One Bad Bet In California
The San Fernando Valley Sun. reports from California. “Marta Sanchez and her husband bought their Panorama City house inApril of 2006, their hearts beaming with hope and high expectations. ‘We could finally say, ‘this is ours’ and stop throwing our money away in rent,’ Sanchez says, recalling the excitement at the time. Then her smile quickly fades. ‘If only we could have known what was coming. We didn’t know this catastrophe was coming - that property values would plummet and the economy would be like this.’”
“Almost three years later, the Sanchez’s are among thousands of San Fernando Valley families teetering on the brink of foreclosure. In the 28th U.S Congressional District, in the San Fernando Valley alone, more than 23,000 homes are in danger of foreclosure this year. Since their loan from Countrywide Financial adjusted last June, the Sanchez’s have not been able to keep up with the $5,000 monthly for their three-bedroom house.”
“‘We’ve only been paying interest on our home for the last two years. We haven’t even begun to cover the principle, so in a way it’s like renting. And for $5,000 we could be renting a house in Beverly Hills,’ she said.”
“Sanchez and her husband knew money would be tight and sacrifices would have to be made when they bought their home for $465,000 in 2006. Their housing payment would go up from a $550 rent to a mortgage of $4,049, but they felt confident that with their steady income they could pull it off. They also felt confident that, though their loan from Country wide would adjust up in two years, their home would go up in value and with equity in the property, they would refinance.”
“But their house is now valued at $274,000 and, not being able to refinance, their monthly payments have shot up more than $1,000 dollars.”
“Jose Hernandez is also hoping to save his parent’s three bedroom home where he lives with his mother and father, two sisters and three nieces. Hernandez’s mother bought the house for $488,000 in 2005. She put $100,000 as a down payment, part of the profit fromthe sale of the small townhouse where she lived with her family for more than a decade.”
“But Hernandez said his mother was steered into a negative amortizing loan. Today they owe more than $500,000 for their home, while at the same time, the value of their house has plummeted. In December…their monthly payment shot up to $3,900 from$2,300 the month before. Since then they haven’t been able to make the payments.”
“‘My parents came from El Salvador looking for something better and they did everything right. They bought something, they waited until they got equity, they sold it, they made a very good profit and they turned around and put a large sum of money as a down payment, and now they find themselves in this situation when they shouldn’t be. My mom feels awful. My mom has actually gotten sick from all of this,’ he said.”
The Ventura County Reporter. “It has been about four months since Tom Roth of Ojai listed a room for rent in his two-bedroom one-bath house. The last time he rented out a room, he paid for an ad in the local daily, and it was scooped up rather quickly. But that was four years ago, and times have certainly changed. Roth has been a cabinet maker for the last 12 years. This is the first time since he began his career in carpentry that it has slowed down to such a degree that he has had to rent out both rooms of his home. He said he has been living out of his vintage Airstream trailer in his backyard in order to make both rooms available.”
“Roth is one of the many homeowners who are trying to make ends meet in the volatile economy. ‘Just in the past year, it seems like there are a lot of rooms for rent,’ Roth said.”
The Ventura County Star. “When the housing market began to slow down, Bill Wilson thought it would be temporary, citing a low unemployment rate and strong economy. A licensed Realtor and real estate investor, Wilson of Camarillo was telling people to grab deals while they lasted, which he thought would be until the end of 2007. Wilson laughs at that advice today.”
“Ventura County’s median sales price for existing detached homes fell to $370,750 in December, or 38.7 percent, from $604,730 for the same month the previous year, the California Association of Realtors reported.”
“Wilson is waiting for…some kind of indication the market is turning around. ‘I might start investing in six months,’ he said. Wilson sidestepped any attempt at prognostication this time by noting he has ‘no idea’ if that might be the tipping point.”
“He admitted he doesn’t want to take a risk in case prices fall an additional 10 percent to 20 percent. ‘It’s tough to part with money and throw it at real estate, because you don’t know if the economy is going to keep slumping,’ Wilson said.”
The Recordnet. “Former Mayor Ed Chavez, who left office in December for a home he had built in Indio, has put his Cavendish Square condominium on the market in a short sale, another in one of the nation’s cities hit hardest by the foreclosure crisis. The two-bedroom, 21/2 bath home has hardwood floors, plantation shutters and a wet bar. It is listed for $160,000. Chavez paid $332,000 for it in 2005.”
“‘I guess it’s kind of the ultimate in symbolism, isn’t it?’ former City Councilman Clem Lee said. ‘The mayor of Ground Zero going through the same thing.’”
“Chavez’s real estate agent, Michael Chacon of M.C. Real Estate of Fresno, said he believed the property has been on the market since November. In a real estate market that has tanked, he said, ‘If you have an investment that is not worth it, … why would you keep paying into it?’”
The Santa Cruz Sentinel. “Bill Brooks has been a residential developer for 30 years and never seen a slower time for development. Brooks…who is just finishing Westlake, a 22-unit town home and condominium project near UC Santa Cruz, said the project will not turn a profit and investment partners will be getting 75 cents on the dollar.”
“Slatter Construction, which scrapped plans to build a condo development in Santa Cruz and switched to a hotel, is steering clear of residential. Details of the new hotel won’t be available for a couple of weeks, but Michael Bethke of Slatter Construction, said it was a market-driven decision.”
“‘I won’t even touch a condo project right now,’ Bethke said.”
The San Francisco Chronicle. “Foreclosures and default notices hit new highs for California and the Bay Area in 2008. In the Bay Area, 61,347 households received (default) notices. Numbers were about 60 percent higher than a year ago. Agencies that counsel troubled homeowners say that loan modifications are becoming slightly more common, but still rarely provide a permanent solution. A report released last month by the Comptroller of the Currency found that 58 percent of modified loans fell delinquent within eight months.”
“Pacific Community Services in Pittsburg counseled about 900 families about mortgage problems last year, according to Thomas LeFleur, executive VP. Of those, 68 received a loan modification. Of all the clients, only three had their principal balances reduced. ‘Everybody’s dreaming of principal reduction because they say their house is worth half of what they owe,’ LeFleur said. ‘That has not started to happen.’”
“At the same time, he said, more homeowners are deciding against paying a mortgage if they are underwater - owing more than their home is worth. ‘We have clients who say, ‘I can afford to make this payment but I don’t know if it makes sense that I should, maybe I’m hurting my family by doing this,’ he said.”
The Press Democrat. “The unprecedented wave of foreclosures that swept over Sonoma County began to ebb at the end of 2008, the first drop in three years, but analysts warned another tide may be building. Some of the decline was likely caused by a new state law aimed at slowing the foreclosure process. Already, there are signs that foreclosure activity is rising again.”
“Real estate agents who sell foreclosed homes for banks said lenders have been holding back on foreclosures. ‘They just pulled the throttle back in the foreclosure process,’ said James Madison, a foreclosure specialist at Coldwell Banker in Santa Rosa. ‘Most of my clients are saying the floodgates are going to open again in February.’”
“Homeowners who once seemed immune to the housing downturn now face having to sell to avoid foreclosure, said Beth Robertson, a Rohnert Park real estate agent. ‘I have gotten a couple of calls from folks that are in trouble that I would never have thought would get in trouble,’ said Robertson.”
“Robertson’s clients are not subprime borrowers. But they now can’t afford loan payments after losing jobs or seeing incomes fall and can’t refinance because their mortgages exceed what the homes are worth, she said. ‘I think we’re going to move into a whole different group. I think foreclosures are going to creep into the upper income brackets,’ she said.”
Palo Alto Online. “The dizzying days of rapid sales with competing offers, plentiful loan money and no contingencies are long over, but the housing market is far from dead, panelists agreed at a community forum Tuesday night. Gone are the days of slapping on a coat of fresh paint, setting out some potted plants and offering a home ‘as is.’ Instead, sellers need to assess what work needs to be done and either fix problems before the house goes on the market or be prepared to fully disclose any issues, the panelists said. ‘This is the most difficult real estate market I’ve ever seen,’ said Steve Bellumori, a Realtor with more than 30 years’ experience.”
“Although the economic fortunes of this area are heavily tied to the stock market, ‘up to this point we’ve been an island of resiliency,’ he said. Bellumori pointed to the lack of land, strong entrepreneurial business climate, good public schools and great weather as key selling points for real estate.”
