Perennial Quest — Death
Filtering out the bad that holds us back…
Take hold of what is true to your hunger
A hunger that will not go away
Plans for tomorrow, they will remain
I have a parable for you today:
A weary traveler was on a
quest to satisfy his deepest longings and desires. He traveled from
place to place, but no matter where he went or what he tried, nothing
would quite satisfy him. One day, exhausted from his search, he
happened to sit beneath a magical wish-fulfilling tree. He thought to
himself, “Perhaps it is not so good to desire so much. It has not
brought me any lasting satisfaction, but I am tired, and I could use
something to eat and drink…” No sooner had he thought this when
delicious food and drink appeared for him to enjoy. “Wow,” he
exclaimed, “this is fantastic, but it would be nice to have someone to
share this bounty with.” As soon as the thought occurred, a companion
appeared to enjoy the feast. His desires replete for the moment, he
thought to himself, “This is very strange. Everywhere I have traveled I
have wanted and found no satisfaction, and here at this tree, I can
have anything I desire. I wonder if there is something magic in this
tree? I wonder if it is inhabited by some spirit? I wonder if it is a
goblin that will consume me?” And, as soon he had this thought, a goblin
appeared, and consumed him.
HELOCs enabled people to satisfy
their hunger for vacations, consumer goods and the like and live well
beyond their means. This went on for an astonishingly long time. Many
of these people became accustomed to living off the extra “income”
coming from their houses. Like the goblin in the parable, the magic
wish-fulfilling house consumed them, and now they have lost their
house, their credit and themselves.
Asking Price: $485,000
Income Requirement: $121,250
Downpayment Needed: $97,000
Monthly Equity Burn: $4,041
Purchase Price: $343,000
Purchase Date: 6/27/2003
Address: 24 Perennial, Irvine, CA 92603
| Beds: | 2 |
| Baths: | 3 |
| Sq. Ft.: | 1,200 |
| $/Sq. Ft.: | $404 |
| Lot Size: | – |
| Property Type: | Condominium |
| Style: | Mediterranean |
| Year Built: | 2003 |
| Stories: | Split-Level |
| View: | Courtyard |
| Area: | Quail Hill |
| County: | Orange |
| MLS#: | S539074 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 10 days |
throughout the first level, Custom paint, Crown molding throughout,
Designer Carpet, Plantation Shutters throughout! Sparkling kitchen with
crisp white cabinetry, Stainless Steel appliances and sit-up bar.
Spacious Master Suite features dual closets w/mirrored wardrobe. Built
in Tech Center with storage. 2nd Bedroom upgraded with Raised paneling.
Enjoy the beautiful Quail Hill area with Award Winning Schools, Resort
styles pools, Parks, Tennis and Private Fitness Center. Convenient to
shopping and the Spectrum Entertainment Center!
I can understand the desire to add colorful adjectives to a description, but this one goes overboard. What exactly is “crisp white cabinetry?”
This is another sad story of HELOC abuse:
- The property was purchased for $343,000 on 6/27/2003 with a $68,750 downpayment and a $274,250 first mortgage with a 4.37% interest rate. I bet she wishes she still had that loan.
- On 8/23/2004 she opened a HELOC for $100,000
- On 8/3/2005 she opened a HELOC for $150,000 and probably paid off the first one.
- On 1/11/2006 she refinances for $462,000 with an Option ARM with a 1% teaser rate. Brilliant move…
- On 1/11/2006 she opens a $60,000 HELOC
- On 5/4/2006 she takes out a stand-alone second for $130,000 and likely paid off the HELOC.
- Total property debt $592,000 plus any negative amortization.
- Total Mortgage Equity Withdrawal of $317,750 including her downpayment. Not a bad take for a small condo.
If this property sells for its asking price (which isn’t likely given its WTF price) the total loss for the lender will be $136,100 after a 6% commission. 123Loan LLC and Clarion Mortgage Capital are the bagholders.
I must admit, it is hard to feel too sad for her plight given the amount of consumer spending she was able to enjoy from her magic wish-fulfilling condo, but in the end, fulfilling those desires has cost her the place she called home, and that is sad.
.
The journey begins with curiosity
And envolves into soul-felt questions
On the stones that we walk
And choose to make our path
Sometimes never knowing
Other times knowing too much
Filtering out the bad that holds us back…
Take hold of what is true to your hunger
A hunger that will not go away
Plans for tomorrow, they will remain
Won’t you join me on the perennial quest
Reaching into the dark, retrieving light
Search for answers on the perennial quest
Where dreams are followed, and time is a test
No time for mental crutches
The maker has moved on
I will take it raw and be on my way
Those that stood beside me
I’m glad you understand
Behind these written words
I share the simple plan
To hang on to the way that we feel
From rivers of sorrow
To oceans deep with hope
I have travelled them
Now, there is no turning back
The limit, the sky
I ask my questions Why? What today?
When tomorrow?
Filtering out the bad that holds us back…
Take hold of what is true to your hunger
A hunger that will not go away
Plans for tomorrow, they will remain
Perennial Quest — Death
Wow! Today we get a song AND a story, along with the house history! Your creativeness never ceases to amaze me.
http://www.crackthecode.us/images/IWantYouToCatchThisKnife.jpg
LMAO!
I was wondering what the patriotic flag photo was all about. Now I know.
