December 21, 2008

A Bidding War For Buyers In California

The Union Tribune reports from California. “After a sharp decline in foreclosure activity that began in September, San Diego County default notices bounced back last month. DataQuick also reported 1,045 foreclosures in the the county last month, a decrease of nearly 9 percent from October but a year-over-year increase of nearly 119 percent. In October, foreclosures had declined 37 percent from the previous month. Some homeowners are reluctant to go into foreclosure, even when they’re overwhelmed by debt. In Chula Vista, Gustavo Diaz de Leon recently negotiated a short sale, in which his lender agreed to accept less than the amount due so he could avoid default.’

“Diaz de Leon, who fell behind on his payments several months ago, continued to negotiate, even after his attorney told him that the wise business move would have been to go into foreclosure, erase the debt and begin rebuilding his damaged credit. The disabled gas-and electrical-line locator refused. ‘I didn’t want to just walk away,’ Diaz de Leon said.”

“He said he used an adjustable loan to buy the home for about $500,000 in 2005. It will be sold for about $330,000. Under the short-sale agreement, the proceeds will be used to pay off a first mortgage and Diaz de Leon will continue to pay off the home’s second mortgage.”

The LA Times. “We’ve pretty much blown through the first couple of stages of grief with regard to the Southern California housing bust. There’s no room left for denial now that home prices in the Southland are down 44% from their peak in 2007, and there’s not much use for anger. Now we’re bargaining.”

“Pretty typical is a one-bedroom, one-bathroom house on East 98th Street in South Los Angeles, near the intersection of the Harbor Freeway and Century Boulevard. Its listing calls the 738-square-foot house ‘great for a growing family.’ The seller wants $85,000 for the house, which sold in 2006 for . . . $365,000.”

“Throughout Southern California, real estate agents say and sales records confirm that attractively priced foreclosed houses sell quickly. Which doesn’t mean prices will go back up any time soon. ‘I am absolutely positive it’s still going down,’ said Dennis Findly, 18-year veteran of Inland Empire real estate. ‘If you’re looking at a house like this for $250,000, it looks like a good deal, but a year from now it could be $220,000 or $230,000,’ he said.”

The Press Enterprise. “The potential for a giant closeout sale seems enormous in Inland Southern California. Riverside and San Bernardino counties recently contained 30,465 lots ready for construction, complete with utilities, streets, curbs and gutters, and much more residential land is in the approval pipeline, according to Metro Study.”

“Bargain hunters have been disappointed that banks have been generally unwilling to drop prices enough to attract buyers. ‘The spread between what is offered and what financial institutions want is huge,’ said Randall Lewis, executive vice president of a major Inland land developer.”

“Lenders are overwhelmed by the sheer volume of construction loans that have gone bad, said Tom Reimers, president of a land broker in Irvine. ‘They are like the crocodile that ate a gazelle. It takes them a while to digest it all,’ Reimers said.”

“Economist Chris Thornberg said he believes banks also fear that by marking their land portfolios to market value they would be forced to acknowledge they are insolvent. Another discouragement for some would-be buyers is that most of the land that has become available has been in remote Inland areas such as Victorville, Hemet-San Jacinto and Banning-Beaumont.”

“In transactions that have occurred in the Inland counties this year, lots ready for building were discounted 50 percent to 75 percent from their peak in 2004-2005, said Tom Doyle, a principal with land brokerage Whittlesey Doyle. Park Place Partners reports that between 2005 and 2008 the cost of a finished residential lot in Temecula plummeted from $270,000 to $125,000.”

“Industry sources said in some cases finished lots in the Inland region have been sold for just a fraction of the cost of the seller’s investment in utility lines and other infrastructure.”

“Highpointe Communities aims to acquire distressed projects that can be sold early in the next home building upcycle, said the Aliso Viejo firm’s chief executive, Steven Vliss. But when a housing rebound will occur is a moving target, Vliss said. ‘We entered into 2008 believing the recovery was about 24 to 36 months away,’ he said, ‘and we end the year thinking it will be between 42 months and 48 months.’”

The Desert Sun. “This corner of Southern California had the highest unemployment rate of any area with 1million or more people in the United States — including metropolitan Detroit. ‘We are the epicenter of the economic crisis in this country,’ said John Husing of Economics and Politics Inc., a leading regional economist.”

