The World Is Not Ever Going To Be Like It Was
The San Francisco Chronicle reports from California. “ACORN, an advocacy organization representing low-income communities, staged a rally at a Wachovia branch at Mission and First streets in San Francisco on Wednesday, with about 30 people calling on the bank to be more flexible in adjusting loan terms to prevent foreclosures. Wachovia is aggressively trying to get homes in or near foreclosure off its books, by quickly initiating the repossession process and aggressively selling them.”
“Susan Fallis, a communications professor at Saint Mary’s College in Moraga, so far seems to fall into the ‘get the loans off the books’ camp of Wachovia customers. In 2004, she sold the Santa Cruz parking lot her father bought in the 1960s for his mobile home business. She reinvested the approximately $3 million into 20 single-family houses in and around Reno, with a 40 percent down payment on each one.”
“Because Reno rents dropped as her minimum payments climbed, she is now losing about $7,000 per month. She has asked Wachovia to temporarily lower the interest rate on her loans by less than two percentage points, without asking for any adjustment on the loan principal.”
“If Wachovia doesn’t allow any modifications, Fallis expects she will have no choice but to default in the next few months.”
“‘It’s absolutely insane,’ she said. ‘I’m about ready to become the Cindy Sheehan of real estate; this is just making me so angry.’”
The Oakdale Leader. “President Bush has just made it even more difficult for those people to own their first home by shutting down the Nehemiah program. Casey Knowles, a PMZ senior loan officer who’s been in the business for eight years, said even though the program is scheduled to end in October, most banks have already stopped offering the program.”
“‘It’s definitely going away quickly,’ Knowles said. ‘I don’t think it’s going to come back. I’d be happy if it came back but I doubt it. It’s definitely going to affect home prices.’”
“‘The program has done a lot of good for a lot of people. I love it. It helps me get a lot of people into houses but it’s pretty easy to walk away when you have no money put into it. If you put three percent into your house you’re more likely to make the mortgage payment,’ Knowles said.”
The Merced Sun Star. “County Bank laid off about 20 employees Tuesday — the first time in its 31-year history that the bank has been forced to cut back on staffing. Company spokesman Thomas Smith, noting the bank’s parent company’s $12 million loss last quarter, said the decision was due solely to the troubled Valley economy.”
“Though no more layoffs are in the works, Smith didn’t rule them out. ‘Are housing values going to decline further?’ he asked.”
The San Gabriel Valley Tribune. “In an economy dominated by high fuel costs, rising food prices and mounting home foreclosures, many people are having a tough time making ends meet. This year, some are supplementing their income by working at the L.A. County Fair.”
“This year, Lisa Barnhouse is part of that work force. Barnhouse used to work in the customer service department at an Acura dealership, but her job was eliminated when the business was sold.”
“‘This money will be used to pay my bills,’ she said. ‘Jobs used to be a dime a dozen … but now I can’t find anything.’”
The County Sun. “Price wars are being waged in north Fontana’s upper middle-class neighborhoods as home builders drop prices, hoping to stave off multimilion-dollar losses. They’re competing against one another, but collectively, their products are going up against bank-owned properties, foreclosures and short sales on homes that were built just two or three years ago around the corner.”
“Maybe Centex is more stubborn than other Inland Empire home builders, and it might bode it well. That’s because its smallest Coyote Canyon floor plan, a 2,470- square-foot home, is going for about $430,000 - a price that other builders would’ve drastically slashed by now.”
“But homes being built by Riverside-based Van Daele Development Corp. down the street start are comparable in size and are in the high $300,000s.”
“Even short sales, which are sometimes super deals, are having a hard time living up to their potential. Real estate broker Jeff Hill has about 20 short sales that aren’t moving because banks and sellers are desperately trying to salvage any value they can.”
“One of them, a 2,572-square-foot home, lies a half-mile away from the Centex tract and is on the market for about $315,000.”
“‘They’ve postponed the sale four times,’ Hill said about the sellers. ‘We have an offer, and then they go out and do their own appraisal … and by the time they come back, the buyer finds something else. Meanwhile, the values decline even further.’”
“Sellers should be happy with buyers’ offers, Hill feels. ‘Everyone saves a lot more money that way, including the lender that’s foreclosing,’ he said. ‘Buyers walk away when sellers try to counter the offer.’”
The Press Enterprise. “Maurice E. McLeod, one of three Riverside County businessmen whom the Securities and Exchange Commission has accused of operating a massive real estate scam, accepted a court settlement that could require him to return ill-gotten gains.”
“McLeod, James B. Duncan and Hendrix Montecastro are accused of defrauding at least 95 investors in multiple states of more than $11 million and forcing many of them into foreclosure.”
“The defendants are accused of directing investors to purchase more than $118 million worth of homes, falsifying loan applications so families with middle-class incomes could qualify to buy multiple homes. According to the SEC lawsuit, the defendants would obtain inflated appraisals on the houses and take the excess mortgage proceeds as a fee.”
“The defendants temporarily made the monthly mortgage payments on the investment homes, allegedly in order to attract more investors. In the process, investors became dependent on the organization.”
“During summer 2006, Pacific Wealth began applying for credit cards in the names of individual investors who were directed to draw the maximum amount of cash on each card for additional investments, the SEC suit stated.”
“‘Investors who questioned the wisdom of this strategy were told by, among others, McLeod, that (Pacific Wealth Management) would stop making mortgage payments if they refused to cooperate,’ the lawsuit said.”
“When the defendants ultimately stopped making the mortgage payments on the investors’ homes amid a cooling real estate market, the properties fell into foreclosure.”
The Union Tribune. “At Magnolia at Bressi Ranch in Carlsbad, about half of the 25 homes have been built and sold for prices approaching $2.3 million. But a few months ago, builder Barratt American abruptly halted construction on six more, and a seventh stands completed and unsold. Work never started on five lots.”
“The reason: The locally based builder, like many home owners, lost its financing. ‘We’ve come to a screeching halt,’ said Barratt’s president, Mick Pattinson. ‘We’re looking for money to pay bills.’”
“Today, virtually no one is showing up at model-home complexes. More than 40 percent of buyers canceled their purchases in July, according to one market research firm. And builders and developers have cut their staffs by as much as 90 percent.”
“‘July was absolutely awful,’ said Steve Doyle, president of the San Diego division of Brookfield Homes. ‘It was the worst month I’ve ever seen.’”
“New-housing market analyst Sharon Hanley reported 193 sales at 1,090 projects in the county in July, off substantially from the July 2007 count of 639. Just three years ago, the all-time July peak sales total was 1,578. Early indications are that sales in August were up a bit but not much better.”
