IHB News 6-19-2010

This weekend's featured property may be a sad case of unemployment causing a distressed sale.

Irvine Home Address … 8 DESCANSO Irvine, CA 92620

Resale Home Price …… $950,000

But that was yesterday

I had the world in my hands

But it's not the end of my world

Just a slight change of plans

That was yesterday

But today life goes on

No more hiding in yesterday

'Cause yesterday's gone, ah-ah ah-ah

Foreigner — That Was Yesterday

IHB News

Wednesday night was entertaining with talk about the local real estate market and national issues influencing it with Pat Regnier from Money Magazine who was in attendance doing research for an upcoming story. We will be having gatherings more frequently going forward.

Several posts this week were picked up by Patrick.net. Each post he picks up gets double readership. The post is seen by regular IHB readers when it debuts, then he sends nearly the same amount of traffic the from his site a day or two later. Thank you, Patrick.

Writer's Corner

The story of the week was my email address getting hacked. A couple of weeks ago someone gained access to a different email account of mine and set an autoresponder to deliver a spam message. That account had the same password as my primary account, so the perpetrator discovered my primary account, tried the password and got it. Then they went over to Yahoo, established golfplan18@yahoo.com as an impersonation account. If you see any email from that account, it isn't me.

I have contacted Yahoo about the situation, and they actually want me to verify my identity and send them a copy of my ID and a statement that it isn't me. That is wrong. I am the one being impersonated. They should be contacting the person claiming to be me and asking them for ID. If they can't prove they are me, then the account should be closed. Yahoo has come to believe it is my responsibility to prove I am real. That is crazy. It isn't like Yahoo has to combat thousands of false claims about identity theft. They should be asking the impersonator for ID. If Google challenged me to produce ID on my account because someone claimed I wasn't me, I could prove it to them, and that would be the end of the claim. If I am being unreasonable, please let me know.

Housing Bubble News from Patrick.net

Fri Jun 18 2010

Seattle Housing Prices: How Low Can We Go? (publicola.net)

Demanding Buyers "Hinder" the Housing Market (nytimes.com)

Current Market Conditions: Its Wild and Weird On the Top (housingstory.net)

Multi-Million-Dollar Mansion Markdowns (huffingtonpost.com)

Two prominent SF Bay Area office buildings have flopped into default (contracostatimes.com)

Three reasons why you should be happy about renting in California (doctorhousingbubble.com)

Banking charge-offs at record levels (financemymoney.com)

Analysts believe loan mod redefaults could hit 70% (snl.com)

Challenges to Foreclosure Docs Reach a Fever Pitch (americanbanker.com)

We are legally forced to use incompetent credit rating agencies (chicagotribune.com)

Elliot Wave predicts triple-digit Dow (marketwatch.com)

Jobless Claims in U.S. Unexpectedly (again) Rose Last Week (bloomberg.com)

Debt Default: It Can Happen Here (capitalgainsandgames.com)

Consumer price index 'inflation report' shows deflation (csmonitor.com)

FBI targets 485 mortgage frauds, but not Federal Reserve (money.cnn.com)

FBI: Mortgage fraud increasing as housing market remains distressed (centralvalleybusinesstimes.com)

91 Banks Miss May TARP Payment; New "Merle Hazard" Song – "Legal Tender" (Mish)

Translation of Fed-speak into English (patrick.net)

Do we need a new consitutional convention? (huffingtonpost.com)

Strategic default as explained by rapper Chamillionaire (legalblogwatch.typepad.com)

Thu Jun 17 2010

Fannie and Freddie money pit may suck down $1 trillion of taxpayer cash (finance.yahoo.com)

Fannie and Freddie: Hopelessly unproductive works (theautomaticearth.blogspot.com)

FBI busts billion-dollar fraud; Federal Reserve's multi-TRILLION dollar fraud still ignored (cnn.com)

Fed Ponders What To Do If Re-Inflation Fails (Mish)

Housing bubble in Australia? Not if you ask their Central Bank (perthnow.com.au)

Czech National Bank more honest; says prices rose too high and should fall (radio.cz)

Currency Fall Curbs Europe's Taste for New York Property (online.wsj.com)

Chinese debt binge is fuelling a dangerous property bubble (smh.com.au)

Senate OKs new buyer-bait closing deadline (inman.com)

Welcome to the post-buyer-bait housing malaise (marketwatch.com)