“But much of his job today is serving as ‘a reality versus a realty broker,’ he said.”
“Although plenty of money is available, the guidelines for lenders have firmed up, Tracie Southerland, financial and mortgage advisor for Opes Advisors, said. Southerland compared housing accessibility in 2003 versus 2009, using a $1.5 million house as an example. In 2003, with 10 percent down, a 4 percent loan on $1.2 million and a second 3.5 percent loan on a $150,000 line of credit, one would need a $143,000 income to qualify. Today, with 25 percent down and higher rates on the jumbo loan, one would need to earn $228,000 a year to buy the same house.”
“‘The buyer pool has shrunk,” she said.”
The Desert Sun. “With foreclosures topping 236,230 across California in 2008 and no economic recovery in sight, a Los Angeles economist advised Palm Springs real estate officials to brace for a ‘mixed bag’ in 2009. ‘This is probably the worst recession we will go through in our working lifetime,’ Robert Kleinhenz, deputy chief economist for the California Association of Realtors said Wednesday.”
“The California Association of Realtors has reported that the median price of existing detached homes in California was $281,100 in December, down 41 percent year over year. In the Palm Springs region, Kleinhenz said, the December median stood at $169,730. That’s nearly 57 percent lower than the median in June 2005 when the market was at its peak at $393,370, he said.”
“Becky Bowles, association president, said the prospect of increased affordability is great news. ‘We can help buyers who have not been in the market for years,’ she said. ‘It’s great to know we’re in a better position to provide housing opportunities to people in areas where they work.’”
The Daily Nexus. “With the recession wreaking havoc on the national housing and credit markets, professor Morris A. Davis traveled to UCSB yesterday to breakdown the key components of the economic meltdown. At his lecture in Corwin Pavilion, Davis - an assistant professor in the Dept. of Real Estate and Urban Land Economics from the University of Wisconsin-Madison - traced the string of events that led to the current financial crisis. The presentation asserted that the failure of real estate value, mortgages, Wall Street, the economy and monetary and fiscal policy are all interrelated.”
“Davis said that prior to 2005, economists and homeowners were not conscious of this bubble, leading to negligence on the part of scholars and investors alike. ‘What happened to the housing market was a historical anomaly,’ Davis said. ‘The society as a whole caused the housing market boom, because people were wildly optimistic about the market.’”
“In 2000, the subprime purchase percent was 2.43, opposed to 2004 when it rose to 14.81 percent - an unheard-of rate of inflation, according to Davis. Davis said average buyers were allowed to take economic risks in housing because it was seen as a risk free investment to the individual buyer. Additionally, when a foreclosure occurred, homeowners did not have to take the loss - the loss rested on the shoulders of the bank.”
“Davis said that American society had been irresponsible as a whole and surmised that the value of homes would not decline in the near future. ‘There was a denial in the market until we were neck high in the muck,’ Davis said. ‘You make one bad bet - that home values don’t drop - and you lose a trillion dollars.’”
“Third-year Spanish major Laura Lozano said the current outlook provided by Davis on the economy is alarming. ‘His presentation was eye-opening,’ Lozano said. ‘It frightened me because I’m about to go out into the workforce. He said the best thing to do now is to buy a house, but I can’t do that.’”
“‘We’ve only been paying interest on our home for the last two years. We haven’t even begun to cover the principle [sic], so in a way it’s like renting. And for $5,000 we could be renting a house in Beverly Hills,’ she said.”
Spelling usually doesn’t count on the Internet, but this is copied from a news story! If newspaper editors can’t spell, then who can? It shows that the news agencies are having to scrape bottom to find staff.
Anyway, at least she finally realized what she was doing! Maybe that will prevent these homedebtors from wanting to be considered victims. I hope that even with our new Socialist regime, nobody would consider cramming down the principal for folks who could only afford an interest-only teaser rate.
Why didn’t the reporter ask some hardball questions like “how could you possibly think going from a $550 rent payment to a $4000 rent payment was a good idea ?” and you were renting honey. Talk about “throwing money away”.
$465k in Panarama City? Are fin kidding me? I hope the house came with bullet proof windows and kevlar vests for the entire family. PC is gang-infested crap hole.
And $4-5k for a mortgage in PC? You can rent a nice condo on the beach here in Marina del Rey for $5k. And no taxes, insurance, or maintenance. Just another ill-informed, want-to-get rich quick, I’m not going to throw my $$ down the drain, SUCKER.
But, but look at all of the ‘tax’ deductions ? hehehehehehe.
And where do you rent for $550/mo in the SF Valley?
I would be very interested to see what income level was listed on their loan application. It takes a $12,000/mo income to swing a $4,000/mo payment. How many people who really make that kind of money are living in Panorama City?
“nobody would consider cramming down the principal for folks who could only afford an interest-only teaser rate.”
You are joking, right?
Those are the ONLY people that will get the cram-down. If you can afford the higher payment, then they will expect you to do so. If you can’t afford a 30-year fully-amortized payment, at 3-4%, THEN and ONLY THEN will you be considered for a cram-down.
Darrell, you are absolutely correct. Too bad Marta Sanchez borrowed from Countrywide. They are very stubborn.
I just talked to my lender to get a “streamlined refi” as my 30-year fixed rate is at 6% and I thought I could do better. Unfortunately, they don’t have a “streamlined refi” program.
However, they are doing cram down principal reductions if all the conditions are met: 1) current on payments, 2) debt ratios are too high, 3) market value is less than the loan amount.
This loan officer said he just lowered a guys principal from $500,000 to $300,000. The investor eats the difference, but realizes it is cheaper than foreclosing and selling in today’s market.
I was being sarcastic. Cramdowns are an absolute abomination.
“This loan officer said he just lowered a guys principal from $500,000 to $300,000.”
That means that guy just made $200,000 tax free. You or I would have to earn $400,000 to net $200,000. And why? Because he borrowed too much money.
chill, bro
he could “make” the same by short selling, but this way, he incurs the opportunity cost of continuing to pay payments on a depreciating asset.
In general, I have no problem if two parties want to modify a contractual agreement they previously made.
HOWEVER, it becomes my concern when:
My tax dollars are used to subsidize the cramdown
AND
The cram-ee doesn’t have to pay income tax on the forgiven debt (thanks to a law passed in 2007)
I
But then he would end up owning that asset, whether depreciating or not, at a cost to me - a renter. Housing will go up eventually. Maybe not my lifetime, but it will.
That $200k was piggybacked into a 30 year balloon. That guy is paying rent his whole life because he still can’t read the fine print. Not to mention the house is probably really worth 100K. And, he just rolled over a non-recourse debt into a recourse debt which if he walks now will end up a wage garnishment for life. Sucker.
”A licensed Realtor and real estate investor, Wilson of Camarillo was telling people to grab deals while they lasted, which he thought would be until the end of 2007. Wilson laughs at that advice today.”
Oooops!……my bad. Ha-ha-ha-ha-ha…….yeah, you’re f#cked! Sorry……
Still listening to realtards sheeple?
If this keeps up, Bill Wilson may need Bill Wilson!
“Flying Pigs loaded down with lipstick, relistings and re-sets…Be prepared to take off on Runway Three- Six and hope for a breeze. NAR ground Control Out.”
Is this the same guy that lived next door to Dennis the Menace??
Beat me to it, ex. I read that and I’m thinking ‘Laffin it up, huh, Sunny Bill?’ But I bet you’re staying out of dark alleys nowadays and also varying your route home. I mean, that’s if you’re a wise man…
Oh, wait.
My thoughts exactly. This flippant flipper laughs, but those who relied on his grossly self-interested advice certainly don’t find the subject humorous. In other parts of the world, he’d be in mortal danger or already dead.
Yar! Heck, I’m ’bout ready to go search him out and kill him myself. Just on general principles.
Yup. My thoughts exactly. Right about now is where we enter the anger phase. Nothing makes people more violent than being laughed at by the person who screwed them.
I would advise RE agent extarodinaire, Wilson of Carmarilla, to shut up, keep a LOW profile, hire a food tester and avoid dark alleys
“Comptroller of the Currency found that 58 percent of modified loans fell delinquent within eight months.”
