Irvine Housing Blog

Ausgezeichnet!

Sorry, I live on a different planet where you have to add the repair/replacement costs to the house costs before you see a final price.

New roof $20,000 and up
Bathroom repairs $2,000 and up
Not to mention what else your going to find
Add at least $40K up front to this house before you talk about rental parity.

What part of $720,000 dollars is this home worth?  Is there a view of the ocean or at least a very nice lake?

Maybe GS will be forced to give back some of their tax payer profits to contribute to the fund designed to pay for the next banking collapse.  Yes it’s already a forgone conclusion by the fine folks on capital hill, another banking crisis is in the bag.  We will prepare by taxing the banks to encourage them to take on more risk, brilliant.  Gentlemen place your bets let moral hazard rain down from the heavens.

What’s up with the lighting in that Senate hearing room?  These people all look like zombies.

They are putting on a damn good dog and pony show over there in D.C today.  Totally worth the price of admission to watch these scumbags squirm.

Clintonism, Bushism, Obamaism—when you’re purchased by GS, they are all the same, GSism.  The congress will just show how tough they are and in 7 monthes the will just be some show legistation that will apprear to be regulating, but will only indemify GS and others.  GS will just say “We did nothing wrong…We lost money.”  Will be sounding like Whitewater.  Laughing all the way to another feeding trough.

One thing different, is we have “Cyrus” in office.  The media will report how well the economy is recovering while the unoffical unemployed grows larger.  The media will have another obamasm.

Banks, M&A, some high tech. show some signs of recovery.  Temporary uptick in car and washing machines sales.

I got this emailed to me from a reader:

Easily Understandable Explanation of Derivative Markets:

Heidi is the proprietor of a bar in Detroit.  She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar.  To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later.  She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

Word gets around about Heidi’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Heidi’s bar.  Soon she has the largest sales volume for any bar in Detroit.

By providing her customers’ freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages.  Consequently, Heidi’s gross sales volume increases massively.  A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi’s borrowing limit.  He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

At the bank’s corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS.  These securities are then bundled and traded on international security markets.  Naive investors don’t really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics.  Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation’s leading brokerage houses.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi’s bar.  He so informs Heidi.

Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts.  Since, Heidi cannot fulfill her loan obligations she is forced into bankruptcy.  The bar closes and the eleven employees lose their jobs.

Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%.  The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Heidi’s bar had granted her generous payment extensions and had invested their firms’ pension funds in the various BOND securities.  They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds.  Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion dollar no-strings attached cash infusion from their cronies in Government.  The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Heidi’s bar.

Now, do you understand?

Don’t expect bullwhips and thumbscrews. Some mild, symbolic spanking is the more likely outcome.

That is exactly why the banks should be nationalized. The equity and bond holders would be wiped out, the banks would be recapitalized by the government, and with a clean slate, the banks could lend again. It wouldn’t crash the world economy; it would only wipe out the existing stock and bond holders from the banks. In fact, it would be a tremendous help to the world economy. The only reason this does not happen is because banking interests control our government.

SB,
Congrads on really owning a house.
Wise warning for others. 

On the featured property:
1.  Is the owner really trying to sell or just pretending?
2.  Since there’s only a first, is it financially better to sell (and pay expenses and back payments) or get TS-FC’ed (no expenses)?
3.  Owner gets a B for converting to only a first loan, but not an A for fully gaming the system.  An A would require full gaming of the system, like the NB women with HEW in the multi-millions, squatting for years without payment and trying to lease the place on the taxpayer’s hard earned money. I shouldn’t pick on her, cause iher hardship was caused by a divorce and her ex’s fault.  BahBahBah.

Sad Buyer,

Congratulations on paying off your house. That is a fantastic accomplishment.

I have a similar bank story. When I sold my house in Florida, about 3 weeks before closing, the bank gave me an incorrect payoff balance. They had improperly recorded a payment about 8 months earlier, and for the last 7 months of the loan, they recorded everything as late, so I had $175 worth of bogus late fees. In the three weeks before my closing, despite having various bank representatives on the phone who admitted their error, I could not get these fees reversed. At the closing, the fees were still there. I had to chose between closing the sale or postponing to fight for $175. I chose to close. The bank was rewarded for entrenched incompetence.

Huntington Bank: you suck.

“The moral of the story.  You have to watch these people like a hawk.  Even when you are down to the last two payments on your loan.”

It’s even a problem if you don’t make additional payments. My parents paid off their house by making the minimum payments, yet the servicer tried to extract further payments from them.

The problem, according to one employee my father contacted, is that payoffs are so rare that software errors go undetected for months if the software is tweaked.

That’s California for you.

Does any one notice that most (if not all) of the bank’s mistakes are to their advantages, not the customers?  what a coincidence!!!

I’d love to hear from anyone whose credit card balance was accidently reduced by the bank.

Be careful now Laura.  Planet Reality has already staked the claim that this POS is at rental parity.  Anybody who pays almost three quarters of a million dollars for this house is absolutely insane.  There is no curb appeal and the entire house needs updating.  There are so many better alternatives for this price.

In a normal market, this crap box might sell for 475K.  And we just might get there sometime soon.