For Would-Be Sellers, The Bad News Keeps Coming
The Orange County Register reports from California. “An appraiser lost her license after state regulators concluded her evaluation of a home for $625,000 in a declining Santa Ana real estate market was ‘grossly misleading,’ a scheme first exposed last year by The Orange County Register. Todd Lackner, an appraisal fraud investigator from San Diego, said Wells Fargo should have known there was something fishy about the $625,000 appraisal. ‘Anyone could have seen the house wasn’t worth $625,000 by going on Google or Zillow,’ Lackner said. ‘And Wells Fargo has much better tools than that. I’m not sure why they didn’t use them.’”
“The home’s current owners, Mario and Paula Gomez, have kept up their monthly payments to Wells Fargo of $2,760, said Paula Gomez. Both are garment workers at St. John Knits Inc. in Irvine. ‘We can keep the house as long as we keep our jobs,’ she said.”
The Contra Costa Times. ” Any doubt about the housing bubble’s thick burst across the job market ends here, on Port Chicago Highway, at an EASTBAY Works one-stop center where a national surge in unemployment shows up in the form of weary faces. At one keyboard, Bob Coleman, of Lafayette, searches for a path out of retirement after his real estate investments in Hawaii went south.”
“Coleman, whose wife works, said he worked for AT&T in sales and marketing before venturing into real estate three years ago to build a nest egg. ‘I thought I was in retirement. I was a millionaire,’ he said as he headed out of the job center. ‘Not anymore. We’ll all survive one way or another, but our world’s different.’”
The Modesto Bee. “The jobless rate in Stanislaus County surged to a 12-year high of 16 percent in January, the state reported Thursday. Merced County rose to 18.9 percent and San Joaquin to 15.1 percent, clear evidence that the recession has hit the region hard. Out on Carpenter Road, about a dozen men stood in the Home Depot parking lot, hoping for a day’s work from a contractor or homeowner.”
“‘It’s terrible right now,’ said Santos Avila, 65, of Modesto, who hoped to make $10 an hour in remodeling, painting, pouring concrete or other work. He said such jobs have been hard to get for the past three years. ‘A lot of these guys here are doing the same thing I’m doing — looking for labor, an honest job.’”
The Recordnet. “Mortgage delinquencies in California and across the county continued to climb at the end of 2008, despite various default moratoriums, but the root cause has shifted from adjustable-rate mortgage payment jumps to rising unemployment…concluded the Mortgage Bankers Association’s new fourth-quarter national survey.”
“Employment is expected to suffer through mid- to late 2010, said Jay Brinkman, the association’s chief economist, and delinquent mortgage and foreclosure activity won’t start improving until after that, he said. ‘The recovery is going to depend on when the jobs come back,’ Brinkman said.”
“Jacy Mahoney was laid off from her production line welding job at Dana Holding Corp. a month ago. She said the only jobs out there are paying $8 per hour, half what she used to earn at the truck frame assembly plant in Stockton. ‘There’s nothing out there, unless I want to go to work at McDonald’s,’ she said.”
“Rep. Dennis Cardoza, D-Atwater, said unemployment is one of a number of issues that have been hurting the Central Valley. ‘I call this the Hurricane Katrina of California,’ he said. ‘I’m talking about the whole enchilada - jobs, foreclosures, the dairy crisis, the state budget crisis, the water crisis - all are imposing extreme economic hardships on the region.’”
The Desert Sun. “California Golf Mart in Bermuda Dunes has been added to the list of businesses closing up shop in the Coachella Valley. ‘It’s a great store and it’s a shame it’s closing,’ said Bill Spratt of Palm Springs. ‘This is just another indication that American is in trouble — that the world is in trouble.’”
The Santa Cruz Sentinel. “As construction shriveled and retail shops closed, Santa Cruz County’s jobless rate reached 12.6 percent in January, led by a nearly 26 percent jobless rate in Watsonville. Scotts Valley contractor Dene Bustichi said competition for jobs is cutthroat. ‘People are bidding jobs at cost and hoping for change orders to make ends meet,’ he said. ‘I’ve not seen it like this in 20 years in business.’”
“When the highly anticipated 2030 North Pacific condos opened last summer, they were touted as small luxury homes within walking distance of downtown and the beach — perfect for aging baby boomers and others who wanted to leave the car at home more often. Now, though, the 70-unit complex with retail space on the first floor sits mostly empty.”
“And condos that once advertised prices between $525,000 and $760,000 are now listing for as low as $399,000. So far, 13 have sold.”
“The Pacific Avenue condos ‘would be a great place to live,’ said City Councilman Mike Rotkin, ‘But at this point, who has the money to make the down payment? What bank will give you a loan?’”
The Associated Press. “Stephen and Linda Drake cast aside concerns about owning property in Mexico because they believed in Donald Trump. The Southern California couple paid $250,000 down payment on a 19th-floor oceanfront condo in Trump Ocean Resort Baja in 2006 before the first construction crew arrived.”
“But admiration for the celebrity developer has now turned into anger and disbelief as Trump’s luxury hotel-condo plan collapsed, leaving little more than a hole in the ground and investors out of their deposits, which totaled $32.2 million. ‘I can’t even stand to see Trump’s face on TV,’ says Linda Drake, a psychologist, whose husband is a commercial airline pilot and financial adviser.”
“Guadalupe Mendoza paid a $200,000 deposit at the first-day sale in San Diego, refinancing her Downey home and getting a loan from a sister. She watched a giant screen show units getting snapped up. After signing papers, buyers were ushered to a buffet of sirloin tip and fish tacos. Cheers erupted in the hotel ballroom for each new owner.”
“‘I did it in less than a minute,’ said Mendoza, an administrator in the Los Angeles County Office of Education. ‘I remember my head was hurting and thinking, ‘My God, what was that?’ I was thinking maybe I should have asked questions.’”
The LA Times. “When Club 740 opened on Broadway in mid-2005, many saw it as solid evidence of the hip night life that downtown boosters had been trying to bring to the city center. The club quickly distinguished itself — but not in a way that most people would boast about. Fights inside and outside the club, reports of sexual assaults and gang activity quickly garnered Club 740 a less-than-savory reputation. A man was stabbed in the parking lot behind the club in August 2006; last December, an intoxicated club-goer fell to his death from a third-floor railing.”
“Part of the problem is that downtown is becoming a residential area, with loft and condo dwellers who aren’t always excited about rowdy behavior well into the morning hours. The Chapman Flats, a 168-unit apartment building, opened last year next door to Club 740. Nearby, condos at the renovated Eastern Columbia building have fetched in the millions of dollars.”
“‘There was a time when Broadway was kind of forgotten in the evening,’ said Los Angeles City Councilman Jose Huizar. ‘So if you had incidents happening in a parking lot or outside a club, very few people would notice. It was kind of no-person’s land. There was no one to say that this activity is happening on these streets. A lot of the incidents didn’t even get reported to police. Now, with more residents living nearby, I do think it is getting on people’s radar.’”
“Amid concern that many Californians would not qualify for assistance from the federal anti-foreclosure plan, a powerful state legislator called on the Obama administration to make more homeowners eligible. The plan limits federal refinancing assistance to people who owe just a small amount, 5% or less, over what their homes are worth.”
“Assemblyman Ted Lieu (D-Torrance) said…the refinancing limit should be raised, perhaps to 115%, to help more people obtain cheaper loans. ‘Otherwise, you’re just going to end up helping a lot of people outside California,’ Lieu said.”
The Press Enterprise. “Almost 45 percent of homeowners with a mortgage in Riverside and San Bernardino counties owe more on their homes than the homes are worth, according to a report. Real estate industry leaders and economists said that because Inland Southern California homeowners are more upside down on their mortgages than most of the nation, few will benefit from the Obama plan.”
“Wil Herring, a Moreno Valley mortgage broker and president of the Inland Empire Chapter of the California Association of Mortgage Brokers, said his customers have mortgages that are at least 40 percent greater than their home values. Herring said many of his customers are not willing to wait for home values to catch up before they move, even if they have to let their lenders foreclose.”
