Bingeing And Purging In California
The Modesto Bee reports from California. “Despite public pronouncements about working hard to keep borrowers in their homes, mortgage lenders are foreclosing unnecessarily on too many home loans, the California Reinvestment Coalition contends. ‘Lenders and loan servicers are not doing enough to keep homeowners in their homes,’ said Kevin Stein, the coalition’s associate director, who wrote ‘The Growing Chasm Between Words and Deeds.’”
“Avoiding foreclosure is Patricia Estrada’s goal, but the Ceres homeowner said her lender has been giving her the runaround for months.”
“‘We’re trying to make an honest effort to keep our home,’ said Estrada, who spoke at Monday’s news conference. She and her husband purchased a home in 2005 with an adjustable-rate mortgage. Her husband lost his job last year, their mortgage payment jumped $1,700 per month, and they fell behind on the loan.”
“To save their house, Estrada said they negotiated an agreement with their lender, Wells Fargo Bank. That agreement required a lump sum payment of more than $10,000.”
“‘I took out a hardship loan from my 401(k) (retirement account) to get the money,’ Estrada said. She said she sent the payment by the deadline, and she has a delivery receipt to prove it. But the lender mailed back the check, claiming it got there late. Even after she documented that the money had arrived on time, the lender started foreclosure proceedings.”
“‘We are in a desperate situation,’ said Estrada, adding that her good name has been defamed by the foreclosure filing.”
“Counselors from ByDesign Financial Solutions are among those working with Northern San Joaquin Valley home- owners to avoid foreclosure. ByDesign’s president, Martha Lucey, said her staff is overwhelmed.”
“Lucey said many homeowners ‘got caught off guard’ by rising mortgage interest rates.
“‘A lot of them really didn’t understand how risky their loan was,’ Lucey said, noting that many homeowners were overly optimistic about being able to refinance before their interest rates rose. ‘The problem now is they cannot refinance … because their home’s value has gone down and they’re upside-down on their loans.’”
The San Francisco Chronicle. “When Veronica Hodge realized the adjustable-rate mortgage on her Vacaville home was due to reset about $1,000 a month higher starting in January, she called her lender in November to request a loan modification, freezing her interest rate.”
“She submitted paperwork, including proof of income, then called back only to find out that it had been lost. She resubmitted the paperwork and was told to wait six to eight weeks. She was still waiting on Monday afternoon.”
“‘I contact them every week, just to get the same script from whoever answers the phone,” said Hodge. ‘They say they’re still reviewing, just give them a few more weeks.’”
“Countrywide is Veronica Hodge’s lender. After receiving a Chronicle query about her situation, the company called Hodge late Monday to say it would reset her mortgage to its initial rate for five years.”
“‘Oh my goodness,’ Hodge said when she heard that. ‘That is wonderful. I want to keep my house. This gives me time to be proactive on what I need to do for my future.’”
The Sacramento Bee. “State officials said Monday that a plan touted by Gov. Arnold Schwarzenegger to aid troubled homeowners helped more than 17,000 struggling borrowers in December and January.”
“But it’s unclear how significant Schwarzenegger’s plan, announced Nov. 20, has been. Throughout last year, many lenders already were attempting to work out deals with troubled borrowers, and in October and November alone more than 19,000 were helped.”
“Lenders reduced interest rates for 2,958 borrowers, either below the loan’s starter rate or its scheduled reset rate. 473 borrowers got their interest rates frozen for a period of less than five years. 212 borrowers got their rates frozen for five years or more.”
“3,494 borrowers got so-called ‘forbearances,’ in which the lender agrees to suspend payments for a specified time. The data for modifications and forbearances did not distinguish between subprime and prime loans.”
“The state’s findings on loan relief are similar to those released in recent weeks by the Mortgage Bankers Association and Hope Now. All show lenders are denting the foreclosure problem, but haven’t greatly slowed numbers of people losing their homes.”
“Despite the increased help, foreclosures still dominate: The lending companies told the state they took back 10,202 homes in California in January.”
“The Governor’s Office estimates 500,000 subprime borrowers in California will see interest rates reset in the next 18 months.”
“State Department of Corporations Commissioner Preston DuFauchard cited obstacles to better results that include a growing propensity for people to walk away from their homes instead of working with lenders. He also said half of borrowers still don’t contact lenders when they get into mortgage trouble.”
“‘We’re really in a fluid market and the credit crisis hasn’t really eased,’ he said. ‘My sense is these efforts all help. They add value. There is no silver bullet. Nothing is going to knock this out of the park, and if there is, no one has found it yet.’”
The Union Tribune. “Fannie Mae and Freddie Mac agreed yesterday to require greater independence for real estate appraisers, whose practices during the real estate boom have been criticized for leading to bad loans and the current subprime mortgage meltdown and credit crunch.”
“Tony Majewski, acting director of the California Office of Real Estate Appraisers, said a state law effective in October prohibited some of the tactics banned in the Cuomo agreement. The law ‘prohibits anyone with an interest in an appraisal from exerting or attempting to exert influence on an appraisal to affect a value,’ he said.”
“Mortgage bankers and brokers differed on what the agreement will mean to them and their clients. Mike Dillon of TCS Mortgage, a San Diego mortgage banker and brokerage that closed about 25 loans last month, said banks might become overly conservative if they alone select appraisers.”
“‘I don’t think it solves anybody’s problems,’ he said.”
“Steve Hops, a mortgage banker at Guild Mortgage, called the agreement ‘a nonevent’ for bankers, because they will still control who does the appraising, but a ‘headache for brokers,’ who will have no role in the selection process.”
“But Hops added, ‘It’s the integrity of the individual appraiser that’s at stake, whether he works for an in-house company or an independent company.’”
“David Eshelman, who operates an appraisal company in Carlsbad, said lenders are already being more prudent in how they review loan applications and appraisals.”
”The real estate industry goes thorough these cycles of fattening up and skinnying down – it’s bingeing and purging,’ Eshelman said. ‘And right now, we’re in a purge.’”
The Desert Sun. “Betty Perales said she used to feel scared, angry and alone about the rising tide of credit card and mortgage debt on a $235,000 home she bought in 2004 that’s now $486,000 in the red. Not anymore.”
“Perales has met with Palm Springs bankruptcy lawyer Gary Holt to sort out her finances and life. And on Monday, the white-collar worker - who along with her domestic partner shared a combined annual income of $66,000 and a credit score of 700 - decided to walk away from their house and let it slip into foreclosure.”
“‘It’s been hard trying to hold it all together,’ she said.”
“Holt assured Perales she’s not alone. Across the nation, amid a struggling real estate market and rising prices of gas, groceries and other goods, credit counselors have noted this trend.”
“Palm Desert lawyer Donald Gagnon III, who is handling a mounting number of bankruptcy petitions, said rising living costs and plentiful credit have motivated some to draw on those reserves to stay afloat. Others are dipping into their 401(k) as well just to pay off rising credit card debt, he said.”
“Holt has seen people with income of $25,000 to $50,000 carrying debt loads on top of their mortgages that equate to a full year’s worth of pay. People used credit cards for food and medical expenses when mortgage payments were under control, Holt said.”
“‘What’s changed is they’re starting to use convenience checks for $3,000 to $4,000 at a time just to hang onto the house,’ he said.”
“It’s a striking reversal from only a few years ago when equity lines of credit or loans were tapped to pay off credit card debt or buy a second home. ‘Now that they’re in a crunch, they have no cushion,’ Holt said.”
“It’s a trap Perales said she fell into, along with a mortgage handler who had her sign papers she thought would provide a fixed interest rate but instead sent her payments spiraling beyond her ability to pay them. ‘The irony of all this is, I had no debt when I signed my last set of papers,’ she said.”
“Perales said the equity line helped the family install a pool and renovate the property. ‘We had no idea that the $2,855 a month at 7.9 percent we were paying was for interest only. All that money, and not a single cent went toward the home,’ she said.”
“Now that it’s upside down in equity, she’s been advised to walk away, lease a new home for a while and regroup. ‘It’s sad. The house of our dreams is in foreclosure, and I owe $150,000 more on it than it’s worth.’”
‘Oh my goodness,’ Hodge said when she heard that. ‘That is wonderful. I want to keep my house. This gives me time to be proactive on what I need to do for my future.’
IMO, they haven’t done one thing for this woman but give her the opportunity to pay more interest before the ‘pro-active’ doesn’t appear and she walks. What is going on here is a redirection. No discussion of affordability. No reflection on how much prices increased during the bubble.
Well these guys can change the subject from prices to ‘crisis’ as often as they want. People still can’t afford houses in California, for the most part. And after everybody calms down and realizes it, what happens to sales next year, and the year after that?
I have to laugh at people that wet their pants because somebody gives a speech, and these people on the internet that go on about the taxpayer this and the taxpayer that. I say show me the math. Five minutes with a calculator shows the hard truth that no entity or group in the world could keep these prices up nor could they pay for it if they wanted to. And nobody wants to. Talk is cheap, show me the numbers.
And here’s a solution; where did most of this housing bubble money come from these past few years? Didn’t the Fed just ‘create it’ out of thin air? Well they can just un-create it. One big, fat, journal entry and all the bellyaching is done. And if that’s not acceptable to the PTB, then let it flow through to the balance sheets of the corporations and individuals that are on the hook.
‘Despite a major slowdown in Orange County’s housing market, home prices are still out of reach for many residents. That’s the most dramatic of the many disparities highlighted in today’s release of 2008 Community Indicators report, an annual measurement of 50 issues ranging from housing, health, education and economics.’
‘The ninth annual report can be viewed as a weather report on the county’s overall quality of life and trends, said Mike Ruane, a county executive who presented the report to the board of supervisors today. The housing market has become particularly off-limits for the 25-to-30-year-olds and young adults are leaving for more affordable housing in other regions, he said. ‘In many ways, we remain a high-cost environment,’ Ruane said.’
They are holding back the dam one finger at a time.
Unfortunately, they didn’t help these people:
Foreclosures reach new high
http://www.bakersfield.com/hourly_news/story/380477.html
Police break up party raging in foreclosed home
BY VANESSA GREGORY, Californian staff writer
e-mail: vgregory@bakersfield.com | Saturday, Mar 1 2008 10:32 PM
Last Updated: Saturday, Mar 1 2008 10:32 PM
About 50 teenagers and young adults broke into an empty, foreclosed home in southwest Bakersfield Saturday, throwing a raging party and making off with the home’s high-end appliances, according to neighbors.
