They Just Plain Walk Away In California
The BBC News reports on California. “In May 2006, at the height of the housing boom, Karen Trainer bought a $500,000 apartment in California - with money borrowed from her bank. By this year, Karen still owed $500,000 on her mortgage, but her apartment was worth $200,000 less. So she was deep in negative equity and, to make matters worse, the interest rate on her loan was about to increase. ‘I thought ‘this is crazy,’ Ms Trainer says. ‘It just does not make financial sense.’”
“As a successful professional, Karen could comfortably have managed the higher mortgage payments her bank demanded. Instead, she decided to stop her mortgage payments altogether and let her bank repossess her apartment.”
“‘Generally speaking, within 5 years you are about back where you were, so my husband and I decided we’ll take the hit and live with it,’ she said.”
“‘This is the kind of conversation that’s going on at cocktail parties, at swimming pools,’ Professor Susan Wachter, professor of real estate and finance at Wharton School of Business says. ‘And suddenly this option which was truly unthinkable in the past becomes thinkable.’”
“Ms Trainer says she feels no moral obligation to go on paying a loan on a property that is going to go on losing her money. She says her friends support her decision. ‘I think people are taking a more cold-hearted look at it,’ she says. ‘Is the bank going to pay for my retirement because I was a good girl and paid my mortgage, even though legally I didn’t have to?’”
“In the city of Stockton - the foreclosure, or repossession, capital of the US for 2007 - estate agent Kevin Morgan sells repossessed houses on behalf of the banks that now own them. According to him, walking away has become commonplace.”
“‘I would say it’s probably 70% of the volume of our foreclosures right now,’ he says. ‘It’s a business decision for their family that the smartest thing they can do is walk away from their home.’”
“As a sign of the changing times, some 60% of borrowers do not even bother to contact their banks to attempt a renegotiation of their loan, Mr Moran explains. ‘They stop paying and they stop talking,’ he says. ‘They just plain walk away.’”
The North County Times. “San Diego County house prices fell by the largest margin yet, tumbling 23 percent from a year ago, according to a report released Tuesday. Year-over-year declines in San Diego County were the steepest on record for the index, which goes back to 1987.”
“House prices approached a 30 percent overall decline, down 28.9 percent from a November 2005 peak. Still, house prices are 78 percent higher than 2000 levels, according to the report.”
“Including inflation, house prices are 35.1 percent below the 2005 peak and just 38.7 percent above 2000 levels.”
“Low-end real estate, below $372,135, led the price decline for the 15th straight month. But for the first time in seven months, high-end houses, defined as those selling for more than $552,477, lost more in one month than the middle-tier, or those priced above $372,135.”
“That high-end houses declined at a faster rate ‘is not surprising, particularly now that we’re two years into a general decline,’ said Maureen Maitland, VP of index analysis. ‘It just shows the demographics of the market decline moving around.’”
The Press Enterprise. “A US. District Court judge on Monday set an Aug. 18, 2009, trial date for three Murrieta men that the Securities and Exchange Commission has accused of operating a real estate scam that defrauded at least 95 investors of more than $11 million and forced many into foreclosure.”
“Judge Virginia A. Phillips chose that date to hear the SEC case that accuses James B. Duncan, Hendrix Montecastro and Maurice E. McLeod of violating federal securities laws and seeks civil penalties and restitution of ‘ill-gotten gains’ derived from the scheme.”
“Also named as defendants are Pacific Wealth Management, Stonewood Consulting Inc. and Total Return Fund, all companies that Duncan, Montecasto and McLeod controlled.”
“The SEC lawsuit said Duncan and his colleagues solicited investors in Southern California and elsewhere who wanted to benefit from the Southern California real estate boom a few years ago. The scheme targeted military personnel at Davis-Monthan Air Force Base in Tucson, Ariz., as well as the Southern California Filipino community and church members.”
“Duncan, Montecastro and McLeod are accused of directing investors to purchase more than $118 million worth of homes, falsifying loan applications so they would afford to buy multiple houses. According to the lawsuit, the defendants would obtain an inflated appraisal on the houses and pay themselves a fee from the excess mortgage proceeds.”
“The complaint said the defendants agreed to make the monthly mortgage payments on the houses only to entice other investors. When the mortgage payments ultimately stopped amid a cooling real estate market, the investment houses fell into foreclosure.”
“About 20 angry investors, wearing distinctive orange t-shirts, attended Monday’s hearing. One of them, James Lheureux, said he believes the defendants have been able to hire ‘high-priced lawyers’ with the victims’ money and he would like to see them prosecuted criminally. ‘We are looking to put them in jail,’ he said.”
The Bakersfield Californian. “The hearing of state accusations against former Bakersfield real estate firm Crisp, Cole & Associates got off to a quiet start Monday in the basement of the Masonic Temple downtown.”
“Regulators say the company lied to lenders on more than $12 million worth of loans. As the designated broker, Cole was responsible for the activities of the company and its staff at all times, the complaint says.”
“Cole’s attorney, Glenn Kottcamp of Fresno, said his client had little to do with the transactions in the California Department of Real Estate’s 25-page complaint, filed last September.”
“In 2005, Kottcamp said, when most of the transactions took place, Cole’s attention was consumed by plans to erect giant towers at Cal State Bakersfield. The towers project later collapsed from lack of funding.”
“‘He didn’t know’ what Crisp & Cole employees were up to at the time, Kottcamp said. David Crisp, 28, a licensed sales agent, served as his own counsel.”
“Cole’s attorney implied Crisp had forged Cole’s signature on one set of documents. The judge ended the line of questioning when the state’s attorney objected.”
“Crisp was mostly quiet, but became bolder in cross-examining witnesses toward the end of the session. In one instance, he attempted to question underwriting standards of Fremont Investment & Loan, but was cut off by an objection.”
“The judge seemed to offer good-natured advice about the need to establish a line of questioning before Crisp could ask such questions of the Fremont witness, Laura Calmes.”
“Former Crisp & Cole employee Robinson Nguyen did not appear Monday. He will lose his license by default when the proceedings end, said Rich, the state attorney. Two other employees named in the complaint made deals prior to the hearing.”
“The downtown vintage shop Shabby Chic has closed its doors after eight years so that the owners can concentrate on another store. Shabby Chic is the latest in a string of downtown retailers that have closed in recent months, most of them casualties of a slow economy. ‘It was doing well, it’s just that we’ve opened another business and wanted to focus on that,’ (co-owner) Kelli Davis said. ‘We just didn’t want to deal with it anymore.’”
