inland Empire.’”
“Yvonne Torres, a real estate agent who works in Riverside County, added that abandoned homes that fall into disrepair can make it hard for neighbors to sell their houses. Torres lives on Mt. Shasta Drive. She said on her street alone, five of the 25 homes are now vacant.”
The Desert Sun. “Many real estate agents who once made a killing off the booming housing markets in the Coachella Valley, California and across the nation are now forced to leave the business or supplement their income with a second job.”
“Coachella Valley home sales were down 21.4 percent in 2007 from the year before and almost 46 percent from 2005, according to Real Data Strategies. In 2007, 52.1 percent of real estate agents who used the MLS - 1,900 people - did not close a single sale, according to Real Data Strategies.”
“‘Without a doubt, so many people went into real estate over the last five years that it’s just a natural cycle,’ said Greg Berkemer, executive VP of the California Desert Association of Realtors. ‘There aren’t enough transactions for all of them to do the business they’d like.’”
“That translates into 7,000 former California agents who once thrived on big commissions but now have to find other work where they can.”
“Real was like like matchmaking for Rosemary Chapman. And she was good at it. She mostly worked with investors, who would buy multiple homes, fix ‘em up and sell them for a profit. Commissions were plentiful.”
“The former executive for a furniture design company in Chicago came to the desert more than eight years ago. At that time, the best jobs - and best money - were in the rosy real estate market.”
“‘I caught (the market) when it was starting to go up,’ she said.”
“And for most of her eight years in real estate, she did well. An agent for Coldwell Banker, she dealt mostly with high-end homes and investors. A smile instantly lights up her face when she talks about selling the Frank Sinatra House in Palm Springs in 2005.”
“When she got that $78,000 commission check, she splurged - on herself and her friends.”
“Chapman brightens when she talks about those days. Days when sellers lined up to find a deal. Days when she’d wait outside a house before the for-sale sign was posted, once at 6:30 a.m., so her client could make the first offer. Days when she’d indulge on travel and dinners.”
“‘I thought it would keep on going and going and going,’ Chapman said. ‘Unfortunately it didn’t.’”
“Chapman tried to hold out during the months after her last sales in February 2007, hoping for the market slump to end and sales to pick up. She worked the phone. Kept in touch with clients. Tried to entice interested investors.”
“But they wanted to wait, determined to hold out to get the most bang for their buck. With the market continuing to tank, everyone wants to time the bottom, they told her.”
“It left Chapman without commissions. Her savings continued dropping during the spring and summer of 2007. Travel. Nights out. Personal luxuries. All cut from the budget.”
“Chapman’s salary used to be in the six figures. In 2006, she cleared $26,000. And with no homes sold since last February and a depleting savings account, Chapman in August had to find another job to make ends meet. She began selling cars at Honda of the Desert.”
“‘I figured if I could sell a house, I could sell a car,’ the 58-year-old said while waiting for her next customer at the Cathedral City car dealership. ‘I had to do something. I had to pay my rent.’”
“Mario Perez of Re/MAX Real Estate Consultants has seen it firsthand. During recent dinners at two different restaurants, the servers were former agents from Tarbell and Coldwell Banker.”
“‘It’s happening and it’s happening like crazy,’ Perez said of Realtors finding new careers.”
“‘There’s nothing wrong with it. You have to do what you have to do. They blow the money (made on the market) and they’re back to doing what they’ve done most of their life,’ Perez said.”
Lots of FBs in that VCS article. And the Sac Bee piece has some interesting quotes from guys wondering if this CA bubble economy is really the best way to go.
I came across something that gives an idea where FBs are trying to raise mney to keep their personal ‘economy’ going but they are as clueless about the value of these items as they are the houses they bought/
Not sure where Geyersville CA is but ran across some interesting listings on Ebay. Now I am a VERY experienced Ebayer - been using it for years. I pronouced hubby’s trenchcoat as only fit to use to bring in firewood and went on Ebay. I was only shopping for Brooks Brothers, Burberry or London Fog coats. Now the Brooks listings were the normal types with the sellers being the same kind who have been around Ebay for years (some overstock, some “I gained too much weight” etc.) It was the Burberry listings where it started to get interesting in terms of FB’s cash flows.
Burberry coats have become one of the ‘must have’ things for wanna-be crowd who spend more than they have to impress people. On Ebay even a brand new Burberry with tags rarely breaks $200 -250 even though they retail for $700-1000.
I kept coming across listings for Burberry raincoats from newbies to Ebay (maybe brand new, maybe been around for a few years but none had done more than 10-15 transactions.) All at once they are listing their Burberry coats and putting a starting bid on used coats that is far above what those coats sell for used on Ebay.
One brand-new Ebayer (1 transaction) from Geyserville CA has gone so far as to list his and her Burberry coats! (And has 2 more things up for sale starting at prices that make an experienced Ebayer howl with laughter when one is used to paying $5-10 plus Priority Mail costs for New Without Tags Brooks Brothers shirts from the factory overstock.)
Here are the links to the Geyserville seller’s auctions.
http://search.ebay.com/_W0QQsassZjanmstanley
http://cgi.ebay.com/Womans-Burberry-Trenchcoat_W0QQitemZ140207009166QQihZ004QQcategoryZ63862QQssPageNameZWDVWQQrdZ1QQcmdZViewItem
http://cgi.ebay.com/Mens-Burberry-Trenchcoat_W0QQitemZ140207009721QQihZ004QQcategoryZ57988QQssPageNameZWDVWQQrdZ1QQcmdZViewItem
Now this one is from NJ and has used Ebay off and on for 9 years but not enough at any one time to figure out how to get thigns sold. Has a reserve price of who knows how much and buyers have walked away.
