Perfect storm is correct…...........maybe these “homeowners” should put some plywood over the windows and ride the storm out…...in about 15 years this house should be worth about $1,700,000.
——-

I know this is a bit off subject but 2 things:

1.  Jim Rogers ( the commodity guru) made a good point the other day.  He said that when bubbles unwind you see some of the larger players go bankrupt.  ie. mortgage bubble=new century, AHM, etc.  He pointed out that not one large homebuilder has imploded yet.  Anyone like to take a poll on which one or two it will be?  If it’s Lennar that will cause some serious problems for the great park.  Maybe there will be an airport there after all.

2.  A friend of mine said he heard a house in Newport Coast’s Costa Azul area was forclosed on and went for under 2 mil.  These homes previously sold for the high 3s and low 4s.  I know this is not Irvine but can someone who has access to this info confirm?

They should of moved to N.C.  Could have purchased a 4500sqft home, on atleast a one acre wooded lot, and been debt free….but then again that would of made sense.

Pay 1.7m and then have to walk to some community pool to go swimming? No thanks!

For 1.7, it should have its own private pool and be lakefront.

The inside is pretty nice and 800k sounds about right.

“The Jewel of Woodbury! Ready to deal.“ Two conflicting statements. If it really was a Jewel, then why do they have to deal?

Take anything Jim Rogers says with a grain of salt.  He’s been bearish on US stocks for 20 years, and still is.  Listening to him is dangerous (that’s true for most TV talking heads, but especially for Jim Rogers).

IrvineRenter,

Another great post.  According to Woodbury’s and TIC’s web sites, they will be opening up another neighborhood in the Southeast corner of Woodbury this month.  It’s going to be called Andalucia (by California Pacific Homes), and the homes look similar to those in the Portisol neighborhood.  Single family homes in the $800k - $900k range. 

You profiled the 3 br Portisol home in your “Land of the Rising Sun” post in March:

http://www.irvinehousingblog.com/2007/03/30/land-of-the-rising-sun/ 

They started asking $918k for 1708 sqft, and now they’re asking $865k.  It’s been on the market since March and still hasn’t sold.  My wife and I toured the home, which is immaculate, but it’s really not worth that much.  Seriously, $865k for 1708 sqft?

The similar homes coming in Andalucia is bad news for the Portisol prices, since the homebuilders seem to be more willing to lower their prices to what the market will bear.  Does anyone else have info about Andalucia?

I read another website where somebody claims to have been purchasing foreclosures since January and has made no less than $90k on each of his flips since then.

just looking at satellite map, it looks more like detached condo. inside is nice though but not for 1.7M.
the builder must have made lots of profit

Love your website.  If anyone is interested.  I did a little calculating, regarding historical home appreciation and came up with this.

Starting in the year 2001 (good year for homes)
I calculated the annual percentage rate of appreciation for homes (I went with 4.5 w/inflation) and came up with the average median home today in CALIFORNIA should not be over $250,000.  These sellers should take a good hard look at historical prices, historical appreciation and get off the river of denial and start dealing with reality.  It is time to get off the roller coaster of craziness!!!!  Who can afford a home that costs over 1 million??? Not many.

A little off topic:  http://www.latimes.com/news/local/la-fi-subprime22aug22,1,5479823.story?coll=la-headlines-california&ctrack=1&cset=true

I have a real problem with these efforts to bail out people who were never qualified to become homeowners in the first place and also the folks who purchased pre bubble and then refi’d all their equity out. I have come to agree that the first group played a huge role in driving up home prices. Just let them return to renting.

Saw this one about six months ago when they wanted $1,850,000.  Great upgrades inside, great location on cul-de-sac across from a small park.  According to the agent, owners lived in it two months then moved to San Diego.  Problem is, there are two identical properties for sale.  They are in a race to the bottom with 36 Twiggs and 34 Shepard, both priced at $1,599,000 (for some reason, Twiggs shows as 400 sq. larger, but they really are identical.)  Oops, Tripple Leaf, looks like you just ate another $101,000 in equity. 