Soon “they” will understand that foreclosure is th best thing that can happen to people like this. It isn’t just the vultures who benifit from the carrion created by defaults. It also liberates those imprisoned by their own stupidity and allows them to move on and start again……hopefully all the wiser.
The problem is, we’ve reached the point where people who didn’t buy into this are getting the shaft.
Had a conversation with someone who, shall we say, is “in the know”……says the only offers for ANY kind of asset are the guys sitting on cash, making bottom-feeder offers in the ten cent on the dollar range.
There is another big group of people sitting on cash, but don’t want to be knifecatchers, are waiting 90 days at a time to see if prices “stabilize”.
Rightly or wrongly, the economy is increasingly being held hostage to those that aren’t going to buy anything until they can get it for a nickel on the dollar, no matter what it does to the wider economy. I’m betting the government is going to do something soon to give them an “incentive” to buy.
That’s BS. Plenty of us will buy when prices revert to historical norms. In SF, a dime on the dollar may very well be the historical norm. Other places it isn’t.
The government has been giving people incentives for a long, long time. We are now starting to see what incentives really lead to. They lead to malinvestment and crashes.
Well, I’ll only partly agree with that statement. Incentives from government were only a part of the picture, but certainly not the most important as is evidenced by other countries (who do not provide the same incentives) having massive bubbles as well (think of Spain, Ireland, Australia, New Zealand, China, India, Singapore, and UK). Excessive optimism cause most bubbles. This one, however was aided and abetted, but government intervention didn’t cause it.
Chuck Ponzi
I think that most bubbles cause optimism, and that the optimism starts to feed the bubble durring it’s final growth stages.
This bubble never would have happened were it not for the tax breaks, the “implicitly backed” GSEs, and government’s FAILURE to impose and enforce cool-headed regulations (especially on the GSEs themselves).
A lot of the other countries you mentioned give even greater incentives than the US. There are direct subsidies, insurance, etc. And how the Hell does somebody “own” a house in Communist China, anyway? Pollyanna gubmints had a lot to do with this, IMO.
Yes, these gov’t’s did fuel the boom, but that isn’t necessary for a bubble to occur. 1920’s Fla. bubble happened in part b/c someone invented A/C, heh heh…
If govt or central bank gets involved, it should be to cool a bubble down. Standing by like Silent Cal makes the inevitable mess all the worse. Of course, this time around we had the central bank AND gov’t feeding into the mess w/ low low rates and tax breaks!
I don’t see this.
Many houses in my area are bing picked up out of foreclosure at close to 2003 prices. Sure, that is HALF the 2006 price, but they ARE selling at 2003 price.
zillow these. (not the huge difference between zillow price and actual sale price)
5549 W Hearn Rd Glendale AZ 85306
5516 W Redfield Rd Glendale AZ 85306
5634 W Zoe Ella Way Glendale AZ 85306
They are going 3-4 a week in my zip now.
I’m not talking houses……..I’m talking stocks, businesses, etc.
One nice thing about the business I’m in (or was in) is that you get to see and hear things that, individually, don’t mean squat, but by adding it together, means something.
Things are going to hell quicker than the MSM is reporting it. A lot of people that WERE NOT involved in the run up are getting killed in the crossfire.
(unless you think the only people not involved are some of the gold hoarding, Fed bashing, return us to an agrarian economy types that are on this blog)
The government and MSM is focusing on New York and Washington. They are chasing yesterday’s story.
The government is either-
-Aware of the bigger picture, and is conspiring to keep it under wraps as long as possible (by talking about boosting confidence), to try to prevent a total meltdown.
0r
-Is too stupid, too willing to believe their own manipulated statistics, or is too involved talking to the same people that caused the problem, to recognize that the final meltdown is well under way.
If you were to ask anyone who knows me, you would find that I’m not the type to panic, and am pretty good predicting what people’s reactions will be, given a certain set of circunstances.
Maybe I’m too close to the problem (being handed my walking papers, after all). Bit it isn’t like I’ve been showed the door before. Everything I’ve seen indicates that a big percentage of the non-government work force is going to be on the streets soon, and will be there for a long time, and when the big game of “employment musical chairs” is over with, everyone will be making 50-75% of the income that they were.
What I’ve seen and heard since January 1 has me thinking about loading up the family, guns, and MREs, and heading for the bunker. If I had a bunker.
You are correct, DinOR. Because US companies have been encouraged to replace US workers with Chindians, Mexicans, etc, we are now suffering the consequence: Widespread unemployment and economic destruction. Lots and lots of people are facing a situation where they have no way to earn a living and pay for housing or anything else. This is not a result of the housing bubble, although the bubble did delay the reckoning.
Captain Willard: “Hey soldier, do you know whose in command here?”
Soldier: “Ain’t you?”
“Apocalypse Now” (1979)
me freakee too, but I’m not sure it’s rational
Quit the panic talk.
1) The governement will monitize debt at some point. Actually print money. Inflation to counter some of the deflation.
2) If China/india want to keep the party going by gving us cheap stuff for increasingly worthless treasuries. Fine. Let them. Eventually they might get the idea this isn’t a good plan.
3) People are saving and cutting back. Some excess capacity is being dumped. People are hunkering down. All good.
4) We don’t know what a sustainable velocity of money should be. Assume we aren’t going to a zero debt system.
5) People are still going to have planes and Gulf Streams. You will get a new job soon. Even if the ole income is a bit lower, the lower income should buy more.
6) Enjoy a couple good beers, keep a stiff upper lip and talk to some friends about the important stuff. Friends, family and good health.
james,
Good points all. In particular China and India. Hey Guys! We’ve given you a solid decade to ramp up your OWN middle class! Hello?
If they were wondering at what point we’d no longer be able to trade their knick-knacks for cr@p MBS paper…? I think we’ve ‘found’ it! Or was “the model” to perpetually sell plastic stuff to us w/ no improvement in their ‘own’ standard of living?
James,
Your #1 and #5 items don’t make sense together. If inflation is going to go up to counter deflation, then the lower income will not buy the same stuff in that environment.
It’s good to note that the San Fernando valley is starting to get brutal. That is good for me and mine because if a person has no roots in Palmcaster and is faced with similar cost to buy a home “down below” then it’s a no brainer.
We’ll likely see more of this effect as we go forward. Foreclosures in closer suburbs will further pull the rug out from under prices in the exurbs.
“Jose Hernandez is also hoping to save his parent’s three bedroom home where he lives with his mother and father, two sisters and three nieces. Hernandez’s mother bought the house for $488,000 in 2005. She put $100,000 as a down payment, part of the profit fromthe sale of the small townhouse where she lived with her family for more than a decade.”
“But Hernandez said his mother was steered into a negative amortizing loan. Today they owe more than $500,000 for their home, while at the same time, the value of their house has plummeted. In December…their monthly payment shot up to $3,900 from$2,300 the month before. Since then they haven’t been able to make the payments.”
Correct me if I’m wrong here, but I thought most neg-am loans had a threshold of 110-115% of the loan amount. 388K + 40-60K doesn’t get you to 500K.
Mexicans have a special right to refinance, don’t you know that? You must be racist. They are just trying to get a fair shake, but have been tricked by the white man once again. Don’t you feel ashamed? You should donate to La Raza to make up for it.
And the sad part is they probably had a hispanic loan officer taking advantage of them.
I don’t know about this particular case, but it sure does seem to have happened time and time and time again with the strawberry picker vs. $750,000.00 mortgage set, doesn’t it?
That has been one of the especially discouraging parts of this whole ongoing mess. Someone here called it something the other day? ‘Affinity fraud’? Where you target your own peer group. I mean, naturally–they’re right there closest to hand and all convenient, but they also are more prone to trust you—’Hey!’ The sap/victim thinks, ‘They’re like me! We’re pals! We’re fellow countrymen! He wouldn’t rip a pal off, right? Right?….Ri…?’
Now, I admit that I laughed my bum off when I heard about some of the uber-rich being taken by Madoff, his ol’ pals and buddies from the country clubs, man, what’s not to laugh at there, ‘affinity fraud’, HAHAHAHAHAHA!
But when these sneaky greedy wretches target old church-going grandmas and people who can’t even read a contract right—then I lose my giggles. Well, depending on the grandma and the illiterate. In theory I lose my giggles.