“The major culprit is one struggling valley residents know all too well: a plummeting housing market and the resulting lack of construction work. Riverside and San Bernardino counties had $12.5 billion in private-sector construction activity in 2005, Husing said. This year it’s $3.8 billion. ‘This area is very, very dependent upon construction,’ Husing said. ‘With that sector in the tank, it’s blown a hole in our economy that’s very large.’”

“Riding a sizzling housing market of just a few years ago has left all of California, and the Inland Empire in particular, bearing a disproportionate burden of the burst housing bubble’s pain, said Sylvia Allegretto, an economist with UC Berkeley’s Institute for Research on Labor and Employment. ‘We were overbuilding, overinvesting and people were moving here,’ she said.”

“A significant amount of industrial, retail and office construction has continued through the housing development standstill, said Fred Bell, executive officer of the Building Industry Association’s Desert Chapter. ‘Whatever is in the pipe is going to finish, and there’s nothing behind it at this point,’ he said.”

“In other economic downturns of the recent past, people continued to spend through borrowing and using their home equity, Allegretto said. ‘All of these traditional avenues that have helped families smooth consumption, the spigot has been turned off,’ she said. ‘You can’t get credit, you can’t get money out of your house, and your wages have gone nowhere. You have no ability to continue to consume the way we have. And 70 percent of our economy is consumer spending.’”

The San Francisco Chronicle. “In these times, when some plummeting markets have vaporized half of the value of their single largest asset, putting together a traditional deal to sell has become an ordeal sometimes bordering on the impossible. For some, it’s time to get creative: Enter the lease-option deal, otherwise known as rent-to-own.”

“As the name implies, a lease-option or rent-to-own transaction involves a potential buyer locking in an option to acquire a home at a later date at a fixed price. The buyer usually makes a nonrefundable deposit and moves in immediately as a renter. Part of each month’s rent may go toward a down payment, depending on the contract.”

“At the end of the rental period, the buyer must come up with a balloon payment for the balance owed on the dwelling, or walk away from the deal.”

“‘I did it because I couldn’t sell my house’ in Rocklin (Placer County) using conventional methods, said Leo Stewart, who now lives in Auburn. Putting his 15-year-old 3-bedroom, 2-bath home on the market in 2006, he found himself cutting his asking price as the market began to tank. After several months with no offers, he decided to try a lease-option sale using a Sacramento firm that specializes in such deals.”

“Another compelling reason to change tactics was that he didn’t want to pay the sales commission and fees associated with a traditional sale through a licensed agent, he said.”

“So far, Stewart’s sale remains unconsummated, but he remains convinced that he’s on the right track. After one would-be buyer moved out without completing the purchase, OptionPlus found a second candidate who is currently renting the home for about $1,700 a month under a contract that calls for him to buy the place for $450,000 next year, Stewart said.”

“‘I don’t expect him to buy,’ Stewart said, because the home has continued to lose value and may be only worth $350,000 now. He is unsure what the prospective buyer will do once the rental period has run its course next year. Nevertheless, he says he’s happy with the arrangement.”

“Caroline Hegarty of Vallejo has done 15 lease-option deals but agrees that buyers need to be very careful because of the significant amount of fraud associated with rent-to-buy schemes. ‘I’ve heard stories where (purported owners) don’t even own the property’ they’re trying to sell, she said.”

The Sacramento Bee. “There are big years when the bottom drops out, the unimaginable occurs and minds reel from it all. That was 2008. So farewell to a year that jointly shredded our home values and our 401(k) accounts. So long to its economic free fall that pushed 19,000 area homes into foreclosure from January through October.”

“Home builders went bankrupt, calling 2008 the worst year in half a century. Banks failed, dying of unpaid mortgages.”

“The Bee recently gathered housing market watchers to assess the departing year in real estate and see where we’re going. Michael McGee, a mortgage lender. Lori McGuire, a home-building industry consultant. Ruben Ramos, the broker-owner of Ruben Ramos Realty in Marysville. He also trains the region’s real estate agents by teaching real estate classes at Yuba City.”

“McGuire: ‘I’m not saying we’re at the bottom. But I have a lot of friends who are professionals in the REO (repo) field. There are multiple offers on the REOs. That’s a bright spot.’”

“McGee: ‘Oh, let me tell you about that real quick. Let’s get that straight. The banks have become privy to this. What they’re doing is taking a quality piece of property that might be valued at $260,000. They’ll put a list price of $220,000 and they’ll get multiple offers, 20 or 30 offers. And then they’ll go back to every one of those 20, 30 offers and say, ‘OK, make your best shot.’ They turn it into a bidding war for buyers rather than a sale.’”