Bankers Let Empty Houses Rot. How Do We Fix This? (721.seiu.org)

Will HOA Lawsuits Compel Lenders to Foreclose on Shadow Inventory? (irvinehousingblog.com)

The "5 second" listing scam to get short sale permission (calculatedriskblog.com)

The Next Housing Crisis (truthiscontagious.com)

Long road ahead for housing "recovery" (chicagotribune.com)

Some Are Born on Third Base But Think They Hit A Triple (hussman.net)

Gear up for another lost decade in real estate (mybudget360.com)

The cheapskate's revenge (salon.com)

Free Trial of the Landlord's Bargain Finder

Wed Jun 16 2010

Radical Ideas From a Federal Housing Bureaucrat (blogs.wsj.com)

Arizona immigration law may increase Phoenix foreclosures (azcentral.com)

What We Know and Don't Want to Know About Housing (Charles Hugh Smith)

Builders in U.S. Lost Confidence After Buyer-Bait Credit Ended (bloomberg.com)

Banks stop foreclosing, letting squatters live free (centralvalleybusinesstimes.com)

Foreclose or let houseowner squat? (patrick.net)

Is Squatting a Viable Long-Term Solution to Stabilize the Housing Market? (irvinehousingblog.com)

Stephen Roach says China's Housing Boom is Not a Bubble; I say "Nonsense" (Mish)

In Desperately Poor Rwanda, Most Have Health Insurance (nytimes.com)

Deficits, Social Security and Medicare, and national security (latimes.com)

Toxic partisan politics is killing capitalism, democracy, your retirement (marketwatch.com)

Financial Reform Bill – Audit the Fed! (bullnotbull.com)

The Coming Financial Derivative Meltdown (fool.com)

Fannie Mae Proposes Bulldozing U.S. Houses (bullionbullscanada.com)

Government-sponsored mortgage debt leads to murder-suicide (ocregister.com)

Pacoima residents want city to fight blight (latimes.com)

Murrieta volunteer "retires" from cleaning yards of abandoned houses (pe.com)

Tue Jun 15 2010

Real Estate Relapse Has Arrived (blogs.forbes.com)

There are 36,000+ Distressed Properties in Orange County (irvinehousingblog.com)

Las Vegas House-Ownership Rate: Officially 59%, But Effectively 15% (dailyfinance.com)

U.S. housing prices still more expensive than any other point in last 120 years (pragcap.com)

Rep. Waters FHA "Reform" Bill to Allow Smaller Down Payments, More Defaults At Your Expense (housingwatch.com)

Sen. Reid Seeks Bubble Re-Inflation (news.firedoglake.com)

Fannie-Freddie Fix at $160 Billion With $1 Trillion Worst Case (Thanks Sen. Reid) (businessweek.com)

Private Sector Closely Watches Federal Decision to Unload Properties (nreionline.com)

Housebuyers Hit by Commercial Real Estate Slide (housingwatch.com)

Strategic defaults on mortgages: The price we pay for the housing folly (latimes.com)

2 ways to justify a price reduction to a seller (inman.com)

Irish Central Bank Hid Housing Market Crash Forecast (prisonplanet.com)

Two Decades Of Greed – The Unraveling (zerohedge.com)

Number of millionaires back to late 1990s levels (mybudget360.com)

State Wants to Borrow From Pension Fund, to Pay the Fund (nytimes.com)

You Thought California State Pensions Were Out Of Control? Wait Until You See This (dailybail.com)

Are you paying too much rent? (patrick.net)

Mon Jun 14 2010

Chicago's Rogers Park neighborhood hit hard by condo foreclosures (chicagotribune.com)

Accelerating Jumbo Mortgage Delinquencies Will Bash High-End Property Values (housingstory.net)

Soros Says We Have Just Entered Act II of Crisis (bloomberg.com)

Rosenberg warns the bear market isn't over yet (money.cnn.com)

Here's Why Many US Housing Markets Are Continuing To Weaken (businessinsider.com)

Applications Point to Slow Summer Housing Season (usnews.com)

Why Tampa Bay's 'real' home ownership rate is so much lower than we think (blogs.tampabay.com)

Waking Up From the American Dream (nytimes.com)

Houseowners in mediation programs face court backlog of foreclosure cases (washingtonpost.com)

In jail for being in debt (startribune.com)

Builders Rush to Complete Houses by U.S. Tax Credit Deadline (bloomberg.com)

