Irvine Housing Blog

“However, according to CAR, more than 30,000 Californian homeowners will face higher down payments, higher mortgage rates and stricter loan qualification requirements when the limits drop.”

Good. Excellent. This is precisely the protection American taxpayers need for GSE-backed loans.

The conforming loan size should be dropped much further. It is absurd taxpayers are “on the hook” for $625k loans to purchase wildly overpriced homes using mortgages that greatly exceed sane debt-to-income ratios. But wall street banks with significant California home exposure would lobby mightily against a further reduction. Who cares about the taxpayers—bonuses must be paid.

Amen. Bring those home prices down to levels for all us “regular” people to own a home. Here, here, (clink clink clink) “Here’s to home values dropping another 20% in O.C.!”

Private investors are slowly coming back to be ready for this (I know of 3 big players offering true Jumbo products), but with ridiculously tight UW (as it should be).

Goes to show you how people think differently when lending their OWN money vs Governnent (not their own money).

Max LTV 80%, but only for the ideal scenario (R/T, SFR, 1-unit, up to certain loan amounts). Have a 2nd home, investment property… LTV maxed as low as 65%.

Want cash-out? Must be primary owner occupied with 720+ FICO. Investment property need not apply.

Have reserves? Even for a non-cash out rate reduction you need 12 months PITI in the bank.

Home listed for sale in past 6 mos? No cash out for you (they think you want to cash out and run).

Etc, etc.

It will be interesting to see how this plays out

Unfortunately, unrealtors stink at economics.  I wonder how many of the struggling real estate agents would defend higher prices if you taught them about price elasticity?  What if it showed them that lower prices might equal more sales (likely the case in today’s low sales market)?  More sales at lower prices will yield more commission dollars than hardly any sales at high prices.

It is possible that two people bought a house for speculative purposes, stopped paying the mortgage, let it go into foreclosure and then formed an LLC to buy it back at auction to later flip it for a profit?  Wow.  I know there is no proof for this but it is does seem like a diabolically simple way to abuse the system.

IrvineRenter—-

I have read your blog for years now and also purchased your book. Have to say you are if not the most, one of the most, astute people around when it comes to Real Estate. Keep up the good fight and keep writing! And, kudos to your many intelligent commentators!

Sincerely,

CarlsbadRenter

C’mon man.
Leave it to the NAR, CAR, OCAR to suggest that what Americans really need at this important economic juncture is more easy access higher sums of low cost debt for….buying houses. Isn’t that what got us into this mess in the first place? Don’t they read? 

Actually, I would think Realtors would SUPPORT the lower limits because of the knock-on effects of price deflation down to market demand and real incomes, which increases the likelihood of sales/inventory turns, and commission $.  All this excessive gov’t intervention and risk taking has done is constipate the system for buyers, sellers, realtors.

I don’t understand realtors aligning on the side of “homedebtors” and home sellers. Don’t they know that homesellers the ones wearing the Star Trek red shirts right now?

Great stuff! This is why IrvineRenter sleeps well at night. There’s never a shortage of damning evidence that everything these clowns put to paper is self-serving and ignorant of the larger impact to the world economy, future generations and the US taxpayer.

Nice one, CAR.

IrvineRenter,
Has there been any response from OCAR?
My F5 key is broken.

“...Have you ever noticed that realtors only defend the interests of homeowners? ...”

We receive weekly mail from a husband/wife realtard team, and one of their “lines” in promo material is, “We have a proven track record of consistently getting the highest price for homes in your neighborhood.”

I would like to call them, and ask if they solely represent sellers.  I know the answer.  I’d like to hand their promo material to buyers they’re representing in our neighborhood!

Thanks IrvineRenter for taking the time to explain what I wanted to say in my post yesterday. NAR is coming up with some “sensationalist” arguments, like 30,000 people being shout out of home buying, when nobody will be left out. They may have to settle for a smaller home, maybe, but that will be it. Why does the government need to subsidize 700k homes?

This is Arizona. Must watch:

http://www.youtube.com/watch?v=WLbTOpyiTOY

What a disaster.

The foreclosure train is back on track. (Until the next scandal, at least.)

O.C. foreclosure auction notices up 32%
http://www.ocregister.com/articles/percent-305845-down-mortgage.html

Up 32% month-to-month and 10% YOY.

Irvine foreclosure sale notices up 76%
http://irvinehomes.ocregister.com/2011/06/23/irvine-foreclosure-sale-notices-up-76/18959/

76%!!! Wowsers!!!

Irvine’s rate is up 76% month-to-month and 4% YOY.

Note that all of this is not really a major trend change in the market. It’s simply the resumption of a trend that was put on hold by the robo-signing scandal and some other delays in the foreclosure process. Something else to note is that, as dismal as this spring sales season was for OC home sellers, the double-dip in prices occurred with a temporarily constricted supply. If the REO spigot had not been temporarily turned off, the price declines of the past few months would have been even steeper.

-Darth

guess this will be the 3rd “leg down”, unless I’m miscounting.  man, this ride is even better than the park brochure made it look.

it had nearly started to slip my mind just how complicit these conforming loan limits were in pumping up OC real estate circa 2008, and couldn’t remember when exactly they were supposed to expire, since it seems like it’s been forever since they were enacted yet they never did.  but then, we’re living in a world (ok, state) with 5 year ‘temporary’ tax hikes.  so I guess nothing’s surprising.

thanks for the timely refresher.

Oh yeah, the property…

Please come back to this one in September and update us if (when) it’s still unsold and the alarm bells set in.  would like to know how many price reductions will have taken place by then.  wonder what the break-even point is.  attempting a $700k condo flip in 2011 in lakeside Irvine?  can’t believe these things still exist out there.