Questionable Practices In California
The San Gabriel Valley Tribune reports from California. “The government takeover of mortgage giants Fannie Mae and Freddie Mac could lead to a dramatic drop in homeownership if they become privatized, an industry group said Tuesday. Looking down the road, privatization of the two agencies would result in a ‘big set of obstacles for homeownership in the future,’ said Joel Singer, executive vice president of the California Association of Realtors.”
“‘Without the implicit guarantee of a partnership between the government and the secondary market I think mortgages would be substantially higher relative to where they’ve been historically,’ Singer said.”
The Times Standard. “Fannie and Freddie have historically helped stabilize the housing market. If the organizations were to become exclusively profit-driven, said Humboldt Association of Realtors President Tom Hiller, housing prices would likely go up.”
“‘We hope they don’t throw the baby out with the bath water,’ Hiller said. ‘Both the CAR (California Association of Realtors) and NAR (National Association of Realtors) will be looking to the new Congress to make sure these entities are saved as opposed to privatized.’”
From Metro Active. “Alberto and Rosa Ramirez pick strawberries eight months a year and earn around $400 a week doing so. Rosa and her sister, out shopping for food, spotted the newest issue of La Ganga magazine, got home, plunked down on the couch to read it and found a real estate ad promising, ‘With Maria and Rafael you can do it-you can buy a house,’ that sounded awfully good. ‘Buy with us and we’ll give you furniture” sounded even better.’”
“And that’s how Alberto, Rosa and Jesus, in the summer of 2005, ended up at the Rancho Grande Real Estate office in Morgan Hill to ask a few initial questions about buying a house. They say they told real estate agent Maria Avila that they weren’t able to afford much. No problem, they recall Avila saying. We’ll find a way.”
“The world Maria Avila created for the financial community to review, he was an ‘agricultural expert’ who owned his own business and boasted an income of around $100,000 a year.”
“From the beginning of their house-bidding process, Alberto, Rosa and Jesus suspected something was a bit off, because the $720,000 loan needed to buy it would ordinarily require a mortgage payment of around $4,800 a month.”
“‘At the height of all this, back in 2005 and 2006, pairs of real estate agents used to circle around places like Home Depot,’ says attorney Pamela Simmons, who represents the Ramirez and Martinez families. ‘They’d pick up a group of day laborers in their SUVs, bring them out to a property they were selling to ‘cut the weeds and fix the place up,’ and then at the end of the day, pay them well and ask, ‘Are you guys by any chance renters? If so, you really ought to buy a house. In fact, how about this one you’ve been working on all day, right here?’”
“Overall, the Ramirez and Martinez families put $39,000 into the house. Maria Avila put in around $29,600-and collected 3 percent as seller’s agent, again as buyer’s agent and a third time as loan agent for a total of $64,800. She netted around $35,200. The families have lost their former affordable farmworker housing, their $39,000 and their house.”
“This is the nature of many of the questionable practices that are leading to boarded-up neighborhoods everywhere Pamela Simmons’ law partner, Bill Purdy, describes these practices as “the root cause of hundreds of thousands of foreclosures.”
“‘What happened to the strawberry pickers at the hands of that particular broker is symptomatic of a massive tidal wave of foreclosures breaking across the state. There will be wave after wave of them. There are many, many more latent foreclosures out there. The approaches used were different, but the result was exactly and invariably the same.’”
“As if the housing crisis weren’t bad enough, the latest side effect is an uptick in neighborhood blight around the South Bay. City code enforcement officials are reporting an increase in the number of homes left vacant and neglected, in large part because of foreclosures. Since last summer, more than 300 such homes have been identified, according to the city, and that means windows boarded up, broken glass and overgrown landscaping.”
“Of those, about 41 percent are bank-owned homes and most of them are clustered around the East Side of San Jose. The surge of foreclosures has made it tough to track down the offenders, said Wayne Chen, policy development officer in the housing department.”
“‘There are bank-owned properties that some folks are taking off and leaving the properties as is,’ Chen said. ‘Because the city is so large, there’s potential for a lot of home sit; it’s hard to proactively monitor them.’”
The Contra Costa Times. “A record number of Contra Costa homeowners failed to pay their property taxes last fiscal year, costing the county $116 million. The rising delinquency rate comes as no surprise to most watching the mortgage meltdown - if homeowners can’t afford mortgage payments, they probably can’t afford the twice-a-year property tax installments.”
“‘It’s been substantial,’ said Russell Watts, Contra Costa’s chief deputy tax collector.”
“Many of the delinquent tax bills are the result of foreclosures, as homeowners often include property taxes in their mortgage payments, Watts said.”
“As the 2008-09 fiscal year tax bills hit Contra Costa mailboxes this month, Watts said, even more people could fail to pay. In addition, assessors worry that homeowners will read their assessed property values and question why their neighbor’s home is selling for $100,000 less.”
“Homeowners don’t realize assessments are based on Jan. 1 values and not current property values, said Ken Blakemore, San Joaquin County assistant assessor.”
“‘That’s a bitter pill to swallow,’ he said.”
The Sacramento Bee. “A financial dispute involving one of Sacramento’s signature condo complexes apparently is turning nasty. As we hear it, officials with project investor Resmark Equity Partners LLC of Los Angeles entered the L Street Lofts building early Friday with the intention of changing locks and assuming control.”
“Representatives of developer Sotiris Kolokotronis then arrived at 1818 L St. and tensions escalated, resulting in police being summoned.”
“‘We got called out after it became a little physical,’ says Sacramento police spokeswoman Michelle Lazark. She says police ‘mediated’ and tempers cooled.”
“Where things stand now is unclear. The sales team is still in place, in offices across from the glitzy eight-story condo complex, considered a symbol of midtown’s residential and retail renaissance. Among buyers of the project’s pricey penthouse units are mayoral candidate Kevin Johnson and Sacramento Kings star Kevin Martin.”
“What’s behind the financial dispute between Resmark and Kolokotronis? It could be Resmark’s concern that fewer than half of the 92 units - priced between $389,000 and $1.2 million - have been sold since L Street Lofts opened last year.”
From KSBW. “Falling property values are putting a strain on the Salinas city budget. Mayor Dennis Donohue said foreclosures are also cutting into the property tax revenue for the city.”
“One Realtor said homes that sold for $600,000 in 2006 are now selling for between $320,000 and $300,000. The lost home value translates into a significant loss of property tax revenue for Salinas - an estimated $4 million for 2008.”
“Donohue said this year’s budget has reserves built in for the shortfall, but the 2009 budget is looming and city leaders will have to do more with less. ‘It has created a 10.2 percent budget gap in 2009, about 12 months from now,’ said Tom Kever, the City of Salinas finance director.”
The Voice of San Diego. “Attempting to fight urban decay in San Diego’s neighborhoods hit hardest by foreclosure, a plan to buy up foreclosed properties here is gaining traction and some national attention. The plan, known as a land bank, would assemble taxpayer, private and philanthropic dollars to purchase foreclosed houses.”
“The push for a land bank comes after local governments have worked strenuously to artificially lower home prices for the region’s low- and moderate-income residents during the years-long housing boom.”
“By purchasing homes in neighborhoods that could have further to fall, the land bank attempts to stop the bleeding of home values for owners in foreclosure-heavy neighborhoods. The plan’s supporters acknowledge that by opening a net under falling prices, the action potentially undercuts the market’s own mechanism for achieving affordability — falling prices.”
“‘It’s a big ocean, you know?’ said Jim Bliesner, director of the City-County Reinvestment Task Force. ‘The land bank isn’t going to be large enough to buy [all of] the houses currently in foreclosure on an ongoing basis. Both can coexist.’”
“But even contemplated on the national level with $4 billion allotted for such programs, the idea falls short in light of the extent of the foreclosure problem, said economist Chris Thornberg, principal at Beacon Economics.”