[George Bush] Now listen, be an American, serve your country, and please, please buy a house to stop the collapse of the housing market. [/George Bush]
Smirk
“Did you just extract your $200k over limit holdings at Indymac just before the FDIC takeover?”
“Yeah, but where to put it now?”
“Did you know they’re now requiring 20% downpayments on houses?”
“No way!!”
“Yup, and you are amongst the lucky few who have that kind of cash!! What better place to put it than to start investing in the housing market!”
“Isn’t that risky?”
“No, no, not at all. Look at it this way, you almost lost it all (but the meager $100k limit) in IndyMac, instead you could invest it directly into the housing market. It’s not only a great investment, but it will help support the banks and prevent others from loosing their hard earned cash.”
(notwithstanding that Sheila Blair thinks that FDIC will be able to return 80-90% of the overlimit holdings once the assets of IndyMac are sold off)
Someone step up and do the patriotic thing – that is transferring your neighbors debt onto yours.
The association fees for this Quail Hill Condo may seem reasonable at $261/mo now…
Look what is happening in the 1986 built Turtle Rock Crest Condos. The Association Fees are $705/mo. They have received two recent assessments of $10,000/condo for the roof replacement and $22,000/condo (due by Sept) for the deck replacement.
What happens if homeowners don’t pay these assessments. Of course they put a lien on the property. Until the person sells they can’t force them to pay. If it forecloses does this debt get wiped away? Do the rest of the homeowners have to foot the bill?
Ya know, posts like this one just make me think that anyone who lives in CA is certifiable (and not in a good way – nothing personal 😉 ). It is not my intention to offend, and feel free to rip me a new one if you like, but I have to make a comparison here.
I know you are reporting the facts, but $261 a month IMO is just unwarranted, and $705 is insane!! Just down the road from me is a luxury neighborhood with near-5000 SF homes (I think most are 3300-4000 SF) on a large hill or a small mountain (have not decided which) overlooking the lake/river. It has a great common area with a very large pool and tennis courts. Some of the lots are over 1/2 acre. It is not quite built out, and the builder has a 3300 SF SFR that he wants 530k for (I think that lot MIGHT be a 1/4 acre but likely less).
Taxes in this neighborhood? Around 2500-4000/year or so, a few may be higher.
HOA Fee? $350…per year!
I thank you for posts like this one, because they remind how it is not just the houses that are way overpriced, but the taxes and services too!
I am sure that Arnold will understand that people just can’t afford it in CA, and come up with a plan to help people out. Just ignore the deficit (of what..$20 billion?) and help people out already! How much worse are things going to get if the deficit ever really gets addressed?
Shadowplay profiled two days ago increased price from $599k to $699k. The bidding war must have begun.
Lets prolong the agony – thanks to our government.
WTF, when they increase their price, I just can’t believe what all you bears forcast. Explain why are they increasing their price?
This one actually makes me sad.
Look at the decorating, this is the single mom house. Professional woman, decent job, one kid. It’s a tight fit, but nice looking and good schools. But it needs to come down to the divorcee single parent price range. Because that 2003 price was unbearable for one income even with a great interest rate. But when you’re throwing away $2300/ month in rate straight down the tubes to your landlord it can seem like a good idea to buy now before getting priced out forever, just so long as your interest and taxes are less than your rent. And that’s the wrong calculation, but it’s the one a lot of people did. And then you stretch it a bit further and say, well so long as within 3 years my interest is less than my rent would have been, and so on…
As I said, this one I do feel sympathy for, it looks like she was trying to do right by her kid, and it just didn’t compute that she wouldn’t be able to afford this tiny condo.
that would be “in rent” not “in rate”….
What a rosy picture you’ve painted. I don’t feel sorry for this individual because I know what you’re saying is a pipe dream emotional appeal. How do I know?
My mother was a poor single parent who struggled to get by, yet she didn’t need to steal 300K+ from the bank to make and buy flatscreen tvs, and clear out Pier 1 and Tuesday Morning to get us by. My mom shopped at garage sales for all of our furniture. $25 for a couch, $15 for a coffee table, etc.
The furniture in this property is 10X better than that of my apartment, and I could actually make the payments on this property, unlike the current “owner”.
It may look cute, but your kid doesn’t need a fancy bed, crown molding, and a bean bag with his name embroidered on it to get good grades in school. Save that money to pay the mortgage so your kid doesn’t have to leave in the middle of the school year and transfer to Santa Ana High because you got foreclosed on.
Well said.
I’m always amazed when I read these posts and view the homes in Redfin. So many of them are model perfect and upgraded to the max. Is this how people really live? We are replacing our carpet after 15 years and I’m tickled pink. Can’t even imagine having one of these “gourmet” kitchens, crown molding, etc. Of course, we have no debt :).
Bravo! My folks were divorced and I lived in an apartment with my mom for several years. It was cozy and I had a great childhood, but I never had custom molding in my bedroom and all the McMansion “Designer touches” that this woman ladled into her tiny condo.
Too many people today think they actually NEED all of this junk they buy, buy, BUY! to fill their homes with.
It’s sad, but I don’t feel sorry for this woman one bit. She was trying to keep up with the Joneses instead of making the right decisions for her family.
I feel sorry for anyone who has to go through hardship. I am not so sure in this instance spending almost 400K in 4 years is enduring hardship. It could be that she is driving around a convertable BMW sporting a new “rack” and designer clothes so she could find a sugar daddy at Javiers or Mastro’s in crystal cove.