“We shouldn’t read too much into multiple bidding? Ramos: ‘Don’t read a lot into it.’ McGee: ‘It’s a ploy. It’s another one of these cottage industries working very well.’”

“McGee: ‘One in three people I talk to who are interested in buying a home in this market are saying, ‘No, we haven’t hit the bottom yet. There’s still more to come and rates are going to get better.’”

“Many in this market owe more than the house is worth. Are walkaways something we should worry about? Ramos: ‘There are a number of instances where that is the only option available. I’ll be frank with you. I meet with couples and families on a daily basis. And probably better than 60 percent or 75 percent, I tell them: Milk it for all it’s worth. Walk away.’”

“‘Let me give you the precise advice I give them. I say when the lender contacts you, lead them on the primrose path. Tell them you’re going to give them a payment in the not too distant future. Lead them further, further, further. Ultimately, they will send you a notice of default. Fine. Continue to occupy the home. Pocket the money you’re saving.’”

“‘And then at the end, if you’re still in contact, I’m going to show you how to get even more money from the lender. Get it and walk away from it. Call me 25 months later. I’ll put you into a nice home.’”

“Thank you all for coming. McGee: ‘It’s a sorry state of events. I’m sorry to meet you all under these circumstances. But it’s reality. There’s going to be a lot of people hurt and it’s not over yet.’”




RSS feed | Trackback URI

77 Comments »

Comment by Ben Jones
2008-12-21 11:24:35

‘This corner of Southern California had the highest unemployment rate of any area with 1million or more people in the United States — including metropolitan Detroit.’

Center of the universe indeed…

Comment by Michael Viking
2008-12-21 14:44:13

In the past week I’ve known three people who lost their job, including a close family member. This unemployment business is starting to hit home with me.

Comment by VaBeyatch in Virginia Beach
2008-12-21 22:17:30

Same here. I was mostly immune, knowing only one or two people not in my industry. Number went up 10 people last week, with two different companies. Thank goodness for those gov’t contractors, they still get business and can pick up the employees laid off from private companies.

 
 
Comment by Pullthetrigger?
2008-12-21 19:51:54

The Spaniards, from Spain, as it were, came to steal gold, other riches, and to establish Catholicism among the natives. They left their wives behind, which is why there are so many Mestizos in Central and South America. Meanwhile, the north of America was colonized by people seeking religious freedom, i.e. the Puritans, who brought their families in order to establish a more moral land than they had in Europe. This is an important point, IMHO, albeit not PC.

Comment by Pullthetrigger?
2008-12-21 19:57:47

Sorry. I thought I was responding to a thread describing something else. My observation still stands as far as I can see, though. It’s just an observation and not a generalization in any way.

 
Comment by Joelawyer
2008-12-21 23:14:53

Spot on correct analysis.

It also helps explain why SA has been moribund for generations.

 
 
 
Comment by bulwark
2008-12-21 11:31:17

Went to a car wash in Irvine yesterday. There used to be long lines. No one was there–prime time, Saturday morning.

Comment by Rancher
2008-12-21 13:26:14

One of the best here in town just closed. The last
Saturday they took in $135.00 for the day.

 
Comment by Sammy Schadenfreude
2008-12-21 13:48:07

Did all those ex-realtors working at the car wash do a decent job of cleaning up your vehicle?

Comment by Rancher
2008-12-21 14:04:09

They were best at vacuuming the carpets..

Comment by Jingle
2008-12-21 15:35:33

Yeah, Realtors really suck….

(Comments wont nest below this level)
 
Comment by combotechie
2008-12-21 16:50:58

“They were best at vacuuming the carpets…”

Probably looking for coins.

(Comments wont nest below this level)
 
 
Comment by Ann
2008-12-21 14:04:31

No…but the mortgage brokers did!

 
 
Comment by SanFranciscoBayAreaGal
2008-12-21 14:07:02

Dang,

I just wait for the rain. Does a great job cleaning my cars. :)

Comment by Dave Barnes
2008-12-21 20:54:14

The problem is that the [Chinese] acid in the rain eats away at the car’s paint.

 
 
Comment by ex-nnvmtgbrkr
2008-12-21 16:06:11

Hey, I’m still trying to verify through a credible source what I heard the other day. Rumor has it that applications at our infamous legal brothels is through the roof. Desperate housewives indeed!

Comment by palmetto
2008-12-21 16:44:10

“Hey, I’m still trying to verify through a credible source what I heard the other day.”