“‘It’s a drop in the bucket,’ he said. ‘It’s not going to stop anything.’”
The LA Daily News. “Home prices might be plunging across California, but the Golden State still dominates the nation’s 10 most expensive housing markets. California accounts for eight of America’s 10 priciest places to buy a house, according to the Coldwell Banker Home Price Comparison Index released Tuesday.”
“Coldwell Banker has been putting out this list for 21 years, and California has always been at the high end, said Jim Gillispie, the company’s CEO. That’s true even now, as the state experiences some of the biggest price drops in the country.”
“‘They came up so much in California (before the declines), it still puts you at a higher price point than the rest of the country,’ Gillispie said.”
“And the reason for such longevity may surprise you. It’s the landmark Proposition 13, passed in 1978, that capped the annual property tax at 1 percent of a home’s value, said Daniel Blake, director of the San Fernando Valley Economic Research Center at California State University Northridge. Most other places have a tax rate of 2 percent to 2.5 percent, he said.”
“‘In California you can pay a higher mortgage and therefore buy a more expensive home for the same amount of money than you can in a place where you have higher property taxes,’ he said.”
“There are two other reasons why California features expensive residential real estate, Blake noted: the economy and the Mediterranean climate.”
“‘It (such a climate) is offered in about eight places in the world, so this is a very nice place to live,’ he said. ‘And we have a lot of really good jobs.’”
These scumbag UHS should take a look at real world situations like these:
‘Jo Hernandez harbors no delusions about the 500-square-foot Le Grand home that her children lovingly call their shack. She admits they’re right. The one-bedroom, one-bathroom house that she, her five children and her mother all call home was built in the 1920s from the scraps of an old barn. It has no heat or air conditioning.’
‘The walls of its cramped, dimly lit kitchen have no insulation. They are made of unfinished wood, as is the floor, which more closely resembles a backyard deck. The kitchen also lacks electricity.’
‘It’s not my dream house,’ jokes Hernandez, 39. ‘But it’s all we have.’
‘It’s all they have because it’s all they can afford. Hernandez is one of roughly 50,000 Merced County residents and nearly 40 million Americans living in poverty, so her family’s struggle is far from unique.’
‘But at $280 a month, her mortgage is hard to beat. And it’s all she can manage on her income. Medi-Cab pays Hernandez $8.25 an hour, or about $1,200 a month. She gets another $600 a month in aid and food stamps.’
This isn’t an abstract debate. Cheap land and housing should be what we are working toward, not the other way around.
BTW, the strawberry-picker article has a lot of great detail and is worth taking the time to read.
If the US ever wants to compete with the likes of China and India, this is like the biggest DUH ever!
The problem with the US is that it’s expecting economic rents at the same scale that it got when it was the only nation left standing past WWII. Those days are long gone, and aren’t coming back.
The rentier economy is going to have a big-time crash.
Well why do you have 3 dogs too? ……….geez
————————————————————-
“There’s a lot of things that would be different if we had more money,” she said. “Even little things — I’d love to take the kids out to eat or to the zoo. But those are extras. We just don’t get many extras.”
Well, I have dogs, and they give me things that money can’t buy, like unconditional love and fleas - ever try to buy a flea?
Actually, my dogs don’t have fleas, but some of us consider our pets part of our family. Much more important than going to the zoo or eating out. Come to think of it, why would I need to go to the zoo, when I live in one…
NYCdj, as a known cat lover who would spend money on vet bills over food, I’m surprised you’d even post such a thought…or maybe one of your cats posted this under your name???
Lost:
I always thought kids come before pets..but hey feed the kids dog food…..can you buy dog food or bacon fat with food stamps?
And in a 500 sq ft shack…..wonder if anyone smokes plays lotto….
Yes i would pay vet bills and eat less…but then that is only me she is forcing her kids to suffer needlessly..
DJ, dogs can add a lot of quality and love to a kid’s life, if I were a kid, I’d take the dog over a trip to the zoo or even eating out. But hey, I agree, kids do come first, when that choice has to be made. But I personally would never be in the position where I had to make that choice. And I would indeed suspect Lotto and smoking and all might be involved - expensive habits, a little self-discipline could be in order.
But, I personally think your cat posted that and now you’re covering for him/her…
LOST you are so KEWL…….
Pets do add to the quality of life, i am just not a dog person but dogs still like me….i pet them play with them, but they cant come home with me……
Its just in this situation, money that should be going to put a door on the bathroom let alone a sink, is being spent on dog food….
I agree, she could afford a higher mortgage payment with her income. I also don’t buy the story about her mom and husband not being able to contribute. The mom surely has a little left after paying “her own bills” (What bills? She lives at daughter’s house), and the soon-to-be-ex needs to pay for his 5 kids, separation or not. I’ll bet she’s just another crack mom who spends all her money on crack.
But I bet the dogs keep the kids warm at night in the Winter if they have no heating!
i pet them play with them, but they cant come home with me……
See, DJ, it’s all about that CAT, isn’t it??? Well, maybe you should let the DOG come home with you just one time…that CAT needs to learn that it’s a real world out there…
(posted by Lost’s dogs…)
Woof woof….come on lost have you ever been in NYC?
You are married to your dog… i see 6-7 people at 630 every morning even in a winter blizzard that just have to walk their dogs before work….nope you’ll never get me to do that….lol
DOGZ shoudl bee freee to run wilde, thn no one would hav to walk thm…
Hey, you stupid dogs get off my computer, dang dogs, bad dogs…
I tried to get a low-interest loan from our ‘money cats’ (Calicos), but like most financial institutions, they aren’t lending now…
Lost
The correct redneck spelling is DAWGS … me n my dawg
DJ,
Lost’s CATS here (all five of us), with our five bits’ worth…
She’s OK, actually quite civilized and even likes us cats, but those dogs of hers, on the other hand, are pestilences from HE**, they are SO clueless that they think Chopin is what you do with bones…
Anyway, carry on spreading the truth about dogs, we certainly appreciate it.
Hi, this iz Wheeton, Big V’s cat. I just want to tell you all that duks R really stoopid two. I hate my new duk. He iz worse then a dawg cuz he won’t stop quacking and he likes water two much.
OKOKOK a touching cat story:
http://news.yahoo.com/s/nm/20080910/od_uk_nm/oukoe_uk_britain_cat
The problem with dogs is that they bark too much which further depresses house prices.After all, who wants to spend a half a million dollars to listen to five dogs barking every day?
http//www.barkingdogs.net
P.S., I got it here many years ago.
Actually I have two dogs, dog food? probably no more than 60 bucks. I give them dry dog food. Not that I’m stingy, that’s basically how much I spend and the brand was recommneded by my vet. Someone here mentioned unconditional love, and that is why they are part of the family.
This is the first time in ages I have seen a reference to the indigent in this country that showed concern for how they are faring in this mess, and wasn’t blaming them for the whole housing bubble.
I’ve seen far too many people posting about how tragic it is that they aren’t getting a 10% yearly return in the markets and that the poor boomer retirees won’t be able to afford a second or third home.
Thanks Ben for reaffirming that not everyone who posts here only cares about the 90210 wannabes and their McMansions.
Just think, this housing debacle has coined a new word: “strawberry picker”, which joins the evocative lexicon inhabited by words like “carpetbagger.” Did some remedial historical research. Folks used to buy cheap luggage fashioned out of carpet remnants. During the civil war Reconstruction Period (1865-1870) many people from the Northern States headed South to make money–including crooks, charlatans and con artists– and were identified as outsiders by their Carpetbag.
‘Jo Hernandez harbors no delusions about the 500-square-foot Le Grand home that her children lovingly call their shack. She admits they’re right. The one-bedroom, one-bathroom house that she, her five children and her mother all call home was built in the 1920s from the scraps of an old barn. It has no heat or air conditioning.‘The walls of its cramped, dimly lit kitchen have no insulation. They are made of unfinished wood, as is the floor, which more closely resembles a backyard deck. The kitchen also lacks electricity.’