“Bambini Carini, a retailer of children’s furniture and apparel at 19th and Eye Streets, closed a few weeks ago.” Neighbor Jezabelle’s Unique Boutique is for sale. Owner Mario Delis said he put it on the market to focus on other business interests.”
“It’s not that downtown is weak, insisted Bakersfield Economic Development Director Donna Kunz. ‘Anything, anywhere, that is a high-end boutique or housing-related is really having a troublesome time right now because of the residential market,’ she said. ‘Between fuel costs and food prices, people just don’t have a lot to spend right now.’”
“‘”Unfortunately downtown doesn’t have that many, so when we lose even one there it’s kind of tragic. Hopefully our restaurants will be able to keep things going until our Mill Creek project gets going,’ she said.”
“The 10-acre South Mill Creek project is a mix of 85 high-rise apartments, 35 condos and 65,000 square feet of neighborhood shops and restaurants.”
The Desert Sun. “The Coachella Valley needs to go after higher-paying jobs, particularly in the health care industry, to diversify its economic base, a national community and economic development consultant said Monday.”
“The desert has ‘enviable assets,’ yet there are ‘troublesome trends’ when it comes to its decline in labor force participation and economic mix, said J. Mac Holladay, CEO of Atlanta-based Market Street Services.”
“‘We have never had, in the history of this country, this set of circumstances at the same time,’ he said, referring to the high prices of oil and food housing values as well as drops in home values, construction and jobs that plague the nation’s economy. ‘It is time for you to get very, very serious about this.’”
“The idea of regional economic development and stimulus is gaining steam among a number of local agencies, including the desert chapter of the Building Industry Association of Southern California, which helped sponsor Monday’s event.”
“‘We’re shifting gears to try to stimulate economic conversations that we have not had in the past and have not been required during economic booms,’ association executive director Fred Bell said.”
“Karen Trainer bought a $500,000 apartment in California - with money borrowed from her bank. By this year, Karen still owed $500,000 on her mortgage, but her apartment was worth $200,000 less. ….. ‘I thought ‘this is crazy,’ Ms Trainer says. ‘It just does not make financial sense.’”
“As a successful professional, Karen could comfortably have managed the higher mortgage payments her bank demanded. Instead, she decided to stop her mortgage payments altogether and let her bank repossess her apartment.”
Predicted here on HBB ,u>years ago.
Also provides further proof that not only were people only interested if it meant making money on the deal, but that they don’t care if the bank loses money on the deal. Me, me, me. It’s all about me.
Fine by me. Just means nice, tight lending standards so I don’t have to compete with these tards in the future.
“Is the bank going to pay for my retirement because I was a good girl and paid my mortgage, even though legally I didn’t have to?”
?!
Firstly, define “legally” ( meaning that PILE of paperwork you AND your husband signed called a Promissory Note? )
Secondly, how did it ever become the bank’s responsibility to “pay for your retirement”?
I don’t get these people. So… basically what she thinks she bought was an “option” and it expired worthless so she can just walk away? Wow, I wish I’d had known that was how it worked back when tech was IMPLODING! Sheesh, now she is free to make IRA contributions or whatever? How did we let this happen?
I don’t get these people. So… basically what she thinks she bought was an “option” and it expired worthless so she can just walk away? Wow, I wish I’d had known that was how it worked back when tech was IMPLODING! Sheesh, now she is free to make IRA contributions or whatever? How did we let this happen?
It’s not a defense of her “morality,” but mortgages were marketed as a can’t fail option:
1. “Real estate prices have NEVER gone down”
2. “When the teaser rate expires in two years you can refinance into a traditional loan because of the price gains, and if you can’t afford the higher payment you can just sell it.”
We let this happen because the large majority actually believed #1 above…review the statements of Greenspan or NAR during 2005. Even I (reading this blog since early ‘05) was surprised at the speed of the collapse over the last year.
With tighter lending practices, banks will not take “walk aways” too lightly. Expect this turd a rude awakening when she and her husband tries to get a loan in the future. They will demand more than 20% downpayment and more fees. “What comes around goes around”
“Firstly, define “legally” ( meaning that PILE of paperwork you AND your husband signed called a Promissory Note? )”
After a contract is signed, there are two equally ethical options: honor the contract or accept the consequences of reneging on the contract.
In a non-recourse state, a borrower can default and (usually) only suffer the loss of the property securing the loan (including any equity). To avoid walk-aways, most prudent lenders demanded a downpayment. That the industry inexplicably abandoned this practice is their own undoing.
Personally, I’m more ticked off that Congress exempted the 1099 income then the fact that she (and countless others) are walking away from upside-down mortgages.
To avoid walk-aways, most prudent lenders demanded a downpayment. That the industry inexplicably abandoned this practice is their own undoing.
B-I-N-G-O !! Give that man a cigar!
ROTFL
Banks forgot that default rates correlate with down payments. It used to be a 25% down payment basically ended defaults; hence where the 20% down came from (rounded down).
Now, how many mortgages are going to happen with 20%+ down required and full doc?
Yep… The correction continues. 2009 will be the greatest drop in prices (for any one year).
Got Popcorn?
Neil
Well, not only congress but the scumbags in California won’t tax these people either on their forgiven mortgage debt, but they’re talking about raising MY taxes. California is willingly giving up BILLIONS of dollars.
Spot on, this is ridiculous - and Karen is the perfect example of why it shouldn’t happen this way.
She can afford her loan and is just making a business decision to walk away - why should she get special tax treatment for walking away when the taxpayers will already end up paying for much of the cost of her walking through the FDIC, bailouts, etc.? It’s absurd.
I’m more ticked off at this selfish woman. She was happy to pay $500K when she bought it - it was worth that much to her, but now that it’s not worth that much to anyone else, she just says nevermind and walks away. As long as everyone is willing to blame the banks and realtards, people will assume no personal responsibility and learn nothing. With that type of society, it doesn’t really matter what congress does.
I’ve never seen the Promissory Note that she signed, of course, but I’d be willing to bet that it had a clause in it that said “failure to pay according to the terms allows the lender to foreclose on the collateral” (more or less).
So now she’s not paying, and the bank can foreclose, just as the written, signed, and notarized contract states.
What’s the problem? Is there some “other contract” that should be enforced over the actual one?