LOL! no comment…
“I am not so sure in this instance spending almost 400K in 4 years is enduring hardship. It could be that she is driving around a convertable BMW sporting a new “rack” and designer clothes so she could find a sugar daddy at Javiers or Mastro’s in crystal cove. ”
NAILED IT ! This buds for YOU.
I know so many girls that are trying to find someone to rescue them from financial hardship..
Specially in the Newport area….
Good luck..the older guys are getting smarter !!! they only get dissposable girls
Every last thing in that house was purchased new. Just sayin’.
Compared to the $343k for the house the $30k max she could possibly have paid for the furnishings is peanuts. Peanuts she didn’t have yes, but the problem was the combination of the unaffordable price and the culture of consumerism.
Did she dig this whole for herself? Probably yes. Were there any exterior sources of perspective begging her not to? Quite possibly not.
It’s deeply embedded. My friend at work doesn’t have a car (in D.C.) so takes the metro to the bus and walks onto base. And the guards keep asking her where her car is. The guards. You know, the ones that make less than 30k a year, can’t understand a well-dressed woman without a car in D.C. You can try to avoid the culture but it will hunt you down.
How about you give me $300,000 that I won’t pay back and I’ll come up with a sob story so you can feel sorry for me and let me off the hook.
30K on furnishings is peanuts??!!!
The frothiness effect of the bubble is deeply embedded.
This woman was selfish to say the least.
Alright guys. It was fun today listening to everyone pounce on me for having sympathy. And yes, my original angle was the sentimentalism angle, but let’s do the math shall we?
People keep pointing out to IR that these are cases of CC debt getting rolled into housing debt. And he has the affordability estimates, we can do the math for how much debt one would rack up to.
At her original terms with the downpayment and fabulous rate, her PITI was $2865/month + $261 HOA fees. ($3126 total). Single professional parent, let’s say $60k/ year before taxes or about $50k/year after SSN, Medicare, fed and state or $4166/month. Leaving a whopping $1040 /month for everything else, food, clothing, gas, maintenance, utilities, cable, after school activities, summer camp or even worse actual daycare. I’ve lived on that little a month after rent, it’s called grad school and with roommates not a kid. I leave the complete estimating to the master, IR.
Now consider, where did she get $67,000 from? Was it really a downpayment if she needed it back 1 year later? Or was it from the bank of Uncle Claudio? Or worse, I know my credit card would give me that much if I asked for it. It would be stupid, but you have to keep in mind the times.
Then with another $100k of debt? She has no money left whatsoever, and starts paying the mortgage with the HELOC or worse with the credit card, misses 1 payment by 1 day, and her rate on the card is up to 25% or more and she has to get it off the card and onto the house. Rinse, repeat.
Folks, this is not $371k additional she walked away with or spent, this is likely mostly interest paid to other creditors to stay afloat. She made one mistake and that was buying this house in the first place. She was qualified for a loan beyond her means by her credit score which must have been stellar to land her that rate.
So. Back to my original point. This is a divorcee single parent house, it can’t cost $343k. Gosh darn it, it’s just wrong.
Good points although you may have missed one potential source of income, alimony/child support. Could have been several thousand dollars a month, tax-free I might add.
WTF?? Why is Quail Hill still in the wtf price range?? Is it stubborn,egotistical, chronic denial??
I wonder how many foreclosures will be hitting QH in the coming months with all those Alt-A loans lining up?
I’m eagerly waiting. I can’t wait to move.
I’m just as surprised as you are about QH. They are eventually going to fall and fall hard.
QH is in the WTF price range because the entire development was completed during the run and peak of the bubble, and because it is somewhat nicer than the majority of Irvine.
QH was built during the boom so almost everyone will be under water, it’s hard for people (at least for now) to price below what they bought or they can’t 😆
Is QH so great, that the residents are willing to live there forever….underwater? “glug, glug”
If so we should change the name of Quail Hill to ..
Atlantis Hill.
I know it is gleeful for us to see all the HELOC A-holes get theirs, but let’s all remember that not everyone was out there trying to rip off the bank over the last several years. We have very good friends who bought new at Casalon in QH. They are a very unassuming family with a Honda and a Toyota, and two toddlers. No HELOC, no lavish lifestyle. All they are is a couple that bought a starter home to live the American dream. Now they agonize as every comp brings them closer and closer to being underwater.
I wish they would accept facts, cut their losses and sell right now — and go rent. But it seems hard for them to accept that all their plans have gone kaput and that they have paid a ridiculous mortgage, taxes, and HOA for 4 years and will have nothing to show for it — and maybe will owe.
I can’t find any joy in watching their situation. So try to remember that while you rejoice in watching the HELOC crowd get theirs, there are plenty of good people who will be suffering as well, for no other reason than buying at the wrong time.
CK, my feeling is that ignorance should cost someone as much as greed….
Weep! Weep! Weep! You must be f$cking joking.
Your friends were part of the problem by bidding up the price so high in the first place. Let them go to hell.
Amen!
Ignorance often does cost just as much as greed, sometimes less (it tends not to land you in jail) sometimes more (greed sometimes gets away with it, or simply gets more money out of it).
I am strictly agnostic on the “should” part.
Tom, I guess you and everyone you know or care about owns a crystal ball, and always makes the most intelligent, imformed decisions in their lives?
