It could be a heck of a lot worse for this particular debtor…..

I have a feeling some of these folks are headed straight back to california-eye-ay !

—————————————————

http://www.ritholtz.com/blog/2009/02/gulf-of-shame/

Remember when Dubai was said to have a quarter of the world’s construction cranes? Well, that was a myth. But so too was Dubai’s prosperity. The credit bubble’s deflation has hit Dubai very hard; and crushed the ex-pats who came in search of opportunity. Here’s the New York Times talking to a laidoff Frenchwoman named Sofia who came to work in advertising last year. She was so excited about prospects in the Gulf that she took out a 15-year mortgage on a $300,000 apartment:

“I’m really scared of what could happen, because I bought property here,” said Sofia, who asked that her last name be withheld because she is still hunting for a new job. “If I can’t pay it off, I was told I could end up in debtors’ prison.”

With Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.

That $152,625 downpayment may not even have been money she saved long and hard for.  Like many buyers of that time, it may have come from “equity” from the previous move-up home.

I feel very bad for this Frenchwoman, and I just hope she can unload that apartment for close to what she paid for it and GET THE HELL OUT OF THE GULF. Dubai is, as far as I’m concerned, a ‘set up’, a big,gem -encrusted Venus Fly Trap for rich and/or opportunistic Westerners gulled by the sci-fi buildings and amenities, and gold-rush atmosphere, into sinking their money and lives into what has to be the world’s most unsustainable city.

Let her story be a reminder to everyone who contemplates immersing themselves in a totally alien culture, of how easily you can run afoul of local customs and laws. No matter how “progressive” and “modern” Dubai may seem, it is still a middle eastern city in which Muslim laws and customs prevail, despite accomodations for western customs. Make sure you know the laws and customs before you go. I feel very sure that if this lady had known that she could be imprisoned for unpaid debts, she’d have acted differently. I also feel sure that if she had educated herself thoroughly on local laws and customs, she might not have gone there to begin with.

We westerners tend to take our progressive laws and our privileges and rights too much for granted. Remember that when you go to these alien places, you’re not in America or France anymore, and the locals are not obligated to respect your culture’s laws and ways.

Here goes the media again, creating victims and false hardships of those re-entering the real world and having to live within their means like everyone else.

http://www.cnn.com/2009/LIVING/personal/02/12/survivor.milesapart/index.html

Perhaps these whiners should take a trip over to the other side of the train tracks in their local city and see where the real hardship is experienced. 

To think that this woman was banking 95K a year off of the credit gravy train at a car hustlership and couldn’t manage to save a penny because she was buying fancy purses, shoes, and fru-fru drinks is beyond foolish.  I am continuously amazed at the stupidity of these people.

So now you have to take a job 1200 miles away earning a lowly peasant’s wage of 42K like the majority of the rest of the country and sleeping on an air-mattress because you can’t buy a real bed now that you are 50K (probably even more now) in debt and all of your credit lines are maxed out.

BOO-HOO.

Get ready for another round of bailouts thanks to losers like this.

Debtor’s prisons, foreigners fleeing the jurisdiction, notes of apology, hopeless FBs, what a great story. There will probably be a made-for-TV movie about someone ending up in a Dubai prison.

Fantastic - these refugees are all most likely headed to the U.S where they will be greeted with lays and citizen of the year awards.

A debtors prison?  Oh how inhumane.  How do you expect people to non-chalantly borrow hundreds of thousands of dollars for condos in Irvine, CA if they have to concern themselves with little things like repayment even if their half-baked plans go bad?  How are bankers going enslave the majority of the hoi polloi who might be too fearful of the consequences of a default?  The owners won’t have that.

IR, I actually read this post last year and went to seek advice from the law firm that the blog belonged to.  The non-recourse nature of my 80/20 loan convinced me (along w/ reading this blog and other housing blogs) it was better to walk away than throw money down a pit.  Buying a house in california w/ no money down is like playing w/ house money in Vegas.

Of course it did.  We are not talking about premium property here.  It’s just another player in the circle jerk that our masters package up and sell to us as the “housing ladder” (not a pyramid! a ladder! a pyramid might alarm the suspicions of the masses).

Anyone that had to earn 153K the hard way would expect their dollar to go a lot farther than a mere drop in the bucket toward the cost of an average house.

