IHB News 8-14-2010

We are having another IHB party on Sunday, August 22, 2010, at JT Schmids at the District.

Irvine Home Address … 6 PALOS #66 Irvine, CA 92612

Resale Home Price …… $530,000

The other day I got invited to a party,

but I stayed home instead

Just me and my pal Johnny Walker,

and his brothers Black and Red

And we drank alone, yeah,

with nobody else

Yeah, you know when I drink alone,

I prefer to be by myself

George Thorogood And The Destroyers — I Drink Alone

IHB News

We are having another IHB party on Sunday August 22, 2010. The party on August 1 was attended mostly by investors, and we anticipate many will attend the event on Sunday, but I want to make clear that it is open to everyone. If perhaps you are looking to buy in Orange County, and you want to meet an IHB agent. or if you simply want to hang out, have a drink, and talk real estate, we encourage you to attend.

For those of you who previously expressed an interest in the fund (this is not a solicitation), the fund will be closing to new investors on Friday, September 17. I know that seems like a long way off, but it often takes time to free up investment capital, and I don't want you to miss this opportunity. Also, the fund is only open to 35 "Sophisticated" investors, and these slots go in the order I receive the paperwork. If you are planning to invest under the sophisticated investor category, the fund may not have openings through September 17.

I now have over $1,000,000 in firm commitments to the fund, so it will definitely be going forward.

Housing Bubble News from Patrick.net

Fri Aug 13 2010

Debts Rise, and Go Unpaid, as Bust Erodes House Equity (nytimes.com)

Burbank still in housing bubble after 40% decline (doctorhousingbubble.com)

Housing market racking up bad grades (chicagotribune.com)

Metro Detroit house sales fall in July (freep.com)

Housing supply on the rise in South Florida (miamiherald.com)

Florida's largest REMAX real estate company franchise ceasing operations (sun-sentinel.com)

Builders Shrink Houses to Fit Buyers' Newly Modest Tastes (rismedia.com)

With housing oversupplied, deflation is a threat (kansascity.com)

Foreclosures up 6% from last year (finance.yahoo.com)

What's the best way to default on your mortgage? (chicagonow.com)

Fed can't do much more to avoid a double dip (marketwatch.com)

Shiller sees double-dip if jobs aren't created (marketwatch.com)

US Plans More Aid for Jobless Homedebtors; NOTHING for Responsible Renters (nytimes.com)

HUD Offers Interest-Free Loans to Homedebtors; NOTHING for Responsible Renters (businessweek.com)

Housing Summit May Yield Fannie and Freddie Clues (abcnews.go.com)

Assumability: A hidden potential value to FHA loans (old but interesting) (washingtonpost.com)

U.S. Is Bankrupt and We Don't Even Know It (bloomberg.com)

Taleb Says Government Bonds to Collapse, Avoid Stocks (bloomberg.com)

Let's do a WikiLeaks on the SEC (blogs.forbes.com)

No place like demolished home (mv-voice.com)

Thu Aug 12 2010

Good news for buyers, bad new for sellers (startribune.com)

Housing Price Rise Actually A Head Fake (blogs.forbes.com)

Californians' income falls for first time since WWII (sacbee.com)

Low mortgage rates fail to move market (msnbc.msn.com)

Squatting Becoming Way of Life for Delinquent Borrowers (irvinehousingblog.com)

Short sale gridlock is 'dizzying' (mortgage.ocregister.com)

Interview with Patrick (patrick.net)

House Prices: Demographics Giveth and Taketh Away (dmarron.com)

Commercial Landlords Worry As Barnes & Noble Contemplates Alternatives (retailtrafficmag.com)

America Is 'Bankrupt Mickey Mouse Economy': CIO (cnbc.com)

Tracy, CA pair charged in $4.5 million.real estate scam (contracostatimes.com)

Scammy Wells Fargo loses debit card suit (sfgate.com)

Banking failures and swindling wealth from working and middle class Americans (mybudget360.com)

Obama administration to provide $3B in banker, oops, housing aid (finance.yahoo.com)

Inept Repairs Leave Economy Stalling (dukenews.duke.edu)

The Fed is not your friend (theautomaticearth.blogspot.com)

Fed Insiders Can Make Infinite Profits (Mish)