In my world, good people sometimes make made decisions, through no fault other than being uninformed. Have you ever heard the saying “You don’t know what you don’t know”? I suspect many of the typical Gen X and Y buyers who were probably making up the lion’s share of buyers in 2002-06 had no idea what a real estate bubble was until it popped in front of their faces. Could you articulate in summer 2004 that we were in a real estate bubble? If yes, kudos to you. I sure would not have been able to. As a matter of fact, I was ready to buy in late 2006(!) when I discovered IHB, and it saved me from the worst decision of my life. Now we are happy renters, waiting for our time to pounce. Does that mean I was smart? Hell no, LUCKY…lucky to find IHB.
So I don’t revel in others pain, because I recognize I could have easily been one of them. But I suppose a supreme being like yourself can cast judgement on those who are uninformed.
Rock on, Food. Must be fun to be you. I have a picture in my mind of what your life looks like. Thanks for the laugh.
“No HELOC, no lavish lifestyle”
…and NO math skills.
“Let’s see, we make 100K a year so we can afford a place which costs between 800k and 1 million. Sounds about right.”
What were people thinking!!!???
While that is certainly true in many cases, not so here…The case I cite probably paid about $500k in 2004, and are likely closer to the mid-$100k income range. So they were not streching. You could argue they were nuts to pay half a mil for Casalon, but at least they could afford it.
Don’t get me wrong people, I have just as much disdain for the speculators as the next guy. I’m stuck renting for the foreseeable future myself. I just sayin that not everybody who bought during the bubble deserves to burn in hell.
Unfortunately it’s short-sighted people like your friends who helped drive this current debacle as well as the RE prices to unaffordable levels.
Hey CK, if your friends didn’t consider their purchase in QH was expensive, then they shouldn’t be complaining. Cost is relative. And if they plan on living there for a long time, then they also shouldn’t care if everything drops 50%.
But if they Do care, and stay in denial as you say, then screw’em. Don’t ever underestimate the power of denial and ignorance. It’s a CHOICE to be or not to be.
As for you, you were not”Lucky”. LUCK is when preparation meets opportunity. You took the time to research and google the market.
If you grew up in South Orange County, you have been witness to a nearly unending stream of growth during that past 30 years. Even with the recent pronounced pullback in the last 12 months, homes in South Orange county have appreciated at a ~10% nominal rate.
For many people this appreciation coupled with inflation reduced the debt owed on their homes to essentially deminimus levels, and afforded lifestyles that otherwise (read if they had to endure nominal increases in housing costs) would have been unattainable.
So for people familiar with this paradigm, and facing what seems frightening like another upward shift in prices, similar to what took place in the late 70s, they made a “rational” decision based on this perspective.
Honestly, how many of you who had more than two nickels to rub together actually made the conscious decision to stay out of the housing market over the past 5 years? My guess is, very few. Rather the majority are truly bitter at their own plight, and now enjoying the pain of others as if it in some way improves on their own miserable state.
“Honestly, how many of you who had more than two nickels to rub together actually made the conscious decision to stay out of the housing market over the past 5 years? My guess is, very few. Rather the majority are truly bitter at their own plight, and now enjoying the pain of others as if it in some way improves on their own miserable state. ”
Given the profusion of stated income loans and the complete abandonment of lending standards. Nobody was priced out the market. Everyone who did not participate made a choice.
That is a good point, however based on the comments on the board I suspect that the majority of posters were effectively priced out because they stuck with traditional financing standards. Wisely. However, those wise decisions were punished for several years as the Fools made off with boat-loads of free money.
There are however a lot of people who bought within their means using conservative financing who are now in bad situations because of the market.
My old neighbor is a great example of the innocent victims of this whole affair. Late 20s, recently married, put 20% down on his purchase in 07, and is now underwater on his place. He has a 6.75% fixed rate mortgage. Because of the depreciation in house price, and the resultant loss of his equity (which I would like to reiterate he SAVED and put down), he is now unable to refinance into a lower rate.
Now this is not someone trying to game the system. He is an Anti-HELOCer! Yet, he is still punished. So essentially there are two classes of people who have beef. The wise renters who endured an increasingly ludicrous housing market, and the naive by conservative buyers who are now stuck holding the bag. I argue that the second group has a far more legitimate claim to being upset with the speculators and the bubble.
We were underwater for a few years in the early 90s but we eventually tripled our money. Patience pays off in real estate.
To be honest with you, I could have easily qualified for a home loan. As a matter of fact, people in prison with no money were purchasing up more than one property in new housing developments and selling them to straw buyers before they were even finished.
I own my own business which i started in 2001 with money I used from the proceeds of my home sale. Yes, it doubled in value in 3 years from 475K to over a 1M in that time.
Was I, am I bitter? Yes, why?
Because I could honestly afford to buy back my house at realistic value in 04. Now everything is a friggen mess, even good credit and 20% down is going to be a streatch on a Jumbo loan because of dumb asses who kept thinking that homes were priced properly.
Mark my words…..and listen carefully…..
It is not good for people to spend 60% of their income on servicing their house and mortgage. That is money that could be much better suited for many other things LIKE KEEPING PEOPLE IN OTHER INDUSTRIES EMPLOYED…..
“I suspect that the majority of posters were effectively priced out because they stuck with traditional financing standards. Wisely.”
That would be me.