“‘Their attitude is that even if they could get a 2 percent interest rate, they don’t care. They want to get out of their house because they don’t see their equity coming back soon,’ Herring said.”
“‘Being upside down by itself is not a catalyst for default. But it does mean less turnover of houses,’ said Greg McBride, senior financial analyst with Bankrate.com. ‘People who are making their payments on time will not be able to sell the house to take a job in another city. They are stuck. They are handcuffed to the house.’”
The New York Times. “For would-be sellers, the bad news keeps coming. This week, one new report showed that one in nine mortgages was delinquent or in foreclosure, while another showed that January contract signings for sales of previously owned homes fell at their fastest pace in two years. In inland areas of California, for instance, sales are surging now that prices have fallen sharply. But most of the sellers are not individuals but rather banks that foreclosed on homeowners who could not or would not pay their mortgages.”
“Christian Punsal, a 24-year-old city employee in Elk Grove, Calif., near Sacramento, is among the first-time homeowners and investors swooping in. Mr. Punsal bought a three-bedroom home for $193,000. On a monthly basis, the house will cost him $100 less than the rent on his two-bedroom apartment. The home sold for $336,000 four years ago, when he was a junior in college.”
“‘I just felt that this would be the perfect time to buy,’ he said.”
The Mercury News. “Marie, a San Jose homeowner, owes about $560,000 on her house in the city’s east foothills and figures it’s now worth about $460,000. She tried to sell it in 2007 when she got married and moved to her husband’s home, with no luck. Now she’s renting out the house, but the income is not enough to cover the loan and property taxes. As she scrimps to pay two mortgages, Marie is considering ditching the mortgage on her first house and walking away.”
“‘I can’t make myself sick,’ she said. ‘I’m at the point where I’m losing sleep over it. I can’t afford that. I have children to care for, and a job to do.’”
“A report released Wednesday revealed that an estimated 13.5 percent of properties with mortgages in the San Jose metro area were underwater at the end of 2008, according to First American CoreLogic. That’s up from 9.5 percent at the end of the third quarter last year.”
“Berkeley attorney Peter Fredman said that many people who contact him have ‘pretty much realized they don’t want to keep the house under any circumstances. They just want some help through that process in terms of personal liability issues, tax issues, just sort of basic hand holding, often.’”
“Reaching a lender to discuss a walkaway client or a deed in lieu can be tough, Fredman said. On his desk are keys to the house of some clients who walked out on their mortgage (and home) last fall. Fredman said he wants to return the keys to the lender, but it’s been months, and the lender has not yet told him where to mail them. Nor have they foreclosed on the homeowners.”
“‘It may come to the point of having to sue them to get them to take the house back,’ he said.”
“Meanwhile, Marie remains in a tough spot. She’s only been able to make the minimum payment on her negative-amortization, adjustable-rate loan recently, so the balance on her loan is increasing with every passing month. Her lender told her that because she does not live in her home anymore, she doesn’t qualify for a loan modification (most programs only apply to ‘owner-occupied’ homes). Also, her lender is only modifying loans for borrowers in default, she said, which doesn’t help her since she is still current on her payments.”
“Knowing this, and loaded down with stress, walking away appears to be a viable option, though she’s worried about the inevitable effect on her credit score. ‘I worked hard to get it to be excellent,’ she said.”
The Marin Independent Journal. “The Danville couple who won last month’s ‘dream house’ raffle will take $1.2 million in cash rather than the $2 million San Rafael residence. Brad and Susan Wells, who own their Danville home, were the big winners in the Community Action Marin benefit raffle that raised about $1.3 million for the agency.”
“Officials with the San Rafael nonprofit organization said the unemployed couple picked the $1.2 million cash option - the amount after taxes - and were still deciding how to use it. ‘They’re going to take a little time to decide,’ said Russ Hamel, Community Action Marin’s director of development.”
“A few days before the raffle, Brad Wells was laid off from his job as a sales executive for a high-tech Silicon Valley electronics company. Susan Wells, who hadn’t told her husband she bought what turned out to be the winning ticket, is also unemployed.”
“The winner of last year’s inaugural ‘dream house’ raffle also took cash instead of the same prized home.”
“Hamel said another raffle will begin in September with a different home. ‘We’re not sure where it’s going to be yet, but it’s going to be another beautiful house in Marin.’”
‘Employment is expected to suffer through mid- to late 2010, said Jay Brinkman, the association’s chief economist, and delinquent mortgage and foreclosure activity won’t start improving until after that, he said. ‘The recovery is going to depend on when the jobs come back,’ Brinkman said.’
Again politicians and media; forget about housing prices. The issue at hand is the post housing bubble economy. Hardly a day goes by that someone I know loses a job, and I am sure many of you out there see the same thing.
‘Their attitude is that even if they could get a 2 percent interest rate, they don’t care. They want to get out of their house because they don’t see their equity coming back soon,’ Herring said.’
Failure to acknowledge the housing bubble is a prime reason these ‘plans’ keep failing, IMO. I liken it to Texas in the 80’s. For a while people held out hope that oil prices would bounce back and save the day. But just like oil, housing prices ain’t going back to these prices we saw. It looks like that ‘dull realization’ I’ve posted about is taking hold.
“The recovery is going to depend on when the jobs come back…”
I always thought recoveries started first, and the jobs come afterwards.
It’s a chicken and egg thing, IMO. What we are seeing is words trying to describe an economy attempting to move toward something sustainable.
Well THAT is the Big Question:
What are sustainable jobs for the future? I think the 4 yr college system is finished We could cut 1/3 and it wouldn’t make much difference.
You really don’t need a 4 year degree for a lot of jobs. Its just to discriminate against those who chose not to get into big debt, by not having rich parents of getting 4.0 in HS to get a full scholarship
Short quick full time 5 day/wk 40 hrs while collecting unemployment 6 month refresher/ new skills schools will be the most logical way to keep people up to date and retrain into new fields.
I completely agree with you that our current system of higher education is beyond over.
Yup, 5 year college has become another way to party.
It’s annoying that schools have gone to making everyone take college prep classes. Not everyone is college material and when there are too many people w/ degrees you wind up with scores of over educated people waiting tables. It’s just plain stupid.
They have eliminated woodworking and auto shop in from most of the high schools here in San Diego. Dumb, dumb, dumb. Auto mechanics are paid damn well. If you are a decent mechanic you will never be unemployed.
THAT would be a radical idea, major cuts in college and spend the money on high schools that teach a trade,life skills Economics, civics, reading writing and speaking English… and then you won’t need to take any remedial courses to get into the newly downsized college campus.
Sounds like a good idea, but its really complicated. Historically, college prep courses taught the so-called future leaders of society, and the vocational courses taught everyone else to follow. This was by design; check out sociologist Ross Finney’s 1920s advocacy of tracking on the basis of its ability to train followers. The problem now is even the college prep courses train followers — look at all the followers that have gotten us into this mess.
What a functioning democracy needs is both college prep and vocational training prior to college, while also providing a strong education in critical thinking and history for all who do not go on to college– not the whitewashed history of most courses, but the real history of the struggle for freedom, liberty, and equality. But, what member of the elite really wants a populace of critical thinkers? And therein lies the problem.
IAT
Hey dj, lots of countries that are not the US use a three year degree program; they cut out the cr*p that most first year college students have to go through. In New Zealand if you are trying to go to medical school, you know in your second year whether you are accepted or not then are on a medical track. Way more efficient than our methods.
I have to tell you I am a bit miffed by your comment about “Its just to discriminate against those who chose not to get into big debt, by not having rich parents of getting 4.0 in HS to get a full scholarship.” I am not rich; my daughter worked her ass off in high school and got $40k/year in scholarships and aid to Smith College (no government loans). She put in the effort and is getting the reward.
yet unlike your daughter, we see so many youth feeling entitled to a full college education and parents expected to pay. It is terrific your daughter did what she did, but many do not even know they can get a pt job to help while in college, much less study, instead of partying all the time.
Seems to be much more important( from the people I know, or have seen) for jr’s to get into ladeeda fraternities/sororities than it is to consider the sacrifices parents go through,w/o children getting scholarships.