Maybe the banks should be a little more careful next time on who/what they lend money to.
Maybe the banks should be a little more careful next time on who/what they lend money to.
Ding ding ding ding!!!
And why is it that we should expect the highest ethics from borrowers, but it’s A-ok for the banksters and brokers to lie like politicians and use whatever sleazy tactics necessary to maximize their payoff and socialize their losses?
Tit for Tat.
Quid pro quo.
Pot calling the kettle black, etc.
Whatever happened to 2 wrongs don’t make a right? It’s never been my goal to live up to the ethics of corporations. I certainly didn’t teach my kids that if business acts improperly, that means it’s ok for you to act badly, too. There are plenty of us that didn’t fall prey to the greed and stupidity - why did these yokels?
What’s the problem? Is there some “other contract” that should be enforced over the actual one?
Maybe the banks should be a little more careful next time on who/what they lend money to.
Ding ding ding ding!!!
I see her point. Is the luxury car dealership going to contribute to my savings nest egg just because I reimbursed them for what I owed on the Ferrari? Would the grocer have the decency to buy me lunches every day if I own up and pay my tab?
“Is the luxury car dealership going to contribute to my savings nest egg just because I reimbursed them for what I owed on the Ferrari?”
Huh? The lender is loaning her money she wouldn’t otherwise have. She didn’t have to take the loan. Is she going to share any profits with them?
Huh, that’s interesting. I’ll rewrite it with quotes around each character:
“”
It still didn’t print. I’ll lose the xml around the word:
“sarcasm”
My bad…and my apologies!
Actually, it’s not that easy. Don’t confuse the duty to perform a contract with a measure of liquidated damages.
The two are independent. The purchaser covenants to make certain payments until such time as she sells the property; the mere fact that the lender has been so stupid as to take the house’s value at the time of default as its sole remedy for nonperformance doesn’t negate the borrower’s original duty to perform, and to keep on performing.
Yes, indeed, as a practical matter, who gives a rat’s ass?
Fine, but contract law does not recognize deliberate default by the borrower, coupled with repossession by the lender, as the valid execution of a contract. It is, instead, a defaulted contract, coupled with an inadequate remedy. And yes, the frigging lenders, who presumably have good lawyers at their disposal, are responsible for their own inadequate remedy.
“Fine, but contract law does not recognize deliberate default by the borrower, coupled with repossession by the lender, as the valid execution of a contract.”
Hm. Someone should tell that to BofA, which is planning on renegging on the Countrywide debts.
Back when my ex-landlord was still trying to get me to buy a house (he’s an unRealtor too), that was his line. “If it doesn’t work out, you can just hand the keys back to the bank.” Foreclosure has always been a part of the plan.
Well you’ve answered my question. It’s official: These were Housing Options! HOPJ or HOPA. If it goes up, it IS my retirement. ( If it tanks, I walk and pocket the monthly outlay as if nothing ever happened )
As *sleepless mentioned, no one here should act surprised, but that doesn’t mean you can’t be hacked off about it.
A tree rots from the top down. Our entire economy is now basically one giant Ponzi scheme. Speculators and the big boyz with the right connections get to play casino with basic commodities like food, oil and shelter, while the rest of us get stuck with the tab when it doesn’t work out so well.
Honestly, I don’t mind so much when your garden variety FB exercises a ‘HOPA’. They’re just modelling the behavior practised –and encouraged by law– by our nation’s ‘leaders’.
If Congress were to restore Glass-Steagall and remove any taxpayer backstop for the GSEs, and if the Fed were to raise rates and reserve requirements, we would see an entirely *different* type of ethics being practised out there.
I’m not saying personal ethics doesn’t matter at all (personally, I chose to stay out of this Ponzi scheme altogether), but when it’s directly competing against financial self-interest, financial self-interest wins out 99% of the time.
Actually that’s a fish rots from the head down.
Trees usually rot from the root, and then the rest of the tree dies.
And newfangled financial structures, they just plain rot. A year maybe, perhaps three or five tops and POOF!
And when you overstimulate the ailing roots with too much water or fertilizer, tree death comes sooner.
(Back to my Burpee catalog.)
My latin teacher used to say ‘If the Gold rusts, what will the iron do?’
Personally, I don’t believe Glass-Steagall or any other regulation will do any good. What needs to happen is these large financial institutions should be allowed to fail. When failure is an option, people tend to behave accordingly.
I think it’s no coincidence that after Glass- Steagall was repealed in 1999, that the Enron debacle and dot-com bubble came to a head and burst in 2001 and the housing bubble inflated and is now bursting.
Glad “we” gave this jackass debt forgiveness.
Never seen anyone that had received a “purchase money” forgiveness of debt 1099 get charged any tax on that forgiveness. If they did get charged/paid taxes on the amount, they had crappy representation.
As a successful, professional __________. [fill in the blank]
..and what about the retirement plans of the honest folk that hold this POS mtg backed?
also, go ahead beotch, destroy your FICO…and just wait until you need to get insurance, a job, etc.
What happens if something else changes along the way?
For all we know, the wonderful folks at FICO could be re-writing their calc engines to take mtge defaults into consideration.
Question for you folks on the blog: when one defaults on a mtge, does that pretty much mean they become the target of a lawsuit? Just thinking that I have seen that, “are you party to a lawsuit?” on a few forms in my day,,,(employment, bonding, loan apps, etc.)
I’m just waiting for the diagnosis of “Post Traumatic Housing Stress” PTHS, to be added to the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition (DSM-IV)
Then our poor FBs, GFs and Walkaways would then be fully qualified as “Disabled” by housing stress and financial trauma, unable to work and eligible for Social Security Disability for the rest of their lives…Again, at Taxpayer Expense of course
“‘I would say it’s probably 70% of the volume of our foreclosures right now,’ he says. ‘It’s a business decision for their family that the smartest thing they can do is walk away from their home.’”
And even though it was a non recourse loan, and a deal’s a deal, if she’s sophisticated enough to know that walking away is her best financial decision, she was sophisticated enough to know when she bought her house that she could walk away.
She took a gamble on a get-rich-quick scheme knowing from the get-go that there was no risk to her! That’s not acting in good faith. The banks should carefully scrutinize mortgage applications and documentation in these cases and try to build a case for fraud if there’s ANYTHING amiss.
“If all that is needed is that the house value is less than the mortgage value, there is a large number of homeowners in the United States who are in that situation”
By this measure every bank in the U.S. is technically dead, game over!
