California is bailing out HELOC abusers with mortgage aid

in an outrageous move, the California Housing Finance Agency is now offering mortgage relief to HELOC abusers.

Irvine Home Address … 50 BURLINGAME Irvine, CA 92602

Resale Home Price …… $549,900

I have no regrets

There's nothing to forget

All the pain was worth it

Not running from the past

I tried to do what's best

I know that I deserve it

Madonna — I Deserve It

The California Housing Finance Agency can't give away the cash allocated to needy borrowers — which isn't surprising considering responsible borrowers are not losing their homes. In fact, as today's post demonstrates, responsible homeowners are paying the price of irresponsible ones. So in an effort to keep their budgets, they are expanding the free-money offering to include HELOC abusers.

How do you like your tax money bailing out spendthrifts?

Mortgage aid offered to those who cashed out equity

— San Francisco Chronicle — Wednesday, April 6, 2011

California has decided that people who stripped equity out of their homes deserve taxpayer help after all.

The California Housing Finance Agency said Tuesday that people will no longer be excluded from three of the four Keep Your Home California programs just because they took out a home equity line of credit or did a cash-out refinance.

Keep Your Home California is a state-run program getting $2 billion from the U.S. Treasury's Hardest Hit Fund. It is designed to help low- and moderate-income people who are unemployed or owe more than their home is worth pay their mortgage.

There are four individual programs under the umbrella program. Eligible homeowners can get up to $50,000 in assistance from one or more of the four programs combined.

When Keep Your Home started taking applications in early February, it barred people from all four programs if they had tapped the equity in their homes.

“We knew we didn't have enough money to serve everyone,” says Diane Richardson, CalHFA's director of legislation. “We wanted to help people who were in some kind of trouble through no fault of their own, who weren't upside down because they had taken out equity.

And those are the only people who should be helped — if we are going to help anyone which is a bad idea laden with moral hazard. Forgiving HELOC borrowing through direct government assistance is no different than welfare for home owners — a direct payment to loan owners for doing something stupid and irresponsible. What would encourage those borrowers to be prudent next time?

Of the roughly 28,000 people who have called the program seeking assistance, about 10,000 were found ineligible. Of those, about 40 percent or 4,000 were turned down because they had taken equity out of their homes.

CalHFA has now decided that people who can't pay their mortgage because they are unemployed or suffered a financial hardship shouldn't be penalized just because they robbed their homes of equity.

CalHFA is stupid. Some bureaucrat made a policy change without thinking through the ramifications. Hopefully, stories like this one will change their minds.

Under the new rules, people who took equity out of their homes will be eligible for the unemployment mortgage assistance, mortgage reinstatement assistance and transition assistance programs if they meet all the other program requirements.

These same programs have also been expanded to include mortgages that were originated after Jan. 1, 2009.

The program originally excluded mortgages originated after that date because they also are excluded under the federal Home Affordable Modification Program. “We wanted to be consistent with HAMP,” Richardson says.

But CalHFA found that a lot of homeowners in trouble had refinanced after that date and it did not want to exclude them.

WTF? Why would we want to bail out people who were abusing their HELOCs after the property crash? Have we learned nothing? Are houses and HELOCs truly free money?

Homeowners who took cash out of their homes or whose mortgage was originated after Jan. 1, 2009, remain ineligible for the fourth program, which offers principal reduction.

I feel much better knowing they aren't getting principal reductions… Not.

To qualify for any of the four programs, homeowners must fall below certain income limits ($119,300 in San Francisco, San Mateo and Marin counties; $108,350 in Contra Costa and Alameda counties).

OMG! We a offering mortgage relief to borrowers making over $100,000 a year? Are we subsidizing the payments on their leased Mercedes as well?

They also must be living in the home and cannot own a second home, but there are no other asset limits. Applicants will not be asked how they spent any cash they took out of their homes or how much they have in bank or investment accounts.

For other requirements, see www.keepyourhomecalifornia.org/eligibility.htm.

It's comforting to know the borrowers are not required to lie in order to obtain their free money.

Richardson says that “a couple hundred” people have received help from the program and that about 2,000 more are in the final stage of confirming their eligibility.

CalHFA is contacting people who were previously disqualified but would qualify under the new rules. These homeowners can also contact the program at (888) 954-5337.

Some people have been turned down because their loan servicer is not participating in one or more of the programs.

All of the major private-sector servicers – Bank of America, Wells Fargo, Chase, CitiMortgage and GMAC – are participating in the unemployment mortgage assistance plan, which makes mortgage payments on behalf of unemployed homeowners in imminent danger of foreclosure. The plan will pay 100 percent of the borrower's payment, up to $3,000 a month, for six months.