Tax Credit Extension Could Help Tax Cheaters (blogs.wsj.com)

FBI to "arrest hundreds of people" next week for Mortgage Fraud (calculatedriskblog.com)

'Jack Nasty' pleads guilty to mortgage racketeering (signonsandiego.com)

Adverse possession: Latest housing fraud to strike South Florida (sun-sentinel.com)

Is Canada's housing bubble about to burst? (thecoast.ca)

The Anatomy of a Bubble (greatdepression2006.blogspot.com)

Oil Spill May Cost $4.3 Billion in Property Values (preview.bloomberg.com)

BP Spills Coffee (youtube.com)

Public employee unions on the defensive (sfgate.com)

SNL skewers unions in "Public Employee of the Year" (taxdollars.freedomblogging.com)


This is a distressed property that looks like unemployment.

  • The property was purchased on 7/16/2004 for $1,036,500. The owners used a $500,000 first mortgage and a $536,500 down payment.
  • On 3/8/2005 they refinanced with a $503,000 first mortgage and did not extract their equity (the additional $3,000 was likely fees and points).
  • They have been in default for over a year.

Foreclosure Record

Recording Date: 04/23/2010

Document Type: Notice of Default

Foreclosure Record

Recording Date: 12/24/2009

Document Type: Notice of Rescission

Foreclosure Record

Recording Date: 11/19/2009

Document Type: Notice of Sale

Foreclosure Record

Recording Date: 08/17/2009

Document Type: Notice of Default

These owners tried to make loan modifications work to keep their house, but apparently, they simply can't afford to make the modest mortgage payment, and now they have to sell at a loss. The good news for them is that they have plenty of equity because unlike their nieghbors, they didn't pull it all out and spend it.

Irvine Home Address … 8 DESCANSO Irvine, CA 92620

Resale Home Price … $950,000

Home Purchase Price … $1,036,500

Home Purchase Date …. 7/16/2004

Net Gain (Loss) ………. $(143,500)

Percent Change ………. -13.8%

Annual Appreciation … -1.4%

Cost of Ownership


$950,000 ………. Asking Price

$190,000 ………. 20% Down Conventional

4.80% …………… Mortgage Interest Rate

$760,000 ………. 30-Year Mortgage

$192,252 ………. Income Requirement

$3,987 ………. Monthly Mortgage Payment

$823 ………. Property Tax

$0 ………. Special Taxes and Levies (Mello Roos)

$79 ………. Homeowners Insurance

$174 ………. Homeowners Association Fees


$5,064 ………. Monthly Cash Outlays

-$966 ………. Tax Savings (% of Interest and Property Tax)

-$947 ………. Equity Hidden in Payment

$348 ………. Lost Income to Down Payment (net of taxes)

$119 ………. Maintenance and Replacement Reserves


$3,618 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$9,500 ………. Furnishing and Move In @1%

$9,500 ………. Closing Costs @1%

$7,600 ………… Interest Points @1% of Loan

$190,000 ………. Down Payment


$216,600 ………. Total Cash Costs

$55,400 ………… Emergency Cash Reserves


$272,000 ………. Total Savings Needed

Property Details for 8 DESCANSO Irvine, CA 92620


Beds: 4

Baths: 3 full 1 part baths

Home size: 3,000 sq ft

($317 / sq ft)

Lot Size: 6,370 sq ft

Year Built: 1980

Days on Market: 28

Listing Updated: 40332

MLS Number: S618132

Property Type: Single Family, Residential

Community: Northwood

Tract: Wm


This property is in backup or contingent offer status.

Welcome to This Beautiful Home in a Super Cul-De-Sac location on Greenbelt, in the Prestigious Gated Community of Windstream … No Mello-Roos, great neighborhood … Highly upgraded, bonus room w/built-in media center & wet bar, remodeled kitchen with center island and granite counter. Spacious master suite has remodeled master bath, vaulted ceiling and walk-in closet, wood/tile/upgraded carpet flooring, custom paint, brick fireplace in living and family room, Plantation shutters, crown molding, lighted ceiling fans, French doors and windows, Inside laundry … Private sunny backyard w/beautiful built-in spa and barbecue, 3 car attached garage with extended driveway, Great association with pool, spa, tennis, barbecues and gates, Enjoy walking the Hicks Canyon Trail to restaurants, shops and excellent Irvine schools. You will love this home and living in Windstream. You are minutes away from the beautiful Laguna Beach as well as Orange County s entertainment center The Irvine Spectrum!

