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Oh the hardship of eating a TV Dinner at your desk instead of a fresh sandwich at a deli. I just about broke into tears after reading that and then remembered how you can make a fresh sandwich at your house for about the cost of a TV Dinner.
I am not understanding the milk in the coffee rather than cream. You can buy the generic cream for not much more than milk.
It sounds like these people just need to learn how to grocery shop.
Haha, I had the very same thoughts. I guess the next step’ll be black coffee (generic store brand only) :( Poor lady
home depot and some banks (chase) have free coffee, free sugar, free powdered creamer. I don’t even bank there and stop by for a free cup now and then.
The coffee at chase belongs to any tax paying citizen anyhow.
when people perceive themselves as rich (relatively), resourcefulness goes out the window. The opposite is also true.
LOL. Brilliant! <Applause>
This is, sadly, what we now refer to as “making big sacrifices” or “struggling to get by”. In the OC, it is driving a 4 year old Mercedes or lowering the pool/jacuzzi temp 1 degree. Our parents generation should be slapping us upside the head - They understood struggle. People during the depression waiting in lines for food, etc. It really makes us look pathetic and materialistic. What if..gasp… someone actually could no longer afford that 4th plasma TV or worse yet, what if they had to drop their HBO subscription. AAAAAgh, won’t somebody save us?
remember, this is a long way from over. the long overdue decline in standard of living will surface thanks to the magnitude of the RE bubble and resulting fiscal and monetary policy.
I dunno. I think the overall standard of living dropped very little during the recent recession, after climbing for a long time. There are statistical ways to measure this (square footage of housing space per person would be one input, for example).
The standard dropped very little because subsidy has delayed correction.
Mortgage brokers, realtors, construction industry workers have seen very little decline in standard of living? Most would find that hard to believe regardless of statistics.
In areas like Merced healthy banks would be better off doing cram downs on everyone. These areas were hyper inflated, and that money flew over east bay into the wallets in SF and other wealthy markets.
Areas like Merced are screwed. Banks would be smart to write off their losses and convert the debt into government backed debt providing the home owners equity to do so. Merced is never coming back. I can only assume banks are not healthy enough to do so. Extend and pretend makes sense in some markets. In areas like Merced it only makes sense if the bank can not eat the balance sheet losses.
Merced is the armpit of California. And I love how a state union worker is complaining about having to cut back on cream and sandwiches while the county tries to approve tax increases from the sheeple to pay for all the public sector pigs. I’ll shed a tear for these folks when hell freezes over. LOL
No doubt.
Every time I hear one of the stories about people supposedly “cutting back” and crying about having to give up Starbucks, dinners out 2-3x a week, and the like, I look at the picture above of the couple sitting on the couch.
I could just imagine trying to talk sense into them back in 2005. Dopey husband would just sit there drooling with the same glazed over look and the ever smiling wife would look at you with her big ass grin, nod her head and when you were done, she’d say…
“You know what? Let’s bake some cookies! Yeah…cookies!”
Since my parents’ county is in despair, I thought I’d check the online foreclosure auctions. Saw one, googled address. Local blockshopper site shows sales from AD -> WI, then WI -> EM, EM -> AI (AI & WI have the same last name, assuming relation), AI -> WI. WI’s final purchase was $150k or about 50% above his initial purchase. The last sale was 90% financed. I don’t want to throw mortgage fraud accusations out in these comments, but it smells fishy to me. And it was the first property I googled!
One NYTimes article I saw had mortgage fraud hotspots, and my parents’ county was one of them. Aside from everything else, fraud was widespread & for the most part ignored. Not enough people are going to jail, from the non-arms-length transactions to the lying securities packers at Bear Stearns.
I think if you listed the top 20 counties for mortgage fraud, they’d be the same as the 20 counties in despair.
This type of property is very unusual. It is extremely atypical for a bank to own a foreclosed property for two and a half years without selling it. This was actually shadow inventory, as opposed to the much more common “shadow shadow inventory” of the bank just taking forever to foreclose. I wonder if there was a lawsuit involved or some other reason that delayed the sale.