Mother of Pearl! Sweet Dancing Jeebus! I semi-lovingly call MY house a ’shack’. Before reading this article, I thought it WAS a shack. See, it was built by some drunk hippie as a vacation cabin in the woods, and the defects are myriad and amazing. I will not astonish you with the details, except to mention once again how last year I took a peek in a side wall and beheld what appeared to be a pallet from Safeways with stenciled blue letters on it. Luckily, not structural. (I think.) Luckily, I am good with tools and enjoy fiddling and fixing, or I’d a been crying my girly eyes out long ago.
Now, of course, I realize it’s a fookin’ palatial mansion, compared to this horrific and really truly ’shack’. I have a real floor and all that fancified rich people stuff, such as electricity and running water. I even have two (2) bathrooms to pee in, if I were to want to run back and forth peeing.
Seriously, though. This is absolutely crazy, how these people evidently live, and in a first world country. Do they even HAVE a toilet? Or is their ‘bathroom’ a bucket in a closet?
I can’t believe none of you picked up on the two satellite dishes on the roof- yeah you’re sooooo poor but eighty bucks a month for T.V. is no problem. It reminds me of the Tijuana cardboard shacks that have the same set up. I wouldn’t have a problem with that except for the “poor me” pity party article that comes with the picture. I also don’t buy the mother that can’t help- BS!! This is exactly what is wrong with this country right now- no one wants to take responsbility for their own actions. If I cry enough, some one will give me money and I won’t have to do anything on my own to fix the situation. I once made that kind of money and didn’t have to live in squalor, its all a matter of priorities. Sorry, this kind of article just pisses me off!!!!
They don’t pay for those services. They buy the FreeToAir box and program them to pick up the signal for free. The box only costs about $150
So if you buy a $720k house on your strawberry picker’s salary, you’re a thieving illegal, and if you buy a $280 per month mortgage house on your poverty-level income, you’re probably just another crackhead.
Exactly what do you lot want people to do–other than be as perfect as you are?
I agree. This family cannot have all the trappings of a middle class life, so why begrudge a few non-necessities that make their life more enjoyable. Still too much rich = good person, poor = bad person Calvinistic thinking in the U.S. and on this board.
This isn’t an abstract debate.
Truer words were seldom spoken.
Then why are Turkey, Morocco and Algeria p!ss-poor?
Climate don’t pay the bills.
‘San Fernando Valley Economic Research Center at California State University Northridge’
IMO, California has institutionally tried to build in high prices. But all they get is a series of booms and busts. No thanks…
You could say the same thing about New York, London, Paris and Tokyo.
But I get your point that this is the entire state not just the localized areas which have strong economic patterns.
True, yet productivity and productivity growth are always the key. Look at how much media is made and how many businesses are created in California. Even with all the silliness, California is a leader in real value creation. This inflates salaries, at least for the few, and sends housing soaring.
At the bottom of the last bust units in the San Francisco Bay Area were going for just under a quarter million, which is around double flyover country prices at that time. This bust is likely to turn out the same. Trees don’t grow to the sky, but right next to the Pacific coast they can get very tall indeed.
The market will bear only what people are willing and able to pay. The real problem with California is that they made it far too easy to borrow tremendous amounts of money, shunting away money that could have been used to maintain their infrastructure and fund R&D.
That happened everywhere, though. Not just California.
Here we go again with the California arrogance. So most of the country is “flyover” land and CA is a wealthy paradise? These recenly released statistics from the Census Bureau - http://money.cnn.com/news/specials/storysupplement/census_income - show that the median income in CA is about 18% higher that the national median. That 18% is not very much considering the much higher cost of housing, taxes and gasoline. (I also remember seeing some numbers last year that showed that the median CA income was ony about 11% above the national median.) Interestingly, those statistics show that the percentage of people without health insurance is also higher than the national number. I’ve seen statistics that show that the high school dropout rate in CA is higher than the national average. The Census Bureau statistics do show that the poverty rate is a bit lower in CA. However, I think that the government considers the poverty level income to be the same in all states, which doesn’t take into account the higher cost of living in California.
So California is not a paradise of wealth and sunshine. Rather, it is a foretaste of America’s future - extremes of wealth and poverty living side by side.
“California has institutionally tried to build in high prices.”
There is evidence for that with the California Coastal Commission creating an artificial value for near coast properties. And certainly outrageous building codes are meant to keep prices high.
YEP………..
EXACTLY - the problem of high housing prices isn’t due to Prop-13 (which itself was a reaction to rapidly increasing house prices), but a combination of wealth (high paying jobs, stock options — good!) and restrictions on growth (bad - e.g. zoning, development fees, etc).
I think that Prop 13 contributes to the over shoot.
Since taxes are low the holding cost on property is higher in California then other areas. When prices are going up then people over react to get in at a lower tax basis.
Lower property taxes mean you can have a higher price since the “loss” people take on the taxes is smaller.
Kind of figured that was one of the factors contributing to the high P/I in California. Lots of other stuff too. Like only good property in Socal is a few miles from the coast.
Wrong. CA realturds work “Prop. 13!” as a selling point into flyers and newspaper ads whenever possible, and fiercly oppose any changes with armies of lobbyists, lawyers and propaganda. Anytime someone proposes even modest changes (such as eliminating the corporate loophole), they get trampled. Realturds do this because they *know* Prop. 13 helps to keep prices high.
Property taxes are part of what economists call “carrying costs”. When that carrying cost is very low (and guaranteed to go even lower in inflation-adjusted terms in the future) people are willing to borrow and spend more. It’s that simple. Personally, I wouldn’t even care much, except the lion’s share goes to grandfathered-in Boomers and rich Trustafarians, while my generation (and future generations) get stuck paying most of the taxes.
Of course, it’s not the only thing that’s “different” about CA –we also have cities that require 6-digit
bribes“impact fees” for all new-built houses, and a byzantine maze of self-contradictory regulations. Oh, and tons of McMansion-only NIMBYists who crusade against any new supply that might be affordable to working or middle-class families. And tons of demand from 12-to-a-room illegals, and a very pro-illegal immigration political climate.Well, the Coastal Commission has done some good. Without their interference the coast would be wall=to=wall 12 story condos. Take a look at the coast in Baja just south of Tijuana and you see what unfettered development looks like. The whole ocean front property obsession is pretty bizarre. 100 years ago folks built small vacation shacks because between the dampness which mildews your clothes/shoes/furniture and rusts everything in sight, and the storms and erosion, beach front property is hard to maintain. I still don’t get how folks secure insurance for bluff top property.
yeah salad, then with a entire coastline of 12 story condos, where, repeat, where would all those vacationers from the midwest have to go and view pristine coastal beauty? New Jersey? Mobile ?
Why would they want to visit CA after seeing movies?
There would be no more ‘muscle beach’ to entice people to visit. It would all be parking spaces,traffic, and condos.
“where would all those vacationers from the midwest have to go and view pristine coastal beauty? ”
Michigan! Hundreds of miles of white sand beaches, loads of fresh water, pretty little coastal towns, islands easily accessible by ferry…plus the nation’s highest unemployment rate. Michigan needs the tourist dollars.
Seriously, when the apocalypse comes and we’re all looking at a future of subsistence farming, I’m going to Michigan.
(I’m a long-time lurker here and just HAD to jump in on the conversation)
Not to worry Ben. Buy in the bust every ten-twelve years or so; Sell in the boom. Makes a man healthy and wise. hehehehehehe
I think it’s that “economy” thing that separates CA from Turkey, etc. Hey, did you know that slavery isn’t actually illegal in Turkey? You can take someone (usually a female), entrap them, call them your slave, and that’s OK. It’s OK with them. I’m not sure about the other places you mentioned.
