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If the first was an option-ARM, it would not take long making the minimum payments to get to > 3.5M in debt. It really only takes $3.3M of debt to get to a short sale, as they are probably factoring in the 6% off the top.
I don’t view > 1M loan borrowers as any different than everyone else, but I view their homes as different. How many people in Irvine can afford this home? Now how many can afford the median home? It is a lot easier to find someone to buy a $500k home than a $3.5M home. The size of the buyer pool makes the properties more dangerous loan-wise.
...because a tax return will tell you all you need to know about someones ability to get loan right?
Tax returns are very useful because people have an incentive to play down their income to pay less taxes. On loan apps they play it up.
Combining the two helps even things out.
Right. Tax returns are very transparent for wage earners. Self-employed and business owners always complain about how their returns don’t reflect how well they’re really doing (when they’re trying to borrow money), but they don’t complain when auto leases completely unrelated to their business are deducted, or when every single meal consumed is too…
“or when every single meal consumed is too…”
One defendant in a tax case is quoted as saying, “I only eat for business purposes.”
Ever seen a Schedule F filer’s tax return? You would be suprised by how the Uniform Cap rules work in their favor.
I’ve met Charlie Engle at an outdoor conference where he was the key note speaker. He is a personable and impressive guy. I recommend the movie “Running the Sahara”.
If he is 1/4 as impressive as I think he is, he will end up bouncing back.
From the Times article it seems like he already is. He is getting screwed, and he is not among those that should be getting the most attention and punishment for crimes committed.
I recommend his new movie “Running America”. He and Marshall Ulrich (sp?) ran across America during our last presidential election.
I believe someone wrote here on IHB or some other board that this $1m down payment was extracted from owner’s 73 New Dawn, Irvine property which got foreclosed last week.. Can someone check to see if this is correct?
An all-cash buyer pulled the trigger on 73 New Dawn at auction paying $1.525M.
We should see it hit the market again soon.
My guess would be around $1.8M.
Aggressively priced for a quick close.
That’s a great catch. According to Realist, the owners of 73 New Dawn that got foreclosed on last week originally purchased this property for $730,000 in April of 1999. They then serial refinanced the property, from what I can tell their last loans were for $ 1.452 and $200,000 5/3/2007. This coincides with their purchase of 31 Reserve for $4,288,500 on 5/9/2007. They took a first for $3,000,000 and a second for $200,000 on this one as well.
Since 2007, they had been renting 73 New Dawn for $4000+ per month in rent. I knew one family that rented that house starting in July 2007.
Talk about maximizing the cash flow…
This new short sale scheme with high list price at 31 Reserve would allow them to live there longer by another 400-500 days or more..
No kidding. This is a great example of what I see every day in the high end of the market and what leads me to believe that IR is correct. If you look at Newport Coast you will see that in many tracts as a result of higher supply the prices are dropping extremely quick, to the point that with todays maniupulated rates they are below rental parity.
We just negotiated a deal in Newport Coast that had comps primarily in the 1.7- 1.9 range and we’re in escrow for well below 1.5. However, I’ve been surprised that some of the higher end Irvine areas have been holding and remain further off from rental parity. However, it truely is a function of demand and available supply that can transact and seller motivation.
A basically honest man who confesses to a seductress…
LOL! Basically honest?
It sucks that the big fish are getting away, but we should go after the little guy who thinks it’s okay to lie their asses off on loan applications. If they hadn’t of participated then this bubble wouldn’t have occurred.
At the very least, these type of people should be removing trash from highways for a few years. Or mowing my lawn.
Agreed.
Every residential application is a “Fannie 1003” form that includes the following warning directly above the signature lines:
“I/We fully understand that it is a Federal crime punishable by fine or imprisonment, or both, to knowingly make any false statements concerning any of the above facts as applicable under the provisions of Title 18, United States Code, Section 1001, et seq.” https://www.efanniemae.com/sf/formsdocs/forms/pdf/sellingtrans/1003.pdf
Oh yes, it is on the Fannie 1003. Whoop-Dee-Doo. Law and Order for the common man all the way and plausible deniability for the Bank Executive.
The point that is being made is that the “lenders” who streamlined the fraud are essentially co-conspirators who appear to be above the law when it comes to equal application of it because they made the little guy sign a piece of paper that acknowledged that he would be the fall guy if things did not work out.
The Government took one more Crackhead off the street and ignored the Dealer.
Let them all go to jail but get the damn priorities straight. If the Kingpins who orchestrated the scheme do not receive jail time then it is hard to justify locking up the small time junkies. Which one is harming society worse?
No doubt dude. I agree fully that the lenders are the steamier of the pile, but what bothers me is excusing the dumbassery of the borrowers. They are like the idiot that smuggles a pound of hash across the border and thinks the risk is worth it.
If we turn a blind eye to the rank and file then the rank and file will continue to do stupid shit because society considers them innocent victims. They are victims, but they are not innocent. They broke the law and need to be punished. Community service is fine with me. Let the leaches give a little something back.
But, yes, it pisses me off that high level executives always bribe their way out of trouble. We need to nail these people.
Absolutely we should go after the little guy, but for the scale of punishment to be fair, then Mozilo & the other banksters should get the death penalty.
Little Success for Loan-Reduction Effort
http://online.wsj.com/article/SB10001424052748703748604576225453501985520.html?mod=WSJ_hps_sections_news
Little Success for Loan-Reduction Effort
Banks don’t want to hand out free money? Man, what kind of CRAZY parallel universe have I stumbled into today?!
Government efforts to encourage mortgage companies to reduce loan balances voluntarily for more borrowers haven’t had much success so far.
Oh please. Yes, we are looking for volunteers to lose money - anyone? Do I see a hand back there?
states have barred borrowers who did a “cash-out” refinancing from being eligible for a write-down, and loan balances aren’t immediately forgiven.
[The] program [blah blah blah] has received fewer than 300 applications
What would success even look like? 500 applications? A million applications? What is the number that the author is looking for?
I don’t understand why Countrywide’s head honcho Mozilo must be punished.
He should’ve filed for bankruptcy and let investors-speculators eat all losses.
His goals were noble: allow janitors and maids to buy $500,000 houses and rent them to poor people.
Bank of America Set to Write Down Principal on California Mortgages
http://www.housingwire.com/2011/03/28/bank-of-america-set-to-write-down-principal-on-california-mortgages?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+housingwire/uOVI+(HousingWire)
anyone who (tries to) run the sahara , or from death valley to the top of mt. whitney for that matter , has serious “mine are bigger than yours” issues and when combined w/ being a real estate “investor” (i.e., failed flipper) should be jailed . not permanently i’m saying , ya’ know , just long enough to let the testosterene wane .
ps sux mr. permanent tan got off but 2 wrongs don’t make a right