Irvine Housing Blog

I’ve been overseas and it seems that the English language has evolved since I have been away.  Let’s see: “Larger” is now a proper noun, and we seem to have dispensed with the convention of making a distinction between singular and plural nouns. Is this, I wonder, the impact of Twitter?  Seriously, how many listings does the average agent handle?  Is it so many that she can’t learn how to spell or write a coherent sentence?

Reading this blog does indeed make me angry.  I feel ever more justified in my belief that while the banks were guilty of faulty stewardship, the actions of the so-called ‘homeowners’ was simply criminal.  I can only assume and hope that that the creditors will be hounding these people for the debts they owe until the next market peak in 10 or 20 years time.

If you borrow $900k your payments will be in the $75k - $100k/yr range.  I was wondering how much heloc/refi cash-out money went into paying people’s payments on loans.  A neat trick if there’s an income dip, but still just a trick.

As an Obama donor, I am upset by the fact that Obama doesn’t really get the housing bubble.  The goal is not to just keep everyone in their home, it’s to get every home to have someone in it who can afford to make the payments.  Tweaking a payment to the point that an owner still can’t really afford it, and is so far underwater that the home in no way resembles even a modest investment, you’re prolonging the agony.  The incentivization of short-sales seems a better policy to me, but 2nd lien holders don’t seem to be happy with the haircuts they’re looking at, even though projecting out a few months to foreclosure, their hair will be completely shaved.

“Readers here are not surprised by these numbers”

Wanna bet? 

I’m still astounded.

Thanks for another helpful post.

You write: “Policy makers have scared everyone into bailing out the banks ostensibly to help loan owners stay in their houses. In reality, this is a poorly disguised bailout of the banks.”

My position is that the bailing out of the banks was a well thought out plan to centralize power in the Federal Reserve and in the US Treasury.
The chart of distressed securities FAGIX, JNK, IAT, and KME compared TLT, for the last 12 months shows how the swapping out of US Treasuries for motgage debt held at banks, investment brokerages, insurance companies and others under TARP and other facilities has monetized debt, as well as stocks, and has depressed the value of US government bonds. The result has been a bloodless coup which has privatized wealth to Wall Street and investors who were savy enough to go long the markets and has socialized losses and toxic debt to the tax paying public. The design and use of the revolutionary Fed Facilities were well thought out and premiditated by Ben Bernanke as a ploy to centralize economic, banking, and monetary power in Washington. This coup was assisted by the SEC and the AICPA with their FASB mark to fantasy ruling (when this came out, I was stunned, like I could not believe it). There could have been another option, that being to shut banks with toxic debt down; but that did not happen; as Ben Bernanke designed a bailout of the banks not the people.

So now after Quantative Easing has ended and all 1.25 Trillion has been used up, banks will start foreclosing and taking losses on the books—from their point of view extend and pretend is out of fuel.

You relate: “That means they need to foreclose on people and either rent the place out or sell it to be rid of it.”  ... I agree.

There is something much greater here than just the people living in the home or the local community or the area of Irvine—a beast political and economic system is rising in Washington DC

The owner of this house must have had some type of illness or family emergency…

just like everyone else in Irvine…  everyone in Irvine has major illness or family catastrophy to explain the HELOC!!!

I bet the advertised open house on Sunday is going to be a mad house.  This is priced $100k under comps.

At current price monthly cost of ownership is $2670?

Dare I say this is under rental parity in Irvine?

IR,
  I noticed that you found Banksy. Cool stuff, eh? Did you see his “Village Pet Store And Charcoal Grill” show?

Back on topic, why did these folks only get a HELOC abuse grade of E? Why not an F? A total property debt of $893,000 & a total MEW of $693,000 on a $655K house makes Dillinger look like a piker, even after adjusting for inflation. Plus he got killed, these folks only have to move…

OT: SEC Charges Goldman Sachs

My comment: BFD. How much do you wanna bet the result will be a slap on the wrist?

Can you say “re-election bid for the incumbents”?