“Hanley’s other findings for July: a cancellation rate of 43.1 percent, up from 27.4 percent in July 2007; weekly traffic to sales offices down to an average 22 visitors per tract, a record low for July; and 84.6 weeks of unsold inventory, more than double the 35.3-week level a year earlier.”
“‘What’s hurting right now is builders can’t sell when there are foreclosures only 10 blocks away that are two or three years old,’ Hanley said.”
“Bill Davidson, an upscale builder and winner of many industry awards, said he understands the future will be different. ‘The world is not ever going to be like it was,’ he said. ‘We’re second-guessing, we’re scared.’”
The Malibu Times. “Only about 60 homes have sold in Malibu through the first two-thirds of the year. Steep price reductions are rampant, but the lower prices are still not sufficient to draw buyers.”
“Even during the worst of years of the last down market-from 1991 to 1996, about 150 homes sold per year. In the glory years, it was more than 300. Last year, when the slow down seemed in full swing, about 175 homes sold in Malibu. If records could be traced back to 1960, possibly this is the slowest year since then for number of units sold.”
“Because so few homes are selling, it is impossible to accurately gauge how far prices have dropped, or at what rate. Everyone has a guess. Fifteen percent? Twenty-five? Thirty percent down so far and heading to 50? Hardly any homes that last sold in 2006 or 2007 have resold this year, so that measure is incomplete.”
“About 220 homes are for sale now and only about 100 will sell during the whole year. Conclusion: Rapid price declines.”
From Bloomberg. “The US housing crisis arrived on July 14 at Stonebrook Court, the 26,000-square-foot Tudor-style home of California venture capitalist Kelly Porter. On that day, four months after putting the house on the market, he cut the price by $US7 million ($8.4 million).”
“It’s still for sale.”
“The mansion sits on 7.5 acres in Los Altos Hills. It boasts a wine cellar, Venetian- inspired ballroom, Italian statuary and swimming pool. At the reduced price of $US38 million, the property is a bargain, the owner says.”
“‘It’s worth every bit of $US45 million, and I reduced it reluctantly,’ said Porter in an interview. ‘We touched up every square inch.’”
“While Porter declined to say how much he spent on Stonebrook Court, real estate records show he paid $US5 million in 1999. He did say refurbishing the place cost ‘tens of millions’ of dollars.”
“‘The upper end is not immune to this decline,’ said Kenneth Rosen, chairman of the University of California’s Fisher Center for Real Estate and Urban Economics in Berkeley. A worsening economy means ‘these people will have less wealth and they will spend less.’”
“A 10,340-square-foot home in San Francisco’s Pacific Heights neighborhood is for sale at $US14.8 million, 17% below last year’s asking price. A home in Marin County’s Tiburon was acquired in August for $US900,000 less than the $US7 million list price in 2007.”
“‘You have smart buyers seeing a softer market, looking to negotiate a good price,’ said David Lichtman, chief credit officer of First Republic Bank, a San Francisco-based private bank and unit of Merrill Lynch & Co. ‘Nobody wants to overpay.’”
“High-end sellers must lower asking prices by 20% compared with a year ago, when initial listing prices didn’t reflect stricter credit conditions, said James Chalke, a broker in Beverly Hills.”
“‘What’s really happening is that sellers are taking value off their own markup,’ Chalke said. ‘A property is only worth what a buyer is prepared to pay for it.’”
“An 11-bedroom property in the Bel Air section of Los Angeles didn’t attract potential buyers until the asking price dropped by $US10 million, to $US35 million, Chalke said.”
“To be sure, the price cuts may often mean only smaller profits on property acquired years ago. Cinthia Haan bought the Pacific Heights home for about $3 million in 1992 and spent $3 million on renovations, she said. She stands to make an $8.8 million profit at the current asking price.”
“Haan spent three years redoing the six-bedroom house in Pacific Heights. ‘I’m ready to let go now,’ Haan said. ‘I’m ready to sell.’”
There’s a slight difference between losing your son, and losing 20 houses you had no business buying…
Are we communicating, professor?
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“Susan Fallis, a communications professor at Saint Mary’s College in Moraga, so far seems to fall into the ‘get the loans off the books’ camp of Wachovia customers. In 2004, she sold the Santa Cruz parking lot her father bought in the 1960s for his mobile home business. She reinvested the approximately $3 million into 20 single-family houses in and around Reno, with a 40 percent down payment on each one.”
“Because Reno rents dropped as her minimum payments climbed, she is now losing about $7,000 per month. She has asked Wachovia to temporarily lower the interest rate on her loans by less than two percentage points, without asking for any adjustment on the loan principal.”
“If Wachovia doesn’t allow any modifications, Fallis expects she will have no choice but to default in the next few months.”
“‘It’s absolutely insane,’ she said. ‘I’m about ready to become the Cindy Sheehan of real estate; this is just making me so angry.’”
She probably has already lost her downpayment. She needs to show some patience and wait for Wachovia to be taken over by the FDIC. At that point, she can work with Sheila to modify the loan. The only thing absolutely insane about what is happening to you Susan is your complete lack of comprehension of finance.
She inherits $3m and puts it into single family houses. You think you’ve heard it all and then you read something like that.
And along with the general feeling of entitlement, expects to be helped out of her gambling debt.
Gambling>?>
Don’t be silly. The Realtors that sold here those houses told her the prices would go UP 20% per year. IF she didn’t buy she would “be missing the real estate boom” (hat-tip David Lereah).
How is that gambling? These professional people gave her rock-solid advice. Now, they’re telling everyone there’s never been a better “time to buy”.
Look who pocketed the money from her transactions. Now, with the forclosures, they’ll get to pocket a little more.
The truth is, there’s never a better time to conduct a transaction that generates fees and commissions.
“The truth is, there’s never a better time to conduct a transaction that generates fees and commissions.”
Bullseye! And it goes far beyond houses. Ya gotta move money to make money!
Trouble is…in the future who will have money left to move, and will they even want the garbage that’s for sale?
Anyone buying 20 houses is a gambler……..no? Or do you prefer ‘investor’…………………:-)
Actually, she’s not looking for forgiveness, she’s looking for a temporary reduction of the interest rate only. Corporations in trouble do this all the time. She’s working the only leverage she has - publicity - to attempt to bring Wachovia to the table. Bad investment? Yeah, in hindsight. She ignored the First Rule - diversification. But it’s not as though she’s asking you to bail her out. Unless, of course, you are a Wachovia shareholder, in which case, she is.
I don’t know how you can say every agent says property will go up 20% every year.
There’s a standard CAR (Calif. Association of Realtors) form used by many agents representing buyers in which the first paragraph states that prices can go down as well as go up and that it’s up to the buyer to make their own determination as to the direction of future prices.
I like the form and use it all the time.