Oh, 36 Twiggs did a “refresh” on the listing.  Don’t be fooled, it’s been on the market since at least February and is vacant.  I wonder how long before all of Triple Leaf’s equity evaporates into the mortgage meltdown ether?

Location?

Is Woodbury on Jeffery or Sand Canyon?  I don’t venture up towards the 5 that often.

Mortgages Push Late Loans to 17-Year High, FDIC Says (Update1)

http://www.bloomberg.com/apps/news?pid=20601087&sid=as2Ho_PwtqjM&refer=home

Bernanke’s Strategy of Increasing Liquidity Survives (Update2)

http://www.bloomberg.com/apps/news?pid=20601109&sid=aS.2chxvsOi8&refer=home

Some financial markets offer encouraging signs to policy makers. The Standard & Poor’s 500 stock index has held the gains posted on Aug. 17, when the benchmark had its biggest one-day jump in four years. Lenders are also starting to write more ``jumbo’‘ mortgages as the market for loans above $417,000 improves, Treasury Secretary Henry Paulson said yesterday.

``When we look at the markets over the last couple of days, I’ve been encouraged to see signs that there’s more liquidity in the jumbo’‘ mortgage market, Paulson said in an interview with CNBC. ``We’re looking at all the markets, and you know, obviously, the equity markets, the sovereign-debt markets, the high quality credit markets, are all fully operational.‘’

http://online.wsj.com/article/SB118779988225905435.html?mod=hpp_us_whats_news

FOUR MAJOR U.S. BANKS said they have each borrowed $500 million from the Fed’s discount window, the first to say they have taken advantage of the central bank’s attempt to add liquidity to the credit markets. Fed officials are cautiously optimistic that markets are stabilizing.

“Is Woodbury on Jeffery or Sand Canyon?“

Woodbury is on Jeffrey.

Thanks! I may cruise up there and check it out.  I hear more positives about the actual area itself then negatives.

Now prices are a totally different story

Agency MBS succumbs to global credit squeeze

http://www.reuters.com/article/reutersEdge/idUSL226239620070822?sp=true

Issuance of bonds backed by non-agency debt has come to a virtual halt as investors refuse to buy securities backed by anything whose payments are not guaranteed. But now, triple-A rated MBS issued by Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac

Fed cash not reaching mortgage players forcing sale

http://www.reuters.com/article/reutersEdge/idUSN2159937620070822

Woodbury has become the new Asian community of Irvine.  I have a friend who lives there and she feels bad for her neighbor - he’s the only caucasian in the entire neighborhood.

I sold out of Irvine and moved to NC.  Got a 4000 sq ft home on 2/3 acre lot.  Not quite debt free, but almost there!  When I’m coming back to Cali I’ll have bags of cash.

I always wanted to live in NC.  I should have moved there a long time ago.

can anybody tell us that in current market condition how much income is needed to qualify for 1.7M loan.  and how many actually earn that much money in Irvine. thanks

Gimme Shelter, of course, details in part the horrible events of the Altamont Free Concert of December 1969.  A volatile combination of willfull ingnorance, misguided hippie idealism, polypharmacy, overcrowded conditions, and Hell’s Angels providing security at a concert headlined by the Rolling Stones led to the front and center stabbing of a young man named Meredith Hunter.  The song being played was “Under my thumb,“ and the moment of Mr. Hunter’s murder is widely considered the symbolic end of the era of the 60’s.  Readers of this blog are welcome to draw their own parallels to the Real Estate Market….,

I would speculate that not too many buyers of homes over $1 mil take out loans for alot more than $1 mil.  To do so shows a bit of desperation for status.  Only the interest on the first $1 mil of loan amount qualifies for the mortgage interest deduction.  And most taxpayers who have the income to pay on a $1 mil loan are limited on the amount of mortgage interest deduction by high income pahse outs and AMT.

