Deep Peace

The Lakes in Northwood is ground-zero for Irvine foreclosures. Despite the beating prices in this old condo development are taking, the design of the property and grounds is quite good.

43 LAKEPINES Irvine, CA 92620 kitchen

Irvine Home Address … 43 LAKEPINES Irvine, CA 92620
Resale Home Price …… $349,900


Deep peace
Of a running wave to you
Deep peace
Of the flowing air to you
Deep peace
Of the quiet earth to you
Deep peace
Of the shining stars to you
Deep peace
Of the gentle night to you
Moon and stars
Pour their healing light on you
Deep peace to you

Deep Peace — Bill Douglas

Some people want a property in the middle of the action, and some people want a property where they can relax and be at peace. The challenge for designers of exterior spaces is creating places of beauty with limited space and and it harmony with what are often undesirable buildings. The more urban a setting is, the more difficult the task becomes.

The Lakes is an old condo development, but the designers did try to make a good land plan with nice exterior spaces. Contrast this development with most garden-style apartment complexes with straight lines of buildings surrounded by a sea of parking. Having designed many of these myself, I can tell you that developers operate by arranging parking, access roads and building footprints to obtain maximum density. If there happens to be any irregular triangular spaces (there always is), the land plan is considered inefficient, and special care must be taken to wring out every available square inch for development purposes, within constraints set forth by the approving body.

The Lakes Irvine California

The land plan of The Lakes (above) at first glance looks like a chaos of poorly arranged buildings. Couldn’t they have straightened out the buildings at the top? Isn’t there a more efficient way to arrange those awkward buildings in the middle? The answer to both is “yes,” but the real issue is how does it feel on the ground. By breaking up long lines of building edges (like the ugliness along Irvine Boulevard on the lower left) the experience on the ground is much improved.

The Lakes Irvine California birds eye

If you look at the arrangement of buildings and the resulting greenspaces, you see ample room for pools and other water features. Also, the additional spacing between units gives a greater sense of privacy that encourages people to actually use the spaces they are provided. When you look at the exterior space pictured in the listing, it looks like a nice location to sit and enjoy the beautiful surroundings.

Perhaps the beauty of these grounds will comfort the underwater homedebtors there; perhaps not.

43 LAKEPINES Irvine, CA 92620 kitchen

Irvine Home Address … 43 LAKEPINES Irvine, CA 92620

Resale Home Price … $349,900

Income Requirement ……. $72,121
Downpayment Needed … $12,247
3.5% Down FHA Financing

Home Purchase Price … $436,000
Home Purchase Date …. 3/7/2006

Net Gain (Loss) ………. $(107,094)
Percent Change ………. -19.7%
Annual Appreciation … -5.8%

Mortgage Interest Rate ………. 4.96%
Monthly Mortgage Payment … $1,804
Monthly Cash Outlays ………… $2,430
Monthly Cost of Ownership … $1,740

Property Details for 43 LAKEPINES Irvine, CA 92620

Beds 2
Baths 1 full 2 part baths
Size 1,204 sq ft
($291 / sq ft)
Lot Size n/a
Year Built 1977
Days on Market 4
Listing Updated 11/30/2009
MLS Number S597487
Property Type Condominium, Residential
Community Northwood
Tract Lk

According to the listing agent, this listing is a bank owned (foreclosed) property.


Great Bank Owned Condo located in desirable Northwood Location in Irvine. Unit has a back patio off the stream that runs through complex, allowing you to sit and relax. The unit also features custom ceramic tile flooring downstairs, living room with fireplace, recessed lighting, white appliances including refrigerator-washer-dryer, white tile on kitchen counters, 6-panel doors, carpet upstairs, 2 bedrooms stairs with 1.75 bathrooms upstairs, 1/2 bath downstairs, unit appears to have been painted recently… Good condition, turn key, ready to move in. The unit is also located close to Northwood High School, shopping, dining and entertainment. The complex includes 2 pools, tennis facilities, stream running throughout.

One of the interesting features of this property is the owner, the FEDERAL NATIONAL MORTGAGE ASSOCIATION. The GSEs do not have much exposure to Irvine because much of it was financed at amounts much larger than the conforming limit.

