Irvine Housing Blog

oh what a tangled web

i think the problem is she paid 500 g’s (2 years BEFORE the peak) for a home 5 miles from dodger stadium where they beat u 2 death if u root for the visiting team

I read this story over the weekend and had the same reaction as the comments here.  Blah, blah, blah.  Get over the entitlement.

Why does the Times insist on publishing these sob stories of people who are clearly screwing up?  I’m not saying they are bad people for making bad choices, but I’m not going to cry for them.

Surely there are more compelling stories out there, given that a whole generation of potential homeowners has been destroyed by this bubble.

IrvineRenter, you sure know how to tug on a man’s heart-strings!  This is quite the heart-wrenching tale of motherhood, banker-deception, and medical bills to produce the perfect trifecta of housedebtor hell!

“and lived there six years, longer than I’d lived anywhere since childhood. The house was meant to be my refuge, a place where I could plant perennials and know I’d see them flower year after year, an investment for my daughter and me after many years of renting.”

I can’t stop crying!  I can’t go on reading another word!

“I bought it in 2005 for $503,000, most of it borrowed,”

Half a million dollars!  HALF A MILLION DOLLARS!  FOR AN OLD-ASS HOUSE!  WTF?!

“a Wells Fargo Bank loan officer assured me, it would be easy to refinance to a fixed-rate loan “

Blah blah blah and the “r"ealtor also assured her that prices always go up.  Everyone else’s fault!

“With little money for extras after fixing the foundation, I scaled back to projects I could do myself”

Seriously, whose fault is this that there was little money “for extras”?  You spent HALF A MILLION DOLLARS for an old-ass “shabby” house which made you house-poor and live paycheck to paycheck.  Oh how glorious indeed!

“He suggested that I wait it out and hope things improved before the rate rise in 2012”

Yes, the old hope-strategy.  In other words, the banker told you to say your prayers and rather than ditch the house when you had your chance - you stuck your head in the sand.

The last denial was based on a bank error

Blah Blah Blah, everyone else’s fault but mine.  I wrote a detailed explanation full of hot and steamy bullsh_t and the evil satanic banker threw it out without even reading it.

“As I grew more anxious about money, my health declined. Problems that had been in abeyance for more than 20 years returned, and my medical bills began to climb as a result.”

Out come the medical bills!  Right on schedule!  I was unhealthy for 20 years and then buying the house made me healthy!  Then I became unhealthy when I lost my house!  These houses must have some amazing healing power!  HEAL!!!!!

I clearly needed a bailout

Oh, well clearly!  I mean the taxpayer saved the bankers!  Where is your piece of that entitlement?  You were just being a good little monkey living beyond your means like the bankers wanted you to!  You did everything right!

I declined to make my mortgage payment

Ohhh, breaking out the Corporate America-speak!  Yeah baby, Yeah!  I love it when you talk corporate to me.  It’s a business decision now!  You are a businesswoman!  Not some deadbeat scorned housedebtor trying to strongarm a principal reduction from the bank!

My rental house is three times as far from work as the old one and about half its size.

And most of all - it is within your means! GASP!

Gardening, once a joy, is a chore I’d rather skip.  I can’t find a life’s lesson here.

Go step on a rake, lady.  Watch out for those medical bills though!

It’s too easy to pile on here… she’s looking for sympathy and this is the first step in her catharsis… in time she won’t see herself as a victim and will realize the hard truth of the dumb decision she made… not sure if she is getting child support from her baby daddy, but her sense of entitlement is certaintly skewed and needs a major tweak… non-wealthy single moms should not be buying half million dollar homes…

I feel bad for the author, but here’s where I call BS.  The home she bought (easily found with some internet RE skills, and it being in LA), sold for $249k in 2002.  So she paid more than double 2.5 years later.  That is 32% annual appreciation.  If you believe that rate of appreciation makes sense, then the purchase made sense.  I didn’t, and that is a big reason my wife and I did not move back to FL in 2007.  The other thing is that a $500k home is a massive luxury.  Sure, it’s LA and all that, but go to most of America and see what $500k buys you.  It’s 2X the median national price. 

When we were temporarily in a rental, it was in a worse location, 1/2 the size, no yard, and significantly lower quality…at the same price as the home we previously owned.  We were paying for a short-term lease and unlimited sized pets (think about the dogs AZDP).

The idea of telling borrowers about serial refinancing should be securities fraud.  What if she wanted to borrow $500k to invest in stocks.  Could a broker tell her she could easily roll that loan over?  Their securities dealer license would get pulled instantly.  Housing is a huge financial industry and should be regulated accordingly.  I would also like to see mandatory counseling, paid for by the gov (or FDIC through taxing banks), for all borrowers.  An independent 3rd party to say, ‘have you thought about this?’.  2-3 hours at $50/hr is 0.03% of the purchase price.  People would not notice that tacked onto their points at origination.

With the upcoming legislation that will make House-foreclosure a Civil Rights violation in California, we should probably start rounding up some lawyers to file some lawsuits on behalf of people such as today’s subject. 

Civil Rights violations make good money.  Wells Fargo had better see the writing on the wall and give the house back.

What’s sad is all she lost is her credit…and she had to move…but she gets her credit back after being a good girl for two years

She didn’t lose any real money, to do that you have to actually have some real money, like I did, and try making it grow by starting a new business in CA, or investing in the market, like I did.  I lost real money.  No one’s bailing me out.  No one writes stories about people like me.  At least I put some people to work and tried to grow the economy.