In actual practice, when Ben posts an article, I often laugh at those stories, too. But that’s because I’m a bad person.
My point is, con-men and con-women should be shot.
Okay, let’s start choosing weapons. I vote for the AR-15.
I was just commenting on a similar situation right here in Portland but if YOU’LL RECALL ( the realtwhore was also their mortgage broker! )
And just to show you there’s no hard feelings, she was more than willing to “re-fi” when to a FRM “after it’s gone up in value”. Gilroy, CA I believe?
“Okay, let’s start choosing weapons. I vote for the AR-15″.
Good choice, or we could use the Barrett 50cal. Very little left, easy pickings for buzzards.
And then there are the shysters like “Federal” “Loan” “Modification” preying on these folks afterward, going after whatever is left. Folks! Educate yourselves! Now!!! DO NOT pay money to ANYONE UP FRONT!!!
wmbz,
Have you checked the cost of .50 cal BAR ammo lately? It’s like $2.50 a round…..
No,
Most recast at 125%, some more.
Chuck
Coming to America, the movie, part 2009:
“‘My parents came from El Salvador looking for something better and they did everything right. They bought something, they waited until they got equity, they sold it, they made a very good profit and they turned around and put a large sum of money as a down payment, and now they find themselves in this situation when they shouldn’t be. My mom feels awful. My mom has actually gotten sick from all of this,’ he said.”
Well hey, all you socially progressive, politically correct, minority-enabling, affirmative action in loan lending, enlighted types:
Is that paved freeway of good intentions getting crowded?
Their first loan was fine, it was the second that was the problem. What does that suggest to you?
cobaltblue:
These people were not given a loan because of affirmative action or anything like that. They were given a loan because it was easily securitizable and saleable to greater fools across the world. The MSM is only showcasing minorities because they seem more pitiable. People imagine that immigrants are naive, innocent, and taken advantage of. The same story is being played out in households of all stripes all over the globe.
“……showcasing minorities……”
That, and those who think the whole problem is because the government FORCED the lenders to loan money to low-income minority applicants.
True, there may be some of that involved. But the bigger problem is mainly because of the:
-Flippers
-Serial HELOCers and refinancers
-Real Estate “Entrepeneurs”, taking out NINJA loans for million dollar luxury properties.
-and all their enablers in the banking and mortgage finance industries.
death by CRA
and now they’ll make it even worse-er
“Becky Bowles, association president, said the prospect of increased affordability is great news.
The “new and improved” talking Becky doll. Get yours at Walmart™ today
What self-respecting Rebecca would ever call herslef “Becky” anyway?
None of them! Me and my seven (7) siblings all have Bible names–Yes, thank you, religious nutter parents, and I’m even named after a BOY Bible figure, thank you even more, ya righteous idjits, don’t ya got eyes. At least it was one of the more impressive figures, with a musical instrument even, and not one of those who got to hang out wearing a bathrobe in a goat-hide tent whilst toddling around the desert being bossed by fiery shrubberies—
You can see that Bible names are a bit of a sore subject with me.
Anyway my point was, my sister got named Rebekkah and she got pegged with Becky when she started kindergarten but it never did stick. ‘Becky’s’ are just, you know, fluffy and bouncy. Perky. Just perfect for a realtor, or a cheerleader, or someone else trivial and useless. Actually, Bex was a cheerleader in high school, come to think, til she quit to play on the girls soccer team because that seemed more fun. But she still wasn’t a ‘Becky’. She’s a ‘Bex’. Or else ‘Would you PLEASE, oh PLEASE shut up?’ Those fit wayyyyyy better.
Don’t tell me you got stuck with Jezebel. What a bummer.
Oops didn’t read that you were named after a boy. Duh me. So now I’m gonna guess Michael. I’ve know a few women named Michael. None went by Mike though.
At least it was one of the more impressive figures, with a musical instrument even…
Your parents named you David? Didn’t David play a lyre?
…oh. I get it now.
Duh. Didn’t read your whole post. Revoke my internet license immediately.
Boy. Oh boy…
Nah, she means Gabriel(le) and not Moses.
Olympia comes from the Greek Bible doesn’t it?
Gotta admit that the Bible isn’t one of my strongest subjects. If it wasn’t in the Omen or an Iron Maiden song I’m kind of at a loss as far as the Bible goes.
If it wasn’t in the Omen or an Iron Maiden song I’m kind of at a loss as far as the Bible goes.
Don’t sweat it. 2000 years from now, The Omens of Maiden will most likely be a bible itself.
Oh, do you have to spell out “Nebuchadnezzar” quite a lot when you are giving your name to people? ^_^
Gabriel(le) sounds like a good guess to me.
‘Comment by potential buyer
2009-01-29 16:29:03
Nah, she means Gabriel(le) and not Moses’
Cheater! You either talked to Jeebus or else you got a good memory, Mr/ Ms. Lurker.
Ahhhh! I just had a big long irate post ready, typed with one hand, while I ate a HotPocket out of my other hand, but now I’ve decided to just be quiet, since all of you’s read more Bible than I ever thought you did.
Oh, but you know what? Make fun of my name and I’ll find ya and kill ya! With my trumpet, and my HotPocket.
Would that give you a nickname of “Gabby”?
My parents came from El Salvador looking for something better and they did everything right. They bought something, they waited until they got equity, they sold it, they made a very good profit and they turned around and put a large sum of money as a down payment, and now they find themselves in this situation when they shouldn’t be. My mom feels awful. My mom has actually gotten sick from all of this,’ he said.”
They didnt do everything right…….they financed with a neg ammortizing loan and have lost everything. What was wrong with the townhouse?
I love the logic behind switching from $550/mo. on rent to a $4,050/mo. mortgage and being relieved they weren’t “throwing their money away on rent”.
I love the logic behind switching from $550/mo. on rent to a $4,050/mo. mortgage and being relieved they weren’t “throwing their money away on rent”.
my thoughts, too….
24 months at $550 = $13,200
24 months at $4409 = $105,816
money thrown away by “owning” = $92,616
Unbelievable. I guess a nicer apartment was out of the question.
She said that if she and her husband were working 24 hours a day they couldn’t make enough to pay at the end of the month. I can’t believe that a babysitter and warehouse supervisor managed to scrape together $4,049 per month.
————————————————————————-
“Sanchez and her husband knew money would be tight and sacrifices would have to be made when they bought their home for $465,000 in 2006.
“Now, when their 14-year-old son needs a new pair of shoes, or new clothes, the family buys it through the sale of recycled water bottles and soda cans they collect throughout the month.”
Am I to believe that they think tap water and no soda are too great a sacrifice? Or do they comb highways and dumpsters for empties?
They probably go out every night and fill their Ford F-550 up with the contents of recycling bins. This is one reason we all have to pay so much for garbage service. The trucks still have to come by and “collect” the recycling, but the bins are often empty, so there’s nothing to sell at the end of the day.
I forgot about the F-550!
I’ve called the Sunnyvale Police a couple of times on people stealing my recyclables. One time the cop caught the woman and LET HER GO with a verbal warning.
I figure if she fills up her truck just once a week she’s probably making at least $1,000 month tax free. You and I would have to earn $2,000 to net $1,000. The fact that the cop let her go angered me, but I know better than to file complaints against the local police.
The fact that the cop let her go angered me, but I know better than to file complaints against the local police.
Oh, c’mon, reuven, the cops have much bigger crooks to catch than some broke hispanic lady trawling through someone’s garbage. They have to go out and track down crooked Wall Street CEOs and banksters, arrest them and then prosecu…
Oh… wait. No, they’re not doing that either. My bad!
Tickets to superbowl = 2000
Venti frappachino= 4.50
Being screwed by an american realtor= priceless
Well the insanity makes sense once you realize that with 20% annual appreciation, a 465k house yields 93k in the first year. THIS is the problem: the only justification for prices that high was continued appreciation. Truely CA RE was simply tulips all over again.
Some simple math here. If it takes you 15 years to pay off the loan at 4050$ a month, it would have paid for 105 years of rent.
I’m sure there was some increased quality of shelter here but… oye.