ROTFLMAO! Images of ex-nnv “verifying” brothel employment!
Now that’s what I call taking one for the team!

Comment by ex-nnvmtgbrkr
2008-12-21 19:09:18

I waited for years to do a pre-qual for one of our local “gals”. Never happened. Found out later that most of ‘em are from other areas and do the month on month off thing. So they’re probably one of your neighbors.

Yeah, it wouuld have been a story to tell sending a VOE to the Moonlight Bunnyranch.

(Comments wont nest below this level)
 
 
Comment by SanFranciscoBayAreaGal
2008-12-21 17:01:58

Hey what legalizing brothels that cater to women? There should be plenty of desperate men out there.

Comment by Sammy Schadenfreude
2008-12-21 18:45:56

There’s ALWAYS been plenty of desperate men out there, and always will be. That’s why brothels for women would be totally superfluous.

(Comments wont nest below this level)
 
 
Comment by scdave
2008-12-22 09:35:54

Its my understanding that Reno is hurting pretty bad so I would not be surprised…

 
 
Comment by In Montana
2008-12-21 17:40:00

I noticed that when I drove to SoCal from MT circa 1997. So much activity at the car wash in Pasadena, so much service, such a big deal, so many new cars! Everyone had a new car. My mother was embarrassed because my car looked dirty…after 1280 miles…sheesh.

Are people more normal there now?

 
 
Comment by wmbz
2008-12-21 11:46:02

“In these times, when some plummeting markets have vaporized half of the value of their single largest asset, putting together a traditional deal to sell has become an ordeal sometimes bordering on the impossible. For some, it’s time to get creative: Enter the lease-option deal, otherwise known as rent-to-own.”

If these folks think rent-to-own is creative or new then they should go ahead and stick a fork in themselves, they are done. The term dieing on the vine comes to mind.

Comment by Chip
2008-12-21 11:57:19

Since lease-option always meant a higher rent asked for the same house when the market was rising, it seems pretty foolhardy to offer a lease-purchase at anything above street-rate rents today. I’d almost think the seller should price the rent a bit below street and screen the tenant carefully, on the small chance they’ll fall in love with the place.

Comment by Big V
2008-12-22 10:37:48

Any numbnut can see that the option price ought to be some percentage BELOW, not above, today’s market rate. But no, that’s probably not considered creative.

Comment by HARM
2008-12-22 17:49:32

And why lock yourself into an option on a used house when there are so many depreciating houses to choose from –and more new inventory coming online every day?

(Comments wont nest below this level)
 
 
 
 
Comment by Jas Jain
2008-12-21 11:46:51


Decimation In CA Home Prices Is DEEP and WIDE: Select Counties & Cities

My forecast is that some time during 2010, 95% of CA zip codes would see prices down 50-80% from the peak and Silly.con Valley would be closer to the latter figure. — Jas
-x-x-x-x-x-x-x-
Change in Median Home Prices for All Recorded Sales (New, Resale, Condos, SFH) as per DataQuick, November 2008

County/City/Area From PK YoY

Median -44% -33%

Alameda County -43% -37%
BAKERSFIELD -50% -40%
CHATSWORTH -36% -21%
Contra Costa County -57% -50%
CUPERTINO -38% -33%
DAVIS -28% -13%
El Dorado County -50% -21%
FAIRFIELD -53% -31%
FRESNO -45% -33%
Fresno County -42% -28%
GILROY -47% -38%
HUNTINGTON BEACH -27% -22%
Kern County -47% -37%
LANCASTER -59% -45%
Los Angeles County -39% -32%
Madera County -51% -36%
Marin County -35% -29%
Merced County -67% -53%
MERCED -69% -51%
Monterey County -58% -50%
MORGAN HILL -57% -52%
Napa County -40% -28%
Nevada County -31% -22%
NORTHRIDGE -30% -15%
Orange County -38% -33%
PALM DESERT -24% -18%
PALM SPRINGS -42% -32%
PALMDALE -56% -43%
PASADENA -32% -24%
Placer County -36% -15%
Riverside County -49% -39%
ROSAMOND -54% -40%
SACRAMENTO -59% -46%
Sacramento County -53% -36%
San Benito County -56% -34%
San Bernardino County -51% -44%
San Diego County -42% -31%
San Francisco County -22% -20%
San Joaquin County -61% -48%
SAN JOSE -40% -38%
San Luis Obispo County -28% -10%
San Mateo County -28% -25%
SANTA BARBARA -31% -19%
Santa Barbara County -58% -45%
Santa Clara County -38% -37%
Santa Cruz County -47% -43%
SANTA MARIA -54% -34%
SHERMAN OAKS -39% -14%
SIMI VALLEY -40% -27%
Solano County -52% -37%
Sonoma County -47% -33%
Stanislaus County -59% -44%
STOCKTON -67% -53%
STUDIO CITY -34% -10%
TEHACHAPI -41% -20%
Tulare County -35% -24%
VACAVILLE -44% -28%
VAN NUYS -36% -25%
Ventura County -44% -33%
WATSONVILLE -54% -42%
Yolo County -49% -28%