Replied to “My old neighbor is a great example of the innocent victims of this whole affair. Late 20s, recently married, put 20% down on his purchase in 07, and is now underwater on his place. He has a 6.75% fixed rate mortgage.”
Why should I feel sorry for a knife catcher? Anyone who bought real estate in the last few years does not deserve my sympathy even if no HELOC abuse.
Is McCain still pitching the NO-BAILOUT platform for his campaign?
WTF???
6.75% fixed is not a bad loan. If you think your neighbor can refi for 5% your dreaming.
And although the old saying is no one know where interest rates are going, they are most probably going up so this time next year interest rates of 7-8% fixed will probably be the norm and then your neighbor will look good at 6.75%
The moral is buy a home to live in that you can afford and don’t pay attention to the real estate market after that.
6.75% is not bad. But with over 700 FICO, he had the opportunity to refi earlier this year in the low 5s. And that amounts to $650 per month is additional financing costs on his mortgage.
I can’t think of too many people where $650/month wouldn’t make a nice addition to their income (especially those in their late 20s). This is a guy trying to build a family, do it right, who got whip-sawed by the market. I am not saying he didn’t make a mistake, however to characterize anyone who bought during the bubble as a greedy monster, or total fool, is painting with too broad a brush.
Like I wrote before, their are plenty of smart, hard-working, rational people, whoe made the decision to buy a house because history/experience taught them that it was the right thing to do. It is unfortunate that individuals like my old neighbor are in the position they are in. Trapped in House for an in indeterminate number of years.
Please don’t misininterpret my sympathy as support for a bail-out. I am firmly behind letting market forces work their magic (Particularly in Newport Coast!)
Ugh…all I can say is ugh. Maybe they don’t want your f$cking sympathy. I guess you and your life is perfect. Do you want a gold star?
CK, I was in the same situation in the last downturn. Young and stupid – mindless of the fundamentals, I bought a condo in 91 which proceeded to lose 25% of its value in the next 4 years. Luckily I bought somewhere I liked – near the beach – and stayed put the next 10 years until I was able to leave with a 70% gain. I never agonized over the purchase – it was my American Dream – my home, something a bit more than $$$, and I just took the drop in value as, well, bad timing on my part and I rolled with the punches. I will say my stay was made easier because by year 4 I was paying less, on net, than the equivalent rent. It was my home, and I enjoyed being there.
So long story short, if your friends need to agonize over their purchase, they were not financially or emotionally ready to buy a house. They went in with more expectations than owning their own home – they went in with the need to earn $$$ from that home, now. Having been in a similar situation I find it kind of difficult to have too much empathy, and I think they should grow up, accept that they didn’t make a brilliant decision, and get on with life.
YES!!! Great comment. Anybody who bought at the wrong time, who can afford their mortgadge, should just suck it up and turn that commitment into an actual ASSET. Pay that F%#@er off! Housing prices are not going to go back up for a LONG, LONG time.
this may seem like a strange concept today, but owning property outright..can actually make you money in the long run. Oh yeah…FYI, that’s called an asset students!
Oh QH has fallen – lots of these “detached” condos that are 1800 sf and 3 stories are down from over $800K to $650K. Now I know that’s not nearly enough, but to paraphrase, the slower they fall, the more blood in the streets. I believe IR had a post that was titled “Quail Hell,” it’ll get there.
QH under $300 sq. ft.
http://www.redfin.com/search#v=3&lat=33.64744828063117&long;=-117.77397394180298&zoomLevel=16®ion_id=38399®ion_type=2&market=socal
Quail Hill is actually a really good location for me, given my work and (especially) my wife’s work location.
But, I hold no misconceptions about being able to afford living there for a starter home.
Which is fine, because I’ll find something cheaper towards the end of 2009 and that’ll work.
” …fulfilling those desires has cost her the place she called home, and that is sad.”
IMHO, it’s NOT sad at all. Stupid woman gambled, and LOST.
Tuff shit.
Whether it be from accident or stupidity, someone (and her kid) is without a home now, and no matter the circumstances of how they got there, that is sad.
And it doesn’t just cost her a home, or the bank a bunch of money – mistakes like this cost everybody, including me and you.
Oh the horror! The torment! The suffering!
Cry me a river. Go rent an apartment like the rest of us.
People who get foreclosed on are not homeless. They rent a home or an apartment, just like they were doing before, except they don’t have a property title in their name. Big deal. They have a roof over their heads, running water, electricity, and cable TV so they can watch Sex in the City and Friends re-runs just like before. And as an added benefit, when the toilet breaks, you order someone else to fix it!
Ugh.
…sometimes they are homeless because their credit is F.U.B.A.R.
You can’t even rent if your credit is destroyed.
“You can’t even rent (in the nice part of town) if your credit is destroyed.”
fyp
“someone (and her kid) is without a home now”
you make it sound like they are now homeless. So they go back to being renters, big deal. This person wasn’t smart enough to be a homeowner, given her HELOC abuse. Do you really think the kid cares if a parent is paying rent rather than a mortgage? No, they have no clue, as long as there are toys to play with and food on the table. You just hope that when they move into an “investor” owned condo, the school change for the child isn’t too tough. Blame your Mommy kid.
Or, like my neighbor, just move back in with her parents — and in the case of my neighbor, with enough cash left over for a new car.
Not looking forward to socialized loss upped bank fees to cover FDIC & taxes coming down the road a few years from now…
I agree with Dick, with one exception – she didn’t lose, she won!
