The real Ponzis and posers of Irvine

Apr 25th, 2011  
by IrvineRenter  in Library News

Astute Observations

Astute Observation by winstongator
2011-04-25 03:56 AM

I have been wondering how ponzi my wife and I could have gone.  We probably could have gotten into a home 4X the cost of our current one.  It is hard for me to imagine that.  Some family members thought we were buying too much house at the level we bought at.  We still have one empty room, and at 4x the home, we’d either have spent a lot more in furniture or have even more empty rooms.  Then there are the many more places my daughter would have to hide.

Two Fortune 500 companies are headquartered in my city.  When looking at some for-sale properties to see prior sale prices, you can find out who owns them.  It is amazing how reasonably priced, relatively speaking, these executives’ homes are, considering their million dollar salaries and tens of millions in stock compensation.  There is a cultural difference in parts of the country as to how much people will spend on housing.

Cash-out refinances are a key enabler of volatility in home prices.  I don’t think the recourse nature of the refi will deter people from ‘free’ money.  There have to be some simple regulatory changes to limit & deter.  The revaluation for tax purposes.

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Astute Observation by Perspective
2011-04-25 09:41 AM

“...There have to be some simple regulatory changes to limit & deter…”  Dodd-Frank makes attempts at this.  However, shouldn’t the staggering losses be sufficient deterrent to creditors from making loans to people who can’t reasonably afford to service the debt?  I think the recourse laws in CA are just fine.  The burden is on the creditor to make “good loans.”

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Astute Observation by ripcord
2011-04-25 07:34 AM

I sure love that neighborhood of condos across from Mason Park.  And it looks like this place is pretty close to rental parity.  Too bad condos are so dangerous to get involved with right now.

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Astute Observation by Feral
2011-04-25 08:57 AM

There never seems to be a “day of judgment” for this demographic.  Like buoys; no matter how far underwater, these types pop right back up.  I expect the OC Housewife will soon announce a loan mod, celebrate with a trip to Phuket, time to bikini shop.  Somehow the lifestyle continues with nary a hiccup.  I’m unsure how they do it, but I’ve seen it happen time and time again, as far back as I can remember.

Rules and laws seem to apply differently depending on whom they’re applied to.  Broken contracts, broken laws explained as “a big misunderstanding”, or a “smart business decision”, etc.  Is personal integrity becoming a trait embraced by fools?

On a side note, a great guy I once worked with is now CEO of a very successful publicly traded company whose name 99.9% would recognize.  He lives in solidly middle class town, nice home, nothing flamboyant, outside California.

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Astute Observation by Planet Reality
2011-04-25 09:08 AM

You are right.  The day of reckoning never comes.  It’s because they have more money and earning potential than most want to admit.  While nicholas cage makes a new $20M movie, they may only get $350K in income or a $500K new product line.  The real posers leaving are not on TV.  But even for them there is always the option of finding the new older but wealthier husband.  The secret these people understand is that life at the bottom isn’t that bad so there is only upside.  I could never live like this, but I do give them credit for understanding this.

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Astute Observation by winstongator
2011-04-25 09:38 AM

BS!

There are some people who built real-estate mini-empires with earnings from a day-job, maybe a doctor, but there are at least as many who ponzied-up heloc’ing one property for a down payment for the next.  Rinse & repeat as prices rise, dp requirements fall, and pay-option arms allow ultra-low carrying costs and you’ve got 5-10 properties.

Nic Cage is your example?  His Bel-Air home got foreclosed.  How is that not an example of living beyond your means?

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Astute Observation by Planet Reality
2011-04-25 09:41 AM

So you think Mcmongle is going to be living in the poor house now?

How many times do you need to see the Donald Trump story line play out to understand.

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Astute Observation by Perspective
2011-04-25 09:47 AM

There are also some, like my brother in Phoenix, who bought cash-flow neutral/positive properties in the years prior to the bubble.  I doubt his household income has ever exceeded $50k with a large family, but they live below their means.

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Astute Observation by Feral
2011-04-25 10:08 AM

Yes.  I’ve known several, pitied some once they hit 40; looks start to go, deals start to go south…day of reckoning?...nope, somehow they always find a new “soul mate” they move in with, who gets their “star quality”, wining and dining, provides the lifestyle.  I knew one in her fifties, always dressed in St. John, luxury all the way.  She shopped at garage sales, but always had a wealthy boyfriend.  The last guy she married was in his eighties, burned through seven figures in about ten years traveling, dinners, cars, etc…fellow probably had a blast, but burned through about 90% of his cash.

