October 18, 2007

HousingPANIC Stupid Question of the Day


Why are people who listened to realtors on commission and bought homes with toxic loans in 2005, 2006 or 2007 in Phoenix, Sacramento, Tucson, Tampa, Miami, Vegas, Orlando, Ft. Lauderdale, LA, San Diego, Miami, DC, Atlanta, Boston, Naples, Detroit, Stockton, Riverside, Fresno, Jacksonville or Reno (and probably a few more) still paying their monthly mortgage payments, taxes and association fees?

Don't they know by now that they'll probably go bankrupt and be foreclosed on?

Don't they know that they're free to stop making payments today, horde as much cash as they can, and eventually just turn in the keys?

55 comments:

buzz saw said...

Edgar's latest blog post is housing related. A win-win.

W.C. Varones said...

Gotta pay the taxes I think. But mortages and association fees? Hell no!

Cow_tipping said...

I think the realtors that participated and appraisers and mortgage brokers etc should be made to pay the missing payments ... talk about a bail out. Make the ones that profited from this racket pay for it.
Cool.
Cow_tipping.

Anonymous said...

Gold to da moooooooon Alice!!!!!

Anonymous said...

I live in Tampa and there was an article in the paper last week on how rents are starting to fall here because so many apartment to condo conversions are coming back to market as rentals. It is becoming a renters market here again as there are so many places sitting empty. The paper said it expects rental rates and vacancies (as more and more units come to market as rentals) to continue to slide well into next year. I have a friend who has several rental properties and only on one is he is breaking even, he purchased that property in 2002 (his first purchase). Two others are sitting empty and one he took a tenant with a horrible credit score and very shaky work record just to get someone in. That's how things are going now in Tampa. I've also noticed home prices are really, and I mean drastically, falling around here. Two years ago you couldn't touch anything for under $200,000. I now see many brand new single family homes (1200 sq. ft. - 1800 sq. ft.) starting prices at $159,000 - $179,000 plus incentives. Granted these developments are on the outskirts of the city, but what a huge difference from two years ago. I'm going to take a look this weekend at a brand new 1800 sq. ft. home (3 bed, 2.5 bath, 2 car gar.) for $159,000 in a beautiful brand new development just 25 minutes from where I live now. If this is just the beginning of things to come, I can't wait to see the deals there will be next year.

Anonymous said...

Dont you think this is just as irresponsible as what got us into this mess. Keith, i think you want doomsday just so you can tell everyone that you were right without stopping to think about the implications. you feel as though you have prepared for something you nor anyone else here could understand. Believe me when i say... even if you are a renter with all your money in gold when doomsday arrives, i will take everything from you by force if it means me surviving.

I also rent and save money like many others here. However, being "right" is not worth a total economic and social meltdown. what is worth it is comming here and listening to you quote articles like they are your own opinion, as well as your own unfounded opinions and ideas. you have little to no knowledge of economics and market forces except what you learned in your macroeconomics 101 course. Believe what ever you want but if the global economy falls apart, nobody will care if you are a renter, the money in gold, or how "cool" and "smart" you think you are when you are online.

Anonymous said...

Enjoying my house in Rancho Cucamonga while you bitter renters live with the Section 8 pigs

Anonymous said...

During the height of Las Vegas's real-estate boom two years ago, property investor Rob Rozzen bought 16 homes, hoping that skyrocketing prices would pump up his retirement nest egg.

Now, Mr. Rozzen says he is considering filing for bankruptcy protection. As the housing market slowed, the 40-year-old was unable to sell the homes, and his full-time job as a real-estate agent was no longer able to support mortgage payments totaling $45,000 a month. So one by one, over the past 14 months, Mr. Rozzen has stopped making payments on his investment properties, for which he paid between $226,000 and $390,000, and lenders have foreclosed.

pwnd

Anonymous said...

Hey anono boy- Rancho Cucamonga is a shit-hole. I would much rather be a renter in Irvine than an idiot with the construction workers as neighbors,paying an inflated mortgage you asswipe.

Anonymous said...

10:07:

A fucking men.