Loan owners get special payment assistance, but renters get kicked to the curb if they miss a couple of rent payments. Another outrage we accept because lenders need money funneled to them.

None of those servicers are participating in the principal reduction program, but BofA has agreed to join a pilot program that will start in a few weeks, Richardson says.

This program will provide capital to reduce the principal balances of qualifying borrowers who are underwater, or owe more than their homes are worth. For every dollar the program contributes, BofA will also reduce the borrower's principal by a dollar, Richardson says.

For borrowers who have received no other assistance from Keep Your Home California, this program could reduce their balance by up to $100,000 – $50,000 from the program and $50,000 from BofA.

However, the program cannot reduce loan balances to less than 115 percent of the home's market value and it won't reduce the borrower's debt-to-income ratio to less than 31 percent, Richardson says.

There are limits to the free money.

California is one of 18 states receiving money from the Hardest Hit Fund. Each state could set up its own program, within limits. Many never prevented homeowners from receiving assistance because they had withdrawn equity from their homes. However, many also have much less generous payouts than California.

To learn more, go to www.keepyourhomecalifornia.org, then click on Programs.

Net Worth runs Tuesdays, Thursdays and Sundays. E-mail Kathleen Pender at kpender@sfchronicle.com.

Isn't this government sanctioned theft?

When you follow the money, a transfer of wealth through tax dollars to forgive the indebtedness of individuals is theft from the collective to benefit the few.

A borrower and a lender agreed to a transaction. When borrower fails to meet the terms of the note, a lender can force an auction for sale of the collateral to recover their capital. The end. If government is asked to step in to the borrower's shoes and repay the loan, a loan that is not already government insured, then taxpayers are giving money to banks through the borrower.

Both parties to the transaction benefit from the government assistance. Lenders get their interest payments covered, or an increased recovery on their bad loan, and borrowers get to continue using the property they cannot afford. The only loser is the taxpayers, nearly 40% of which are renters, who are asked to pay the burden of supporting the two parties who entered into a bad private contract.

It looks like theft. It feels like theft. Isn't that theft?

Some may argue that all government taxation and spending is theft. But all government is merely organized thuggery. The direct transfer of wealth from one group to another is theft, particularly when their is no collective good obtained from the transfer. Proponents of the mortgage theft being perpetrated today would argue that rescuing the banks was necessary for society and keeping squatters in homes benefits neighborhoods. I think that is bullshit.

Bear rally buyer

The owner of today's featured property is paying the price of their poor timing. This property once sold for $745,000 back on 6/6/2006. The current owner bought this “bargain” as REO paying $550,000 on 11/29/2007. He borrowed $440,000 and put $110,000 down, a good chunk of which he is about to lose.

Despite getting it for $200,000 off it's peak price, the property is being offered for its purchase price, and with commissions, the owner is going to take a loss. Apparently, Irvine real estate was not the best place to park his money over the last 3 years. He should have read the IHB.

Irvine House Address … 50 BURLINGAME Irvine, CA 92602

Resale House Price …… $549,900

House Purchase Price … $550,000

House Purchase Date …. 11/29/2007

Net Gain (Loss) ………. ($33,094)

Percent Change ………. -6.0%

Annual Appreciation … 0.0%

Cost of House Ownership

————————————————-

$549,900 ………. Asking Price

$109,980 ………. 20% Down Conventional

4.87% …………… Mortgage Interest Rate

$439,920 ………. 30-Year Mortgage

$99,718 ………. Income Requirement

$2,327 ………. Monthly Mortgage Payment

$477 ………. Property Tax (@1.04%)

$100 ………. Special Taxes and Levies (Mello Roos)

$115 ………. Homeowners Insurance (@ 0.25%)

$0 ………. Private Mortgage Insurance

$348 ………. Homeowners Association Fees

============================================

$3,366 ………. Monthly Cash Outlays

-$396 ………. Tax Savings (% of Interest and Property Tax)

-$541 ………. Equity Hidden in Payment (Amortization)

$206 ………. Lost Income to Down Payment (net of taxes)