Steve:
My cousins both went to Smith college, and 1 works now at Harvard medical school, as a researcher into auto immune diseases.
————————————————-
scholarships and aid to Smith College (no government loans). She put in the effort and is getting the reward.
My daughter got a 4.0 in HS, lots of AP credits and scored in the top 5% on the ACT, yet so far the scholarship offers have been mostly paltry. The best one so far is only $10K. I guess you have to be in the top 1% to get a full ride.
“Seven years of college down the drain”
Bluto
One big problem about high school is that it is lacking “personal skills and responsibility” classes. This would include personal financial budgeting, questioning commission-based authority, prioritizing, misc street smarts, etc.
These sorts of classes aren’t even offered in college (at least not for credit towards graduation).
Colorado– most of my scholarship offers were about $5K a year. But added up they were full tuition… the last one grew to meet tuition rises. (Alas, I did have to take out loans for living expenses.)
Apply for every scholarship she’s even remotely qualified for. Yes, apply. Yes, that means you have to find out they exist first. But the upside is that there are few applicants if nobody knows the scholarship exists and your chances are better.
I was in Odessa during that time. Whole neighborhoods of lovely homes left abandoned. Recovered after 10 years with the advance of oil prices.
I don’t think the eventual recovery (or rise) of oil this time will cause all boats to rise in non-oilcentric towns.
It’s not the economy, per se.
It’s jobs.
The story about the suckers who put big deposits on units in that Trump resort in Baja is probably the IDEAL cautionary tale about greed- big name promoter, rah-rah session to lure the buyers, and yes, the typical outcome.
‘‘I did it in less than a minute,’ said Mendoza, an administrator in the Los Angeles County Office of Education. ‘I remember my head was hurting and thinking, ‘My God, what was that?’ I was thinking maybe I should have asked questions.’
Yeah, I was posting this stuff when it was going on.
‘admiration for the celebrity developer has now turned into anger and disbelief as Trump’s luxury hotel-condo plan collapsed, leaving little more than a hole in the ground and investors out of their deposits, which totaled $32.2 million. ‘I can’t even stand to see Trump’s face on TV,’ says Linda Drake’
Anger and disbelief? These people got played for the suckers they are. Anyone remember the expensive flipper-palooza conventions this guy had?
So that Mendoza guy is a school administrator in LA. With brains like that running them, no wonder the public schools in California are in such dismal shape and graduate such dullards.
Even better, one of the other couple was a financial planner.
Drake “whose husband is a commercial airline pilot and financial adviser”
Guadalupe Mendoza is a woman. The fact that she was so easily suckered into such a high-risk “investment” tells you something about the intellectual caliber of LA Public Schools administrators.
Quick anecdote about The Donald. Friend of mine was in charge of medical/emergency operations for power boat race The Donald sponsored off Atlantic City, probably mid- or late-’80s. Ocean was choppy; one of the boats went airborne, end-over-end, smashed into the ocean deck-side down; killed the competitor. After getting radio reports from the scene, my friend made the call; race was over. Well, The Donald barged into the operations center, demanding loudly to know who was trying to end his race. He was steered to my buddy and told him point-blank, “Oh, no. No. You are NOT stopping my race.” My friend’s response? To a couple of AC’s finest, “Someone get this a$$h@le out of here.”
I like to think I have enough backbone to have stood up to The Donald the way my buddy did. That might be just wishful thinking on my part, though.
Have a nice weekend everyone.
I’m sure you would have stood up to The Donald. There are many similar stories to your friend’s story (although most of them didn’t involve anyone dying as far as I know.)
Do you know why The Donald was doing those Apprentice shows? It’s because he has so much trouble getting people to work for him. He has reputation in his industry of being impossible to work with and never listening to reason. He had to go to a TV show to find employees. People who aren’t in the industry think its an impressive accomplishment to work for The Donald when in reality its hell. (The Donald also does all that TV so that he doesn’t end up effectively bankrupt.)
The sad thing is, guys like The Donald usually have enough city officials in their pocket to demand and get revenge on guys like your friend who have the integrity and guts to do their jobs.
Was checking out of Bakersplat CostCo on Friday when two six-foot, perfectly coiffed, beautifully dressed, thoroughly gorgeous Amazonian ex-models bedecked in bling cornered the checkout guy. “Here, make a million dollars,” they said to him, handing him a slick black and gold brochure.
Donald Babes, cruising the warehouse! (WTF?!!!)
The young guy (gayer than a tree full of mockingbirds,) took one look at them and tossed the advert in the trash barrel. “Some one should put that guy in prison.” was his comment to me.
What these women were doing in Bakersfield…at CostCo no less (!) is beyond me, but the kid’s reaction was telling.
Trump must be desperate if he’s going after the Central Valley “investor” class. Yikes….
Admiration turned into anger and disbelief.
Times have changed.
“Stephen and Linda Drake cast aside concerns about owning property in Mexico because they believed in Donald Trump.
BWHAHAHAHAHAHAHAHAHAHAHAHAHAHA!
Once again, when you read about these “sophisticated” investors dropping a quarter-mil “because they believed” in The Donald (or some other snake-oil peddler) and his co-promoter, the lovely yet unimpressive Ivanka, all you can do is shake your head. Or laugh.
Since the beginning of the world, fools and their money have been parted. It’s the natural order of things.
This stuff is making me laugh again! Yeah, because they believed in Donald Trump! Ha! Yep! Don’t those dolts know that Donald Trump exists? People reserve “I believe in” for non-existent things: Elves (and the variation spelled “Elvis”), leprecauns, Jesus, Unicorns, pink elephants, ghosts, God, the abominable snowman…
Jesus existed. You can argue his credentials as a virgin born Son of God but he did exist as a man, at least.
Elvis existed too. But note, you cannot say you “believe in Elvis” because he no longer exists. Nor does “Hey Suess!”
Premature Signation.
Is that you Rumpole?
expensive flipper-palooza conventions this guy had?
Oh I remember it well….The lack of basic common sense with many people just amazes me….
Probably worse because they were buying in Mexico. As the story notes, the consumer protections are weak (nonexistent?) in Mexico.
IIUC foreigners generally cannot purchase real estate in Mexico. All they get is a 99-year leasehold. And of course the government there is so stable that it would never just confiscate property belonging to foreigners during economic downturns.
Dennisn, I think that changed, the ownership thingy. But, seriously, unless and until they get those drug gangs eliminated and the beheadings etc are stopped..
Going to stay north. Or way way south. Think south and go further.
In Mexico a foreigner can own property outright if it is farther than fifty kilometers from the ocean, inside that border you only get a 29 year lease which is held usually by Banamex, renewal is easy and pretty much routine. Government in Mexico is not as efficient as in the US. LOL!! But it sure does know how to collect tariffs and fees when you buy there.
We ought to charge Mexico for caring for their lawbreakers. Pemex, anyone?
“Think south and go further.”
Antarctica?
desertdweller….Are you near Glamis ?? I just got back from three days riding there…
All you would have to do is google “Mexico” and do a few hours of research on how lawless, violent, and corrupt that place is. That should be sufficient to make these Trump worshippers forget about “investing” in real estate down there.
Hey Sammy,… you’re really talking about DC, aren’t you?
I remember reading about the Trump Baja project right here on this blog in December 2006. My thought, immediately, was that those people would lose their money, and deservedly so. I mean, the bubble had already popped, and here are individuals — all of whom appeared to be Americans — proudly giving their money to a foreign-country real estate venture based solely on a name that gets way more respect and attention than it deserves. Had any of the purchasers ever done business in the Third World, or visited it other than in a tourist bus or ensconced in some sanitized all-inclusive resort? The L.A. Times notes that “the risk may be higher in Mexico because consumer protection laws are generally weak.” No s__t. I bet the buyers would have paid for a condo in a proposed Trump Tower Patagonia.
I loathe Ivanka Trump. Daddy’s little heiress making blatantly false claims in order to lure middle-class Americans into debt bondage and financial ruin.
Yes, the people who bought were greedy fools. But it turns my stomach to think that this rich little girl took her licensing fee, smiled at the cocktail party and then left hundreds of people devastated.
