A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.
Here is a fantastic article on real estate asset deflation in the US written by a San Francisco Real Estate agent. http://www.safehaven.com/showarticle.cfm?id=7237&pv=1"I sell investment real estate in the San Francisco Bay Area. Have been for 25 years. It's a nice business. I've enjoyed it, and I value my clients.My pappy's a realtor. My grandpappy was a realtor. My uncle's a realtor; so is my brother. Heck, some of my best friends are realtors (and it takes a big man to admit that).That's why it pains me to give you the bad news, to wit: Real estate in America is officially dead. But only for a generation or so."
That mortgage broker seemed to really care about all the FBs he sold voodoo loans too. What a heart, huh?In other news, I called a loan processor today. Not for a loan, I was calling to see if he wanted to take a job for $11/hr (about $23K/yr salary) with one of my clients. It was for the same type of work he did before he became a RE guru in Southern California. He wasn't terribly appreciative of the call. I remarked that his industry is now officially gone and he said he would just go on unemployment. Good for him, that pays what? Approx $1300/month?Hope he can make his bills on that...oh well...on to the next one.
BWA HA HA HA HA HA HA!!!BWA HA HA HA HA HA HA!!!I love the dude's comment at the end. "All the people that got loans won't be able to qualify for the same loans if new standars are implemented." Well no shit Einstein. That's the whole point you fucking douche. Those people shold not EVER qualify for ANY LOAN. They still don't get it.
Keith, don't slow down. This thing is really just getting started. Subprime Mortgage Collapse Eviscerates California Headquarters By Daniel TaubMarch 28 (Bloomberg) -- The words ``New Century'' used to flash several times a day on caller ID at Taleo Mexican Grill in Irvine, California, where diners wash down Salmon Veracruz with $7 hand-shaken margaritas. Reservations were often for 10 or more. Not anymore, said Nic Villarreal, the owner of the restaurant, located two blocks from New Century Financial Corp.'s headquarters. ``We don't get any.'' In Irvine, where just nine months ago office vacancies approached a three-year low, home prices were at an all-time high, and unemployment was less than the national average, at just 3.6 percent, the unraveling subprime mortgage market is ruining the recent prosperity. Hometown lenders including New Century and Ameriquest Mortgage Co. already have fired more than 3,000 people, house and condominium prices are down 17 percent since June and office vacancy rates are poised to double this year, said John McDermott, regional manager for Orange County at commercial real estate broker Sperry Van Ness. ``It's a huge engine that has been shut off,'' McDermott said. ``I don't know where the new influx of jobs are if you take the lending market out of the equation.'' At Phillips Auto in nearby Newport Beach, California, no one from the mortgage industry is shopping for Porsches these days, said Theresa Seradsky, the dealership's general sales manager. Instead, they're putting their Porsches up for sale through the consignment program, she said. No Buyers ``Two years ago, every other day we had somebody coming in to buy,'' Seradsky said. ``In the last two weeks, we've had nobody.'' New Century, Irvine's second-biggest employer, may be forced to seek bankruptcy protection after the lender to people with bad or limited credit said New York-based Morgan Stanley and UBS AG of Zurich were among the companies that cut off access to $17.4 billion of credit lines. New Century is supposed to be the anchor tenant of an almost-complete, 20-story office tower being built by Maguire Properties Inc. ``We don't have any comment on industry rumors or speculation,'' said New Century spokeswoman Laura Oberhelman. ``There has not been a bankruptcy filing.'' The collapse of the subprime industry probably will affect everyone from printer-paper suppliers to office-maintenance companies to retailers who depend on employees of lenders including New Century for sales, said Jacquie Ellis, president of the Irvine Chamber of Commerce. Before its collapse, New Century had 7,400 employees, compared with 8,600 at the University of California, Irvine, she said. `Massive Layoffs' Coming ``There are going to be massive layoffs and maybe something worse than that,'' Ellis said. ``You wonder what impact it's going to have on other companies as well.'' Cracks in the mortgage market began to appear last year. U.S. subprime borrowers fell behind on their payments at the highest rate in four years during the fourth quarter, according to data compiled by the Washington-based Mortgage Bankers Association. The