Dust in the Windrow

The City of Irvine boasts nearly 20,000 tall Eucalyptus trees forming a series of windbreaks. Today’s owner from 4 Windrow thinks the market winds have changed and people are ready to pay $500K for old condos.

4 WINDROW Irvine, CA 92618 kitchen

Irvine Home Address … 4 WINDROW Irvine, CA 92618
Resale Home Price …… $498,000

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Dust in the wind,
all we are is dust in the wind

Kansas Dust in the Wind[Now] Don’t hang on,
nothing lasts forever but the earth and sky
It slips away,
and all your money won’t another minute buy.

Dust in the wind,
all we are is dust in the wind
Dust in the wind,
everything is dust in the wind.

Dust in the Wind — Kansas

Have you noticed the rows of Eucalyptus trees crossing Irvine in many places? According to Wikimapia:

In Irvine, there are currently about 12,500 eucalyptus trees on private
property (either The Irvine Company land or HOA property) and about
5,700 trees on public property. These are arranged in 38 windrows,
stretching predominantly in northwest-southeast direction, parallel to
Santa Ana Mountains. The trees were originally intended as windbreakers
to protect the citrus groves from the Santa Ana winds blowing from the
mountains. As of today, the windrows have no agricultural use since the
citrus growing industry that gave name to Orange county has left Irvine.http://www.irvinehousingblog.com/wp-content/uploads/2007/06/img_6368.JPG

The
oldest of Irvine’s windrow eucalyptus trees were planted by George
Irvine in the late 1800s. Another round of planting occurred between
1920 and 1940, again for agricultural purposes. As of 2009, the trees
are roughly between 70 and 100 years old. The lifespan of Eucalyptus
globulus, which are native to Australia and had to be imported, ranges
from 50 to 150 years, dependent on growing conditions, soils, and
overall care.

Irvine windrow trees were generally neglected for
their first 30 to 60 years. As agricultural windbreaks, they received
minimal care. When orchards were replaced with row crops, the
eucalyptus trees were considered to block sunlight and reduce harvest.
They were, as a result, routinely damaged from improper pruning
practices. The trees were not provided supplemental irrigation, but
opportunistically took advantage of crop irrigation. As agricultural
fields were converted to urban development, the trees again were often
damaged or encroached upon during grading and construction. Following
development, the trees have been provided a much higher level of care
and maintenance.

The City ordinance prohibits removal of any
eucalyptus trees that are part of the windrows, whether on public or
private property, without an explicit permission from the City.

These Eucalyptus tree windrows are one of the few pre-development features that still exists in Irvine. Just as the trees briefly slow the dust in the wind, people come and go from Irvine houses. In the bigger picture of cosmic time, our moment in these houses is just as ephemeral.

4 WINDROW Irvine, CA 92618 kitchen

Irvine Home Address … 4 WINDROW Irvine, CA 92618

Resale Home Price … $498,000

Income Requirement ……. $102,647
Downpayment Needed … $99,600
20% Down Conventional

Home Purchase Price … $530,000
Home Purchase Date …. 11/29/2004

Net Gain (Loss) ………. $(61,880)
Percent Change ………. -6.0%
Annual Appreciation … -1.2%

Mortgage Interest Rate ………. 4.96%
Monthly Mortgage Payment … $2,129
Monthly Cash Outlays ………… $2,780
Monthly Cost of Ownership … $2,230

Property Details for 4 WINDROW Irvine, CA 92618

Beds 2
Baths 1 full 1 part baths
Size 1,450 sq ft
($343 / sq ft)
Lot Size 2,739 sq ft
Year Built 1977
Days on Market 2
Listing Updated 11/25/2009
MLS Number S597251
Property Type Single Family, Residential
Community Orangetree
Tract Ph

According to the listing agent, this listing may be a pre-foreclosure or short sale.