That would be my point, wouldn’t it now?
Thanks for chiming in with the obvious.
‘You can take someone (usually a female), entrap them, call them your slave, and that’s OK.’
Awesome! Do you have to go to Turkey to get one of those things, or can you get one off eBay? Because my last hitchiker ‘helper’ recently got away.
I want one too.
Oly, let me know how that one works out for you. We’ll swap notes, etc.
Seriously, man. In my recently articulated view, half the world would be better off if they were my slave(s). As things are now, most people just waste their time on trivial activities. Think how much more we’d get done if we, and by ‘we’ I mean, ‘those slaves’ had some nice clear structure and purpose.
‘In my recently articulated view,’
I forgot to mention that this particular view was put forth by me in an argument with a Farm Bureau or else a Grange representative guy. Jeeze, you’t think a Christian farmer would be more gentle and patient, right? Also swear less. But you’d be wrong.
Good thing I know my Bible, and can take the spiritual high road, otherwise things would have degenerated right away.
‘It’s all they have because it’s all they can afford. Hernandez is one of roughly 50,000 Merced County residents and nearly 40 million Americans living in poverty, so her family’s struggle is far from unique.’
‘But at $280 a month, her mortgage is hard to beat. And it’s all she can manage on her income. Medi-Cab pays Hernandez $8.25 an hour, or about $1,200 a month. She gets another $600 a month in aid and food stamps.
Poverty? Her net worth is 100s of thousands more than your typical underwater FB, who will end up getting more welfare than this woman every would.
If there were no Fannie and Freddie, you’d be able to buy a livable, basic house for $100K everywhere in the US.
My grandfather bought a few acres of land next to the highway back in the 60s in NW Colorado for a thousand dollars. He then built a small log house on it, logged the timber himself and built it with help from family and friends. No debt, no mortgage. No indoor plumbing for a number of years. He then contracted with some business in Denver who wanted a big sign by the highway, I think it was a motel chain, so he now had a small income from that (he was a game warden, so he had a pretty stable job also - since like the poor, poachers will always be with us, probably one and the same).
When he retired, he sold the place and bought a small camper trailer that he put in a little trailer park. He used the proceeds from the land sale (by now it was zoned commercial, but still not worth a whole lot, this was the mid 70s) and spent his retirement traveling and prospecting and rock hounding.
This is how life used to be, at least where I came from. Houses were shelter, not much more, and your freedom was where it was at. You can’t be free when you’re in debt.
Oh, and the company in Denver was always late on their sign rental payment, so he went out one day with a chainsaw and cut the thing down. Boy, were they torqued. My grandfather was an early monkey-wrencher. He later ran for sheriff and was elected.
lol
thanks for the story.
Edward Abbey lives.
Just imagine if your grandfather worked for a bank. I’m imagining what he would do with his chainsaw when people would be late on their mortgage payments.
Reuven:
Even in NYC the farther out areas should be $100K for a 1 bedroom condoze…..
But you will never see $100K in Greenwich Scarsdale, Dix Hills, or Park ave. Even before the boom Starter SFH in Greenwich were $400K, in 1999
You could mosey on down to City Hall in 1995 and pick up a Park Ave. “classic six” if you were willing to pay the property taxes annually.
But why would you? Renting was cheaper than the back taxes.
Nobody in their right mind thought that the Fed would blow the mother-of-all-bubbles a little over a decade later, and they certainly were not going to go “negative cash flow” (like all rational people.)
So spare me how prices in the Emerald City never go down, and how it was all dancing ponies and rainbows in 1999 when it was anything but a scant five years prior.
my brother bought a nice one bedroom in upper west side manhattan for $150k in 1997. nearly 700 sq feet. toda would run around $700k. Wealth is not greater really than in 1997. How far will NYC drop??? 80%. SHould be interesting.
evil
Back taxes on such a place may be a bear depending on how long it’s sat there, but NYC property taxes tend to be lower than the surrounding burbs, and IIRC there’s a yearly cap on how much property taxes or assessed values can be raised in NYC (6%?), so that older properties tend to have much lower taxes than newer construction (such as ugly, opportunistic condos with no parking in Staten Island). The way taxes are structured, it’s probably more tax-efficient for someone earning $75k/yr to pay taxes on a $150k prewar coop or SFH in the outer boros than on a $150k starter home in, say, Mamaroneck.
If any of those mythical properties still existed, of course.
Forgive me if I’m wrong, but a lot of $$ in NY comes from investment bankers and such, no? If that is so, then perhaps 1999 was the end of a boom time for NY, as in Silicon Valley.
Actually, closer to late-2000, early-2001 was the end of the boom years for the investment bankers but your basic point is correct.
The internet “boom” set off an artificial boom in Manhattan RE.
Ask the depressed people who bought in 1989-1990. They were so burned that they never bought again. And they lived through another boom cycle to be mocked.
Pauvre petites!
You never know. Depends on how much debt collapses and how bad things get in the city. Crime could really skyrocket and if you get the wrong guy in office… uhg.
I wonder if they had these kind of problems in Rome.
Could see a Monty Python routine on arguing about prices in ancient Rome/Greece
In Rome they did inflation by debasing their currency, literally..
Interesting reading..
“The plan’s supporters acknowledge that by opening a net under falling prices, the action potentially undercuts the market’s own mechanism for achieving affordability — falling prices.”
Which proves that these jerks were never for “affordable housing” in the first place. What they were really after all along was granting economic favors in exchange for votes.
They’re going to get it whether they like it or not.
Try flying coast-to-coast in daytime some day, and try looking out the window.
This plan is so doomed it’s not even funny.
Slim looks out of window at 37,000 feet. Sees a lot of vacant land below.
An extraordinarily important point that seems to have escaped the Harvard’s and MIT’s and Princeton’s and the Chicago’s of the world.
You have to fly over the American West to realize how much vacant land is out there. Driving through the California desert is also recommended to get a sense of the amount of overbuilding of unneeded, unwanted homes occurred over the past decade. I suppose all those homes are now on Uncle Sam’s balance sheet after the GSE take down?
You don’t need do nothin’.
You can sit your sorry @ss down at a computer, pull up Wikipedia, figure out the population of the US, and the area of Texas, and do long division.
That’s all you need to do.
If you’re bored, you can divide the population of the US by the area of the US but that’s like overkill, man, and why strain your wrists doing the long division, huh?
“By purchasing homes in neighborhoods that could have further to fall, the land bank attempts to stop the bleeding of home values for owners in foreclosure-heavy neighborhoods. The plan’s supporters acknowledge that by opening a net under falling prices, the action potentially undercuts the market’s own mechanism for achieving affordability — falling prices.”
What a waste of money. The best way to create more affordable housing is to let prices fall. Instead, these leaches get in the way.
The reason these idiots want to “save” foreclosures is stated in my last post, at the very end of this thread.
“If the organizations were to become exclusively profit-driven…”
translation:
If pigs were to fly out of my arse…
========================================
“Fannie and Freddie have historically helped stabilize the housing market. If the organizations were to become exclusively profit-driven, said Humboldt Association of Realtors President Tom Hiller, housing prices would likely go up.”
“‘We hope they don’t throw the baby out with the bath water,’ Hiller said. ‘Both the CAR (California Association of Realtors) and NAR (National Association of Realtors) will be looking to the new Congress to make sure these entities are saved as opposed to privatized.’”
Even Greenspan said yesterday in essence that F&F was not legally backed by the full faith of the government ,and he made a point of
this . The government did have the option of going into receivership
instead of take-over . The spin now seems to be that the government
did legally back these private companies . Greenspan than went on about how “Ginnie Mae” was in fact legally backed by the full faith and insurance of the USA . Than Greenspan went on to make the point about how government should not own companies, in so many words,
and he said in essence that F&F should go private owned again ,but be broken up into smaller companies .