Center for Responsible Lending in Durham, North Carolina, expects the foreclosure rate for subprime loans to exceed 22 percent in California metropolitan areas including Irvine, Merced, Bakersfield, Vallejo-Fairfield, Fresno, Stockton, Santa Ana, Anaheim and Riverside. Half of the 20 biggest U.S. subprime lenders are in California, including three in Irvine, and about 13 percent of the nation's subprime loans are in the state, according to the Washington-based Mortgage Bankers Association and industry newsletter Inside Mortgage Finance of Bethesda, Maryland. More than two dozen mortgage lenders have closed or sought buyers since the beginning of the year. Irvine-based People's Choice Home Loan Inc. filed for bankruptcy protection last week. H&R Block Inc. is trying to sell its Irvine-based Option One Mortgage Corp. unit. Accredited Home Lenders Holding Co., based in San Diego, has offices in Irvine, and Ameriquest is based in Orange, just north of Irvine. Home Prices Fall For Irvine's 190,000 residents, the median price for new and resale houses and condominiums was $641,500 in February, down 17 percent from last June's peak of $775,000, according to La Jolla, California-based DataQuick Information Systems. The city's median home price is still almost triple what it was a decade ago. New buildings with about 2.5 million square feet of space are set to open this year in Irvine, which may boost the city's vacancy rate to about 22 percent from 11.2 percent now, according to a Sperry Van Ness analysis of data from CoStar Group Inc. The rate was at 7.9 percent, close to a three-year low, as recently as the third quarter. Office Vacancies Increasing delinquencies in the subprime market may be hardest on Irvine's biggest office owners including closely held Irvine Co. and Los Angeles-based Maguire Properties, which last month agreed to pay $2.88 billion for 22 office complexes in Orange County and two in downtown Los Angeles that Blackstone Group LP acquired in its February takeover of Equity Office Properties Trust, Sperry Van Ness's McDermott said. New Century leases about 267,000 square feet of space in two buildings at Maguire's Park Place project in Irvine, and agreed to lease about 190,000 square feet, or more than a third, of the space at the new 20-story office building that Maguire plans to complete in the third quarter. Maguire has said New Century's leases at existing buildings and the new site are at below-market prices and could be replaced at higher rates. Maguire also is trying to sell 11 Orange County properties with about 3 million square feet of space that were formerly Equity Office sites. Bill Flaherty, senior vice president of marketing for Maguire Properties, said while it may be ``a little choppy in '07,'' even with a worst-case scenario of subprime companies abandoning space, Orange County still will have an office vacancy rate of about 10 percent or 11 percent. `Some Chop' ``At 10 percent, we're building in those markets, as are our competitors,'' Flaherty said. ``That doesn't mean there won't be some chop, but this isn't a risk-free business we're in.'' Taleo Mexican Grill is in the same Michelson Drive retail- and-office park as Maguire's new building, and restaurant owner Villarreal had prepared for the influx of lunchtime customers from the about 600 New Century workers that would have been there. Instead, lunchtime business is down by as many as 60 people a week, he said. New Century used to call with reservations of 10 to 20 people two or three times a week. Sales at Baguette Time, a sandwich shop across the parking lot from Taleo, are down about 10 percent in the past several weeks, said owner Mo Khataw. The shop used to get walk-in customers from New Century and made $80 to $100 deliveries to the company once or twice a week. `Small Guy' ``We're a small guy, so even if we lose $100, $200 a day, that's a lot of money,'' Khataw said. As recently as last year, loan officers were getting annual pay of as much as $200,000, said Charlyn Cooper, a former manager at subprime lender Secured Funding based in nearby Costa Mesa. Now they're being offered low-paying jobs in call centers. At the California unemployment office in Santa Ana, which also serves Irvine, fliers in a rack by the door read: ``Home Loan Funding in Irvine is now seeking energetic and enthusiastic customer service representatives. While other mortgage companies are downsizing, we are hiring and expanding!!!'' ``Twelve dollars an hour is not a living wage for us,'' said Jorge Perez, who manages the office. ``You can't live here and have an apartment. That's not near what you need to be making.'' Home Loan Funding Inc. representatives didn't return telephone calls seeking comment. Ankur Kumar, 27, worked in Ameriquest's