I was waiting for someone to point out that they did far from everything right. That has to be the biggest mistatement of the entire post. I can’t think of how they could have done things more wrong. I agree with McCain, there should be a law that requires some minimum education with ARMs to explain that a 1% change in interest does not increase payments only 1%.
“Of all the clients, only three had their principal balance reduced. ‘Everbody is dreaming of principal reduction”
And why NOT! This entire facade… was built on “dreaming”!
Since BofA and Citi have both found common ground ( dividends of a penny ) I’d say they’ve already palmed the pain off on to the shareholders? Are *WT Economist and I the -only- ones MAN enough to admit cramdowns are the answer!? Hmm?
The shareholders certainly benefitted from the phantom profits being made on the way up, so why shouldn’t they also participate in the resultant loss?
LOL! Yeah ( did you want that penny in quarterly installments? ) Actually when I pull up Citi’s chart, it traded between 45 and 50 from ‘04 thru Oct ‘08 ( and we all know… what happened from there? ) So it wasn’t like there was any kind of outrageous upside, was there?
No, nearly as “I” can figure the only guy that “benefitted” was Robert Rubin. My point is that you’ve cut the “dividend” to what HAS to be the very definition of a “token amount”, you’re share price has been decimated, you’ve gotten BILLIONS in handouts ( but you -still- can’t seem to find room for principal reductions? )
Most of the profits were made before 2004, I think. I don’t really follow Citi, but I’m just saying. Think very carefully before buying new or used stocks.
Cram-downs are NOT the answer. Make your payments or get out!
DinOr,
from bits:
“I know people in Miami who are refusing to pay their mortgages, they have the money but tell the bank that unless the principle is drastically reduced they will not pay.
Now, here is where it gets interesting, guess what they are doing with their money?
They are buying FNM because it’s so cheap now.”
–
Miami is down +40% from peak according to Case Schiller (at 169 from 280)
Prices at 2003 levels.
–
In Miami the attitude is different; they don’t care, if principle isn’t reduced they just stop paying.
PHX too. I know a lot of people that are waiting until prices get a lot lower, with plans to buy at teh bottom and then walk from their current house.
Oh I’ve no doubt there are those out there ready, willing and able to game the system. Shame on them. And in essence the “Bi-residence flip, flop and fly” won’t “fly” as I believe lenders will require ( as they had for generations ) a FIRM offer on your -existing- home… but then again, scammers do what scammers do.
I’m trying to speak more to the viability of the U.S as a nation and the most ethical way to deal w/ all that neg. equity. I’m not -unaware- that I’m on a slippery slope here, but it’s safe to say that we’ve taken the “Safety Manual” and thrown it out the window that fateful day the FED first stumbled onto the idea of TAF. And TSLF. And TARP.
So we’ve made exceptions for anybody and everybody -except- for the guy that’s stuck making the payments. All you former Bush-haterz feel free to jump in and help me any time now!?
Why couldn’t Bush have sneered about the “genius of capitalism” when the housing bubble and auto loan bubbles burst?
Answer: because the Wall St Playas were going down with this ship and class will tell.
BUSH SHOULD HAVE DONE NOTHING. And prevented HeliBen and Hanky Boy from doing anything either.
If you are a ‘fiscal conservative’ and voted for Republicans in recent elections, congratulations: you are a sucker.
*I voted for Gore.
not a gator,
Uh… I was referring to compassion? I think we all know where the root causes of the bubble lie, securitization, generous tax codes for RE and lax lending. Tag that on whomever you want.
But I ‘was’ talking about compassion.
?
My take is different on this.
Scamming is now institutionalized.
What difference the bank or the individual?
Muir,
I lost a post from hours ago, but my take was along the “sophisticated debtor model” Donald Trump has been so adept at sharing?
Since we’re now obviously winging it and taken everyone ‘else’ into the equation; why not the FB? “I” on the other hand would suggest that they’re only getting the house for what it ’should’ have sold for.
Again, with or without an Epic Bust, 30 FRM are just too brittle and dated for today’s American lifestyle. We’re now having layoff’s just among our own posters. The mortgages we’re using today are basically the same obligation we had when there was lifetime employment. I’m very open to exploring more flexible arrangements.
“viability of the U.S as a nation and the most ethical way to deal w/ all that neg. equity.”
The most ethical way is to force the banks into sale. Common and preffered shares get zilch, bond holders get any net after sale of assets. It is not ethical for the government to force the current and future taxpayers to prop up zombie banks.
Again, with or without an Epic Bust, 30 FRM are just too brittle and dated for today’s American lifestyle.
————————
You’re absolutely right, DinOR!
As a matter of fact, we should have 10 year mortgages, fully amortized, with a max of 23% of gross income going to housing costs.
We have LOWER wages, less stable employment and fewer employer-paid benefits (especially the all-important health insurance and defined-benefit pension plans) than we did decades ago. Therefore, housing price/income ratios should be much lower than they have been historically. Time for Americans to cut their fixed costs in half, if not more.
And though I suggested principal reductions for a long time, the amount written down should be a second loan that’s due upon sale or refinance of the house. Some would argue it should be a full-recourse loan, too.
These idiots are NOT “victims.” A foreclosure is a GIFT to them because they will have gotten out of a burdensome contract. Those of us who have stayed out of the mess should not have to pay for them.
Like reuven said, if the lenders take the hit themselves, I’m more open to the idea, but taxpayers should not have to spend a single cent keeping FBs in houses that they never intended to pay for themselves.
“Sanchez and her husband knew money would be tight and sacrifices would have to be made when they bought their home for $465,000 in 2006. Their housing payment would go up from a $550 rent to a mortgage of $4,049″……..
OMIGOD…..550 to over 4 grand??? That’s insane. What were they renting in Cali for 550, a garage?? That isn’t a whole lot more moneys than I pay here outside Detroit.
And how many couples can automatically take on an extra $42,000 a year in housing payments BEFORE the reset, not even including everything else??
Amazing.
they probably had a rent controlled apt in LA for the entire time they lived in the USA. They were idiots for thinking 550 a month was throwing money away, when market rents were probably 1200+ a month for comparibles (and that is a generous undervaluation of rent).
They lived in a converted garage. Read the article before making snarky comments.
Rant
How is paying $550 a month for rent throwing money away? You get a place to live, right? Do they consider buying food, paying for gas, cable, phone or electricity throwing money away? Funny thing is they don’t consider soda or bottled water as throwing their money away.
“OMIGOD…..550 to over 4 grand??? That’s insane”.
Yea, they made a really smart move. look at all that rent money they were ‘throwing’ away. Morons pure and simple.
IN the 90s when they originally bought, you could get a house for 70k in Palm Springs. I did it. The economy was horrible out here, so except for coastal towns, there was alot anyone could buy and live in nicely, nice part of town etc. That would bring the timeline just about right, -10yrs from 2005 would be 95. Yeppers, the econ would net you a nice house, 3/2 in lots of areas in CA Riverside co etc for 70k.
Too bad they took the leap.
And it wasn’t because they were minorities. This entire global economic devastation was encouraged by the greed mongers, WS, banks, and trickle down..RE agents etc..
In normal underwriting times, the rules state you can not take on a mortgage payment in excess of 130% of your rent. This is a good example of the lender being stupid too!
“housing payment would go up from a $550 rent to a mortgage of $4,049, but they felt confident”
WTF did they feel confident about?
“Former Mayor Ed Chavez, who left office in December for a home he had built in Indio, has put his Cavendish Square condominium on the market in a short sale”
I just love the deals here in Stockton. You know it’s the time to buy when the damn Mayor jumps ship, abandons his condo and uses a listing agent far far away from “His” city.
I am closing next week on an 1,800 foot 3/2/2 in great location in Stockton. Inside pie shaped lot with fantastic yard; jungle gym for the kids, tree house, grapes, fruit trees, greenhouse, shed, bombshelter & the bank is going to pay for; new paint, new central air unit, hardwoods refinished, new 200amp electric service and some termite work.
With $35k down my payments will run $750/mo. I am still living in my previous primary resedence I bought for 96k in 95′. I sold it in ‘04′ for $250k and rented back for years. It went NOD last summer and as soon as I knew my landlord wasn’t making payments I stopped paying rent.
So in summary.