She probably took that 317k and invested it wisely, moved to San Antonio Texas to a really nice home she now rents, and plans on adding to her new nest egg until she can retire in 10 years.
What is sad is all the responsible people who have been furiously saving over the past 6 years but still can’t afford a home due to the run up in real estate, caused in part by people like the one documented today.
She wins we lose! I’m getting really tired of not being the smartest guy in the room.
TheNumbersNeverLie, I stand corrected.
You are right.
“…moved to San Antonio Texas to a really nice home she now rents, and plans on adding to her new nest egg until she can retire in 10 years”
I don’t know if I’d call that a win. Having no assets and renting for the rest of your life is pretty sad.
I also doubt she even knows what a nest egg is.
Also, all this equity people pulled out won’t add up to much with high inflation. In 8 years, 300k won’t go very far. Hell it doesn’t go far now.
Got a house by me that was owned by a professional who worked with me for two years and was fired due to an unethical thing (not germane to this). He bought the house two years ago for 320,000. He paid mortgage for two years and has been trying to sell it for 18 months (he knew he was not going to last where we work), first at 390,000, then down incrementally until a month ago when it was 329,000–about what he paid for it (but with the commission would be a short sale, I think, or pretty close to one). Last week, I noticed the “for sale” sign was gone, the realtor’s keybox was still hanging on the front door knob, and I could see through his house (i.e., all furniture gone). I’m figuring this is a “walk away,” right? How long do you guys figure it will take before another sign shows up on his front lawn or some other action will happen? 8 Months seems to be what people here cite as the timeframe from last mortgage payment to REO, right?
Thanks!
It certainly sounds like a “walk away.” Foreclosure to final resale is about a year.
Hey, cut this lady some slack, she’s one of the chosen people (Jewish), you can see that nice menorah on the fireplace mantle.
alan? Please don’t bring religious/race/political threads into the comments that could draw out the worst in some of us.
Besides the fact that it’s not a menorah…
Menorahs have either nine branches or seven branches. What she has on her mantle has eight candles and a handle… It’s a plain ole candle holder.
Alan, or whatever else you call yourself, what is the whole point of your comment? Leave relgious affiliation out of your commentary, it’s unecessary and pointless. You don’t want to come across as and idiot, especially in this blog.
Too late.
Actually, that’s not necessarily a menorah. There are lots of those things at Crate and Barrel and Pier One. Many women of other denominations (including me) would just see it as a pretty, tea-light stand. Why would you want your menorah out all year long? Is that standard?
Anyway, I haven’t shopped for furniture or deco in years. Not earning enough to throw money away.
$300,000 and I guarantee she spent iot on nothing. She didn’t buy gold at the low or even invest conservatively. It was spend on NOTHING.
This lady had $300,000 that has vanished and she will not nor ever pay it back. I have a heart. But not an ounce of sympathy. Stop and think what percentage of people who have toiled long hours for their entire life and were lucky to retire with $15,000 in the bank.
I, like most Americans, have never felt so sick about the future of this country.
Have any of you traveled through Michigan lately? Probably not. there is no reason to go there. Its over. Done. Finito. Its never coming back. Yet there are still hundreds of thousands of 50-60 year olds waiting for the good times to return. All the kids who go to college , graduate and then leave.
My brother in Chicago tells me that the place to be is buying foreclosures to rent to all the people who are losing their homes . . . . to foreclosure. I guess.
I actualy would rather not make the money and instead see this country get back to being the platinum standard for the world.
Oh well, how bout that Britney Spears!!!
I don’t want to sound partisan,…
But this is the price we pay to elect a bunch of morons to run our country for the last 8 years!
They’ve been running it ….to the ground.
And I’m sure we will do the same this coming November.
Because we are so stupid, foolish, easily Neo-conned!
Look at them!
Dick and George and Co. will be laughing all the way to the bank, courtesy of the special interests.
Dodd, Rangel, Obama, and Co. are cozying up with the bankers, the very ones that are causing this mess.
And we are left holding the bags!
Yes, I am an American, and I am feeling sad, sick about the future of my beloved country.
I remember a quote from a hard working cop, catching the Senator from Idaho in the airport bathroom
“No wonder this country is going down the tube!”
Yes, this country is going down the tube because we keep on electing these morons to run it!
Hey, not necessarily on the “stream of the current specific topic,” but does anyone have any perspective on home prices in the Mission Viejo area? Pretty much right on top of Irvine, so I think any of your viewpoints should be pretty sharp.
The OC Register this morning reported an actual up-tick in home prices for Orange County, the first in 7 months.
http://lansner.freedomblogging.com/2008/07/16/oc-home-prices-rise-for-1st-time-in-7-months-in-june/
My story —– and reason for asking! Get your kleenex. Ha. I kid. But here goes:
Moving out here from the Mid-West in February 2005, I foolishly bought a home, desperate to secure a place with a 2-car garage within which I could work on my Dodge Dart…..”buy now before you’re priced out forever!” they screamed.