“Unless, of course, you are a Wachovia shareholder”…
I’m a WB shortholder, so I guess she’s fixin’ to MAKE me money.
Not just single family houses, but single family houses _all located in the same flippin’ place_. This takes the prize for a stunning lack of diversification and commonsense.
So…this woman basically inherited $3 million free and clear.
She clearly isn’t an investment wizard…so why not put that into CDs? At least until she can do some studying and make a rational decision. Even at a crummy 3%, she’d make $90K per year. That’s in addition to whatever she earns as a professor.
Somehow that just wasn’t good enough. Instead, she buys a ton of houses with wacky loans, thinking this will somehow make her wealthy beyond her wildest dreams. And now she’s “angry.” She compares herself to Cindy Sheehan, as though losing a child in war is somehow comparable to being greedy and stupid enough to take out a bunch of loans you don’t understand in order to become a slumlord.
This one really left me gobsmacked.
Oh..kay..? How do you put 40% DOWN on all 20 homes and still manage to find yourself with 20 N.O.D’s? I mean isn’t there a point where you’d have to be trying… to default?
Has Reno lost ‘that’ much of it’s value? If she is basically managing an ‘estate’, where’s her estate attorney? … did she even consult with an estate -planner-? I’m sorry but whatever she put ‘down’ seems to me was squandered in some fashion or another and in typical FB style we’re getting selected readings from the truth.
I can see selling the parking lot ( although I would have kept it ) but her inheritance was mismanaged from the git-go. And I agree, whatever you think of Ms. Sheehan, it’s a classless analogy.
“How do you put 40% DOWN on all 20 homes and still manage to find yourself with 20 N.O.D’s?”
Sigh, that was my thought as well. I’m so perplexed by this. It also appears she didn’t get fixed rate financing. Why?
The only explanation I can come up with is that she wanted better cash flow. But she put 40% down, so you would think she had decent cash flow, albeit at the opportunity cost of those down payments.
If she just HAD to buy RE instead of CD as others have suggested (man, I could live well on $90K and not working), why not put 20% down and keep the other 20% liquid for cash flow problems?
Sumpin’ don’t smell right here…methinks she put 40% down and then turned around and got second mortgages on each…
Reno is toast. Citibank just closed their branch offices in Northern Nevada and sold the customers to Fells Bargo.
Is ex-nnvmortgagebroker still posting? I’m sure he could fill us in on more detail.
“why not put 20% down”
Exactly. There are many people here that can speak to the market dynamics of the time more accurately than I ever could but if you put FOURTY % down and ’still’ couldn’t make it work..?
…IF she turned right around in ‘05 or ‘06 and plundered her own holdings, let’s face facts, that money is long gone. She had her inheritance, Next!
Then she could have bought 40 houses. Doubled her upside!
Sarcasm off.
“Is ex-nnvmortgagebroker still posting? I’m sure he could fill us in on more detail.”
Well, I guess I could elaborate, but in the end your “Reno is toast” comment pretty much sums it up.
And as for that Betty, she’s gotta be tops in the running for the “Stupid B*tch Award” of ‘08. 20 SFR’s in Reno?! ROTFL! Oh the comedy!
It was a riches to rags story…
Sure glad that she believes in diversification.
“Stupid B*tch Award” of ‘08″
Having been crowned by the ‘07 recipient, Cindy Sheehan. See that? We’ve come full circle.
Typical teacher/professor brains. No common sense. Diversification is the key. Why didn’t she invest in the bunny place?
I’m not a bum. I was a poor black child……………
40% down the bank will move to take the properties back. its the no down the bank does not want.
Good point, cactus.
Easy come, easy go.
Re: Ms. Fallis
I’m a Reno guy and looked her up on the Assessors web site and Recorder’s site… she is in a lot of trouble. Most of her purchases were in Sparks in new subdivisions. According to Zilliow, which I have noted is high in these area,shows she lost about 100k per home. So she has only lost 2/3 of her “bet.” Time for her to cash in and leave the table. All the houses she purchased are on track to lose at least another 20 percent or so. All houses were purchased in the name of her new company: Fallis Properties LLC.
The name says it all….
“Fall is properties”.
What exactly does a “communications” prof teach? Rhetoric? I’m confused.
Lol at $3 million Susan. Brewster blew $30 million almost as fast. Richard Pryor is not impressed.
I’m kind of impressed myself. I mean, a lot of folks wouldn’t have the slightest clue how to blow every penny of a $3 million dollar inheritance in one financial move. Really, very impressive.
No kidding!
That’s a totally impressive achievement.
Easy come, easy go.
This is why You spend You Money while You are alive and enjoy it.
Mom and Dad works 60 Yrs , spends NO Money to leave it all for the Children , who have No common sense and Blow 60 yrs of work in a Few Months and end up Broke Losers anyway.
This happens 99% of the Time.
My Brother in Law was Killed at 33 Yrs old and left 250k to my Neice. But He left 3 Executors from 3 familys to guard her trust( One could not do anything without majority rule) and she could never spend more than the interest.
She is 32 and a Multi-millionaire Now , because She still had to work for a Living and learned how to make wise Investments.
3 million down the toilet on an exercise in greed. Excuse me while I go beat my head on the wall a few times and think of what I could have done with 3 mil.
I agree with everyone above ,but if the bank has that much of a down payment ,than why not just give better loans to this lady and
not loose money by having that many foreclosures ? Even assuming that this lady went on adjustable rate loans that skyrocketed in the interest rate ,giving the women more manageable loan terms does not seem to me to be a bad move on the Bank’s part . I would not be thinking that the Bank should try to improve the loans had this women not put such a good down payment on these homes .
Come on ,in spite of the get rich quick mentality of this borrower ,the bank has a situation where if they give better loan terms, the women might be able to cash flow on those rentals .I’m not saying that the lady deserves anything ,but the bank might be able to save some money by working on this deal . It’s not as if the lady doesn’t have some skin in the game . Sorry,I think the Bank should try to work with this situation because she must be close to cash-flowing on those properties and her biggest problems is that she is stuck with really bad loans that are to high on the rate now. There might be more details to this deal that we don’t know about ,but if I was the Bank I would try to work with this these loans .
“I agree with everyone above ,but if the bank has that much of a down payment ,than why not just give better loans to this lady and
not loose money by having that many foreclosures”
The large down payment is the reason to foreclose on the homes.
Desmo, I’m assuming that she is down by about 10% over her down payment ,so ,if you add foreclosure costs ,the Bank might still be able to have a workable deal here if they give her better loans . It could give the lady time to sell off the properties one by one ,or maybe wait for a better market ,or perhaps cash-flow while she is waiting 10 years for some improvement in the market .
The bank didn’t receive the downpayment, the seller did.