Nice to see someone figure it out. The depression Keith and Co are so desperately craving will hurt everyone, owner or renter. Do all you $250K a year consultants think you'll make $250K a year if things go as bad as Keith hopes? Think you'll make $25K? Good luck with all that.

Sure houses that cost $1M will cost $100K. What good will that do you is your income is $0?

Anonymous said...

Anonymous said...
Dont you think this is just as irresponsible as what got us into this mess. Keith, i think you want doomsday just so you can tell everyone that you were right without stopping to think about the implications. you feel as though you have prepared for something you nor anyone else here could understand. Believe me when i say... even if you are a renter with all your money in gold when doomsday arrives, i will take everything from you by force if it means me surviving.

I also rent and save money like many others here. However, being "right" is not worth a total economic and social meltdown. what is worth it is comming here and listening to you quote articles like they are your own opinion, as well as your own unfounded opinions and ideas. you have little to no knowledge of economics and market forces except what you learned in your macroeconomics 101 course. Believe what ever you want but if the global economy falls apart, nobody will care if you are a renter, the money in gold, or how "cool" and "smart" you think you are when you are online.

October 18, 2007 10:07 PM



Your wrong. A massive correction would be good inline with the world carry capacity, which at the moment is unsustainable. Complete collapse would cleanse the Earth significantly for life to continue.

brokersleaveyoubroke said...

Gotta pay the taxes I think. But mortages and association fees? Hell no!

Not really. The only option the town has is to forclose to collect back taxes and it takes them just as long to forclose as the bank. When the bank forcloses they have to pay the taxes from the proceeds of the sale.

Frank@Scottsdale-Sucks.com said...

I live in Tampa and there was an article in the paper last week on how rents are starting to fall here because so many apartment to condo conversions are coming back to market as rentals. It is becoming a renters market here again as there are so many places sitting empty. The paper said it expects rental rates and vacancies (as more and more units come to market as rentals) to continue to slide well into next year.

That is also the case here in CA. The house I rent has dropped about $300 for similar sized houses in the area. I'll be negotiating my lease down when it comes for renewal.

So much for the trolls who insist that rents are "skyrocketing" ... lol

ApleAnee said...

Anonymous said...

Enjoying my house in Rancho Cucamonga while you bitter renters live with the Section 8 pigs

October 18, 2007 10:11 PM

You are a waste of oxygen. I resent your presence on this Earth. The time is coming when all of the cockroaches such as yourself will be removed from our presence. And we will smile :-)

Anonymous said...

All you crybabies that are BLAMEING Keith for what he posts need to get over it.

It's just his opinion. What scares the crap out of you is that you know he's probably right.

Homeowners...

Just turn in the keys. File for bankruptcy after the foreclosure. Then spend the next couple of years paying back all the debt bankruptcy no longer erases.

You'll be back on your feet much quicker than taking the slow bleed.

ApleAnee said...

Anonymous said...

10:07:

A fucking men.

Triple A fucking men. We know there is a locomotive coming. We know. We know. We know. I will be very happy that the locomotive rolls over many of the arrogant slugs that have caused this problem by believing that they are entitled to a free lunch at everyone else's expense.

Actually I hope it rolls over, backs up, rolls over and backs up again. But, I am also so very sad for those who lived by the rules and are going to suffer just as badly as the free lunch maggots.

I can see McMansions burning on the horizon. Makes me smile.....

Anonymous said...

From the look of some of the posts above some of you more effected individuals are starting to panic. That's good because you are opening to the possibly of what may happen. Do not let fear restrain you from analyzing for yourself a wide perspective nor blame Keith as he was neither the creator nor is he the destructor of these events. Remember that if these events were never allowed to take shape by the powers that be, and have an impact on our lives as they are, then we would not be concerned with them or find ourselves gravitating towards this blog. Keith is reporting and facilitating an exchange on many perspectives from which we can benefit from whether agree or disagree.

-dcandout

{venting} said...

Sure houses that cost $1M will cost $100K. What good will that do you is your income is $0?

Get over yourselves...

The reason we are in this mess is GREED!!!

