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I don’t think this is going to happen. People are skeptical enough of the GSE’s, that if they start funding massive investor purchases of properties, it would probably be the last nail in their coffin. Your local bank should have no restrictions on how many loans you can take. If the loans are that low-risk, why do the banks have to sell them off to the GSE’s? (The best counter-argument to this is that just because the banks aren’t doing something doesn’t mean it’s bad, which is proved by its false opposite, ‘If banks are doing it, it must be a good idea’.)
If there were no limit to the number of GSE loans one could get, you’d start buying ‘hundreds’ of properties in Vegas, have you already purchased the groups of 25 that would represent the down payments going towards all-cash purchases?
You are underestimating the negative effect investors had in the run-up. Yes, they were more appreciation investors than cash-flow investors, and I understand the difference, but investors are different than owner-occupants.
I’d like to see you get more loans to grow your business, just not GSE loans.
investors had nothing to do with the runup in prices. it was the speculators.
During the run-up, speculators were considered investors. Did we call Lehman a speculation bank, even though their actions were not much different than many budding real-estate barons?
And now the “investors” are helping prop up prices and preventing them from coming down further.
Uh, no, they were referred to as specuvestors.
During the run-up these folks were one and the same.
~Misstrial
Did you ever hear the term ‘specuvestor’ in the mainstream media? cnbc? Wall St Journal? I love the term, but it was not really generally used.
Was referring to matt138.
~Misstrial
Irvine Renter goes national!
http://money.cnn.com/2010/12/07/real_estate/ladera_ranch_foreclosure.moneymag/index.htm
It’s a long article, here’s IR:
Orange County has long been a bastion of conservative values; the idea of homeowners not paying and then staying put rankles. Larry Roberts, a local blogger and real estate investor better known as IrvineRenter, calls them “squatters.”
One hot question is how much of this is “strategic” defaulting—that is, how many people who have stopped paying have simply decided they will no longer pour money into a bad investment? Californians talk about short sellers with BMWs and/or conspicuous surgical enhancements. (A tour of Ladera short-sale listings confirms the first part of the story.)
But the financial picture of defaulters usually isn’t rosy. “There’s a strategic element in most defaults, and few defaults are purely strategic,” says analyst Goodman. “You have your hours cut back at work or go through a divorce and re-evaluate ... You don’t just say, ‘Oh, it’s three o’clock, time to default.’ “
NICE!
Oh I just love this! OC has lots of wealthy people living here, but when you look under the veneer of The OC, you start to see something very disturbing. The media struggles with the idea that a good chunk of the OC defaults are people who have been swimming with no suit for years ... fakes ... phonies. And now, they’re sinking in a cesspool of debt. We still have thousands of them all over Orange County.
It’s a race to the bottom as the phony rich add to the growing number of strategic defaulters. It’s a flush cycle.
Example: The Housewives of Orange County are exposed one-by-one on Lansner’s blog:
Alexis Bellino
A Newport Beach home owned by O.C. ‘Housewife’ Alexis Bellino and her husband Jim that the pair managed to rescue from repossession several months ago has been scheduled for another foreclosure auction, and now is also listed for sale at $3,695,000.
Lynne Curtin
‘O.C. Housewife’ Lynne Curtin and husband Frank may file for bankruptcy, the pair told reporters today. “Everyone thinks because of the show we’re gazillionaires,” Lynne Curtin said. “When the economy turned we lost all of our money in real estate investments. We’ve been trying to get back on our feet ever since then,” Frank Curtin said.</b>
Jeana Keough
<i>Now that the Coto de Caza home of recently retired “Real Housewives of Orange County” cast member Jeana Keough has escaped foreclosure, it’s up on the market!
Tamra Barney
It’s been a long, hard trial, but the short sale finally went through for the home belonging to ‘Real Housewives of Orange County’ personality Tamra Barney.
Lee….it’s best to ignore these crazy women.
How can I ignore theme, Orange County is full of these latte drinking bimbo’s. They have no understanding of culture, and they don’t know how to value what’s most important.
It’s entertainment for the masses, Lee. The sheeple love their television programs. I loved the bread and circus analogy from the other day.
Just go watch some TMZ, pay your taxes, and STFU.