http://cgi.ebay.com/Authentic-Mens-Burberry-Trench-Coat_W0QQitemZ250214888491QQihZ015QQcategoryZ57988QQssPageNameZWDVWQQrdZ1QQcmdZViewItem
And another from Silverdale WA
http://cgi.ebay.com/NEW-Burberry-Raincoat-Designer-Jacket-mens-44-regular_W0QQitemZ230223789393QQihZ013QQcategoryZ57988QQssPageNameZWDVWQQrdZ1QQcmdZViewItem
And NJ again
http://cgi.ebay.com/Burberry-Mens-Double-Breasted-Trench-Coat-NEW-44R_W0QQitemZ200200597947QQihZ010QQcategoryZ57988QQssPageNameZWDVWQQrdZ1QQcmdZViewItem
And California again…
http://cgi.ebay.com/MENS-BURBERRYS-WOOL-REVERSABLE-TRENCH-COAT-50-LONG_W0QQitemZ330211476159QQihZ014QQcategoryZ57988QQssPageNameZWDVWQQrdZ1QQcmdZViewItem
They all go around saying “Paypal account required to bid” (blue type at top means that) and “Paypal only” for payment. No experienced Ebayer is EVER going to use Paypal which just ships the money to some unknown address when the seller is a newbie with zero or little feedback if the price is more than $10-15 max. They keep setting a reserve price that bidders have to bid past before the thing will sell. Experienced Ebayers never bother with that garbage -they just set the minimum opening bid as they know that serious Ebayers won’t screw around with a reserve auction and waste their time.
So apparently the FBs are trying to sell their stuff and prices no one on Ebay will pay…… They are peddling their raiincoats…..
I am looking forward to some most excellent shopping on Ebay when the FBs get desperate enough!
That’s funny - Burberry or not, used clothing is used clothing. You can buy it cheap from a thrift store. And to call a Burberry “designer” clothing as one poster does is ludicrous - Burberry has basically one design that hasn’t changed much for probably 100 years.
If experienced EBayers don’t use Paypal, what is the preferred means of exchange? (I have never used EBay or Paypal).
If experienced EBayers don’t use Paypal, what is the preferred means of exchange?
I don’t know. I’ve used Ebay for several years, maybe 4-6 times a year. It’s never bothered me to do Paypal - the alternative is a check, which can take a week or two to clear before the seller ships the stuff to me.
I’ll bid on stuff from newbies, but my price is almost lower than for a seller with some feedback.
Also, I also in the categories I bid on, I almost always see long lists of items with “wishing prices”. For instance, I’m not going to buy electronics for almost new cost without easy return policy, etc. Ebay is a hassle and a risk - I need to get a cut on the price to make it worth my while. And yet there always seems to be a long list of electronic gismos for what they’d go for at retail.
Using paypal is fine, even to transact with a newbie… as long as the seller has a verified paypal account and certain criteria are followed. The covered amount is only $200 though for people with ebay ratings under 50, so it depends on how much the item costs whether you want to take a risk for the over amount. Now that paypal is part of ebay, each listing tells you the eligibility for buyer protection. If you are thinking of ever selling in the future, you should list a bunch of small stuff now to get your rating numbers up ahead of needing to sell something larger.
As a learner the old timers can be quite insular. But you probably already figured that out. Best to take your hits with small stuff until you figure out how to make a workable listing.
How do you know these are being sold by FBs?
Taking a guess. The areas they are from. The brands and things they are trying to peddle. The fact that they don’t have a clue about what the stuff will really bring at auction. Doing the listings in a way that no knowledgeable Ebayer would.
Maybe they aren’t FBs but unemployed ‘used-house’ sales people or unemployed loan sharks aka as mortgage brokers.
Who ever they are, they are look to be in financial trouble.
There’s any number of reasons they could be short on $$$ or otherwise need to sell the items… it just seems quite a stretch to automatically assume that they are in trouble because of the housing market
Comment from AnnScott:
“I am looking forward to some most excellent shopping on Ebay when the FBs get desperate enough!”
I’m waiting for a Ralph Lauren Purple Label suit in my size and color to appear on eBay at a please help me pay my utility bill price (~:
Oh I have done far far better than utility bill prices.
Just bought a Brooks Brother suit for hubby. Gorgeous heavy grey tweed in a muted pattern in hard to-find-size of 40L with 32/32 pants. Paid $40 including shipping. One of my regular sellers again.
My ISP bill is more than that!
Bet I could find a Lauren Purple Label in your size and color at a less-than-utility bill price at least for a winter heating bill in a large part of the northeast. As I type this, there are 5 Lauren Purple men suits on Ebay that are under $250 with 4 under $150 and 3 between $50 -100. 7 have sold in the past 2 weeks (more limited search capabilities on closed auctions) and only 2 broke $500.
I have sold a ton of stuff on E-bay and I ONLY use PayPal. Just make sure it’s a verified address and confirmed account. I’ve never burned by following those guidelines.
Burberry is *so* chav!
http://en.wikipedia.org/wiki/Chav
from the ventura article:
If they continue to make their interest-only monthly payments, they’ll owe even more on the home in a year, and its value will likely have dropped lower than it is now. They’re trying to do a “short sale,” selling the home they bought for $610,000 for $399,000. Of course, they would lose their $73,000 down payment and may still owe money on the house, but they would walk away with their credit intact.
Ouch losing $73k is going to hurt. It’s tough for most Americans to save half that amount. I keep telling my family members who want to buy this year than go right ahead. Just be prepared to see your $100k equity evaporate in 12-24 months. Oh well I’ve preached enough…we will see if they listen or not.
It is like someone on this blog said the other day - “I’ve worked hard to save my xx$$. I’m just not going to give it away.” Classic but so true.
“If they continue to make their interest-only monthly payments, they’ll owe even more on the home in a year, and its value will likely have dropped lower than it is now.”
Talk about one foot on the dock and one foot in the boat!
with the pants down and a JT poised just delow their bare buttocks, menacing their very existence….
… and a clown standing ready with a frozen trout.
“In the fourth quarter of 2006, so-called equity extractions – from refinancing, home-equity loans or outright sales – accounted for about 17 percent of Californians’ disposable income, according to Scott Hoyt, the director of consumer economics at Economy.com.”
“That was about twice the U.S. average. Only in Arizona and Nevada did homeowners depend more on home equity for cash.”
WOW! That number is absolutely astounding! Think of the change in consumer spending that would happen if people started saving 16% of their disposable income instead of spending it in CA.
I think the lack of easy equity extraction loans and the lack of available equity will have a similar affect will it not?
This is huge and not just for these states. I just don’t see an easy way out of this mess. That is just such a large chunk of change to just pull out of the economy overnight, which is basically what is happening.
And what is the ripple effect here? If 17% disposable income goes away practically overnight, how many jobs does that kill that in turn dries up yet more income?