Hmmmm……..”Shoulda Rented” seems like pretty obvious advice now, but back then, I couldn’t find an objective soul anywhere to discuss the realistic-ness of an ever-expanding SoCal housing market. I drew a deep breath and jumped in. Just because I wanted to have a damn place to live and call home. And it has made me sick to my stomach ever since —- Yup, I readily acknowledge myself as a citizen of “Upside-down Town.” (Has IR used that old disco song/video yet? Lol)
I’ve been following the Irvine Housing Blog in earnest for the last 4 or 5 months. Damn I wish I found you back in early 2005. Grrrrrr……but anyway —
So — just trying to get a gauge of the Conventional Wisdom, in this online community, of the likely future and stability of a “desirable” family bedroom community like Mission Viejo, in the wings right alongside Irvine.
Is Mission Viejo just as screwed as Irvine? Or is there some *magical* quality (sprinkle sarcasm to taste) about the planned mountain-side community of Mission Viejo, in close proximity to the jobs in Irvine (the ones that are left, anyway) and with great schools and the distinguishing title of “Safest American City to live in.” ?
Personally, I would think its just as screwed as anywhere……..but do the rest of the house-buying sheep (as I clearly was) likely think otherwise?
OC’s house-price “rally” —- anyone call B.S. on that?
Chart of OC Median Home Prices, since early 2005:
http://lansner.freedomblogging.com/?attachment_id=2827
Hum.
Thanks Housing Bloggers!!!!
Cheers,
Mike T.
Yup. B.S.
At this point the press will try to anything, to keep their Realtard AD clients happy.
On another note, even though CA is tanking. Clearly various cities are riding the crash differently.
Ex: Laguna beach won’t change much, because it’s been impossible to buy properties there since the 80’s. In fact, properties in LB don’t even come up on MLS since it’s such a small and tight network there.
Mike,
Sad to say, Mission Viejo is going to get killed even worse than Irvine. Don’t take any comfort (or find any denial) in the latest sales reports. This fall and winter is going to be Armageddon in South County (and Irvine too.) The REOs will hit the market in force, and there won’t be many buyers around.
If you can afford the house your in, put the resale price out of your head and live your life, otherwise the stress will not be pleasant. If you can’t afford your house, make plans for moving on.
Prices will fall much more, and they will not be coming back any time soon.
Hey, Thanks IrvineRenter for offering your perspective on my situation.
Butchery of home values in Mission Viejo it will be then, by your reckoning. So sad. A nice young couple just bought the house across the street from me several months ago, and are gutting it / re-modelling the entire thing, inside and out. I think they got it about $150,000 less than the original asking price…….I really like these two, it will hurt to think of what further damage to their home value I might cause if I end up in foreclosure. But so it goes. Onward!
Can I ask any questions about the effect that Hyper-Inflation (I know, big media buzzword, sorry) might have on home prices? As in, might rapid deflation of the dollar’s value have any effect in buoying UP the home prices?
With a dollar worth less and less, won’t a home priced even at the 2007 Peak become a bargain at some point?
I know it still relies on people’s incomes increasing to match the dollar value’s slide, but if consumer prices for everything in sight continue to climb, won’t salary hikes HAVE to happen? How else does the nation even continue to function?
It all seems like a global staring contest, to see who “blinks” first……Either the dollar rallies, or EVERYTHING has to start pricing up, including people’s income numbers. Or, as you guys seem to be quite keen on, Economic Meltdown or “Armaggeddon” of some sort ensues.
I have yet to hear anyone comment with any amount of real emphasis or focus upon the liklihood of salaries rising rapidly to offset the inflation of the entire consumer universe…..and whether this could occur in a crazily-rapid fashion, almost overnight, and make current house prices seem quite reasonable.
Do I think about all of this too much? Yes, probably. I think most seriously-aware-of-reality homeowners do nowadays…………good to find you all here!
A pleasure reading and chatting with you all.
Regards,
Mike T. in M.V.
This is where I get nervous. The indications for inflation are everywhere, but I notice I haven’t been reading a damn thing about wages ticking up at all. And why not? Because this is a recession. Unemployment will go up. People will stay in their job despite a bad raise because they won’t want to risk going out there in this job market. Really, what I see happening is a simple decrease in standard of living. Everything will cost more, and you won’t make more to be able to pay for it. In SoCal, with our INSANE DTI ratios AND long commutes, this means housing will suffer a good bit. As food, gas, and other expenses cost a lot more, and people are only getting paid a little more, they’ll need to cut costs somewhere. Some of those people will choose to cut housing expenditures (or, at least, not take on more).
Ordinarily, inflation comes with economic growth and wage growth, taking housing up with it. This is different. This is inflation that got built into the system by Greenspan that HAD to find an outlet, and finally has.
I’m not going to be like some and predict the downfall of society. However, I do think that the SoCal economy is headed nowhere good for 5 years. It’s going to get tough out there, and we’ll probably even see some migration out of SoCal (by those with means). Eventually, it’ll come back, but I’m truly scared that the US’s days of having so much wealth are ending, and we’ll become something closer to Europe in living conditions. Not bad, surely, but not stellar.
“Can I ask any questions about the effect that Hyper-Inflation (I know, big media buzzword, sorry) might have on home prices?”
House prices will not be supported by inflation unless the price inflation is further fed by wage inflation. You must have wage inflation to support home prices because payments are made from wages. The real worry the FED has about inflation is whether or not we enter into a wage/price spiral where workers expect future wage increases to offset inflation. If wage increases become a realistic expectation, then inflation gets out of control. Right now we are seeing inflation without wage increases (the worst kind for consumers.)
From my reading it seems wages have been stagnant for a while now, and there is no indication they will rise anytime soon. In fact, as IR points out unemployment will rise, putting downward pressure on wages.
