Irvine Housing Blog

New lingo for Irvine HELOC’d hipsters:

original payment motivation = instant gratification from ever rising home prices.

current payment motivation = What, me worry?

You and others keep saying that lenders have been trying to appeal to morality to encourage borrowers to continue paying, but I have not seen any evidence of this.  Where do you see this?

Reading this article made me cringe.  These little carrots being dangled by the lender is nothing more than drug dealers giving away some occasional freebies just to keep their clients hooked.  The drug dealers know the small upfront out of pocket cost is peanuts compared to the long term financial benefits they will receive.

I sure as hell hope not one cent of this bribe money is tax payer money!

Does anyone in this blog chain actually read?

First of all, let me say that I was one of the early receipients of the Responsible Homeowner Reward last year. The number was substantial enough for me to stay. I grilled the bank as to why I was getting this “reward” (I was late only once in two years), that they said theywanted to reward those responsible homeowners for doing the right thing.
Second, don;t get caught up in the language of the contracts. Society can not and will not go after strategic defaulters for more reasons than I can write here. So drop it.
Third:  The Program works, folks. If my bank was able to lower default rates by 50% at a cost that is far less than the alternative; then I want to be a part of that bank.  To be clear, a bank MUST hedge against the risk of default - strategic or not.  You’d be an idiot if you didn’t buy home or car insurance.
Fourth: Financial incentives in the US have been working for more than 200 years. Buy a book, and step away from your angry Blog world. Or better yet: google “financial incentive theory”. Enjoy.

I was offered money NOT to walk away when it might not have been in my families best interest to do so. We stayed, my bank paid, and gues who won? I did, the bank did, and the neighborhood did from me not abandoning my house.

Are there two awgee’s posting? Has alzheimer’s kicked in if it’s the same person? Has awgee had a close enoucnter with Jesus?

No idea, but here’s a post from awgee that explains his position quite clearly:

2011-09-15 11:24 AM
It may be a bit gray, but that does not change the morality of going back on your word, and the grayness is a strawman argument.  The defaulters know whether or not they can still pay.  They know whether or not they are scumbags.

If you have not LOVE, you have nothing. We all need to show more compassion, unless you want the same judgment back on you. Awgee, I wouldn’t wish for you to be in the position of millions of americans, even though I KNOW it would bring understanding and compassion from you.

I am sure I saw that Chase bank had a “cash rebate” mortgage program about oh…a year ago advertised in one of those lobby displays.  The interesting part is that they claimed they either patented or trademarked it so that no one else could ever offer rebates for timely payment etc.  So the idea isn’t new to mortgages, and I thought the idea that Chase could get intellectual property protection on the entire idea, to be as absurd as much else that goes on in banking.  That, and it was ridiculous to think some buyer can’t figure out that the rebate isn’t worth the higher interest.  That, and I realized, most borrowers are as ignorant or stupid as Chase thought in its heavy advertising of this “concept” enough to think that the tiny rebate matters more than the huge monthly payment (look to the number of Americans who purposely overwithhold tax so they will get a large refund check, huge numbers).

MarketWatch That’s because, starting Oct. 1, the maximum size of loans that can be guaranteed by the government controlled Fannie Mae and Freddie Mac drops from a maximum of $729750 in high-cost markets to a maximum of $625500. Also, many borrowers who previously ... UPI.com Wall Street Journal (blog) CNN

Maybe this will release some of the hot gas in the bubble.

House Is Gone but Debt Lives On

http://online.wsj.com/article/SB10001424053111904060604576572532029526792.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Redfin’s new RE agent look up tool
http://www.redfin.com/real-estate-agents/search-scouting-report

Pretty interesting has sales statistics for any RE agent, not just the redfin ones. Can see median price, ranche or prices, average number of reductions and so on.

Excellent article on deficiency judgments in Florida against strategic defaulters, with tons of soundbite-worthy quotes:

wsj.com: House Is Gone but Debt Lives On

But what is a loan owner supposed to do when the bank refuses to foreclose after non-payment of the mortgage?

Mind you, the loan owner is still responsible for the home….

The people below,  Aliso Viejo officials,  are losers, should be fired and ridden out of town on a rail. These Nazis are the ones responsible for draconian open house sign rules in place in Aliso Viejo.

They waste tax payer dollars by having someone like Ted Halsey (Building Official), drive around in his personal car on weekends and steal open house signs off of street corners. All at a moment in time where cities can’t afford to wasting money. And I’m sure this clown is making overtime to boot. I caught in the act of sign stealing on Sunday afternoon October 2nd. He told me he must have around thirty signs in his car.

These jokers cost must cost agent thousands of dollars per year in signs and wasted time. They also are doing a disservice to the homeowners who the bills and the salaries of these trolls. I’m sure the city can figure out a better way to spend the people’s money.

Mayor: Carmen Cave
Mayor Pro Tem: Donald A. Garcia
Council Member: Greg Ficke
Council Member: William “Bill” Phillips
Council Member: Phillip B. Tsunoda

Promises go to many people:  The companies promised that they would try really hard to make good investments so that their investors make a good rate of return on their stocks, bonds, etc.  Investing in 100% collateral loans, assuming homes values always go up, not verifying income was all bad business judgement.  So who are they to talk about taking the moral path?

When you purchase a home, a bunch of promises are made: 
Your promises:
1.  you will pay on a monthly basis for the home
2.  If you cannot, your home will be taken from you and all payments you made are not reimbursed.
3.  Sometimes, the bank sells the home for more, depending on the state, you don’t always get your equity back.

Banks Promise:
1.  They will use their expertise to check title, check appraisal (their collateral) and make sure the home is worthy of their investment.
2.  They will collect the money and adjust your principle until it is fully paid in a fair manner. 

What happens when the banks that make these promises are the same banks that make investment decisions (mortgage backed securities, loose appraisals, lack of proper corporate oversight) that lead to a real estate bubble that reduces your home values and put you in an upside down position?  Did they live up to their portion of the bargain?  I think this is a very complex moral question and not easily answered.  There are multiple variables.  Ultimately, people make choices based on their circumstances.  No one makes a strategic decision and blow up their credit if they have the cash.  That would be incredibly unwise.  95% of the people who make these decisions either are DEEPLY upside down, lost a job, or have to make a decision between shelter they can no longer afford or food for their family.  The guy who speaks about keeping his words has probably never been squeezed enough in life to have a very real moral choice.

I guess someone else thinks it’s a good idea.

Oops… Here it is:

http://media.ally.com/index.php?s=43&item=485

Is FL a non-recourse state? Where the loan seconds?

Are the banks using a judicial foreclosure to get around the non-recourse non-judicial foreclosure? 

Does FL have a “reclaiming period” for the former owners to buy back the property?