Also, many Republicans today are saying today that it was the Demo’s that wanted F&F to remain big and they blocked any attempts to downsize those Companies for a long time .
Also its interesting that Greenspan than addressed supply and demand
in housing stock and suggested that after this is cleared out he saw the economy becoming inflationary . Greenspan also mentioned words to the effect that he was surprised that the economy is doing as well as it is ,and than he made a plug for his book .
As much as I hate Greenspan for the mistakes he made ,it was interesting what he was saying . I didn’t notice that the cheerleaders or media ran with “the words of Greenspan” following that short TV interview .
No way did the Dems back F&F over Repub protests. They were ALL in on it, all of them. The Dems were doing it for the sake of “the common man”, and Repubs were doing it for the sake of “a healthy industry”. They were all stupid, and if Greenie didn’t like it, then why didn’t he say so earlier?
I think he’s just saying this now because Paulson plans to gradually kill the GSEs off (I hope), so he wants to get people in the mood for it.
Big V …I’m just repeating what I saw on the news today . Its seems like blaming the other party is what they all do . That is why I am not thrilled about either side right now . I just thought it was interesting that Greenspan was trying to make the point that F&F was not really legally backed by the full faith or insured by the government . F&F were private Companies that use to charge mortgage insurance on their loans . I think that was the more likely cause of the willingness of investors to put money into those loans . Also ,F&F had defined underwriting guidelines ,and certain appraisal requirements . F&F had lower loan limits until recently ,so that was also a additional lower risk . It wasn’t until
lately that F&F starting buying the more creative loans . I think that F&F was always to big ,and if your to big ,one big downturn in a housing market and it can put you into serious losses .
But why were they paying bonuses to their managers and CEO’s if the Company didn’t have some basis in profit motive . How can you have stockholders if your not a private company ? My understanding was that F&F was created with a mandate
originally ,but than F&F moved into being privately owned by all its stockholders . Am I missing something here ?
“Even Greenspan said yesterday in essence that F&F was not legally backed by the full faith of the government ,and he made a point of
this .”
Rogue actions are the new black .
So F/F have never been profit driven to begin with?? Sheesh.
I don’t get it. House prices would go UP if Fannie and Freddie were private companies? Don’t think so. Without all that “implicit backing”, I think financing would be harder to get. BTW, has anyone at The Government provided a precise description of EXACTLY HOW it will get the funding to back all those GSE MBSs? Because there’s not enough $$ and there never will be, ya know. It will be interesting to see how all this plays out. I have a feeling that no one will go unscathed, including myself.
“I don’t get it. House prices would go UP if Fannie and Freddie were private companies?”
I didn’t get that either. More fear from the RE shills…you know, buy now before F&F become private and you get priced out forever.
I think what Mr. Realtwhore meant to say was:
“LOANS will be more expensive!” ( and I’ll be out of a job.. )
Watching Greenie, I noted he said
it wouldn’t cost the taxpayer anything.
WHAAAAAAAA
Are you frigging kidding me?
How is that?
It always costs the taxpayer.
And it wasn’t the dems that wanted
F/F to stabilize, it was ALL of thems
who wanted it.
Dems for people/Repubs for “healthy”/ MONEY
for thems selves. ( channeling LOTR).
(lord of the rings) ( i don’t think the reception is good!)
Big V.
This site might answer some questions as to the legal status of
Freddie as being a private owned company ,until the takeover of course ,and the information said that they were not backed or insured by the government .
http://www.Freddiemac.com/investor/fag.html
Also this article from July 15,2008 from TIMES ON LINE is a interesting read about Freddie and Fannie .
http://business.timesonline.co.uk/tol/business/columnists/article4333174.ece
housing prices would likely go up.”
no they would go down because it would be harder to get a loan and more expensive
With or without lipstick?? -
Thanks to all HBB’ers for helping me through the gloomy mood I’ve been in since the F&F debacle. I’m still trying to get my head around this and I have questions for you all:
1. If F&F own or guarantee about 50% of all mortgages, what does that mean for the other 50% that is owned, I presume, by private entities (such as Lehman)? Are F&F going to start buying up those too to prop up the market now that they have a blank check? Is the bailout going to support the bad debt F&F already have or are they doing this so they can pile up even more bad loans on the taxpayer’s shoulders? If so, where does this lead to except runaway inflation?
2. Do they still have that new 700K limit for the amount of the mortgages they can buy? If so, how does that affect us clownifornians who still think 850K is rather on the cheap side?
Cassiopeia,
I’ll keep this short, so I will hit only the second part of question #2. If I went after this whole post, you would all get a sermon.
The kool-aid is still strong here, esp. in South OC. My wife still tells me of groups she is a part of or overhears talking about 30-year-old run down condos w/2 bed in Mission Viejo being considered cheap at 225-300K. That MIGHT be true if they were only 5-10 years old.
With the limits at 700K. it just means that banks have less rope to give people to hang themselves. Housing is coming down. Homes are running in the low end at 400K here in Rancho Santa Margarita, down from the 600-700K nonsense of the last 3 years.
I suspect that housing will drop another 100K on those homes only because no one, but a few are able to sell.
Once again…
Salaries/Wages/Income do not support these levels of debt load and people are wising up, albeit slowly, top the fact that there is a lot more cost to homeownership than just P&I every month.
I keep telling my wife the new mantra is…
Yes, we can buy it, but can we REALLY afford it?
What does that mean? Can you stay home to be with the kids after school? Can we stay debt free? Can we afford to take vacations every year? Can we live on just my salary? Can we really pay for all the costs of a home, say maintenance, repair, the 15K new roof in 20 years, maybe the closing costs if we move in 15 years?
See, there is more than just the old “HOWMUCHAMONTH” to this conundrum.
Oh well, I guess I gave a sermon. I am just fired up about this. In the short, housing will continue to slide. It won’t matter if the goobermint said you borrow 2 million a 1%. The numbers have to add. Bottom line.
I’ve noticed that USBank is pushing home equity loans both on radio and TV, with the disgusting slogan “get more out of your home” and showing hot tubs and whatnot. (fine print: Rates vary by loan to value and credit limit. The rate will not exceed 25% APR.). Are they crazy?
I noticed one of their signs the other day. Rate was prime MINUS 0.76%, but it was variable, as in ephemeral. Maximum 70% LTV, maximum 25% APR. There really ought to be a law.
I love it when OCDan gets fired up! He becomes a whirling dervish and can’t contain himself.
Why would anyone have paid $700K in that forsaken land of Rancho Strawberry Margarita? Does tequila flow through the water pipes there? Nothing out there should be more than $140/sq.ft, Irvine should be at $175/sq.ft. and Newport beach should round it out at $200/sq.ft. Until that happens, the housing gear will be stuck in neutral.
Fired up. You should have heard me talk to a fellow renter at church last Sunday. We compared notes and were on the same page.
However…
Wife was upset because I mentioned to this other woman, who BTW agreed w.me, how people bought at these “Crazy Eddie” prices, TRACT HOUSING!
My wife said others might overhear me and think me too judgemental, esp. at church
I told her then if that’s how they feel they should have talked to me before paying 650K for 1400 Sq. ft. tract house on 1/10 of an acre.
Crikey! Of course I am opiniated on this issue. This whole credit bubble has the potential, I hope I am wrong, to drag the entire economy down or at least take us all into some quasi-socialist-communistic-goobermint is god will save us fututistic economy that I want no part of.
Sure, it can be argued that my wife and I got ours by selling just about at the top, but as I said, we took off about 15% even at the top just to get out.
While we made a nice killing, it still doesn’t mean everyone should have been buying at these crazy prices, which in turn drove everything from Maine to San Diego and Seattle to Key West through the roof, so noone could buy 3 years later w/o 20%, 36% DTI, fixed, and FICOs in the 750s. Nice, now we just locked up not just the proverbial barn door after all the horses got out, but we locked up the largest segment of our economy.