Ding ding ding!
Congratulations RMS! George, tell the man what he’s won.
A brand new devalued currency!!!
My one quibble with the above contention is that banks have a downpayment (capital, such as it is.) And, they have the ability to raise more (see Merrill Lynch.) Thus, just because the assets are worth less than the liabilities, doesn’t mean they’re insolvent.
“As a successful professional, Karen could comfortably have managed the higher mortgage payments her bank demanded. Instead, she decided to stop her mortgage payments altogether and let her bank repossess her apartment.”
And this is the bank’s weakest link: walking away as an ‘investment’ decision is one thing, but in a falling economy this walking away trend becomes a mad rush for the door. At that point there really is no bottom. We are oh so close.
Not only that, but as soon as the stink of walking away turns into the good smell of smart money management….look out below.
At one time getting a divorce was rare.
At one time filing Bankruptcy was worse than getting cancer.
At one time living in a rented apartment/home was considered throwing money away.
At one time debt was wealth.
Now walking away from the best investment you could ever make is making entirely too much sense for millions and millions of people.
Hmm…how times change.
At this rate, we can start killing people that annoy us. Gosh, just like the Wild West days.
Seen on bumper sticker in Tucson: Some people are alive only because it’s illegal to kill them.
At this rate, we can start killing people that annoy us. Gosh, just like the Wild West days.
Can I go first?
At this rate, we can start killing people that annoy us. Gosh, just like the Wild West days.
You say that like it’s a BAD thing….
This will all be worth it if it sounds the death knell for housing being seen by society as an “investment”.
I also hope the banker men are paying attention here. What kind of rate ya gonna charge in this brave new world banker men?
I don’t think rates will solve it. They will have to require higher down payments, since the rate is 0 when you stop paying.
Most certainly, I’m just sick of hearing people refer to a 6.5% rate as “high”. As if some invisible ceiling has been created that will prevent rates from ever breaching 7% again.
While another bubble is unlikely in the foreseeable future, i don’t see any huge changes in the psyche of bankers.
Lending is a competitive business.. some lenders will need the income more than others and will offer better terms to attract borrowers.
Yeah, but selling mortgage backed securities is (or was) a competitive business as well. Now buyers of these securities are going to be much more skeptical about what is being sold them, and thus lending standards will tighten.
I think they’re out of money, Joe.
Since i don’t want to be a property manager/landlord/shoulder to cry on, but I do like RE as an investment, I’ll be the first inline to buy some MBS once prices bottom out.
There is little security in a security who’s collateral value is hugely inflated by a bubble. But once those values are stablized there remains only the normal investment risks.
In the future, ratings will be more closely scrutinized than ever before, and those ratings will need to be more accurate than ever.. or they’ll get called out.
BigV.. there’s a big difference between not having money to lend and dealing with a constipated secondary mortgage market.
You probably qualify for a mortgage.. go to the bank and tell them you want to buy a home.. see if they’ve got any money to lend you.
Bankers will not be loaning money until 2012. Big V has it right, No moneys!
Mr. Vikram Pandit said he would sell $500B of Citigroups off balance sheet assets. Unfortunately he did not like the bid because it made Citigroup insolvent. Merrill has diluted its shares by 1/3rd to try to pick up the $43B its lost. Will merrill survive and where will it make any moneys?
Bennigans goes into BK chap 7 after its report “In June, Metromedia Restaurant Group [owners of Bennigans and Steak and Ale] said it was working on a debt restructuring plan.
That announcement came after the Wall Street Journal said the company was in talks with lender GE Capital Solutions and that it had prepared a bankruptcy filing in the event it was needed.” Banks could not roll over the lending - no moneys.
This is just the beginning, the 4th inning.
I think they’re out of money, Joe.
The sooner the banksters run out of money, the sooner I get to buy my $25k dreamhouse in the city –all cash.
If all those f**ckers went out of business tomorrow, it wouldn’t be soon enough. Wall Street *needs* borrowers, but responsible cash buyers don’t *need* Wall Street.
Debt (and fractional reserve lending) is the root of all evil.
The sooner the Karens turn in the keys the sooner we can recover.
I suppose that’s one way of looking at it but there wasn’t some “life event” like a sick spouse and as far as the article mentioned she still has perfectly good job.
Now she won’t be 1099′d for the debt forgiven and she can still salt away bucks in a tax deferred account like her 401K at work? People, it’s messed up attitudes like Karen’s that give the banks the ammunition to go to congress and say; “See what we are confronting?” I’m sorry but there has to be consequences.
Aren’t there consequences, though?
Banks tighten lending standards, so the consumer suffers as it’s harder to get loans (and harder still with damaged credit) and the banks suffer due to reduced business.
I guess this is in theory. Personally, I’d also like to see provisions such that the walkers can’t buy again for 15 years. But it seems as though tighter lending standards (and higher rates) should provide that disincentive albeit over time.
Of course, Big Ben and Mister Hanky appear to want to eschew such prudence…
And mortgage agents, lenders won’t turn over their loans for 15 years knowing they stand behind what they “sell”. Of course fast turn around on fees, etc. was never a issue. Give me a break!
“…there has to be consequences.”
Like higher interest rates, can that be one of the consequences? Pretty please?
With a cherry on top?
Hey, no problem, just so long as rates reflect risk again! 6-7% ain’t cutting it. When “professionals” see no problem in walking that’s gotta be good for at least low double digits.
Of course that would mean prices would have to…
“Of course that would mean prices would have to…”
Oh! I know, I know! Hold firm, right? Buy now before monthly payments go up with rising rates!
Yeah, I agree. I’m surprised at the “I want them punished!” crowd everytime one of these stories comes up. CA is a non-recourse state. The lender knew this when it gave her the loan. If she kept paying the mortgage when she’s $200 large underwater when she can just walk away and rent I wouldn’t call her a responsible citizen I’d call her an effin idiot. She’s doing the smart thing.
Jimmy,
I’m not oblivious to the economics of the situation here but this will make it infinitely tougher for newer younger borrowers. Does she care?
I could make the case that it’s not responsible for me to sit at a stop light when I can just cut through the gas station. …. Anyway, Karen sure was no innocent and all I’m asking with these “Don’t 1099 Me Bro” walkers is that they can borrow ( provided they can find a lender ) tomorrow for all I care!