That description isn't too bad, although I don't understand the Title Case of the first sentence. Perhaps if the bar is lowered enough, realtors can pass the test.

10 thoughts on “IHB News 6-19-2010

  1. Laura Louzader

    Now, this is just too bad. You can bet the lender will move very briskly to foreclose and move these people out, because the lender is at absolutely no risk here. They will not be stuck with a nonrepayable loan for a property worth two-thirds as much.

    It’s unfortunate that these people put so much of their wealth into their house. If they’d bought smaller and kept a large supply of cash in low-risk instruments, this would not be happening to them. But here in the U.S., you are considered strange if you don’t live up to every dime, and interest rates kept artificially low further discourage savings and prudence. This foreclosure is a demonstration of the wisdom of living below your means. These unfortunate buyers were not profligates or gamblers or debt addicts, but only doing what most Americans do, which is pretty much living up to their entire income and buying as much house as they could afford. This is certainly no crime and it is what most “prudent” folks do, but it renders you much more vulnerable to the vagaries of the economy and life’s misfortunes.

    That is why Americans will not weather a prolonged downturn as well as the Japanese, who are much more resilient because of high savings.

    I believe that the generation just now coming of age will take a lot of lessons away from this disaster, and that they will return to the caution and super-frugality of the generation that came of age C.1930. An economy of savers and little debt will not experience the wild fake “growth” that we thought we had, but it will be a much more resilient and sustainable economy, and downturns will leave far fewer people in the lurch.

  2. scottinnj

    A little Saturday humor, courtesy of The Onion, on how to write a real estate listing


    After 14 weeks, this horrible property has attracted no interest, SO THAT’S WHY WE’RE USING ALL CAPS AND FAR TOO MANY EXCLAMATION POINTS!!!!!!! Yes, we’re willing to write in italics and underline at random to get you to notice this abysmal HOME!!! We’ll even spout uninformative buzzwords like MEGA-DEAL, ***WOW***, and <> just to get your attention!!!! PLEASE, PLEASE, PLEASE STOP BY THIS DUMP-HEAP TODAY!!!!!***

  3. OrangeRenter

    I think you’re right IR… it’s not like Yahoo has to actually locate the person. They can just send an email to that account saying, “please contact us within 3 days or this account will be closed”… No response/close account. Simple!

    I think I’m going to change my passwords today. I too use the same pw on multiple accounts (there are SO MANY to remember these days!).

  4. mike23w

    [url=http://www.mybudget360.com/the-middle-class-two-income-trap-–-two-breadwinners-plus-extra-money-to-support-the-banking-industry-how-middle-class-americans-are-losing-ground-by-supporting-the-financial-sector/]The Middle Class Two Income Trap[/url]


  5. SoCal78


    We recently had I.D. theft in our household and when we called the police, they recommended we report it on this website:


    Regarding Yahoo’s instructions for you, I know it may seem like a hassle for the burden of proof to be on you, however I would look at this way — if they put the ball in the account holder’s court and that person was then able to produce a bogus ID to “verify” they are you… then what? I have read they go to quite some lengths to continue this scheme, so I wouldn’t put it past them. At least this way, you have the opportunity to put the kibosh on it with relative ease. Sorry you had to go through all that. Good luck, IR.

  6. E


    Reading MISH today, there was an advertisement for the Astoria Condos in Irvine.

    Pretty funny considering I’ve never seen a larger group of anti-condominium people.

  7. Stock Investor

    IrvineRenter: “I have contacted Yahoo about the situation, and they actually want me to verify my identity and send them a copy of my ID and a statement that it isn’t me. That is wrong.”

    No, it is not.

    To report a crime you have to make an official statement. An anonymous statement is not good enuogh. So verification of your identity is required by legal procedure.

  8. newbie2008

    From Yahoo point of view, who is the real Larry. Since they don’t personally know you, it going to be hard to tell. Try contacting your local police on identify theft. Since Irvine has relatively low crime, they are more likely to help than a high crime rate area that has bigger fish to fry.

    As for learning from history, the only history for history is people don’t learn from history. People default to old habits. Teach your children for they will be following in your foot steps and the habits you establish for them.

  9. minou270

    I can’t say that I feel too sorry for them. There were a lot of nice homes in the area in 2004 for $540k. They could have paid cash for a house, had no payment, and would not be facing foreclosure.

Comments are closed.