$89 ………. Maintenance and Replacement Reserves

============================================

$2,723 ………. Monthly Cost of Ownership

Cash Acquisition Demands

——————————————————————————

$5,499 ………. Furnishing and Move In @1%

$5,499 ………. Closing Costs @1%

$4,399 ………… Interest Points @1% of Loan

$109,980 ………. Down Payment

============================================

$125,377 ………. Total Cash Costs

$41,700 ………… Emergency Cash Reserves

============================================

$167,077 ………. Total Savings Needed

Property Details for 50 BURLINGAME Irvine, CA 92602

——————————————————————————

Beds: 3

Baths: 3

Sq. Ft.: 1821

$302/SF

Property Type: Residential, Condominium

Style: 3+ Levels, Contemporary

View: Courtyard, Panoramic, Peek-A-Boo, Trees/Woods

Year Built: 2001

Community: Northpark

County: Orange

MLS#: P776324

Source: SoCalMLS

Status: Active

——————————————————————————

Bring your checkbook & RUN DON'T WALK! Equity Seller * PRICED 2 STEAL! * DROP-DEAD GORGEOUS w/ Walls of Windows & DRAMATIC Open Layout offering ARCHITECURAL FLAIR, Designer Paint, Elegant Shutters, & Stylish Decor! SURPASSES Every Home in this Price Range! IDEAL FOR ENTERTAINING Inviting Family Room w/ IMPRESSIVE Fireplace & Soaring Ceilings opens to GENEROUS Dining & BRIGHT Charming Kitchen. * SHOWS LIKE A MODEL! * Retreat upstairs to SPACIOUS Master w/ Romantic VIEWS, Walk-in Closet & Relaxing SPA-LIKE BATH w/ Large Soaking Tub. Spacious Secondary Bedrooms, including Generous Main-Floor Suite, offer PRIVACY & CONVENIENCE for Family, Guests or Roommates. Enjoy Summer BBQ's in Spacious Tree-Lined Patio. Convenient Indoor Laundry & Direct Access Garage w/ Built-in Storage make this HIGHLY DESIRABLE floor plan a * MUST SEE! * RESORT-STYLE Amenities include 5 Pools & Spas, Tennis & Sports Courts, Clubhouse, Parks & Tot Lots, & Meandering Walking Trails WELCOME HOME! ACT FAST! Only ONE at this Price!

ARCHITECURAL?

78 thoughts on “California is bailing out HELOC abusers with mortgage aid

  1. Partyboy

    “OMG! We a offering mortgage relief to borrowers making over $100,000 a year? Are we subsidizing the payments on their leased Mercedes as well?”

    Why should someone’s income be a determining factor for eligibility? Don’t get me wrong, I am against all such programs. But if income is going to be an entry condition, those who make enough to pay income taxes should be the ones ALLOWED to participate, not the other way around. Excluding those who fund the program from actually participating in it is bullshit.

    If that’s unreasonable, do away with the progressive tax system. I F-ing hate the way this country continues to penalize success and reward laziness and/or ineptitude. Low income people get the majority of the benefits with none of the burden.

    Make your lot in life and deal with it. If you don’t like where you are in life, do something about it. Stop waiting for someone else to bail you out.

    “Opportunity is missed by most people because it is dressed in overalls and looks like work”
    – Thomas A. Edison

    1. Mat Masters

      First why do you draw an arbitrary line on income taxes when its a know fact everyone pays sales tax, gasoline tax, payroll tax, fica, ect. So who really doesnt pay income tax (no fed or state). Even earning $24k per year , a married couple with two kids still pays taxes. How much should they Pay to fair in your eyes? Just a much as some one who earns four times as much ($100K). Really?

      Stop crying like a little baby that America penalizes success and rewards laziness. Why do people (who have the same complaint) even try to argue that earning $100k is a burden. What a bellyacher. Oh my life so bad, woes me …. All those “other people” get welfare and “free lunches” at school. I wish i was on welfare and got free lunches. The real lazy one was you not thinking through your thought to logical conclusion you are better off not on welfare.

      1. Perspective

        You’re singing from the Democrat hymn book!

        You can make these arguments, but then you cannot argue that we should tax cigarettes or junk food in order to discourage the activity. Either you are rewarding/punishing through the tax code, or you are not. Make a decision.

        1. Mat Masters

          I dont have allegiance to any to either party, but to accuse some one belonging to a party, because of their views, merely reveals your allegiance.

          BTW this a lazy response. Ignore all points, offer no rebuttal, label the writer as some one who can easily dismissed (in you eyes) and offer up some strawman argument about a pack of smokes and a mountain dew. WTF?

          Do you really taxes as punishment for living in America? Isnt paying your taxes one of the most patriotic act you can do? Help America survive and prosper for the next generation.

          Another belly acher move along… go take some tums for your tummy….

          1. Perspective

            I thought I made a point? Hmm. The point is, taxes do reward and encourage behavior. Taxes also discourage and punish behavior. That’s a point simple enough for you to understand, I’d think?

            And your rhetoric and vitriol is probably better served splashed on an NPR or KPCC blog. This is a blog about Irvine-area housing prices. It is completely fair to complain about the fact that tax dollars are supporting housing prices to the detriment of renters.

          2. Mat Masters

            Again I never said tax code doesnt influence behavior. So I not sure what your talking about.

            As for the IHB, my response was to the first poster, who was complaining about taxes.

            Why cant I post a rebuttal to someones rant on a message board. Who are you to tell me to leave.