( They just won’t get the b-e-n-e-f-i-t of Mort. Int. Deduction nor Cap. Gains Exemption until that 200k has been absorbed from years of filing without that kick from Schedule A ) I mean c’mon, fair is fair.
I’m not oblivious to the economics of the situation here but this will make it infinitely tougher for newer younger borrowers. Does she care?
The walking away crowd is hardly solely (or even largely) responsible for the fact that it will get tougher for new borrowers to borrow. Everybody in this fraud (banks, mortgage salesmen, realtors, and real estate speculators of all flavors) all get to share in the blame.
It should be remembered that the tougher it gets to borrow, the lower house prices will go, and for those of us currently sitting on the sidelines, that is certainly a positive development.
“It should be remembered that the tougher it gets to borrow, the lower house prices will go, and for those of us currently sitting on the sidelines, that is certainly a positive development.”
Absolutely! Karen is the poster child for the AltA, Prime and Option ARM tsunami that is coming to a neighborhood near you. I think even a 10% down payment requirement would bring this market to a near standstill, let alone 20% or 30%.
2009 is the year of reckoning for the “nicer” areas not plagued by Subprime.
Lisa,
I think you highlight a sobering reality. The Karens aren’t failing in the traditional sense (can’t make the payments), they’re choosing to “fail” because it makes more financial sense to them.
How many will fail and how many more will “fail.”
…Shudder…
Yes, but the government is actually REWARDING her for doing this by deciding not to tax her on $200k of debt forgiveness.
I’ll tell you what - can I take out a “loan” from my employer and then not have it taxed when the debt is forgiven?
I’m all in favor of people walking away and living with the consequences when it comes time to look for a job, etc., this was the bank’s screwup, but there’s no reason these people should be given huge extra tax benefits for speculating and then walking when it didn’t pan out.
… since it is officially suggested as “the smartest thing they can do” by a real estate agent, nobody should be worried about moral or legal issues.
alta,
( Just between me and you.. ) Thanks,
does the “walker” get 7500 tax credit ?
LOL!! Hell, why not?? Given their new victim status and damaged psyche, they probably think they DESERVE it.
The Desert Sun. “The Coachella Valley needs to go after higher-paying jobs, particularly in the health care industry, to diversify its economic base, a national community and economic development consultant said Monday.”
Sounds like a consultant’s advice all right. “Just create high paying jobs like health care.” Is it reallly that easy? Let’s just have a bunch of high paid nurses, doctors and druggists shuffling money around? I hope that’s another “industry” that disappears…consultants. My late father-in-law said they were just some s.o.b. from out of town, and my experience with them bears that out.
People always say that a person has to come from somewhere else in order to command respect. They said that about Jesus. His countrymen didn’t believe in him, but then he went out in the world and, oh, well, I guess they killed him. Never mind.
lmao..best line of the night!
Now here is sweet moneymaking gig if there ever was one. Like the snake oil salesmen of yesteryear, travel from town to town selling crappy ideas to desperate locals:
Town #1: “Yeah, yeah healthcare…that’s the ticket.” Town #2: “You really need to attract I.T. and R & D.” Town #3: “You need a….monorail!”
Oh, boy, edgewater, consulting has to be one of the biggest scams going. One consulting firm got their meathooks into a company I used to represent. “Consulted” them practically into the grave.
Wanna see what a “consultant” can really do? Check out ebay. The new CEO is a former “consultant”, LMAO!
We have some at my work right now. The sessions are a howl - the make the customer do all the work!
An ex-girlfriend used to consult. She had a liberal arts degree yet consulted on everything from software to auto parts. She’d work only about a quarter of the year and get by on that for rest of the year.
I heard a great line about consultants years ago.
“They borrow your watch to tell you what time it is”.
Mike
“My late father-in-law said they were just some s.o.b. from out of town, and my experience with them bears that out.”
Consultant, with a capital C that rhymes with P that stands for Pool!
Those who can do, Do!
Those who can’t do, Teach!
Those who can’t teach, Consult!
For all you teachers, relax, I’m just jesting.
Let me fix this for you, having worked in this field:
Those who can , Do!
Those who can’t , Teach!
Those who can’t teach, Teach teachers.
Those who can’t teach teachers, become administrators.
CONSULTING. If you’re not part of the answer, there is plenty of money to be made in prolonging the problem.
“The desert has ‘enviable assets,’ ….
Let me list those for you:
1. Hotter that the hubs
2. ……………..Hey, give me some time!
Since this is the California thread…
It looks increasingly likely that at this time next year my wife and I will be living in San Francisco, so I want to start looking at rentals to get an idea of what we can expect.
Craigslist Chicago is now (sadly) nothing more than a bunch of morons that want too much for a place that offers too little. I would imagine that Craigslist San Francisco has suffered the same fate. It certainly looks that way based on what I can find.
So, what good sites are the Bay Area people using to track rentals?
Craigslist Tampa Bay is the same. You’re smart to ask the bloggers where else to look. Craigslist real estate is mostly for morons and scammers, at least in this area.
we got a great rental in the Coachella Valley from Craigslist. We had to wade through the crap, but there were many more options than the newspaper ads.
Will you be living in San Francisco proper, or a suburb. Tell me the city where the job is located. Craigslist is still the best resource, but most of it is BS, so you have to do a lot of critical thinking.
It would be San Francisco proper. I would have to find a new job, but don’t anticipate any issues. My wife would just be changing offices at her law firm (SF office is in the financial district). We would like to avoid buying a car and prefer just walking to work, like we currently do in Chicago.
Well, you will not need a car in that area. Rents are pretty high up there. You should troll craigslist and immediately throw out the highest 1/2 of asking prices. Those are almost certain to be FB, who are dreaming. Of the remaining 1/2, check Google maps to get an idea of the traffic,etc. and look at the street view. Of the handful of stuff you find that’s decent, look it up on Zillow to see when the owner bought it and how much he/she paid. If the rents in the building aren’t covering the morgage, forget about it.
It will not be easy to find a non-FB-owned apartment, so start early and blog around to get more info on a neighborhood before you commit to anything. SF is very pricey and some of the complexes are outright unlivable due to old age and overcrowding. Good luck, though. I just want to make sure you go in prepared!
If you live in the East Bay near BART, your wife’s commute may well be shorter than if you lived elsewhere in the City.
Yes, you should look at the BART lines. SF proper has a lot of micro-neighborhoods, where it can be fine in one area and a gangland a few blocks over.