Related Stories:
Plan targets blight from foreclosures
Registry to help city monitor abandoned, foreclosed properties
Partyers trash second home
Blogs:
What’s going on? Have teens gone wild? Or … ?
“They’re all out front, they’re drinking,” said Scelina Mitchell, who lives across the street from the home.
Bakersfield police visited the tidy, stone-accented house in the 4500 block of Whitegate Avenue twice in the early morning hours after receiving calls, police Lt. Brad Wahl said.
HSBC Bank USA repossessed the home in November, county records show. It sold for $540,000 in 2006, according to First American Real Estate Solutions, a data firm.
Vacant, foreclosed homes do not seem to be causing police significant problems, Wahl said.
“I haven’t heard or noticed anything like that on my shift,” Wahl said.
Mitchell and her husband, Matt Mitchell, said police simply dispersed the partygoers, and they worry the “nonchalant” response might attract future rabble rousers.
“What I would have liked was at least a reprimand,” Matt Mitchell said. “And a report filed.” On their normally quiet block, two other homes are in foreclosure, he said.
Wahl had limited information Saturday about what officers found at the home, and what actions they took, but he was reasonably certain no arrests were made.
A City Council committee approved a plan to track foreclosures, in an effort to limit neighborhood blight, on Feb. 19.
The plan may come before the full Council as early as this month.
“What I would have liked was at least a reprimand,” Matt Mitchell said. “And a report filed.”
It should at least be reported on their permanent record!
Lives can be ruined, young ones do make mistakes.
I’m so sad that our world is becoming a one mistake, you’re out of here!
No, I don’t cater to the entiltlement ones.
This will end well.
Keep da powder dry! and no canned peas for me (Oly!)
Jelly ew!
Leigh
“A City Council committee approved a plan to track foreclosures.”
I can certainly rest better now, knowing that the politicians have everything under control!
The past couple years, after finding Ben’s oasis, I have been preaching about the evils of debt. One consultant at work told me, “I’ve never seen anybody so against debt. You know there is such a thing as ‘good debt’. Don’t you?”
I have thought long and hard about that “good debt” crap. I have concluded that debt is only good during a credit expansion. But we are in a credit contraction now. Debt is once again evil. All they did was allow her to hold on to her debt. They did worse for her than doing nothing for this woman. It’s like the doctor telling you that he is going to keep you alive, with the cancer still in your body, just long enough to pay his bill.
Henny Youngman: “Doctor Goldberg is in the house tonight. He’s a great doctor. Last week he gave his patient six months to live. The guy said, “doc, I can’t pay my bill”. So Doctor Goldberg gave him another six months.”
No, you’re right, there is no “good debt” - ever. Debt is only good for bankers. The Bible had lots to say about debt and ain’t good. (Of course, we have to balance with the chapters about sacrificing small animals.
)
Debt means slavery for the borrower. Can you use debt temporarily for good as in start a business, buy house? Sure, if done prudently and with an eye to paying it off as fast as possible. Pushers of “good debt” mostly seem to leave off the “and get rid of it as fast as possible” part.
Of course, we have to balance with the chapters about sacrificing small animals.
I find many small animals to be delicious.
I’m a proud member of PETA (People Eating Tasty Animals)
I could never read Leviticus without getting hungry. All that stuff about the “sweet savour” of roasting lambs and sweet cakes and oil….
I know. I know. I always want to be a vegetarian.
Unfortunately, ‘the spirit is willing… but the flesh is tasty.’
I told you I wasn’t good with cliches, or proverbs, or whatever those things are.
‘I could never read Leviticus without getting hungry.’
I just realized, Thomas: I never read anything without getting hungry.
“Debt means slavery for the borrower”
On the road, often run out of reading material in the evening, but at least I can count on the Gideons, so I can always fall back on Proverbs as a reasonably interesting read:
“My son, if you become surety for your friend, if you have shaken hands in pledge for a stranger, You are snared by the words of your mouth.”
I think it means no co-signing.
Proverbs is just full of little gems.
“As a dog returneth to his vomit, so a fool returneth to his folly”
Kind of sums up our whole economic cycle for the last 10 years or so.
Classic!
I am sick to death with the “use other people’s money as leverage” excuse. For me. . .not so much. I GET the idea of borrowing over time to buy an appreciating or income generating asset. BUT, I’m DONE with people (including fellow lawyer friends) talking about the “rich daddy-poor daddy” dynamic in making money! What a bunch of garbage that we (US) has bought into. Please send $30 to 2341 Jefferson, San Diego, CA 92110 to buy a “Debt=Wealth” t-shirt with the caption on the front and a picture of a house and a cartoon picture of a bag of money on the back. Unfortunately the shirt comes in one size. . .5000 sq. ft.
NYC and Vermonter, you are people after my own heart. After living with debt for almost half of my life, it has been finis for 2 years, and I am so glad. I will never go back to that. If it means renting a 1 bedroom and letting the kids have it so I can sleep on the floor and wifey can have the couch, so be it.
Debt is 99.98% for fools. Yes, some (very few) use it very prudently and quickly. The remaining people are gunned down by a financial hit squad.
While it is 8 years old, I highly recommend Manning’s Credit Card Nation. Good history and really sheds a lot of light on how we got to where we are in terms of a debtor nation (on so many levels) and the service nation, instead of production. 2/3s of the way through. Excellent book for 8 years old.
Another good book: Gotcha Capitalism: How hidden fees rip you off every day and what you can do about it.
Saw the guy who wrote that being interviewd about a month ago on a Sunday morning biz show on CNN. Seemed to be pretty down to earth and just sick of all the nickel and diming that goes on.
However, a lot of these fees are makeup for all the writeoffs that go on. Heck, if banks just kept money in the vault and lent out minimal amounts at low interest, it would take decades to make any large profit.
On the other hand…
Debt is OK under the following circumstances:
*You keep the payoff balance in your savings account and that account is paying you more interest than your creditor is charging you.
*It’s a student loan, and the ROI of the education works out.
*Inflation is higher than your credit card rate. The current stagflationary environment has certainly rewarded those who bought patio furniture a year ago (see my post below). Prices this year are like 2x last year.
My only comment about the student loans is that it’s very important to realistically balance what sort of return you are getting for what cost. Many folks forget that it’s what you LEARN and the contacts you MAKE in college, much moreso than the name on the sheepskin.
Point being, going to a private collect and racking up $30,000+ per year of debt to go teach 5th grade is insanity defined.
One benefit from retiring from the military and having atleast 10% disability. My children can go to college tuition free in California. Of course that is only for public college.
California has some great public colleges, though: UCLA, UC-Berkley, and UCSD, to name a few.
As a former Gaucho, I must remind you not to forget UCSB - 4 Nobel Prizes inside of 6 years (a greater total than either UCLA or UCSD) is nothing to sniff at:)
http://nobelprize.org/nobel_prizes/lists/universities.html
Debt can be good if you know exactly what you’re doing; it’s one of the more dangerous financial tools, but like any power tool, in the right hands it can be used well. For example, borrowing money long-term with a fixed interest rate below actual inflation can be a fairly good way to make money, even if what you invest that borrowed money in has small returns.
My advice would be: don’t borrow unless you understand the risks. It’s easy to comprehend, but hard to follow for most people.
Debt is fine if you can invest the proceeds of the loan and return a greater rate than interest paid on the debt. Income property can be great if tenants pay off a million dollar loan for you in twenty years so you can recieve rental income for the duration of your life.
Debt, though, brings risk into the picture. While buying a rental property and having the debt serviced by tenants’ rents, what happens if you have no tenants for a lengthy stretch? Or if the house ends up having some defect and the builder has since B/Ked? Etc., etc.
Most people will recommend doing investment properties at the lower end of the spectrum. This way there is always more demand. I know a number of people that do the investment property thing and they have done quite well. One friend, even through the bubble continued to buy properties. Always ones that cash flowed from day 1, and said some were for tax reasons.
Very well said. “Good debt”? I don’t think so….
“”The past couple years, after finding Ben’s oasis, I have been preaching about the evils of debt. One consultant at work told me, “I’ve never seen anybody so against debt. You know there is such a thing as ‘good debt’. Don’t you?””
NYCb,
First lesson my hubby learned after we eloped (er…maybe second, we were very poor), NO DEBT FOR YOU!
I love him so! It’s so very difficult to look into those baby blues and say “NO”. It’s easy to say no when ya can’t rub two nickles together to make a dime! (Back in the day - think 1981).
Of course, now he loves me so, and abhors debt.
GMTA!
Leigh
Your hubby has blue eyes? I was just BARELY reading, like yesterday, about how blue eyes are a relatively new mutation. Before that everyone had brown eyes, evidently. I myself own green eyes, with a sneaky and snarky expression, like ‘Gollum’, is what I heard, also yesterday, and not in the context of a scientific article.*
I don’t know when that mutation happened, but I’m sure it’s all my mom’s fault, just like everything is.
* I made a note to kill the person who told me this, but honestly, I’ll probably forget before I get to it. Busy, busy.
No joke - my eyes are emerald - his are baby blue!
Honest as the day is long.
MY Sissssssssssssterrrrrrrrrrrr!
Leigh
P.S.
Mean evil woman.
Laser beams.
HAR!
I read that and also that all people with blue eyes are related to Brad Pitt. And since my Mom has baby blues she is related to Brad Pitt. I just can’t look at Brad Pitt in the same way now he’s family.
How do you say…
Yummy and ewwwwwwwwwwwww!
Tooooooo Funny!
Leigh
Even though I could buy a house out right with cash, in a historically normal market, I would probably only put 20% down and invest the rest wisely in the stock market. I havent seen a historically normal market for awhile.
“One big, fat, journal entry and all the bellyaching is done.”
That would be named the “Journal Entry of Doom”, right?
Somehow I don’t think that would end the bellyaching. In any case, it already seems to be flowing through the balance sheets just fine.
So, the OC Register is (rightly) saying that housing is still unaffordable in OC, while National City (apparently on crack) is saying that OC in Q407 was fairly valued (only 7.1% overvalued). Not sure how National City came to their conclusion, but OC prices still have a long ways to fall. Here is the link to the National City map (the report, in pdf format, is available at this site): http://tinyurl.com/33nz9b
First post got sucked into never never land so here’s try #2.
Ben, if you ever decide to run for public office, I may have to relocate just to be able to cast my vote for you.