The owner refinanced this property on 04/03/2007 for $364,000. As you may recall, the GSEs were not responsible for the housing bubble, and their late entry into subprime mortgages and the lowering of lending standards was a response to the loss of market share they experienced when CDOs took over. This loan was one of those stupid ones they bought in reaction to the runaway market of the bubble. Now is when they pay for their mistakes — or to be more accurate — we will pay for their mistakes.

Foreclosure Record
Recording Date: 10/05/2009
Document Type: Notice of Sale (aka Notice of Trustee’s Sale)

Foreclosure Record
Recording Date: 06/30/2009
Document Type: Notice of Default

Most of the loss is being absorbed by the owner and the second mortgage. The owner put about $45,000 down, and there was a second for about that much; the remainder will be covered by the US Taxpayer.

41 thoughts on “Deep Peace

  1. AZDavidPhx

    AmTrust Bank just got shutdown.

    I pulled all of my money out of this bank just one week ago. I called them up on 11/30 to shut down my accounts and the lady on the phone assured me that everything was just fine and dandy…


    AmTrust Bank – Retail, Wholesale


    On the heels of its parent company’s bankruptcy, Amtrust Bank became the 130th bank to fail in 2009 when the FDIC took it into receivership on 2009-12-04 at an estimated cost of $2 billion. New York Community Bank in Westbury, N.Y. assumed AmTrust Bank’s $8.6 billion in deposits and purchased $9 billion of the failed bank’s $12 billion in assets.

  2. AZDavidPhx

    Everyone be sure to check out the report by Price Waterhouse Coopers on Emerging Trends in Real Estate 2010 linked at today.

    To say it is bearish on 2010 is an understatement.

    It appears to agree that 2009 was just economic foreplay and 2010 is going to be when the debtors are forced to make some tough choices – or ‘capitulate’ as we like to say.

    Report predicts eventual 50% of market peaks and good opportunity for cash buyers when sellers ‘cry uncle’.

    All the optimism being peddled by the government is an illusion folks. The recession is without a doubt not over.

    1998 prices are on their way.

    1. wheresthebeef

      Good article. I like how they don’t sugarcoat anything. Sooner or later, it’s time to face the facts…no more pretend and extend or kick the can down the road. If things pan out like they suggest, the time to buy might be 2 or 3 years down the road.

    2. Lee in Irvine

      Well, Well, Well … what a surprise, they’re bearish on 2010.

      How were they advising their clients in Dec 2007?

    3. Blueberry Pie

      Has anybody tried to buy Christmas lights this year? Wow! I went to (2 different) Targets, and they each had only alloted about 2 shelf widths for Christmas lights. They were mostly cleaned out.

      Last year I seem to recall about 10 shelf widths of Christmas lights. I think this repression is somewhat self-fulfilling. If all the Targets understock for fear of slow sales – they’re going to have slow sales!

      Also, I cannot find clear lights on white wires this year. Frustrating.

    4. MalibuRenter

      “It appears to agree that 2009 was just economic foreplay and 2010 is going to be when the debtors are forced to make some tough choices – or ‘capitulate’ as we like to say.”

      Funny. I thought it was going to be the lenders captitulating.

  3. IrvineRenter

    Picking up from Yesterday:

    Email Exchange With The Cleveland Fed On U.S. Inflation Expectations

    Inflation Expectation Questions For Joseph G. Haubrich

    1. When was the last time you bought a computer? Did you expect prices to drop? Did you buy a computer anyway?

    2. When was the last time you bought a flat panel monitor or TV? Did you expect prices to drop? Did you buy them anyway?

    3. If you expected the price of steaks to keep rising, would you buy a years’ worth? Six months worth? Do you even have a freezer?

    4. If you expected the price of milk to keep rising, how much supply would you keep?

    5. Do you have a storage tank for gasoline when you expect gas prices to keep rising?

    6. If your refrigerator was in good shape would you buy another one if you thought they were going up in price.

    7. If your refrigerator, microwave, TV, or even car went out, would you buy them or wait if you thought prices would drop?

    8. I keep hearing how inflation expectations will cause people to buy consumer items, or deflation concerns cause people to not buy consumer items, but in light of the above practical test questions doesn’t that seem to be a potty notion?