Another possibility is to live in Marin, and take the ferry in from Larkspur in the morning. The ferry building is at the foot of the financial district. It probably involves a car to get to the Larkspur landing, though.
The Inner Richmond district is pretty cool and not as expensive as other parts of the city.
Indeed, you really need to focus on exactly where you’ll be working first. There are reasonable commute options from the burbs into various parts of SF. In many cases the burbs are nicer living than any part of SF that you might think was reasonable. I’ve never understood how so many poor people can afford to live in such an expensive city…
It’s mostly to do with the ‘newly poor’ (relative to the influx of the newly-minted millionaires who now pay top dollar for housing) people who’ve been locked into rent controlled apartments.
You’ll be looking at $3000 in rent. Maybe by then house prices in SF will have fallen sufficiently that you can by a house in SF for $400K. You may have timed your move perfectly with the bottom of the California bubble bust.
SF houses won’t drop to $400k by this time next year. Maybe Aug of 2012, but its going to take SF several years before it approaches bottom.
I agree.
And that won’t be in the “nicer” places of SF proper.
Further, I don’t know what age “Brian in Chicago” is or what he does, but I wouldn’t put SF down as the number one place to move if I were leaving Chicago.
To each his own, I suppose.
Seems to me everyone pretty much uses CL here in SF to find apts. Maybe someone else on this list knows something I don’t?
They would be better off going after jobs like opening up CNC machine shops.
Preach it, Trader! I had the opportunity to visit such a shop a few months ago. (They were doing some machining for my father’s lab.)
Any-hoo, you talk about a business that was going gangbusters, this place was it. Just an unassuming little shop on a side street.
But the shop’s work was impressive. Drill bits for the oil industry and other nifty stuff.
And, if you’re an equipment geek like Dad and me, this place had gear to die for. We darn near swooned over the CNC setup. Sweet. Very sweet. We even got a demo.
My employer just shut down another maufacturing site in San Jose. What will all the people do? When will they offshore the rest of us?
Is Bennigan’s out in CA? ’cause they just BKed. Wow, never saw that one coming.
Yes, I think there are Bennigans here. That’s a restaurant, right? I’ve never been there.
Is Bennigan’s out in CA? ’cause they just BKed.
Let Butters tell you about Bennigans
http://www.southparkstudios.com/clips/153191/?searchterm=+Anniversary
It’s one of those “casual dining” restaurants. Been around for years, I haven’t been to one in a long time, it was OK for a bite and a beer (I think they served beer, maybe I have it mixed up with another establishment, they all sort of run together after a while). Seemed like every mall or strip had a Bennigan’s and a bank.
“Wow, never saw that one coming.”
What other shoes are out there…hurtling through space right now?
“What other shoes are out there…hurtling through space right now?”
Good question. The Bennigan’s thing really sucks for Florida, since it happens to be part of Florida’s low paying service industry base. They had some poor girl on the news this evening who is out of her waitress job.
Yeah, up here they interviewed a kid who showed up today for his first day at work - talk about a bad way to start your working life!
Sizzler should be next to go BK. Used to be a cool restaurant years ago when they served your steak on cast metal plates with wooden handles. Now it’s basically a fast food cafeteria.
I sure hope so. That place is absolutely dreadful. I remember going there like 18 years ago with some very old relatives, and “cafeteria” is a perfect description. Yeeeeuck!
Applebees
TGIF
and then ?
Chilis, already gone in Oregone.
Applebees was saved when it was bought by IHOP.
All the others are going down!
How the hell does IHOP stay in business? Godawful place.
Bennigan’s were rare in California. The Bennigan’s website shows only two locations in the whole state.
Bennigan’s were common in Texas, Florida, Illinois, Pennslyvania, Michigan, and Colorado.
The Real Estate Market Starts Climing Again
During the past couple of years we’ve all seen a tremendous change in real estate in the country.
This change actually has spread all over, businesses loosing money while gas prices are extremely high.
The real estate market has become a big issue for all of us out there, we’ve seen many homeowners loosing their homes and struggling to find a home to rent because of their credit.
What happen to us?
Remember the bubble 4 years ago?
That’s exactly the answer, from years of prosperity and times of spending, traveling and investing in stocks and real estate, we are now experiencing another bubble but this time the bubble is going in a different direction and we are wondering what to do.
So real estate was going down and it’s still going down, some economists say that it will get stable in 2 years from now.
The sellers market became a buyers market, and today we all know it by now.
Investors and renters that saved their money for better days to buy to make money are in the market today, that’s making the real estate market busy.
Real estate agents that learn how to change with the market also learned how to make money from the changes, these real estate professionals are making lots of money and while we are all struggling for business they’re making the business.
Today you can get a home directly from the banks for almost half the price.
I’ve seen homeowners that are so desperate that they’re willing to give their homes for free, just come and take their loan and continue their payments.
On the other hand, investors are looking to buy homes in bulk, they can get homes $.50 on the dollar.
Some banks like bank of america and countrywide are selling hundreds of homes in bulk to investors at a discount prices.
So real estate agents are busy getting hundreds of listings and reo’s from banks, then they’re selling these homes at a low price to future homeowners and investors.
It’s definitely a buyer’s market like we had in the early 90’s, so if you’re an investor or a homeowner.
This is your time!
I’ve seen homeowners that are so desperate that they’re willing to give their homes for free, just come and take their loan and continue their payments.
That’s not giving it away for free, that’s giving it away for what you owe on it … not such a good deal for the buyer if the place happens to be underwater in negative equity land.
Just think a great way to live free for a year! “Sure I’ll take over the payments, no problem just as long as its full recourse.”
I’m going to bed! Manana
G’night, hozzie.
“This is your time!”
Not quite, trolly trollmeister.
yanni: use spell check and troll somewhere else.
Some banks like bank of America and countrywide are selling hundreds of homes in bulk to investors at a discount prices.
wow.. hundreds of homes??
At a rate of one hundred homes sold per day, the projected inventory of 2 million REOs will all be gone in just 20,000 days! That’s only 54.7 years before they are ALL GONE!
What are you waiting for? Get off the damn computer and call your local Realtor!
Yes, you are so right Mister Fidelitymutualmortgage dot com, it is a good time to buy.
However, It is an even better time to wait.
Ben, can you send Yanni a big FU for me to the e-dress he provided?