These stories are nothing more than fabrications authored by base and vindictive blackguards blinded by jealousy. Knowing full well that they can never aspire to any place in Irvine society, they fling falsehoods and mud at those with higher SAT scores, better life achievements, and greater inner peace.
It must be horrible to be these non-Irvinites living out there in Riverside, their filthy pockmarked faces pressed against the translucent force-field of ever-low interest rates and genteel manners which forever insulates Irvine from the sort of price declines which occur among the cities of the dirty and low-born.
Anyone know if their motel on PCH in LB has gone into Default?
Address: 690 S. Coast Hwy., Laguna Beach 92652
~Misstrial
Do you want prices to fall where they should be or do you want an in-flux of cash flow investors to prop up prices?
It seems your opinion changes based on the area we are talking about. If it was Irvine, remove all forces that would cause prices to be stable… in Vegas, remove all forces what would prevent investors from buying more property.
Am I understanding that correctly>
Do you want prices to fall where they should be or do you want an in-flux of cash flow investors to prop up prices?
Exactly right. IrvineRenter, you cannot have it both ways. We should be championing the idea of prices falling to levels that middle class families can actually afford them. Do you think that investors are doing some kind of a service by snapping up properties before the price falls to a level where it will be bought by someone who will actually live in it?
Somebody told me I should come read the IHB today. They were right.
It’s like walking into some sort of parallel universe here from what I used to read and comment on so religiously a couple years ago. Apparently in this universe Irvine Renter is the prick house flipper who he used to ridicule so much in that other universe—- and AZDavid is the smartest guy in the room that I find myself saying “amen, brother” when reading his comments. WTF happened here?
It’s not your father’s IHB, ck…more like Bizarro IHB.
this is true.
IR has turned on us renters.
blinded by money and greed.
real estate investing is distasteful; although i would do it in a split second if i knew i could make money off of it. it’s still distasteful.
i see IHB readership dropping.
http://en.wikipedia.org/wiki/Self-perception_theory
Self-perception theory asserts that people develop their attitudes by observing their behaviour and concluding what attitudes must have caused them.
“Brent White, the University of Arizona law professor who’s made a name for himself by urging more underwater homeowners to consider walking away from their homes, has published a 168-page book to help borrowers who are wrestling with that decision”
And for a mere $18.95 ( plus shipping and handling ), you too can get the help that you need! Just go to BrentWhite.com Call within the next 5 minutes and get a free bag of popcorn! ABSOLUTELY FREE! LIMIT 10 PER CALLER! HURRY!
WSJ.com: Walking Away from Your Home for Dummies
http://blogs.wsj.com/developments/2010/12/07/walking-away-from-your-home-for-dummies/
I would trash my credit for a quarter million dollars tax free-wouldn’t you?
There aren’t the natural buyers to buy these excess homes, but there are the families to live in them
IrvineRenter, I am afraid this is complete spin.
If there are families available to rent the properties then certainly there are families available to buy them. Of course, the prices may be too high to buy. The solution is for prices to fall so that more people can buy.
We do not need land barons popping all over the place turning neighborhoods into detached apartment complexes.
This article makes it out to be that these “investors” are doing some kind of public service. If prices fall then people who actually live in the houses can buy them and fix them up without having to pay rent to a land baron.
Do you envision a country where the haves own all of the houses and rent to the have nots?
If the government is pushing for “homeownership” then that is not compatible with land baron kingdoms. Investors such as yourself should not receive one penny in subsidies. I do agree that the government should keep its nose out of the market completely.
I disagree that land barons are the market saviors. Bottom feeders is more accurate. I would like to see all this “investor” money go to something productive other cornering the market on houses.
Why don’t these investors build a factory and make something so that all these people can work and pay to fix up their own houses?
Smart Investors are not buying homes in Irvine (or any other part of OC) mainly because the deals here don’t produce positive cash-flow.
As for LV, they’re selling more homes there than ever before.
My point is this is not investing. Whether people are buying “cashflow” houses in Irvine, Vegas, or the fu{king moon. It’s just gaming and nothing productive results by it that improves the economy in any way. Maybe Home Depot sells a few more sinks and refrigerators made in some other country but that is about it.