Comment by Blue Skye
2008-12-21 12:06:12

Jas,
Do you have the number for the city of Santa Rosa?

Comment by Jas Jain
2008-12-21 12:23:53


SANTA ROSA -52% -38%

Jas

Comment by Blue Skye
2008-12-21 13:17:06

Thanks. My niece moved up the ladder in 2006 and couldn’t sell the first house afterwards. Probably won’t be a topic of discussion when I’m around my sis’ table this New Year’s, cause I told them to duck she told them not to pay any attention to Uncle Skye. Nah, a couple of drinks and I won’t be able to keep my tongue.

(Comments wont nest below this level)
Comment by Big V
2008-12-22 12:07:50

It’s hold your tongue. And be careful. Your niece’s hubbie might clock you one.

 
 
 
 
Comment by Professor Bear
2008-12-21 12:51:02

How many insolvent banks are implied by those half-off numbers?

 
Comment by Anthony
2008-12-21 15:53:51

Notice than Humboldt county isn’t on that list (never is), but median prices here are only down 15%.

Comment by ex-nnvmtgbrkr
2008-12-21 16:12:57

For the last time, IT’S THE WEED!! You know how that good bud puts you in delayed reaction mode. Sooner or later the stoners will awaken from their bong induced haze and say “duuuuuuuude………no way…….like somebody totally hosed me on my house, man!”

 
Comment by uptick
2008-12-21 19:51:17

In Humboldt I see more rentals and the asking rental prices are trending down. Lots of people are trying to rent their house and hold on that way, so market glutted.

 
 
Comment by Big V
2008-12-22 10:40:07

Jas, you are a trooper.

 
 
Comment by Chip
2008-12-21 11:53:13

““Diaz de Leon, who fell behind on his payments several months ago, continued to negotiate, even after his attorney told him that the wise business move would have been to go into foreclosure, erase the debt and begin rebuilding his damaged credit. The disabled gas-and electrical-line locator refused. ‘I didn’t want to just walk away,’ Diaz de Leon said.””

I admire this guy’s character a lot. But at the same time it seems like someone today paying Bernie Madoff the money they borrowed from him.

Comment by pdxHOMEDEBTOR/ocSANDRENTER
2008-12-21 15:07:43

“I admire this guy’s character a lot.”

If he pays off the second in full, I’ll agree with you. But words are free…wake me up after he makes 12 consecutive payments to the Foolish Lender holding the 2nd bag. Bet after 1 or 2 payments, he changes his mind.

PortlandHomeDebtor

 
 
Comment by edgewaterjohn
2008-12-21 11:55:39

“There are multiple offers on the REOs. That’s a bright spot.”

Yes, but at what price levels in relation to what the banks want? It sounds like there’s still a mighty big chasm between the two.

Comment by Blue Skye
2008-12-21 12:08:39

Sounds more like a reserve auction.

 
Comment by Ann
2008-12-21 14:08:47

And how many of those multiple offers end in a closed sale…

I have been following a home in the area that is a foreclosure..it has been under contract 4 TIMES..just again this week placed on the market..went to the place just to see the inside…looks perfect..so what is the hitch..probably qualifying for the loan..

 
Comment by Big_Bob_slob
2008-12-21 14:23:44

I found a forclosed house on Friday on the hotsheets that had a terrific price. (The price would have to be good for me to be interested). We called our agent and went to see it on Saturday. We made an offer and found that there was already two offers that had been made. It is probably the bank using this same tactic.

Comment by HARM
2008-12-22 17:54:03

Bait ‘n ’switch. Yet another crooked tactic from the same a$$holes that brought you $0-down option-ARMs, NINJAs, and taxpayer securitization of their crap mortgages. No thanks –wake me up when there are some real deals, no secret reserve prices, no shill/phantom bidders, no ringers, etc.