It would have been much smarter to take the lottery winnings and leave the state - buy a house for straight cash elsewhere and at least have a place to live when the scheme collapsed in on itself.

How was your experience with this law firm? I wanted to post more about them, but there is no “about us” or “contact us” on their home page. He must be very busy too because he hasn’t posted since the middle of 2008.

As long as those loans remained non-recourse, it certainly is like gambling. The most accurate comparable is a “call” option. The only premium for the option is the payments on the mortgage while you own it. With an Option ARM, that could be a very small number indeed.

“lays and citizen of the year awards”

Not to be too picky about spelling, but I think you meant “leis”.

Then again, maybe you did mean “lays”

Good information, IR.  I read the lawyer’s article last year at his blog site (he’s linked on Housing Doom) and wondered if, down the road, the 2nd & 3rd holders would decide to take action.  I have heard that those vulnerable debts are quietly being purchased at a discount from the original lenders, for later legal action.  Have you heard anything like this?

After some digging, he is with Doan Law.  There is a link on the original site, but it doesn’t clue you in that it’s his firm.  http://www.doanlawfirm.com/KenAndrews.php

I’m also interested if anyone has had experience with the firm.  Not like I own a house or have a mortgage, but I like to know who is credible, and maybe who to refer the realtors to.

They have an office in Santa Ana.  It seems like they were really busy w/ bankruptcy cases.  I think they are the one of the few firms out there that are experienced w/ lien stripping in a chpt 13 bk(which I originally wanted their services for).  However I was convinced otherwise when the lawyer told me of the non-recourse nature of my loans and even if my junior loan was dropped the house would STILL be underwater.  He told me if any collection agency would try to collect on a non-recourse loan they would be stupid to try.

$612,000 for 1,200 sq ft.

$510/sq ft.

That’s just mind-boggling.

Good thing she doesn’t live in SoCal where 95K per year is just above the poverty level.

You got me.  Congratulations.  I was not confident in its spelling, but too lazy to spell check it and figured that the average reader would know what I meant - as you astutely did.

Here you go.  Keep up the good work.

The could create a made for TV debtors prison in America for a reality TV show.  I would definitely watch it.  Time to dollarize this depression.

Irvinerenter if you get time please read this and let me know what you think.

The End by Michael Lewis -
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?PMID=alsoin/The-End

I think that’s the cut off point for your church to help pay for your child’s private school tuition… high cost of living places like the OC are going to be totally screwed by Obama.

Come here.

Don’t worry bout da price.  The price is just a numba.  Prices are for schlubs - you ain’t a schlub is ya?  You don’t look like one - you are good lookin.  You deserve a nice place ta call yer own and live tha dream.

Don’t pull away, come here.  What am I?  You want to be renting and throwin away ya money for tha rest ah ya life and have strangers think you are irresponsible and have no money?  Maybe you ain’t ready to be an ownah and I can respect that.  Here’s my card, give me a call when yous ready to take that next important step in your life.

Oh so, you are ready? Ah, I thought so.  You seem like a serious kind a person who takes ownaship seriously.  Well, these days, we talk financing.  What will you pay me to live in this here house for one month?  I can work with yas - just tell me.  We can work out all that final price papawork latah.

You wanna pay 2000.00 a month?  I can get you in for 2000.00 a month <COUGH>for a little while<COUGH>.  Huh?  No, I didn’t say nothin.  Anyways, let’s get you in for 2000.00 a month.  I’ll take care ah you - sign here, I’ll even take care of some of your costs just because you seem like a nice person and I like helping people like you out.  Here’s some cash - go take the Mr or Mrs out for some pizza on me.  Go on - enjoy it.

Wasn’t that easy?  And you was worrying about tha bottom line.  Sheesh!  Enjoy ya house.

What percentage of borrowers understand the terms of their mortgage (even a simple 30 year fixed)?  What percentage of borrowers understand the legal consequences of foreclosure?  Can you think of any more complicated transaction that most people complete?

I’m not sure there’s a solution, other than the government protecting people from themselves with more regulation of lenders.

Let’s begin with re-programming the masses to analyze their home purchase for 1 to 5 minutes longer than they spend analyzing a piece of produce at the local supermarket.  That will be a huge start and get us moving in the right direction.

At present, we are surrounded by a bunch of dopes who keep picking up bad fruit that goes rotten immediately after the purchase.