Dude …I’m saying that if the properties go into foreclosure ,the banks are going to clear less than 50% of the original value of the house . By rewriting the loans ,they might avoid foreclosures if she continues to pay down the equity and wait for a better market .
Some of what Desmo said is true.
The banks typically close faster on those with equidy.
Howerver, House, I also agree with you. Forty percent in the game - like they (banks) need more housing?
Now try to follow me here.
Banks are not in the bussiness of housing. Soooooooooooo naturally the banks would want to work out a business deal, theortically.
Howerver, when a mania occurs - Seldom does a large (or small) entity think the opposite.
What goes up must come down? What goes down will go up? (Eh?)
O.K. I do have a point.
Toooooooooooooo many math challenged, euphoric collectives with greed vains.
Or, as Alad may say:
Green veins.
Editor took the day off.
Leigh
Here’s the little point you are missing, she was making a MINIMUM payment. She had an option arm or as Wachovia likes to call it a pick a payment loan. She never was cash flowing, she just thought she was.
LOL! My God, this might take the cake for the stupidest bubble buyer of them all. 20 SFHs in that POS city aka Reno? Are you kidding me!!!
As someone pointed out, you could make a decent living just off of interest from CDs. I hope this lady gets the fattest, longest Joshua Tree ever known to man.
“I hope this lady gets the fattest, longest Joshua Tree ever known to man.”
Already done, my friend. If this isn’t a classic case of JT self-impalement, I don’t know what is. 20 SFR’s in Reno?!!……..it’s like she purposely jumped naked out of an airplane somewhere north of Mohave with her cheeks spread wide, screaming “bring it!!”.
Sigh, my sister is selling Mom’s houses here in San Diego and wants to buy investment houses in Silver Springs. I felt she should just rent the SD houses but she ain’t listening to me.
Whatever, I just don’t want her to come crying to me when Mom is out of money. We had a deal. I got the cat and she got the Granny Beast.
Bows tearful eyes toward floor.
Some analogies are not to be thought, lest spoken.
The unaware.
To think she squandered Dad’s life work - add insult - $$ given, vs, life taken. Unbelievable.
Sigh,
Leigh
I know from my graduate studies that many college professors are from wealthy families–that is how they can afford to be in school for so many years. They also have no clue how to manage money. This case does not surprise me at all.
Keep the popcorn popping,
Red Baron
‘New-housing market analyst Sharon Hanley reported 193 sales at 1,090 projects in the county in July, off substantially from the July 2007 count of 639.’
Correct me if I’m wrong, but ‘projects’ would mean townhouse and condo buildings, and subdivisions. This could mean around 900 ‘projects didn’t see a single sale in July. These developers are probably going to walk away and the real fire sales should follow. Take note elsewhere; SD is way ahead of the rest of the state and every time the ‘experts’ say it’s hit bottom, it gets worse.
SD is way ahead of the rest of the state and every time the ‘experts’ say it’s hit bottom, it gets worse.
We have a coworker who likes to quote the ‘experts.’ Now the young kids mock him and ask when have they ever been right? At some point we’ll overshoot on the downside. We’re not there yet…
Got Popcorn?
Neil
The Malibu Times. “Only about 60 homes have sold in Malibu through the first two-thirds of the year. Steep price reductions are rampant, but the lower prices are still not sufficient to draw buyers.”
Have you guys seen that show million dollar listing? According to them things are great in malibu.That dude chad scares the hell out of me.
Calling Chad a dude is using the term loosely.
Have you guys seen that show million dollar listing?
yea I hate that show I hope Malibu burns to the Ocean after watching it.
I’m signing a two-year lease on a 2500 square foot house in San Dimas with city-light views for $2600/month. Ain’t life grand when the bubble-press doesn’t snare you in its propaganda trap?
2,600 may not be a mortgage payment in that place, but paying that much for rent out there sure sounds like a bad deal to me.
“… out there…” Where do you think San Dimas is, 29 Palms?
And welcome to San Dimas Al. Hope you enjoy it as much as my family and I have.
The trick, babykins, is to sell at the top of the bubble. That time was about 18 months ago. It’s a bit late now.
Enjoy the ride down. We’ll meet you at the bottom.
And remember, babykins, while nobody rings a bell at the top, you have all the time in the world to buy at the bottom.
He’s just giving it away @ $1461 a square foot…
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“The US housing crisis arrived on July 14 at Stonebrook Court, the 26,000-square-foot Tudor-style home of California venture capitalist Kelly Porter. On that day, four months after putting the house on the market, he cut the price by $US7 million ($8.4 million).”
“The mansion sits on 7.5 acres in Los Altos Hills. It boasts a wine cellar, Venetian- inspired ballroom, Italian statuary and swimming pool. At the reduced price of $US38 million, the property is a bargain, the owner says.”
Kelly Porker needs to be stop feeding at the trough of loose lending. Venetian- inspired ballroom? I hear faux replicas are all the rage in Vegas and surprisingly enough, many of them have swimming pools too.
Except that nobody has $38 MM to spend. There are a few Silicon-Valley based lucky ducks with net worths in the billions. Unfortunately, none of them are looking to buy a venetian-inspired bathroom in Los Altos at present, seeing as they already own houses here and there and are living their lives in pleasantry as we speak.
Don’t tell, but I’m trying to get one of them (aforementioned billionaires) to hire me. If that happens, I will do all I can to prevent this specific Los Altos house from finding its intended buyer.
Please excuse all typos, as my hyphen finger is acting trigger happy.
Call me stupid and slap me silly.
When one refurbishes ones HOME, is it not for the pleasure of living comfortably?
The updates to our HOMES have been for our enjoyment, fully realizing that the next one may not be inpressed with said style. (Fortunatley, we have good eye for said style).
My head hurts!
_______
“While Porter declined to say how much he spent on Stonebrook Court, real estate records show he paid $US5 million in 1999. He did say refurbishing the place cost ‘tens of millions’ of dollars.”
Genius…er…idio…I give up.
Grrr…
Leigh
I can get a New home built Now for 60 bucks a square foot.
Allowing a Mill an acre the land would be 7.5 Mil. leaving a cool 30 mill to build a house .
How can any MOOROOOON in the World spend 20 or 30 Mill on a Remodel?
For a Grand a Square foot I’ll remodel Your 26k sq foot house and Me and my children will Move in and Be Your servant for the rest of our lives.
Any Takers? I need a job like this.
“Though no more layoffs are in the works, Smith didn’t rule them out. ‘Are housing values going to decline further?’ he asked.”
Doubting Thomas has good reason to ask this question. As a company spokesman, I would envision him at the top of the layoff list. I guess the bank hasn’t heard of the putting out press releases on the internet yet.
Smith didn’t rule them out. ‘Are housing values going to decline further?’ he asked.