Thanks,
BV
Other than an “Advertise With Us” link, the Fidelitymutualmortgage dot com site doesn’t have a contact form.
Shhhhhhh! Keep quiet already! I don’t want anyone to beat me out on the deal ‘o the century!
yanni-
Back under the bridge with your wind pipe, boy!
Yanni is the first live troll sighting in here in recent memory. The trolls of yore (2004/2006 era) beat a hasty retreat ages ago, zigging and zagging under a hail of sniper fire from the HBB regulars. Still a tough crowd, I’m happy to report, and no place for trolls to rear their empty heads.
“Ms Trainer says she feels no moral obligation to go on paying a loan on a property that is going to go on losing her money. She says her friends support her decision.
The banksters’ assumption that masses would willingly accept economic serfdom and kind a way to make their payments, regardless, has blown up in their face. Even “investors” who could afford to make payments on their rapidly-depreciating properties have shown no qualms about simply walking away from their obligations - screw the banks. I’m guessing lenders are still somewhere between the “denial” and “bargaining” stages. Anger will follow shortly, once the full magnitude of their folly sinks in. And at that point, friends and neighbors, we are going to see a truly vicious tightening-up of lending standards and credit. The banks now realize what kind of people they’re dealing with, and will treat them accordingly. No credit for you!
Here’s what I see coming: In a major reversal of bubble-era practices, scorched banksters will now go to great lengths to ensure ultra-conservative appraisals on properties. Since borrowers can walk away from their obligations without penalty, leaving the lenders holding the bag, you better believe the burned lenders are going to drastically reduce the borrowers they’re willing to deal with to only the most creditworthy segment of the population. Twenty percent down will become mandatory, as well as proven income, minimal debt, and a solid credit history [and not just a high FICO scores, which can be falsified].
And that, friends and neighbors, means us smug creditworthy renters, our time coming round at last, are slouching toward Armageddon to be born, so to speak. Greedhead sellers better get used to our “insulting lowball offers,” since by this time next year we’re going to be about the only game in town.
Oh yeah, I forgot to tell you that I JT’ed all the bankers last night because I wanted in my mind to make them loosen up a bit. Unfortunately, it turns out that the swelling and inflammation is now being joined by a nasty infection, so the overall effect has been a little less loosening. Sorry guys.
“Twenty percent down will become mandatory,”
Tru dat. 20% will also become the minimum. I tried to buy a second house during the early 90’s, and Wells Fargo wanted 30% down - my application was to buy a $275K 1500 square footer near San Luis Obispo with 20% down to be my new primary residence, and I was going to rent out my current house with a mortgage of $250 per month to get at least $450 per month in rent. Old fashioned lending standards are comin’ back, and America has just started its diet. Lots of entertainment to come during the next 5+ years.
Yesterday I just closed on a 10% down 5 year ARM. The rate was 5 5/8%. I’ll have the thing paid off in maybe 10 years.
This was even though last year my tax returns said 19K and the year before was about 5K.
The zero downs are gone, but there is still plenty of slop around if you have a 750 FICO.
I know I’m going to be unpopular for saying this - and I rarely contribute … so, if flame you must, go ahead. But…
The banks all knew the rules when they funded these loans. They knew that the Karens of the world could just walk away. And, since she’s admitting that she actually has the means to pay - the bank can go after her personally if they really want through a judicial foreclosure. The system allows for this and frankly, people that don’t use the system are going to be taken advantage of people that do use the system. And it’s not like there’s a bunch of crazy loopholes that only litigious, well-educated, highly-sophisticated, technically inclined people can take advantage of …
The home-owner gambled, the banks gambled - the fact that the taxpayer gets stuck with the bill is indeed maddening … but that’s the fault of the system that was pre-arranged. For the most part, that system (single-recourse, bankruptcy laws, etc.) have worked pretty good since the 30’s & 40’s.
Who was greedy first? The banks or the home-owners? Hard to say, really.
I absolutely agree.
Businesses for decades have been filing bankruptcy as a tactical decision often unrelated to their ability to actually keep paying their bills - if that weren’t the case, most bankruptcies would end up in liquidation, not reorganization. As long as the people who are walking away accept full responsibility for the consequences (foreclosure, damaged credit history, etc), and don’t whine about it, they have acted just as morally as business people have been.
the fact that the taxpayer gets stuck with the bill is indeed maddening
when did it become a fact that taxpayers will get stuck with the bill? Chances are estimated at 50/50 the GSEs won’t even need to take advantage of the housing bill, and should they dare to, among many penalties awaiting them their corporate officers will likely be tossed out on their ears..
Wealth is simply evaporating.. nobody who doesn’t own some of the bad debt will be paying anything.
Banks will pay.. Brokerages and hedge funds are and will continue to suffer..
If any “taxpayers” are paying it may be those who’s pension funds or city govts invested in bad loans, or those who own shares in the banks or companies who are getting hit, and similar. My taxes haven’t gone up.. have yours?
It is pointless to give facts to the bailout crowd. They want so passionately to believe the man is reason they aren’t getting ahead, and want to stand still so badly, that pointing out a drop in the bucket is all that congress voted on is a waste of time, IMO.
What’s a few Trillion dollars when your $58T in debt already.
I disagree with you about the GSE bill being a drop in the bucket, but only because it is open ended, evergreen and nobody can possibly have done due diligence to determine the values of underlying assets. It is a WAG to say that the GSE may cost only $25B next year. That is based on assumptions and models that have never failed, right?
‘That is based on assumptions and models that have never failed, right?’
Guess, wonder, put your paranoias to work, doesn’t matter to me. This is the biggest RE bust in history, and fortunes are going to be made. Again, the biggest RE bust in HISTORY. People are going to be talking about this for centuries. What any one person spends his or her energies on this will determine how they make out.
hmm.. It was (and still is) pointless to give facts to those caught up in the housing mania as well, but i’m sure it’s just a coincidence. We are much smarter than those fools..
Chances have been estimated at 50/50 by the same snakeoil salesman who gave us The Bubble. Why would they ask for it if they weren’t gonna use it? That’s like believing the old “let’s just snuggle naked line.
Sorry Ben, I don’t think the bailout will stop house prices from falling, but I do think it will mess up our economy even more.
look.. if you really believe the GSEs will take advantage of it, it means they are bullet proof.. They really are too big to allow to fail once they take govt money.. That the govt guarantee is explicit for $5T of debt.