Off topic, but I figure we could use a little cheerful housing related news after all the housing gloom & doom

http://www.ocregister.com/news/belay-school-own-1816770-children-orange

http://efinancedirectory.com/articles/The_Dangerous_Disconnect_Between_Home_Prices_and_Fundamentals.html

Not sure if this article was already posted. I never realized how bad the RE market got hit in Japan and how simliar it is to the market here in Socal. Can’t see how Irvine doesn’t drop at least 40%.

Mortgage industry job cuts surpass 38,000
Companies stop ‘on a dime’; 24,000 positions eliminated so far this month

http://www.msnbc.msn.com/id/20396081/

I had a guy cleaning my carpets the other day who provided some insight into the local real estate market.  He stated that construction on Orchard Hills has completely halted.  Can anyone verify this statement?  He also said that his business was down considerably.

HAHA, well I’ll be bringing my asian wife with me then.

Accredited just cut 62% of the workforce.  The remaining employees are being sent home with one month’s paid vacation. All loans have been halted. 

BNC just closed shop and will be laying off 1,200 people today alone.

“HAHA, well I’ll be bringing my asian wife with me then.“

OK, the lending side is a total disaster.  No surprise there.  Bloomberg had it that 100 home mortgage lenders have gone under since the beginning of 2006.  My question is how is the impact being felt in other parts of the home market (ahem the builders, painters, appliances, etc.) 

I heard that the installed price of granite counters has gone through the floor.

I mentioned Orchard Hills previously, because this is a IC development that was supposed to be along the line of Shady Canyon, though not quite as exclusive.  If they have stopped developing in the area, which was due to start selling in late 2008, then Irvine Company is implicitly telling us that they too expect a protracted downturn in the market.  However, I only have the word of a carpet cleaner.

On the other hand is appears work on the Laguna Crossing development is continuing apace.

Bank of America Helps Rival Countrywide.

http://thegreatloanblog.blogspot.com/

I go there on business one week a month.  I would never want to live there.  There are some beautiful old neighborhoods in Charlotte and Raleigh and some awesome small towns but the summers are really hot and most of the areas I have been to look run down.

Has anyone else noticed that IrvineRenter has stopped participating in the comments section?

Lose an arm and a leg:Get an option arm today!
http://www.thegreatloanblog.blogspot.com/

IrvineRenter unplugged for a while. He is back now…

Lehman, Accredited, HSBC Shut Offices; Crisis Spreads (Update3)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aoFMxKqap0ek&refer=home

The tone in the mortgage market is ``exceptionally cautious,‘’ Lonski said. ``You’re looking at what will be in all likelihood the worst case of home price deflation since the 1930s.‘’

Well, Bloomber is full of “shorts” and “bulls”, so very hard to know who is telling the truth.

I saw in CNBC a hedge fund manager that was 100% up YTD in his fund because shorting stocks related with the subprime mess.

The right moment to short everything: builders, lenders, even Harley Davidson was 02/07/07 when HSBC UK reported the increase in his loss prevention fund, nothing was the same after that.

OK, the “owners” live in this house for 2 months and leave for San Diego. I’m willing to bet they didn’t turn one knob on their 10 knob kitchen stove!

Bank of America Invests $2 Billion In Countrywide

http://online.wsj.com/article/SB118781794985005692.html

Gimmie shelter indeed
Should city bail homebuyers out?
Alarcon wants Los Angeles to help those facing foreclosure

http://www.dailynews.com/news/ci_6683739

Steps eyed to prevent foreclosure
Lenders says they’re trying to help shaky buyers, but activists want more action.

http://www.sacbee.com/103/story/337988.html

Often, said Ed Delgado, a senior vice president at San Francisco-based Wells Fargo, troubled borrowers are reluctant to give up cell phones and satellite TV to work out financial solutions.

Where’s Waldo?
Where’s W?

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2007/IO+September+2007.htm

welcome back

Yeah, you might as well ask Homer Simpson to give up doughnuts and beer!