“I’m not sure there’s a solution, other than the government protecting people from themselves with more regulation of lenders.”

That is the conclusion I have come to. For as much as I dislike government meddling in our affairs, the behavior of all the parties involved in the housing bubble screams out for more regulation, particularly since we will all end up paying for it.

I want to know how you fit 3 bedrooms into 1200 sqft?  That third bedroom must be a closet.

If 95k is near poverty level, then majority of people living in OC are in poverty.
Them median income at the peak of the bubble in OC was 80k.

My home is paid for and my company is still doing good business at full retail, yet I feel depressed from reading all this stuff.

My friends want to borrow money and some resent me for not being in the same boat they are.

It used to make me feel better to take the boat for a ride around the harbor but that does not seem to help. I am a thinking part of the problem with me is seeing Obama on TV thinking there must be some mistake, he can’t possibly be the President.

This is going to be a shitty time for many of us even if we are not on the brink.

I miss Ronald Reagan and the other grown ups that used to run things.

You and I have similar thoughts and circumstances. I finally stopped reading the CNN sob stories about the folks in financial ruin - it just became too depressing.  This morning on the radio I heard about the propsed tax increases for California and the nation.  If I didn’t have a reason to stay in my current job (a pension), I would seriously consider leaving California.

Oh yeah.  Viva Reagan!

Ha ha ha ha!

The celebrity version would be can’t miss TV.

you’re kidding, right?

Man, you guys are on a roll today!

What in the hell is a “country club girl”?

By the way, these people don’t look like they’re starving.

Not kidding at all…

IR, great thread today.

I think you’re right, the lender will probably hold out for the $459k.  If they were smart, they would list it in the low 4’s and might get some bidding activity.

If you need to cheer up….buy a floating hot tub for your boat….....

www.tugtub.com

Let me see.  I got a big first and very small HELOC second. 

I can stop paying the HELOC and stay current on my first and pretty much…

I walk?

Won’t they report me and destroy my credit?

What happens when to the title to the deed?  If I ever pay off the first, then the second can come back and kill me, right?

PS- Tony don’t surf.

Larry Flint is working on that.  ;-D

I live in a 2bedroom with 808 sqft. (though not particularly happily)
I would consider 1200 sqft luxurious at this point.

I don’t want to get TOO far off-topic here, so I’ll just restrict my comment to:
Ronald Reagan hardly ran things as a grown up.
I hope this link works…...

Long story short: every president since WWII has successfully reduced debt as a share of GDP EXCEPT for Reagan and the Bushes.

The median income is a paltry <BULL>$98,923<BULL> according to wikipedia.

It’s well accepted that everyone in Irvine, CA received an 11K pay raise between 2005 and 2008.Incomes only go up.  Recession is growth.  Up is down.  Left is right.

Here’s the property from a different angle, clearly showing all of the bedrooms.

“I’m not sure there’s a solution, other than the government protecting people from themselves with more regulation of lenders.”

Actually, the market left on its own can take care of itself.  The lenders who got burned lending to Joe 6-Pack will do a better job of checking credit & viability so as to not sustain those losses again.

Oh yeah, I almost forgot:  The system was rigged so that the taxpayers sustain the losses. 

“Smart” in terms of a Wall Street employee equates to “clever” as in being able to privatize gains and socialize losses.

Perhaps you just need a bigger boat?

Or perhaps the denizens of Newport Harbor just need to spruce up the harbor a bit?

Hey she’s one of the lucky ones—she still has a job.

It would make a great sequel:

I like this property, single level with no stairs.  It’d be perfect for my parents and grandmother.

It looks like the chinese are coming to save our housing market.  Woo hoo! 

According to the article “Many buyers are unfamiliar with U.S. markets, so they focus on well-known ethnic Chinese neighborhoods”.  Does Irvine fall into this category?

http://www.msnbc.msn.com/id/29162036/

This is a great blog. But don’t you ever talk about TARP here?

Or is Irvine so far gone, that not even TARP can help? Anything in TARP that might help here?

“It’s a great time to buy because of the financial crisis, and houses in large cities like New York and Los Angeles will definitely go up in a few years,” Ying said. The home is an investment, but he’s also planning long-term: He hopes his 5-year-old son might use it if he goes to college in the United States.