Best of both worlds… detached homes with low maintenance yards and HOA ammenities … less land but well used so yard and patio are enclosed for privacy while grassy front yard is rolling lawn maintained by HOA. Living room with vaulted cathedral ceilings has double patio doors overlooking the rose garden and yard. Spacious kitchen has remodeled Euro-style cabinets with big island cooking area and breakfast bar. Direct access to laundry in garage and dining room/family kitchen with corner windows onto yard. Master suite is the only room perched above overlooking living room and corner windows over the yard. 2 Bedrooms down and next to bath. One has double door entry for use as work at home office or den or library.

Worst of both worlds… small and expensive.

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Is this what affordability in Irvine is about? Should a family making $100K a year with $100K in savings be content to live here? Is every other buyer looking at nicer properties making more money and have more savings? I find it incomprehensible that a small, old condo in a spotty neighborhood (by Irvine standards) should cost a half-million dollars.

53 thoughts on “Dust in the Windrow”

  1. Another tidbit…throughout California, eucalyptus trees were planted along railroad rights of way. They were intended to provide timber for the railroad ties, but then it was found that they didn’t make for great ties.

    If you drive up US-101 to northern california or down historic US-101 down to San Diego (through oceanside, del mar, encinitas, etc…) you’ll notice eucalyptus trees running near the railroad.

    Usually in CA, it’ll be a row of eucalyptus trees, an old railroad, and an old US highway route all together.

  2. 1,450 sq ft and three bedrooms (not two; the listing has been corrected) is not that small. Perfectly acceptable for a family of four, IMHO (couple and two kids); great for a family of three or less. Of course, you get basically no yard, although the HOA parks and pool and stuff make up for that, in theory.

    Now, should a family making $100k settle for something like this? Probably not, but if they want to live in Irvine, they have to-the robocomps say it’s worth the half million, give or take fifty grand. They can live elsewhere if they want more space.

    1. As you have noted, in Riverside, you can get much more that is much nicer, the substitution effect will start to kick in. For this to be a half-million dollar home, you would think, nothing comparable would be available 20 minutes away in Corona for 30% less. That isn’t the case. Certainly the readers here are biased toward paying for OC, and that is why there is a premium, but the premium is determined by buyers on the fringe who may not value OC as high. If marginal buyers substitute out of the area — which has been Riverside County’s primary mechanism of growth — then prices will stabilize in Riverside County as the volume picks up, and prices will continue to be weak and volumes low here in OC.

    2. Why pay anywhere close to this price when the 20% off coupon (called ARM Resets) in on its way to you now?

      Half a mil for a condo? So you can have BBQs in your own backyar….oh, wait, no. So you can have a garden your own yard…oops, no.

      Oh, I know, so you can sit in the “Association” front patch of grass that your neighbors use as their pet potty. Yeah, that’s worth half a mil!

      1. Not technically a condo-no common walls. I’d call it a “townhouse”, since there’s no yard or close to no yard.

        Still a very mediocre place. But that’s what you get if you want to live in Irvine and aren’t completely made of money. The low crime and good rated schools are big factors to the whole “Irvine Experience”-I think the high price for what you get is more than just the commute. For half a million, you can get a real house with a real yard, 50% more square footage, and low or no HOA fees and Mello Roos in Santa Ana, right next door to Irvine. Good example (this one is even close to Irvine):

        http://www.redfin.com/CA/Santa-Ana/3729-S-Woodland-Pl-92707/home/4525584

        For Sale (MLS-listed)
        $485,000
        3729 South WOODLAND Pl
        Santa Ana, CA 92707
        Beds: 4
        Baths: 2.25
        Sq. Ft.: 2,190
        $/Sq. Ft.: $221
        Lot Size: 4,800 Sq. Ft.
        Property Type: Residential, Single Family
        Style: Two Level, Traditional
        Year Built: 1971
        Community: Santa Ana South of First
        County: Orange
        MLS#: U9004140
        Source: SoCalMLS
        Status: Active This listing is for sale and the sellers are accepting offers.
        On Redfin: 79 days