17%!! wow… 17 is the number of the day on the Sesame Street show my daughter’s watching today - coincidence?
The local news here ran a story last week about Countrywide cutting off home equity lines of credit. There were a bunch of homeowners in San Diego who claimed that Countrywide hadn’t informed them that their line of credit had been cut off and their checks written to contractors bounced. I felt bad for this one lady in the story, she still owes her contractor for the work done and her kitchen was totally destroyed.
Pulling credit lines….It reminds me of 1981……
Holding a press conference to offer Lifelines — 1984.
IIRC, it was 122,000 borrowers affected this go around. How soon until the next HELOC cut offs come along? This week? Next week?
What is nifty is this will be done poorly; and will create more inventory to compete with their CFCs massive holdings of REOs.
The sweet smell of deflation.
Agreed, they’ve broken out the dartboard here - too much, too fast - the cuts will be draconian.
“ ‘I know about a dozen people who are losing their houses,’ Pierce said. ‘All are in real estate…’ ”
Schadenfreude meter just hit the stop so hard the needle broke. Woohoo!
“Despite his 30 years in the real estate business, Pierce says he misjudged the market, getting in over his head with financing much like thousands of other San Diegans. ”
Drank too much Kool-Aid at the NAR conventions?
Imagine any other business with that amount of incompetence — “I know 10 other doctors that died in surgery this year; I know 10 pilots that crashed their planes, etc.”
Can you imagine this level of incompetence in other professions? “I know 10 doctors who died in surgery, or 10 pilots who died in plane crashes.” (My other post seems to be eaten or delayed so if it shows up, sorry.)
I must be living in a time warp here in Humboldt county. My wife is a banker and just Friday had an old guy up from San Diego who had inherited about $800K and came up to Eureka to buy a bunch of land and houses. As we had been down vacationing in San Diego last weekend, we couldn’t believe how much houses there had fallen in value…and that people were not in denial about the bad market. My wife told this guy that real estate here hadn’t dropped as much as down in San Diego, but conditions were such that housing prices here were primed to drop as they have in San Diego. The guy refused to listen and said–”prices won’t go down in Humboldt, everyone wants to move here!” He sounded just like a real estate agent from two years ago, and this, coming from some geyser who has no conception of the market conditions in northern California.
Funny thing is, prices for homes in San Marcos and Rancho Bernardo were almost identical to prices in Eureka…that in itself says Humboldt county is way way overpriced. But yet the southern Californians keep coming up here and buying!
The eternal redistribution of wealth continues …
The legacy wealth here is what drives much of our commercial real estate and in selective markets (Los Gatos, Saratoga, Los Altos) the residential market also….IMO, if you did not earn it, some will throw it around like the guy above in Humboldt county…
“A fool and his money are lucky enough to get together in the first place”.
Brilliant. A geezer putting his money into non-liquid, declining assets.
How do you make $400,000 in real estate? Start with $800,000.
Just looked at new homes in San Marcos and RB today — still ridiculous in the $700,000’s and a Mello Roos Joshua Tree to boot. Sure, they’ll throw in $30,000 in “upgrades” that cost ‘em about $7,000, but when are they going to wake up and smell the receivership auction?
“‘No one ever explained that to us; they sort of smoothed things over and said we could do it,’ Ambriz said.”
You guys can do this!
That commercial never gets old - Too effing hilarious. Some of the comments below the video are great. Nothing like having Suzanne and your wife gang up on you so that (1) Suzanne can zap your ass for a sweet commission and, (2) you can commit financial suicide.
““In previous periods of economic hardship, homeowners typically fought like hell to save their homes, Jaroslovsky said. Today, however, it’s a very different story. ”
That’s because they didn’t put a down payment on the house, dumbass!! No skin in the game.
DOC
“‘I figured if I could sell a house, I could sell a car.’”
But she obviously couldn’t sell houses, or else she wouldn’t be selling cars.
it’s not her fault - those damn buyers have screwed up her perfect, fairy-tale life by not buying.
“‘I figured if I could sell a house, I could sell a car,’ the 58-year-old said while waiting for her next customer at the Cathedral City car dealership. ‘I had to do something. I had to pay my rent.’”
I’m sorry did she say rent?
Julie
Well, at least she was apparently smart enough not to drink her own Kool-Aid. Contrast this with the other used house salesmen mentioned above.
Who’s to say the reason she’s paying rent instead of mortgage now isn’t due to said inability to sell houses?
And why didn’t she Save her money for the up/down times? Instead of splurging $78k on herself and friends, that would have been a nice ‘rainy day’ savings start.
Amazing.
H went by Toy Hon yesterday and 10 salesppl were standing around doing nothing= no one buying, and H found out most of them didn’t know their autos or had any on the lot. Toy is doingn a mjr ( a little late?) refurb of entire dealership, so the majority of the cars are off lot at Mary Pickford theatre parking lot. So, if there really was someone with cash in hand to buy a car yesterday/anyday, you have to drive somewhere else to locate the auto to test drive. Bad mgmntship. IMHO
It doesn’t take but a little cash to live large nowadays. Problem is… people have forgotten how to save. Tell you what’s priceless- going out with your best friends in the world and buying them champagne for dinner. Then slipping your husband a few hundred from your own labors
to cover the bill. Hundreds I don’t spend on crap.
Amazing how much people spend on crapola, isn’t?
How many things do you need? I have spent the last 6 years decluttering and I still have more to go. When I spend on stuff, I don’t care about the name unless it means quality at a fair price. I want to buy it once and have it last.
I’m with you - I’d rather spend money on experiences. I have a shot at taking those with me. The stuff my kids will sell at auction when I’m done with it.
(By the way, I think the best cure to collect “stuff” is to attend a weekly estate auction. No buying, just attend. There you can watch a lifetime of collecting “treasures” being sold off to the highest bidder, if a bidder can be found at all.)
I’m with you all the way, Vermontergal. The more you declutter the more everything looks like clutter.
With a real estate agent, in the middle of a boom, the accoutrements of wild success are essential to selling ongoing success to the
victimsclients whom you are carting around in search of a house.Hey, mind if I borrow that? That’s sweeeet.
Out of the frying pan and into the fire!
