Irvine Home Address … 96 CANYON Crk Irvine, CA 92603
Resale Home Price …… $4,500,000
Who are you?
Who, who, who, who?
I woke up in a Soho doorway
A policeman knew my name
He said “You can go sleep at home tonight
If you can get up and walk away”
I staggered back to the underground
And the breeze blew back my hair
I remember throwin’ punches around
And preachin’ from my chair
Who Are You — The Who
So who is John Mulkey, Housing Guru from Waleska, Georgia? He is a realtor who posts on Active Rain to network and find business. He expresses opinions shared by many realtors — and he couldn’t be more wrong. He managed to write a post I interpret as genius parody, a channeling of sheeple energy so full of unintentional irony that it casts reflective light on the tormented souls of the clueless masses.
“While news stories, articles, and blogs continue to be written about “Strategic Default” and how those facing foreclosure shouldn’t be allowed to walk away or have their mortgage balance reduced, punishing foreclosure victims only continues the pain for all of us.
The problem we face isn’t one of a few hundred or even a few thousand
who carelessly spent beyond their means;”
It is way, way more than a few thousand who carelessly spent
beyond their means. Mortgage Equity withdrawal was fueling the US
economy for the last decade. The attempt at minimizing the issue is
hereby exposed as fraud.
“this issue touches tens of
millions of U. S. homeowners, the majority of whom acted responsibly,
and with the knowledge available to them at the time. Most thought they
were making wise choices. How
can we blame the homebuyer for not seeing the fallacy of never-ending
home price escalation?”
The sheeple bought on the foolish advice of realtors, the experts, probably using a toxic loan per the foolish advice of their mortgage broker, another expert. I will acknowledge that we cannot blame homebuyers; we should blame realtors and mortgage brokers who peddled that bad advice as experts.
“In their recent testimony before Congress, the
heads of the big banks said they didn’t see it. Jamie Dimon,
Chairman and CEO of JP Morgan Chase said, “Somehow we just missed that
home prices don’t go up forever,” an erroneous assumption shared by the
U. S. Treasury. And if the “brilliant” minds on Wall Street
didn’t see the crash coming, who could expect those on Main Street to
have superior knowledge? Regardless of what Mr. Dimon may have
known, few anticipated the intensity of the housing crash or the scope
of its reach.”
When I read this quote, I burst out laughing. The author of this post was using this quote as support for his argument that experts failed and therefore he is not responsible for anything. The irony of the quote and the subtle sarcasm in Mr. Dimon words completely escaped the author. And for the record, many people from Wall Street to Main Street saw this coming, me included.
“It’s time to stop blaming the home purchaser and to
accept the only workable solution for both them and for the housing
market in general. It’s time to see beyond what we perceive as the
“morality” of the solutions for those facing foreclosure, and to look
to what solution best serves the country as a whole. And that is to
reduce the principle of homes underwater to their current value.”
WTF? The reasons for me not wanting to give money to my underwater neighbor are many and complex, and “putting aside morality” and taking one for the team are not likely to persuade me to change my mind. Remember, responsible homeowners are NOT losing their homes. Who am I supposed to pity? The genius whose idea of personal finance is a Ponzi Scheme?
I have an idea; why doesn’t the author start writing personal checks to the lenders himself. Isn’t that what he is asking us to do? Somebody has to lose a great deal of money, and as someone who had nothing to do with the fiasco, I really don’t want it to be me. I don’t want the government to use my tax dollars to bail out anyone, much less a HELOC abuser who looks down on me as a lowly renter.
an action would immediately help to stabilize a large portion of the
market, and would protect neighboring homes from further declines in
value. It would not affect the bank’s or investor’s equity, for the
homes are only worth what they’re worth; and foreclosure sometimes
results in below market returns.”
The problem with banks is not the equity in the property, it is the book value of their loans. Writing off the balances would wipe out our banking system, that is the problem. The author thinks this has something to do with home values; it doesn’t. This crisis has everything to do with bank loan balances, capital ratios, and borrowers making payments. Since he has incorrectly defined the problem, any solution he comes up with will be erroneous.
“Those who speak of the inherent
unfairness of such a solution fail to consider the ultimate damage of
continued foreclosures, the consequences of which will depress home
prices for years.”
So what? Home prices are what they are. What difference does it make to society if home prices are up or if they are depressed? If people are living in their homes and making payments, it should not matter. Depressed or stagnating prices does rob realtors of their ability to stoke buyer fears to inflate housing bubbles, but it also makes housing affordable for real families and stimulates the economy by freeing up personal income for personal spending rather than spending on debt service.