            I have a suggestion, either respond to my points in an intelligent fashion or dont read and respond to them. If you do respond please explain which points are “rhetoric and vitriol”. I

          3. Perspective

            Okay I’ll ignore your comments then, but don’t question someone’s intelligence and then repeatedly misspell words and use the wrong words in your comment. Slightly contradictory and embarrassing…

          4. Mat masters

            Ok mister spelling police, sorry I didnt spend more ttime proof reading my all important IHB post. Surly someone your high IQ could understand my point, which was you NEVER answered any of my posts, just tried to call me names, told me to leave, now your saying I’m of low intelligence, while ignoring the fact you offer no rebuttal. yeah who is the smart one?

            It must be embarrassing for you to have no rebuttal other than your words are misspelled. Oh the horror!! Frankly I didnt think you deserved the time, since you only attempted to discredit me without offering anything of substance.

            And your last post, saying I questioned someone’s intelligence, (which I did not, I said the poster was lazy for logically thinking about the response they wrote), and then question my intelligence due to some misspelled words is rich!

          5. Joseph

            @matt138: Because someone disagrees with you on taxation they should go to a different blog? Sorry, pal, that’s not your call. Grow up.

      2. matt138

        earning $100K is not a burden, being taxed to death to pay for an economy-crushing, central planning bureaucracy is.

        1. Mat Masters

          According to Perspective, this is the IHB, not for taxes.

          You do realize that under the current Fed Tax system, A person (single, no kids) who earns $100k, pays about $19k in taxes to Fed. (didnt account for 401k, insurance, etc.)

          Under a flat tax of 25%, well do the math…you would owe more……’

          Taxed to death, hyperbole much?

          1. Partyboy

            MM,

            It’s not the amount, it the fairness of everyone carrying a part of the financial load. It seems as though you don’t agree with a flat tax system. If that’s true, I suppose you think sales tax is unfair. Shouldn’t lower income people pay less sales tax than higher earners? Should the price of a gallon of milk be a sliding scale based on a person’s income? You pay $1 and Trump pays $1000? Where do you draw the line on supporting the poor and punishing the successful?

          2. Partyboy

            It depends on what the money is used for. If tax revenue was used on something I agree with, I would not have a problem paying more in taxes. Having a few people in the government control how much I will pay and how that money will be used makes me want to pay less in taxes.

      3. Partyboy

        The line I draw is not arbitrary. Since everyone pays non-income taxes, I see it as something that is fair because it applies to everyone. Income tax is a very different animal because it escalates as you become more successful in your career. I don’t really care what the tax rates are as long as they are applied proportionately.

        I certainly don’t wish I was on welfare. And while I am not envious of people who NEED programs like welfare, I get pissed off when I see some buying milk and cheese at the grocery store using food stamps and then pull out $40 to buy a 30-pack of Coors Light and a couple packs of Marlboros. If that makes me an unreasonable prick, so be it.

    2. Mat Masters

      2nd point: The real lazy one is you not using your brain to figure out the people earning over a $100k receive much more benefits than those who “dont pay any income taxes”.

      You benefit from the EPA, USDA, Military and host of other programs set up by the government just as much as other who earn less than you.

      “Defending the country benefits everyone; but it benefits the rich more, because they have more to defend. It’s the same principle as insurance: if you have a bigger house or a fancier car, you pay more to insure it.
      The interstates and airports benefit interstate commerce and people who can travel, not ghetto dwellers. Energy is used disproportionately by the rich and by industry.
      As for public education, the better public schools are the ones attended by the moderately well off. The very well off ship their offspring off to private schools; but it is their companies that benefit from a well-educated public. (If you don’t think that’s a benefit, go start up an engineering firm, or even a factory, in El Salvador. Or Woodlake, ca (yeah exactly never heard of it.)

      Tempting as it is for the rich to take all the wealth of a country, it’s really not wise to leave the poor with no stake in the system, and every reason to agitate for imposing a new system of their own. Think of social spending as insurance against violent revolution– and again, like any insurance, it’s of most benefit to those with the biggest boodle.” < <<>>>>

      1. gepetoh

        MM, it might just be the WAY you say it, not WHAT you say. I must say that I agree with on the point about taxes, I think we as Americans (or citizens of any country) owe it to our government to pay some type of “payments” for keeping us safe in this land. If that “payment” is in form of taxes, so be it. We are PRIVILEGED to live here, not ENTITLED. If you don’t feel so, maybe you shouldn’t live here. There should be no debate on whether we should be paying taxes, although we can debate to no end about what the taxes should look like.

        Having said that, I don’t know the message should be “stop crying like a baby and pay your taxes, you moocher”. Maybe a more subtle approach would be received with less antagonism.