Great.
It isn’t like we have any manufacturing in this country. What’s that. 9% of the entire economy.
This will not end well.
Remember the Credit Suisse charts. My gawd! The Alt-As, Options, HELOCs, Primes, Pick-a-Payments all are coming due over the next 3-4 years. Look at what happened in the last 13 months. This economy has nothing left to withstand the deterioration in these 5 loan types, not with the monies outstanding. Just what is left to go with? Sure, sell more Treasuries. At what point does hyperinflation on the dollar kick in again when the rest of the world finally decides we are no longer a viable crack, er I mean, debt addict?
I hope I am wrong, but things are gonna get much worse before they get better.
I hope I am wrong, but things are gonna get much worse before they get better.
You can say that again. 2009 will feel a lot like 1929, bailout or no bailout.
cassiopeia ….You ask the million dollar questions. Yes I would think that F&F still has the 700k limit now . One wonders how far the blank check goes . I think that the now government owned F&F will buy loans
(who else would ). In fact I think there will be a attempt to re-spike the punch bowl . This will all be seen as emergency measures to stop the log jam in the credit markets . Congress and the Senate is working right now on bringing back the seller assisted loan program that the Housing Bill took away because they were the most corrupt ,but now they want to bring them back . So ,as a government I guess you can make any kind of loans you want . No down payments here we come .Doesn’t look like regulations ,or cleaning up the corrupt system ,or making prudent
loans are going to be on the agenda in the near future . Based on what I have been seeing lately ,questionable loans are still being made .
I guess nobody remembered that I said they will get the Housing Bill passed and than they will change it after the fact .
I haven’t heard that any new debt will be covered, but I suppose that’s possible. They say that they want to begin reducing F&F’s exposure to the mortgage market by 10%/year, beginning in 2010. Of course, by then, most of the declines will have already taken place. Just based on that, though, I get the feeling that Paulson is trying to reduce the companies so he can privatize them and boot them out of government affairs. If that is the case, then I don’t see them buying up a bunch of crap loans, really.
I hope I’m right. However, based on my past predictions about what various stooges have done so far, I’m probably not.
Do any of you think this F&F is going to eliminate a crash….and we will turn out like japan, slowly letting the air out over the next 10 years?
No.
In fact, I’m wondering if it is triggering a crash.
The preferred market is in a tizzy over the nationalization, and suddenly regional banks are excluded from raising money by issuing preferred. So cascading defaults are in the future.
And I also think it will look VERY attractive to a future administration to renege on Hank’s vision of complete backing of the GSE debt. Giving the bondholders the first 12% of the haircut would save the gov’t about a trillion dollars — which is real money. This uncertainty will start to drive mortgage rates up.
But then, what do I know.
Are F&F going to start buying up those too to prop up the market now that they have a blank check?
I would guess no now that everyone is watching
Jesus is my co-signer…
========================================
“And that’s how Alberto, Rosa and Jesus, in the summer of 2005, ended up at the Rancho Grande Real Estate office in Morgan Hill to ask a few initial questions about buying a house. They say they told real estate agent Maria Avila that they weren’t able to afford much. No problem, they recall Avila saying. We’ll find a way.”
“Overall, the Ramirez and Martinez families put $39,000 into the house. Maria Avila put in around $29,600-and collected 3 percent as seller’s agent, again as buyer’s agent and a third time as loan agent for a total of $64,800. She netted around $35,200. The families have lost their former affordable farmworker housing, their $39,000 and their house.”
LOL…. You crack me up, lad…
WWJD?
I’ve never met a WASP in our country named Jesus, although I know quite a few Hispanic ones…
Why’s that?
Just a guess here… Cultural differences? You ever met a WASP named Mohamed? Or an Arab named Joshua?
Joshua=Jesus
Arabic Issa=Joshua=Jesus
Exactly. Should help when I run for office. “I’m here to save you” will take on a whole new meaning for those in the know.
Because WASPs are not Catholic.
What Prime said
These folks took “you have not because you ask not” to a whole new level.
Well we always knew this stinker would float to the top? This lady got almost 65k in commissions ( off this (1) deal ) so if that’s all it took, why NOT cruise the Home Depot!
Sheesh, can you guys believe that? How hard could she have worked? The toughest part must have been keeping a straight face when she scribbled in “agricultural expert” ( and the 100k income! ) I know “I” couldn’t have.
Well, it wouldn’t surprise me that
some/ a few, buyers who couldn’t
afford a mortgage would get one.
Saw a guy on msnbc who was a
‘recovering’ mortgage brkr and
he was divulging all the tricks
in the books, and those things
they did with peoples
signatures, incomes etc by forging
etc.
It all sounded like alot of scams abounded
and the others followed suit because
they had to “compete”.
desertdweller,
Right, it’s the same “logic” dope peddlers use.
“If they didn’t get the dope from me, they’d just buy it from the guy down the block”
In ways it’s the same criminal mentality.
“Attempting to fight urban decay in San Diego’s neighborhoods hit hardest by foreclosure, a plan to buy up foreclosed properties here is gaining traction and some national attention. The plan, known as a land bank, would assemble taxpayer, private and philanthropic dollars to purchase foreclosed houses.”
The La Jolla Philanthropic Association, of which I am an honorary board member, will be leading the charge in buying up these foreclosures. We will then proceed to tear them down and plant trees and gardens to help beautify these areas. Our goal is to aesthetically improve neighborhoods surrounding La Jolla so that it won’t be such a shock to those coming here. That drive coming west on the 52 into La Jolla can be downright scary and heaven forbid you come from the southern part, pacific beach specifically, which is a glorified parking lot.
When driving through La Jolla, I lock the doors of my car and I don’t stop completely at stop signs. I also don’t wear red or blue bandanas there (or white after Labor Day).
One should never drive through La Jolla with locked doors. How will the valet open the car door for you? And did you know that if you ever get a ticket for not stopping completely at a stop sign, Sushi on the Rocks will give you a complimentary California Roll.
And how, pray tell, do you geniuses plan on maintaining those pocket parks you are creating ? California is famous at building very nice parks and then letting them turn into weed infested dumps since no one ever budgets money for maintaining them.
Sometimes the neighbors maintain them.
Precisely what I’m doing with a weedy, vacant lot to the east of me. It’s owned by the City of Tucson, but I’ve never seen them lift a finger to do anything to improve it.
After awakening from a fine slumber, peering out my studio window, and seeing a homeless guy snoozing beneath two oleanders (boy, was that dumb), I decided to do something. I am damned if I’m going to bust my gut to fix up my house and yard, only to have a homeless encampment next door.
So, I’m planting a cactus garden over there. Take that, homeless people.
BTW, the neighbors (at least the ones I’ve told) are all in favor of my little project.
La Jollans put the “tear” in volunteer. They have magnanimously sacrificed their retirement to nurture said parks and gardens and to water them with the grateful tears and kosher salty sweat streaming down their faces into the soil. La Jollans are notorious for having green thumbs, though some here may think it comes from thumbing through all those benjamins.
You know, I actually know some native La Jollans, who work and are (relatively) poor, and rent. shocking.
They’ve been trying to push this landbank thing FOREVER. Each time, there’s a new excuse for it. GMAB. Can’t people see that it’s a conflict of interest? I hope the crash doesn’t provide the final excuse that finally makes people actually do this.
“A record number of Contra Costa homeowners failed to pay their property taxes last fiscal year, costing the county $116 million. The rising delinquency rate comes as no surprise to most watching the mortgage meltdown - if homeowners can’t afford mortgage payments, they probably can’t afford the twice-a-year property tax installments.”
==========================================
How does Contra Costa County make up for the missing $116 Million that they have no doubt already spent, applying the “Mark to Model” concept, oh so popular this century…
How does ??