On an OT side note, one thing I’m immensely grateful for are the decrease of real estate listings that so pompously state, “seller will entertain offers between x and y”, although I might borrow the same verbage as a potential buyer one day.
Valley Glen area still in some denial. Was there this weekend and Homoaners still not getting it. unbelievable.
“Homoaners”. LOL!
That’s exactly why I picked my call sign.
Welcome to the club.
It’s getting late and any caffeine in my system is already long gone. What’s the PB stand for?
Preach it brutha!!
Ben, tell us all how YOU REALLY FEEL!
You are so right about the numbers. The woman raiding her 401K is nuts in so many ways. These people are crazy.
Do yourself and family, if inc., a favor. WALK! I am not one to just give that advice lightly since people should make good on their debts. However, in this situation, these people will pay who knows what in interest plus principle and WILL never recoup the money.
For example:
30 year mortgage on a 500K home will cost…
1.5 million on P&I. Add another 150K for taxes over 30 years. Add in another 100K in HOAs and 25K in insurance. Subtotal is 1.775 million. Toss in another 50-100K in upkeep, assuming house is new and doesn’t fall apart in 15 years.
At any rate that lovely home will cost you about $2 million. Good luck with that.
Now lets take that and divide by $1500/month for rent. remember this is Clowneyfourkneea. My math tells me that 2 million divided by 1500 = 1,333.33. Wow! At 2 million I could rent for more than 100 years with less hassles and invest the difference in something else.
Before you guys give me inflation and the like, remember rents will come down with the glut of inventory and remember that I can always find someone to go lower because the landlord is in better financial shape.
However, just to even the playing field…2 million divided by 3000 (extreme monthly rental in Buffet’s old beach home, for example only) and I still get 666.67 months or 55 years. Sheesh at my age of 40, not old by any standard, renting is still the way to go!
Home prices have no place to go BUT DOWN AT LEAST IN THIS WACKY STATE!
OCDan:
You’re FORTY!? Ew.
Come on now! 40 isn’t that bad. Sure, sports are getting harder and harder, but it is okay. If this whole schebang can hold together another 40 years (I doubt it, but can hope), I just might make it without any real pain in this lifetime. So what if the next generation has no oil, no money, no food, no water. I’ll be dead. No problem (for me)! Just kidding!
Selfish of me, but I’m kinda sorta glad I’m my age. Those young’uns have some mean she-it coming their way. I’m doing my best, though, to save the world, i.e. O.C. recycler.
That’s assuming your rent doesn’t go up - but, hey, I’m with ya.
The miracle of compound interest…
OCDan, you have tangentially explained how az_lender came to be in possession of a couple of million $$ (including book values of all the mortgages) while never having had a salary of even $50K. Although my mtg biz is only 15 years old, I did start lending out modest amts to private individuals much earlier in life. And I usually did NOT own a house. Those 12% muni bonds you could buy in 1981 were extremely helpful. Just recently I inherited some dough but I’m not counting that.
on the flipside my 65yo mom has her house paid off this year, and her dominant expense is going to be the landscaping @ $100/mo (less if & when I move back to Fresno I guess).
She’ll be self-supporting on her $900/mo SS checks.
I’m looking at a $500K house in Fresno now, ~20K sqft lot beautiful enough to be buried in. If & when I pull the trigger it will be because I think I can pay it off in 10yrs, avoiding the great bulk of interest. No HOA for this kid either. Might as well rent if you’re subjected to that BS.
“That is wonderful. I want to keep my house.”
I truly love it! Banks trying to keep someone in the house for property maintenance only, and she’s all giddy. Wait till the neighbors move out and boards go up on the windows and she can’t borrow on her CC’s, then she goes from poster woman to victim.
“Wait till the neighbors move out and boards go up on the windows and she can’t borrow on her CC’s, then she goes from poster woman to victim.”
Sounds like Visalia…or Sacramento…or Bakersfield…or (insert city name here).
“Well these guys can change the subject from prices to ‘crisis’ as often as they want. People still can’t afford houses in California, for the most part. And after everybody calms down and realizes it, what happens to sales next year, and the year after that?”
Precisely. Despite the mayhem and absolute lack of sales, the average house in my East Bay neighborhood is 600k, and that’s with a 16% decline. 600k might as well be 10 million because there’s no way in hell that I will ever pay anything close to that amount.
I’ve had my finger on the “move the hell outta’ here” button for a few years now and only recently started thinking about the possibility if CA RE would actually become more reasonable. Reasonable as in an actual job would pay an actual mortgage. Sure- houses will probably always be expensive here. But the standard for the last 5 years here has been complete and utter non-affordability regardless of how much you make.
The worst part about all of this is that my community is getting millions cut from the schools. Tragic because NOBODY gets why this is happening, which is directly related to the housing bust and the boom that created the unstable environment in which the state counted on an artificial economy.
Indeed- solving these problems requires calling it by it’s name. It isn’t about “poor homeowners”, loans, or anything else. It is PRICE and price alone.
Ben said, “where did most of this housing bubble money come from these past few years? Didn’t the Fed just ‘create it’ out of thin air? Well they can just un-create it.”
The Fed’s job is to create money. The Fed is charged with maintaining the overall price level and maintaining full employment. They do this by controlling, or attempting to control the supply of money in the US. They do this by creating money - and yes, out of thin air. However, creation of money is not the same as relaxing lending standards. The banks, brokers, Wall Street, etc. are the ones who lent money to people who didn’t have a chance in hell of paying it back. You can blame the Fed for a lot of things, but the Fed (and most rational people) expected that lenders would only lend to people who would pay them back. When that model broke down, the Fed (and once again, most rational people) were caught by surprise.
And yes, the Fed can just “un-create” the money. But IMO, that would be just the wrong medicine at this point. The economy is already slowing. Some would say that it is slowing dramatically. Uncreating money at this stage of the cycle would cause the slowing to get worse. This is the track the Fed pursued prior to the Great Depression - it didn’t work so good then, and it wouldn’t be the correct course of action now.
I’m not the one saying this is a crisis. The bubble dough is already in money heaven.
The Fed must believe that it’s a crisis. Else why is it cutting rates at such an unprecedented pace, and offering unsolicited advice to lenders about reducing loan sizes (also unprecedented?)
It’s not unprecedented. See late 1998 and fall 2001.
Hmmm…malfeasance by bankers, broken industry, perhaps, soon to be broken trade imballances? Deflation?
Many are surprised - I agree.
As Jas would say, “It’s the debt stupid!”
Best,
Leigh
Few are prepared.
“When that model broke down, the Fed (and once again, most rational people) were caught by surprise.”
Nobody at the fed or the upper echelons of finance were caught by surprise. This bubble was created to fleece the early boomers of their accrued wealth before they slipped into retirement. Dubya was simply a facilitator for the folks who control the wealth in this country.
And yes, the Fed can just “un-create” the money. yes thats what Ben Bernake wants when he suggests the banks forgive part of the loan. And the banks created the money so they can uncreate it. The FED is just trying to help by offering very nice rates of interest that the banks can borrow from.
Is the money supply increasing now? I don’t see how nobody is borrowing ?
“One big, fat, journal entry and all the bellyaching is done.”
Details of the plan and precedents, please?
Debits, credit, the black hole goes poof. Precedents? None, kinda like the audits of the Fed that have never happened. BTW, whose country is this anyway?
“”IMO, they haven’t done one thing for this woman but give her the opportunity to pay more interest before the ‘pro-active’ doesn’t appear and she walks. What is going on here is a redirection. No discussion of affordability. No reflection on how much prices increased during the bubble.”"
No discussion of SATURATION.
NONE.
What’s going on - grrr…
Saturation.
Ya just can’t make this stuff up…er…
Some do.
Leigh
BTW, the bartender/flipper must have found out some of you were talking about her. The post got cut off, but should I let her in?
‘“I don’t understand how people can expect to make a living flipping something that’s loosing 3% or more a month. Maybe she should go back to bar tending. ”
It’s not rocket science, Lip. You buy VERY LOW (50% of market value or less), and then sell to an investor LOW (55-60% of market value).
The wholesale market where I’m at (Tampa) is going crazy right now. The investors who have been in the game for a long time are snapping up properties (good deals, mind you) left and right, renting them out, and cashflowing. I’ve closed 2 deals already this year, got another one closing next week, and am about to put another under contract. All of them are bank REOs that I sold to cash investors.
While you and the rest of the sheeple are sitting around crying about how bad the market sucks, and debating over when the bottom will arrive, the smart investors are going to town. Opportunity abounds in this market.
Ever hear the saying, “Buy when there’s blood in the streets?” Well, guess what? There’s blood in the streets. And by the time you and the masses realize what’s going on, and start buying on speculation again, the smart ones who bought great deals NOW will be sitting back and laughing. Again.
And I’ll be retired in Costa Rica, sipping a pina colada that some other bartender made for me, and thanking God that I didn’t listen to people like you.
Steph
(The stupid bartender from FlipThisWholesaler)
I won’t be going back to bartending anytime soon, because I’m out there making things happen, doing deals, and
Steph’s choice of words (eg, “cashflowing”) leads me to believe he read the “Rich Dad Poor Dad” book series.
She didn’t say “positive cashflowing” did she?
let’s hope her birth control is structured better then her flipping ability.
How can you make money flipping houses on a 10% spread?
I don’t think she flips homes just gets a commision on any sales. Vulture investors will just cut her out of the deal at the last minute anyway thats why they are vultures. So good luck with that.
Reading this post makes me wish that there were a way to buy put options on individuals.
LOL!
I have this wish regularly, here in the Alt-A Bay Area.
We’re so special!
[Alt-Bay = San Francisco Bay]
LOL! Three minutes later I’m still chuckling over this one.
I’ve often wondered about shorting houses.
CME allows you to short or buy different areas of the country’s housing markets.
The Nov 2012 San Diego contract is around $180 which is 25% below the current spot month (in other words you can buy San Diego futures contracts expiring in Nov 2012 for 75% of todays current price - if the price goes up you make lots of money, the market is saying San Diego is going a lot lower). For a 400K house you would need about 7 contracts.
“It’s not rocket science, Lip. You buy VERY LOW (50% of market value or less), and then sell to an investor LOW (55-60% of market value).”
Must still be bus loads of investors out there with buckets of money and boxes of stupid…
Wow! I’m pretty sure I must be jealous because I won’t be rich someday like her. Luckily, I don’t like Pina Coladas and pretty sure I wouldn’t like Costa Rica, either, so it all works out.