      2. Partyboy

        MM,

        You make a good point about how the rich have more to protect and therefore should pay more to protect it. But a flat tax system does exactly that. The more you make, the more you pay. Paying more in nominal dollars is reasonable. Paying more in percentage of income is not.

        You mention that the poor should have some stake in the system. If they pay no income tax, what is their stake? They have no reason to vote against social programs which will benefit them at no cost to them.

        A favorite quote of mine which could not be more true than what we see happening in America today:

        “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

    3. IrvineRenter

      “Why should someone’s income be a determining factor for eligibility?”

      First, I don’t think anyone should be eligible. This is a terrible program implementing a terrible idea.

      Second, people who make over $100K a year have a series of entitlements in their style of life that they can cut back on to make their mortgage payments. Money if fungible. The money may be coming in to pay their mortgage, but that frees up disposable income they can use to purchase their entitlements — entitlements that are not being enjoyed by the renters and other wage earners who are being asked to support the entitled lives of high wage earning loan owners who can’t afford their homes.

      Any direct transfer of wealth is theft, and it’s irritating enough to have tax dollars going to support spendthrifts, but to have that money going to support high wage earners who could afford the payments is outrageous.

      “Excluding those who fund the program from actually participating in it is bullshit.”

      When the government wants to start supporting my rent, we will talk, but I am being asked to fund a program I cannot participate in. That is bullshit.

      1. Partyboy

        Agree with you that this program should not exist at all. Disagree with the implication that renters who fund this are getting screwed more than owners who fund it and cannot participate. As you see in my post, I don’t differentiate between owners and renters, I think it’s bullshit to disallow ANYONE who is funding this from participating in it.

    4. Laura Louzader

      I have a better idea… do away with all these programs. They do nothing but reward stupidity and dishonesty, and they inflate housing prices artificially.

      I hate to see a person’s income politicized. Many people who make fortunes earned them by being extremely creative and productive, others by being predators and parasites, like our banking class.

      Some people have low incomes because they are lazy or unskilled, others have low incomes because we could not afford to hire them in their extremely necessary jobs, such as paramedic or day care worker, if they demanded more money.

      Whether you have $10 or $10M, it is yours if you came by it honestly, and no one has more of a claim on it than you do, least of all some bankster predator or parasitical home borrower. I should not have to help subsidize the dishonest lifestyles of people who will not starve without my help, nor enable someone who is “poor” to live a iifestyle most people have to earn.

      We started assistance programs as a way to keep people who really and truly cannot take care of themselves from falling down dead in the streets. How quickly these basic, minimal assistance programs that serve a very small cohort and that are necessary in a civilized society, morphed into a massive welfare state that enables some folks to breed litters of kids by artificial means on the taxpayers dime while tens of thousands of children go hungry yearly in this country; and enable the deceitful and delusional to live lifestyles far over their heads while people with severe mental illness freeze and starve on the streets of my city.

      Time to get back to basics: minimal assistance for a strictly defined cohort of people who are really defenseless such as children, those with critical mental illness or the destitute elderly, emergency assistance such as limited unemployment for people in desperate temporary need. Anyone who can take care of himself or herself on any level needs to do exactly that- a nice place to live in a prime neighborhood and lots of amenity, or home ownership, or wads of spending money, are NOT entitlements-they must be earned.

      1. Michael T

        “enables some folks to breed litters of kids by artificial means”

        Huh? “Artificial means”? If you’re referring to stuff like in vitro fertilization, you’ve got the wrong scapegoats. That’s a toy of the upper middle class, like older couples who think that insurance companies should be financing their dangerous and irresponsibly narcissistic desire to conceive an embryo at all costs.

        1. Laura Louzader

          Excuse me, Michael, but have you forgotten OctoMom,
          the California pig who a couple of years ago gave birth to a litter of 8 kids, made possible by in vitro fertilization, even though she is on welfare, has never been married, and these kids have no official father?

          Additionally, she had 6 other kids before this bunch, a woman who just loves to have babies, har. She has never in her life earned a paycheck or been married to anyone who did.

          Also, her parents went into foreclosure on her $500,000-plus house.

          Between the costs of delivering and supplying post-natal care to all those kids, her foreclosure also has cost the taxpayers a lot of money. I roughly figure she has cost the taxpayers of CA about $5,000,000. Multiple births cost many, many times what singleton births do, especially when you have 4 or more babies at one birth.

          Here’s a good link to start with to see how this woman has soaked the taxpayers for her keep.

          http://www.babble.com/CS/blogs/famecrawler/archive/2009/03/12/octomom-new-house.aspx

          1. Michael T

            You’re making your bizarre generalization based on a single data point culled from a banal media story. Please, stop insulting our intelligence.