What good did it do me when the houses were $1M but my income was 30K? Or 15k?

Do you think people will do worse when the economy collapses and all of your money and gold and houses mean jack squat?

You seem to think that the only people that matter are those who have extra cash on hand.

I have news for you buddy - more than half the world's population goes to bed hungry every night. Most people on this earth don't have 2 cents to rub together. Ask the guy in india who gets paid 15 cents a day (if he's lucky) for 14 hours of back breaking labour... enjoying your Nike's are we?

Why is this so? Because less than 1% of the world's population owns more than half the wealth. And then there are the henchmen like you and me that constitute the next 5% which own 15% of the worlds wealth.

That's right - we are henchmen - because we've been bought. We sold our souls so that we could get a piece of the pie. When was the last time you wondered about the starving kid in Africa...

Oh yess - let me send a cheque... that'll help! Now pass me another slice of cheescake!

Then you got that last 90% which own less than 5%.

When this collapse happens - do you think that the 90% are going to care? Are you for real? Do you think that we matter so much? Talk about hubris... all hail Pharo and his henchmen!

At this point - the average human on this planet is starving. After the collapse, that average has nowhere to go but up.

What poetic justice - while we were stuffing our faces and bombing the crap out of the nomads to grab even more resources... well looky looky... now we're complaining how the party is coming to an end.

Just picture that poor starving nomad (on a crutch because his leg got blown off) staring through the barb wire fence at us fat turds as we feast and complain about the end.

He'd laugh if he had any strength left.

The only thing Kieth is guilty of is ignoring that inner voice which kept saying "This is wrong" - this is why at a subconcious level (even if it does mean his own destruction) he is egging on the apocalypse. There's only so much fakeness and hypocrisy a guy can take.

At some point you snap and throw your fate to God.

You wanted the war...

Bring it on!

I'm sure that when the dust settles, the rest of the world will pity us... oh about the same as they pitied the Russians after the USSR collapsed.

Yeah... you remember feeling sorry for those Ruskies right?

{/venting}

Man... That feels good!

Shout out from North Atlanta said...

The advice makes sense but these people are stupid enough to take their I/O and ARM loans are not smart enough to get out of them. they don't understand, most of these people seem to live for today and don't worry about paying anything off. Most of them don't speak english or understand they are in trouble anyway.

PablitoRun said...

Keith,

I am assuming you mean Jacksonville, FL, I am curious as to why you included it. Is it guilty of association by being in Florida?

I don't think there is anything special that will keep prices from falling, but I think it is much much more in line with average US than the rest of Florida.

I used to live there Jacksonvile = Georgia much more than Florida.

Great place though, I loved it.

Go Jags!

Anonymous said...

I bid-down my rent 300.00 Monthly on a newer SFH in a spanky gated community from what the flip-lord listed it for, plus made him pay the 150.00 Monthly HOA to boot!!

This is in Northern Virginia or NoVA to us locals, right outside of Washington DC, where "it's different"!!!

NOT!

Anonymous said...

It's unbeleivable that there are still so many people who think home prices are somehow going to magically turn around and pop right back up. They figure all they have to do is just hang in there for the next year or so and everything will be alright. I honestly feel sorry for them and the hell many will go through desparately trying to hang on to what they really didn't have to begin with. It's so easy to say "just walk away", but how do you do that when children are involved. It's hard enough for adults, but it's truly devastating for children.

Anonymous said...

BLAMEING?

Cow_tipping said...

This is america, not japan, there aint no slow bleed.
In Japan, family name, commitments, promises made and implied as well as their employment rate and savings rate were sky high. Every one, including corporations would pay bad debt no matter what. In USA, if I found out my neighbors house sold for less than what he paid, but more than what he owed and its dropping, that is an instant sign for everyone to get out. We will also let the bank have it with no regrets unless there was a profit to be made, and walk away from it without fear of your family's good name being sullied. Its going to be fueled by realtors pushing it down to make a sale and hence commission and there by justify their profession, mortgage brokers being super cautious and since they will in the future be working for the bank itself, they'd know if its a bad loan it will bite them, and hence will only loan a lot less than market $$ leaving you to come up with the difference or argue the selling price down and its going to be a wheeling and dealing kind of sale with realtors playing referee. cant wait, and bring on the popcorn. Its not doomsday unless you are under one of those houses that is being wheeled and dealt on, and you thought it was worth a lot more than any one would ever be argued into paying. Like buying a used car - avoid dealers, avoid those that play games and hardball and go with the granma who only drove it 3 miles to church every sunday.
Cool.
Cow_tipping.

f'ed said...