 
 
 
Comment by sm_landlord
2008-12-21 12:13:19

If they’re still finishing construction projects in the Inland Empire as mentioned in the OP, that means we haven’t seen the bottom of construction employment yet, unless the Federal make-work programs kick in before the last spec construction winds down.

More bad news to come in the IE, I think.

 
Comment by 45north
2008-12-21 12:53:37

And probably better than 60 percent or 75 percent, I tell them: Milk it for all it’s worth. Walk away.

This is worse than the depression. The financial institutions are afraid to take the hit. The borrowers and the financial institutions are afraid yet the government is supposed to be courageous? The government is as afraid as they are.

God bless America.

Comment by Blue Skye
2008-12-21 13:18:53

Isn’t it amazing to be able to watch the future unfold, just across the border?

Comment by ella
2008-12-21 18:39:50

Isn’t it amazing to be able to watch the future unfold, just across the border?

Yes.

You might think we’d be paying close attention and using your experience to make better choices (policy and personal) but instead we seem to have chosen a “we’re not dumb and greedy like those Americans ” theme, which is really annoying. Every realty association press release talks about our awesome Canadian lending practices and our complete lack of subprime, and our magical maple leaf power.

We’re walking about with our nose high in the air, on a muddy ground covered with rakes and banana peels. And polar bears :) .

Comment by 45north
2008-12-21 20:46:39

Ella, Blue Sky Isn’t it amazing to be able to watch the future unfold, just across the border?
The danger for Canada is that we assume that private parties such as mortgage companies and builders act in their own best interests. US experience shows that this just not true - they have and are choosing short-term interest over long-term.

In my community association, I am saying that much of the development in Canada is contrary to the long-term interests of the builders and mortgage companies and to the over-all interests of the Country.

(Comments wont nest below this level)
 
Comment by Joelawyer
2008-12-21 23:27:00

Energy down.

Lumber down.

Car makers down (Canadian factories).

Tourism down.

Um. What else do they have for an economy?

(Comments wont nest below this level)
 
 
 
Comment by Sammy Schadenfreude
2008-12-21 13:45:58

Contrast the sleazeball realtor telling his “clients” how to scam the system, with the rare honorable FB trying to honor his obligations. The tragic thing is, a functioning democracy and a free people is only possible when the great majority of the population are morally capable and inclined toward self-governance and doing the right thing. When most people adopt a “scam the system” mentality, it won’t take long before a police state will arise to treat the mass of people like the criminals and lowlifes that they are. The loss of our liberty could end up being the ultimate and deserved penalty for the mass culture of corruption and entitlement that has taken hold in this country.

Comment by Bill in Los Angeles
2008-12-21 18:50:28

On the other hand, no society that went totalitarian ever had a Bill of Rights, a Constitutionally-limited government or a Declaration of Independence.

Comment by Kyle
2008-12-21 23:37:23

Plenty of authoritarian/totalitarian countries have constitutions that sound oh-so-wonderful on paper. I’m not saying a police state is going to happen, but it won’t be stopped because of the particularly American title headings on constitutional documents - they aren’t that unique in the history of the world.

Neither the Bill of Rights nor widespread gun ownership have slowed down Bush and Cheney from strip-mining our rights over the last eight years. Most of the yahoos chest-thumping about ‘freedom’ have been quite happy cheering the process along - as long as they think it’s happening to someone else, for ‘patriotic’ reasons, ‘to potentially halt a ticking time bomb’ or other propaganda fantasies.

(Comments wont nest below this level)
Comment by Bill in Los Angeles
2008-12-22 07:27:11

People having enough of bailouts - now that’s a ticking time bomb.

 
Comment by JCclimber
2008-12-23 15:19:43

Per my recollection, Germancy was a democracy in the early 1930’s. Italy was in the 1920’s. So was Japan, in fact they held elections during the war.

Constitutions are only as good as the people are willing to enforce. Hence the need for the Second Amendment.

 
 
 
Comment by Big V
2008-12-22 12:16:45

Sammy:

People aren’t any less honorable today than they’ve ever been. The bank wrote the contract, so if there’s a walk-away clause, then it’s fair game.

 
Comment by HARM
2008-12-22 18:06:45

When most people adopt a “scam the system” mentality, it won’t take long before a police state will arise to treat the mass of people like the criminals and lowlifes that they are.