I’m a think’n, though, that if I hit on a surefire get rich strategy, I would not be wasting time defending it to the HBB. In fact, I’m pretty sure that I’d want as few people to know as possible, especially those I didn’t like.
No, now that the FB hoard has dwindled, they’re just easier to pick out. Today we get to know the monumentally stupid on a first name basis.
Sure let her/him in! “Ever hear the saying, “Buy when there’s blood in the streets?” Well, guess what? There’s blood in the streets.”
There isn’t blood in the streets - yet. The streets are just getting emptier and the lights are getting turned off earlier.
The streets are getting emptied of greater fools.
Got to agree w/the above posts. Sounds like she has been reading too many get rich quick gurus. BTW, why is it that if these yahoos were really as successful as they tout themselves (minus the bookdeals) then everyone in the world would be a millionaire? Heck, if a bartender can do it, anyone can (no dissing on that profession, just sayin’).
The sheeple just never learn do they?
This makes me wonder how our 23 year old bartender in the West Village is doing with his multi-family home in Connecticut. I bet he’s doing great. Maybe he even got his citizenship since the last time we spoke to him.
Shucks — missed my chance to find out how my wife’s hairdresser’s investment homes are doing, as my wife had her hair cut yesterday without alerting me…
Hey, Stucco, something tells me your wife’s hairdresser will soon be in a barber shop where she finishes up each cut with a “happy ending”.
“Would you like some trim with that haircut?”
She’s just another casey with really messed up lips. Steph, was the cash-flow used for some plastics because you can quit the collegen already.
NYCBoy - ever go to that bar of the same name?
Hey Steph:
I made 200% in a couple of days in January on stock index put options. Then made another 200% on calls buying the January lows. I didn’t have to skulk around town in sleazy neighborhoods, deal with lowrent buyers and sellers, lie my ass off to a lender, etc.
When you can do that, we’ll talk about who the sheeple are, sweetie. In the meantime, I like my margaritas without salt. Thanks.
That is crazy. There’s no way. I don’t think so. I have to question this post and correct the misguided information. You have to have salt on your margarita. And none of that blended sh*t. Give it to me straight. I can take it.
Word. Salt and on the rocks is the only non-gay way to drink a margarita.
‘I like my margaritas without salt. Thanks.’
TX, I’m somewhat afraid of you, as I am of no other mortal, but still–this nonsense cannot stand. Look, if there’s no salt, then it’s NOT A MARGARITA. You’re just guzzling stuff out of a bottle.
Or, and this is way better, a goat-skin bag, if you’re in Zihua, on the beach, and the goat-skin guy comes by. Ah, those were the days! Humanitarian service, is what I called it then. Nice sunsets. Ungrateful melanin-enhanced illiterates. Superb margaritas.
I have to go now, I want to look at photos and feel nostalgia.
Sounds like she’s wholesaling. She’s either assigning properties to other investors for a flat fee, say $5K, or she’s doing a double closing at escrow and never really holding title to the properties…
While that’s done in Oregon by those not licensed, technically it’s considered “real estate activity” which requires a real estate broker’s license. Not sure how FLA treats it.
BTW, that was a VERY popular way for new investors to get into the investing game “WITHOUT EVER HAVING TO WORRY ABOUT FIXING UP THE PROPERTY!!”, as the late night infomercials touted.
Allows one to do lots of transactions quickly and build cash. Flipping seems to have taken on this definition the last five years as compared to the old definition where value was actually added by doing some renovation…
Let her in, I need a good joke
“…It’s not rocket science, Lip. You buy VERY LOW (50% of market value or less), and then sell to an investor LOW (55-60% of market value)….”
A man runs into a bar and says to the bartender, “Give me twenty of your best single malt scotch, quick!”
The bartender pours the shots, and the man drinks them down, one at a time, as fast as he can.
The bartender says, “Wow. I never saw anybody drink that fast.”
The man says, “well you’d drink them that fast if you had what I have.”
The bartender says, “Oh my god. What is it? What do you have?”
The man says, “Fifty cents.”
HAR!
Hit me funny bone!
“And I’ll be retired in Costa Rica, sipping a pina colada that some other bartender made for me, and thanking God that I didn’t listen to people like you.”
The people on this blog are hardly mainstream. We called the housing bust for what it was before it started to go south. I think the vast majority of people on this site are sitting back and enjoying the carnage that they’re seeing. Blood on the streets? Maybe. But, right now there are plenty of people cleaning up that blood–knifecatcher “investors” who will lose everything. Of course, these investors will be crying for some government bailout before too long or will simply walk from their commitments, like those before them.
This will take many years to play out. Sell now or be priced IN forever!!!
Besides, I’d rather retire somewhere NICE like California. Why would anyone want to retire in a place where most people don’t even have electricity?
Yeah, yeah, yeah,… so you made enough cash to go and “retire” in some cheap ass country south of the border. La dee da. If you want to impress with the amount of cash you made, lemme hear that you’ve retired and are living on Lake Geneva or somewhere where there’s a cost of living. I could sell my comic book collection and live off it in Costa Rica.
“The investors who have been in the game for a long time are snapping up properties (good deals, mind you) left and right, renting them out, and cashflowing.”
Given enough cash of my own, or an “exotic” enough loan, I can make almost anything “cashflow”. If you buy a million dollar house for a million dollars cash, and then rent it out for $1 a year, well, technically it’s “cashflowing” (assuming no maintenance, taxes, etc.)
If I buy that same property with a Neg-Am loan for 100%, at zero percent a year for 5 years (the rest gets added on to the loan balance), and I rent it out at $1 a year (assuming no maintenance, taxes, etc.), well again, I am cashflowing.
However, that doesn’t make these properties good investments.
Heck, if he/she’s able to dupe investors into buying properties from him/her at a greater price than they were bought for, then more power to him/her.
Why bless her heart! While I applaud her efforts to improve her life; bartending should not be a “career choice”, she just doesn’t get it.
First of all, trying to take on the HBB with her massive (14 months, was it?) experience, is futile. This group would chew her up and spit her out and not even notice she was here. We’d had to rename her Steph Speed Bump.
Sheeple - us? I would submit that she is the truer definition of sheeple. I’d put my 20 years of real estate experience against her 14 months any day. I doubt she even knows what the RTC was.
I read some of Steph’s posts, mostly so that I had knowledge before I spoke (typed). Didn’t she say she was disappointed with 2007 and that she didn’t make her goals? Why then, would she trumpet her “success” so vigorously. I also hope she was joking about buying a hummer with her profits - classic rookie mistake. How about putting money aside for savings/retirement/Costa Rica fund, since this gig doesn’t come with a 401K? Also what about taxes - think she’s paying taxes on her “business”? And health insurance; if she’s not taken care of that, then just one health problem or incident will drain her dry.
The problem with most rookie investors/wholesales (or whatever moniker we come up with) is the lack of discipline. Spending too much on a property or doing a deal that’s too complex and missing something that eats the profit, committing to a deal without a firm investor, etc.. getting ripped off by a con artist. This is what wipes most of them out.
I give her till the end of the year. How long was Casey S. a successful bidnessman in the up market?
I always wondered who was sticking up those silly handmade signs “handyman’s special”! So I did learn something from Steph.
Clearly another person who is clueless as to what “market value” means. If you can buy to 50% of some price, unless you are extremely lucky, that price is not market value. And if you sell at 55% of market value, you are just stupid (or extremely generous). Why not sell at 100% of market value, since market value is the value that it will sell at, by definition. If you’re in a hurry, you may want to sell at a little below market value to sell quicker. But there is no reason to sell at 55% of market value - maybe 55% of the previous market value, but not 55% of market value.
ben,
isn’t that the same mantra that got alot of these people in trouble the first go round. how do you leverage a depreciating asset is my question
Simon, people are f—ing idiots. Haven’t you figured that out yet? God should not be doing a lot of bragging right now.
State officials said Monday that a plan touted by Gov. Arnold Schwarzenegger to aid troubled homeowners helped more than 17,000 struggling borrowers in December and January.”
I am sure Arrrnold is also going to give those “trouble HO’s” a break on their property taxes too. btw has anybody seen reports on property taxes not paid for 2007? I know my previous LL was in arrears by over $8k.
O/T but CA related: Had the car radio on this am and heard on the news that CA had over 1000 government officials making $200,000 or more per year. Hey Gov, how many of those are ‘non-essential’ personnel? What’s the cost of bene’s for those 1000 individuals and how mucha it agonna cost to retire them?
Most of those people are probably firefighters for Cal-Fire, police, or prison guards. These folks make well into six-figures with their overtime. Look no further than Vallejo’s pending bankruptcy. These “public servants” have hamstringed unions to make them aristocratic. Sure, some of these people save lives (some of them just sit at fire camp all day and snarf down bag lunches), but these same professions in almost any other state would make no more than a third of these salaries. Ridiculous!
Not sure about my old home state of NJ. Talk about the union crapital of the universe. A guy in Ridgewood retired from the police force at 48 with a full pension and 148K a year for the rest of his life. What a racket!
I figure at some point cities will face the choice of paying their current employees or paying $148K a year to people who play golf in Florida. It won’t be pretty when it happens, but pensions will be reduced or perhaps totally abandoned in the end.
Hey, let’s not forget the nearly 3,000 SF city employees who made more than $100,000 in 2005.
Would it be any less now? Seems to me, that is highly unlikely, with our $6 billion city budget.
Ridiculous.
Given the cost of living (renting or, god forbid, owning) in San Francisco, it’s astonishing that anyone would work for LESS than $100k.
“‘I took out a hardship loan from my 401(k) (retirement account) to get the money,’ Estrada said. She said she sent the payment by the deadline, and she has a delivery receipt to prove it. But the lender mailed back the check, claiming it got there late. Even after she documented that the money had arrived on time, the lender started foreclosure proceedings.”
Consider that God’s way of saving you, sweetie. Don’t throw good money after bad.
‘god’s way of saving you,sweetie. Don’t throw good money after bad’.
Amen cayoron.
Just walk away Renae…
And what good is this idea going to do for the state. If the lenders agree to lowering the value of the loans, then the property taxes will also have to be lowered and there goes revenue for the state/county/city. How is construed to be in the best interest of the state?
She’s already lost several thousand on her Hardship withdrawal with taxes and fines, if you have to dip into your 401K it’s already a lost cause.
It’s not a hardship withdrawl, it’s a loan. No taxes, no fines, no penalties. You pay it back with interest, to yourself.