I don't agree with your opinion, Keith. The longer people try to hold on, the better. Prices will still go down. If people just start walking, a lot of these homes will deteriorate so fast without anyone living in them that they won't be worth buying at all. This is bad news for both home debtors who will have larger deficiency judgments, and renters because real inventory would decrease since homes rot fast without someone taking care of them.

Anonymous said...

Oooops Keith, you forgot the mother of all housing bubble cities 'London'

Anonymous said...

rancho is a major shithole. I'd rather rent in a section 8 complex than own a house out there I couldn't even give away. Its on par with riverside or Palmdale.

wc said...

I just don't get why people always forget the laws of gravity or even the rules of logic. It seems some people are destined to be ants and others just short-sighted grasshoppers. As an ant - I'm damned tired of helping house and feed the stupid grasshoppers.

LauraVella said...

Homeowners think the housing market is only in a temporary buying opportunity mode.

Even after slow spring sales they still believe RE always goes up!

Anonymous said...

frank @ scotssdale

You can renegotiate before your lease goes up. The owner will want to. put your toe in the water and see there reaction now, to know what to expect when your leases is about to expire

Think of it like your cell phone contract, you can re negotiate now and pay lower or get a new phone, but they will want you for another 2 years.

LauraVella said...

Anon said:"I live in Tampa and there was an article in the paper last week on how rents are starting to fall here because so many apartment to condo conversions are coming back to market as rentals".


Here in Alameda, our rental market for the complex we live in is "maxed out" per the HOA CC&R's.

I guess it will suck when a homeowner cant sell, because the market is "frozen in time" wants to rent his unit out instead, but the HOA won't allow it because they are maxed out for the owner occupied/rental ratio.

What's a desperate homeowner to do?

LauraVella said...

Enjoying my house in Rancho Cucamonga while you bitter renters live with the Section 8 pigs

What makes you think renters all live in section 8?

You're the one who sounds bitter! Did your loan go up and your property value drop?

I'd rather pay rent, and live in a very nice upscale condo, than be tied to a falling rock and be tied to a falling rock, losing 50k a year in "poof" equity!

Anonymous said...

The homeowners are criminals too.

Don't flip it, strip it!

http://sfbay.craigslist.org/sby/fur/450681739.html

George L said...

I live in the San Fernando valley here in L.A. and I seriously doubt that rents will go up.there are 3 units here in my building that have been available for the last 8 months without any takers. at $1200 for a 2 bedroom flipped apt. 2 families will share a 3 bedroom house with a converted garage and pay $800 more in a much nicer area of the valley(yes, a bit crowded but get used to it).and with all the thousands of empty condos yes, empty and yes, thousands.condos that nobody will buy for $380k starting price.believe me rents will come down as well because they are no longer going up.in fact the only thing going up is the "for rent" signs in this empty condos and unsold "flips"

I will be uploading pictures of the $1200/month crap shacks in the next few days.

Anonymous said...

live debt free or die

Baracaded said...

My house will be paid off in 2047.I bought a semi-truck load of pork&beans so I can wait this all out and do the right thing and preserve my credit score so I can be able to buy by then some plastic injection molded furniture on my plastic injection molded card w/o having to over extend myself.Boy I'm proud of myself,my family wrote me and said I better be!Come home baby,I found some more recipes!

Anonymous said...

What consequences if the lender on the first foreclosures but you are current with the second lender. Do you have to pay back the line of credit back and are responsible in the future such as a lien against you. The property is in Ca?

Anonymous said...

Rancho Kookamoungus: where the arborists recommend pouring a concrete footing to plant your trees in so they don't get blown over during the Santa Anas....