Agree with your basic sentiment, but beware of painting “everyone” with a too-broad brush. There are many here who see what is happening to the nation’s ethics (or lack thereof) and do not like it one bit. Of course the problem is, even those who don’t like the Game must live and play under its rules.

When all the Little People see the People Who Count systematically raping them and their future earnings without consequence, why *should* they feel any compunction to be “moral” and get screwed for doing so? The worst thing to come out of our Ponzi-conomy over the last few decades is the complete erosion in trust for government and authority to protect the working-class/general public –either our political freedoms or our economic interests.

When your country is run by thieves and con-men, what are your odds of surviving –much less prospering– by behaving as an honest person? Why is it “immoral” or irrational to join in on the thievery, when thievery is rewarded and honesty is penalized?

Sadly, thievery = rational self–interest in a klelptocracy.

 
 
 
Comment by stanleyjohnson
2008-12-21 13:25:45

There are many homes still going up in price according to Zillow in 90274. Like 300K up!!!!!
90274 is Palos Verdes Peninsula, CA located between Long Beach and LAX along coast that large hill or mountain.

ZESTIMATE®: $2,250,000 What’s this?
Close
Zestimate
A Zestimate home valuation is Zillow’s estimated market value. It is not an appraisal. Use it as a starting point to determine a home’s value.
Learn more
The Value Range is the high and low estimated market value for which Zillow values a home. The more information, the smaller the range, and the more accurate the Zestimate. See data coverage and accuracy table

* Value Range: $1,575,000 - $2,362,500
* 30-day change: $309,000
* Zestimate updated: 12/19/2008

Last sale and tax info

Sold 06/30/2004:
$2,049,000
2008 Property Tax:
$23,974

Comment by Ann
2008-12-21 14:11:43

Zillow is useless..its like saying this is the blue book value of my car and expecting to get it…

Zillow has never been a good judgement of housing prices and doesn’t take into account the foreclosures in the area..

Still has my old house being priced around $555…the idiot has it listed for $510 and the last model exactly like mine sold for $400k
about 3 months ago. Yet Zillow has not taken that into account.

 
Comment by awaiting wipeout
2008-12-21 14:14:32

Our former McMansion (So Ca) went up $20K in 30 days on Zillow’s Zestimate. BS, I don’t buy it. I calendar the market price weekly from 3 sources.

 
Comment by Big V
2008-12-22 12:19:29

Zillow doesn’t take any “low” prices into account. That’s why the Zestimate is always wrong.

 
 
Comment by vmaxer
2008-12-21 13:40:15

“‘Let me give you the precise advice I give them. I say when the lender contacts you, lead them on the primrose path. Tell them you’re going to give them a payment in the not too distant future. Lead them further, further, further. Ultimately, they will send you a notice of default. Fine. Continue to occupy the home. Pocket the money you’re saving.’”

Barney Frank and the other Bozo’s that are so eager to have the rest of us pay to bail out FB’s, should read this.

 
Comment by SanFranciscoBayAreaGal
2008-12-21 14:11:26

Lost in Utah,

Where the heck are you gal. Haven’t seen you post recently. Hope everything is okay.

Comment by bink
2008-12-21 15:52:46

She posted a notice saying she’d be traveling for a few days. She’ll be back.

Comment by SanFranciscoBayAreaGal
2008-12-21 17:03:35

I thought that was Olympiagal

Comment by bink
2008-12-21 18:47:34

Oh man. I’m confusing Lost with Olympia. I blame a lack of sleep and alcohol.

(Comments wont nest below this level)
 
 
 
Comment by Lost in Utah
2008-12-21 16:15:16

Weird, first time I’ve checked the blog in awhile and I see my name!

Nice to be remembered…although for what, I’m not sure…

I won’t be around much, am on my way to FILM SCHOOL! Montana State U, the best for film in natural history. MFA. If I’m gonna be poor, I’m at least gonna enjoy it!

Leaving Utah after the first of the year, subleasing my house to friends and then returning in June.

Anyone wanting to stay in touch can reach me at info at yellowcatbooks dot com. Also have 2 books coming out in January and am starting a third. The new one is called “Don’t Squat with Yer Spurs On: My Life as a Squatter after the Housing Bubble Burst.”

Take care, everyone, and thanks, Ben.

Comment by dude
2008-12-22 09:08:36

I’m questioning your sanity moving farther north in January!

 
Comment by desertdweller
2008-12-22 10:54:51

Where in MT is Mont U?
Got some friends I want you to say HEY to. in Butte..