Wow! 50.5% of homes in Riverside County had underwater mortgage? Looks like prices in Riverside have a long ways to go, ... on the downside.
Basically anybody who purchased or refied between 2003 and 2007 or so in Riverside County is underwater today (unless they put down a huge downpayment). I can easily believe that 50.5% of those houses that have mortgages (IE, excluding those who own their house free and clear) in Riverside County fall into that category.
I guess you can believe whatever you want, including the tooth fairy, but they appear to have data that says 50.5% of ALL homes in Riverside are underwater.
I wonder what has more credibility, Core Logic data or Geotph’s beliefs?
I believe the heading of the chart was as follows:
At least half of homeowners with a mortgage owe more than their homes are worth in 17 of 386 U.S. counties. Counties with the highest percentage of mortgages under water as of Sept. 30.
I also believe you didn’t bother to read this.
Speaking of despair, I’ve been wondering how this 500+ days of squatting is affecting property tax revenues. I’ve been searching for info on how much the California budget is getting hit by non-payment. Anyone know?
“Ortiz commutes 90 minutes to his job in San Jose as a maintenance supervisor for a garbage company. He pays $50 more a month to own in Los Banos than he would to rent in San Jose….I feel like I won the lottery,”
Wow…seriously, the stupidity of people never ceases to amaze me. One bad decision begets another and then another until a person is no longer capable of making any good decision. Do people HAVE to own so badly that they would willingly subject themselves to commuting 15Hrs/week? Apparently, yes.
I doubt those are comparable properties. Owning a 2000 sqft detached home vs. 750 sqft apartment does feel different.
The guy is probably spending 10% of his income on gas alone. These super long-distance commutes usually don’t end well.
You’re probably right. It is 80 miles from San Jose to Los Banos. That’s 160 miles a day. Assuming 20 miles per gallon, that’s 8 gallons a day. Assuming gas averages $3.75 a gallon for the foreseeable future, that’s $30 a day spent just on gas. There are roughly 20 working days a month so he’s looking at $600 a month spent on commuting.
This doesn’t include depreciation on his car and doesn’t include his time.
If you figure he makes $10 an hour and spends 3 hours commuting, that’s 30 dollars a day. 20 working days a month mean that he’s spending $600 of his time commuting a month.
Add in the depreciation on the car of another $100 or $200 a month, you’re looking at $1300-1400 a month spent on commuting costs alone.
So his savings of $50 on his mortgage/insurance over rent costs him around $1300 a month so he’s costing himself more than $1000 in opportunity costs and expenses.
That’s a bad deal. Where have we seen this before? Oooooh right - it went something like this: “You want to borrow as much as you can to maximize your tax deduction!!”
Morons. Every last one of them.
Forget power lines…nothing can persuade me to live in a town called “The Bathrooms”.
some people’s time isn’t worth anything which is why they can commute 15 hours/week.
Boy! I better not let my wife and kids read this blog. They might think our normal life is improvied. We eat out less, have less TV, less cars, older cars, than they do.
Who needs a South Beach Diet Bar when oakmeal and nuts are cheaper and healthier alternatives.
The percentage of housing under water only tells part of the story. It’s the percentage under water that really counts. The likelyhood of a walk away with 100% of the houses 3% under water is lower than the 1% of the house that are 99% under water. Just buying a house makes most buyers 8% under water.
IR:
Lansner on RE has an article up re Peggy Tanous of Irvine, one of the Real Housewives of OC.
Apparently “her” house is in Default and it appears she’s been squatting since 2008.
Would you be able to do an analysis for us on this particular property?
http://lansner.ocregister.com/2011/02/08/newest-housewife-defaults-on-irvine-home-loan/98648
Pic of Irvine house:
http://stoopidhousewives.com/2011/02/08/real-housewives-of-orange-county-under-water
~Misstrial
It looks like a Columbus Grove house.
:hides from AZDave’s ForTheChildren trolling:
Did someone say “the children”?!
Oh another OC pretender? Pray tell!
IR & Zovall - What do you call that “Submit the word you see below:” prompt? I wanna see if I can put on of those on the comments section of my blog, but I do not know what to look up.