“If we’re serious about solving the foreclosure
crisis, let’s address the underlying cause—homes worth less than their
The underlying cause of default is not negative equity. Negative equity is motivating defaults because the sheeple were told by realtors and mortgage brokers prices would go up forever, and when that did not happen, they bailed. Negative equity merely exposes the poor underlying motivation for home ownership: making a profit, and the people are making a rational business and investment decision when they default. Perhaps if realtors didn’t create false expectations through their ridiculous representations about appreciation, then negative equity will stop being a problem because owners will pay less attention. In addition, negative equity will stop occurring because people will not buy for foolish reasons and inflate housing bubbles.
“I’ve recently seen comments from some
who said, “I don’t care if my home declines in value, I don’t want to
save those who acted stupidly.” And while I doubt that those making
such statements really aren’t concerned about future decreases in the
value of their own home, I do think they want to punish those who they
perceive as taking advantage of the situation.”
Did this guy just call everyone who disagrees with him a vindictive liar?
“However, the problem
extends beyond housing, and millions will continue to suffer until we
begin to restore economic order and sanity. We must do something; and
the palliative measures of government have demonstrated their
inadequacy to bring solutions. What is needed is bold action, from
leaders unafraid of the political consequences. Whether it’s
legislation to allow for “cram-downs” or forcing banks to lower
principle balances on homes underwater, to fail to enact a workable
solution is to allow the morass to continue; indeed to perpetuate it.”
I agree with his conclusion that failing to act will cause the morass to perpetuate.
Great! Bring it on!
Populist appeals to self-serving instincts give false hopes to many, and contrary to the author’s desires, such false hopes from posts like his only serve to allow the morass to continue; indeed to perpetuate it.
Negative equity is not a a complicated or confused situation, and the defaults and foreclosures are not a social problem requiring government intervention. Calling for someone else to pay the price, notably shifting the entire burden of poor decision making from borrowers to lenders and US taxpayers is never going to sit well with me.
Lenders are more culpable than borrowers, but not that much more, and I am not thrilled about seeing lender’s share of the losses increase as long as I am guaranteeing them.
No twist of logic or compelling narrative is going to remove the moral hazard; principal reductions to restore equity are wrong, and I will speak out against them as often and as loudly as I can.
Irvine Home Address … 96 CANYON Crk Irvine, CA 92603
Resale Home Price … $4,500,000
Income Requirement ……. $943,473
Downpayment Needed … $900,000
20% Down Conventional
Home Purchase Price … $5,700,000
Home Purchase Date …. 5/11/2007
Net Gain (Loss) ………. $(1,470,000)
Percent Change ………. -21.1%
Annual Appreciation … -8.5%
Mortgage Interest Rate ………. 5.11%
Monthly Mortgage Payment … $19,568
Monthly Cash Outlays ………… $25,200
Monthly Cost of Ownership … $17,980
Baths 6 full 2 part baths
Home Size 9,489 sq ft
($474 / sq ft)
Lot Size 28,766 sq ft
Year Built 2009
Days on Market 373
Listing Updated 1/20/2010
MLS Number C10006941
Property Type Single Family, Residential
Community Turtle Rock
According to the listing agent, this listing may be a pre-foreclosure or short sale.
Come see this beautiful Tuscan Style Estate with views of the canyon and city lights in the gated community of Shady Canyon! There is approx 9,489 square feet of living space including a separate pool house with 3/4 bathroom and kitchenet. The gourmet kitchen and butlers pantry has ample space to prepare for dinner parties yet functional for everyday cooking. Take the elevator to the basement for the theater room and an additional room that can be transformed into a wine room, gym or bonus craft room. The main floor boasts a library/study, formal living room, informal living room, TV family room, gourmet kitchen with butlers pantry. Outside you will find a pool and spa, built in BBQ and bar area, outdoor fireplace with seating area, three separate water features including the entry fountain. This Estate is awesome!
Two gourmet kitchens? How many do you need? Do you often have visiting gourmets that need a place to work?
A few weeks ago in Foreclosures Ravage Irvine’s High End, I profiled 63 CANYON Crk Irvine, CA 92603, a new build in Shady Canyon where the owner walked and let the lender take back the property. On that property, the lender is holding out for an unrealistic asking price hoping to break even.
Today’s featured property is another big lender loss on the way. They are advertising the property as a short sale to generate interest, but I question if they will find much. Everyone knows more of these properties is coming, and nobody wants to be a knife catcher. Many will anyway.
How long before they give up on the short sale and move this property?
Recording Date: 12/23/2009
Document Type: Notice of Sale (aka Notice of Trustee’s Sale)
Recording Date: 09/21/2009
Document Type: Notice of Default