-Haven’t payed rent in like 8 months (and my rent was $150/mo less than the payment for the same home when I rented it).
-Home I sold for $250k in 04′ (netting $120k) now worth $80k? Bank loaned $365k on it!!!!
-Buying far superior fantastic home for $150/mo less than my rent ($300 less than my previous house paymnet).
-Still have more cash left from these transactions than the $35k the new purchase is draining from my cash.
Stockton is not Detroit, the bankers don’t get this. They see a file and are convinced that Stockton is the ghetto and are selling $900/mo rentals for $60-80k! You do the math, it works to about 10-20% return!
Well, Rich, you obviously did not partake of the idjitness that just about everyone else in Stockton seems to have gulped down so liberally, and now, as a richly deserved reward, you get a bombshelter AND some grapes!
Huh huh huh?! Awesome!
See, this is one a them happy stories I like so much.
I think it’s due in large part to the fact that prices got SO far ahead of themselves there! Or SAC for that matter? I think it’s just wonderful that prices have stooped to those levels.
The wife and I had considered getting onboard w/ a 2nd home down there ( or Modesto etc. ) but I’m not sure the comparison to Detroit is entirely undeserved. I seen a lot of repo’s on C/L and it didn’t look like it took too long for the gangs to find them?
Just make sure the INSIDE door latch of the bombshelter locks down all snug and tight…it looks as if this is going to be a BIG ONE
I agree, Stockton is not like Detroit. California is excellent for farming and vacationing, so it will always be worth something. Stockton is the ghetto, though. I would get instantaneously killed upon setting foot there.
“California is excellent for farming and vacationing…”
I dont know ’bout that, with all the shortage of H2O for the past how many years, and the increase in population, the draught idea is that there soon will not be enough water to drink, much less to grow food on.
Some people will need to leave, and a lot of prime farmland will need be reconverted to farmland back from residential. It would take $$ to bulldoze all those houses and tear out all those streets, but people would do it if food became more valuable than real estate (which it always has been overall, until recently).
Notice I’m just talking about the land being worth something, not necessarily the condominium complex that was built on it.
Half the population of Stockton has been incarcerated, according to a Merc. News report that came out several years back. Doubt its changed much.
Rich, this works mostly because you are owner occupied (and smart). An investor buying in Stockton can get slaughtered. One of my friends just spent $2800 in Stockton, replacing the HVAC unit, stolen when the house was vacant for a month. Hard to make that up on $800 rents.
Rich, your name is quite appropriate. Good planning on buying a place with a bomb shelter. Are they common in Stockton?
Does anybody know the source of bank loan tightening for homes? Are the tigher loan standards self-regulation by banks, new banking legislation that has recently been enacted, or maybe new rules from Fannie/Freddie if bank wants to securitize and sell their loans? I remember lots of press early on about the inability to regulate banks and their loan terms, so I have to believe these tougher loan standards are coming from the banks themselves rather than mandatory compliance from some new regulations elsewhere.
“Although plenty of money is available, the guidelines for lenders have firmed up, Tracie Southerland, financial and mortgage advisor for Opes Advisors, said. Southerland compared housing accessibility in 2003 versus 2009, using a $1.5 million house as an example. In 2003, with 10 percent down, a 4 percent loan on $1.2 million and a second 3.5 percent loan on a $150,000 line of credit, one would need a $143,000 income to qualify. Today, with 25 percent down and higher rates on the jumbo loan, one would need to earn $228,000 a year to buy the same house
I think it’s coming from the market itself. Trust me, if they could find a GF to palm their “works of fiction” off on ( they would )
I’m told there’s absolutely NO appetite for “Broker Originated Loans”. Never should have been in the first place.
So this is simply banks assuming they will need to keep the loan and therefore the loan needs to be viable.
I remember Alan Greenspan in 2005 saying Fed did not need to interfere with bank lending standards as the banks will “self regulate” as needed. I guess we are finally seeing that.
I think it would have been more efficient to put some simple rules in place to begin with. These bubbles are no good for me.
Big V,
Agreed. I’ve often heard Viet Nam vets say their life really has (3) distinct chapters.
Their Life -before- VN, During… VN, and -After- VN. In a weird way ( I’m ’starting’ to be able to relate? ) I’ve lost the stomach for bubbles.
Banks lending their own money?!??!??!!!
The banks are getting rid of all their repo this year, or early next. Banks can’t sell their notes, but do have cash. Gov is throwing out more. They will lend WITH GREAT PRUDENCE….
Now comes the gov to the rescue to fix the problems that are almost resolved if left alone.
Yeah Rich, U.S Bank has been doing it for some time. I’m told ( by market cap ) they are now the largest bank in the country.
When you go to get qualified by USB ( you’ll KNOW you’ve been qualified )
$465,000 to purchase a Panorama City post WWII small-ish home in gangland? No critical thinking skills, let alone due diligence. How much dough did these guys make?
We were north of $140K income in 1998, when we bought our former McMansion (sold), and a $320K loan scared the cr*p out of us. I know this group is privledged, but come on.
“‘The buyer pool has shrunk,” she said.”
- Household-level home purchase budgets have shrunk.
- Aggregate home purchase demand has dropped off the cliff.
- Home prices are still crashing, yet nowhere near equilibrium.
“Southerland compared housing accessibility in 2003 versus 2009, using a $1.5 million house as an example. In 2003, with 10 percent down, a 4 percent loan on $1.2 million and a second 3.5 percent loan on a $150,000 line of credit, one would need a $143,000 income to qualify. Today, with 25 percent down and higher rates on the jumbo loan, one would need to earn $228,000 a year to buy the same house.”
“‘The buyer pool has shrunk,” she said.”
The sad reality is that the proverbial $1.5 million dollar house in Palo Alto is a dump on 1/8th of an acre, and would only rent for $2k/month — Silicon Valley people don’t seem to be able to do the math even though they’re nerds!
Oh my gawd. 143K income to buy a 1.5M dollar home?? You’ve GOT to be kidding me!! What in the heck is this moron thinking?
228K isn’t even CLOSE to the necessary income to support a 1.5M dollar home. Try 400K as a MIN, more like 500K before I’d feel comfortable buying a home in that price range.
If this is “tight” lending, we have a LONG, LONG way to go down from here. Tight, in my book, is nothing allowed over 2X income for loan amount (750K income required for 1.5M dollar loan). They are still at 10X income on the loan amount! That’s insanity!
They buyer pool on a 1.5M dollar home should be restricted to people making >400-500K/yr. That’s about .01% of the population. Even >100K puts you at only about 5% of the population.
That’s the thing that’s so mind boggling. Only ~5% of the entire country can afford a home that costs >300K. How’s that for a sobering statistic!?
Michael Fink,
Well then maybe YOU can explain why we built so many 1.5 mil. homes!?! Hmm?
What did those 1.5M homes cost to build ? Not 1.5M I can assure you.
Perhaps because we are idiots, and somehow thought that flipping houses to one another was going to make us all rich?
Also, 1.5M dollar houses probably were built (during the boom) for about 300-400K, with lots that cost 1M dollars. The biggest bubble was in land prices, you could probably buy that same lot today for 100K, but the construction would still cost you 250K.
The biggest bubble was in land prices, you could probably buy that same lot today for 100K, but the construction would still cost you 250K.
———————-
Precisely.
Developers and builders way overpaid for land as the bubble grew. They expect the buyers to pay for the developers stupidity and greed. Good luck with that.
Basic construction cost is 500K
Land 600K
“Upgrades” and other junk 100K
Interest, realtor fee, homebuilder profit 300K
2006 home total: 1.5 M
Basic construction cost is 500K
Land 200K
“Upgrades” and other junk 0
Interest, realtor fee, homebuilder profit 100K
2009 home total: 0.8 M
“‘The buyer pool has shrunk,” she said.”
Translation: “It would seem that our Village of Idiots has wandered off”
… that we would have to actually pay our loan back on the agreed-to terms. We never could afford the fully amortizing payment of $5,000/month, so today’s bad economy really has nothing to do with it. But we’re like “Hey, the MSM is giving us a blanket excuse, so why not?”