The child begging for donations for CA debtors is so true.  The Fed printing of money is trying to stick it to other countries that purchased US T bonds and note for safety, but will be paid back in inflated dollars.  Japan and the Arabs fell for that trick, let’s see if the Arabs and PRC will be left holding the bag (of course US middle and lower class savers will be holding the bag too).

TARPs were just justifications—putting lipstick on a pig.

“It is appropriate to feel compassion for people losing their homes ...”

Is it appropriate to feel compassion for me losing $60K to Enron’s bankruptcy?

Obviously, I am not looking for compassion, pity or bailout. Despite Enron’s bankruptcy my bottom line was 6% profit in that year.

Over-borrowing + default is actually indirect sale. Sometimes very profitable one. Good price, no agent/broker comissions, no general/termite ispection, no advertisement fees, no open houses.

Is it appropriate to feel compassion for people making a lot of money?

That’s funny.

How do you look up the loan and HELOC record for these houses?  Is there a public search for this?

For those who are local as well as in the biz, I highly recommend coming to the Irvine Area broker’s preview meetings every Wednesday at 9:00 AM. These meetings have a great cast of Realtors and is a frequent haunt of “The Emperor of Irvine”. TEoI recently spoke of how the market is fully stabilized, how distressed inventory has been stemmed, and that an expected appreciation rate of 5% is not out of the question for Irvine properties in 2010. Yes, this is being said for the benefit of the Realtors there, but with REO’s on the rise and HAFA getting revved up, 5% upward is, shall I say, a bit on the bright side. It’s part kabuki theatre, part slow motion multi vehicle crash scene, but that is the conventional wisdom out there.

If you did not see the “other meteor” movie that came out when “Armageddon” did, “Deep Impact” had a scene where two of the main characters are standing on the beach right after the comet hits the Atlantic. A mile high wave comes right at them with predictable results. That scene reminds me of the Realtor commmunity, led by TEoI cheerleader types, standing on the Pacific, as the long anticpated foreclosure wave crests right in front of them. Unfortunately the only thing they will say at the time will likely be “It’s best to buy now before you get priced out forever”.

My .02c

Soylent Green Is People

IR,

Don’t be so sure about any “down payment”.  Many deals done during the bubble included a transfer of funds into the buyers account from their Real Estate agent. This was to satisfy asset requiremnts. This money was kept there during the application process and then transfered back to the agent after the close of escrow.  “Down payments” were done in the same way.  When escrow closed the HELOC was opened and the proceeds went back to the agent.

An empire for whom?  How about Ken Lay—how’s that empire going?  Look, if you’re going to switch the topic from housing to politics, don’t expect to not catch some blowback.  And your use of the word “socialism” tells me all I need to know.  If you think Obama has adversely affected the economy for the majority of middle class Americans any more than had GW Bush, Bush senior, or Reagan, then you are deluded.  Taxpayers always clean up the messes that genius Wall Street, Greenspan-approved Ponzi schemes, and other foolish “free marketers” have created through abuse, corruption, and system gaming.  Privatize profits, share losses: there’s your “socialism”. 

Yeah, CEO types sure have all the answers.  What a joke.

(For some reason, my response ended up at the bottom of the thread)

An empire for whom?  How about Ken Lay—how’s that empire going?  Look, if you’re going to switch the topic from housing to politics, don’t expect to not catch some blowback.  And your use of the word “socialism” tells me all I need to know.  If you think Obama has adversely affected the economy for the majority of middle class Americans any more than had GW Bush, Bush senior, or Reagan, then you are deluded.  Taxpayers always clean up the messes that genius Wall Street, Greenspan-approved Ponzi schemes, and other foolish “free marketers” have created through abuse, corruption, and system gaming.  Privatize profits, share losses: there’s your “socialism”.

Yeah, CEO types sure have all the answers.  What a joke.

We provide a very useful resource locally (based in Newport Beach).  If anyone has questions regarding ‘Short Sale’ they can stop by our site and get answers ‘on the spot’ from our team of Short Sale Experts (available online from 9am until 11pm PST).

Since the beginning of this year, more than 7,500 CA residents have visited our site and 100’s have chatted with us.

www.ShortSaleLiveChat.com

Thank you!

Richard