Irvine Housing Blog

Ms. Kelley Carter’s pretty hot.

She should move to Nevada and work at a legal brothel.

http://azrealestateangel.com/home

She’ll be back on her feet in no time.

Speaking of moral hazards; here come the principal reductions.

http://www.reuters.com/article/idUSSGE62N02520100324

“If you believe rents and interest rates are stable, or if you see this property as a long-term personal residence, there are reasons to consider this property.” 

Ahhh, progress, starting to get a little bit more realistic and consistent in the message.

In our next session we will analyze the identity crisis of this blog, namely how it is worsening, and steps to keep readers and convert them into customers.

I read this story yesterday.  I loved Mr. Chatburn’s Two-Wrongs Make a Right logic.  He used to feel that bailing out his neighbors was wrong until he saw “NEWS programs” that talked about the “AIG bailout”.  Oh and the fact that he himself is now underwater because of his struggles to keep up with his own bills.  He is all for the Hypocrisy now if it means getting to live at the expense of everyone else to pay his bills.

I loved his phrase:  “Why don’t we help our own first”

WE?

What is this WE business?

What Mr. Chatburn really said was: “Why doesn’t AZDavidPhx help Mr. Chatburn first”

That’s what he was saying.  Volunteering the responsible people who did not live above their means to help him pay his cable bill.

The answer to IrvineRenter’s question is “Yes”.  Money for nothing is the new entitlement.  This is outright Socialism being called for by this guy and he doesn’t even know it.  When he gets back to work and his taxes go up to pay for it all, he will switch back into small government free market Capitalism mode - but for now big Socialism is AWESOME.

LOL!  I read this article (here in Shanghai) this morning—and said to myself “This should be in the IHB”.  Yep.  I thought the same thing about Mr. Setbacken.  He only put $2,000 down, but he’s been paying it off and has resisted tempation.  As for their neighbors the Chatburns—well, it must be nice to pay your mortgage every month for nearly 20 years—and owe $100,000 more than when you started out!  I wonder what they did with the money.

As for Ms. Carter—well, sometimes there are just no words.  Obviously a total dumbass (especially for going public with her stupidity) and a sorry (but sadly typical) example of a realtor.  The fact that there are no barriers to entry in that business is one of its main problems.  Ethical, competent realtors must be a tiny minority.

Not sure what you base your rental parity considerations on, but rents are falling. I am renting in Irvine and our rent has been lowered by 30% over the last 3 years. I expect to see another 10-15% when we renew this summer. The Irvine company has more and more vacant units which will further drive down prices. $2000 for a 2BR (which is what the better communities are charging) is not realistic anymore. Just look for a 2BR in Irvine on Craigslist: just on March 23 there were several hundred units listed

The details is at BA website…

Earned Principal Forgiveness

Bank of America is taking an innovative “earned principal forgiveness” approach to HAMP modifications of the NHRP-qualifying mortgages that are at least 60 days delinquent with current loan-to-value (LTV) ratios of 120 percent or higher.

  * An interest-free forbearance of principal that the homeowner can turn into forgiven principal over five years resulting in a maximum 30 percent decrease in the loan principal balance to as low as 100 percent LTV.
  * In each of the first five years, up to 20 percent of the forborne amount will be forgiven annually for borrowers that remain in good standing on their mortgage payments.
  * Forgiveness installments for the first three years are set at the 20 percent level.
  * In the fourth and fifth years, the amount of forgiveness will be dependent upon the updated value of the property, so that the LTV will not be reduced below 100 percent through principal forgiveness.

This solution will be considered when it provides a more positive outcome under the net present value test than under the standard HAMP guidelines.

http://newsroom.bankofamerica.com/index.php?s=43&item=8662

I don’t have any hostility towards bank programs that are designed to tempt people into continuing to pay on hopeless underwater homes.

I hope banks do more of that… It puts the consequences of bad loan decisions right onto one of the parties that made the bad decision. When home debtors pay more on their underwater loans, it reduces the costs borne by responsibile home owners and tax payers.

I really don’t see how this home could have been originally purchased in 1998.  Woodbury wasn’t even a gleem in TIC’s eye 12 years ago.

“Later, after Mr. Setbacken talked to Ms. Carter — she “cried and cried and cried,” he said — he had a change of heart. In an e-mail message, he said that perhaps wealthy Americans could donate money to aid homeowners. If he had more money himself, he might help some neighbors pay their mortgage bills.”

While Mr. Setbacken is a great American, I would not say that he represents the best of American character. My interpretation of the above statement is that Mr. Setbacken was emotionally moved by Ms. Carter and so he effectively said that people with more money than him could donate money to help out the home owners. If he really wanted to help, he could always take out a HELOC on his current equity and use that to help his neighbors. But no…his heart was pulled and he promoted the idea that someone else can fix it. It’s this kind of slippery slope thinking that get us in trouble.

Now, I’m not saying that my heart would not be pulled and that I would not make the same statement as Mr. Setbacken. I’m just saying that he’s not necessarily the best that America has to offer. The best American will have the courage to “hold the line” when the line must be held.

It looks as if all the walk away/short sellers already got big breaks.  1.  payment of the unforgivable student loan to a forgiven house loan 2.  Years of high living borrowed money which may be forgiven upon FC and default. The only ones that have not been given big breaks are the savers who paid a large down payment or used the save money only to loss it in the stock market.  The wise savers have very little to show for it (only loss money without getting new cars, vacations, etc.)  The foolish borrows still have their home equiity paid cars, vacation memories, saving for a year or more of free rent and the possibility of a bailout.  The savers are out the loss in the stock market with no talk of a bailout for them.  Not even free rent.

After all this and more, I decided to save less.  The banksters and govt. are going to take it anyways.

Thank you IrvineRenter for yesterday’s post.  It was the wisest advice for the stock market that I’ve ever read (both in business publications and study at Cal and other unversities).

Should be required reading for anyone who believes strategic defaulting is simply a “business decision”. I enjoy asking people who think contracts aren’t worth the paper they are printed on “tell your kids after investing too much in them don’t see any return so your’re going to walk away….” is that all right? How this differs from a financial commitment is unclear to this writer.

To those people in genuine sufferance, forbearance. For those people with self inflicted wounds, foreclosure, and quick.

My .02c

Soylent Green Is People.

It’s interesting to see this play out in Phoenix.  The housing and rental markets are anemic; the people who are buying are, for the most part, investors who dream of a reinflated bubble where they’ll be able to rent a 1500 sq. ft. tract shack for $1300/month.

Those who still have their homes have seen prices fall by as much as, or more than, 50%.  Keep an eye on this, IR.  I guarantee there’ll be a mad rush for these forgiveness programs in their first few months, until prices continue to drop, and strategic defaulting looks less like a cop-out and more like the only way out.