LOL. Amen to that. But Ivanka’s unfounded assurances that The Donald was involved in every aspect of this project may come back to bite her shapely little bottom once this lands in a courtroom. And then “Daddy’s little hieress” might be inheriting not much more than a pile of legal bills.
“We can keep our house as long as we can keep our jobs.”
And as long as then can keep the hope alive that the $2,760 per month they pay to Wells Fargo is money well spent.
I think the big question here is, how in the heck do a couple of garment workers afford $2760 a month?
St John Knits are high high end.
And maybe they have been working there for decades,hence a better income.
And again, gosh, does everyone have to make peanuts for an income?
I wish I had a pt job there. Would love the 2nds. And I could see Angelina once in awhile. hehehe She is their spokes model.
Not everyone, but most garment workers and strawberry pickers probably do.
“The home’s current owners, Mario and Paula Gomez, have kept up their monthly payments to Wells Fargo of $2,760, said Paula Gomez.
“We can keep the house as long as we keep our jobs,” she said. Both are garment workers at St. John Knits Inc. in Irvine.
The Gomezes told the Register last year that the sellers paid the home’s $125,000 down payment. They also produced a contract from the previous owner promising to cover the first three mortgage payments, to give the couple $30,000 and a plasma TV if the mortgage was approved. The Gomezes said they got the money but not the TV.”
“as long as we can keep our jobs…”
Yeah. The handwriting about job security was on the wall even in 1999. At least in my career. I frowned on long term committments even back then. California unemployment rate will probably get to 15% before it reverses.
People are only beginning to wake up (painfully) to the reality that there is no job security and no one has a right to any job security. Home ownership is not a right either.
This recession/depression is going to put the nail in the coffin of 30 year mortgages. Maybe in two generations, 30 year mortgages will be resurrected. People will realize they better save for a huge down payment and a ten year or even five year loan or they better save enough money to cover the entire purchase price of their house before they borrow anything.
And yet, in the midst of all this carnage, the CA legislature just passed a huge tax increase. The prospects for an additional tax increase this year to supplement what already has been passed looms large. The instability of the ‘now,’ coupled with the hazy landscape going forward — in the markets, in employment, in taxation, in housing prices, and the cumulative effect of all the other additional unknowns, leaves many in CA teetering on the edge. Brother, can you spare a dime?
As I posted yesterday, the highest paid CA government employee is the UC Berkeley coach, 2.8 million. Maybe the NFL could kick in some dough, since taxpayers are training their players: http://www.berkeleydailyplanet.com/issue/2008-08-07/article/30760?headline=Football-Coach-Tops-UC-Payscale-at-2.8-Million
You get no argument from me that that’s ridiculous. But, I’m for shutting down the intercollegiate athletics in toto, for they don’t make any money, and any money they make they keep.
BUT, as was pointed out yesterday, you can look up the salary of all state employees by name, and public sector employees are underpaid. Cherry-picking a few examples doesn’t change the fact that the average state employee is paid less than equivalent private sector workers. And, work conditions are worsening. As the best leave, the costs will go up because the state will have to subcontract the private firms to do the same work.
Check yesterday (or the day before) for a complete discussion of this phenom.
And, finally, boo that my reponse to ouden mallon’s 11:35 claim is being pushed further and further from the context in which it was articulated.
IAT
BUT, as was pointed out yesterday, you can look up the salary of all state employees by name, and public sector employees are underpaid
Underpaid? With that level of job security? For the most part, their salaries+benefits match the private sector. Those pensions are worth a fortune. That is assuming they are honored…
Got Popcorn?
Neil
I agree Neil….Underpaid my a$$…
at my alma mater Univ of Florida and most schools in the SE conference, athletics are very profitable.
Many “Mens” basketball programs are profitable…
On a plus note, it sounds like I’m going to get my tax refund.
At least I’m getting what I am owed. Maybe. Figure that we will get jacked on tax rates soon.
Total BS. State and Co.,City workers are paid more than those in the private sector. Include health for the worker and the family. Pers or some rediculous retirement plan. Retire at 90% of your highest salary. Move out of state and pay no state income tax. On and on and on. Don’t get me started. As bad as the porkulous bill that gives amnesty to illegals. They SNUCK it in. Don’t vote for any Dems.
Don’t get me started.
Yes, you should stop, because you have a long history of spouting Fox News know-nothing garbage on this board.
I work for a state-funded higher education institution and my pay scale is about a third lower than it would be in the private sector where I worked for a decade before this. With better benefits, job stability and yes, sharper employees and much less bureaucracy and red tape than the corporate world, it’s a reasonable tradeoff for me. But I’m sure not “paid more than the private sector”.
“Include health for the worker and family” - presuming you’re talking about health insurance, it will cover my family if I pay a few hundred bucks a month out of pocket, similar to my plan in the private sector but no more generous. Retire on 90% salary? Maybe after 40 years service, it’s pretty rare. And CA state pensions are CA state-taxable, even if you move out of state.
And outside of the Tim McVeigh set, I don’t see any evidence that “amnesty for illegals” was “SNUCK IN” to the stimulus bill.
Perhaps you should shut off the bellowing of Rush and Hannity and Loud Obbs and reacquaint yourself with the world as it is, not as you wish it were in your resentful, angry state of mind.
I think athletics salaries are ridiculous, but it should be pointed out that all but a couple hundred grand of that comes from corporate sponsorships and donations and not out of state coffers.
C’mon, what choice did they have. They made more spending cuts that tax increases. And, what you should be complaining about, they borrowed a third of the money they need to cover the deficit.
CA finances are in big trouble, but the tax increase is not the problem. Neither is alleged unrestrained government spending. The problem is the state has a straitjacket system, foregoes massive amounts of money (and has since the 70’s) by treating commercial property like residential property in property tax assessments. After three decades of neglect, the very infrastructure of the state is teetering on the edge, at the same time as the borrowing to obtain operating funds of the past continue to require serviceing (i.e., we’re still paying interest and, should we stop, future borrowing, which given the way we have structured things, we must do, will be more expensive or perhaps even impossible — no one will lend to us if we default).
So, please, get off the anti-tax bandwagon. Complain about the borrowing — a tax on the future — not the responsible act of trying to pay for things as you go.
IAT
IAT–
If you don’t feel that you’re paying enough taxes to the state, feel free to voluntarily contribute more than you owe. I’m sure it would be greatly appreciated.
You know, I’d do that, I really would, but, alas, I was a kid living elsewhere when they passed Prop 13 and then interpreted it as applying to commercial property. All the problems trace back to those acts — the rule of needing a 2/3rds vote to pass a budget, the response of hard-coding expenditures into the constitution, the whole mess. As the state put itself on the road to financial suicide long before I was able to play a role in trying to prevent it, who am I to try to stop them by volunteering to unilaterally pay more. That would only facilitate additional bad decisions. I refuse to do that.
IAT
Of course you would appreciate it if other people covered the tax burden for you, but we all think that you should be required to pay your fair share.
I don’t.
Huh?
I’ll pay the taxes that are required. I will still advocate for higher taxes, with a progressive structure — and, yes, I would be paying the higher taxes in such a scenario. Call me crazy, I just think it is good to have bridge inspections, food inspections, a dmv that licenses motorists, a CHP, a state polic force, a prison system, and believe those living now should pay for it rather than borrow the funds to pay for it and thus hand the bills to the next generation. I know the borrow-and-spend crowd (Republicans, HELOC’ed home loaners, and such) think that’s the old out-moded paradigm. We’re seeing the fallout of that new paradigm even as I write.
IAT
Texas has everything you want to have with a 0% income tax. Amazing isn’t it?
Yes, especially the loathsome vehicle inspection fees.
“C’mon, what choice did they have. They made more spending cuts that tax increases. And, what you should be complaining about, they borrowed a third of the money they need to cover the deficit.”
What real cuts did they make? The state spends $13B per year on services to illegals and dependents and cut none of that. The tax increase per year is nearly that much. The state adds nearly 50 employees per day every day for 10 years, yet there are still no cuts in state government employment. How’s that a cut? The budget for next year is still expected to be more than for this year. That’s a cut?!