Reagan insider: GOP destroyed economy (Republicans, skip this one) (marketwatch.com)

Australia: Did you remember to sell the house today? (prosper.org.au)

Man Who Fought FBI Spying Freed From "National Security Letter" After 6 Years (wired.com)

Wed Aug 11 2010

Cheaper in San Mateo, CA but still not cheap enough (patrick.net)

Foreclosures increase in affluent Park Ridge and northwest suburbs (chicagonow.com)

"Buy and Bail" Houseowners Get Past Loan Restrictions (bloomberg.com)

Personal income drops 7.1 percent in Naples, Florida (miamiherald.com)

Jobless alarms fall on deaf ears of investors (marketwatch.com)

Fed to resume buying Treasury bonds with newly printed cash (latimes.com)

Top Fed Official Warns Fed Risks Repeating Past Mistakes (huffingtonpost.com)

Quantitative Easing Take II; Uncharted Territory (Mish)

The Federal Reserve's Magma Chart (economix.blogs.nytimes.com)

James Bullard and the Fed's incredible threat (csmonitor.com)

Greenspan: A Charlatan Unmasked (bullionbullscanada.com)

Fannie and Freddie's Foreclosure Barons (motherjones.com)

The peril of false bottoms (atimes.com)

Afraid of deflation? Heres what to do: avoid debt! (bankrate.com)

The Rise and Fall of the Dollar (zerohedge.com)

Realtors got talent (for corrupting our laws with lobbyists) (PDF – sabor.com)

Tue Aug 10 2010

Northeast of Silicon Valley, recession's effects are magnified (latimes.com)

Far From the Poor, Real Estate Woes Nip at Lake Forest (nytimes.com)

Belvedere house up eightfold, but not any nicer than it was (patrick.net)

Unsold Housing Inventory Grows (blogs.wsj.com)

Foreclosed On — By the US (online.wsj.com)

Study Reveals Foreclosures Result of Excessive Debt (irvinehousingblog.com)

Worrying Numbers Behind Underwater Houseowners (dailyfinance.com)

Freddie Mac: $4.7 billion Loss, REO Inventory increases 79% YoY (calculatedriskblog.com)

FHA Insured Mortgages, a Disaster in the Making? (realestatechannel.com)

Housing Insanity: MORE debt, LOWER downpayments (theatlantic.com)

Our Economic Shell Game (taxhome.blogspot.com)

Inflation the Path to Future Deflation (greatdepression2006.blogspot.com)

Billionaire developer Paul Milstein dies (therealdeal.com)

Per Capita Income Falls In Wealthy Bridgeport Metro Area (courant.com)

United States Per Capita Personal Income (bber.unm.edu)

America goes dark (nytimes.com)

The hottest housing market: Information (washingtonpost.com)

The Best Fiscal Stimulus: Trust (miller-mccune.com)

Founding 3-person startup with no revenue better than working for Goldman (adgrok.com)

Mon Aug 9 2010

S.F. house prices drop as distressed sales rise (Case Shiller wrong) (sfgate.com)

Maui house sales show continuing decline in median price (staradvertiser.com)

NYC delinquency rate continues upward as distressed properties list grows (therealdeal.com)

Seller Beware: New "Ideal Buyer" Scam (9news.com)

Real estate called 'poor investment' (lansner.ocregister.com)

Stranguflation: Deflation and Inflation Where it Hurts America Most (huffingtonpost.com)

Deflation it is (theautomaticearth.blogspot.com)

Underemployment 18.4% in all Age Groups (Mish)

Jobless and Staying That Way (nytimes.com)

Are Fed-Up American Workers Getting Their Gumption Back? (newsweek.com)

Calif. deal put Senate candidate Jeff Greene on front line of mortgage mess (miamiherald.com)

Contra Costa's $100,000-plus public pension club grew 25% last year (contracostatimes.com)

Battle Looms Over Huge Costs of Public Pensions (nytimes.com)

Raise My Taxes, Mr. President! (newsweek.com)

A Gift the Wealthy Don't Need (nytimes.com)

Greenspan Calls for Repeal of All the Bush Tax Cuts (nytimes.com)

Housing Policy's Third Rail: Fannie and Freddie (nytimes.com)

Fannie and Freddie Now Part of Federal Budget (PDF – cbo.gov)

But Will It Make You Happy? (nytimes.com)

Are we in control of our own decisions? (ted.com)


This delinquent owner may be having unemployment issues. The property was purchased on 4/27/2005 for $615,000. The owner used a $492,000 first mortgage and a $123,000 down payment. People generally won't walk away when they are just on the cusp of going underwater and they have such a large down payment. The NOD was filed in April.