          2. Laura Louzader

            TYeah, sure, Octomom is an isolated case of one woman who has managed to milk the Nanny State for millions of dollars for benefits that have added greatly to the cost of carrying her while doing the rest of us no good. While she is the only person I’ve heard of thus far who managed to get fertility treatments covered by the state, she is nowhere near the only one who has been enabled in extremely irresponsible behavior and financial extravagance by the perverse incentives created by our overreaching and unjust alphabet soup of programs designed to incentivize going into debt and assuming obligations, like immensely expensive houses, or a family of 7 kids born to you before you’re even 21 years old.

  2. winstongator

    Are you subsidizing their Mercedes lease payments? Yes. Money’s fungible. Money saved on payments can go towards cars. But if they didn’t get help, they might just completely default, and then their share of a payment would be 0. So your subsidy would be bigger!

    A lot of the people getting government help – either through this program, or lower interest rates by the Fed buying MBSs and Treasuries, or gov guarantees on their mortgages – are the type of people who decry welfare and medicaid. To get people to support it, you need to have it seem like a sensible program that ‘needs’ to be done.

    What I would rather see is better unemployment benefits, short-term job creation programs, or just an across the board tax rebate. The money spent would be held constant.

    Real leadership would work to transform how foreclosures happen and reducing the stigma associated with them. It would also include acknowledging that the main problem with housing is that prices were too high.

    1. AZDavidPhx

      Better unemployment benefits are not in the bank’s best interest. The masses might buy food rather than pay the mortgage on a house that has lost 50% value. That’s why we need better banker welfare so that the money is guaranteed to go to the proper recipients.

      Undoubtedly there are strings attached somewhere for these people whom are being “helped”. There is no free giveaway.

      1. winstongator

        The way I see it, the string is that you keep making your payments that you might have otherwise defaulted on. The big reason to take this assistance and keep paying is that you think you’ll be able to sell in a couple of years and get a little cash at closing. If the state got all the proceeds at closing, no one would take the assistance.

        1. AZDavidPhx

          What are the tax consequences of this “help”? I assume that it counts as income does it not?

        1. winstongator

          $500M in fraud. $8k/instance. 60k acts of fraud out of ~3M. 2%. Not great, but the way it was structured was ripe for abuse. Most of it probably went to specuvestors where the $8k was all the profit on the deal. There’s also a point where you have to pay it back if you sell the home before a certain point. How many takers do you expect to do that?

  3. AZDavidPhx

    What does that tell you about California’s shadow inventory when they are now resorting to these Cash-For-Mortgage-Payment schemes? What it ultimately boils down to is public welfare for banks that made poor lending choices moreso than bailing out screwed house debtors. They will find one way or another to give away public money to screwed bankers. Notice how the money is set aside as a trough for the pigs to gorge themselves at.

    1. Planet Reality

      It means it’s deep deep into the shadows.

      For a while I thought I was seeing the shadow of a shadow. Now the inventory seems to be a shadow of another shadows shadow.

      Well what do you know 2011 market price = 2007 market price on this Irvine condo. Let’s see what this goes for, 5 years post bubble I hope the Irvine “crash” comes soon.

      1. AZDavidPhx

        I know, I know, there is no shadow inventory on Planet Realtor.

        I thought that Jan 2009 was the absolute bottom. What is this 2007 business you are talking about? Please clarify, I am certain that you did not mean to imply that something was priced below the perma price plateau.

        “post bubble” I like that. As the chart shows, the bubble clearly deflated in 2009.

        http://www.crackthecode.us/images/28_Yorktown_Nothing_To_See_Here.jpg

        1. AZDavidPhx

          No sir – no hot air left in that Irvine bubble. Nope. The market is ready to stand by itself.

          1. Planet Reality

            David, what part dont you get about homes purchased in late 2007 and 2008 with about the same market price as today.

            Everyone knows Irvine is down from 2006.

          2. AZDavidPhx

            And it was supposedly a smokin deal too at 200K off peak price when it was bought.

            You’d think with all that surging demand in 2009 and real money finding a way in, the seller would have made a buck or two rather than pour in 100K to break even.

            What “crash”?

          3. Planet Reality

            Was this supposed to be a smoking deal? Hard to imagine.

            Late 2007 and 2008, there was a lot of talk from blow hards like you about the upcoming Irvine crash, which has been.. Well let’s just say non existent since then. Fools like you were predicting higher rates in the face of government and bank molestation.

          4. AZDavidPhx

            Gee, I don’t know but if you plug the address into zillow and look at the price chart, it was bought in 2007 for approximately what it was valued at the “bottom” in 2009. Sounds like a “smokin deal” to me. And then you come on here today and act like that 2007 purchase price was not way below the comps at the time.