Instead we get the largest state tax increase in history and a vote in May on a deceptive proposition (1a) that doesn’t cap spending, but instead extends the higher taxes for another two years, four years instead of two.
I contacted both my assembly member and state senator three times each on items related to the budget and have yet to get any response from either of them. I’ve been contacting on a very limited basis elected representatives going back to the early 80’s. This is the first time I haven’t gotten at least the generic form response.
The entire California legislature should resign or be recalled. The British were thrown out in a revolution over taxes and lack of representation. Perhaps California needs a revolution.
The entire California legislature should resign or be recalled. The British were thrown out in a revolution over taxes and lack of representation. Perhaps California needs a revolution
The difference being, Californians elected the corrupt and incompetent legislature that represents them, while the British were our unelected rulers. When you vote for bad leadership election after election, you lose the right to complain about bad governance.
“The difference being, Californians elected the corrupt and incompetent legislature that represents them, while the British were our unelected rulers. When you vote for bad leadership election after election, you lose the right to complain about bad governance.”
While I generally agree with that observation and definitely the sentiment of that observation, it must be noted that most districts in California are drawn so as to be non-competitive. You typically get the choice between the candidate of the majority party in that district and fringe candidates from any other parties. Often, it’s not much of a choice. It’s a corrupt system that’s failing and needs to die.
At least during the bailout votes at the federal level last fall, my house member and senators were willing to explain and defend their positions. My state reps say nothing at all. They just hide.
What real cuts did they make ??
Exactly !!! Anyone suggesting that California has a revenue problem is completely disconnected from reality OR is a government employee… Government employees would not even accept a two day a month furlough for god’s sake…They “ALL” feel their jobs are immune from any market forces…Why ??
Hear hear, IAT. It is truly sickening how the so-called leaders of this country, with the implicit consent of the imbeciles who elected them, are passing along the bills to future generations. I’m all for pay-as-you-go taxation - when people get bit in the wallet, they tend to pull their head out of their backside and start demanding better accountability for how their money is spent. But there’s no such thing as something for nothing - if you want decent schools, roads, policing, code enforcement, etc., then you’re going to have to be willing to cough up the taxes to pay for them.
The unofficial Wisconsin State motto has long been ” Buy a house..and RENT it from the State”
Looks like this is going nation-wide with all of the property debtpit taxes going through the roof:)
Got TABOR?
I’m in no mood to protest tax increases. I do what I can to avoid them. In fact, I’m thinking of moving my permanent address back to California after being based in Arizona for twelve years. California politicians allow their citizens more civil liberties than Arizona politicians, even though there are more and more Arizonans who are social liberal these days. Arizona voters tried at least once to legalize marijuana usage, but the courts refused to recognize the referendum. Arizona state government has become more totalitarian over these years. Laws against victimless crimes have imposed stiffer sentences.
I’ll take a higher tax than have my civil liberties taken away.
I’m interested in the story about the “Golf Mart” closing. There was a big “Family Golf Center” in my town in western New Jersey that closed 2 or 3 years ago. I never understood the market for it. When I was growing up in the 50’s and 60’s, golf was a rich man’s passtime and its an expensive hobby just for the fees to use a golf course but, suddenly, it was supposed to be a family sport. For everyone. There have been a lot of public golf courses built. My town has one and I wouldn’t have known about it except for a controversy in the local news that the town wanted to spend $3 million for a new clubhouse on the golf course. SUVs, granite countertops, playing golf.
Golf can be cheap in the hinterland. There’s a nice complex about 4 miles south of me that has a championship 18 hole course and a pair of “duffer” 9 hole courses. Early week specials for 9 holes exist. Last year they were offering “9 holes for $9″ excluding cart rental. That’s the price of a movie nowadays.
http://www.falconcrestgolf.com
nice- lots of contour for IN
I pay $12.00 for 18 holes with cart (par 72, 6856 yard layout).
(Of course it is in Central Florida and you have to start play after noon.)
$40 at noon in August for a round.
But mostly for the 120+ courses here in the desert, it is more like $90 per round and UP.
The city of Carlsbad is taking a bath on a municipal golf course they built about 2 years ago. This town just can’t seem to say NO to any development, be it the Bressi Ranch McMansion farm, which is littered with foreclosures, or big box stores. Now city taxpayers get to subsidize golfers. The silver lining is that this will be one remaining hillside that isn’t bulldozed into oblivion.
http://nctimes.com/articles/2008/12/14/news/coastal/carlsbad/z7657e6ac934212af8825751d006b03b4.txt
“The Danville couple who won last month’s ‘dream house’ raffle will take $1.2 million in cash rather than the $2 million San Rafael residence…The winner of last year’s inaugural ‘dream house’ raffle also took cash instead of the same prized home.”
Yet, there are still home sellers in California who insist “I’m not going to GIVE my house away!” Well, no, you aren’t. No one would even take it for “free”.
Whoops. Looks like I forgot to enter the contest again. Dang.
“Yet, there are still home sellers in California who insist “I’m not going to GIVE my house away!” Well, no, you aren’t. No one would even take it for “free”.
They made the right choice, and even if they both had good jobs, still would have made the right choice by taking the cash. I can only imagine the expense and upkeep associated with this “dream house”, even if it were mortgage free. Why bother at this point?? A big noose around the neck is all that house would be.
Lot of necks, lot of nooses, I’m afraid.
That, and San Rafel is nowhere near Danville.
Very smart of that couple. They pocket $600,000 after taxes. Should put that in T-bills. It will keep them going through this potential deep depression.
“‘It may come to the point of having to sue them [the lenders] to get them to take the house back,’ he said.”
You couldn’t make this stuff up.
“She said the only jobs out there are paying $8 per hour, half what she used to earn at the truck frame assembly plant in Stockton.”
I heard some jackass from the Hoover Institute on the Radio a few days ago claiming that cutting the minimum wage in half would create twice as many jobs. The prick didn’t consider that cutting his own pay in half would allow the right wing to hire another crackpot economist.
What a pantywaist. It would create twice as many people who work full time, but still can’t afford to eat.
Besides, I don’t think there are companies out there who just sit there and hire as many people as they can possibly afford to pay. They always employ the minimum number of people they can to get all the work done, regardless of wages.
They always employ the minimum number of people they can to get all the work done, regardless of wages.
With worker’s comp, other insurance, liability, etc. Its expensive to hire an employee at NO salary! For small businesses minimum wage can matter. But in this economic environment, there is no hope they will hire.
Minimum wage is for an untrained, unskilled worker who you do not care if you have to replace tomorrow.
I’d rather worry about funding education. And… making it so that a high school degree means something. (2/3rds of the ‘graduates’ of the LA unified who apply at our work FAIL the literacy test we’re now required to give to ensure they can actually follow written instructions. ugh… their degrees are worthless. Remember when a high school degree was something to be proud of?)
I believe NOW is the time to invest in infrastructure. REAL education is part of infrastructure. Fake degrees… No.
Got Popcorn?
Neil
“I’d rather worry about funding education. And… making it so that a high school degree means something.”
Functional literacy really is the minimum acceptable standard. Even that doesn’t make you competitive for much. A system where students, parents, schools, or society deem it acceptable to graduate from high school without basic literacy skills is failing miserably.
+1
I thought a sign of being near the bottom was when we saw houses foreclosing for the second and third time. I see that happening already –though not sure that’s a sign of the bottom. My husband and I saw an open house several months ago in Folsom, of a house that looked like a foreclosure in a really nice upper middle class neighborhood. It sold in December for $550k. Two months later Trulia shows that it’s bank owned again. This has to really hurt the banks. Even if people have the down payment for a house, the whole job security thing must be a big problem.
http://www.trulia.com/foreclosure/2003161614–Fall-River-Dr-Folsom-CA-95630
http://www.trulia.com/homes/California/Folsom/sold/1615346-101-Fall-River-Dr-Folsom-CA-95630
‘This is just another indication that American is in trouble — that the world is in trouble.’”