By the way, love the profiled garage I mean house.  Working hard for that 6%!

I dont understand the hiring of the short sale expert.  Wouldnt you want to hire the lousiest agent you can find and hope they never find a good buyer.

The banks rarely foreclose on time and will extend a few times so you can squat for a bit longer while your crappy agent does their best at finding a buyer.

Boohoohoo, cry me a river lady!  You made some bad financial decisions and now you need to endure the consequences.  With all this carnage, homeownership to many people is STILL the holy grail.  When that changes, then we can have a recovery.

Two points that anger me in these types of housing sob stories:

1) It’s not the variable rate feature of your mortgage that’s caused your payment to be unaffordable.  Rates have declined dramatically since 2005 and your payment would have declined accordingly.  If I’d gone with a simple 3/1 ARM in 2007 rather than a 30Y fixed, I’d have been paying ~$800 less monthly for the last two years!

So just admit it!  You got an option-ARM because there was no possible way you could have afforded the monthly payment otherwise!  You had to pay less than interest costs hoping someone or thing would save you in a few years!

2) Disclose how much money you saved while not paying your mortgage before the short sale!  I demand to know that too.  You’re giving me all of the sad “poor me” facts and leaving out the “look how I screwed the system” facts.

Don’t they have a second story about that house?

“I’m so happy that I bought a house in Highland Park for $200,000 less than it cost just a few years ago. Certainly, it has dilapidated because the previous owner, a lady, had no money for repairs and only grew flowers.”

I’d like to start hearing more financial advisors mention that home “owners” are just throwing their mortgage payments - principle as well as interest if it is actually an amortizing loan - down the drain. It’s my reply when I am given an opinion about my rent money. Difference is, the rent money is much less down the drain than the mortgage.

$500k for a trashed house in a dodgy neighborhood that might be improving over time if the bubble would just keep inflating? Even if she would get her bailout, will she and her daughter be able to keep living there? I guess that between the economic devastation and police and fire department cutbacks, the neighborhood may not be getting safer and more attractive any longer.

Why does the women expect the bank to bail her out?  Why does the bank expect the federal govt to bail them out?  Why is it that the taxpayer is force to bail out the banks and banksters allow to keep all the bonus for running the bank into the ground?

She only asking for what the banksters got.  The bailout should of gone to neither.

I’m surprised that the LA Times didn’t play the single mother violin.  She doesn’t realize that many seeming nice things can be actually an anchor to bring you to the bottom.

Though I understand the sentiment that people that make bad decisions should not be bailed out, I think we fail to appreciate a couple of things.

1) A lot of people, dare I say most people, are not financially literate. I know it seems pretty simple math when you look at your salary and try to figure what type of home you can afford, but when people see a lender and they assure you that they can make it work and you don’t need to worry about it, then a lot of people would just go with that. It is naive, but most people would trust a lender when they tell you they can make it work. Most people don’t understand credit card debt, APR’s, variable interest rates, the stock market, etc. so they are trusting of others that, they feel, do.

2) A lot of these homeowners are seeing wall street and big CEO’s getting govt taxpayer bailouts when they essentially kicked the world economy in the face. They made bad bets and horrible decisions, but hey they didn’t need to ‘endure the consequences’

3) If we truly do not want to subsidize bad behavior then there shouldn’t be a penny of federal money or any tax payer dollars that goes to treat any issues related to alcohol, tobacco, smoking, gambling, promiscuity etc., since people should face the consequence of these bad decisions. So if someone does drink (maybe not even that heavily) and goes to the ER with some liver issues and can’t fully pay for the treatment, then he should be put out because he needs to face the consequences of his bad decisions.

I don’t drink, smoke, gamble etc., but I’m sure some of my tax money goes to dealing with people that have problems because they do.

Again, I’m not justifying her decisions or siding with her, I’m just saying that people here are being a bit harsh.

it’s all about learning how to do the math. too bad math is not most americans strong suit and we tend to make purchasing decisions based on our emotions rather than the bottom-line.

I was in at my ex-Washington Mutual bank the other day, checking Chase’s refinance rates (moving from our current 30-year to a 15-year fixed). Nice banker lady went over costs, etc., then began riffing about all the people who were in trouble because they had borrowed more than they could afford, etc. etc. (She knew it was safe to say this because I can afford my borrowing).

When I suggested that, notably at WM, there was more than enough blame to go around, she doubled down: No, it was simple, people shouldn’t borrow more than they can afford.

And I wondered: I’m a moderately knowledgeable citizen, financially, with an investment portfolio I pay attention too, substantial savings, etc. Yet I didn’t know much about refinancing, costs, how to estimate by loan capacity, and so forth. How much more true was this for most buyers who took the Washington Mutual option-arm line (remember, it was advertised heavily and promoted as a great smart thing to do)?

This story in the LA Times was indeed an emotional puff piece—and I’d like to see the buyer’s story about a reasonable deal on a house that needs work, but had a nice garden, at a good price. But the outrage directed at buyers alone—even weepy and self-interested ones—is not enough. The problem is, there’s no solution, and the businessman who lost real (not borrowed) money and faces badly-designed regulation (I’m for good regulation, but a lot of it, as any honest person of whatever party should admit, is badly-designed and ineffective) as he tries to rebuild a business, something that if done by honest business owners is good for us all.

The bank managements, however, were and are not honest business owners, and their purchase of the people who write the regulation should scare all of us).