“‘The fundamental question is, will the real estate market turn around next year?’ Maurer-Watkins said. ‘If it does, we’ll see less of these. If it doesn’t, we’ll see more.’”
I wonder what the city pays this genius for such enlightened insight. Yeah, and the team that scores the most points is going to win the game.
“The couple said they didn’t understand the rate increase that came with their adjustable-rate mortgage loan. While the couple said they are partly to blame, they think their Realtor and mortgage broker should share some responsibility.”
A few years ago my husband and I purchased a small home near the beach in Carlsbad. We wanted to hire someone to shop interest rates for us. We hired a guy who was recommended by our bank. As we were signing the escrow papers, my keen eyed husband questioned a 10k charge that didn’t make sense. As it turns out, the fee was going to the mortgage broker who had worked out a deal with a bank. We were going to pay a higher rate than we would have gotten by shopping on our own. He was charging us 10k for the favor. Needless to say, my husband blasted him with both barrels. We were signing so many forms, it would have been easy for the jerk to slip that charge through. We weren’t first time buyers. We bought and sold several homes and investment properties.
There is a lesson to be learned here for anyone taking out a loan. Put aside extra cash to have all of the paperwork reviewed by an competent attorney. This should be part of saving up to buy a house. It can save a lot of heartache and finger pointing in the long run.
“‘No one ever explained that to us; they sort of smoothed things over and said we could do it,’ Ambriz said.”
[You] can do it?
Isn’t that exactly the language Suzanne used?
“‘If we can’t sell, we’ll just walk away,’
Ya know, Ben has been right all along about this. I initially figured that Congress will keep passing bills to artificially prop up the market–which they indeed will try to do. But, the effect is that this thing is just way too big to save and, especially, the vast majority of homemoaners will act just like this lady quoted above. People don’t want to save their houses…they wanted the promise of easy money with no skin in the game. Since that isn’t happening anymore, this thing is going down fast. Even in Humboldt county California, the latest stats show median home prices took their biggest monthly hit…very uplifting for me since all through last year, median prices held steady. Clear a path…this thing can’t be stopped and it is starting to look good!!
That’s why all the talk of people just wanting a piece of the american dream, just wanting to own a home is total BS IMHO. I think a lot of people that bought houses in the last five years were hoping to make a big bunch of money for doing nothing. For so long all anyone would talk about is how much they paid for their house and how much it was now worth - nothing about the pride of home ownership, projects to improve the house (beyong stainless steel and granite), no interest in the neighborhood or community and not a glimmer of permanence. It was all how long until they could cash out or move up.
Just watched 60 minutes, they did a segment on Denmark - since a study found Danes the “happiest” people on the planet. In a lengthy discussion with some 20 something Danes, 60min tried to find the reason they’re so happy while Americans (30th) are not Some had been to the states; and they all seemed to understand that America’s problem is it’s unreasonable need and expectation for material gain.
Finally, when asked, one of the young men said he had some simple advice for Americans, “..don’t depend so much on the American Dream.”
Much of the world knows our “dream” is not about a home.
My wife and I saw that too. I agree 100%.
Lane
The Desert Sun. “Many real estate agents who once made a killing off the booming housing markets in the Coachella Valley, California and across the nation are now forced to leave the business or supplement their income with a second job.”
Something doesn’t make sense here! If anyone really “made a killing”, he should be able to endure a stretch making less income.
Which leads me to believe that nobody–save a few home builders and lenders–was actually making a great deal of money in the housing Ponzi scheme.
Even if you take a typical “flip” during the peak of the boom: Once you factor in the 6% R-E commission, the cost to carry the unit for several months and the costs to fix it up, how easy was it to make money even when there were greater fools out there?
Suppose you bought a condo for $250K. You held it for 4 months while trying to flip it. Let’s figure 2K carrying cost for each month, 5K in basic improvements (paint, carpet), and 6% commission.
That means you’d have to sell it for 250 + 15 + 8 + 5 = 278K to break even! Even the people at the height of the boom who could buy for $250 and sell for $300K 4 months later have made 22K over 4 months, or 5,000/month. Let’s suppose the most successful “flippers” got in and got out at the exact right times and were able to flip 8 properties total. That’s $176,000. Not a bad income if you can do that in a year, but that’s probably the best anyone could have done. People who managed that were probably in the top 1% of all flippers. (And that’s assuming they got out before they were left holding the bag)
So I’m wondering how many flippers and/or agents, despite the stories of “making a killing” really made out all that well. Houses aren’t easily traded like stocks, even in bubbly times!
(In the old days, “flippers” were generally contractors who had the skills and resources to fix up houses themselves. They’d buy a truly distressed house and add real value to it. It got perverted to mean people buying condos at top dollar, putting a fresh coat of paint and countertop inside, and then selling it to a greater fool.)
So I’m wondering how many flippers and/or agents, despite the stories of “making a killing” really made out all that well. Houses aren’t easily traded like stocks, even in bubbly times!
I suspect none of them. I bet they kept rolling their money into the next flip and kept going until they lost it all.
I can honestly say I know some. Starting in 1990 one of my cousins started an investment club that brought at least one house in Sarasota a year for rental purposes (she only brought if it would cash flow). In 2000 they began to sell all their holdings since properties were selling much higher than they could cash flow for, and sold everything by 2003. She is 45 and retired with only one residence at this time.
But she started before the bubble. The point is the actual amount of cash made at the height of the frenzy was small. Just about everyone who already had a home well before the bubble and sold and more important rented or moved to a cheaper market made out.
A lot of these people upsized into McMansions and do not put all of their equity back in to the new house. These people have lost money in real terms. If your 200k house sold for 400k and you payed 200k down on a 800k house and it goes to 600k your at zero. Lower and your hosed.
Even people who where smart and went to a cheaper housing market could suffer losses over the longer term if they work since the lower pay may offset the real-estate gain.
So the only people that probably realized real gains are the ones that sold and rented and the ones that sold and retired to a cheaper place.
I agree. The ppl that made the most money were not those that got in during the frenzy, but smart ppl that bought cash flow properties when you still could pre-bubble, and then realized that they should get out when the frenzy ocurred. Same with any other bubble, ones those that ignorant money jumps in saying me too, time to get the hell out.