            Please explain the Zillow chart, PR. Why is this condo not commanding an easy 600K?

          5. Chris

            Come on PR. People talked about the pending crash in ’06 and ’07 through ’08 was the first leg down. Sure the current price is above Mar ’09 (and that’s been your argument ever since). Geez, like we don’t have internet or something. The current Irvine price and its recovery are *pathetic* compared with the DJIA rise from the ashes.

            This house will probably be sold at 1/2 mill +/- 10k given how long the last Burlingame house was on the market before it was sold. If it does happen, that’ll be 10% off from ’07.

            Bring your checkbook….

  4. Heidi

    Reading about programs such as this one leaves me….utterly flummoxed. That (1) ANYONE can think this is a good idea (other than the bank + derelict home”owner”) and (2) the collective citizenry isn’t outraged to the point of charging to the state Capitol with pitchforks in hand completely boggles the mind.

    I am as sorry as anyone that some people have lost their jobs and can’t pay their bills. However, the sad fact is, if you can’t afford to live where you live anymore, you need to adjust your lifestyle and move to something you CAN afford (don’t you??). If one’s property-buying gamble didn’t pay off for you, *I* don’t want to pay for it.

    Head Still Spinning….

    1. Planet Reality

      How long will it take for you to accept that everything that the government has done over the past 4 years is for the banks. It was easy to identify in 2008. You would need your eyes closed hoping for something far different back then not to see it.

      Now are you not going to accept that this will continue with new programs and everything will continue to work in the favor of bank profits?

      The easiest way for Irvine inventory to go up is to blindly believe the inventory number published on this page.

      1. Chris M

        What the hell makes you think she doesn’t accept any of that? It looks to me like she accepts that it happened and is happening, but she’s not happy about it. Are you actually in favor of injustice, PR?

    2. IrvineRenter

      Heidi,

      Even after writing about this insanity for over 4 years, it still makes my head spin too.

  5. irvine_home_owner

    Great post today IR.

    Makes one wonder if it means anything to be responsible nowadays.

      1. IrvineRenter

        This is the first bubble in history that every stop has been pulled to prevent the herd from being wrong.

        They may win.

  6. tlc8386

    The banks are taking money out of retires, income investors with zero interest rates, last I looked mine were .01% and giving it to those they funded for heloc’s and mortgages.

    The government is allowing this to refund the banks, keep people in their homes due to the fear of destruction and neighborhood depreciation.

    The fed created a bubble of demand with cheap money which fueled a huge market in housing and job creation (which many are demanding again) and the rest of us who did not participate will be paying for this cycle of abuse.

      1. tenmagnet

        What about S&P earning enormous fees by slapping those Triple-A ratings on toxic paper?
        Those criminals at S&P and Moody’s should have been prosecuted as active participants in the MBS scam.

        1. tlc8386

          Scam was all about keeping us in debt and spending cycle which fueled the bubble. Tax free heloc money we all felt rich and thus spent it.

          A friend just called a said a few years ago they lessened their heloc and now Wells just sent them a letter and gave them much more. The banks have not stopped giving out free money to indebt you to them forever.

          Anything to keep us in the ponzi scheme of debt sucking any equity out of you!

        2. gepetoh

          Let’s hope gov’t gets pissed off at the threat and sends the SEC after them. IMO they are more to blame than any other group. They knowingly and betrayed the foundation of their existence – to be an IMPARTIAL judge of security quality.

          1. Swiller

            HAHAHAHA!!! Like Christopher Cox from NEWPORT BEACH, who was head of the SEC during the fraud? We all know repugnantcans are much more moral and conservative than defacrats…..right?

            You dunderheads who voted for them deserve everything you get and more. Me? I’ll do everything I can to recoup my fruadulant caused losses. I’m going to pay for the sh1t this gov does anyhow….like 3 wars we have no right to be in. Invading sovereign countries, wiping their a$$ with the U.S. Constitution, f gov, and f the citizenry who voted for them.

  7. Soylent Green Is People

    Personal responsibility died with the “Me” Generation. We live in a post personal consequence world, one where boo-boos are salved by Uncle Sugar because “it’s not you’re fault…”

    The farthest some of these people can see into the future is what time American Idol is on, and how soon till the Iphone 5 is released. America’s credit rating is put on notice and it seems the only news that’s fit to print is who will get voted off Dancing With The Stars.

    This is the world we live in today. Do we accept or revolt? My guess is the status quo will overwhelm the indignant. Seems to be trending that way.

    PS – Tuesday is Soylent Green Day.

    My .02c

    Soylent Green Is People.

    1. Planet Reality

      As long as people have food, shelter, freedom, and their large flat screen TV and iPhone to boot – there will be no revolution. They accept that life.

      Take the first 3 away and the blood is shed at any cost.