Same way the state and the fed’s do it…Borrow…
And whom do they borrow from, based upon such a poor showing this year, and probably much worse next year?
Im the tax man, yeah the tax maaaaaaaan…
Float the bonds, raise the taxes and raise them in a way that you can’t avoid paying….Water & Sewer come to mind…
Property taxes are regressive in boomtown counties. It seems that if the government seriously wanted to promote home ownership, these taxes would be minimal, instead of giving tax credits for mortgage interest, which is just an underhanded giveaway to promote usurious lending by banks.
“Overall, the Ramirez and Martinez families put $39,000 into the house. ”
I seriously doubt they put ANYTHING into the house. In the heady days of the boom, zero down would have been what these folks would have gotten.
I would bet their $39K figure is how much they made in total neg-am payments.
Typical MSM lazy reporting.
No, you don’t understand. They liberated $100K of equity, used $39K to put in a pool, buy patio furniture and a BBQ, and sent the rest to extended family members. Let us all pray that it was WAMU who made the loan.
Straw(berry) Man Buyer
“The world Maria Avila created for the financial community to review, he was an ‘agricultural expert’ who owned his own business and boasted an income of around $100,000 a year.”
Priceless…
Does anyone have the link to that website that will do W-2s for you? I am looking to buy a house and need a quick W-2 for a 250K salary.
I know a guy named Aurelio who will do one for you for a few hundred…he’s probably down at the park about now…
Try Olympic and Alvarado in downtown LA.
ICE can’t seems to figure this one out, but it’s a pretty well known fact in LA that anyone needing falses docs of any kind just needs to show up with moola.
That’s where I got my medical license.
Even if he earned 100K/yr, there is no way he could afford a 700K house.
Why this woman isn’t doing the perp walk is one of the greatest mysteries of our time. It’s almost as if the press is actually impressed that she was able to pull it off.
NoSingleOne,
No jive. I just can’t believe this was just (1) day and (1) deal. No wonder these @ssclowns were scurrying as quickly as they good to cattle prod deals through? I realize this is an extreme example but this is why there needs to be a “Chinese Wall” between realtors and mortgage brokers.
The San Gabriel Valley Tribune reports from California. “The government takeover of mortgage giants Fannie Mae and Freddie Mac could lead to a dramatic drop in homeownership if they become privatized, an industry group said Tuesday. Looking down the road, privatization of the two agencies would result in a ‘big set of obstacles for homeownership in the future,’ said Joel Singer, executive vice president of the California Association of Realtors.”
“‘Without the implicit guarantee of a partnership between the government and the secondary market I think mortgages would be substantially higher relative to where they’ve been historically,’ Singer said.”
We can deduce that this guy doesn’t believe in free markets at all. In a free market, mortgages should be lot higher based on the risk and those who made cheap mortgages are suffering and rightfully so.
Communization of the economy will lead us to the same end as the Soviet Union.
Jas
Mr. Singer assumes home prices will stay at some high plateau, when the stubborn fact is that the higher the borrowing costs go, lower home prices will surely follow. The end result, the monthly mortgage payment, will still be same. The CAR must not be listening to its members because a buyer-seller standoff doesn’t generate commissions.
As for the bigger set of obstacles to homeownership, maybe we do need some barriers to entry. Financial invalids are trying to run the race, but keep on falling over and dying.
“Mr. Singer assumes home prices will stay at some high plateau, …”
Rumors are circulating that this is a purpose of the Treasury take down of the GSEs. We’ll see over time if this is just a rumor, or either a stated or unstated policy goal, and if so, whether it will work during an economic slowdown with a record level of vacant homes.
“Communization of the economy will lead us to the same end as the Soviet Union.”
This is my worst fear in a nut shell.
California is all set up to break off from the union, heck look at our flag…
It says “California Republic” and there’s a loan red star above, and a sea of red ink below, and in the middle there’s a bear market.
Perfect!
http://upload.wikimedia.org/wikipedia/commons/9/9b/Flag_of_California_Republic.svg.png
So you think that the U. S. A. will break up into 50 separate countries like the Soviet Union did?
Hasn’t it already?
Do you think that Michigan is the economic equal of New York?
Of upstate New York, maybe.
mortgages are like risky bonds that can be called anytime. Of course the rates would be higher without Government backing
I have bought GNMA mutual funds, interest payments guaranted by the USA government about 4.5% right now.
I went to Sacramento for the state fair a few weeks ago, and I thought it was pretty nice up there. I hadn’t been there for like 20 years. I saw a lot of agriculture, but it was pretty and it didn’t smell. I also saw the Blue Diamond almond plant. That was cool. Should I move there? What do you guys think about it?
Hot as heck, but if you enjoy boating or personal watercraft it’s a good place to be and prices are cratering in the immediate area.
Been through there a time or two,
mosquitos love my person.
Are you a mosquito magnet?
Whenever I go somewher new, I get bitten like mad. Luckily, I become immune after a year or so.
Sacramento has always given me the willies, for some reason…
Why, what’s wrong with it? I didn’t see the whole thing. Are there bad areas and good areas? Is the area around the big fair thingie one of the good ones?
There are lots of good areas to Sacramento, and lots of bad areas, as with any city of moderate size. I personally LOVE the fair and like the area (though the financials of living in California drive me up the wall.)
The area around Cal Expo is, actually, moderate-to-bad in terms of living. Lots of cheap apartments and they use the east end of the property as a homeless shelter in the winter. I usually wouldn’t consider that such a bad thing but one of my jobs is right there and some of my coworkers have had their cars broken into— one even got beaten up by a bunch of rowdies looking to have fun.
Go a little south, toward the university, and it becomes a nice area, though parts of it are prone to flooding. Caveat emptor. Also nice is the area just across the river, to the east of the Capital City Freeway.
My advice is this— if you choose to move, the most important thing in terms of transit is to be on the same side of the river as your job. Either river. Bridges are choke points, and you can always figure a faster route if you don’t have to go across one.
(And if you do decide to move, I’ll let you know cool things to do. As long as they’re history, nature, or theater-based. I’m not exactly up on the club scene.)
LOTS of bad areas, crime, bad air, etc. Briefly considered moving there a few years ago, but after driving around all day and then watching the disturbing local news back at the hotel my ex and I quickly decided no f*$#^@! way. I’m still up there for a week or two every year for work, and these visits have only reinforced my negative view of the place….and it is extremely hot in the summer to boot
I lived there very cold and foggy in the winter. Nice rivers though I lived in Orangevale.
Come on out, Big V. We’ve been happy in Sac for ten years. But the summer temperatures can suck.
The best part is no commute if you live in the city.
IMHO…The reason why F&F went out at a little lower rate for years was because the loan amounts were capped ,they had insurance on the loans ,
believe it or not those loans use to have standards of income ratios ,and for most years they required income documentation . The investors bought F&F paper because of these reasons ,more than the implied backing from the USA ,which I contend that the big investors knew it wasn’t legally backed by the USA . Two years ago I was looking up the F&F web site and
saw that they disclosed that they were not backed . So for all intent and
purposes ,especially since they were a stock owned companies ,the Government has just taken over a private owned Company that is listed on the stock market . So what is all this talk about how the government should turn F&F into a privately owned enterprise ,it already is ,but now
it will be Government owned .I guess the issue is should it be turned backed into a privately owned company . Think about it . If F&F was
backed by the government with all the mandates that would entail ,than why did Paulson have to ask Congress if they could back it ? Make no mistake ,this is the biggest take-over by Government of a private Company that I have ever seen ,along with all the liabilities and so forth .
“By purchasing homes in neighborhoods that could have further to fall, the land bank attempts to stop the bleeding of home values for owners in foreclosure-heavy neighborhoods. The plan’s supporters acknowledge that by opening a net under falling prices, the action potentially undercuts the market’s own mechanism for achieving affordability — falling prices.”