    9. What about asset prices? Would people buy stocks if they thought they were going up? Houses? This one I will answer for you (you bet).

    10. Does the Fed factor in asset prices into its inflation expectations? If so how? Did not the Fed completely ignore a housing bubble? In fact, isn’t it true the Fed could not see a housing bubble that 100 housing blogs could see?

    11. Given that the Fed ignores asset bubbles, commodity speculation, etc (the only areas in which people actually do things simply because they expect prices to rise or fall) while focusing on consumer price expectations that have no bearing on what people do, doesn’t the Fed have its inflation policy ass backwards?

    12. Isn’t it silly to actually think inflation expectations 30 years out matter one iota?

    13. Given that the Fed has blown bubble after bubble of increasing amplitude, ignoring the problems until they blew up in the Fed’s face, with Bernanke denying there was a housing bubble, then denying there would be a recession, then coming up with preposterous unemployment expectations, pray tell exactly why should anyone believe the Fed can model inflation expectations or even inflation as it is actually happening?

    14. If the Fed thinks that market expectations are important, why not simply let the market set interest rates?

    15. How could letting the market set rates possibly be any worse than the repetitive bubbles the Fed blew under Greenspan and Bernanke?

    16. Pray tell of what use is the Fed other than to bail out banks when they get in trouble? And of what use is that to anyone but the banks?

    17. I would appreciate your comments on The Fed Uncertainty Principle, written Thursday, April 03, 2008, before the massive bailouts occurred.

  4. AZDavidPhx

    Oh, and right on schedule Obama is coming with New Deal economics, riding in to save the working man with makework jobs on our roads and bridges.

    This is where we start down the price inflation path. Look for more government help soon for the working man by increasing the minimum wage to 100.00$ an hour.

    How does spending money on roads and bridges repay our foreign debt? Oh wait, it doesn’t. Just more tail wagging the dog.

    1. Geotpf

      America’s foreign debt per capita is not excessive, compared to other countries (key words there are per capita; America is the most populous rich country, so it’s overall foreign debt is also the largest). The foreign debt of the UK is more than four times as much; Iceland, eight times; Ireland, ten times; Monaco, twelve times. Germany, France, Spain, The Netherlands, Switzeland, Belgium, Austria, Sweden, Hong Kong, Demark, Portugal, and Finland all have more foreign debt per capita than the US.


    2. Lee in Irvine

      I’m home today, sick, watching CNBC .. here’s a few very interesting comments I heard just the last 10 minutes.

      “the downside of the secondarily dip appears to be over” ~ Erin Bernett referring to the stock market sell-off today

      “people moved to the downside on food during this economic slide, isn’t a slowdown at McDonald’s an indication that people are moving back to the upside” ~ Steve Liesman on McDonald’s disappointing sales

      I’m absolutely convinced that CNBC in its present format is dangerous.

      1. IrvineRenter

        I have thought that about Fox News and CNN at times….

        I find the network does have its pulse on the narrative being believed by the clueless masses. They are a great contrarian indicator. If CNBC is parroting a general bullish feeling the market cannot go down further, we may be on the cusp of a significant leg down.

        1. Lee in Irvine

          The dangerous comment was in reference to jackasses on CNBC encouraging people to buy stocks, when it’s not prudent.

        2. Gemina13

          At work, CNBC plays all day. The portfolios & investment folks use Jim Kramer and Larry Kudlow as contrarian barometers: whenever they say “sell,” our people buy, and vice versa. It’s worked so far, especially when it came to Lehman Brothers.

      2. thrifty

        A better term is vacuous. There’s only so much genuinely worthwhile news of any sort new each day. 99.99% of what is interpreted as news by the public is just opinion or entertainment. The fact that it appears on supposedly “news” programs doesn’t change it.

        1. Eat that!

          That describes Fox News to a T. The 0.01% that is news on that channel is the weather report, which, if they could find a way, they’d blame Obama for.