Looks the NAR has planted their shills outside the U.S and opened up the Kool-Aid spigots. 

The U.S will be more than happy to take your money Mr. Ying - step right up, sir, you are quite the negotiator and you drive a hard bargain.

I like how he sets himself apart from those short-term knife catching vultures.  No sir, he is all about the long-term.  His 5 year old son is going to live in that house when he goes to college - yes, sir.  No half-baked plans here at all.

I met with this gentleman last year around May or June at his office in La Mesa, down near San Diego.

Sharp Guy, very straightforward, and as “un-lawyer-like” a fellow as I could have ever hoped to come across. (That’s a positive.) His opinions of the housing market, and the pain to come in the future, are a carbon-copy of your playbook here on IHB.

I’m in a non-recourse 80/20 loan as well, and will, in all likelihood, be moving forward with foreclosure on my horribly upside-down home in Mission Veijo sometime soon…at which point, I will very confidently be retaining this fellow to handle any of the legal tidbits.

I got a very good vibe from him, he seemed 100 percent “no BS.”

Irvine is grossly overpriced relative to fundamentals and it is dominated by Alt-A and Jumbo loans. Nothing in the TARP is going to make prices more affordable, Alt-A any less toxic, or Jumbo rates any lower. In short, the TARP is not going to help here.

Sure he ran up the debt, but it was Good debt used to make bombs and other fun stuff.  Everyone likes those things…

Why wouldn’t he do the same thing on his next property? Unfortunately, the previous owners name is very common, and I could not locate the property he moved to. We will probably see it as a short-sale or foreclosure soon enough.”

Some serious Schadenfreud here. Renting in Irvine must really do a number on you. You’re imagining this guy tooling around in his shiny BMW with the wind blowing through his hair.

It’s like your captain Ahab and this a white-whale that’s escaped.

First, I feel sorry for her lost.  She made a 25% down but the housing when south.  It not like others who had no equity in the house and are asking for a bailout or walking away.

It seems like the banks have some recourse, but how likely are the banks going after the individuals who walked away with possible lots of cash through equity withdrawal? or some new housing that made cash back with home purchase?

I would like to find some of these people that moved on. I am only going on supposition that they would continue this behavior at their next residence. Until I find some concrete examples, it is still supposition.

“If I were him I would put in everything now and go until something broke. But, thank God, they are not as intelligent as we who kill them; although they are more noble and more able.”

Very interesting on the non- vs. recourse laws.  It seems only the original loan is non-recourse and if the proposed govt program to refinance at “more affordable” rates will make the loan recourse and put the borrower in debt for life.  Will the banks and courts be garnishing wages, so the people/debtor will only be take home only enough for substances? 

Say morgtage slave makes $50,000, SocSec 7.5%, CaITax 7%, USITax 15%, rent&utilities; 25%, food & clothes 5%, car & insurance 5%, court garnishment (debt service on $200,000 at 6% 15 years for prior foreclosed house debt and court cost)40%.  It’s like the song: “...16 tons and what do I get, another day and another dollar in debt….”  Do the math and see a lawyer and accountant.

Will the TARP be used to refinance the non-recourse Alt-A’s and option ARM’s, thus making the non-recourse loans in to a recourse loans?

like a doghouse…

And “smart” in terms of politics, equates to not paying your taxes, which in turn leads to a job offer in a cabinet position.

My best pal, a world traveler, says the same thing. She studies up on the countries she visits for months before she even buys a ticket. She visits places like Afghanistan, Peruvian jungles, the real Australian Outback, Saudi Arabia, and Nepal.
She’d never live in a foreign country unless it was totally westernized. She never takes for granted anything, but she’s been doing this sort of real world adventure stuff for 25 years. Even she’s gotten into trouble a couple of times.

Except maybe the people who they are dropped on…
Just sayin’.

Except Regan did not pass the budget, that was the Democrats who controlled congress during his time. A President only proposes budgets. Congress changes them and passes them.

During the Regan years he proposed lower taxes and lower spending, Congress passed lower taxes and more spending. You wonder why the debt increased.

Just think about this in terms of today, Obama has proposed a budget, which he has actively campaigned for on his bully pulpit. Congress actually takes this proposal or a portion of it, changes it, and then passes it.

It IS listed for $395k. Why is it worth $459K? After all it is just a glorified condo with a hefty HOA fee.