Who gets to pay for this? Is it taxpayers (mostly homeowners) paying to prop up the price of housing in the form of higher taxes, or creditors (folks who own or are owed fixed or quasi-fixed dollar obligations) who will pay some form of inflation/devaluation tax?
At any rate, it sounds like another ‘rob Peter to pay Paul’ wealth transfer scheme, or perhaps in this case, ‘rob Peter to pay Peter.’
PB, I have to disagree that taxpayers are mostly homeowners. I have never owned a house, yet have been paying taxes for 17 years now. They never gave me a break for being a renter!
Do you consider yourself to be a typical taxpayer? Keep in mind that there is a high degree of mutual positive correlation between wealth level, taxes paid and home ownership.
The homeowners get to deduct all that interest from their incomes. We renters are carrying those deadbeats on our shoulders.
True, but the interest deduction does not go very far to help someone who bought a $500,000+ home near the peak on a high LTV loan; imagine paying 6 pct nominal interest in the 15 pct tax bracket on a $500,000 loan. The annual interest payment alone (after taking the deduction into consideration) is roughly
(1-0.15)*0.06*500,000 = $25,500,
which exceeds our annual rent for a home that would have sold for over $500,000 at the bubble peak. PITI plus home equity losses have been brutal to this group over the last year or so.
Actually, maybe you’re right. If 69% of households own their own home, then I guess most people are homeowners, which means that most taxpayers are homeowners too.
I wonder, though, how that will change now that the homeowners have simply stopped paying their taxes. Give them a deduction, they take a mile.
Hey, Big V, I hereby award you 100 points for character. I don’t think that I’ve ever seen a debate on a blog in which somebody says “Actually, maybe you’re right.” It’s nice to see some humility and open-mindedness every once in a while.
” True, but the interest deduction does not go very far to help someone who bought a $500,000+ home near the peak on a high LTV loan; imagine paying 6 pct nominal interest in the 15 pct tax bracket on a $500,000 loan. ”
This must be the strawberry picker
A person buying a 500,000 loan should be in the 30+% tax bracket.
That person gets even less of a tax break due to AMT.
hey everyone, Allena’s over on the Bits Bucket, go say hello…
“Fannie and Freddie have historically helped stabilize the housing market. If the organizations were to become exclusively profit-driven, said Humboldt Association of Realtors President Tom Hiller, housing prices would likely go up.”
How did things work when they were not exclusively profit driven?
1) Home prices reached unaffordable heights.
2) They lost billions and billions of dollars.
3) The housing market became historically unstable.
How is this all supposed to change if they become exclusively profit driven?
“How is this all supposed to change if they become exclusively profit driven?”
If they loss billions of dollars they go out of business and we don’t have to pay for it for 30 years or more.
Come on you guys ,F&F has been profit driven .
BIG V ……I posted the links above where we were talking about F&F
that explains the legal status of F&F and I posted the link to a interesting article about Freedie and Fannie .
“From the beginning of their house-bidding process, Alberto, Rosa and Jesus suspected something was a bit off, because the $720,000 loan needed to buy it would ordinarily require a mortgage payment of around $4,800 a month.”
They bit off more house than they could afford.
“Looking down the road, privatization of the two agencies would result in a ‘big set of obstacles for homeownership in the future,’ said Joel Singer, executive vice president of the California Association of Realtors.”
“‘Without the implicit guarantee of a partnership between the government and the secondary market I think mortgages would be substantially higher relative to where they’ve been historically,’ Singer said.”
Wouldn’t lower home prices potentially offset any increase in mortgage rates? Ultimately, without fraudulent underwriting, it is household incomes which limit what people can afford to pay for housing. With a glut of vacant homes, the market would eventually bring prices down to affordable levels if ‘affordability programs’ were not present to keep prices ridiculously inflated.
Wouldn’t lower home prices potentially offset any increase in mortgage rates?
Of course that Joel Singer person is a fool or a liar.
Or worse an executive vice president of the California Association of Realtors.”
“If homeowners can’t afford mortgage payments, they probably can’t afford the twice-a-year property tax installments.”
Why do people say such dumb things? Property tax is easier to afford than mortgage payments.
What they should say:
“If homeowners aren’t paying their mortgages, they probably don’t see any point in paying the twice-a-year property tax installments.”
Dude, the Bush administration has been having SEX!
http://www.cnn.com/2008/POLITICS/09/10/oiil.scandal/index.html
Two Interior Department employees “received combined gifts and gratuities on at least 135 occasions … — a textbook example of improperly receiving gifts from prohibited sources,”
Under the sheet sources are prohibited forms of political capital? This is the first time I have ever heard such a thing.
–
The LA Daily News. “Home prices might be plunging across California, but the Golden State still dominates the nation’s 10 most expensive housing markets. California accounts for eight of America’s 10 priciest places to buy a house, according to the Coldwell Banker Home Price Comparison Index released Tuesday.”
All 5 CA metro areas reported by Radar Logic are making new price lows (PPSF) almost everyday and three of them are still the most expensive areas by PPSF in the country. The top 5 most expensive areas in the US are — San Jose, San Fran, L.A., N.Y. and San Diego.
Jas
“And that’s how Alberto, Rosa and Jesus, in the summer of 2005, ended up at the Rancho Grande Real Estate office in Morgan Hill to ask a few initial questions about buying a house.”
I’ve mentioned this before, but I do recall around 2005 the Modesto Bee had an article about how Mexican immigrants were giving the real estate market a second wind. Seems that was happening all over. Either people like this convincing strawberry pickers that they can afford a $700,000 house. Or else having multiple families going in together on one house.
Some of the Task Force’s goals with the buying-up of foreclosed loans:
Lender
Incentives/Benefits
• Assist in maintaining value of non foreclosed
properties in high concentration markets;
• Potential tax benefits from property transfer to
non-profit organization;
• Potential for back end new home buyer lending;
• CRA investment opportunity with reasonable return;
• Removal of foreclosed properties from balance
sheets as non-performing loans;
• Reduction of cash reserve obligations related to
foreclosed properties;
http://www.frbsf.org/community/resources/2008/0715/Bliesner.pdf
———————-
The Community Task Force is comprised of the following people. Note the industries from which they come:
Taking CRA a step farther, San Diego hosts the City/County Reinvestment Task Force, a group of banking, government, real estate and community development experts who monitor banks’ CRA activity. City Councilman Tony Young and county Supervisor Ron Roberts co-chair the task force. Members include Scott Kessler, CEO of the Business Improvement District Council; Lynn Hastings, a residential real estate investor; Jim Schmidt, former chief counsel of the late Great American Bank; Robert Adelizzi, former president of the old HomeFed Bank; Wendell French, community development manager for Wells Fargo Bank; Marco Polo Cortes, entrepreneur and adviser to National City Mayor Nick Inzunza; Gordon Boerner, vice president of San Diego National Bank; Arturo Rivera, corporate affairs manager, Washington Mutual Bank; Joseph Horiye, program director of San Diego’s Local Initiatives Support Corp.; Alfred Arguello of Bank of America; and Robert McNeely, senior vice president of Union Bank of California.
http://www.sandiegometro.com/2005/may/banks2.php
Thank you for the info, CA Renter
~Misstrial
“There are two other reasons why California features expensive residential real estate, Blake noted: the economy and the Mediterranean climate.”
Mr Blake….you are full of Sh52t….I have lived in California for over 20 unfortunate years now and I can state with certainty that it has nothing to do with Mediterranean climate or should we say as your subtext suggests…lifestyle.
Most of California is rural, dilapidated, or choked with smog. None of which look, smell, nor feel anything like any part of the Mediterranean…at least not the parts of the Mediterranean that I have been blessed to see.
Amazing how much hype this state gets….for nothing.