Anonymous said...

please look at this financial petition. i think it may help a lot of people. http://www.financialpetition.org/ please look at it, sign it if you think it worthy, and feel free to send it to your friends and aquaintances. i feel it will help a lot of people.

russdog666 said...

once they default on the mortgage then the credit score declines drastically. Next, their huge credit card balances debt will then be hit with the default APR.

Yes= the rated can go up when you default on another debt not connected to the C Card. Limits are withdrawn and rates can go up. That can be significant if you are carrying 30K or 50K cC debt.

They might could rent for less, but higher credit card rates will cost enough to make them think twice. The C Card companies will make you their bitch if you have a large balance and poor credit.

Those who don't have large CC balances may still fear losing the credit as a re4sult of turning in the keys or walking away from a house. may also fear being unable to buy a car (credit) or looking bad on a credit report used by an employer (job advancement).

Others can actually afford the houses they bought and don't want to deal with the pain in the ass of moving. They have careers to focus on and don't need th distraction of moving.

Anonymous said...

oops that's russdog777. sorry

Anonymous said...

Do all you $250K a year consultants think you'll make $250K a year if things go as bad as Keith hopes? Think you'll make $25K? Good luck with all that.

Sure houses that cost $1M will cost $100K. What good will that do you is your income is $0?


Speak for yourself, sheeple. Some of us HP'ers have been preparing for this crisis for years. As a matter of fact, my investments overseas in emerging markets are on fire, including real estate, which is giving me an higher return due to favorable exchange rates. As soon as Bush was elected for the first time, I told my wife: "Here we go, the shady group will invent a phony war and will trash the economy" Sure enough...so predictable, just the sheeple can't see. If you believe in CNBC, Faux News, White House, GOP, Giuliani & Co. etc, etc, etc, you are a fool who deserves to get screwed. I'll be on the beach overseas, watching this mofo burn down from my laptop. You keep waving your little sheeple flag in front of the porch, while the Wall Street boys and the shady group who controls this government sticks to you and to your family good. Prepare the wallet because they are not done with you yet.

Anonymous said...

Enjoying my house in Rancho Cucamonga while you bitter renters live with the Section 8 pigs

I wouldn't touch Rancho Cucamonga even with Casey Serin's d!ck.

Andrew Hac said...

To "ANONYMOUS - October 18, 2007 10:07 PM"

Quote:
#####
Believe me when i say... even if you are a renter with all your money in gold when doomsday arrives, i will take everything from you by force if it means me surviving.
#####

And to answer your question, I will blow SHITs like you up sky high before you even have a chance to get close to me. TAKE BY FORCE ? What the hell do you know by force ? GRENADE, MACHINE GUN, MARTIAL ARTS... Shits like you are the one that gets this country into this mess. Now you want to threaten us with empty air ? Haaaa, haaaa, haaaa.

Osman said...

Don't they know that they're free to stop making payments today, horde as much cash as they can, and eventually just turn in the keys?

Are you high? You can't seriously be advocating people do this... right? What happened to Mr. Personal Responsibility?

Just in case any of you are thinking about it... laws passed in 2005 make it much easier for lenders to go after your personal assets, including your primary home. There are some states with laws that make it possible to hold onto your personal residence (including Florida) but you need to know the specifics for your state.

Rather than walking way, it's probably a better idea to try for a work-out with your lender. Banks do not want the foreclosure on their books and they're bad at being home owners. Don't just ignore the problem. Be proactive. If you're in trouble, call your lender. Call a hotline.

Anonymous said...

"...i will take everything from you by force if it means me surviving."

Only if you can, otherwise you simply perish. Lets not kid ourselves here; everyone eventually arrives at this conclusion under the right circumstances, and the seeds of an aristocratic rebellion are closer to sprouting today than they have been for many generations.

Anonymous said...

The reason is simple Keith:
I bought in Vegas 05 took out equity line and waiting for houses to keep dropping once I feel the time is right I'll have a good down payment and excellent credit to buy a home and let mine go.

Anonymous said...