Bottom line is american disposable income has beening vanishing over the years, rising health care costs, school, utilities, the average median income can’t keep up. The US federal government can’t keep throwing money at the problem & expected it to be resolved. Bottom line housing prices need to come down to a price people can afford them. Demand is gone, its simple economics. That why it angers me when the federal government throws away my tax dollars trying to fix problems. All this does is delay & make the crash even worse, who will be the next to crash, the federal government, I can’t see how we can continue to overspend & survive as a country. Prices of everything needs to come down. Maybe somebody shouldn’t be making 10 million to run a company, just think of how many middle income jobs that salary can pay for. Its ridiculous, how important does this guy think he really is. Everyone is replaceable
Nate,
No question. The only thing I would add is that the American Worker laid flat on his back while all of this was going on, just as long as their “precious little castle” continued to Zillow ever higher.
that’s exactly it–the working classes (and middle class) realized their income was stagnating or going down but took the booby prize of access to credit. It’s okay, I don’t need to make money–I can borrow!
And the crap they borrowed it for–!
not a gator,
Truth. I go off the deep end by blaming the workforce all too often. I tend to think many were in their cubicle sneaking a peak at their “daily appraisal” ( much like we did w/ our 401k’s during the tech boom ) Besides, asking the boss for a raise is such a PITA.
But there’s a lot more to it. Firstly, what good would it have done to say “These medical ‘benefits’ suck, what happened to the old… package?”
Speaking of disposable income, health insurance etc..
Just found out (wasn’t divulged during Oct health ins sign up)
that the Flex Pay with a debit card Only for health copay etc,
doesn’t come with all health ins coverages.
What does that mean for me and many others? It means that today
so many MDs do not take insurance up front. They demand pay
first then you can try to get your insurance copay/treatment
covered on your own time. GOOD LUCK with that.
So, if I and many many others wanted to pay up front and battle
it out with the faceless ins bots, the expendable income
in “My” funds are marked for other things, not goodies, just basics, not out of pocket ins.
Didn’t they just pass a law that officially holds the health-care provider responsible for billing disputes with the insurance company? They’re not allowed to make you deal with it. I could have sworn.
Ha ha ha…
I lived w/ a deviated spetum (screwed up nose) for years! Snoring, sore throat, poor sleep, weight gain etc. Finally… got a comp. package that included Health Ins. that would “cover” it.
Spoke at length w/ specialist staff and was ASSured my total out-of-pocket would be $200! Great, when can we schedule it? ( Dirty little secret ) Hospital -makes- you sign a Waiver that says: “Anything this schmuck’s Insurance doesn’t cover, HE is on the hook for!” ( It’s in the fine print )
Bottom line, I get sent bills from the Hosp. and laughing gas MD for over $2,000! Pay it or we’ll take it “collections”! But… but… bu…
The “Health Care Industrial Complex”……..
the next bubble.
GS Fixer,
It’s such a sham. The (1st) I’d heard of it was when I got a “Collection Notice” in the mail 3 or 4 months later. I called and read the surgeon’s staff the riot act. I repeatedly asked his long-time office mgr., “How many ‘times’ did we discuss this? How many times did I ask you if you were sure… that was all our portion was going to be!?”
( Then the typical… ) “We understand your frustration but…” What really ruins it for me is the Dr. is like a friend of the family. We’ve known him for 20 years. ( He’s now retired, comfortably I’m sure )
The federal government is not throwing away your tax dollars to fix problems. They are simply giving a handout to the elite.
As you accurately describe America is a sinking ship. The elite have bribed the crew (gov’t) and are now busy grabbing the last gold on the sinking ship and transferring it, by the trillion, to their get-away craft.
As for the large payments to CEO’s, again, this is just the elite doing their best to raid the treasure chest before it goes empty. There is no job in the world that should reasonably pay $10M. But if you and your buddies control all major corporations and government - you have complete freedom to rip off the average man.
Agree 100%!
The CEO at my company got $2 MM in base pay and $98 MM in stock options last year. This is a guy who is literally laughed at for some of the decisions he’s made. This laughing does not overtly occur on our campus, but you should hear our competitors laughing their heads off.
“At his lecture in Corwin Pavilion, Davis - an assistant professor in the Dept. of Real Estate and Urban Land Economics from the University of Wisconsin-Madison - traced the string of events that led to the current financial crisis.”
___________________________
What I most want to become extinct, besides McMansions, are public university departments of real estate studies. According to the quote from the student, this bozo apparently advised the young people attending his lecture that “the best thing to do now” was to buy a house. For God’s sake, they’re in San Diego! If there are any Wisconsin state-level executives reading this blog and wondering where to cut expenses, you could start with Prof. Davis. Ridiculous.
Hey!..Just shows you that the University of Wisconsin, Madison isn’t called “Whiskey Tech” for nothing !
Goooooooo ..STATE Street
The University of Wisconsin System also appears to have quite a sense of humor when it comes to California.
The University of Wisconsin-Superior evidently gave Arnold Schwarzenegger some sort of a BS(bull$hit) degree, with a major in international marketing of fitness and business administration whatever the hell that is, and CA bought it…hook, line and SINKER
Now stop that nonsense. We Michigan Wolverine drinkers can give those Badgers a run for their money any day.
When I was an undergrad at UW Madison in the mid 60’s, Playboy used to rank the “Party Schools.”
When that issue came out we scammed the list and were shocked to see that UW was not listed. However, there was an asterisk and the fine print read something like:
*The University of Wisconsin is not mentioned in the above list as we perfer not to list the professionals with the amatures”/i>
(True story!)
Was San Diego State University in there?
Still is!
SDSU and UW-Madison are still ranked as party schools.
But it’s getting expensive to party that hard. Tuition has gone up 200% and the enemy of all students, fees, have gone up 400%. Kids just don’t have 15 grand to waste while pretending to study!
Academic “real estate” centers are all funded by and shills for the real estate industry. The university likes these entities because they get to collect 50% overhead on the funding. It is a sell out of the university mission, pure and simple.
If uni presidents’ salaries were capped to 100K, a lot of this stuff would stop. They need to build up the school into a giant fiefdom so they can “justify” their outsized salary. It’s the tribal warlord system of management. Totally inappropriate for the land grant system.
Some schools in the UK which teach nurses started adding CAM courses–should be called SCAM, because CAM is a giant bucket for every technique or potion which can’t pass muster in a double-blind controlled experiment.
$137K right there
http://www.madison.com/wsj/projects/uwsalaries/redbook.html?Name=Davis,%20Morris%20A
WOW! Can’t believe an assistant professor gets paid that kind of money to spout such complete nonsense. For those who are not aware of University salary structures, business faculty are paid roughly twice what “normal” faculty are paid (e.g. science, social science, humanities, etc…). Let’s hope that all changes with the collapse of the “business knows best” aura.
You know our executives still need to make a lot money, even though we’re not making a profit anymore. They have cleverly come up with the perfect solution:
1. No raises for the poeple who actually do the work.
2. No free candy for the poeple who actually do the work.
3. Birthday celebrations will now be held quarterly instead of monthly, so that will save money on free cake.
I am amazed and enamoured by the brilliance we have working for us in the executive ranks. These people deserve every penny of their 7-figure salaries, if not more!
Note: There will be no reductions in the “fancy dinner meetings with hors’ de oevres and champagne strictly for senior management” schedule.
hors d’oevres
One day, I will spell it right the first time.
PSSST!
It’s “hors d’ouevres”! I wouldn’t have said anything if you didn’t first.
Or maybe “hors d’oeuvres”?!
Someone throw us a bone here!
hors d’oeuvres (copied and pasted from Merriam-Webster)
Horse do-overs.
Whores devour!
What I find amazing is there is no law against paying bonuses despite having completely f8cking up. Cuomo is investigating that slimeball Thain for moving up bonus payments but commenters say “no law was broken”.
I don’t think that there should be a LAW against it. But it should be considered an adequate excuse for a tar and feather party by the stockholders.
Stock holders are zombies. Every proxy initiative gets voted down by 99.98% of the outstanding shares. I’ve never seen a vote that was even close. Even the HP Compacq fiasco wansn’t all that close and they had the founders’ families on the opposition.
If you own shares in a mutual fund odds are your manager is voting like a zombie. 401k plans are murdering our economy.
Exactly. Toss out the entire Board of Directors for approving compensation policies that allowed bonuses even when the company is self-destructing.