No dummy, it’s GOLF that’s in trouble. It turned into an expensive hobby for rich old white guys in retirement, no one else can afford it anymore.
I totally agree. Putt-Putt’s gotten WAY too expensive. Ever since Tiger shot a 21 at the Fayetteville PPA Open (that was in 2007, I think), the whole sport’s turned into a rich-old-fart-and-blondebimbo-caddy scene. Disgusting. So what I did is to dig holes in my side yard, fill each one with an empty tuna can, spraypaint my balls orange, and set my lawn-mower to “lowcut.” Now I’ve got my own private course. Same diff — IMHO. Screw Putt-Putt!
Luv,
Jen
Jenbones, I suggest that the next HBB should have the HBB OPEN at your house. It would be a blast!
I love blond bimbos. Don’t discriminate against blonds. Sorry I couldn’t make Vegas. Obama, the wise, told me not to go. he he he he he he.
Um … a blonde without the e is a man, pismo.
you spray painted your balls orange?
I’ve done that. Make sure you use water based paint… ahem…
Give me the road less traveled anytime. Paved golf cart paths? Ball washers?
Prefer my green without a flag, a hole, a buzz cut and a cloud of pesticides.
Holy Sh!t batman, you mean when Golfers are affected, then truly things are bad. And only then will people pay attention?
The Desert Sun. “California Golf Mart in Bermuda Dunes has been added to the list of businesses closing up shop in the Coachella Valley. ‘It’s a great store and it’s a shame it’s closing,’ said Bill Spratt of Palm Springs. ‘This is just another indication that American is in trouble — that the world is in trouble.”
“Stephen and Linda Drake cast aside concerns about owning property in Mexico because they believed in Donald Trump. ”
How do I put this politely? Anyone who puts trust in the Donald just because he’s the Donald is brain-damaged.
Trump also tried to flim flam Fresno on a golf course project. By a one vote margin they didn’t go for it. Bubba(mayor) wanted it however.
I wonder how Trump Towers in Waikiki is doing ? They were still building it last March. I took a drive through Merced. A few too many twenty somethings walking aimlessly around town.
The good news:
“An appraiser lost her license after state regulators concluded her evaluation of a home for $625,000 in a declining Santa Ana real estate market was “grossly misleading,”"
But reading the article we find that: “Corrine T. Villalobos of Whittier surrendered her appraiser’s license on Feb. 11 and agreed to pay $2,000, if she reapplies for her license, to cover the cost of the investigation by the Office of Real Estate Appraisers.”
If she reapplies she pays $2,000. This after overappraising a house by something like $300,000. California really is paved with gold for crooked appraisers.
test
The gate opened.
…”Wells Fargo should have known there was something fishy about the $625,000 appraisal”.
When I purchased my townhome in 2007, I asked WF when was the appraisal to be started since I never say anyone come to the property. I was informed that tey did an ‘”Electronic Appraisal” on the property and it turned out, amazingly, exactly the agreed on purchase price (343K).
Anyone? WTF is an “electronic apprasail”?
Its is an appraisal that is generated based on county record information along with shared data bases of other appraisal companies…
Also, it usually includes a drive-by by the appraiser with a photo taken from the car…
Thanks for the info, scdave!
“Also, it usually includes a drive-by by the appraiser with a photo taken from the car..”
When flooding caused our County to be declared a natural disaster area, my wife was in the front yard when a guy pulled up and started taking pictures (he never got out of the car). She hollered that someone was snapping photos of our place I ran out to confrot him and he said WF sent him to verify we were not flooded.
Always learning something from the HBB members!
The American Liberal Media just doesn’t want to publish stories illustrating the complete and utter, 100% total failure of the Obama administration to date.
Maybe Muirder or Excreter can explain why we Americans need to be fed the lie that “anything” is “improving” under the rule of the Kenyan Marxist so far.
From the U.K.Mail Online:
By Paul Thompson
Last updated at 12:35 PM on 06th March 2009
A century and a half ago it was at the centre of the Californian gold rush, with hopeful prospectors pitching their tents along the banks of the American River.Today, tents are once again springing up in the city of Sacramento. But this time it is for people with no hope and no prospects. With America’s economy in freefall and its housing market in crisis, California’s state capital has become home to a tented city for the dispossessed.
Those who have lost their jobs and homes and have nowhere else to go are constructing makeshift shelters on the site, which covers several acres.As many as 50 people a week are turning up and the authorities estimate that the tent city is now home to more than 1,200 people.
In a state more known for its fantastic wealth and the glitz and glamour of Hollywood, the images have shocked many Americans.Conditions are primitive, with no water supply or proper sanitation.Many residents have to walk up to three miles to buy bottled water from petrol stations or convenience stores.
At other times, charity workers arrive to hand out free food and other supplies. Joan Burke, who campaigns on behalf of the homeless, said the images of Americans living in tents would shock many. ‘It should be an eye- opener for everybody,’ she said. ‘But we shouldn’t just be shocked, we should take action to change things, because it’s unacceptable. ‘It is unacceptable that in this day and age we have gone back to a situation like we had during the Great Depression.
Many of those living in the tent city are pinning their hopes on President Obama’s $787billion stimulus package which is aimed at rescuing the economy and creating jobs. The President has also announced plans to save the homes of nine million people from foreclosure by restructuring their mortgages.
cobalt,
One time I’ll try to explain this to you.
What we are seeing today is the result of 30+ years of a false economy.
Both Democrats and Republicans contributed.
Reagan in 83 fired Voulker and started deregulation under “all government is bad” and “trickle down” (or “voodoo economics” as Bush said during the Presidential race.
The democrats were as guilty (NAFTA)
Glass-Steagall repealed by a Republican Senate (”The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by Republican majorities on party lines by a 54-44 vote in the Senate[and by a 343-86 vote in the House of Representatives.)
Since 1983 the very rich has paid ever less in taxes.
___
Much has been posted on these things.
____
Now one last thing, I doubt you would have the courage to tell me names in person.
It is very unmanly to do so over the Internet.
But that goes to your character, or lack thereof.
That was “conservatism.”
What we are seeing today is the result of 30+ years of a false economy.
We’re paying for delayed gratification.
Both Democrats and Republicans contributed.
Amen.
I’m ok with some debt. But I still remember seeing the graphs of default rates vs. down payment or DTI.
Got Popcorn?
Neil
Some leverage is okay…It can assist in profitability and growth…Its all about balance…
I doubt you would have the courage to tell me names in person.
It is very unmanly to do so over the Internet.
But that goes to your character, or lack thereof.
(just in case the first post fails)
Google “Hooverville”. We now have “Obamaville”
Nothing new here: The American River has long been a haven for transients. So’s the L.A. River down in the Long Beach area. Same with Ventura’s river.
There’s something about rivers that draw these people.
Creosote plants grow in what were riverbeds hereabouts, including amid the channel of what was once the state’s second longest.
Theres a University of VA study that 66% of the nation’s housing value decline is in California (another 21% in 4 states: Nevada, Arizona and Florida). I can remember reading articles 30 years ago about house prices going to $100,000 in CA (ordinary houses), at a time when house prices for a comparable were about half that where I lived, Long Island NY.
I visited CA a few times when my sister lived there and also on a vacation to San Francisco and we did a lot of driving around. Its a vast state, so much open space. Honest question: Why would Californians be so susceptible to rapid real estate escalation? I recall a “House Hunters” I saw maybe 2 years ago with a couple in San Rafael wanting to buy a house. They had 2 children and they lived in a 2 bedroom apartment that he got as part of his compensation for being the manager of an apartment complex. He also did some free-lance computer work. The house they bought was over $700,000 and it was a small Cape Cod on a slab with a small yard. It needed work. The floors weren’t level and it was just a cheaply built house with 50 year old fixtures. Fortunately, “House Hunters” is mostly fiction.
Obama just got here. There’s no way he can undo what’s been done. He’s just trying to stop it from getting worse.
I’m no fan of Obama, but to blame him for everything that’s come crashing down at the beginning of his watch is unfair. That particular house of cards has been years in the making. While his “solutions” are guarenteed to make things far worse, he inherited a horrific situation. Eight years of the epic incompetence of the Bush Administration, compounded by irresponsible Democrats like Barney Frank and Chris Dodd, means there’s plenty of blame to go around.