As one other poster said, if you dont understand how to run the numbers accurately to see if it will cash flow, or cant add any real value (such as a contractor that knows electrical, plumbing, roofing, etc., that can put sweat equity in) it is unreasonable to expect that you should not lose money even though some idiots did luck out. But as you said, those idiots probably quit their jobs and reinvested thinking they were next Donald Trump and ended up losing it anyway.
So much money changed hands that, no doubt, there were people who made money.
It’s just that, if you do the math, you’d have to be very successful to “make a killing” (which I interpret to be an amount where you can work less or not at all, a minimum of 6 million or so) even during the most bubbly years! R-E just isn’t that liquid, and there are high carrying and transaction costs.
“she only bought if it would cash flow”
Bingo. The key to the whole thing. Idiots are still buying properties that won’t produce a positive cash flow. They are awaiting the bounce, turnaround, recovery, whatyoumaycallit. When buying property w/ positive cash flow, one does not depend on future appreciation.
“‘One of my key messages is that real estate is local,’ said Appleton- Young, who spoke at a conference Thursday called ‘Special Weapons and Tactics to Survive a Down Market.’”
What?…is she a consultant for Black Water now?
Exactly; and is the message “real estate is local” a tactic or a weapon?
LAY’s other comments in the Tribune article were equally moronic or devious. She pointed out the large number of baby boomers who bought for cash on the Central Coast. Yeah yeah. I know of many many cases of Very Weak Hands holding Morro Bay property. Perhaps LAY is right in predicting that Central Coast property will hold up better than some other Calif regions. Whoever HAS money, might be motivated to buy here. Being near the beach with no traffic congestion is nice. But it does sound an awful lot like the old It’s Different Here tune that is playing everywhere everywhere everywhere.
Any insiders from the dark side, aka REIC, wish to expand on these ‘weapons and tactics’?
I suspect that they have been doing this kind of thing all along. For example, last year it was front page news here in Costa Mesa when an Eastside house sold for over a million. From that point to the peak every seller’s price shot up. One property listed last year for 1.8m for a month or so, then delisted. It just came back on the market for 1.49m. It’s a nice property, but even Zillow (a usually bullish and questionable source at best) has it Z-estimated at 850k or so.
I suspect that price inflation is one of the tactics used to assure that when the bubble burst and heinously inflated prices dropped by (omigawd!) 50% the bottom would still be terribly inflated. But then I ponder this and realize that I am giving the REIC too much intellectual credit and that price inflation is standard operating procedure for that group. How else does a cesspool of narcissism feed its voracious hunger?
northern rock of Great Britain has died.
whose next?
http://tinyurl.com/2pt4q5
The bigger question is when, not who.
Oh, man, and instead of selling it off, they nationalized it. What a bunch of nincompoops. I’m sure that the taxpayers will appreciate that in the fullness of time… not.
They have a program (sorry, don’t know the name or who televises it) that shows the British Parliament debates. I think it it one of the best programs going, sometimes it gets hilarious especially when the members take the PM apart over some especially stupid gov’t policy. Blair really got his hits at times.
I’d bet this is going to cause an uproar in Parliament, maybe it will be televised (if not already).
I remember watching some spirited exchanges between Blair and the other MPs. He was certainly coherent, even if you didn’t buy the BS he was peddling. Try to imagine a similar exchange between W and Congress.
It’s “Prime Minister’s Questions” and, at least here in Tulsa, it used to air on PBS on Tuesday nights fairly late (like 11pm) and then replay on Sunday nights. I think C-SPAN carries it, too, but I don’t know which C-SPAN channel or time.
Yes, C-SPAN carries it, and sometimes the TV Guide Channel labels it “House of Commons Questions.”
Codependency at its finest!
I don’t think the UK govt had much of a choice in the matter after all the aid they had so far given Northern Rock was added to the UK national debt, some weeks ago. At least that was honest accounting. Northern Rock seems worthless, offers to buy were trivial & the gov’t is trying to avoid wider economic damage.
do you realize that this Northern Rock failure alone has added 17% (that’s seveteen PER CENT!!!!!!!!!!!!) to the national debt of the UK at the stroke of a pen in Parliament. ( takes it from approx 530 Billion pounds to 630 Billion pounds overnite!!!!!!!!!!!)
yeah, the UK housing market looks just peachy
Shouldn’t that be 18.9% - (100/530) It must have been preferable to covering the deposits, what a mess.
I thought the addition was 55 bn pounds?
That’s ok, the UK government is 100X more functional than the CA one. Talk about a disaster occurring in slow motion.
Got popcorn?
Neil
That spike in the UK national debt happened some time ago.
Yeah, when the government took over repayment of the debts of Northern Rock.
It seems as though more and more realwhores are experts in forclosures. Hum !
This quote was from the Napa, CA piece:
“Last October, the Bremen home was estimated to be worth $520,000, while loans on the property totaled $558,000. This included $100,000 in equity that the owner used to pay off consumer debt and fix up the property. City staff estimates today’s home value at $430,000.”
Amazing to see these numbers…from a local Housing Authority!
“What you’re seeing is the fallout from the mortgage crisis,’ said David Chandler, a bankruptcy attorney in Santa Rosa.”
No, what you are seeing is the fallout from a financial mania. The mortgage crisis is also the result of a financial mania. Why do these people constantly point to another symptom as the cause? It is the financial mania that caused all of this fall out including the mortgage crisis, the stratospheric inventory levels, the record low sales levels, the price deflation, and the foreclosure epidemic.
Now what caused the financial mania? Greed and stupidity.
“Why do these people constantly point to another symptom as the cause?” Few like to admit being both greedy and stupid.
“‘He sees his neighbor’s homes that used to be worth $700,000 or $800,000 and are now worth $400,000 or $500,000,’ Adibi said. ‘And when you see that, you just don’t feel as wealthy.’”
See, this is the part that I don’t get. I have never felt wealthy just because my name was on the deed for a piece of real estate. For me, it’s all about the debt (if any) and the cash flow. The only thing that makes me feel wealthy is liquid money, liquid assets, or other things that I own free and clear. And even “stuff” that I own free and clear has an annoying tendency to depreciate, require maintenance, etc.
If I owned a single-family house and lived in it (which I do not), I would be more worried about how much the next roof job or plumbing job was going to cost me, rather than the house’s current market value. I would be worried about paying my taxes, my insurance, etc. Unless, of course, I was mortgaged up to my eyeballs and going underwater.