Inflation has been the worry of the Fed for over ten years now. We can keep wages low if inflation is kept under control, but keeping inflation under control at this point is a little like the Big Bad Wolf huffing an puffing at your door. The Fed has done all it can to stave off the inevitable, but the inflation boogeyman is still at the door.
I’m afraid we’ve run out of tricks to play on the fundamentals, and now we will see some reckoning. The current admin is just hoping things won’t blow until they are gone, so we can blame the next guys. That’s politics!
So..rising consumer prices, lower house prices, stagnant wages and more unemployment. Not a rosy picture, but its where we are.
OH — briefly though, also —- !
IR, can I ask why you feel that Mission Viejo is likely to get killed even worse than Irvine?
Curious what makes the situation any different for that locale versus Irvine.
I do not doubt that you have a well-formulated basis for assessment, hope you will share.
Thanks much,
Mike T.
“IR, can I ask why you feel that Mission Viejo is likely to get killed even worse than Irvine? ”
The farther you are from the main employment center, the more property values will drop. San Clemente will fall the most in OC, and you will see a gradient up through Irvine. It has less to do with neighborhood desirability as it does with proximity to employment. The economic engine of OC is in Irvine/Newport Beach. The farther you move from this location, the worse things will be. Also, Mission Viejo is a bit older than many of the surrounding communities, so dated properties in neighborhoods without great amenities will suffer due to desirability issues.
Gotcha………I think!
I guess I have been under the impression that people would rather live “farther up in the hills,” so to speak, in Mission Viejo, than down in the (pardon my opinion) “Pasty, Desolate Sprawl,” as I see it, that seems to be the Irvine I have come to know.
Air quality gets better as you go farther South, closer to the Cleveland National Forest and open spaces, etc…..does this mean less to people than a 10-year-newer house with a more modern kitchen, in a house in Irvine that’s surrounded by freeways and choked strip-malls? I ask this question in full sincerity. I know from reading your previous posts (I think) that Portola Springs looked like a good option to you at one point (assuming the prices dropped considerably) and I think that area is quite nice, too. Close to the mountains and bathing in clean, relatively smog-free air……..which Mission Viejo has in spades too.
Note that I am not trying to Polly-Anna myself into believing that Mission Viejo is some kind of shangrila! Far from it. Nor have I deluded myself into any kind of “my neighborhood is different” kind of thinking. But it does seem like a lot of the qualities of Mission Viejo (or Foothill Ranch, Or Rancho Santa Margarita) has going for it are in many ways nicer than what the Irvine “low-land sprawl” has, just by virtue of close proximity and higher elevation / nicer air quality.
I am honestly just trying to get a grasp on what the vast majority views as the most attractive attributes of a given area.
Most of the properties I viewed that were actually in Irvine gave me the shivvies, just based on their actual land-locked-by-endless-flatland-sprawl locations.
It’s just seemed like M-V has been an attractive, close “getaway” from the Irvine Anxiety and Clatter……..just my $.02
I am NOT arguing with anybody. Just, as I’ve said a number of times (enough, I hope!) trying to fully grasp what will be valued in the future, and what will be not.
Thanks TONS again for all of your time and thoughts.
Best Regards,
Mike T.
Whoops, incomplete link in the last post:
(hope it doesn’t get clipped again this time)
http://lansner.freedomblogging.com/2008/07/16/oc-home-prices-rise-for-1st-time-in-7-months-in-june/
61 Secret Garden, $284 Sq.Ft, the price drops seem to be accelerating again
http://www.redfin.com/CA/Irvine/61-Secret-Gdn-92620/home/5931251
Can someone please explain to me when you have a total Mortgage Equity Withdrawal of $317,750 (or any withdrawal for that matter) and this “income” is not spent on the home, doesn’t Uncle Sam require you pay taxes on this??
If so, the Fed will have alot of money to collect in back taxes.
You are also not supposed to deduct the interest on money that was borrowed and not put into home improvements. Technically, they all owe taxes, but most will claim insolvency and avoid having to pay, if they report it at all.
What a great country! Live the highlife on someone else’s nickel and walk away…
1/2 a million dollars for an apartment?
CRAZY!
Why does everybody assume that this is a “She” that owns this place?
If you do a reverse address lookup on whitepages.com it shows that it is owned by a “Jason Horton” who is the owner of a valet company.
Who knows if the info is correct however.
According to the property records, the owner is not Jason Horton. The owner has a woman’s name.
In the future, even if you know the owner’s name, please do not post it. Thank you.
“I suspect that the majority of posters were effectively priced out because they stuck with traditional financing standards. Wisely.”
That would be me too. Our gross is way over $100K with excellent credit. But I’m 10 years away from retirement and refuse to get into that deep of a hole. Why didn’t everyone see it coming after the dot.com bubble?
I still have 2 “moments” in this bubble of a nearby very nice upper middle class newer neighborhood. We looked at a house in 2003 listing for $530K and I shook my head and told my wife it was a bubble price. Then came the “double bubble” and a similar nearby house listed for $750K. I shook my head harder and said this cannot last. The peak ended up over $800K. Now there is a bank owned listing at $550K and it hasn’t sold in a month. I’m waiting for no more than $400K.
They must have left off the Y on crisp.. Crispy White Cabinetry is what white cabinetry becomes after 24 months of equity burn. 🙂
Joe
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