Talk about a deer in the headlights phrase…
He’s about to go under an 18 wheeler and isn’t willing to look that extra little distance to see how bad things are. Fall and winter are tough economic quarters… yet none in the REIC are willing to point that out.
Got Popcorn?
Neil
Merry Christmas.
This will end well.
Leigh
Jim Cramer says, ‘ Fall of ‘09 will be the time to buy’. He’s a complete clown!
“ACORN, an advocacy organization representing low-income communities, staged a rally at a Wachovia branch at Mission and First streets in San Francisco on Wednesday, with about 30 people calling on the bank to be more flexible in adjusting loan terms to prevent foreclosures.
ACORN - the group where obama gained his experience as a “community organizer” and this group was a advocate for lower mortgage standards…
“‘The program has done a lot of good for a lot of people. I love it. It helps me get a lot of people into houses but it’s pretty easy to walk away when you have no money put into it. If you put three percent into your house you’re more likely to make the mortgage payment,’ Knowles said.”
Democracy Now! recently had a story about Obama’s community organizing career. Seems that he wasn’t very successful at it.
And that brings up a larger point that got hashed around at Green Drinks last week. We were talking about Presidents who’d been successes in some other area before they went into politics. Other than Eisenhower (military), Lincoln (railroad attorney), and Washington (real estate investor and surveyor), we couldn’t think of any.
Yeah, but thanks to the magic of K-Street revolving-door corruption, *plenty* of politicians have lucrative “private-sector” jobs AFTER they leave office. Mostly by selling useless “services”, overpriced military HW and other crap to the U.S. taxpayer.
Ancedotally -
It is a crime to talk about intel.
General’s - talking head(s) advisors?
Ahen - Treason.
On the teebee - stratergerizing. (Sticking fork in both eyes).
There are hardworking, honest, good people in govternment. Polly comes to mind.
I cannnot image what Polly does quietly for us daily.
And the so many others - here -
For the sake of U.S.(A.)
Best,
Leigh
Politics is a talent in and of itself. I don’t think it’s fair to expect people to be really good at more than one thing. After all, how many people on this board can say something like that for themselves? Like “I led a failing, two-bit soap-and-handbag store to a place in the Fortune 500, then went on to win a Nobel Peace Price in literature.” Not too many.
I know a guy that would lie, even if telling the truth was easier…
He had exhausted all other avenues of making a buck in the city of angles, and was cozy with a formerly high-level disgraced politician, and about 10 years ago, an L.A. City Council seat race was wide-open, the incumbent being termed out, so he threw his hat in the ring, and ran for office.
I think he came in 7th out of 8 people running, so society dodged a bullet.
But imagine if he’d been elected, and started schmoozing his way up the political ladder?
I’m satisfied with being above average at more than one thing. I run a competent ship in my workplace, make competent money trading the markets, and so far, none of my daughters has gotten knocked up by trailer trash (or any other trash).
O.K. I’ll bite (although not Nobel prize nor Fortune 500 material).
Just average.
Leigh
Can’t say a whole lot but my father-in-law, who’s a very impressive guy, will be awarded the US equivalent of the Nobel prize shortly.
We’ve known for a number of weeks but have had to have been tight lipped.
Mike
Congrats to your FIL and family!
Grant didn’t do so bad as a general himself.
Hoover was a very succesful engineer and businessman before promulgating the first great depression.
Reagan was succesful actor, enough so to head up SAG.
Herbert Hoover was a very successful mining engineer.
Beat you by a mile Mot. The hoople?
Although not as well-remembered as Eisenhower, you would have to include include Zachary Taylor and U.S. Grant (successful generals). William Taft (circuit court judge pre-president and Supreme Court justice post-president). Teddy Roosevelt (author and military strategist). Woodrow Wilson (president of Princeton). Warren Harding (newspaper publisher). Herbert Hoover (Engineer).
That makes the list a little larger but I think your point is well taken — “not many”.
Funny thing about that list — Taylor, Grant, Harding, Hoover, and (some would argue) Wilson, are all remembered as being sub-par presidents.
Grant, Carter to name two right off the top of my head.
John Adams was a successful farmer and attorney.
Ronald Reagan, actor.
There’s plenty.
I
“Sellers should be happy with buyers’ offers, Hill feels. ‘Everyone saves a lot more money that way, including the lender that’s foreclosing,’ he said. ‘Buyers walk away when sellers try to counter the offer.’”
Will “First and Final Offer” finally gain traction?
If you’re happy and you know it, take the offer (clap clap)
If you’re happy and you know it, take the offer (clap clap)
If you’re happy and you know it, the realtor’s face will truly show it
If you’re happy and you know it, take the offer (clap clap)
LOL
The buyer’s revenge:
If you’re happy and you know it, walk away (clap clap)
If you’re happy and you know it, walk away (clap clap)
If you’re happy and you know it, the realtor’s face will turn to sh*t
If you’re happy and you know it, walk away (clap clap)
BWAHAHAHAHAHHAHHAHAHHHHHHHHHHHHHHHHH!!!
“Maybe Centex is more stubborn than other Inland Empire home builders, and it might bode it well. That’s because its smallest Coyote Canyon floor plan, a 2,470- square-foot home, is going for about $430,000 - a price that other builders would’ve drastically slashed by now.”
Coyote Canyon…”Buy Now…before we’re DOGMEAT GULCH !”
Sheesh, where do they think up these foreboding names…or is it a subtle warning
Just more garbage out there. I lived near that area for 10 years. Those homes shouldn’t be more than 150K, TOPS!
BTW, SIL and BIL are short-selling home we sold them at 400K for 319K. No offers. This house has been on market for more than 3 months in Fontucky.
Sadly, he declared BK and she is using her name a lone to buy a 287K home in Murrieta.
This is his 2nd BK in about 10 years. Crikey! To top it off…SIL is an accountant. Hilarious!
You can’t make this stuff up.
“Will “First and Final Offer” finally gain traction?”
I’ve got a lowball in on a house right now. If I’m not mistaken I’ll be skipping “first and final” and going straight to “second and lower”.
“High-end sellers must lower asking prices by 20% compared with a year ago, when initial listing prices didn’t reflect stricter credit conditions, said James Chalke, a broker in Beverly Hills.”
Hey, I thought wealthy people were immune to tight credit conditions. Are you telling me they have to borrow to buy houses too? Houston, I think we have a problem…
“Fallis, a communications professor at Saint Mary’s College in Moraga, so far seems to fall into the ‘get the loans off the books’ camp of Wachovia customers. In 2004, she sold the Santa Cruz parking lot her father bought in the 1960s for his mobile home business. She reinvested the approximately $3 million into 20 single-family houses in and around Reno, with a 40 percent down payment on each one.”