The thing about real property is that you never really own it, even if there is no mortgage. There’s always some county inspector, zoning board, tax collector, rent control board, or busybody neighbor telling you what you can and cannot do with your property. Not to mention the cost of keeping it up. It’s more like the property owns you.
Northern Rock bailed out - see Chrysler, Lockheed, NY City, etc…
If I am reading it correctly, the bailout will not help the current shareholders - they are SOL!
The government will “decide” the “valuation” of outstanding shares. Trading has now been halted on Northern Rock.
…British Leyland
“Jaroslovsky said before the hearing. ‘I’ve never seen so many people care so little about losing their homes.’”
Point is - it wasn’t their homes!!
It seems as though more Real Estate
@hores have suddenly become experts on foreclosures. Hum!
http://www.house.gov/bradmiller/images/PredLend07.pdf
Oh, great. Note that Congresscritter Miller engages in race-baiting in addition to the class-baiting and populist pandering. He wants to allow bankruptcy courts to modify the terms of mortgage loans. You might as well just nationalize the mortgage business if that happens - who else would make loans if the terms were subject to government tampering if the borrower wouldn’t pay?
Get this line:
“Hardworking American families stand to lose more than $160 billion in wealth.”
I guess if debt is wealth, then war is peace and lies are truth. Maybe now I can get that flying car I’ve always wanted, because I understand that congress will be repealing the laws of physics next year. Just as soon as they finish rewriting the economics textbooks.
Guess hard working ppl that didnt buy more than they can afford dont deserve cht. You cant help one person with tax dollars without hurting another. Also he is for stricter lending laws, hmmmm. I think they are already beginning to self regulate. Billions of losses will do that.
might as well just nationalize the mortgage business if that happens - who else would make loans if the terms were subject to government tampering if the borrower wouldn’t pay?
———–
It is done all the time in bankruptcy proceedings with business assets that secure loans including real estate.
It is done all the time on investment/income properties (think rental properties).
It is done all the time on 2nd homes and boats and other toys in bankruptcy.
Hasn’t stopped lenders fromlending on commercial real estate or investment properties or 2nd homes.
The only type of loan that the bankruptcy court can not cram-down (that is the phrase for reducing the amount of the principal) are loans secured by the borrower’s primary residence.
Bankruptcy courts used to be able to do cram-downs and alter the interest on primary residence up until the early 90’s as I recall. Then the law was changed. Before the change in the law, lenders had no problem lending.
He wants to allow bankruptcy courts to modify the terms of mortgage loans. You might as well just nationalize the mortgage business if that happens - who else would make loans if the terms were subject to government tampering if the borrower wouldn’t pay?
Bullhocky. Banks have the right to get things like this written down - why shouldn’t their customers?
Google “cramdown” if you don’t beleive me.
“600,000 Americans are at risk of losing their homes in the
next year. Our most important asset has become our most
vunerable.” – Congressman Brad Miller
This mailing was
prepared, published and
mailed at taxpayer expense.
“vunerable”?
Can’t the taxpayer afford a spellchecker, or maybe a reviewer?
And since when are “homes” our most important asset? There are many things wrong with that statement.
And what’s worse: no one loses their “home”. You make that wherever you are. You can have a real home in a shack if you have the right attitude.
People may lose possession of the building in which their home resides but I suspect for most FBs, it will in the end turn out to be a blessing.
“Our most important asset has become our most
vunerable.”
Quotes like this imply there’s a bad guy. Who is the bad guy Mr. Miller?
“A friend of hers who cleans houses is facing similar problems after being coaxed into buying a $400,000 home. ‘It makes no sense that she got a loan, and now she’s like $30,000 in debt because she was using a credit card to try and cover her payments,’ said Ambriz.”
The financial institutions thought they we’re soo smart encouraging people to borrow against their houses thus securing the loans against real estate. With people like the one above turning to credit cards to service their debt, the financial institutions will now be taking hits on unsecured credit card debt in addition to losses on foreclosed properties. Credit of all types should tighten up like crazy in the next year.
“Credit of all types should tighten up like crazy in the next year.”
One would really think so, let’s see what happens. Banks should be especially loathe to make any kind of “equity” loan - that’s for sure - no matter where the FFR stands.
I attended several Kennedy Wilson probate auctions this weekend in S. Central LA.
Wow, what a change from a couple of years ago, when you’d see 60+ people standing around the front lawn and 10 or so bidders.
This weekend, the “crowd” at the auctions numbered maybe 20-25, with only 3-4 bidders. One house drew no bids, the auctioneer lowered the opening price from 250K down to 225K, then 200K, then simply cancelled the auction. At that auction, which was a predominantly black part of S. Central, and which had some kind of junk yard down the block from the house, the homeowner next door (with a shiny Ford SUV in the driveway) came out complaining that her appraisals of her house have come down “136K” over the past year. I guess living nextdoor to a foreclosure that won’t sell isn’t going to help, LOL.
Its still early in the game. Unless its very cash flow positive you might want to preserve capital until after the summer. Perhaps hold off for another year.
Those crackerbox S. Central houses that were selling for 375 - 400K two years ago, that are now selling for 200 - 250K…I figure they’re worth somewhere between 90K - 150K, that’s when I’ll jump in, no sooner.
Ghetto boxes are worth 25K in most other cities. Why is LA special?
People keep hoping that South Central will gentrify some day.
Me, I’m not interested in being an urban pioneer. Pioneers are those guys with arrows in their backs.
South Central has had a tiny area around USC gentrify. They rest isn’t even close and the USC area will have to be defended with heavy firepower to endure.
But those slums have a sharp drop ahead. I wouldn’t be surprised to see homes go for $50k.
Got popcorn?
Neil
Ghetto boxes 25K in other cities, why is LA special?
I don’t know, but I have some thoughts.
(1) Since the Calif state income tax rate is very high, it promotes burying cash in illiquid assets.
(2) Since the cost of heating in Calif is much less than in the northeast, higher mortgage payments are affordable to low-end buyers.
(3) Perhaps the socialist state of California provides bigger rent subsidies (directly or indirectly) than some states that are less socialistic. Thus enabling positive cash flow at higher price levels.
(4) C’mon now. $25K? Which cities do you mean?