        There’s a bunch of BS short sales that are even larger, such as this one:

        http://www.redfin.com/CA/Santa-Ana/2101-Louise-St-92706/home/4471978

        For Sale (MLS-listed)
        $499,000
        2101 LOUISE St
        Santa Ana, CA 92706
        Beds: 4
        Baths: 2.5
        Sq. Ft.: 3,850
        $/Sq. Ft.: $130
        Lot Size: 8,839 Sq. Ft.
        Property Type: Residential, Single Family
        Style: Two Level
        Year Built: 1960
        Community: Santa Ana North of First
        County: Orange
        MLS#: C09124387
        Source: MRMLS
        Status: Active This listing is for sale and the sellers are accepting offers.
        On Redfin: 10 days

        Of course, that one will almost certainly sell for more than a half million (if the short sale actually goes through).

    3. This house is over-priced – Irvine or not Irvine. The comps in the last 12 months are between about $375k and $450k. What makes this seller think this is worth $500k is a mystery to me. Some sellers and/or their agents feel so embolded at teh first uptick in home prices, and back to WTF pricing. THey WILL lower the price or we’ll see if they find a buyer.

      1. Actuallly similar units (size and area) sold for between $350K and $499k in during this downturn – which is a big disparity. I still think that only a naïve buyer will pay $500k for this house, detached condo.. whatever.

  3. Thanks for the horticultural lesson. My husband and I raised 2 kids in a 3/2 condo, 1200sqft. But we bought way back in ’93. Today we couldn’t afford to buy our condo. Well, we could, but wouldn’t buy it. If I were looking I’d go to Mission Viejo or Lake Forest. If I didn’t have to work (commute) I’d go down to Dana Point or San Clemente. Or even up to the Long Beach area for the real authentic old places with some character.

    1. Yikes–you want to see a sticky, messed up housing market? Spend an afternoon on Redfin in the Long Beach zip codes. Hubby and I are waiting to buy there and it’s insane. Anything with character in a livable neighborhood is still insanely priced and even in the best parts, the schools are pretty sub-par. But when we can get in, we’ll take the character of Long Beach over the staleness of OC any day (no offense, just a personal preference).

  4. People in your community have been made to believe that this is affordability.

    What has really been sold to your people is a country club membership, an extremely expensive membership. The only difference is that your average Joe gets in using someone elses money and a mindset of musical chair groupthink that there is a line of eager beavers waiting to assume all pledges of debt from the prior generation.

    People know that the houses are not worth that kind of money so they make up excuses to rationalize away their doubts. We see all kinds of excuses being paraded around like:

    1.) Irvine weather reports
    2.) Irvine masterbatory architectural planning and overthetop design
    3.) Irvine crime statistics
    4.) My personal favorite – Irvine Schools! Oh yes! We must do it for the sake of the children Ah Guchi Guchi Goo! Yes, adults using childworship as a substitute for personal responsibility and prudent financial planning. Just like politicians out there justifying everything as beneficial for children.

    It’s just plain marketing, pure and simple. Nothing wrong with any of these things on the surface. It’s only when you think, does it become uncomfortable. The money being ‘paid’ by these folks for their country club dues is has no hope of ever being paid back. It’s all part of the circle-jerk Orwellian mindset that today’s buyer must adopt by believing that money can be borrowed into perpetuity to pay for past debts.

    If the majority of people in Irvine owned their homes, and I mean OWN – not OWE, I would have no problem with it. The problem is the massive amount of debt you people owe. Holy Sh*t you people owe so much money and we all know that it will never be paid in full.

    Some of the dumber crowd living there like to pull out the work hard canard – social Darwinism. Claims that Irvine is for hard workers who are rewarded for their service. These folks believe that debt is wealth and a FICO score is their rank in society. Being granted a 500K mortgage is their reward for being so successful – a bigger hamster wheel for them to run on in front of all the other lower class hamsters.

    When credit dries up and the government is forced to raise interest rates, it is all going to come crashing down fast and hard. All of the marketing BS that grooms your community will not matter once bankers lose faith in your hamster’s ability to keep the wheel spinning.

    In the meantime, they will go ahead and let people throw money away in down payments.