See. Still a victim. Another one of California’s entitlement mentality: an inheritance that was foolishly spent speculating in real estate. Now that the bottom has fallen out, EXPECTS the bank to lower her principal and interest rate. And I just read that the automakers want their bailout too, for their bad decisions making nothing but butt-ugly pickups. Where is my bailout on precious metals and stocks?
Natty City paying HELOCS to go away . . . what’s next?
http://money.cnn.com/news/newsfeeds/articles/djf500/200809040131DOWJONESDJONLINE000276_FORTUNE5.htm
“‘It’s absolutely insane,’ she said. ‘I’m about ready to become the Cindy Sheehan of real estate; this is just making me so angry.’”
You already sound like a kook nut-job with your investing skills.
I thought it, but I’m glad you said it.
ACORN is the worst joke ever. Their main source of income is “memberships”, then they all have two minute hate together against the enemy of the day while ejecting any who aren’t totally with the group. The depths of so-called public advocacy don’t go any lower.
They went through the neighborhood just north of here. Their organizers claimed that the area didn’t have any organization that was advocating for the people living there.
Yes they did. And they still do. It’s called their neighborhood association. And one of their officers came to a city-wide meeting to warn other neighborhood associations to beware of ACORN.
Why do people living in so-called neighborhoods need “advocates”?
The whole concept just astounds me.
This “victim” advocacy seems to work so well to syphon off government money and set up various “programs” like Head Start and Child Welfare programs and various Centers for various “services”.
Now it’s “housing fairness” or something similar. I thought Equal Housing Protection Act or whatever name they gave it was to make everyone equal in housing? what went wrong?
Where will all this end? Bankruptcy, I guess.
“This “victim” advocacy seems to work so well to syphon off government money and set up various “programs” like Head Start and Child Welfare programs and various Centers for various “services”.”
And don’t forget LaRaza, the granddaddy of all “advocacy” shakedown groups in the US today. Wouldn’t exist without taxpayer money.
This Arizonan heartily concurs.
La Raza gets taxpayer money? How?
Eastmond’s Law:
All institutions tend over time to become run for the benefit of those who run them.
Read the paragraph under “Criticism”. The Wiki article is heavily slanted in LaRaza’s favor, but “Affordable Housing Initiatives” is one of LaRaza’s big shakedowns, like ACORN. In 2005, earmark was 4 million. Under the housing bill, Barney Frank has evidently earmarked something like 15 mill. Yes, the do have corporate sponsorship and privated donations. Also something of a shakedown, Ford gives, Wachovia gives, etc.
http://en.wikipedia.org/wiki/National_Council_of_La_Raza
What? That just can’t be… I thought their primary purpose was to train folks to run for Pres.
Just like the Chamber Of Commerce?
“New-housing market analyst Sharon Hanley reported 193 sales at 1,090 projects in the county in July, off substantially from the July 2007 count of 639. Just three years ago, the all-time July peak sales total was 1,578. Early indications are that sales in August were up a bit but not much better.”
Percentage drop in San Diego County July new home sales from July 2005 peak to July 2008:
(193/1,578-1)*100 = -88 percent.
It looks like builders may have to lower their prices some more to eliminate the inventory glut.
Does anyone think it is worth making lowball offers at new developments with lots of vacancies just yet? There is a development near us with nominal asking prices of $1m or so which just might work for us at 60 pct off, but I have little inclination to insult sellers unless there is some chance they will accept an offer.
Never underestimate the power of a low bid.
Never underestimate the power of no bid.
Ask anybody who’s ever traded (or made markets in) equity or commodity futures how that ends up.
I imagine if you are making your living trading equities or commodities, then no bid means no income.
But our opportunity cost of not bidding is renting, which is still pretty low compared to the costs of PITI and falling knife holding costs of loanownership.
No, it means if you’re actually long (which can happen if you’re a market maker) and there’s no bid, there’s no way to get out.
It’s poopy-time with the brown stuff running down the inside of your legs.
And remember, as a market-maker, you’d “paid” to put out two-sided quotes.
In a collapsing market, the bids disappear first. Always.
Nobody is willing to hold a long position in that asset. Hence, no bids.
Which brings me to the classic “Three Stages of an Investment” joke:
[Stage 1] “It’s a great investment.”
[Stage 2] “I’m in it for the long-term.”
[Stage 3] “Somebody, anybody, please give me a bid.”
‘[Stage 3] “Somebody, anybody, please give me a bid.”’
I intend to be a Stage 3 buyer, if I ever buy. I may even stipulate in the contract that the seller has to come back in order to shoot the squirrels.
“shoot the squirrels”…
I’d request they eat them as live prey.
Insult away. They are better off hearing what the property is ACTUALLY worth anyhow. If they don’t take it they will look back with a tear in their eye saying amongst themselves, “Why did we not take that offer?”
Sun Tzu, the author of The Art of War, would go so far as to bait them against each other so that they will GLADLY lower the price just so the $ does not end up elsewhere. Then he’d get them to the bottom dollar and tell them, “See you next year”.
IMO here are the typical sellers willing to take the money and run;
A seller who has long owned the property, owns it free and clear, has some kind of disability and needs 24 hour care or have a terminal illness and just wants to go dance in the sun for the time they have left..
A estate sale wher you have heirs particularly if they are out of state and the property is in California..
A bank owns it….
Dave,
I agree with your first 2 but when a bank owns it, sometimes they take 2 months to even respond to your low ball offer.
I’d rather have the clap than deal with a bank.
I plan to submit a low ball offer to a bank or two and go back to my rental and forget about it. Why “wait”?
Just check the assessed value after completion of construction in the county register. It reflects the building costs + land costs of the developer/builder. I find values there usually at 30%-50% of the asking price. Take this as your offer.
“Hanley’s other findings for July: a cancellation rate of 43.1 percent, up from 27.4 percent in July 2007; weekly traffic to sales offices down to an average 22 visitors per tract, a record low for July; and 84.6 weeks of unsold inventory, more than double the 35.3-week level a year earlier.”
I am trying to parse that 43.1 pct cancellation rate. Does this mean the effective number of homes sold for July was
(100-43.1)/100*193 = 110?
I guess now would not yet be the time to buy a new home, according to JP Morgan*, as almost nobody is selling?
*”Buy when everybody is selling, and sell when everybody is buying.”
I would agree that most markets are definitely NOT showing capitulation yet, but it feels like it’s getting closer.
“It may be said with a degree of assurance that not everything that meets the eye is as it appears.”
Rod Serling
It’s nice to see some reality beginning to spread into the Malibu market. Prices there are still crazy high, though. I recall posting here about a month ago that driving through on PCH there were For Sale signs all up and down the 26 miles of coastline. As I have also posted recently, these expensive areas have, for the most part, frozen up rather then dropping price.