So anyone brave enough to buy some Countrywide stock?  IF CWide survives it might be a risk that pays off.  Since the announcement CWide stock jumped 20% in after-hours trading.

Looks like a short to me.

I live in a suburb of Raleigh. Gorgeous community. Yeah-it’s hot here and we are looking to move back to San Diego to be closer to family. BUT, we have some of the top schools in the nation, low crime, traffic is NOTHING like california, clean city, brand new large homes everywhere that you can buy without having to take out ARM loans, or older historic homes if that’s more your style etc… It’s a great place to raise a family if you can’t afford socal home prices.

Run down is not how I would describe my area at all. Lots of green grass, trees, new homes… There are still large, beautiful farms with cows out to pasture. Sure there are older places in the Raleigh area, just like there are old, run down places in So Cal.

My MIL lives in LA and it gets hotter there than it does here. The only difference is the humidity we have here in NC.

With that said we’ll be moving back soon and might actually be able to buy a home this time!

Actually, Woodbury is off of both. You could say that the “front” side of Woodbury (the main park and clubhouse), is closer towards Jeffrey. But the “back” side of Woodbury does go along Sand Canyon, where Woodbury Court apartments are located. The perpendicular streets to Jeffrey and Sand Canyon are Trabuco and Irvine Blvd (meaning that all of Woodbury is located in this square of streets).

In the spirirt of democracy and a good saturday round table discussion, what is your view on the proposed bailout plans that the presidential candidates have been discussing?
http://thegreatloanblog.blogspot.com/

I know this is an Irvine blog, but why the idea that brand new everywhere is better? And those homes in NC don’t appreciate—so much for the bags of money. Living in the Bible Belt has its own unique culture. And really look carefully at the schools, especially compared to Irvine. Can I have my grain of salt now?

Re: Andalucia. You might want to add another $100k for upgrades and landscaping.

Several years ago my business was involved with some of the
board members at Countrywide.  When the CFO and the Bank President just walked away about a year ago it was the writing
on the wall. From that point forward the insider trading on this
equity has been beyond anything I have ever seen before.
Then last week. They burn thru 11 Billion. Then this week.
Another 2 Billion from BA at 7+%. And now we are looking at next week.  The stock is at 21 for the weekend. But I smell the same
smell that was around when New Century imploded. This is just a whole bigger dog when it goes paws up.  Unless the Fed drops rates or BAC does something dumb. The dog has had his day.
When the CEO goes on CNBC and says the crud that he did
about his own company after he has dumped about 400 Million
in insider options should be all you need know.  Next week.
Low teens.

I have heard that, also. They, Irvine and builders, halted construction of new homes until 2010.

Dear SoCal buds and all others-

Here is the linke to the Petition Taxpayers Against Wall street and Mortgage bailout, if you have not already signed it,

http://petitiononline.com/bailout/

We have to stave this off. Here’s to restoring affordability to the SoCal and other overpriced housing markets.

Here’s to restoring personal responsibility and recognition of the risk/reward tradeoff.

Inland homeowners on foreclosure tightrope

http://www.pe.com/localnews/inland/stories/PE_News_Local_D_mortgage25.3563f4d.html

Herrera said when one of her clients started house hunting in February, he pre-qualified for financing with nothing down and a rate fixed for 50 years in the mid 7 percent range, even though he had a recent bankruptcy and could not easily document his income because he is a self-employed carpenter.

A few weeks ago when that client had picked his dream house in Riverside, Herrera said, the best mortgage he could get had an interest rate in the high 8 percent range and could adjust even higher in five years. It also required a 5 percent down payment.

But Herrera said that mortgage product also was discontinued before her client could secure it and so he now is considering a mortgage that will require him to make a 10 percent down payment. To qualify, he will also have to improve his credit by waiting until October to apply, when his bankruptcy will be two years behind him.

By then, Herrera said, she fears that mortgage program also could be history.

“...a mortgage that will require him to make a 10 percent down payment.“

Oh no!  The horror!