    1. Oy Vey… having a bad day, huh?

      (1) Irvine weather… pretty nice. Indeed within five miles of the ocean the weather is really nice. If you want to see a weather premium go check out Manhattan Beach…

      (2) Planning… well it does work. The City is fairly large but you can get around it easily and we are not overwhelmed by the rush hour traffic on the 405, 5 and 55. Again, if you want to see a place with sky high values at rush hour try to take Sepulveda Blvd on Manhattan Beach during rush hour. It’s a nightmare, and their prices make Irvine look like where _their_ maids live.

      (3) Crime statistics. I think this is a sign of a high uniform socio-economic make up of the city. I can leave my garage door opened all day, with the keys in the cars and nothing will get stolen. I don’t need an alarm in my house (although people are sold into them). It’s not the IPD, which IMHO are a bunch of fascists, but the fact that we’re reasonably far away LA county.

      (4) Schools… I know you don’t have kids, but schools are an important factor when you live in a place. Look, one of my vendors just sold his condo in Playa del Rey because that’s in the LAUSD and the schools suck. Even though he pays more in taxes that we do, most of his neighbors send their kids to private school out of necessity. That’s at least $15K a year, non tax deductible and on top of the taxes he sends the LAUSD!! So, having good schools around does help tremendously.

      1. You’re quite naive if you think nothing will get stolen if you leave your cars unlocked. There’s usually one or two “break-ins” a year in my Turtle Rock neighborhood (I use that term loosely because it’s usually a laptop or cellphone left in plain sight in an unlocked car that gets stolen. Fortunately the police are pretty good and things get returned. It almost always turns out that the thefts were done by local teenagers looking for pot or x-box money.

        1. Well, I’ve lived in my house in TR since ’87 and I haven’t had anything stolen.

          But, of course, I don’t leave laptops laying around.

          Although, my son’s garage band have the stuff in the garage (guitars, keyboard, drums, amps, speakers, etc…).

    2. What the hell David? You think you know our city. Sorry, you don’t. So please stop with your attacks on the character of the people who live here. Irvine is not the only city in the country with real estate. We have friends in LA who send kids to private schools because the LA schools are terrible. We have an amazing school district in Irvine. Both my kids went from K to 12th grade here. If you ever have a kid you will be concerned about the schools.

      1. Sue, it’s a well known fact that AZ thinks Irvine is a bloated overpriced city that’s not even worth a dime over Detroit.

        Personally, I like Irvine and have lived there from ’01 until ’04. If I were to relocate back to the States, Irvine would be both my wife and my first choice mainly because of my kid(s). There’s a premium that you would pay for a city like Irvine (as well as Manhattan, NYC, San Francisco, etc) that most folks just don’t understand.

        However, I’d be in the same camp as AZ in regards to both SF and Manhattan as I don’t understand and would not pay a dime to live in both places. Perhaps being a father makes a huge difference here as I would probably pay to live in either SF or Manhattan as a single person….I dunno…whatever float people’s boats.

    3. “4.) My personal favorite – Irvine Schools! Oh yes! We must do it for the sake of the children Ah Guchi Guchi Goo! Yes, adults using childworship as a substitute for personal responsibility and prudent financial planning. Just like politicians out there justifying everything as beneficial for children.”

      WTF? You obviously don’t have kids. Should people with kids not care about the quality of the schools? Who do you figure will be paying taxes when you retire?

      1. WTF? You obviously don’t have kids.

        So what? What does that have to do with financial responsibility?

        Should people with kids not care about the quality of the schools?

        That’s not what I said. I stated that parents should not exercise poor financial planning using their children’s “education” as an excuse.

        Who do you figure will be paying taxes when you retire?

        Certainly not the kids who grow up to be highly educated corporate executives.

    4. Similar school situation in Silicon Valley, where a 1000 sq condo in Cupertino sold for $1million – all based on school access. (Unless being within biking or walking distance of Apple’s HQ is important to you.) 3 miles and one school district away, prices are MUCH lower.