Provided she pays it back, she’ll probably come out ahead, since the interest (8%?) will be better than her expected return on stocks in the next couple years.
But it is the after tax money that is used to pay off that loan
“Mortgage bankers and brokers differed on what the agreement will mean to them and their clients. Mike Dillon of TCS Mortgage, a San Diego mortgage banker and brokerage that closed about 25 loans last month, said banks might become overly conservative if they alone select appraisers.”
“‘I don’t think it solves anybody’s problems,’ he said.”
It may help to solve the problem faced by potential buyers of homes priced above affordable levels due to coerced appraisal inflation.
According to a report about Mortgage Brokers which says that certain rules could drive many brokers out of business. Officials of the trade group said appraisals ordered by brokers sometimes can be used for more than one potential lender, giving the consumer more flexibility.
Ben,
sure, why not. She’s fresh meat for the crowd. By the way, I think it’s interesting that she thinks we’ve hit some sort of bottom. Has this bartender ever looked at the Ivy Zelman reset chart…or noticed that Alt-A carnage is now making it’s way into the headlines? Naw, that would require due diligence. Hope her looks hold up, she’ll be bartending til she’s ninety.
Spike: Why are you trying to confuse the issue with the facts? lol
This really pi$$es me off and I’m not real happy that Ben, and the rest of you, are being so flippant about this. This isn’t something to laugh about and treat like just another little issue to produce a few jokes and then sweep under the rug. This is really a crisis. The position of bartender is a sacred position and this tw-t is cheapening it. Quite frankly I am appalled at her, and the rest of you for not being more angry about this.
Hoz,
it’s just the fun I had today. Had to see a few clients and lo and behold, shared the elevator in two very nice, prewar co-ops with realtors and their prey or should I say well-dressed but apparently clueless couples eager to buy. Do realtors always work in teams?
Both couples were being double-teamed and treated to a non-stop stream of facts and fiction and general nonsense about the buildings in question…both of which I know well as they are right around the corner from me on West End Ave. Yeah, there’s a semi-famous person in each building…depends if you think the guy who wrote Driving Miss Daisy being in residence will add anything to your bottom line. I really like listening to great salesmen work, but this was truly amateur hour stuff, all to move $2-3 million apts.
It’s all free comedy in the city.
“Canine ownership has nothing to do with mankind’s love of animals. A guy gets a dog for one simple reason: to meet chicks.”
I saw a blind man in the airport this weekend. Whenever anyone walked near his dog it would go straight for their crotch. He appeared to be trained. I wont mention reason two.
All right, geniuses: I’ve got a burning question for you.
There are some condos in the area where I work (Anaheim/Buena Park, 6 years tenure, not going anywhere) listing for between 100-140K. 2 bed/1 bath; a little bigger than what we’re currently renting in the South Bay.
My husband and I could lowball, put down 20% on one of these suckas, live in it for about half our current rent (yes, this includes HOA, taces and ins.), bank a considerable sum (quickly reclaiming our 20% DP), and then buy the house we really want in an awesome community in 3-4 years, renting out the 2-bed condo to cover expenses (although I’m not sure it would cash flow then — depends on what the economy looks like.)
I have my doubts, but I’d like to hear how YOU articulate them, Neil, PB, Tx, Hoz, and all the other lovable lil’ rascals here.
Ben, the consulting fee is coming.
BTW: to all you shirtmakers out there, how ’bout a WWBD? (Jones, not Bernanke) t-shirt? That would be sick.
Oh, please be gentle. I’m not a troll, I’m just trying to lower my living expenses (and buy a kick@ss house in three years!)
Really kickass?
You might want to wait five…
Insufficient information hllnwlz. Always be suspicious of anything that is priced too low. Like that time that hooker told me $8 for….well never mind. I won’t go into that.
The key is not the price in this case but the value. If you are going to be surrounded by angry little hip-hoppers, Britney Spears and other assorted ghouls and goblins then you are going to hate living there. It might be close to work, which is usually good, but that doesn’t mean it’s a good place to live. I could pay 1/3 of what I do in rent in a heartbeat. That doesn’t do me any good if I get treated like a goat on Prom Night in Alabama.
“That doesn’t do me any good if I get treated like a goat on Prom Night in Alabama.”
Oh Christ! LOL! Having lived in Alabama… LOL!
Sounds reasonable to me. The only questions I would wish to know: How many of the units are owner occupied, How many are in foreclosure, And what undisclosed maintainance is needed e.g.: new roof, sewage connection, paving etc.
You may take a small loss on the condo in 3 -4 years, but saving half the current rent ($1800/mo ?) for 4 years is a reasonable tradeoff. BUT only if the property works for you! It is smaller.
If the property is primarily rented units, I would not buy it.
I’m with Hoz. If the numbers work and you lowball, we’re starting to see select opportunities where its not a bad 3 to 5 year plan to buy. Not at most locations.
Don’t buy if you cannot negotiate hard. Don’t even think about it unless you can distance yourself from the purchase and be quite the a-h*le. I’m serious. Its not even close to the time for the timid to enter the market. Only those willing to be a bastard can get a decent deal today.
But your scenario sounds fine. One question for hllnwlz; can you accumulate a 25% down payment in 4 years after buying this place?
If the answer is yes. Good luck!
If the answer is no… You probably won’t be able to buy the home you want in four years.
But this is the 2nd time today today I’ve given a thumbs up to a purchase attempt. Wow… I wasn’t predicting *that* this early…
I’m going to buy a home some day. Real estate is like picking an apple from a tree. You want to grab it only after its ripe. In most areas, those red apples… are still green. But select markets are ok.
Last question. Are you ok with being underwater? Really ok? I’ve decided that being $100k under water doesn’t scare me (easy to say before I buy…). But being $150k under water would depress me. Each buyer has a limit. What’s yours? Obviously, this purchase would never get $150k under water.
But I’m only interested in SFR’s.
Got Popcorn?
Neil
Just remember, if you buy too soon, you might have to live their forever.
Make sure you get to look over the HOA’s books. Get an informed opinion (contractor/inspector) about repairs for the Association. ie. Roof, termites, plumbing, paint etc.. If the financial statement does not give a history of payments from your future co-owners, find out how many are slow to pay.
Then add up the expenses and see if the reserves will cover them. I doubt they will.
I consider HOA’s to be the most un-American un-democratic thing possible. YUK!!!!!
Well, I’m only second string on the junior varsity team around here but from what you’re saying, it sounds like the numbers work so I’d probably do it, IMHO. That being said, I’d hate to deal with a HOA ever again in my life so I’d at least do some due diligence and find out what kind of financial condition the HOA is in - you don’t want to be hit with 4 or 5 figure “special assessments” as soon as you move in.
Tell me about it! My townhouse was a ’steal’ at $89,000, but I’ve had to waterproof the basement (4,840 simoleans) and pay an assessment for paving and drainage repairs (1,700 simoleans). I miss my old apartment.
On the other hand, my old apartment complex is now a section 8/illegal ghetto where the cable installers won’t go before 10 a.m. and after 5 p.m. and rents elsewhere for a 1 bedroom apartment are more than my mortgage, taxes, insurance and HOA combined.
There are some condos in the area where I work (Anaheim/Buena Park, 6 years tenure, not going anywhere) listing for between 100-140K. 2 bed/1 bath; a little bigger than what we’re currently renting in the South Bay.
I posted a long comment on the degeneration and decline of older Central anaheim/BP from heavy immigration impact . Don’t know if first post went thru but at $100-140.000 i would imagine these units are converted apts and likely in marginal immigrant -impacted slumzones. Seen them all over NW OC .
I do know Buena Park and it is somewhat marginal like Stanton which it borders to the north. If these are secured gated hoa compunds it may not matter but don’t expect long-term appreciation over time as the trend in NW OC is for citys to pack in as many developments as possible. Disney narrowly won a decision to prevent the development of 1000-2000 affordable units close by their theme park but elsewhere the developers control NW OC.
If U want cheap units then Platinim Triangle area of Anaheim will have tons of them soon at firesale prices as that area is a redevelopment disaster zone, with the ambience of a Soviet/chinese cold war-era concrete-block housing tract.
Any condo this cheap in CA raise flags to me. Not saying they shouldn’t be that cheap, but living in a slum is not worth any price. Cuidado.
“Any condo this cheap in CA raise flags to me. Not saying they shouldn’t be that cheap, but living in a slum is not worth any price. Cuidado”
I think there was a similar converted apt/condo complex posted on bens a while back which were priced in $100,000- 200,000 range in a shabby corner of Santa Ana. Real bad rundown scuzzy condo complex packed with section 8’s, low life renters, shrill shreaking toddlers, drug dealers, whatnot.
This is the way LA/NW OC is trending. Tons of condo units in marginal densly packed immigrant-welfare areas priced at $100,000-200,000 range and many units rented out to lowlife scumbags, hip-hop ghetto blasting gangstas, with some white trash wannabes thrown in.
Welcome to LA
Is the difference in price due to the area? If so, then perhaps you can cut your rent in half by simply moving there and renting.
Is the difference in price due to the condition of the place? If so, then you might lose more $$ than it’s worth on the deal. You might be willing to live with the conditions, for instance, but will have a hard time finding another buyer/renter down the line.
I’m just aksing these questions because it seems unlikely that, in this environment, you can really find an equivalent condo for less than the cost of renting. I get the feeling there’s something wrong with the place if it’s much cheaper than others of the same ilk.
This would be my question too - houses and condos were so overpriced and have only begun to fall so why is this “cashflowing” (as compared to rent) so easily so soon? How much down are you putting and are you taking into account the opportunity cost of that money? (Whoops looks like you are but I’ll leave that in for other prospective buyers.) What are the crime and registered sex offenders stats in that block? It seems to work with a 6% fixed 30-year, but I think my big question would be how is the neighborhood? And what happened to it during the last downturn? If all looks good than this just may be what you want.
Replying to myself - sad.
One other thought, can you wait a year? I think this will be the year of the big drop. Imagine if your condo is losing value faster than the 50% of rent you are saving - is this something you can stomach?
Good luck! Wish there was an easy answer in this one.
Hi!
I seem to remember that you like the Blue Angels?
I attempted to e-mail information to you a few months ago, and it bounced?
My apologies if you’re not the same one - some have similiar handles.
Either way, here is my experience with HOAs.
DO NOT pass go and DO NOT collect $200.00! LOL.
As others have said, check rental vs owner occupied, as well as investors…er…speculators looking for a quick return.