Every single one of them.
You get free cake at your job!!!
–
December sales and price report (CAR):
http://www.car.org/newsstand/newsreleases/dec08salesandprice/?view=Standard
Reported Median Price of a CA Resale SFH down 52.7% from the Peak, 19 Months Ago, and down 41.5%, YoY
Median Price of a CA Resale SFH:
Dec-08 $281,100 -52.7%
May-07 $594,530
These numbers are distorted by the mix of homes. If we look at the price decline for the same homes, the decline is close to 40% based on other data series. Approximately half of the decline in home values in the US, in dollars terms, is due to declines in CA!
CALIFORNIA WILL TAKE AMERICA DOWN WITH IT.. Californicators are among the biggest dopes on the planet. And conceited dopes at that. The state and most municipalities and counties will declare bankruptcy in the coming years.
Jas
Ah, Jas. True to form, as always. The dopes are just as big everywhere else you go, trust me.
California just has more dopes. Dope concentrate even. On the plus side California has more smart people as well. Too bad stupid beats smart in demographic rochambeau.
Has Jas gotten out of his bill/bond positions yet?
Hey I represent that !
Slim with a story from the streets of Tucson…
I had a meeting this morning. As is my standard practice, I hopped on my ugly old mountain bike and pedaled across town.
At one busy intersection, I heard a guy calling my name. A local UHS who promotes his love of bicycling in his ads. But he wasn’t on his bike. Rather, he was driving the Car of Virtue, a Prius.
Well, being the snarkatroid that I am, I couldn’t help but asking him why he wasn’t on his bike. He lifted a heavy briefcase to show me why he couldn’t be out on the streets with me.
Which prompted me to cheerfully remind him of the load I routinely carry on my bike. We’re talking tools, a U-lock, a lighting system, books, papers, camera, etc. It all fits into two panniers, and I’ll bet that it weighs more than UHS’s briefcase.
He continued yammering at me, but I ignored him. Instead, I was thinking about that house he listed near here. Baby, that house sat there for what was it? Almost a year. According to a neighbor, the homeowner finally gave up on Mr. Bicycle and found another agent. That gal had the place sold in a matter of weeks.
Enhancing the first-time home buyers’ credit, which was enacted last year. Under current law, the credit, which is capped at $7,500 and applies to purchases of primary homes after April 8, 2008, and before July 1, 2009, must be repaid over 15 years, starting two years after the credit is claimed. In the House and Senate proposals, folks who buy homes in 2009 don’t have to pay back the credit as long as they don’t sell the house within three years.
But, as we’re seeing in so many of the stories Ben posts, people buy the house, then uh-oh, something happens.
Job loss. Another baby on the way. Divorce. That sort of thing. Which means that the Dream House has gotta go.
What will happen to these people?
Just another reason to wait, kind of like the rumored 4.5% mortgages coming down the pipe.
So, what effect do you think this “free money” would have on prices? Also, somehow, I bet there is a clause in there that eliminates this “stimulus” if the buyer makes too much per year. So, what effect would that have on the low-end vs. high-end markets? Finally, I wonder whether people will keep waiting to buy, to see whether the gub’mint will come back with “wait, wait, there’s more!”
Amex had a credit line for my business at 2 million. Six months ago they cut it to 1 million. This is after i have never been late in the last 15 years. Today they called and said after review they want to lower it to 500k. This is a business credit line. Fortunately i could come up with the money or my business was doomed.
Who says credit is getting easier. Trust me when i say I have never been a day late and wire them money 3 days beore due date.
They’re taking it from you because you never use it. You have to have a history of repaying $2 MM before they’re willing to give you $2 MM.
CNBC just posted an article quoting Oppenheimer’s Whitney.
She says, NO BAD BANK!
Paraphrasing….
1) The banks have tightened lending standards because they can no longer securitize. Taking the bad loans off their books would not make them lower standards again.
2) The banks have other loans that are going bad, so will still have losses.
3) They have heavy cost structures that need to be dealt with.
4) The vast majority of the losses have already been written down by most institutions. The VAST majority of “bad bank” assets would really be coming from just a few lenders.
Her conclusion:
“Those lenders, we argue, should monetize their “good” assets to cover their “bad” assets.”
I’m all for “bad bank” IF it results in bankruptcy of the entity that needs to sell. Go full RTC on them!
“Those lenders, we argue, should monetize their “good” assets to cover their “bad” assets.”
No banker wants to publicly admit that there aren’t enough good assets left.
Bad bank, no biscuit.
Guys you want to know how people go from $550 to $5000 payment? Their public assistance is at least $3000.0 for that family and anoter $3000.0 comes from untaxed work ” under the tabel” cash money. It is the stymulus package for some group of population from the Gov &Co. that they recieve whole their life, so the losers are we, not them, they are always the winners…
They are losing the house. These people got a nice house to live in for a while, but the “winners” are the CEOs, banksters, and stock brokers who made a killing during the boom, and can easily live off their accumulated fat while the rest of us scramble to find a way to feed oursevles for the next year or two.
Year or two??? Such an optimist!
Check out the delusional realtors on market watch. Unbelievable.
http://tinyurl.com/c9o887
It’s “the Sanchezes”, not “the “Sanchez’s”. Plural, not possessive.
Apostrophe abuse drives me up a wall!
How is your response to “could of” , or “should of” ? Just curious. Mine is a loud cringe.
More properly, “could have” and “would have” vs. the more-conversational options, which are even worse than the above.
hold on–you can use an apostrophe if a word doesn’t ordinarily have a plural: p’s and q’s.
Sanchez ends in a voiced s sound, just like a plural, but since it’s spelled “z”, you wouldn’t write Sanchez’, thus Sanchez’s.
While many words are pluralized by adding “es”, names typically aren’t.
Isn’t the English language wonderful?
Agree! Taught it for 14 fun years!
I’d just like to ramble out a long and somewhat points couple of things.
At this point I’d like to say the Hitchikers Guide to the Galaxy has some good advice on the cover. It says Don’t Panic in large friendly letters.
This country has survived a lot of stuff. WW1, WW2, Britian and the war of 1812, the Spanish American War, mutiple bank panics, currency collapses, the civil war, the cold war, Japan in the 80s/90s, and plenty of other stuff.
So. I think it will handle Bernake, Greenspan, Bush and the other jokers that have happy-assed their way through our lives.
Insolvent banks.
These jokers got seriously over leveraged in ways that your average homebuyer could only dream of. One thing to think about with all of this with the negative savings rate and all. If these banks fail, the amount of money in deposits is not actually as large as you’d think.
Basically since leverage was so high the actual reserves are low.
Consequently the hit on FDIC will be a lot less costly to everyone than a full fledged bailout of all the bad loans. The problem is right now, the banks keep shoveling money out to pay for those junk loans. Pull the plug and let them fail.
So, I’m trying to say that we need to keep that fact out there. It might leak into the MSM and public awareness.
Let the bad banks fail and go extinct. Give the insured their money. They will put it into new banks. Poof. Problem solved.
You are a man of my own mind, Jim.
Ditto.
This whole meltdown is fitting.
Having grown up in SoCal, I’ve always marveled at how unsustainable it seemed (and I’m over 50).
My father bought the OC house I grew up in for $13k in 1966.
I doubt it was more than 2-3 times his yearly teacher income.
Today if I want to become a home owner in coastal SoCal, its approximately 7 times my yearly income (and I make 6 figures).
Nope, I won’t bite, never been a home owner….and I think this situation now is completely deserved. I relish it and fervorently want the government to stay out of this long over due correction. Finally….I’ll get the opportunity I’ve waited for.
THis is disgusting; the used house salesmen (realturds/realtards, used car salesmen) need to be put in JAIL for this travesty. Not the few who are ethical and moral; but the many who are in bed with the appraisers, home “inspectors” and mortgage “brokers”—all jokers with conflicts of interest and $$$$$/greed as the end all–not the client’s best interests. sad commentary on american greedy and immorality. sounds like those “doctors” who bought no money down $1,400,000 with the $6500 interest monthly payment for a tiny bugalow in the poor part of santa monica, with the rented beamer/lexus and just one paycheck away from foreclosure, one job loss and mr/ms. doctor can enjoy a real taste of america.