      If you have kids, it’s about math; you might be able to send one kid to private school on a $100K income, but at $12-22K a year, with more kids it makes more sense to live in a place where you can send them locally.

      That said, you can have very fine schools with a lot of brown-complected (hispanic, that is, not indian) kids in them, and you’ll still get a lot of white flight, which helps both the private education economy and the house prices in Irvine and Cupertino.

      The whole school thing is partly economic, and partly racist/classist. Either way, it results in higher RE prices for good school districts – which is why we should all move to Virginia and Vermont, where the schools are the best in the country!

      1. The whole school thing is partly economic, and partly racist/classist.

        I wasn’t going to go there. The last time I used the “Y word” (Yuppie) – it ignited a firestorm.

        1. AZ, Asians play a large factor on why Calfornia cities such as Cupertino and Irvine are priced as such. Noticed that I used the word **California** above.

          For the past several decades, California has transformed into a multi-cultural state. With that comes a premium for folks who happens to migrate/immigrate from other countries to pay a higher price to be in a location with better school district than some of the other crappy locations such as Santa Ana, Compton, etc. For Asians, education is their number 1 concern when it comes to family raising. If that’s not their number 1 concern, then you wouldn’t see Asians score higher in just about everything along with Whites (while Latinos, AAs and other races falling behind). The Asians that are lucky enough to buy in California are mostly the top of the eschelon/pinnacle in their respective countries. Thus, they have the money/wealth to bid up the housing prices in locations where school district scores (API) are high.

          Norcal’s comment on Vermont and Virginia, frankly, would work very well for family with blond hair and blue eyes. Unfortunately, it won’t cut it with Asians. I’m pretty sure you know the Mason-Dixon line and its history (although Vermont is above that) if you get my drift.

  5. For those that think interest rates will be low forever:

    Fed’s Sack: MBS Purchases Lowered Mortgage Rates by 100 bps

    “Brian Sack, who runs the markets group of the Federal Reserve Bank of New York, spoke to the Money Marketeers of New York University …

    Mr. Sack’s group estimates that the Fed’s purchases of $300 billion in long-term Treasury securities earlier this year helped to push yields on 10-year Treasury notes down by about half a percentage point. … Purchases of mortgage backed securities, he says, pushed those rates down by a full percentage point.”

    If he is right, interest rates should move to 6% next year as they phase out the Federal Reserve MBS purchase program. That represents an effective increase in interest rates of 25%, and it will reduce the borrowing power by about 12%. Prices should drop to reflect the reduced borrowing power — unless you think wages will be a lot higher next year….

      1. I expect that the Fed will wind up the MBS program as announced. For the right yields non-Fed MBS has a chance to recover (not to bubble proportions, however)and lower asset prices make it easier to find the right yield by lowering asset risk. Lower prices will more effectively cure the housing markets than the MBS purchase program, HAMP and the buyers tax credit program combined. Get it? Lower prices have helped and still lower prices will help even more.

  6. A very interesting article on the possible future rate of foreclosures:

    Seeking Alpha

    I’d like to see the continuing upward trend in defaults and foreclosures plotted against maximum DTI’s allowed by the GSEs.

  7. Interesting that Irvine should consider Eucalyptus trees protected. It’s not like they are Oaks, Elms or Pines. Personally, I wouldn’t want a Eucalyptus on my property. They are very dirty trees with lots of droppings to pick up. Their roots tear up sidewalks. They are prone to “sudden limb failure” on very hot, dry days because they grow too fast. Every year you read about someone who was killed when a Eucalyptus limb fell on him/her. I bet they were only planted as windrows because they are fast growing are require little maintenance.

    Wow, Irvine really is soo special.

    1. Protect Eucalyptus trees are like giving special protection to African snails, Asian mussels, feral cats, etc. They are not native and grow like weeds. The Eucalptus trees are also great fire hazzards. Lots of oil, easy to catch fire and burns very hot. Great firewood, poor structual strength. BTW, the fallen leafs are great fire starters. Have an apartment and needed to put out fires from them, smoker butts were igniting the leafs from a neighboring parking lot.