Now perhaps we will see some price movement, although I’m not sure who will be buying to set the lower comps with the jumbo load market frozen up. I expect Malibu to get hammered when the pay-option ARM resets get into full swing. With any luck, I will be able to pick up a beach house in a few years at a reasonable price.
For some perspective, between 1960 and 2005, housing prices in Malibu went up by a factor of about 100, not adjusting for inflation. A $25K house became a $2.5 million house. And most of the city still has no sewage system; you get a septic tank and a couple of cesspools with your beach shack. The motto of one of the campaigns to put in sewers was “Flush Without Fear!”. It lost.
Let’s not forget the added bonus that the house directly abuts Pacific Coast Highway, for those who wanted the noise of the LAX flight path but felt that Westchester didn’t have enough mudslides or fires to suit their taste.
t’s nice to see some reality beginning to spread into the Malibu market.
Reality will be the invisible hand slapping them hard.
TWO YEARS of inventory! The best selling seasons are over in 2008. Credit is tightening… I really doubt they’ll break 200…
Got Popcorn?
Neil
“‘The upper end is not immune to this decline,’ said Kenneth Rosen, chairman of the University of California’s Fisher Center for Real Estate and Urban Economics in Berkeley. A worsening economy means ‘these people will have less wealth and they will spend less.’”
Just wait until the Alt-A and prime resets peak. The upper end ain’t seen nothin’ yet.
I just read that the neg-am loans are starting to default earlier than expected. Apparently, between people making the minimum payments and their house values going down they’re hitting the 125% triggered reset well before the calendar triggered resets.
A good example of a non mask-able interrupt (NMI).
Processor lingo for the techies is actively encouraged. Was this X64 or SPARC you wax eloquently about? Don’t get me started on deferred and disrupting traps or we could be here awhile.
Neat coincidence: the most popular processor for interrupt-driven embedded applications is, of course, the ARM.
Well, back in 2005 we were running with DTACK grounded.
(Mot 68K)
Lawdy, lawdy, lawdy, wake me up when you get to the 8086, wontcha?!?
Oh, don’t worry about all those resets. My MB friend says things will be just fine because he can refinance them into fixed rate loans.
My response:
“Well, my friend, what about when they can’t bring money to the table when they’re underwater? Will they still be able to refinance? I know they won’t be able to bring money because if they had money in the first place, they wouldn’t have needed these loans and wouldn’t just be making the minimum payment.”
……chirp, chirp……..chirp, chirp…….chirp, chirp…….
Prof. Bear~
I live in your neck of the woods and am curious as to which developement you are referring to. We (hubby and me) are also looking to purchase (when it makes fiscal cents
) in the North County area, specifically Rancho Bernardo or Rancho Penasuitos.
Stars End
I like the look of the homes at Avaron Del Sur, but looking at their web site, it seems they are clinging to the hopes of selling units at $1.2m or so, which is way out of reach for us.
By contrast, on visiting the ziprealty.com web site for the first time in months, I see an interesting shift in 92127 listings: Though the median list price is once again up around $1.3m, the homes offered at that price point are much bigger than they were a couple of years back. Case in point (and check out the 6/2-6/3 price changes!):
17046 SAW LEAF LN, SD - Rancho Bernardo, CA 92127**
Beds: 5 Type: SFR Sq. Ft.: 4,444 Lot Size: 17,080 Sq. Ft. MLS #: 086027227
Baths: 5/1 Built: 2003 $/Sq.Ft.: $293 List Date: 04/11/08 On Market: 146 days
List Price: $1,300,000 - $1,330,000 Price reduced
Estimated Monthly Payment: $8,648
Description
Gorgeous bel etage home finely upgraded w/tile flooring, gourmet kitchen, enchanting wine room, formal living/dining rooms, 4 fireplaces, recessed lighting, custom paint, dual staircases, office, elegant master retreat, 4+ car garage & sparkling pool.See supplements 4 more
ZipRealty Price Track
Price Reduced: 04/30/08 — $1,450,000 to $1,400,000
Price Increased: 06/02/08 — $1,400,000 to $1,435,000
Price Reduced: 06/03/08 — $1,435,000 to $1,400,000
Price Reduced: 07/29/08 — $1,400,000 to $1,300,000
In 2004, she sold the Santa Cruz parking lot her father bought in the 1960s for his mobile home business. She reinvested the approximately $3 million into 20 single-family houses in and around Reno, with a 40 percent down payment on each one.”
—————————————————————————-
Greed is good!…uh until it isn’t anymore.
Gordon Gekko: Greed is good.
And never forget from that other classic Glenary Glen Ross: COFFEE Is for CLosers.
Oh, did everyone watch Robert Schiller’s Yahoo Interview?
“U.S. house price decline could be worse than the Great Depression.”
Oh, could it now, professor?!? After all, it all came out of left field, right?
Wank-issimo!!!
Remind me someday to tell you how this “honored” professor groveled in front of my group (former company) to get his worthless spawn a summer job.
Actually, his spawn was quite nice so we stuck him somewhere where he’d do no harm, and paid him, but he was a nebbishy kid. Bet he didn’t get laid either in New York inspite of all the dough he made that summer.
“Haan spent three years redoing the six-bedroom house in Pacific Heights. ‘I’m ready to let go now,’ Haan said. ‘I’m ready to sell.’”
But Cyntia Haan’s real comment went something like this,
I have spent three years sitting on my ass watching HGTV and spending Heloc money telling other people how to work on my house. Now I want to get paid my well earned equity because I am a real estate mogal…just like Trump.
It’s absolutely insane,’ she said. ‘I’m about ready to become the Cindy Sheehan of real estate; this is just making me so angry.
I think, Ms Communications Professor, that you may soon deserve to rot in da house and be a cellmate with our good buddy Casey. I personally couldn’t stand Ms. Sheehan and her actions. But at least I can sympathize her loss and with the reason for her anger. And your greedy reason isn’t in the same league. R we communicatin’?
“Because Reno rents dropped as her minimum payments climbed, she is now losing about $7,000 per month. She has asked Wachovia to temporarily lower the interest rate on her loans by less than two percentage points, without asking for any adjustment on the loan principal.”
This is just so sad. This woman has no clue, does she? She has been losing money ALL along not just since rents dropped.
This is not sad. This is freaking hilarious! Geez, can you imagine what so many of the people here could have done with a $3M inheritance? They sure as hell wouldn’t be stupid enough to buy 20 SFHs in one location.
I hope this beeyatch loses a lot more than $7K per mo. Hope she is personally bankrupt as well as being morally bankrupt.