Captcha:
http://en.wikipedia.org/wiki/CAPTCHA
Yup, it is a CAPTCHA. There should be some good Wordpress plugins for it. Another Wordpress plugin that works great to help reduce spam is ‘Akismet’
Can you explain why people complain so much that their homes are underwater, they earn less, etc?
They signed a contract which clearly indicates how much money they would pay each month for the next 30 years, rain or shine. So, they could afford to pay.
My understanding of the house buying process:
* You buy a $700,000 house today.
* You must set aside at least $4,000 for the monthly payments, taxes, repairs, etc
* You must keep in bank $50,000 (12 * $4,000), so you’ll be able to survive and pay for the house for a year or more if you lose your job.
You nailed it.
These people clearly thought it was a fair deal back when they bought the house and indebted themselves for 30 years.
So the house has now lost half its value. So what? What does that have to do with what you bought it for? Where was your ability to afford the house dependent on the current market value of the house? You paid the premium to be a house owner at a time when many others had to go rent because they could not afford it. Isn’t that worth something?
It’s not like many of these folks would have changed their minds had someone tried to talk them out of buying.
It is odd that somehow the perceived value of a house goes down when the market value goes down. It’s almost as if people were buying homes during the 00s purely to capture the magic appreciation.
No matter what you said, you couldn’t talk them out of it. If you showed them it was a bad deal using math, they would call you a bitter renter. If you told them they won’t keep going up, they would say something like “something is worth whatever someone will pay for it” (never mind the fact that, in the aggregate, people _weren’t_ paying for houses they were borrowing. What they should have been saying is that something is worth whatever someone can borrow for it.)
No matter. Here we are half a decade later and people are finally waking up to the fact that home ownership costs money. The people locked into these homes will be nickel and dimed for the rest of their lives and stand little chance at accumulating any sort of net worth. Their only chance is bankruptcy and then rebuilding but the powers that be are fooling them into thinking that staying in the house is the best course of action for them. In this way, the banks will take all that they earn.
So, what’s the moral of the story? Rent, don’t buy and watch the great unwashed masses (yes this is you, Irvine) eat shit because of their past bad decisions.
>The people locked into these homes will be nickel and dimed for the rest of their lives and stand little chance at accumulating any sort of net worth.
In 30 years, their houses will be worth much more than now. So, if they keep paying, they will eventually accumulate some wealth.
Mr. James Irvine was able to buy the whole Irvine area for $25,000, it was only 150 years ago.
Thank you for proving my point, Vincenzo. It is no wonder people like yourself are so easily manipulated.
These houses will not be ‘worth more.’ They will deteriorate as time passes and become worth less. This decrease in value will be compounded by a declining population. However, the absolute value of the dollar amount attached to them will be greater, but they will not be more valuable in nominal terms. In all likelihood, they will not return to the nominal value witnessed in the past decade ever in our lifetimes.
By your logic, its only a matter of time before tulip bulbs are as valuable as they were at the peak of tulipmania. How likely do you believe that to be? I’ll remind you that at the height of tulip mania, tulip bulbs were selling for roughly 10-15 times what a skilled craftsman made at the time. In today’s dollars that’s a single bulb for around $750k. Seem like a likely scenario to you? It is about as likely as home prices coming back to the same nominal value.
I don’t argue about it.
House prices will certainly go up if measured in green bills.
House prices will decline if measured in hours “you have to spend in office listening to your grumpy boss”.
I wish people measured value this way. Unfortunately people just think “its only $xx which I can put on my credit card and worry about it later.”
I like to put the value on something I buy in the same line as “how many hours a day did I have to work (relative meaning) to pay for this.” And that determines how badly I want that item. If I NEED that item, I just bitch and moan about having to pay for it, but if I NEED it, it does not matter the cost (medicine, car maintenance, etc).
There is no almost about it. In bubble areas, during the period from 05-07, people bought because of appreciation. If you didn’t believe the appreciation story (there were more than just IR), you rented. IR, I know others in FL who took a similar tack to you and are still renting.
The ‘budget shortfall’ could be construed as the additional amount needed to pay for public workers’ retirement plans, perks, etc.
http://www.pensiontsunami.com/