      Oak trees, Maples, and any fruit tree would be much better than Eucalyptus trees. Eucalyptus trees should of only been used as a temporary wind breaker and cut down when more fire resistant trees take hold.

  8. Sue In Irvine –

    You are diverting my entire argument and creating a straw dog by insinuating that I care nothing about schools.

    On the contrary. My attack was against those who justify poor financial decisions like 500K mortgages using children as an excuse. It’s a classic manipulation of human emotion used against you by realtors and existing homeowners.

    Politicians use children to manipulate the public all the time. It is a well known marketing tool.

    I think it is great that you have nice schools. I think it is unacceptable for an adult to enter into a Ponzi scheme mortgage for any reason. And that is what you have in Irvine right now – a bunch of participants in a Ponzi scheme peddled by a corporation that makes a fortune off its customer’s juvenile view of the world.

    There are good schools in any city – come on.

    1. David

      Real Estate is a Ponzi schema only for flippers and the marketing myths by the RE “sales machine”. In this, Irvine is no different that any other place in the US. There are degrees of variance (again, took a look at Manhattan Beach) and ownership (The Irvine Co. is not entirely unique. In most cases, it is replaced by the local politicos).

      I think that for homeowners and investors, residential real estate is a very bad Ponzi schema.

      And, anyone who thinks otherwise is a fool.

      Of course, IMHO, marketing and politics is run by pretty smart crooks to dupe dumb fools.

    2. Oh, missed the last part. You will notice that wherever you have a good school, property values reflect that.

      What makes Irvine desireable by us parents is not that we have individual good schools, but that the ENTIRE SCHOOL SYSTEM is very good.

      For an example of how a fucked up school district can sabotage a good school check out the LAUSD and the charter schools in LA. When the local school district is crap and ran by a bunch of political and union thugs more intent in their power gain than in teaching the kids then you have absolutely no garantee going forward that your local “excellent” school will stay that way.

      Don’t make the argument that a good school DISTRICT should not help home values because that’s flat out wrong, at least the way schools are run in California.

      1. I completely understand the appeal of a good school district. I went to a nice school.

        My point is strictly financial prudence. The same guy who participates in the Ponzi scheme by taking out a 500K mortgage is exercising poor judgement. The school district is independent of this poor financial decision.

        If it were purely about “the children” then he could just as easily rent in the same area without speculating on real-estate.

        1. Ay, we’re debating apples and oranges.

          I’ve already stated that using your own home as an “investment” is stupid. When you take into account wear and tear you end up not making that much money.

          Now then, for those who see their own home not as an investment but as a place to live, paying a bit more for a good school district makes lots of sense.

          Does this justify a 500K townhouse? Hell, I don’t know. It does sound high, OTOH prices are much higher in Manhattan Beach and the quality of life up there is nowhere what is is here.

          1. I agree with you. I would pay more to live near a good school district too. However, I would pay higher rent before I would take out a 500K mortgage.

            I think many house buyers in Irvine were actually just speculators who happened to live in the houses they bought and used things like “the children’s education” as an excuse to rationalize their lousy judgement.

            I was not saying that good school districts are not worth paying more for. I was strictly saying that using the school district as an excuse for taking out a stinky mortgage does not wash with me when I hear it.

  9. JL –

    That does not take Bulls*it to a far enough extreme these days.

    The IrvineCompany could instead tell the taxman that Irvine is now a non-profit Koala Bear refuge whose mission is to raise awareness and prevent Koala genocide in other parts of the world.

    Tell the house buyers that 50% of each dollar they spend goes to saving cuddly little bears. Turn house buying debtors into progressive social activists. Let them put bumper stickers on their cars to let everyone else know what philanthropists they are.

    That is how you sell some nice stinky BS to the bubble dwellers.

  10. I agree with Eat That!

    I highly doubt interest rates will go up next year. I think that this whole ‘Phasing Out’ the purchase of toxic mortgages is just another one of those programs that will be extended when the due date comes – just like how they extended the first time buyer scam.