Look people, I think u are all over reacting. I do think house prices will continue to drop however it's not the end of the world. Once prices drop low enough people will start buying again. I unloaded a few properties when the market was good and I'm waiting for the right time to pick up some more. I belive there are lots of people just waiting for the right time...I'd say the way things are going in a couple of years.

Anonymous said...

Nasdaq fell 70% from peak. Trillions of paper wealth was evaporated. We had a mild recession. Then life went on.

Housing will be the same. Some markets like Miami and Las Vegas will crash and burn. Some will see only minor drops. Which city does what is debatable and is beside the point.

We'll probably have a mild recession in 2008, clean up some messes and move on with things. You hysterical freaks sound like 12 year old girls who think the world will end because your boyfriend of 3 days just broke up with you.

I'm not sure if I should laugh at you or feel pity for you. I cannot imagine what life must be like for you. Nothing but anger and hoping for suffering from your fellow man. That my friends is fucking pathetic.

And for those who want to leave the country, please do. Hell I'll buy you the 1-way ticket to wherewver it is you want to go. That $2000 would be a wonderful gift to my country in not having you around anymore.

Anonymous said...

And for those who want to leave the country, please do. Hell I'll buy you the 1-way ticket to wherewver it is you want to go. That $2000 would be a wonderful gift to my country in not having you around anymore.
==========================
Forget it, you cant find a decent seat on any major airliner due to our robust economy.

Anonymous said...

Include 2003 and 2004 on that list.....

ApleAnee said...

{/venting}

Man... That feels good!

October 18, 2007 10:57 PM

Well done. Thank you.

ApleAnee said...

Anonymous said...

Look people, I think u are all over reacting. I do think house prices will continue to drop however it's not the end of the world. Once prices drop low enough people will start buying again. I unloaded a few properties when the market was good and I'm waiting for the right time to pick up some more. I belive there are lots of people just waiting for the right time...I'd say the way things are going in a couple of years.

October 19, 2007 6:59 AM

Can you get over the damn real estate already? Swear to god our society is truly OCD. Real estate is the symptom. 5 years ago during the tech bust (yea we lost money) we weren't in debt to every other nation in the world for wars, Walmart crap yadda yadda. As the foreigners pull their funds that prop up our little Ponzi we are screwed. Just like the bank pulling the credit line from your MasterCard. Get over your f**ing houses people. Your "wealth" was all in your mind. It never really existed, except for the generous foreigner who made it all possible by buying your worthless ass mortgage so that you can pretend that you are Donald Trump.

Happy Homedebtor said...

I love the hostility and venom on both sides, and even more - Keith's rediculous self-serving advice.

Why not just walk away? Ummm...because we can not only afford our house but we can afford it in spades? Chasing the latest trends is being a "sheeple" - damn Keith, you're advocating a sheep mentality now - nice! Even at its peak of insanity, the market only had 40% or so of mortgages as ARMs - so you're generalizing on something that's not even a majority. I get the distinct impression noone here took even Econ/Math/Stat 100, despite the claims of overeducation and incomes in the top 1%.

Renters in Section 8? Nah, renting may or may not be more financially responsible right now depending on your area/etc. However, what none of you ever address is that most of life is based on perception: perception > reality. Simple but true equation - and the general perception is that people who "own" are better off than those who rent. And it's usually true - not always, but usually. :)

Better to take the pain and slowly build up? How about we not even feel the pain and build up at a medium-fast pace while we enjoy our homes? Remember, about 2/3 of mortgages in the last few years were still non-ARMs. Add in all the existing ones and you're talking a very small % overall.

My patio is done, it looks absolutely fabulous. I'm going to BBQ with friends and setup a workshop in my garage this weekend. I love me some hardwoking illegals! Zomg, life sucks - my company just shelled out 98% of my spring graduate tuition. /cry I'll be losing that house any minute now, right?

imbankruptiungcountrywide said...

My ridiculously overpriced condo is about to be come foreclosure history and I am renting a far nicer place that is twice the size for a lot less.
I have used the extra $$ to pay off all my credit cards and pay the one card I use every month now.
Never felt better - finally escaped the American Nightmare.