I agree Big V….But, there is no changing the fact that there are a lot of angry white men particularly in the south that will never accept a black man as president…Think Rush…
You know, there are other blogs for this kind of post. All that hatred is going to burn you up.
Please. The man has been president for a MONTH. Ok?
“The American Liberal Media just doesn’t want to publish stories illustrating the complete and utter, 100% total failure of the Obama administration to date.”
Uh oh…. me detects a sore loser. McCain? Is that you?
There will be a Bay Area meetup on Friday, April 3rd, sometime after work, somewhere in Newark (right off the 84 on the east side of the bay).
I’m thinking El Burro.
Please RSVP if you think you can go. BigVHBBatgmaildotkom.
-V
From the Mercury News piece: “I can’t make myself sick,” she said. “I’m at the point where I’m losing sleep over it. I can’t afford that. I have children to care for, and a job to do.”
Hey, don’t forget your new husband; he didn’t marry you just to support your kids and mortgage. Talk about marrying baggage!
I found out today that the real estate market really ISN”T in as bad of shape as everyone makes it out to be. This news came from a Marin realtor named Ginger who sounds as if she has taken too many happy pills. For your viewing pleasure, I’m sending you her webiste:
http://www.blogbythebay.com
Enjoy.
Nancy
While financial institutions are collapsing, the earth in California is pretty darn stable. That in itself is amazing!
I can’t imagine what will happen if any part of California starts a slippin’ and a slidin.’ To say the least, that scenario would most certainly send California over the clift. Unemployment would soar to 50 percent.
Our entire country is basically hanging by a thread and anything could and eventually WILL bring our financial system to its knees.
As bad as life is in America now, some people will eventually turn lemons into lemonade. Any smart, young, person who’s inherited some money should start buying homes. Eventually, our country will come back but it may take decades.
Good point, as the economic pressure mounts, eyes should be peeled for a black swan(s)…now more than ever.
eyes should be peeled for a black swan ??
My single biggest concern/fear….
How about if Yellowstone erupts? That would probably send the few survivors back to the stone age.
There is a bright side to adversity. Most advances are made during times of adversity, rarely are they made during the good times, as most people just go with the flow, understandably.
Mind you, I’m not saying good always comes out of adversity. There’s an awful lot of adversity in the Middle East and in Africa and I don’t see much good coming out of it. Right now, anyway.
It’s probably gonna take a lot more pain, but I do have faith in many of my fellow Americans. It will take a few brave souls who are willing to put their nuts up on the table and risk getting them chopped off. Others will eventually follow that example.
Palmetto,
I’m right there with you, brother. Adversity brings out the best and worst in people. I know a lot of people who have innate goodness and the strength to do what’s necessary, yet principled, to get through this and give others a helping hand as well.
Why would a smart young person with an inheritance want to throw it down the rat hole of investing in unwanted, unneeded homes whose prices may not recover for twenty years? And how many do you have to sell, Mr Investor Troll?
“Why would a smart young person with an inheritance want to throw it down the rat hole of investing in unwanted, unneeded homes whose prices may not recover for twenty years? And how many do you have to sell, Mr Investor Troll?”
Exactly! Why not take the same money and start a sustainable business?
Personally I think there is going to be a vital and potentially huge business in de-constructing most (if not quite all) of the Mc-Crapshacks built over the past 20 years. Salvage everyting of any possible value. Like a Sioux Indian with the proverbial buffalo
With the fraudulent subprime lenders out of the picture, is the FHA trying to pick up the slack?
The Next Hit: Quick Defaults
More FHA-Backed Mortgages Go Bad Without a Single Payment
The Palm Hill Condominium project in West Palm Beach, Fla., has a default rate at 80 percent for loans from one lender. A dozen loans went bad after no payment or one. The apartments built 28 years ago on former Everglades swampland were converted to condominiums three years ago. (By Joshua Prezant For The Washington Post)
By Dina ElBoghdady and Dan Keating
Washington Post Staff Writers
Sunday, March 8, 2009; Page A01
The last time the housing market was this bad, Congress set up the Federal Housing Administration to insure Depression-era mortgages that lenders wouldn’t otherwise make.
This decade’s housing boom rendered the agency irrelevant. Americans raced to aggressive lenders, seduced by easy credit and loans with no upfront costs. But the subprime mortgage market has crashed and borrowers are flocking back to the FHA, which has become the only option for those who lack hefty down payments or stellar credit. The agency’s historic role in backing mortgages is more crucial now than at any time since its founding.
With the surge in new loans, however, comes a new threat. Many borrowers are defaulting as quickly as they take out the loans. In the past year alone, the number of borrowers who failed to make more than a single payment before defaulting on FHA-backed mortgages has nearly tripled, far outpacing the agency’s overall growth in new loans, according to a Washington Post analysis of federal data.
Many industry experts attribute the jump in these instant defaults to factors that include the weak economy, lax scrutiny of prospective borrowers and most notably, foul play among unscrupulous lenders looking to make a quick buck.
If a loan “is going into default immediately, it clearly suggests impropriety and fraudulent activity,” said Kenneth Donohue, the inspector general of the Department of Housing and Urban Development, which includes the FHA.
‘Fredman said he wants to return the keys to the lender, but it’s been months, and the lender has not yet told him where to mail them. Nor have they foreclosed on the homeowners.”
“‘It may come to the point of having to sue them to get them to take the house back,’ he said.”’
Sounds like he’s saying that the # of foreclosures on the books undercounts the actual number of foreclosures, that the banks are probably not staffed up enough or reluctant to process them all. How many empty houses are there on your street?
Anyone looking for a Rancho McMansho at under $150/sq ft?
17661 LA CATRINA, Rancho Santa Fe, CA 92067**
Beds: 4 Type: SFR Sq. Ft.: 7,001 Lot Size: 4.3 Acres MLS #: 081038235
Baths: 3/1 Built: 2008 $/Sq.Ft.: $143 List Date: 03/07/08 On Market: 365 days
List Price: $999,000 - $1,299,000 Price reduced
Description
As is. Subject to seller and lender’s approval for a short sale. Custom home under construction, framing complete. Two story tuscan villa, high up on 4.35 hillside acres with panoramic view lot in cielo. Master suite plus three additional bedrooms and bo nus room upstairs. Downstairs has greatroom, library, casual family room plus, seperate living and dining rooms. 3 balconies w/loggia.
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ZipRealty Price Track
Price Increased: 06/02/08 — $2,895,000 to $3,395,000
Price Reduced: 06/03/08 — $3,395,000 to $2,895,000
Price Increased: 07/17/08 — $2,895,000 to $2,899,000
Price Reduced: 12/10/08 — $2,899,000 to $999,000
Yeehaw! 15,000 people showed up at the protest in Fullerton (John and Ken KFI), any HBB’s there?
Is this another Tea Party?
If so, wow! 15,000! This is in line with what I see and read from colleagues and friends e-mailing me their complaints about pork barrel, earmarks, bank bailouts, auto company bailouts, and tax increases.
Each of us should answer this question: Has anyone told you they like the new Congress and Obama’s spend and tax policies? Actually no one told me they approve of that stuff at all.
Remember how many people protested the Iraq War? Did that stop it? Hopefully this turns out different.
wesellsandiegohomes.com/Listings/0/39128/California/San-Diego/4151-Third-Avenue.aspx
They’re finally lowering modestly the wishing price on my adopted loft. It originally listed last March for $750K, lowered in June 2008 to $699-750K, pulled off the market in fall 2008, relisted in Jan 2009 for $675K, now listed for $635K.
The decline in wishing price is not even matching the general decline in prices over the same period. My guess is that it might sell for half of the original listing price if they move more quickly, a third or less if they continue to drag this out.
“Christian Punsal, a 24-year-old city employee in Elk Grove, Calif., near Sacramento, is among the first-time homeowners and investors swooping in. Mr. Punsal bought a three-bedroom home for $193,000. On a monthly basis, the house will cost him $100 less than the rent on his two-bedroom apartment. The home sold for $336,000 four years ago, when he was a junior in college.”