    Be ready for headlines like: ‘Congress Debates Whether or Not to Extend Program’ coinciding with a media blitz by lobbyist agents telling us the world will end if we do not continue buying stinky mortgages.

    This is how the new administration lies to us. It sets firm dates and then shifts the goal post when the deadline arrives, blaming things that nobody could have forseen. This is how the remainder of it is going to play out.

    1. Huh? The Congress has nothing to do with the MBS purchase program. I agree with you and Eat That that their will be some political pressures to extend it – I just think the Fed won’t do it.

  11. QueenCity –

    You are right – I mis-spoke (had TARP in mind) but I still say that the incentive to extend the program will be their short term fix. FDIC is going to need a bailout, FHA is going to become insolvant. The government will be in fire fighting mode for the entire year and increased interest rates will not be acceptable. Who else is going to buy the junk?

  12. Bunning Statement on Bernanke: ‘You Are the Definition of a Moral Hazard’

    “…you have decided that just about every large bank, investment bank, insurance company, and even some industrial companies are too big to fail. Rather than making management, shareholders, and debt holders feel the consequences of their risk-taking, you bailed them out. In short, you are the definition of moral hazard.”

    If you read the entire statement, this Bunning is a very clear thinker. I was expecting to read a typical attack-dog screed; instead, it was a thoughtful and truth-laden rebuke. Good stuff.

  13. Why the Loan-Modification Program Isn’t Working

    “The first three months of a mortgage rewrite are something of a probation period— and very few homeowners are making it out of that trial. More than 650,000 borrowers have been placed in trial modifications, but as of September, fewer than 2,000 had become permanent.

    The major difficulty now is the weak economy and rising joblessness. Under the U.S. government’s plan, a modified loan payment must not account for more than 31% of a family’s income. With unemployment north of 10%, in a growing number of cases, the mortgage isn’t the problem — the lack of a paycheck is. “It increasingly appears that HAMP is targeted at the housing crisis as it existed six months ago, rather than as it exists right now,” concluded the Congressional Oversight Panel, a group charged with evaluating the program, in an October report.

    Another is the changing behavior of people who owe more on their mortgage than their house is worth. According to a recent analysis by the credit bureau Experian and the consultancy Oliver Wyman, nearly 600,000 borrowers might have intentionally defaulted on their mortgages in 2008, twice as many as the year before. The social norm that in previous eras would have prevented people from simply walking away from their homes seems to be eroding — but HAMP puts a low priority on reducing the overall amount a person owes. In fact, among permanent modifications, the average loan amount as compared to home price (the so-called loan-to-value ratio) has increased.

    The other big gap in HAMP is the way it deals with— or fails to deal with — people who wouldn’t be in a position to keep their houses even with a modification. Emily Jones, a manager at Neighborhood Housing Services in Boise, Idaho, says about half of all people who walk into her housing-counseling agency fall into that camp. “The goal isn’t to keep the home in every situation,” she says. “The goal is to avoid foreclosure, and in a lot of situations, it’s not in the client’s best interest to try to keep the home and only postpone the inevitable.””

    1. The reason it is not working is because these sheeple equate “Loan Modification” with “Principal Reduction“.

      When all the bank wants to go give them is a temporary interest rate or payment reduction – what is a spoiled American with an entitlement complex supposed to do?

      Why should they have to pay back all the money that they “borrowed”? The house was supposed to go up in value! It’s not their fault! AZDavidPhx should have to pay back all that money.

      1. AZDavidPhx, You’re way too wound up. You need to relax before you burst a blood vessel in your forehead.

        1. But AZDave is right on target here.

          The HAMP program is a complete government failure; rewards the iresponsible on the backs of the responsible.

          A large % can’t prove their income. Some don’t even understand how to sign a document or even read simple instructions… They should pull the plug, and start foreclosing… Renting is really not that bad.

  14. Thanks for the info on the eucalypti, one of my favorite features of Irvine. Sad to hear that they’re approaching end-of-life.

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