Have fun and become the next Spielberg, not of financially savvy, but of filmdom fame!
I would love to go back to school.. Good for you, Chin!

 
 
 
Comment by SanFranciscoBayAreaGal
2008-12-21 14:13:46

auger and Kahuna Bear, haven’t seen your postings for a while. Come back. Kahuna, I miss your cartoons.

 
Comment by az_lender
2008-12-21 15:33:15

Frustrated by the fact that today’s California news-posts don’t say anything about the central coast, I figured I had to make up my own news about it. I can remember that I’d already been posting on HBB for a while when the very first Morro Bay foreclosure showed up on foreclosure.com. Now it shows a dozen of them, plus another eight “pre-foreclosures.” Since I don’t pay any money to foreclosure.com, all I can see of the addresses is the street names, yet this alone is sufficient to show that at least 10 of the 12 listed foreclosures are in the cheap areas north of town, the hillside full of tiny houses that you see when you drive along Highway 1 towards Cayucos. The more expensive stuff is seaward of Highway 1, either in the “heights” of the actual town or along the shoreline of the real Morro Bay (a narrow inlet) or in the beach tract below the present foreclosure area. I guess if the Mortgage Crisis started inland and is creeping seaward, it has only another 200 yards to go. Will that take 200 days or 200 weeks?!

Comment by sm_landlord
2008-12-21 17:03:48

Most of the areas that I am watching are still in the tax lien stage at this point, although one area is showing a lot of “preforeclosures” (whatever those are).

Lots and lots of tax liens. I think some local governments are going to be mortified when they check the tax receipts and discover that many more neighborhoods have largely failed to pay property taxes. There should be an explosion of that between now and when the next payments come due in California. With a lot of the HELOC money cut off, where will the FBs get enough cash to make those payments?

Comment by Leighsong
2008-12-21 17:54:59

May be a repost, but interesting none the less.

IRS to help homeowners refinance or sell homes

Snips

…The plan announced by IRS Commissioner Doug Shulman would speed up a process where financially distressed homeowners may request that a federal tax lien be made secondary to liens by the lending institution that is refinancing or restructuring a loan.

Taxpayers will also be able to ask the IRS to discharge, or remove, its claim to a property in certain circumstances where the property is being sold for less than the amount of the mortgage lien…

He said the program will focus on those people who ordinarily pay their taxes in full but “because of these extraordinary times are getting behind in their tax payments.”

Normally it takes about 30 days to rule on a request for a discharge or subordination of a tax lien, but Shulman said the IRS will work to speed up that process so there would be no delays for people trying to obtain new mortgage loans. The IRS urged people to contact the agency’s Collection Advisory Group early in the home sale or refinancing process.

Full article at:

http://news.yahoo.com/s/ap/20081216/ap_on_go_ca_st_pe/irs_homeowners

Leigh

Comment by pismoclam
2008-12-21 20:41:00

Yes, the IRS will play ball, but the basta–ds at the Franchise Tax Board will say pluck you. Even if their lien gets wiuped out by foreclosure. You’re also lucky if the person you talk to speaks English.Personal experience in Pismo.

(Comments wont nest below this level)
 
 
 
 
Comment by Dave of the North
2008-12-21 19:19:00

“Pretty typical is a one-bedroom, one-bathroom house on East 98th Street in South Los Angeles, near the intersection of the Harbor Freeway and Century Boulevard. Its listing calls the 738-square-foot house ‘great for a growing family.’ The seller wants $85,000 for the house, which sold in 2006 for . . . $365,000.”

One bedroom - great for a growing family? A growing family of what - rats?

Comment by travanx
2008-12-22 00:55:30

Well since that area is in the hood, maybe hoodrats? I am sure a ton of druggies could fit in there.

 
Comment by JCclimber
2008-12-23 15:24:45

Location, location, location.

Intersection of 2 major roads. Nice. Must be real quiet with lots of greenery, I’m sure.

 
 
Comment by Thomas
2008-12-23 15:14:02

“Economist Chris Thornberg said he believes banks also fear that by marking their land portfolios to market value they would be forced to acknowledge they are insolvent.”

And they are being encouraged to continue pretending they’re not insolvent by the various government bailouts, and the hope for more.

Some good honest fellow, as George Washington put it, might well decide the time has come to start forcing banks to recognize losses on their empty foreclosures — by doing to the houses what George’s “good honest fellow” did to British-occupied New York in 1776.

 
Name (required)
E-mail (required - never shown publicly)
URI
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post