fraud-detection department from mid-2004 until last May when he lost his job as part of the company's layoffs. In his new career as a fitness trainer, he hopes to have an income of $30,000 this year, compared with more than $40,000 when he worked at Ameriquest. `Something Risky' Kumar lives in a five-bedroom Irvine house and pays almost $3,000 a month between his interest-only loan payment and taxes. Kumar rents out three of the house's five bedrooms, which pays for about half his monthly housing expenses. The interest rate on Kumar's adjustable-rate mortgage is scheduled to go up in October. He plans to refinance. ``I'll probably have to do something risky, to be honest,'' he said. Natalie Lohrenz, director of counseling at the Consumer Credit Counseling Service of Orange County, is meeting with about 65 people a month who are seeking help to avoid defaults on their mortgages. It was about 25 a month last year. She said she has counseled people with monthly mortgages of $4,000 and incomes of $6,000 a month. ``There are plenty of people out there living their lives with two-thirds of their income going to their mortgage,'' Lohrenz said. ``That's something we didn't see a few years ago.'' Even with New Century's collapse, some Orange County real estate brokers and landlords expect space given up by the lender and others in the mortgage industry to be taken by others. `Resizing' Doug Holte, western regional partner at closely held real estate developer Hines, which is building a 12-story Irvine office tower scheduled to open in May, said he expects his company to have few problems leasing space at the 266,603-square- foot site. New space, as well as sublease space put on the market by lenders, will likely be absorbed by lawyers, accountants, technology companies and others, he said. This week, Hines announced a 25,400-square-foot lease with Wachovia Corp. ``It's a resizing of an industry that had hyper growth,'' Holte said. ``We didn't really anticipate that that hyper growth would continue.'' The subprime mortgage business's roots in Orange County go back to the emergence of the area's homebuilding industry in the 1960s. Companies such as Newport Beach-based William Lyon Homes Inc. and Lennar Corp. started developing houses in the area, and the two remain among Orange County's largest homebuilders, according to an Orange County Business Journal ranking. Savings and Loans They in turn attracted the savings and loan industry, which provided the mortgages used to purchase homes, said Peter Navarro, a business professor at the University of California, Irvine. After the collapse of the savings and loans in the 1980s, executives from that industry started subprime and other mortgage lenders, said Melissa Richards, general counsel for the California Mortgage Bankers Association. Their time at savings and loans gave them experience dealing with investment banks, which ended up buying packages of loans from subprime lenders for mortgage-backed securities, she said. ``You have the developers there, and you had the need for companies to get people into homes they can't afford,'' Navarro said. ``And that's how I'd describe the subprime industry.'' The 65-square-mile city of Irvine last year was named by the U.S. Census Bureau as one of the county's 10 fastest-growing cities. Once entirely part of the 120,000-acre Irvine Ranch, which was assembled through Mexican and Spanish land grants, Irvine has grown to 190,000 residents from 10,081 when the city was incorporated in 1971. Irvine Ranch In the 1960s, as urbanization moved south from Los Angeles County, Irvine Co., which was formed to manage Irvine Ranch, began designing master-planned communities for the land. The closely held company sells land to homebuilders who construct residential villages following Irvine Co.'s designs. Irvine's residential neighborhoods, many in gated communities, are dense with beige-colored houses with Spanish- tile roofs, each home looking almost exactly like the one next to it. Covenants, conditions and restrictions homeowners must follow keep homes looking similar and their yards free of clutter. The city's median home price is about 36 percent higher than the state average, according to DataQuick. Beth Krom, Irvine's mayor since 2004 and a city council member for four years before that, said housing affordability is one of the city's biggest issues. The increase in prices has outpaced incomes, she said. ``This isn't Beverly Hills,'' Krom said. ``It's not a community where everybody is living next door to a millionaire. Many people couldn't afford to move back into their homes today.'' To contact the reporter on this story: Daniel Taub in Los Angeles at
did that guy say that everyone in the bus shld have a license??Don't they already??