          1. IrvineRenter

            When election season tunes up, I always notice CNN going pretty far to the left. I didn’t mind it when I was pissed at Bush, but I would rather observe from the center like Chris Mathews (but not MSNBC). Fox is Fox, and I don’t think they even pretend to be other than what they are. In their defense, the actual hard news stories on Fox are usually well done and factual; it is their commentary shows the tilt the earth off its natural axis by listing to the right.

          2. Lee in Irvine

            Oh please … poli-ticks.

            I hope Fox continues to blame Obama … just like MSNBC did the Monkey Man. Remember, Obama campaigned as a man for “Change and Hope”, yet his first major action was appointing that scumbag, Timothy Geithner, as Secretary of the Treasury. LoL … WTF?

      3. thrifty

        Lee: hope you’re better soon. Were you watching CNBC a few minutes ago when Paul O’Neill was interviewed? I thought his answer to every posed question was dead on accurate – as was his book about experience as Treasury Secy under Bush. What a guy!

    3. norcal

      Hey, AZDavid,

      Calm down – since when is the minimum wage rising so quickly? $100/hour, forsooth.

      And would you rather pay $100/hour to a flagman safeguarding road repairs, or $400/hour to a lawyer OKing paperwork on an Alt-A jumbo loan? Who’s working for the public good?

      1. AZDavidPhx

        I was just being facetious on the 100.00$ an hour. But the point being that unemployment must be a factor in countering present inflation. Loading everyone up with a makework job just hands out money.

        1. priced_out

          …eh, if the jobs are raking leaves, then sure. But didn’t we have the news networks spend two weeks talking about infrastructure maintenance last year? If we’re going to spend money to repair infrastructure now or later, may as well spend it now.

  5. thrifty

    More information about the coming crisis is noted in the Times Online (Dec 7) which quotes Realty Trac and Mark Zandi (Moodys chief economist). Amalgamating their information shows that 2.3M homes have already been foreclosed and another 5.2M will likely be foreclosed over the next 2 years. Looks like the worst, indeed, is yet to come.

    1. Geotpf

      That would seem to support stable to slightly negative prices, if 2.3 million homes were foreclosed in 2009 and 2.6 million each in the next two years. (Unless some of that first 2.3 million happened in 2008 or earlier, then that would be more negative.)

      1. thrifty

        I don’t think that would support stable to negative prices because the foreclosure inventory is building rapidly. Were the inventory disposed of as rapidly as it has been acquired over the last 2 years, then I would probably agree with you.

        1. norcal

          And it depends on the market; Dr. Housing Bubble points out that 54% of the highest-risk loans are located in California, and of those a large proportion in LA and OC. So if the foreclosure tsunami hits in the next two years, you could expect prices in those areas to decline at a greater rate than, say, rural Vermont.

  6. KJB

    I can’t agree more on the design of the LAKES. It’s not the greatest looking complex, it’s clearly not brand new but the mature trees and unique (for Irvine) design give it a unique character.

    I couldn’t imagine living in another Irvine company apartment, had the savings and realized actual monthly cost of 14xx a month on a 1200 sq ft 2bd 2bath place in Irvine beats anything I could rent.

    So I purchased a unit in this development last year at a price below the listed price in today’s blog, my place is in much better shape and I can’t be happier. No one has a direct view into my unit and vice versa, its almost always perfectly serene (occasional condo noise of kids etc, pretty rare) and the location is great. I hate the courtyards and long alleys in the newer units that all seem to echo, plus I refuse to suffer the dirge that is Mello Roos.

    The only draw backs are the age of the units and what comes along with that age (occasional work). If you want to see price disparity look at the prices for units that haven’t been touched versus those that have been redone it’s kind of fun to see what improvements are truly “worth”. The constant sweeping needed to remove all the leaves can also be annoying.

    I am bearish on real estate and mostly agree with your blogs sentiments. I don’t expect any return but sometimes real estate isn’t a purely fiscal decision, I have a low commute and DTI of 2 for my mortgage. When it’s time to move on I rent it out and use my savings to upgrade to an SFR, preferably out of California.

    I figured I would put a face to your blog as one of the few admitted property buyers in the last year.

    1. IrvineRenter

      Thank you for your great description of life in this complex. With your added detail, I feel like I have a well-rounded picture of life there. That is the kind of information I would like to see more of here on the blog. People live in these neighborhoods, and some of them are special in their own way. The words of people on the ground experiencing life is important and interesting.