There were 10 listed on the MLS in the Frogtown neighborhood of St. Paul for $20k, and that’s just the worst neighborhood in St. Paul - North Minneapolis is much worse.
From Daily Breeze article: “He notes that the 30-year fixed rate is now about 6percent. And over 30 years, a buyer will pay more for a $400,000 home at 6percent than a $450,000 home at 5percent.”
Excluding tax benefits, the $400K home at 6 percent has a lower monthly payment. If you were to include the tax benefits, the $400K home at 6 percent is even more advantageous. One example Mr Higgins didn’t give is the same home selling for $300K in a few years. Throw a nice down payment into the equation and a significantly higher interest rate doesn’t even come close to pushing the monthly payment as high as the first two examples.
Sorry Mr Higgins, you’ll need to sell your overpriced homes to some greater fool, although it seems there are very few of them left these days.
I’ve created a spreadsheet to estimate the “carrying cost” of various mortgage combos (accounting for every detail that I am aware of).
$400K @ 6% with 5% down has a carrying cost of $2284.87/mo.
$450K @ 5% with 5% down has a carrying cost of $2278.62.
… and with a tax rate @ 1.17%
$400K scenario adds $380/mo payment
$450K scenario adds $439/mo payment
$400K at 6% would then be cheaper.
Same relationship at $800K vs $900K, etc.
I was calculating using the same down payment in dollars, not as a percentage, in each case. Regardless, the difference is negligible, aside from my $300K example.
I don’t recall seeing any 30-yr fixed loans at 5% but I’ve sure seen a lot at 6%. And let’s not forget 450k is jumbo (with the last five year’s traditional zero percent down) and 400k is not. Nope, his numbers do not make sense.
I found the post re: Congressman Miller in today’s Boston Globe. There was a feature article about a couple who bought a family home for 155K in 1996 and now owe over 300K and are whining up a storm. They declared bankruptcy to try to avoid foreclosure. Of course, the article doesn’t say what they did with over 200K. They are “victims” pure and simple, poor souls about to lose the family homestead. On the other hand…….
“Kim and Robert Canfield filed for bankruptcy last summer to save their home from foreclosure. The Saugus couple makes about $5,500 a month after taxes. Their monthly mortgage payment had climbed above $3,000. The house has been in Robert’s family since the 1920s, but they could no longer afford the payments.”
Kim and Robert Canfield are dead, and that is a tragedy. But Kim and Robert Canfield are dead because they had no code. They are dead because they had no honor. And god was watching.
“The house has been in Robert’s family since the 1920s”
talk about a serial refi!!!!!
Too funny!!
More fools they if they planned to take the easy way out. Refinancing to pay off credit cards is nutso and just puts everything you own in the banks hands.
Well, living beyond their means was problem one. Problem two was not understanding how things work. Well, the banks got them coming AND going. Got them for piles of interest and fees on the cards and now because they were dumb enough to take out equity to pay the cards, get the house too. It would have been sheer genius on the banks’ part except for that little problem of plummeting values…
Adding to this, the article is incorrect - the refinancings started in ‘98, not ‘01, and occured seven times (eight including the original mortgage of $90k), not three times as Ms. Blanton reports.
The total value of mortgages pulled on their property is over 1.30 million dollars. Seven mortgages have been discharged, one mortgage remains at $328,500. The Canfields are what the HBB calls “serial refinancers” in the worst. In essence, the Canfields owed $90,000 in 1996. In April, 2007 when the foreclosure notice was filed with the county, the Canfields debt secured by the property rose to $328,500. Meanwhile, East-West Mortgage pulled in closing costs on eight mortgages during the 10+ years (home purchased in November, 1996) the Canfields resided at the property. The estimated $40,000 in closing costs that the Canfields have paid over their occupancy of the property in Saugus is nearly half the principle owed on their original mortgage.
The Canfields should be ashamed, all their relatives should be ashamed. They not only deserve to lose the property, they should be forced by relatives to change their name to “Cantmanagemoney”.
Good point about the loan
blood suckersbrokers. What an insane waste of wealth all around. The incentive system the financial industry set up could not have been more twisted. If you WANTED to trash the economy, you could not have done a better job getting people to act against the collective self-interest.I eat breakfast everyday a thousand yards from Congressional aides just itching to put a subpeona on my forehead.
Special Weapons and Tactics to Survive a Down Market.’”
I wonder if Leslie mentioned to her constituents the special weapon we have reserved for her. We carefully select them from the most lush area of Joshua Tree National Monument, and we launch them from the exhaust pipes of idle Hummer 2’s.
Poor Leslie, She is probably developing a seige mentality from reading all these blogs. LOL
It’s about time we saw more stories like John Kaspar — a prudent person who saw the lunacy and didn’t jump in with the rest of the lemmings. Rather than every Freddie FB victim story out there, here is someone who isn’t getting the Joshua Tree treatment for a change. I wish the media would write more about this so more people could potentially follow their example.
“Chapman tried to hold out during the months after her last sales in February 2007, hoping for the market slump to end and sales to pick up. She worked the phone. Kept in touch with clients. Tried to entice interested investors.”
One year without ANY income…maybe God’s way of telling you to do something else.
It makes my heart soar to giddy heights when I hear that realtors are losing their homes. Many will say I’m mean spirited but they are wrong. For instace, the realtor who is losing his $1 million home (once was) I couldn’t care less. That he has Parkinson’s is a different matter. Losing his $1 million home was brought about by greed. Parkinson’s was not his doing. In fact, there are thousands (literally) of instances where my heart goes out to those who are in trouble for one reason or another but realtors and mortgage brokers wh took part in this greed driven Ponzi scheme deserve every ounce of trouble they get handed. If ever there was a true saying for these people it’s: “You reap what you sow.”
http://en.wikipedia.org/wiki/Karma
Last weekend I was going over new weekly RE listings in my area and saw a 40-year-old, 687 sf, 5,000 lot 2/1 with an asking of $450,000. I don’t usually do this, but I e-mailed the listing agent and kindly suggested that she added one too many zeros in the asking price. I got her response today and she called me, “mean-spirited”. Turns out that really was the asking price… heh… go figure.