They probably got that down payment from their last house, relized where the market was going and now want out.  Must be stressfull…

When people like this are eliminated from the market as competing bidders, the rest of us will be able to buy a house we can truly afford.

So much for “real estate always goes up”

Drop Foreseen in Median Price of U.S. Homes
http://www.nytimes.com/2007/08/26/business/26housing.html?pagewanted=1&_r=1

The North Carolina idea is a great one! Do you people have any friends you can lure to NC and get them off the Cali freeways?

Can’t Decide If The Time Is Right To Buy A Home? Read This Good News For Orange County, California Home Buyers

http://activerain.com/blogsview/159381/Can-t-Decide-If

OMG, I’m gonna barf.

The mere mention of bailout sickens me.  I will only support the bailout if the government is ready to give me a bonus of 2 times the amount of bailout for me being financially responsible.

Mortgage Mess Hurts Main Street, Beyond

http://www.washingtonpost.com/wp-dyn/content/article/2007/08/25/AR2007082500709.html

Inside the Countrywide Lending Spree

http://www.nytimes.com/2007/08/26/business/yourmoney/26country.html?pagewanted=1

A Psychology Lesson From the Markets
By ROBERT J. SHILLER

http://www.nytimes.com/2007/08/26/business/yourmoney/26view.html?ex=1345780800&en=f22bc73ddd26445e&ei=5124&partner=permalink&exprod=permalink

Foreclosures Force Britons to Ponder Shift to Fixed Rates

http://www.nytimes.com/2007/08/24/business/24home.html?pagewanted=1&ei=5087
&em&en=176293db556041d1&ex=1188273600

Facing foreclosure, and determined to avoid moving in with her mother, Ms. Whittaker found a way out in an increasingly popular arrangement here known as a “sale and rent back.”

A private company bought her home, allowing her to avoid foreclosure; then the company rented the house back to Ms. Whittaker and her partner and they did not even have to move.

The catch is that the company paid the couple less than the value of their apartment.

Why oh WHY are all the politicians both on the local and national level pushing bailouts for failing homeowners and secuflippers when every poll taken nationwide indicates that the majority of voters in almost every locale are vehemently opposed to a bailout for reasons related to the bad economics and intrinsic injustice of it?

From what I’m seeing and hearing and reading, 80% of the electorate is passionately opposed to bailouts for greedy, delusional, self indulgent buyers.

Certain presidential candidates, especially, need to take the temperature of the electorate before they promote bailouts. Do they listen to people out here at all?

If the proposed bailout passes, can I get bailed out of my CC debt and then go buy a $500K condo and get bailed out of my oversized debt on that?

Will casino gamblers also get bailed out of their debts and losses as well?

No??

Then the bailout shouldn’t happen.

We have to be pretty far gone morally and in the matter of a basic grasp of economics also, for the bailout proposal to get as far as it has.

I used to be 100% opposed to a bailout.

But then, after reading about various govt. help for homeowners programs in the past (ex. FHA formed to help fight off the Great Depression - http://www.hud.gov/offices/hsg/fhahistory.cfm - and persuade investors it was ok to lend to homeowners) that actually worked to help the economy as intended ... I’m not as sure now.

FHA Down Payment Rule To Ban Seller Financing

http://www.washingtonpost.com/wp-dyn/content/article/2007/09/28/AR2007092801828.html

http://www.dallasnews.com/sharedcontent/dws/bus/industries/realestate/stories/DN-economist_29bus.ART.State.Edition1.35aa3f1.html

Jack Haynes, executive vice president with Countrywide Home Loans, said lenders are having a hard time interesting investors in purchasing the mortgages they make.

“Things are stacking up on everybody’s shelf,“ Mr. Haynes told builders at the show. “At a certain point that will strangle the mortgage industry if it doesn’t get some relief.“

The Unexpected Consequences of a Cooling Market
Lives Are Put on Hold as Homes Sit on the Market

http://abcnews.go.com/2020/story?id=3655647&page=1

No sign of relief in San Diego housing slump
Agents, analysts and builders all share a pessimistic outlook.

http://www.latimes.com/business/la-fi-sdhomes29sep29,1,173647.story?coll=la-headlines-business

Woodbury is the boondocks.