And it logically follows that if a corporation cannot fail you should beg, borrow and/or steal all the money you can get your hands on and buy that company’s stock.
—-
i don’t give a flying fcuk who does what or who pays for what.. all i care about is making money for ME, and i’d advise others to think likewise. This GSE thing is (may be) just one of the many unique opportunities offered us to become quite wealthy in a hurry.
Wallow in gloom and doom or be open minded and flexible. It’s up to you and nobody much cares what you do.. but i already know that very FEW people will have the gumption and the ability to stay above the fray and in doing so make a fortune in the coming years.
Big V, you sure have some gems today!
(And by gems I don’t mean a euphemism for, well, nevermind)
As a successful professional, Karen could comfortably have managed the higher mortgage payments her bank demanded. Instead, she decided to stop her mortgage payments altogether and let her bank repossess her apartment.
It is hard to convince she is anywhere near to be a successful professional.
It is hard to convince she is anywhere near to be a successful professional.
She made a prudent business decision. How is that not a trait of a successful professional?
Buying a home at the peak of the bubble and foreclosure two years later, how is that a successful professional?? Give me a break!
Actually, her lack of ethics, cold focus on the bottom line, and willingess to jettison inconvenient obligations and liabilities means she’s probably quite successful as a professional. She has no soul, but that’s another matter.
“Actually, her lack of ethics, cold focus on the bottom line, and willingess to jettison inconvenient obligations and liabilities means she’s probably quite successful as a professional. She has no soul, but that’s another matter.”
She can forget any “public trust” employment.
Somewhere, somehow this will come back to bite her. She’s so remorseless in her decision — that attitude will come across next time (by her estimate in 5 years) she applies for a mortgage. At which point, lenders will be scrutinizing at a level that will exclude “professionals who could well afford the loan” yet feel no moral obligation to pay it back. This red flag will not go away in 5 years. In fact, I wouldn’t be surprised if Ms. professional and her husband are divorced by then.
She bought the place to begin with! Isn’t that enough said. Now she is some Savy Professional because she is gonna walk away. She can be your Financial Consultant or whatever. I’ll keep my shirt, thank you.
“She can be your Financial Consultant or whatever. I’ll keep my shirt, thank you.”
Exactly; avoid with extreme prejudice!
“David Crisp, 28, a licensed sales agent, served as his own counsel.”
Maybe he’s as capable as his own legal attorney as he was running a real estate empire!
Bakersfried lawyers must be very expensive.
“David Crisp, 28, a licensed sales agent, served as his own counsel.”
What happened to “David Crisp, 28, multi millionaire real estate mogul”?
“Bakersfield lawyers must be very expensive.”
Or got their pockets picked through his ingenuity! I know a couple that got fleeced and they aren’t very happy.
There is an old lawyers’ saying that a man who represents himself will have a fool for a client. I guess Crisp thinks he’ll prove it wrong. Probably even go to law school afterwards and become a guardianship attorney.
OT - but slightly related
After this mornings rollercoaster ride, what’s the betting that a lot more properties go on the MLS, as people realise that they don’t really want to be in L.A when we get another temblor?
Any old-time angelinos have any data on the Northridge quake-effect, and the rise/fall of listings afterwards?
sorry, can’t help with the listing data, but leave Calif and go where? Pick your poison:
Golfball size hail. Floods. Hurricanes. Tornados. Rain all year. Scorching sun all year. Overcast 300 days a year. Stifling humidity. Sleet.. (i did’t even know what sleet was ’till i asked someone from the NEast..) ad infinitum.
I’d prefer living with the once in a blue moon earthquake to very uncomfortable weather conditions..
I’m not going anywhere!
Nothing’s more depressing than London in winter, and I’m not going back there unless they make me…. I totally agree that the odd earthquake is not a reason to leave L.A - but I wonder if its enough to make other people leave…
IIRC that after the Northridge quake, there was a descernable uptick in houses for sale, as some people wanted to bail out - I was just wondering if anyone had other-than-apocryphal data to prove or disprove the hypothesis that a big-ish quake would make more people think of leaving, and if it showed up in the listing numbers..
Aw, heck, gotta love you Cali guys, I feel the same about Florida. I’ll put up with a hurricane threat and some humidititty. I wuz hoping the hurricane threat would empty out my state, but it didn’t, so I’m sure earthquakes won’t empty out Cali, unless of course you get the big one and part of the state falls off into the ocean. And even then…
So, yeah, pick yer pizen.
I was thinking this same thing while ushering my darling students out of my (built in 1938 by an FDR WPA project) classroom. It feels like 1994. I’d wake up once every four nights to a good-sized aftershock and real estate values were declining too in good ol’ California.
Northridge was like the last nail in the coffin for many people in LA. It was preceded by the Rodney King riots and some pretty hellacious fires.
It sped up the out migration and pretty much halted moves to LA. Real estate came to a standstill. Nothing but the most desirable properties sold quickly, and the less desirable sold really cheaply (for less than the cost of rent). That didn’t change much until 1998/1999. Then in 2000/2001 the party started and gained momentum.
Today’s earthquake will have some effect. But, in looking at the Northridge quake, it was an event amplified by riots, fires and actually, higher than normal unemployment.
“Northridge was like the last nail in the coffin for many people in LA.”
I know a doctor who lost million$ due to the Northridge earthquake.
One story from (I think) LA Times article on Rent Control of about six months ago.
A LL had his rent-controlled apartment complex in the Valley listed for sale, for something like $600K. Northridge earthquake hits, building damaged, all tenants forced out but the building remains for sale.
New buyer comes in and pays something like $800K for the damaged building. After paying for repairs, the new buyer could charge ‘market price’ for rents. So the damaged building was worth more than pre-earthquake condition.
There’s a really good poll on the forum right now. It’s about the emoticons. You all should go and give your opinions.
This is coming down so fast I’m amazed. Buildable lots in NorCal are under five figures now, if you have cash. Bless market forces. Bless them.
“But for the first time in seven months, high-end houses, defined as those selling for more than $552,477, lost more in one month than the middle-tier, or those priced above $372,135.”
This gives one pause for concern. Are we entering a new phase of the bust?
I’ve consistently seen that cheaper/poorer/start-up housing falls sooner and faster than constlier/richer/move-up housing. Compare the Inland Empire to Newport Beach.
Or compare different zip codes within any given city: the cheapest neighborhoods almost always show higher price declines than their wealthier neighbors, even in that same city.
Is something new happening?