Foreclosure Record

Recording Date: 04/16/2010

Document Type: Notice of Default

Irvine Home Address … 6 PALOS #66 Irvine, CA 92612

Resale Home Price … $530,000

Home Purchase Price … $615,000

Home Purchase Date …. 4/15/2005

Net Gain (Loss) ………. $(116,800)

Percent Change ………. -19.0%

Annual Appreciation … -2.7%

Cost of Ownership


$530,000 ………. Asking Price

$106,000 ………. 20% Down Conventional

4.57% …………… Mortgage Interest Rate

$424,000 ………. 30-Year Mortgage

$104,433 ………. Income Requirement

$2,166 ………. Monthly Mortgage Payment

$459 ………. Property Tax

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

$44 ………. Homeowners Insurance

$385 ………. Homeowners Association Fees


$3,055 ………. Monthly Cash Outlays

-$363 ………. Tax Savings (% of Interest and Property Tax)

-$551 ………. Equity Hidden in Payment

$181 ………. Lost Income to Down Payment (net of taxes)

$66 ………. Maintenance and Replacement Reserves


$2,387 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$5,300 ………. Furnishing and Move In @1%

$5,300 ………. Closing Costs @1%

$4,240 ………… Interest Points @1% of Loan

$106,000 ………. Down Payment


$120,840 ………. Total Cash Costs

$36,500 ………… Emergency Cash Reserves


$157,340 ………. Total Savings Needed

Property Details for 6 PALOS #66 Irvine, CA 92612


Beds: 3

Baths: 2 full 1 part baths

Home size: 1,800 sq ft

($294 / sq ft)

Lot Size: n/a

Year Built: 1975

Days on Market: 370

Listing Updated: 40340

MLS Number: W09083522

Property Type: Townhouse, Residential

Community: Rancho San Joaquin

Tract: Wl


According to the listing agent, this listing may be a pre-foreclosure or short sale.

Enjoy this stunning City light views from the tranquil private end unit . Close to award winning schools, shopping, churches and park. Very close to the golf course. 3 Bedrooms 2.5 Baths, Breakfast nook in kitchen, good size dressing area in master bth, Inside laundry room with direct garage access, Community pool and spa.

21 thoughts on “IHB News 8-14-2010

  1. Antonio Gomez

    I am interested in more information on the IHB investment fund. Can one invest an IRA, for example.Thanks for your response.

      1. OrangeRenter

        I wish I could invest in your fund, but can’t. I hope you post on future wins and losses, so I can live vicariously through that 🙂

        I’m surprised no one has posted some anti-comment about you taking advantage and profiteering, but you deserve to put your 4 years of hard work and expertise into practice and profit from all the goodwill and reputation you’ve built here.

        I hope you and your investors make bank!

  2. Laura Louzader

    I feel for this homeowner, for your guess sounds right. Nobody will walk away from a huge down payment and an affordable mortgage on a home not quite underwater…. or even substantially underwater, unless he is in a really dire pass. And it could be a long time ere he is re-employed at a job that equals the one he lost, if this is indeed the case. Jobs that pay over $125K a year are extremely difficult to replace in better economies than this one.

    I have a number of friends buried in houses and condos worth much less than they paid, but they are staying because they love the places and bought them to have a home, and because they have too much at stake. It’s just too sad when someone is forced out after investing so much, because of the loss of income. But no matter how much you’ve saved and how prudent you’ve been, you will eventually reach the end of your money if you have no income stream.

    We are all taking so many losses as the economy continues to unwind, and I fear we’re nowhere near the end of it.

    1. winstongator

      I appreciate that people are attached to their homes, but it was their prior incomes that enabled them to get those homes. A home is usually someone’s biggest single line item on the expense side of the budget, and not addressing that when their is an income shock is a mistake. I’m not talking about selling a home the day you get laid off, but I think that people put it off for too long.