For Housing, the Summer of the Unsold

http://www.nytimes.com/glogin?URI=http://www.nytimes.com/2007/09/29/business/29chart.html&OQ=_rQ3D1&OP=1163b819Q2FQ5EnmXQ5EQ7D_-Q22p__!HQ5EH99Q7EQ5E9Q2BQ5EHQ2BQ5EXQ27Q22TimQ22Q22Q5EHQ2B-xQ24p!Q51x!PG

If you don’t have a nytimes subscription, there’s an excerpt here with some interesting looking graphs

http://bigpicture.typepad.com/comments/2007/09/housing-freefal.html

As I noted elsewhere.  Woodbury as a whole is woefully overpriced.  It’s on the flats, far from the ocean.  As a neighborhood, it has absolutely no geographical interest and nothing to anchor it.

At least Portola is on a hillside, even if its like in a different county.

TR has the hill, TRidge has views and even Quail Hill sits on rolling hill elevated above the freeway.  There are homes in TR selling for less per square foot, and even TRidge and Quail Hill are on a race to the bottom.

There never was a “High End” east of the 405 in Irvine.  These people were fools to buy there and now they are suffering.

It looks like a nice house but $1.65 Mil? Even if it was priced at half of that price there would be very few that could swing the financing with todays tight lending standards.

“Triple Leaf”...Ha ha Did they use that name because “poison ivy” was not so apealing?

I’m sure many folks who live east of the 405 would and can argue that you are full of it.  Not everyone wants to live near the ocean. I for one fail to see the allure of the ocean with it’s overcast and fog most of the year.  Then there is the traffic and the constant partying and drug culture along the coast. No thanks.  To say people were fool to buy east of the 405 could be the stupidest quote I’ve read on this board, ever.

The part of North San Diego County I would like to relocate to is loaded with fluff such as this listing.  (putting on my gramps Simpson hat) There was a time when the phrase “million dollar home” meant something.  This house is the perfect example of something that isn’t “worth” a million dollars to anyone unless that million dollars cheap money.  Being able to spit on your neighbor from your bedroom window is not an attribute of a million dollar home.  At least not where this home is located.  Hence the appropriateness of Tonye’s comment on the 405.  You may not like the ocean but it does add something to the value of a property for most people.  Drop a nice home in a clustered neighborhood inland and you have a fiasco.

What stuck out at me about this house is the tiny size of the lot. Here you’ve got a 3,700 sq ft house on a 6,300 sq ft lot. Good God, that’s an exercise in claustrophobia!

Back in the mid-‘90s I had a 3,400 sq ft place on 3/4-acre (32,600 sq. ft., about 5 times the land under this overgrown shack) in a part of the Boston area (onthe Scituate-Cohasset line, right neat the ocean) that makes Irvine, California look like a Wal-Mart parking lot. (Well, actually, Irvine looks like a Wal-Mart parking lot anyway, but that’s a different discussion.)

I paid $390,000 for the place and had to put another $15,000 into it for a few things, i.e., a deck, pave the driveway, an in-ground sprinkler system. Yeah, I know prices have gone up (Zillow says my old place is worth $940K now), but $1.65 million for the Irvine place? What drugs are people on?

Oh, and don’t tell me about a park across the street or in back. I had that along with my 3/4-acre.

There’s a reason they shoot stuff like The Crow and Mario Brothers in Carolina-the labor laws. How often does a major hurricane blow through, anyway?