if you see a cockaroach, aren't you supposed to step on it? coulda got 3 in one shot there...
Growing number of U.S. states mull mortgage refinanceKeith, may I suggest a new thread on this topic? market-meddling. punishment for intelligent people.
"No warning can save a people determined to grow suddenly rich." - Lord Overstone
Orvine down 17%?!?!?!But how could that be. My realtor told me prices never go down!!
really, what qualifies you to be a mortgage broker? I am guessing that these people didnt go to college. Is it wrong, with my BS Degree in Economics, to look down on these people as not having a "real" job or any kind of formal education? It seems to me that mortgage brokers are in the same league as people who sell cars.
really, what qualifies you to be a mortgage broker? I am guessing that these people didnt go to college. Is it wrong, with my BS Degree in Economics, to look down on these people as not having a "real" job or any kind of formal education? It seems to me that mortgage brokers are in the same league as people who sell cars. Oh please STFU!! You have a BS in econ? OOooohhh!! So do I, do you want a special prize? Everyone I knew in college was either majoring in psych or economics. Difference is I don't look down my nose at people without a degree you elitist douchebag.
'Is it wrong, with my BS Degree in Economics, to look down on these people as not having a "real" job or any kind of formal education?'Are you kidding? If you found this blog, you can look down on them simply by virtue of having a brain.
BAAAAAAAAWAhahahahahahahahahaPeople who got a loan 2 years ago will not be able to refi into another loan.WELL TO DAMN BAD!!!!!!!!!WHY THE HELL DID THEY SIGN THE DOCUMENTS AND GET APPROVED BY THE LENDER?BOTH THE BORROWER AND LENDER NEED TO PAY DEARLY FOR THEIR GREED AND STUPIDITY!!!!!!!Let them loose in the street where they belong...friggen dunces
"Is it wrong, with my BS Degree in Economics, to look down on these people as not having a "real" job or any kind of formal education?"Because your BS is so damned impressive? Congratulations on making it through 4 years of college.
Anon 9:09 PM, I agree. Every day I wake up with this fear of lawmakers messing the market up even worse by trying to rescue all the subprime FBs out there. I'm going to assume that their hearts are in the right place but thoughts of bailing out those facing foreclosure is terribly misguided.This is really, really important.2 wrongs do not make a right. Foreclosure proves that someone should never have had the home and the mortgage in the first place. By the same token, it is WRONG to keep these people in their home to try to address the mistaken original purchase and mortgage.It's not like the alternative is for these FBs to take their families to live in a dumpster somewhere. There are perfectly good homes available for rent.I'm a renter myself, should I go crying to other taxpayers to help me buy my own home?
Stop the bailout. Hpers, taxpayers, voters, the time to act is now. We save for a reason. Don't let a misguided congress what is ours to help the liars, cheats and short-term thinkers responsible for this housing bubble.http://tinyurl.com/2pc8yk
The only reason subprime borrowers were able to get into a house was because they were paying the same monthly payment for the house as they would have if they pay rent.In essence the subprime borrowers who lied to get into a subprime loan have not lost anything. The house was never their, the Subprime broker just allow the subprime borrower believe the house was their. Subprime brokers are making this into a big moral issue trying to make people believe they care because the Subprime brokers are the one who have the most to lose.No more $8 coctail for lunch, and driving a new Lamborghini or Ferrari to work.