“‘I just felt that this would be the perfect time to buy,’ he said.”
—————
It’s not perfect as the house will be $123,000 soon enough. But if he’s paying less for a house (assuming the numbers quoted includes PITI) than an apartment, it’s not a bad deal.
The rent on his apartment could drop 25% in a year, and 25% the year after that. It could make him regret his decision.
Not as likely in Elk Grove, weirdly enough… because the population more than doubled in a time period exactly concurrent with the housing bubble, the Elk Grove area is vastly underserved as to rental properties.* To my sorrow. I live in Elk Grove.
*There are reasonably nearby low-rent areas… but they happen to be the county’s ghetto. Don’t ask me why five miles makes such a difference.
What bothers me about this guy is that he’s treating this house purchase so lightly. Evil Rob and I have been preparing to buy a house since before we were married (in 2001)– our realtor said we’re the best-prepared first-time buyers she’s ever seen.
Our budget is similar to Mr. Punsal’s, though ours is based on PITI, not payment alone. (PITI roughly comparable to current rent… and we have $400/month wiggle room for increased utilities, upkeep, etc.) Of course, that means foreclosures. And we’re going with a larger place because we’re trying to serve our needs for the next two decades (if not longer.) We’re not looking to buy now because it’s “perfect” but because it’s “darned near good enough.” Yeah, we could get a better deal later… but money isn’t everything and we’re ready. (We have a toddler whirlwind in the making, so our no storage apartment adds that little extra bit of stress to the whole project. Whee.)
We’re having a lot of trouble because the properties that suit our needs are getting bought in a matter of days… and there’s more we never get the chance to look at.
We spent years getting to this financial level, where we have a reasonable surety about employment (extremely secure so long as the entire economy doesn’t crash), good cash flow, living below means, etc. We’ve moved enough that we’re sick of it, and Evil Rob’s promotion path is in-city.
And we’re competing against mid-twenties single guys who think it’s the “perfect” time?
This is when I start beating my head against the desk…
Can anyone well-versed in rational expectations theory please comment on the implications for housing prices of Team Obama’s talk that the “third rail” of housing subsidies might be curtailed or eliminated?
BTW, I personally think this is one of the best ideas they have set forth, and no less than The Economist magazine editorial staff sporadically makes disparaging remarks about the folly of U.S. housing subsidization policy. (In the case of a UK publication, this could be a case of the very black kettle pointing out the black pot, though…).
NATION’S HOUSING - KENNETH HARNEY
Are mortgage deductions really at risk?
By Kenneth R. Harney
3:00 a.m. March 8, 2009
WASHINGTON – Call it the third rail of the federal tax system: the politically untouchable cluster of special benefits and subsidies set aside exclusively for homeowners, including deductions for mortgage interest, local property taxes and capital gains exclusions on up to $500,000 in sale profits.
Is the Obama administration serious about beginning to clamp limits on at least some of these subsidies? The administration isn’t commenting on anything beyond what was proposed in its first budget submitted on Feb. 26, but housing and banking trade groups are worried that the initial proposal to cut back on the ability of upper-income families to write off mortgage interest and other expenses is just the opening move in a longer-range effort to reform the federal tax code.
…
Is there a real possibility that Congress would take away tax breaks that millions of people have come to consider an essential part of the home buying equation? Here’s a quick overview of the issue:
What did the Obama budget propose specifically on mortgage interest and property tax deductions? Starting in 2011, homeowning households with adjusted gross incomes of $250,000 and above could only take write-offs at a 28 percent marginal tax bracket rate. To illustrate, say you’re in the 35 percent bracket and have $20,000 of mortgage interest, property tax and charitable deductions, all of which are targeted in the Obama proposal. This year you’d be able to write off 35 percent of the $20,000 – $7,000. If you were capped at a 28 percent rate, you could only write off $5,600. Your tax bill would go up by $1,400.
They are just flirting around the edges with the deduction…The real cut will come from a significant reduction in the “cap” on the mortgage limit and elimination of 250/500 tax free…That may happen after things stabilize..
Hurricane Bush leaves St. Lucie County homeowners under water
Economic hurricane? Florida county may declare itself a disaster area
Such a move would loosen regulations and free up money
By Brian Skoloff
ASSOCIATED PRESS
3:00 a.m. March 8, 2009
PORT ST. LUCIE, Fla. — County Commissioner Doug Coward wants to declare St. Lucie County a disaster area. J. Pat Carter / Associated Press
Just five years ago, Port St. Lucie was America’s fastest-growing large city. Then the foreclosure crisis slammed it like a hurricane.
Today it sits in one of the hardest-hit counties in the nation. Thousands of houses are empty or unfinished. Neighborhoods are littered with for-sale and foreclosure signs and overgrown, neglected yards. Break-ins are on the rise.
But one politician believes he has a unique solution: Declare St. Lucie County a disaster area as if it had been hit by, well, a hurricane.
“This is a man-made disaster,” County Commissioner Doug Coward acknowledged. But he said that is why “we’ve got to do something. Clearly, the economic crisis of the country far exceeds the ability of local governments to solve it, but we’re trying be a part of the solution.”
From the SD Union-Tribune Sunday Homes section, augmented by my comments and analysis (in italics):
Time is on their side
Seller: Alice Hawks, 61
Home: 1,890 square feet, La Mesa, bought as new in 2004
Listed price: $479,900
Agent: Rob Northrup, Re/Max Associates
“I watch home and garden shows – they show how to sell and present a house,” said Hawks, a self-employed hair stylist. “When Rob Northrup came in, my house was nice and clean, neat, but he said we need to take this chair and couch out, take half the pictures down. That totally changed the room.”
Hawks is a seller who is not forced to sell but wants to for two reasons – she’s worried about navigating the stairs as she ages and she doesn’t like living in a development governed by a homeowner association.
Reaction to her home was swift – she almost immediately went into escrow. But the buyer backed out, as did a second buyer. Similarly, she’s angling to buy a replacement home but ran into more competing buyers on foreclosures than she expected.
“I’m hoping to find something,” she said.
Listing info from ZipRealty dot com:
4111 MASSACHUSETTS #12, La Mesa, CA 91941**
Beds: 3 Type: SFR Sq. Ft.: 1,890 Lot Size: 3,790 Sq. Ft. MLS #: 090006068
Baths: 2/1 Built: 2004 $/Sq.Ft.: $254 List Date: 01/29/09 On Market: 38 days
List Price: $479,900
Data from Redfin dot com:
Property History
Date Event Price Appreciation Source
Jul 07, 2004 Sold $590,000 303.8%/yr Public Records
May 14, 2004 Sold $480,000 – Public Records
Current estimated price per square foot for homes in La Mesa =
about $225 = 2004 prices
They are asking $479,900 / 1890 = $253 per square foot
———————————————————————————-
Seller: Craig Nelson, 47
Home: 4,000 square feet, Solana Beach, bought for just under $1.5 million, made improvements totaling $300,000
Listed price: $1.9 million
Agent: Brian Yui, HouseRebate.com
Nelson and his wife Nicole deBerg-Nelson, 40, have bought, fixed up and sold about 10 homes over the years and decided now was as good a time as any to sell their view-rich home.
“I think markets are markets and if you’re selling into a tough market or a hot market, you’re buying into the same market,” said Nelson, a commercial lending officer at a local bank.
He said the couple is not desperate to sell and expects to receive low-ball offers, which they intend to reject until they get what they want. If they had sold at the peak, Nelson thinks they might have received $2.5 million.
“The beauty of it is – I’m like a lot of people in the market – we get to live in a great house and if we don’t sell, it’s no big deal,” he said.
Redfin shows that homes in that zip code (92075) sold for about $600 per square foot in Summer 2008, but have subsequently crashed to sales prices in the $420 per square foot range. For a 4000 square foot home, I guess that means we are talking in the neighborhood of $420 X 4000 = $1,680,000 unless their improvements were really, really good, and exactly what the one prospective buyer who might be looking in this market wants.