    2. Feral

      I agree. If a sports superstar drove drunk and took out your kid, he’d probably do time served/community service, lose a few endorsements. If your wife went to LA and wore an expensive bracelet, some celebrity might fancy it, and tear it off her wrist; if charges pressed, celebrity cries this is a big misunderstanding; lady bumped into me! Bracelet fell off, it’s lost. I’m the victim! LA jury agrees and quickly acquits. Celebrity photographed wearing identical bracelet a week later, says she simply had a “copy” made. Celebrity wears bracelet in “leaked” s*x tape; career soars after it’s “protested” release. Yup, the world we live in today.

    3. Swiller

      Hey Soylent, the times are a changing, you need to change your name to Subway….now you KNOW why those subs will always cost $5. Soylent Way, is healthy!

  8. tlc8386

    The me generation has formed the plastic society, instant gratification, acceptance of fraud, take all you can and lack of real apathy for human conditions.

    I have a very hard time living in this era.

    Greed has taken over.

    1. gepetoh

      I’ll bet if we were 40 year olds living in 1840, we’d still say 1820 was so much better. It’s change, neither progress nor digress. I think we sometimes get so jaded in our current mores that we tend to forget there are a lot of things and behaviors that are BETTER today. Working conditions, discrimination and bigotry, sanitary conditions, etc. are much better today than yesterday because we’ve learned not to tolerate worse. The way we think today aren’t necessarily all bad, folks.

    2. milton friedman

      The “me” generation? Heh, sorry fella, that’s capitalism. Capitalism is all about quick profits in the short term. You can always move to Canada if you don’t like it.

      1. Mat Masters

        Before you start kicking people out to Canada Milton, the great thing about America is if enough people dont like something they can change it.

        1. milton friedman

          Wrong. America is about freedom of capital, not freedom of people. If you don’t like it, maybe you’re not working hard enough to be a successful entrepreneur. Canada might be a better place for folks like you who need coddling.

  9. Swiller

    Too funny!!! Defacrats and repugnantcans pointing the fingers at each other while both suffer from cognitive dissonance. You have to love the direction this country is going. We are broke, but we can sustain three wars to bring oil, er I mean freedom to people.

    On the housing front, I sure hope I can get more help on my mortgage that I *will* default on. I’d love me some of that free money that the voters have ELECTED to give me. ROFLMFAO!!!

    Keep voting the same, keep listening to the extremists on radio to further polarize you while your country goes to hell in a hand basket. While this happens, I’ll take advantage of any program out there, and the best part about it is YOU VOTED FOR IT!!! Hahahahahahahaha!

    1. nefron

      Those of you who are outraged over today’s article, did you write/call/email/otherwise complain to your local representatives? To Sacramento?

      Listen, politicians get away with this stuff because not enough people stand up and yell, and yell, and keep yelling until the news media figures out there’s a story and the politicians finally get afraid that they might lose their jobs. STOP COMPLAINING ON A BLOG AND COMPLAIN TO YOUR ELECTED OFFICIALS.

      Why did the banks win? Because not enough ordinary people with a vote complained long enough and loud enough to stop their elected officials’ hands. It is that simple.

      The rich and the powerful have money, influence lobbyists, anything they need to buy what they want.

      We have one thing – our loud, complaining voices that our elected officials fear when they get too loud and too complaining.

      That is the way our system is designed. This is how we keep them honest. We watch them and we complain and we threaten to fire them when they give away too many favors to the rich and mighty.

      The politician will pick his job over money from a lobbyist wanting a favor every time, so if enough people are watching, the politician will do the right thing.

      Start hounding your congressmen instead of just complaining on a blog.

      And another thing. We can fix our own economy. Check the friggin labels and buy stuff made in the USA.

  10. BD

    They country seems to become more polarized each day…

    Makers and Takers…

    There will always be a majority of loosers who will vote to take your money and everything else …fair or not. When nearly half of the US people pay no federal income tax? How is that fair? And the wealthiest 10% pay 40% of all income taxes at the federal level how can anyone be suprised…???

    Not just my observation on taxes… it is reflected daily in the ‘support programs’ we now have for idiots.

    The prudent are always punished to pay for the imprudent or stupid.

    My .02

    BD

    1. Mat Masters

      I wouldnt say its the majority of losers (gotta watch spelling or Perspective will get ya). Since 1980, Regan Bush I and Bush II increased the deficit. Where was the fiscal responsibility then?

      As for 10% the TOP TEN% wage earners paying 90% taxes…that seems high but what ever… how much do the top 10% earn? How does that compare to what the other 90% earn.

      I bet the top 20% of wage earners make 60% of the income, so in progressive tax system its easy the top 20% would pay 80% of taxes or more.

      seems fair to me….

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