      Part of what makes Irvine great is the quality of design of most of what is built here. When the design is lacking — like parts of El Camino Real — I point that out as a negative, but it is a negative compared to the rest of Irvine, but it is typical of most of Orange County. Even Irvine’s weakest design efforts are median OC quality or better, and it shows in the price premiums.

      The property you purchased sounds like a good fit for you, and on a payment affordability basis, you will probably not find a better deal even if prices go lower.

      1. tonye

        The problem with living in a condo is that you can’t set up a meth factory very well.

        If you have a big enough house you can make plenty of meth and sell it wholesale to the IPD. They are fantastic distributors so long as you treat them like the Mafia they truly are.

        I don’t care if the dollar goes to hell in a hand basket. The market for meth is strong.

      2. Bitter Renter

        IrvineRenter writes:
        > That is the kind of information I would like to see more of here on the blog.

        Yet the forums have apparently been discontinued, making it far less likely for this level of in-depth discussion of different neighborhoods to take place…

  7. IrvineRenter

    Don’t let FHA’s loose rules create another housing bubble

    By The Kansas City Star Editorial Board

    The nation is enduring continuing foreclosures because too many people bought houses they couldn’t afford and too many have zero equity. Now they owe more than the house is worth and many are inclined to simply mail the keys to the lender.

    In the aftermath of this housing bubble, the Federal Housing Administration is doing more to help prop up the market. But there are signs the FHA is overextended. Worse, its lenient lending terms could be sowing the seeds of future foreclosures.

    The FHA helps funnel capital to the market by guaranteeing that lenders will be paid back if borrowers default. Taxpayers don’t back up this guarantee; the money comes from insurance premiums.

    But the risk is rising that the FHA will become another in a series of agencies requiring a taxpayer bailout.

    In November, an auditor’s report found that the agency’s capital reserves had fallen to 0.5 percent of its $685 billion pile of insured loans — dangerously below the 2 percent cushion it’s supposed to have.

    At the same time, Congress doubled the maximum mortgage the FHA could guarantee to more than $729,000 for single-family homes and $1 million for multi-family properties.

    This was supposed to be a temporary move, and it may have made sense in the higher-priced California market. But in the halls of Washington, the danger is that temporary steps tend to become permanent. Sure enough, some in Congress want to boost the maximums even more and make them permanent. That move would put the FHA outside of its traditional mission of concentrating on mortgages for low- and moderate-income families.

    After release of the auditor’s report, the agency announced steps aimed at strengthening its reserve. It proposed to raise the minimum credit scores required of borrowers, cut the amount lenders can contribute to closing costs and increase the down payment, now at an unjustifiably low 3.5 percent.

    Unfortunately, the agency hasn’t said how much the down payment requirement would rise. Some in Congress say the minimum should be 5 percent, and bills to that effect have been introduced. Keep in mind that FHA loans have traditionally required a down payment of 20 percent. Clearly, the agency has gone too far down the wrong road.

    The FHA’s challenge is to help support the market during a difficult time — but without forcing a taxpayer bailout or approving too-lenient loans that breed the next foreclosure wave. The most important thing the agency could do is move quickly to increase the minimum down payment.

    1. Lee in Irvine

      Word has it Barney F-Fa-Frank wants to increase the FHA limit another $100,000 next year. LoL

  8. me

    The average American hasn’t been able to afford the “American Lifestyle” for some time. Our gov’t and credit industry has laid out a path of smokey mirrors to make us believe we are more wealthy.

    Youtube the lecture from Elizabeth Warren in 2007 on The Coming Collapse of the Middle Class.

  9. how about 7% oc drop?

    Feds see O.C. home prices down 7%
    December 8th, 2009· posted by Jon Lansner

    The Federal Housing Finance Agency, federal mortgage regulator, says that Orange County home values were falling at a 7% annual rate (OK, 6.94% to be precise) in the third quarter. That is…

    •The 12th consecutive drop
    •But the smallest drop since Q3 2007
    Depending on the report, the Orange County home market is giving mixed signals whether homes prices have truly firmed… Examples…

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