Is it wrong, with my BS Degree in Economics, to look down on these people as not having a "real" job or any kind of formal education? no...I have a B.S. in Economics also...and I look down on them also.
I suspected the viability and credibility of mortgage brokering was suspect when my hair stylist left the salon to do mortgage brokering. Really, she did and had no education. Bright lady, great stylist but had a high school education and a drugs conviction. Still, find it hard to belive that she could understand what she was doing...
Mortgage crisis Million-dollar homes get hit.Watch video http://cosmos.bcst.yahoo.com/up/player/popup/?rn=952695&cl=2215593&src=news
"Oh please STFU!! You have a BS in econ? OOooohhh!! So do I, do you want a special prize? Everyone I knew in college was either majoring in psych or economics. Difference is I don't look down my nose at people without a degree you elitist douchebag. "Oh looky here... It's out anon troll again who is too coward to post under his real name. I doubt that you have any degree. Why else would you be acting like a bitter loser making flaming posts in his mamma's basement when you're not flipping burgers as McD'a? And if you knew anything about economics, like you claim, you would know that home prices are not going to go up at 15% - 25% a year as you claim throughout this blog.
"Keith, may I suggest a new thread on this topic? market-meddling. punishment for intelligent people. "A 6.75% fixed loan is not going to save these people. It will end up costing the taxpayers (including the responsible savers) billions of dollars.
I just wanted to give a little of my take on the "greed and stupidity" of these borrowers. The truth is that these are ordinary hard working people (he works at a factory job for $10-12@hr. and she makes $7 at BK). They are not highly educated, have a couple of children whose lives they would like to make better and are trusting of other people and the "system" as a whole. Along comes someone who has a smooth talk and looke, claims to be educated in finance, and offers them an "opportuntiy" to advance in life. The clincher is always...well...the BANK says you can afford it. If the BANK did not think you could make the payments then they would not make you a loan. Put that together with a trust of other people and you have what you have today. Now, speculators are a whole different breed.
Oh I see now. Anyone who disagrees with you paranoid freaks is a troll who works at McDonald's. Check.That's how I know you have no clue what you're talking about. When confronted with a dissenting voice your only response is a childish insult. If you did actually have a clue you'd respond with a thoughful explanation on why you thought I was wrong. Point out any inaccuracies in my thinking. You know, like intelligent people do. But instead you call me a troll and accuse of of working at McDondald's.Does my mother wear combat boots too?
That's how I know you have no clue what you're talking about. When confronted with a dissenting voice your only response is a childish insult. But your constant hurling of insults, such as calling many of us "bitter scumbag renters", does not count, right?If you did actually have a clue you'd respond with a thoughful explanation on why you thought I was wrong. Point out any inaccuracies in my thinking. Real estate is crashing and even the bigwig investors are admiting to that. The only people who think real estate is still the big thing are people like Kendra Todd. You must be proud to follow intellectual giants like her.
But your constant hurling of insults, such as calling many of us "bitter scumbag renters", does not count, right?I have never called anyone bitter or scumbag. I do think you are paranoid. That's not an insult that is an opinion based on what I've read here regarding conspiracy theories.
Now, speculators are a whole different breed.Indeed. A most deliciously disgusting breed. Speculation and the greed behind it have destroyed markets before. It was only a matter of time before it got its grubby hands on real estate. Again.I have no sympathy and little compassion for those who make their living preying off of others. The trouble with this whole mess is that the taxpayers and people who do honest work are left paying for the scammers via government relief efforts and inflated property values.It still surprises me that any of this was legal. It doesn't take more than a few brain cells to see that this sort of thing would end badly.
Looks like it's starting to sink in to the renters around here. The gubermint is going to use YOUR tax dollars to bail everyone out. YOU got left behind in this bubble and YOU will end up paying for it. In other words you will get fucked once from the front and once rom the back.Actually a 3rd fucking will come when your money in the bank will be worthless as rampant inlfation due to this whole mess will erode all your savings.All I can say to that is HA HA HA, told you so!!
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