And yeah, Cage will be fine, someone will hire him.  Ditto Lohan…she’ll probably win an Oscar, command $20/mil a film soon.  No such thing as bad publicity.  Float to the top.

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Astute Observation by gepetoh
2011-04-25 10:32 AM

This may come as a surprise, but I agree with PR.  I think it’s just a matter of understanding how to take advantage of the system.  Of course there are the likes of Nick Cage that can just earn their way out of their mistakes, but there are others who just simply know how to game the system into a certain lifestyle.  The kicker is that many of them have figured out a way to leverage themselves into debt, and live the life of luxury USING that leverage for the rest of their lives.  So they could die with millions in debt, but have also lived the great majority of their life in luxury.  It’s an innate ability to many, I think.

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Astute Observation by octal77
2011-04-25 11:22 AM

Yes, but do they sleep at night?

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Astute Observation by gepetoh
2011-04-25 11:31 AM

They go to their grave with it, so I’m guessing… Yeah.  I’ve never seen Real Housewives whatever, but I’m guessing they’re not agonizing with guilt over their lifestyle?

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Astute Observation by Alan
2011-04-25 01:23 PM

Not if the party goes all night long. Otherwise, I bet they do. Plastic surgery and botox clean up the bags and lines around the eyes.

I agree too - there are more than a few who love the thrill of finding the next pot of gold, and how to skip out ahead of the bills.

I guess Nick Cage is getting foreclosed because he doesn’t want to throw money away on underwater houses bought for speculation. Why throw new money making up for losses when you can use it to live big and buy new stuff? I don’t know how he gets around the banks coming after the difference, but maybe with enough lawyers he can get a deal.

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Astute Observation by HydroCabron
2011-04-25 03:34 PM

Cage might be a bad example: careers in Hollywood do have endings. The percentage of feature film stars who enjoy ultra-high earnings for more than 5 years is small. A sliver of those enjoy more than 20 years.

It’s weird that Cage has lasted as long as he has, because he’s only good when the role comes to him. That lugubrious, haggard reading does not suit more than a few roles.

I love the Cage foreclosure story because of one agent’s description of the decorating style: “frathouse bordello.” This should be incorporated into every listing, as appropriate, to join the other boilerplate terms such as “light and bright”, “turnkey”, and “executive home”.

Google “frathouse bordello” and it’s the first hit.

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Astute Observation by winstongator
2011-04-25 05:23 PM

If that’s why Cage is getting foreclosed, then he is no different than any other pretender.  How many homes & properties does Warren Buffet have?  How many of those properties have mortgages?

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Astute Observation by Woodbury Renter
2011-04-25 06:54 PM

Cage’s problem is the IRS.

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Astute Observation by Anonymous
2011-04-25 11:25 AM

Slump’s toll: Calif. real estate agents down 16%

http://lansner.ocregister.com/2011/04/25/slumps-toll-calif-real-estate-agents-down-16/107891/

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Astute Observation by tlc8386
2011-04-25 03:08 PM

Abfab is just about the funniest show ever!!! My favorite is when they fly to NY city for one door knob. Talk about excess in spending.

For the Ponzi’s they just thought housing goes up forever totally inexperienced folks at finance—all the way.

The housewives are a disgrace in excess and being a wife. Look at yourself in the mirror girls are you really happy? Everything they represent runied marriages, family and finances all for what? To think you are famous? Really—

How are your children turning out?

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Astute Observation by Perspective
2011-04-25 04:45 PM

I think it’s interesting, that the one Housewives series that was cancelled after just one season, DC, was the one series that had a few educated and genuinely successful housewives.  The problem was, the only poser on the show, was the only interesting person (“interesting” in the reality show world context where viewers want to see train wrecks).

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Astute Observation by tlc8386
2011-04-26 09:32 AM

Train wrecks must mean seeing fake; plastic woman with disfunctional families who only want money and notoriety in an effort to elevate their self esteem.

Showing a real housewife who works, raises her kids, cooks and cleans is the real norm in order to afford these homes.

They need a show The Real, Real Housewives.

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