Honestly, the condo market is soooooooooooo oversaturated, I’d run faster than a speeding bullet! FWIW.
Best,
Leigh
Leigh!!!
I never got the email… and I hate to admit this, but I thought I had been — how you say? — snubbed!
But, oh yeah, it ain’t so, says Leigh!
If you give me an email, I can send you another polite request, THEN you should be able to reply to me.
I’m going to have to buy a controlling interest in the company that makes Dramamine if I want to go up, but my husband will LOVE it,
Thanks, Leigh! BTW, love your song.
Durrr… Leigh… you can email me at hllnwlz@aol.com.
Peter M, I know you’re right. BTW, love your characterization of the Platinum Triangle. My husband’s a Canadian and would probably love to live there, if only to see Edmonton when they’re in town.
I’ll keep my eyes open there.
I’m half-alien (two generations removed), fluent in Spanish (thanks to teaching kids who know more Spanish than English) and I know what the neighborhoods can be like.
We’re weighing our options, but for all of you thoughtful posters, know that all those thoughts have gone through my mind, e.g. probably gonna take a hit when we’re ready to move, may not be the nicest area, etc. I appreciate being told by someone else though.
Hoz, thanks for bringing up the point about the proportion of other renters.
And thanks for the info on extra assessments for stuff I haven’t even used yet! Durn HOAs!
Thank you so much, guys.
barbluvsong@ yahoo dot com
Gonna get you in the air darlin!
Weeeeeeeeeeeeeeeeehaaaaaa!
Leigh
Ok, I replied under Hoz earlier.
Basically, I posted that its ok to buy, but only if you’re sure that you’ll have 25% for a down payment in 2012. Otherwise… think about it.
Good luck!
Neil
The investors who have been in the game for a long time are snapping up properties (good deals, mind you) left and right, renting them out, and cashflowing.
What in the hell is “cashflowing”?
Basically leveraging yourself to add income-generating assets to your portfolio, using the income stream for additional leveraging, lather, rinse, repeat.
Heck, almost everyone with a job is cashflowing. the difference is do you stop some of it by keeping it in some investment (maybe even the mattress) or does it all go back out in bills, etc.?
Man, I hate some of the words we use. Everything has to have a spin.
Cashflowing. Crimineys. BTW, is that the opposite of debtflowing?
A lot of FBs are cash-flowing into their britches as I type.
Is it their Aunt FLo?
“Cashflowing” is a method of keeping credit revolving and keeping enough money handy to pay the bar tab without actually generating positive net income through GAAP.
A cruel accounting!
Actually, as long as there are “greater fools” Steph actually does have an arbitrage opportunity. Sort of like being at the top of another Ponzi scheme–”let’s make money off the knife catchers!”
I do not believe in the greater fool theory when there are fewer moneys available to borrow thus fewer borrowers. Steph’s best arbitrage opportunity is to buy a bar/tavern with a live in apartment above that she can live in while her other properties go belly up.
I dunno, Rich Dad was on Larry King with Kim, HE was saying it is a Buyers market now, everything is ON SALE, and she, Kim, was a little hesitant, but they have $$$$$$$$$$$$$$$$ so they can afford to …well we all know everything said on LK is truth, right?
So, with Robert Kiyosaki speaking excitedly about how good the market is right now for buying..I will just watch, for a year, then think again. RK is telling the truth, right?
Otto Ludwig Piffl: Is everybody in this world corrupt?
Peripetchikoff: I don’t know everybody.
I don’t know Mr. Robert Kiyosaki.
Robert is Rich Dad.
I was surprised at his over zealousness over the market, but he does have his precious Trademark to protect.
Others are dipping into their 401(k) as well just to pay off rising credit card debt, he said.”
Borrowing to pay off borrowing. What a concept!
Yes, but they promote it as borrowing from yourself and paying yourself back. Yea gotta lov the smoke and mirror crowd out there. The sob stories are coming when they can’t pay their 401 plan back and get hit with the 10% plus higher tax rate for the added income.
Remember when the government used to say, “deficits are okay since we merely owe ourselves.” That’s how it starts. Next thing you know some guy in Beijing has you by the sack and is telling you to sing Sweet Caroline while wearing a thong and leather mask.
Why would one be wearing a thong?
Sacks, Neil Diamond, and leather. Doesn’t get much better than that.
And borrowing from assets that are protected in bankruptcy to pay off debts that are dischargeable in bankruptcy - genius. Not to mention that they have to pay back the loan from the 401(k) with after-tax dollars. Super genius.
I know this belongs in the Bits Bucket, but has anyone else noticed that inflation is through the roof? I want to buy a few things for my new rental (which is almost twice as big as my last one), but I can’t believe the price of things that used to be cheap. Is it the exchange rate between US and China?
It is the exchange rate between US and ROW (rest of the world).
It is so funny that I am reading this right as The News Hour is doing a special on how bad inflation is. They are basically making fun of the, “there is no inflation” bullsh-t. They are ripping Paulson for a “weak dollar” policy. They just had an economist that said the U.S. needs to tighten its belt because, “we are not as rich as we thought we were”.
Another secret is out!
I couldn’t believe that a 10.5 oz can of Campbell’s chicken broth now costs between $1.49 and $1.79 here in Salinas. Went to Bakersfield, and found Swanson’s (larger can) chicken broth for $0.59 a can; bought 10 cans.
Buy condensed bullion paste (”Better than Bullion”). (It’s in with the bullion but tastes waaaaaay better.) No need to pay for mostly water, even at 0.59 a can.
What do you think the maximum price for a high-quality patio umbrella should be?
OK, I’ll just tell you: $800 at Home Depot.
And it’s not a canopy or an offset umbrella or a lighted umbrella or a heater umbrella or even an Eyore umbrella. It’s just a nice umbrella, that’s all.
I’ll betcha a tree (real or fake) would be cheaper.
‘I’ll betcha a tree (real or fake) would be cheaper.’
I think that’s gonna be my new motto, if that’s okay with you, Vermonter. My new motto for ALL. Like bacon, it goes with everything.
Great garage sales coming your way!
Weeeeha!
Leigh
Went to Bakersfield, and…
Scotty beam me to Bakersfield?
Casey Research just published a study showing that inflation is happening all over the world. This was mostly from IMF data which probably lowballs the problem. Not a pretty picture.
landlord, update your blog
Yea, landlord. old stuff.
And arroyo etc how do you get those sf’s on your posts?
Inflation is probably running 20% right now. We got the Argentina thing working. Once inflation goes ballistic (quarter or 2 more to go) the Fed will have to stop the rate cuts. Then say hello to deflation. This is madness.
Ohhhh, so THAT’S when the deflation starts.
Given enough time, any prediction will come true.
Actually - it’s been a pretty normal cycle everywhere else in the world for the last several decades. The real fun starts after the exchange crisis when the IMF gets called in.
Oh America, always so late to the party.
Bingo!!!
How much would chicken broth cost in 6 months with 20% inflation? Would bullion paste be cheaper? Would it be cheaper to drive to Bakersfield, CA from VT to get said chicken broth if the sale was good enough? Has Swanson hedged “chicken part” futures enough to keep down their costs against Campbells? Would eating said broth be more or less enjoyable under an umbrella or tree? Would the umbrella or the tree be a better inflation hedge?
I don’t think we can do enough analysis of these important issues….
Thingies are more expensive right now. That does not necessarily mean inflation. It is not inflation when China is willing to buy the state of Wisconsin’s entire Milk Production and will pay for it. We cannot produce as much milk as there is demand.
I am biased towards inflation, but the data points are suggesting but not confirming (yet) 6-8% inflation.
I realize a lot of you regard Mr. Williams site with the integrity it deserves. But for the work that I do, I use the governments figures. That way my work can be reproduced by any individual.
I would not get carried away with hyperinflation or massive deflation scenarios. It looks more like muddle.
‘The irony of all this is, I had no debt when I signed my last set of papers,’ she said.”
That is not irony that is signing your will before committing financial suicide.
The MSM/public still don’t get it. These home-moaners didn’t own anything, they are not victims. They were gamblers who lost and want a do-over at your expense. It is hard to take away someone’s house that was really never theirs to begin with. Now with Bernanke wanting to forgive mortgage debt on underwater deadbeats, it will serve as a new precedent to be irresponsible. Interestingly, PMs got hammered today and the dollar rallied strongly against the Aussie dollar, among others. And, of course, we had our usual PPT turning things around at 3pm on queue. Hmm.
Bernankes proposal is *not* a bad thing. Really. Here, read this:
http://market-ticker.denninger.net/
Now let’s analyze the impact of this were it to come to pass.
First, it will rape the banks. Hard. They will basically eat the phantom appreciation in house prices caused by their unsound lending. The loss goes where it belongs, instead of where it doesn’t. The MBS holders have their loans bought out by the banks as the loans are reissued with the principal buydowns, so they remain (mostly) whole.
Second, it will rape anyone who is paying but purchased in the 2005-2007 years. This sort of change will almost certainly produce a wave of intentional defaults as people simply refuse to watch their neighbor get $200,000 in “free principal” while they do not. That will add to the pressure on those banks.
Third, it will adjust the real estate valuations more rapidly than would otherwise occur, which will shorten the length of time that we suffer economically materially.
Fourth, it will likely prevent a re-run of the 1930s, as by NOT attempting to sweep it all under the rug and shift the default costs off on someone else confidence will be restored in the system. We will actually see those who were responsible for selling financial “instruments” with 100,000+ pages of paper you’d have to read to understand them (clearly impossible) eat the costs of their intentional mispricing, just like they got the profits during the “boom years.”
Fifth, it will be the absolute end of zero-down and “liar loans”, unless you like paying credit-card style interest rates. There’s no way you’re going to get a bank to do this again once they take this sort of hit. This is a huge net positive for the stability of our economy and financial asset base going forward.
Also, there’s a bit about todays “PPT” action at the end of the post if you follow the link. Here’s another good “PPT” article for ya though…
http://ticker-classics.denninger.net/2007/11/idiocy-on-display-ppt.html
Happy reading!
“Folks, let’s dispense with the stupid first - what do you think the odds are of some mythical working group inside the government that manipulates the stock market, slings around billions of dollars to do so, and leaves nary a trace - and yet nobody ever manages to get their hands on one scintella of evidence in the form of a trade confirmation, funds trace, or other piece of evidence that would prove this, and get it to some intrepid blogger (say, for example, me)?”