You know what makes me angry? People who think that losing money is just as bad as losing a son. Grow up, lady. You should have taken that $3MM, waited out the RE crash, then bought yourself a house/car, and saved the rest of it for living and for your kids. But NOOOoooo. Little miss “daughter of a businessman” had to be a hard-nosed RE investor, renting out her investments AT A FREAKING LOSS.
For all you who dismiss the US capitalistic system, claiming that it is really just a glorified aristocracy, I present to you Susan Follis, TFBOTM (trust-fund-of-the-month) baby, a perfect example of capital selection. Not a lot of “old money” left these days to buy up all that overpriced RE in Palo Alto and the like.
TFBOTM = trust-fund-BABY-of-the-month.
Can we get a song here, please?
(To the tune of “Camptown Races”)
trust-fund-BABY-of-the-month,
crying, crying
trust-fund-BABY-of-the-month
crying all day!
Losing every month,
Losing every year,
I bet my money on the real estate boom,
Now I can’t even buy a beer.
HAY!
Ok you guys, I agree that this investor was greedy ,but the bank might be able to avoid a lot of foreclosures if they re-write those loans into something more workable . Like I said before ,I’m saying the Bank should improve the loans ,only because she put 40% down on the houses . Don’t get me wrong ,I don’t like the way this investor compares herself to a person who lost their son ,but just as business decision of a Bank ,they might avoid foreclosures by working with these loans . Again, I’m only saying this because the borrower put so much money down on these properties .
WB is desperate for cash. Tell me, how can WB come up with cash more quickly in order to shore up reserves.
1) Rework loan so as to continue to recieve amortized or IO payment.
2) Foreclose and unload the property on some knife catching sucker for a lump sum receipt of cash.
Methinks #2 makes better sense to a bank struggling to stay afloat.
If WB is owed 1500K per house and each goes into foreclosure the best that WB could do is end up with a loss of $400K. WB is better off reworking the loans, then sell to FHLB for full value cost $100K.
3) Create a company out of thin air and then sell the junk properties to it, then take it public.
I’m saying the Bank will repossess these homes, only because she put 40% down on the houses.
Put zero down and the bank will deal.
Now if Reno RE has fallen over 40% (yikes) I don’t know what the bank will do.
“Barnhouse used to work in the customer service department at an Acura dealership, but her job was eliminated when the business was sold….”
“‘Jobs used to be a dime a dozen … but now I can’t find anything.’”
This sounds like something that could have been said in 1931.
I also found it interesting that the article couched the choice to work the county fair as a means to “help pay the bills”.
Are you trying to tell me that those who worked the fair in preceding years did it as charity work?
Trust Fund, Baby! Trust Fund, Baby!*
To the tune of Paul Revere’s “Good Thing”.
(Used without permission. I didn’t even ask.)
“If Wachovia doesn’t allow any modifications, Fallis expects she will have no choice but to default in the next few months.”
“‘It’s absolutely insane,’ she said. ‘I’m about ready to become the Cindy Sheehan of real estate; this is just making me so angry.’”
By that, does she mean she’ll start blaming the Jews for her problems?
Sept. 4 (Bloomberg) — The U.S. government needs to start using more of its money to support markets to stem a burgeoning “financial tsunami,” according to Bill Gross, manager of the world’s biggest bond fund.
More of the taxpayers money he means, or future taxpayers like the next 100 years.
That ain’t workin’ thats the way you do it privatize gains socialize loses just like that guy on CNBC TV
Already done, my friend. If this isn’t a classic case of JT self-impalement, I don’t know what is. 20 SFR’s in Reno?!!……..it’s like she purposely jumped naked out of an airplane somewhere north of Mohave with her cheeks spread wide, screaming “bring it!!”.
I claim the video rights to this. That picture is so hilarious for one so deserving.
Hi HBB. I would like to ask for some wise opinions from the smart folks here for a friend I just made contact with again after many years.
This friend owns a townhouse near the White House in DC. She says it is a gated community in a safe area back there (I have never been to DC but know pockets are safe and others not safe). She says that her 1 and 2nd mortgage is around $620K. She says its current value is $620K. She knows there is a bubble, but says since area is good she expects to hold better than others. On a moral basis, she would like to either rent out or sell and not walk, but may have to consider that. Her mortgage is around $3400 and $450 in HOA. She expected potential rent to be $3700-$4200. She is having some financial difficulties and owes a lot of money outside of mortgage (6 figures +). She has been self employed and income not steady. If she is able to do her specialty, she can be worth a lot of money. She also doesn’t want to go BK, but that may be the last option and have to be done. She definitely is planning on moving and I did get her to see that the townhouse may become a big liability instead of an asset. So what is best option. Walking and tossing keys to bank? Rent out and stop paying mortgage, pocket rent until bank forecloses? File BK? Keep trying to pay mortgage and other bills (her preference, but not my recommendation)? Keep house and rent out and pay mort (not my recommendation)? Any other thoughts. What is the expected prognosis for the area walking distance to White House, and right in heart of the Capital? Thank you for any assistance.
You probably shouldn’t get legal advice from the Internet for something like this! She should talk to a lawyer.
She has multiple mortgages? While the primary may be non-recourse (in other words, the bank accepts the house as collateral, and can’t go after you for more if you default), the other mortgages probably aren’t.
What makes her think the “current value” is 620K? Does she have an offer at this price?
Do you really think someone will rent a townhouse for $3850? (Her break even price assuming its rented 100% of the time?) Would you?
Rent out and stop paying mortgage, pocket rent until bank forecloses?
This is extremely immoral! Now she’s putting an innocent victim–the hapless renter who will come home one day to find his stuff on the street–in the middle of her problems. If she suggested this, I suggest you find some better friends.
She is delusional about what she can get for the house and for rent. Her only real option is to let the bank foreclose.
http://4.bp.blogspot.com/_nSTO-vZpSgc/SLkCmQILtOI/AAAAAAAADM8/K6kwsoPW9bc/s1600-h/so-calprices-bc.png
“‘It’s definitely going away quickly,’ Knowles said. ‘I don’t think it’s going to come back. I’d be happy if it came back but I doubt it. It’s definitely going to affect home prices.’”
————————-
Just wanted to point out that they are admitting here that these “down payment assistance” programs DO affect prices (since the lack of them affects prices, according to this statement).
These programs make houses MORE EXPENSIVE, thereby making them LESS AFFORDABLE for the “poor folks.”
Why can’t anybody be honest about things?
Agree 100%. All these give a way programs just increase the price of the house and creates a false market . The credit markets got to get back to borrowers having skin in the game to reduce the risk of buyers who walk and have nothing to lose after being slammed into a low down real estate deal by the industry . They have a 40% default rate with these seller assisted down payment programs ,so you tell me
what a joke these programs were .