I work at a small tech company in San Jose, in a building shared with a mortgage brokerage office; it used to be occupied by a day-trading firm - I couldn’t make this up if I tried! Anyway, at lunch the other day I was annoyed to discover a bright pink sheet of paper that had been wedged beneath my windshield wiper (and everyone else’s in the parking lot). I thought I’d share it here, as it is another data point suggesting that All Is Not Right In Silicon Valley. I preserve the grammar, capitalization, punctuation, spelling, and emphasis from the original, as it adds to the charm:
“A Lucrative Alternative to the Devastated Real Estate Industry Quickly Gaining National Attention Among Top Realtors and Financial Professionals”
Learn How the best of Corporate America, the best of Wall Street and the best of the Direct Marketing industry have come together for the first time ever to create the “perfect storm” of business opportunities for the already successful Realtors and Financial Professionals who want to earn unlimited income that is unaffected by disastrous economic conditions.
* Why this unique, never before seen business model is attracting the attention of high level Real Estate Brokers, Mortgage Brokers, and Financial Pros from all over North America and how you too can align yourself with these insiders before its yesterday’s news and you are reading about it in the Wall Street Journal. (This has nothing to do with Multi-Level Marketing (MLM) or any other Mickey Mouse money game).
* What the top financial education author and expert in the world has to say about this business model and why he devoted one whole chapter of his recent NY Times best seller to
If You’re A Frustrated, Disappointed, Under Paid Realtor And You Are Tired Of Working Longer And Harder To Make Less And Less Money In An industry That Has Been Cut Down At The Knees With Absolutely NO Signs Of Recovery, Then You Can End Your Worries Right Now by clicking on this website and reading Every Word ..
http://icreatemyownwealth.com
Phone: (408) 888-5608
Fax: (408) 371-8241
I am the Master of my Soul. I am the captain of my ship
I’m guessing it some sort of franchise pitch, but I’m not going to give them my email address to find out. No interest in running whatever the latest gimmicky retail opportunity is. I wouldn’t be surprised to find that the franchises involve selling insurance, annuities, or some sort of financial products. I saw a lot of this during the last housing downturn in the early 1990’s.
A Personal Message From Andrew J. Cass
Former Investment Banker / Mortgage Banker
Anybody else think this dude has the look of Bubba’s girlfriend in Club Ahnold over at San Quentin?
“I’ve been through ups and downs before, but I thought we’d make it through this one,” said Bailey, who has dark bags under his blue eyes. “Forty-three years, and we never missed a mortgage payment on the various homes we owned. I didn’t think it would turn out like this.”
I call B.S. on this - if he has never missed a mortgage payment, then why did his lender auction his house out from under him?
43 years and kicked out on their A$$es. They should have had a long paid for house and be enjoying the golden years, at least financially secure. But they had to go to the housing casino one last time, bet everything on one roll, and …. drum roll please ….. LOSE.
bet everything on one roll, and …. drum roll please ….
*snake eyes*
http://biz.yahoo.com/ap/080217/homeless_foreclosure.html
Homeless live in abandoned Homes.
Interesting post about Cleveland. My Calif response is to notice how all the mini-storage facilities here are available to renters from (about) 6 am to 9 pm, not in normal sleeping hours.
Here is the land bank idea taking root.
Since its inception in 2002, the Genesee land bank has demolished 800 homes and built 200 single-family homes and loft apartments. This year, the land bank is spending $30 million, much of it drawn from private investment, for projects that include the renovation of two historic hotels. “If it works in Flint, one of the hardest-hit real-estate markets in the U.S., it clearly can work in stronger market areas,” Mr. Kildee says.
Officials in the Cleveland area are proposing a countywide land bank. That could result in the demolition of a “significant majority” of the city’s 12,000 vacant homes, says Cuyahoga County Treasurer Jim Rokakis.
http://finance.yahoo.com/real-estate/article/104440/As-Houses-Empty,-Cities-Seek-Ways-to-Fill-the-Void;_ylt=AvwJ9XeATAEdJOxyoQ367y27YWsA
This is ironic. The ‘affordable housing program’ seems to have gotten people into homes that were proven to be unaffordable.
The Napa Valley Register. “Because of declining residential values and adjustable mortgages resetting to higher rates, the city of Napa’s affordable housing program is losing two single-family homes.”
“Both owners got in over their heads when their adjustable mortgages reset to higher rates. They couldn’t afford the increased monthly payments, said Jan Maurer-Watkins, manager of the city’s housing authority.”
“Making matters worse, each house had lost more than $100,000 in value. The mortgages exceeded what the houses are now worth, Maurer-Watkins said.”
And this is why. The idiots that manage the program are relying on appreciation to make it work. Gee, anyone ever think that affordable housing may be fundamentally coupled to lower prices?
“‘The fundamental question is, will the real estate market turn around next year?’ Maurer-Watkins said. ‘If it does, we’ll see less of these. If it doesn’t, we’ll see more.’”
Sadly, what sellers need to do is sell their house if they have to, at the highest offer they can get within a reasonable time on the market. They will most definitely take a loss and their neighbors will hate them, but it’s the only way to get out of this housing slump with the less amount of damage to your personal credit. Sellers cannot afford to be greedy no more, sell your house, pay back as much as your can on your house loan and then work out payments. Your credit will stay intact and even without a house, your credit history will be clean. Another good idea is start thinking of moving out of CA, because this state is way too expensive and the quality of life is getting much poorer. I can see why so many Californians have left, the state is in a financial mess and it’s not only their housing market.
Thanks for posting this information, Ben. It’s the same song everywhere. Walking away is now not just a business decision for some, but a matter of survival. I am most perturbed about the government efforts to “help” homeowners with things like HopeNow and Project Lifeline. The so-called counselors manning these phone lines are not advocates for homeowners, but rather agents of the Big 5 Banks to force people to stay in their gigantic upside down loans. I’ve even heard of counselors encouraging people to stop paying their credit card bills and health insurance in favor of their mortgages. Their loan modification plans are ones that only add back payments and penalties to the balance of the already upside down loans. No wonder they’ve only been able to “help” 10,000 people.
The fact is that people are just not going to hang on or fight for their homes like they did in the 90’s the last time people went upside down on their mortgages. The banks walked away from their obligations when they wrote down their portfolios, so why can’t homeowners - the ones that pay actual cash for the actual assets that asset-backed securities are based on????