Doesn’t his intellectual curiosity make him wonder about so very many days when the stock market is deep in the red, but the DJIA miraculously closes above water after an 11th hour rally? Oh, I see — he has no intellectual curiosity, and no imagination to boot.
You need to spend some time on his forum. On any given day, there are a lot of reasons for miraculous closes. They’re just not obvious to casual investors. The people on there are anything but. Check it out sometime.
I bet there are tons of reasons for miraculous closes on a surprisingly regular basis. But not a one of them is consistent with the notions of efficient markets or no arbitrage conditions (i.e. the white noise Hoz is fond of discussing).
I, for one, have taken to closing out my positions at the end of the day. It’s just been too crazy to let anything ride overnight.
I’m not the only one.
That’s your explanation right there.
You’re welcome.
PB,- “…what do you think the odds are of some mythical working group inside the government that manipulates the stock market….”
I think the odds of a “working group” are slim at best. I posted on this blog numerous times that I have never, ever seen any actions from an unknown. I watch blocks, 10,000 shares of Berkshire A would not pop up. To move the market in a meaningful fashion as happened this afternoon requires mopes coming in with 100 lot buy orders, nervous shorts, itty bitty day traders. Big blocks leave a ’stink’. The stink is traceable and most houses keep track of the blocks. The reason is to know which house to call when you need to cover a position.
How do you explain a frequent tendency of the DJIA to revert to the flat line in the last hour? It does not look much like white noise to me, but perhaps my armchair empiricism is biased…
P.S. If there were a PPT and the goal was secrecy, trading large blocks of shares would seem like an unlikely mechanism.
Picked up some shorts of SPF and HOV late this afternoon after they went up 13% and 8%, respectively. Let’s see what happens the rest of the week.
P.S. Absence of evidence merely constitutes weak evidence of absence. Imagine anyone questioning Enron’s viability as an ongoing concern a couple of years before they blew to smithereens…
Ahem…lot’s of blocks moved…er…the cheese.
Who noticed?
Ya just can’t make this stuff up!
Leigh
“To a mouse, cheese is cheese; that’s why mousetraps work.”
Wendell Johnson
“You can keep the cheese, just let me out of the trap.”
FB
Brother!
“State Department of Corporations Commissioner Preston DuFauchard cited obstacles to better results that include a growing propensity for people to walk away from their homes instead of working with lenders.”
‘WORKING WITH LENDERS’ - Is this like when the beer-bellied building super shows up at the apartment of the twenty-something blonde and suggests that maybe they can ‘work something out’ on the rent? Because it seems to me that sticking around the home-debtor prison shelling out $$$ every month, instead of walking away, is just another screw job.
OT
“Thank you Bill Maher for highlighting the insanity of the telecom fight. Why are we begging the government not to give a company a free pass for violating the law and the bill of rights? This is insane… Credo Mobile has a email form for petitioning the house of representatives not to cave to the Bush administration company. I have no grand illusions that we can stop them, but any shot at saving our civil liberties is better than none.
Here is the link: http://act.credomobile.com/campaign/fisa_house
watch this/ share it with your friends and neighbors.
http://www.uncountedthemovie.com/trailer.html
This is OT, but in the world of the IT, I think we all must protect what little we have left of the constitution and civil rights. This blog and others could go by the wayside, if not for freedom of speech.
We managed to roll back media consolidation and some immigration policy via petition why not this.
Feel free to slam me as an awful neocon, but I’ve read the statutes and case law, and I’m not convinced the searches being debated infringe on the Fourth Amendment.
What sometimes gets forgotten is that the Fourth Amendment doesn’t require a warrant every time the government searches anything. There are plenty of cases where warrantless searches have always been allowed — at the border, for example, or of communications originating overseas. (Those could traditionally be surveilled without a warrant — even if one end of the communication is within the United States — as long as the government agent monitoring the communication was himself located overseas. Because of changes in telecom technology, that’s harder to do. Hence the FISA updates being debated.)
Basically, my read is that some fairly obscure legal gray areas are being exploited for political purposes, and being portrayed as more sinister than they remotely are.
I think it might be another Watergate issue, spying on the other party.Again.
But then there was the guy this week who got arrested by the Feds, his GF turned him in for saying he wanted to off GW.
I would say a. he was nuts, b. she is nuts. c. I am going to watch what I say to my H for awhile. !!!
The point of the 4th amendment is for We The People to be secure in our papers, persons, and by extension communication from unwarranted and/or unreasonable government intrusion.
Customs may have plenary search powers to control the physical transference of goods across international borders, but I see no reason why this has to extend to warrantless, non-probable cause eavesdropping on telecommunications, loopholes & gray areas be damned.
‘We had no idea that the $2,855 a month at 7.9 percent we were paying was for interest only. All that money, and not a single cent went toward the home,’
Suuuuuuure ya didn’t, suuuuuure ya didn’t….
Whether lying or not, they at least are able to distinguish the concepts of principle and interest, something that a non-trivial percentage of mortgagers would be unable to do.
This is as good a time and thread as any to give the usual Rancho Santa Margarita/Mission Viejo update.
Was out and about this weekend and it was pure armageddon out there. Every, and I mean, every corner had 2, 3, 4 even more open house signs, as well as, the plethora of garage sale signs out. This is going to get ugly real quick. Homes still asking 400K. You are kidding right. No one is left to buy. Those that are either: 1. left the state, 2. are not credit worthy enough under new guidelines, see Wells Fargo, or, 3. sitting on cash and saving more by renting.
Folks, RSM and MV are going to get clobbered this summer. By next year all bets are off. This time last year there were nowhere near this many signs.
Bring it on. Purge all this debt infestation.
The carnage isn’t as obvious on the other side of the 5. My lady and I live in an apartment in Laguna Hills… We’re keeping an eye on a FSBO across the street from our apartment that’s had a sign up for about three months now. Last I checked, they were still asking near 600k. I’ve been tempted to knock on their door and offer 300, but haven’t yet. I’ll give it a few more months and see how desperate they get
Laguna Hills is really toast! I’ve been watching closely since last July. The usual $700k smallish SFR’s are now $550k or less. There are 10-12 homes SFR’s under $500k. The better 4BR SFR’s that were priced $800-900k are about $650k. Overall about 20% below the peak. And almost nothing sells. I’ve seen lots of properties bought 3 years ago offered for lower prices than when they were bought. A plethora of foreclosures, short sales, you name it. I guess the last median was $390k, or so, some 35% off last year.
“RSM and MV are going to get clobbered this summer”
Sounds good…I actually *like* the MV area…usta live in a rental on Arbolitos, overlooking that vast green belt. Now that was nice!
OC Dan, thanks for the update. I’m renting a SFR in Lake Forest. Some (but not a ton) of homes for sale in my tract (houses built in 1970s), but they aren’t moving. It will be interesting to see if we get a lot more listings/signs in the next few months. I’m still sticking to my SWAG that I’ll buy in late 2009 or early 2010, but I know that could change depending on how fast or slow we get to the bottom (the timing of resets/recasts on I/O and Option ARMs are still a little unclear to me, but I know there are a LOT of folks in OC that used them, and they will cause a ton of foreclosures).
Forget that! Its so 2007.
For 2008, let’s try a little reverse financial engineering: Squatting in $3 million dollar waterfront mansion in Florida and paying nothing.
At least, that’s a new and growing problem we learn of via MW in South Florida. MW is a local developer, and claims this has become “very serious.” (I have been able to independently verify this with a local resident, who tells me the local papers are filled with such tales).
He writes:
“There is a very important phenomena that is occurring that has only been covered in an only “glancing” manner. Beyond the concept of “jingle mail” — which suggests that folks who can pay their mortgages may just choose to walk away given the dramatic loss of equity due to housing’s collapse — consider the following: As a developer, I had stepped to the sidelines and rented beginning in 2005, because I was sure that housing was unsustainable and was bound to collapse; it took 2 more years for it occur.
Nonetheless, as I have followed several of the homes that my wife and I were interested in a few years back, they are all on the market now. What is shocking, that in each and every case, I have been told by brokers and banks that the owners, have ceased paying their mortgages in some cases for nearly 2 years and have continued to occupy these homes. Now, these are homes in excess of $2,000,000 in the very best neighborhoods in South Florida. Brokers have added that these buyers further complicated things by putting huge home equity lines on top of their mortgages and now have no possibility of selling their homes for amounts needed to cover their accumulated debt.
This may not seem like news, but understand what this means: There is currently an 8-10 month wait to get a court date to have a foreclosure filing heard in Dade and Broward counties. The bankers have non-performing loans on their books to the best heeled borrowers in multi-million dollar amounts with no immediate means for recovery; with a non-secured second mortgage in place, there is no possibility for a “short sale” that will satisfy all of the borrower’s debt. They are reluctant to take a haircut knowing that they have the home equity debt still around their neck and are likely to frustrate any near-term sale.
There is no clean way to sell the home that would guarantee “clean title” hence a foreclosure is the only means to separate the property from the dead-beat speculator/squattor. Banks do not want to spend the $50,000 required to take a home through a foreclosure and clear the title — only to put the house back on the market for a deeper loss afterwards. Most likely, they have not revealed these owner occupied defaults to their shareholders, thanks to the sheer numbers of non-performing loans on their balance sheets, and the daunting task of foreclosing on all of them. This is the ultimate seizure and full stop of the market whereby everyone is standing in a stalemate. As one broker said to me, “these bums sitting in $3,000,000 homes overlooking the water are likely to be left alone by the banks for 2 years before the banks even get serious about foreclosure.”
So here is the difference between “walking away,” these folks are doing anything but walking away, they are sitting on lounge chairs sipping martinis living cost free! (not to mention that they have ceased paying property taxes and insurance). I can only imagine what this market will look like in the coming years . . .”
I don’t know about you guys ,but the more I hear about the so-called victim FB’s ,the more I want to puke about the fact that people want to spend tax dollars to aid over-spending , want-to-be rich criminals , living high on the hog .
When the government started this bail out cr*p and didn’t immediately go about the process of restoring law and order ,they took the wrong turn .
It was a matter of the banks making bad loans and should not of been a matter of trying to bail out a false market riddled with unqualified speculators on low down liar loans .
Ok, so the banks can re-write a portion of their creepy loans for homeowners that really wanted to be homeowners and the rest can get out because they never deserved a loan on a overpriced POS to begin with . I just want to know when new Banks are going to open up so I don’t have to deal with banks that have time-bomb bad loans on their books .
Eyes closed -
Clicking ruby red heels three times -
There is no depression, x3
Please!