Millions of Homeowners Only Have Three Choices.
http://thegreatloanblog.blogspot.com

NYT reports about Countrywide customers facing foreclosure:
http://www.nytimes.com/2007/09/30/business/30country.html?pagewanted=1

Looks like Countrywide’s support for customers isn’t really impressive. Especially when compared to other lenders. But avoiding foreclosure, whenever possible, should be in the interest of all lenders:
“A 2003 Federal Reserve study found that estimated losses on foreclosures range from 30 percent to 60 percent of the outstanding loan balance, as a result of legal fees, lost interest payments and property costs. Countrywide said it incurred $600 million in losses on loans it holds in the first six months of 2007.“

On the other hand, for avoiding foreclosure, someone has to come up with the difference between mortgage interest rates houseowners can afford and the interest rates on the market now. And Countrywide seems to be financially too hard pressed to do that.

NYT already has another story about Countrywide customers facing foreclosure:
http://www.nytimes.com/2007/09/30/business/30country.html

Sue, afaik NYT subscription, a.k.a. “Times Select” ended a few days ago. Now almost everything is free, except some archived content from the pre 80s, I guess. You don’t need login for this article anymore:
http://www.nytimes.com/2007/09/29/business/29chart.html

If you’re a customer, you’re eligible for a payback. you might want to check this:
http://www.nytimes.com/membercenter/faq/timesselect.html#tendsqa3

Sue, NYT subscription, a.k.a. “Times Select” ended a few days ago. Now almost everything is free, except some archived content from the pre 80s, I guess. You don’t need login for this article anymore:
http://www.nytimes.com/2007/09/29/business/29chart.html

If you’re a Times Select customer, you’re eligible for a payback. Check this:
http://www.nytimes.com/membercenter/faq/timesselect.html#tendsqa3

“By Marlene Bridges, REALTOR®  Representing Buyers and Sellers in homes purchases and sales in South Orange County, California”

Hmm, when she urges potential homewoners to buy now, and does so as a professional, isn’t she liable if this advice will turn out to be desastrous for all the buyers acting on it?

Refinance, short sale or foreclosure. Great. I guess most here know that without your story.
But wait, isn’t there are fourth choice? Giving back the house to the lender (I forgot that latin name for that) and walk away? Afaik this at least saves your credit rate.

I just went back to the archives, and read Irvine Renter’s first post.

One response opined that the sub prime foreclosure rate would go up only a few points and so what?

Sardonic laughter here, and also a few tears.

The conclusion is that things will be far, far worse than the most
gloomy prediction in Feb, 2007.

I also have to ask if refinancing is a good idea, when the core of the problem is that the buyer paid a frivolously inflated price at the height of the bubble. Refinancing simply comes down to throwing good money after the bad. It would only result in the buyer paying much more than the property is even remotely worth. Wouldn’t it be better to call it quits, move away, and wait for prices to level out before trying it again?

Of course, this isn’t advice a mortgage broker like you likes to hear.

Sry for double posting, comments didn’t show on my browser. I suspected it was because of a WordPress spam filter, prohibiting comments with more than one link. Would be nice if one of the IHBers would simply delete the ‘surplus’ posting. Thx!

Am I right that this guy was talking about tax foreclosures (link, pls!)? That’s a totally different kind of business than foreclosures by mortgage lenders, that only result in the sale of bank-owned property. In tax foreclosures, the property is sold in an auction, starting at low prices. You might really make a good deal there sometimes.

It depends on where.  Some States, like Minnesota, have enacted a fair market value law.  Basically, if the State takes the property via tax default, they get it appaised and have to sell it for the appraised value.

Other States do tax certificates.  Florida is one of these States and they do a fairly good job of putting their information on the web.

And other places, like Orange County, have system designed to favor the old boys of the game or automatically go to the State.

This guy is right on, in the first part of his analysis.  It’s just what I have been thinking, but expressed far better than I could say it.

The last part, the Rooseveltian bail out.  There’s no use discussing the philosophy of it, because the problem is too big to be solved without excruciating pain.  The problem makes the S&L crisis and the RTC look like a walk in the park.

If we stopped the war, and slashed the defense dept’s budget in half, you might get close to having enough money.  Maybe.

Neither of those things are gonna happen.

The problem is somewhere above a Trillion dollar problem, and maybe many trillions.