    1. Geoffrey Chaucer

      Irvine Renter is an elitist. Even Milburn Drysdale, CEO of the Commerce Bank of Beverly Hills, conducted business with hillbillies.

    2. IrvineRenter

      Laws and rules pertaining sophisticated investors and accredited investors discriminate against putting money from certain investor classes into risky investments. The government doesn’t want grandma to invest her entire life’s savings in a complicated investment scheme and lose it. Bad things happen to good people that way. The rules are designed to screen out not the “dumb people” but the good people uneducated in financial matters and risk. I understand why these rules are in place, and I agree with them.


        1. Planet Reality

          If you have enough assets that you are willing to lose and can fog a mirror then you are sophisticated.

          1. chipotle


            The SEC equates wealth with financial sophistication. If you are a high school drop-out who won the lottery, you are sophisticated. If you have a Ph.D. from Cal Tech, but teach high school physics for pennies, you are not.

      1. Laura Louzader

        The rules regarding private placements are also designed to screen out those who could not financially bear the loss, which is why the threshold for “sophisticated” investors is usually a net worth of $500,000 verified in writing, and the definition of a “qualified” investor is $1,000,000 net worth and a single income of $200K or joint income of $300K, verified in writing.

        The higher the potential return, the greater the risk of losing a substantial portion, or all, of your investment.

        If you’re broke, you don’t need high risk investments- you need a secure savings account.

        Also, if you’re broke and in debt, you can realize an INCREDIBLE return, like about 12% to 29% by doing the following: PAY OFF YOUR HIGH INTEREST DEBT AND KEEP ALL THAT MONEY YOU’RE PAYING IN INTEREST.

        Until you have your debt paid down, including your house and car loans, you don’t need anything riskier or “higher return” than a pile of cash to get you through emergencies and to put toward your retirement.

        1. ?

          Thanks for clarifying that for me. I didn’t realize that “sophisticated” was a legal definition. I thought Irvine Renter was being creative with his wording.

          By that definition there could be a lot of retired grandmas in Irvine who own their home outright who could be considered sophisticated. I guess I should consider myself lucky that I am not sophisticated.

    1. Laura Louzader

      Your post makes me smile, for it brings back an ancient childhood memory. That was when my grandfather moved into his dream bachelor pad in a new St. Louis high rise and the place had no 13th floor. 11-year-old imp that I was, I could not resist affixing a sticker to the elevator button plate on the 14th floor, a thing I found in MAD magazine, that told the residents they were really living on the 13th floor and good luck to them.

      It makes me think of our current situation as an economy and country- we’ve really been living on the “13th floor” and plastering stickers over the label- we’ve deliberately deluded ourselves since 1980 regarding our ability to sustain our vaunted way of life while the industries that built our wealth were being moved offshore and the resources that fueled them depleted relentlessly, heedless of the fact that every borrowed dollar and every measure we took to pretend and extend was another step closer to the empty shaft. And we really stepped into it in the past ten years, not minding that it was a blast of hot air that kept us aloft for about 10 minutes.

      Now that we’re in free fall, we’re flailing about blindly in search of any finger or toe hold, anything to break the fall, like all the desperation maneuvers by the Fed, and the array of mortgage assistance programs and bailouts.

  3. jb

    There were some sophisticated investors going for investment grade CDOs just recently who have nothing to show for it.

    Moodys and S&P are getting sued for their rating schemes/systems. Grandma’d better watch out. 🙂

    1. Swiller

      Hey, what’s the PROBLEM? Just use the same charts for child support that us PO FOLKS use. I’ve seen plenty of fellow men paying $1500 a month and only making $5000 gross.

      Let’s just assume The Duck would pay 30% for his child per month…how much would THAT be?

      See how fair isn’t so fair when your rich…or poor for that matter. It’s why I agree so often with Planet Reality.

  4. tazman


    Can you post the address for JT Schmidt’s at “The District?” Those of us from outside the area do not have a point of reference for where this is.


    1. IrvineRenter

      2415 Park Ave.
      Tustin, CA 92782

      Phone: 714-258-0333
      Fax: 714-258-1333

      I copied and pasted that address into Google Maps, and it goes right to it. JT Schmids appears just under Google’s marker.

Comments are closed.