Leigh
“‘We’re trying to make an honest effort to keep our home,’ said Estrada, who spoke at Monday’s news conference. She and her husband purchased a home in 2005 with an adjustable-rate mortgage. Her husband lost his job last year, their mortgage payment jumped $1,700 per month, and they fell behind on the loan.”
Hopefully her husband isn’t named Eric and didn’t buy into those lots at Lake Shastina that were being pushed on TV several years ago.
I just saw another commercial for those like a month ago or so.
Anthony
That was funny Eric Estrada. Olah!
ATTENTION HOMEOWNERS: Foreclosure Prevention and Counseling
Congresswoman Bono Mack will be hosting a foreclosure prevention and counseling community workshop to cover topics such as buying a new home, refinancing, preventing foreclosure, building credit and avoiding predatory lending. For more information, contact my Washington, D.C., office.
Where: UCR Palm Desert Graduate Center auditorium, B100
When: April 19, 2008, from 8AM to 3PM
Where was MaryBono Mack when it all started. Oh yea, she voted for all the things that are in place to pillage the villagers.
I can prepare the Power Point presentation for Bozo myself.
Buying a home: Don’t
Refinancing: You are underwater so you can’t
Preventing foreclosure: Fake your own death
Building credit: Quit spending on sh&t you don’t need
Avoiding predatory lending: Rent
There we go. You owe me $99.95 for the NYCityBoy Housing Seminar.
I’ll give you 1/2 price for a good one for SLIDE #3
Picture of Elvis?
I got that same email from Mack the knife. Just free PR for the election year. If the damn dems would get out and vote, we could finally get rid of her.
Lets pray, Aretheycrazy!
If only the spanish speaking would finally vote for someone who is on their side more than the REPs that are snowbirds ie: only here during winter months.
Great. She gets to keep her low interest rate for 5 years but my daughter has to continue paying her rent which WILL increase because she didn’t want to jump on the crazy RE bandwagon.
It actually sickens me that someone now gets a ‘fixed rent’ for 5 years! After which, she’ll walk when it resets! Bloody disgusting! There should be class actions suits going on here. At the very least, discrimination against renters………..i’m kinda laughing, but pissed at the same time!
Yup.
It won’t reset in 5 years. At the rate Congress is going, I’m sure they will make any rate reductions permanent within the next couple of months. Even so, the odds overwhelmingly favor this person walking on their obligations in a year or less.
I just love these people that took out a ton of money from their equity during the boom and now they are crying the blues .Lets say the housing prices had remained level ,than this borrower still would not of been able to afford her home because of her over spending and would of needed to sell .These are people that were increasing their lifestyle on the backs of their house they planned to sell to a greater fool .
I contend that these FB’s intended on selling just as soon as they thought the rah rah appreciation had settled down and they just didn’t bargain for a decrease in prices ,(because you know ,real estate always goes up ).
Betty Perales said she used to feel scared, angry and alone about the rising tide of credit card and mortgage debt on a $235,000 home she bought in 2004 that’s now $486,000 in the red.
Huh? As if she were trapped in the basement by rising water? Sheez… have a Chap. 7 lifepreserver, eh?
Argh.
friend of mine is going to a new townhouse complex in Corona (developer asking 329K) with a cash offer, close tomorrow, of 225K. I can’t wait to hear what he gets told.
While I would never want to live in Corona (I couldn’t handle having to drive the 91 freeway every day), that sounds like an interesting offer. My gut says that the developer takes the deal (assuming that the developer could get the necessary paperwork together to allow a same day close); the IE is in a world of hurt. Please let us know what happens.
Well, not literally close tomorrow but a non-contingent cash offer. The place actually looks decent. 200/sf at current asking. There are mountains behind the complex. I looked at the pictures and thought, “damn, why am I not in California.”
Because there is only one way through those mountains to the towns where everyone works.
Yep, those are the same mountains that keep all the smog in the valley when it’s 110 in the shade. The state of California contains both the best and the worst places I’ve lived. I count the Inland Empire as the worst. It’s great, however, if you like strip malls, auto parts stores, traffic, meth labs, and mediocre chain restaurants.
She is still over paying @ 225k. You can get that already here in Carlsbad, a much nicer town. I’m in the very La Costa area and my complex has several bank owned condos @ 230k.
Corona is too far away, is one exit below the Norco fields where all you smell is manure while you sit in rush hour traffic on the freeway.
Tell your friend to wait a year. Corona will be even cheaper. Heck, even Murietta 3bd bank owned homes are just a little more than what she wants to spend and its closer and nicer IMO. But I would never live that far out in Riverside.
my sister lives in Corona and it’s something of a sh-hole. Zillions of cattle ranging along the west side of the valley produce a really fierce manure stink on winter mornings. Summers are high-desert dry.
way too much population for the 91 to handle, which is actually the ONLY way to drive the 5 miles from Corona to “the OC”.
It’s early but . . .
Texas - 44 of 8247 Precincts Reporting - 1%
Name Votes Vote %
Obama , Barack 437,362 58%
Clinton , Hillary 305,008 41%
I worked a lot on this one. I got very motivated by contempt for that witch.
Thank you for your service to the country.
Huckabee dropping out. I really came to like him and donated to his campaign. By far the most likeable of all the candidates. I hope he runs again. Really good guy.
I think he’s a good guy, too, just too conservative in social issues for my taste. I just don’t get the whole McCain thing - he wasn’t good enough in 2000 for the reps - what’s changed to make him any better now?
exactly, with the Republican’s putting up McCain made my choice easy, first time I’ll be voting Democrat my entire life. Obama seems like the less evil of the 2 Dems, both talk up health care reform which will never get through congress and Obama’s housing plan is one degree less interventionist.
Bush-brand® Conservatism has been fatally damaged, the fundies didn’t want a Mormon, the cheap-labor glibertarians don’t want a god-botherer, McCain wins by default.
aside: as a JBR I prolly want McCain to win as the Dems look like they’re really eager to bend me and my silicon valley salary over to save all these smegwit suicide loan takers.
Religious, hence insane.
Obama, Paul, Huckabee, the best in the field. Slowly and surely, however, the reality of the modern party system is scratching these folks off in lieu of the oldline political hacks, Clinton and McCain.
It’s kinda sad, really. Yeah, Huckabee’s religious, but he’s also honest. Honesty and integrity are something we really really need right now, above and beyond the phony party dogma.
Robert Dumond
Insane view of how to control AIDS, no regard for science. Puts his hatred of gays over safety of nation recommending that we roll back research and quaranteen those infected (Note who will get tested if they know it means quaranteen and there is no tx)
The soft spoken hatred and bigotry of religion.
With that control freak attitude of hers, she would probably have a nervous breakdown in office and be a disaster.
Which would be entertaining as hell to watch, but we really don’t need any more of that kind of entertainment after the last 8 years.
Thanks!
Congrats! BTW, you really ought to think about dabbling in this market:
http://iemweb.biz.uiowa.edu/graphs/graph_DConv08.cfm
Did you say your name was Ramblin’ Rose?
Ramble on Baby
Ramblin Rose.
It was the 70’s when that song came out and the world was in one of its truer recessions.
We teenagers were much more interested in concerts and dressing cool. This song keeps playing in my head today.
It must be a reverse omen. I feel the chaos in the country today.
I feel like a Ramblin’ Rose. Where’s my led zepplin album?
Ot, but I’m lazy
WSJ
WaMu Board Sets Targets Shielding Executive Bonuses
“The move, approved last week and disclosed in a securities filing late Monday, essentially shields the pay of chairman and chief executive of the thrift, Kerry Killinger, and more than 100 other executives from the continuing mortgage fallout…
…The new formula angered some WaMu investors, who have seen the value of their holdings shrivel as the thrift’s mortgage troubles worsened. In the past year, WaMu’s share price has tumbled about 70% — to where it was about 12 years ago. The shares fell 26 cents, or 1.9%, to $13.39 in New York Stock Exchange composite trading. “They’ve cost their shareholders a lot of money,” said David Dreman, chairman of Dreman Value Management LLC, which holds 27.9 million WaMu shares. “Bonuses should be given to the executives who enhance shareholder value, not destroy it.”
There’s who you know, and over here you have your favoritism…
There you go, as Reagan would say. Here’s your free market capitalism at work. What a racket.
“‘I took out a hardship loan from my 401(k) (retirement account) to get the money,’ Estrada said. She said she sent the payment by the deadline, and she has a delivery receipt to prove it. But the lender mailed back the check, claiming it got there late. Even after she documented that the money had arrived on time, the lender started foreclosure proceedings.”
Something about this story doesn’t add up. I smell a fart. Ten bucks says that there’s an important detail, unflattering to her side of the story, that she is omitting.
yep, an unflattering detail or three. Doubtful they were anxious to foreclose.
“Countrywide is Veronica Hodge’s lender. After receiving a Chronicle query about her situation, the company called Hodge late Monday to say it would reset her mortgage to its initial rate for five years.”
Shame on the Chronicle for this unethical interference!
Yep . Lenders have been foreclosing on people who lost their job for decades ,yet now because of this housing mess lending becomes the new social security program for job loss .Why don’t we just have the lenders pay for medical expenses of people also .
First the bail out talk started as a remedy for people who were unfairly put into loans they couldn’t afford . Now the lender is suppose to re-write the loans of any person that has lost their job .Next it will be any one who had other obligations that they found more important gets a write -down of their loan . I thought that unemployment insurance and savings was suppose to take care of job loss periods .
You see where all this bail out madness is going . The only logical thing to do is to let the lenders foreclose and re-sell to real buyers . The current homeowners are a bunch of blackmailers anyway (reduce my loan or I will walk ).The bulk of those people should be prosecuted for loan fraud if true Justice was a priority .
Also , I’m a little afraid of BB suggestion about reducing loan balances .The last time BB suggested something to Congress ,they did it (the Stimulus Package ). Again ,this sort of bail out action would reward bad borrowers ,and punish the responsible borrowers .
What do you do when the investment banks and the lenders breached their duty to underwrite loans ,which created a crime wave of loan fraud or defective loans ,which created inflated prices ? Are the people of the United States going to accept someone like the Chairman of the Federal Reserve setting the taxpayers up for years of obligations to bail out people who engaged in mad-hatter acts during a housing frenzy ? You don’t think the lenders are going to do these write downs without incentives from the government do you ?
If you reward bad behavior ,than you get more bad behavior . Maybe they should have some psychologist testify before Congress .