Let’s just be real here and call it what it is: Real Estate Gaming. We see it dressed up in articles such as today’s that make it out to be some kind of public service which I take exception with.
It is no more investing than if I started up a company to buy up all the low priced gasoline at $3.00 a gallon so that I could add a few drops of honey to each barrel and sell it back to the poor at $5.00 a gallon claiming that the investor fuel is much sweeter than the old fuel.
define investing them.
If I buy the stock of a company and hope it goes up in value in hopes of selling it, how is that any different from buying a house in hopes that in future the values will increase so I can sell it?
each represents a stream of cash flows and depending on the discount rate and the growth of those stream of cash flows, it will be valued higher or lower.
I am taking risk and expecting to earn a return. Isn’t that investing?
I am taking risk and expecting to earn a return. Isn’t that investing?
No. That is gambling.
define investing them.
Buy a farm. Grow some vegetables. Sell the vegetables to get back the money you spent on the farm.
lol.
its no wonder you clash with so many people. You have own definitions of everything.
Buy a farm and grow vegetables? That is called entrepreneurship.
And what if the entrepreneur doesn’t have enough cash? That is when he gets INVESTORS who make and INVESTMENT who take a RISK by betting on the person or on the idea.
Gambling is a game of chance wherein no skill is required.
actually david is right.
i trade stocks in and out.
it’s not in any way productive or beneficial to society. it’s actually detrimental in some ways. but i make money. quite lucrative for the time spent. i could probably live off my trades.
it is absolutely gambling. from wikipedia:
“Gambling is the wagering of money on an event with an uncertain outcome with the primary intent of winning additional money”
i play the odds just like poker or any other game of chance. it’s just that trading has better odds than playing against the house in vegas.
thats because you trade. You don’t invest. two different things.
By Wiki’s definition, any risk taking is then gambling.
The farmer in David’s example is gambling since he doesn’t know what the price of his crops will be in the future too or whether he will actually make money or not.
So anything with variance is considered gambling by that definition.
Yeah, you forgot to mention that the banks are also taking back those Las Vegas homes en masse.
Maybe they’ll figure out a way to securitize and sell them off to investors.
The 10 year is at 3.16%, or .76% higher than when B-52 Ben first mentioned QE2. Wasn’t QE2 intended to lower interest rates or at least keep them low?
Oh fear not - they are going WAY lower ; he who shall not be named said so.
AZD, I think I know the person you are talking about. The same guy who said the Fed can keep rates low forever. Not sure how that will work out in a few years.
The process has begun. That is why I say if you buy now anything over $800K be prepared to stay and pay. In 5 years or a decade. Somebody will have to buy with interest rates dramatically higher.
For every 1 point rise in 30 year fixed rates buyers loose 10% in purchasing power. If you pay 1M dollars now you may have to sell at $750K b/c that is all people with great incomes can support.
Just a thought for the group to consider. The feds activities are most surely distorting the economy.
BD
Just read “Soylent Green” on Calculated Risk that 30 year fixed rate loans have already risen by a full point from the October lows. Wasn’t the Fed supposed to be able to keep rates low for as long as they wanted? Didn’t B-52 Ben just say that he would consider QE3 on 60 minutes the other night? How could interest rates go up?
http://www.calculatedriskblog.com/2010/12/mortgage-rates-rise-sharply.html
Downtown Irvine is the IBC
Most people will do anything to avoid being kicked out of their own home and ruining their credit. A short sale foreclosure saves a homeowner’s credit and gives them the luxury of time to relax and find a new place to live. No one wants the local sheriff to come knocking on their door to evict them from their own home.
Start by contacting a bank’s loss mitigation department. They will give you all the information you need to move forward with negotiating a discount on a loan. Believe it or not banks don’t want to take a house back into their REO inventory and they will work with you to avoid this.
Here are some key points to remember:
1. 90 days late or more is the best time to contact both homeowners and banks.
2. Have all paperwork prepared and ready to submit to the loss mitigation department of a bank.
3. Follow up, follow up and follow up again.
4. Ask the negotiator questions, they typically will be very helpful.
5. Do as many foreclosure short sales as you can, you are helping people out of a very bad situation and making money at the same time!