"There is a section of the population here that over-extended themselves to buy here and then keep up the facade of wealth. In the next year or so they'll be forced out in dribs and drabs."
Sharon Sodikoff, Prudential Homelife Realty, January 2008.
January 17, 2008
HousingPANIC Quote of the Day
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More good stuff from the article:
"The next wave of problems will come from prime borrowers who bought too much house or borrowed too much against it," said Michael van Zalingen, director of home ownership services at Neighborhood Housing Services of Chicago. A "prime" borrower is one with good credit.
Real estate agents warn that some high-income borrowers have already been forced to sell or leave their homes and more will follow. Especially those who used their homes as ATMs, withdrawing cash via home equity loans.
"For those who utilized home equity loans for five to ten years to finance their lifestyle, the chickens are coming home to roost," said Chicago-based real estate agent Marki Lemons.
It's Chicago but sure sounds like Scottsdale!
Yes, and all of you realtors encouraged them to do it in the name of profit. You should be prosecuted! You and your mortgage companies KNEW that they were lying on applications and that they really couldn't afford it.
Any person doing the math could figure out that sooner or later the price of houses would exceed the pay scale of the average American.
YOU CAUSED THIS WITH YOUR GREED.
yep...I personally know many people that were seduced by the easy "Home Equity" money...most of these wide eyed zombies have no clue their home values are tanking or are going to tank (upside down)... this housing depreciation will take yeeeaaaars to run it's course!
Hey Keith, any topics on "Protesting your Home Taxes"...I think this is a mystery to some people and a topic of this might actually help some with a lower tax outcome...
saw a scarry Chase add last night, it said you could get updates on your phone about your avaliable limit on your credit card before you bought that new big screen TV. If you might be worried about going over you're limit for a TV, you can't afford the TV.
Hey Keith,
I LOVE your blog!!! You are a genius writer...anyway, have seen the "Cramer Meltdown 2.0"? or maybe it's 3.0 at this point...check it out! There will be blood...
http://www.cnbc.com/id/22706231
If the link doesn't work, just go to CNBC website and it should be there in videos, it's from today...
MassBubbleGirl
But I thought HELOC was free money?
HOW True!. . .I just heard horror stories over the past weekend about AAA borrowers who bought 12 condos in downtown San Diego, and are now in default. . .collecting rent and not paying mortgages. . .also a lot of individuals are now forced to make the decision to buy an new condo that they signed up for, or just walk from the deposit - BUT the kicker is this. . .if the developer can't sell the condo for the price negotiated, the buyer has to pay the difference. . .so if you walk from say a 100K deposit on an 800K place, and it sells for 600K, you are on the hood for 200K!!. . .the only way out - file bankruptcy.
Allelujah, Allelujah, Alllllleelujah!!! Finally, someone in real estate speaking some truth. I guess there comes a time when you just simply run out of excuses and spin and have to call it like it is.
While the US real estate market slumps and corrects itself, look at some of these international investment opportunities. http://www.unifersal.com
Anonymous said...
Yes, and all of you realtors encouraged them to do it in the name of profit. You should be prosecuted! You and your mortgage companies KNEW that they were lying on applications and that they really couldn't afford it.
Any person doing the math could figure out that sooner or later the price of houses would exceed the pay scale of the average American.
YOU CAUSED THIS WITH YOUR GREED.
So why was the person who was smart enough to lie on the application not also smart enough to do the math? The person who lied on the application was smart enough to know that he had to lie in order to get the loan for the house he couldn't afford right?
As far as I know realtors didn't put guns to these people's heads. These buyers who "can't do the math" are also the people who are cashing out the 401K now to keep the Blue Light Special going and going. "So many to impress, so little time". Why should those of us who didn't succumb to the fever feel sorry for those who did?
Personally, I am pissed because my tax dollars will go to help BOFA buy out Countrywide. I did the math way back when and I was responsible and I did not lie, but I am going to pay for the irresponsible ones anyway?
Does this help you see what a crybaby you are?
Blame goes to all levels, from Bush to Congress to Greenspan to regulators to realtors to mortgage brokers to appraisers to buyers.
All was well as long as home prices continued up.
Homedebtors are defaulting, not because they can't pay the mortgage (for many, rates have yet to reset), but because they don't want to, now that prices have stopped going up and have started down.
The REAL OC
Die!! Newport Real Estate Pimps
...some high-income borrowers have already been forced to sell or leave their homes and more will follow. Especially those who used their homes as ATMs, withdrawing cash via home equity loans.
"For those who utilized home equity loans for five to ten years to finance their lifestyle, the chickens are coming home to roost," said Chicago-based real estate agent Marki Lemons.
January 17, 2008 6:51 AM
And we're talking to YOU, Californians! Kiss your Hummers goodbye...
anon @ 7:42
Are you *sure* it's Chicago? Frank says this stuff ONLY happens in Scottsdale! :)
Many people only bought because they thought they would retire as millionaires. They didn't want all the hassle of a McMansion. What happens when an "investment" stops appreciating? Everyone sells.
But I thought HELOC was free money?
That's what all the drunken Tommy Bahama wearing clowns in Scottsdale thought too.
Are you *sure* it's Chicago? Frank says this stuff ONLY happens in Scottsdale! :)
Scottsdale is the epitome of this stuff. You can go to Vegas, LA, San Diego, NY, Chicago, and all of those combined don't approach the level of fakeness and pretentiousness that exists in Scottsdale.
It's like the Promised Land for phonies from all cities where they all hang together and pretend to be rich. After lying to themselves long enough, many actually begin to believe it.
Interesting news from today's San Diego Daily Transcript:
Countrywide CEO cancels USD real estate conference appearance
Angelo Mozilo, chairman and CEO of Countrywide Financial Corp., will not participate in the Jan. 22 University of San Diego Burnham-Moores Center for Real Estate annual conference as previously scheduled.
"And we're talking to YOU, Californians! Kiss your Hummers goodbye..."
As a midwest transplant in CA, I completely agree. I've been renting in Sacramento for 7 years now and I've watched the hubris. A new development near me used to have a banner up saying "$1,000, $1,000, $1,000" Meaning $1,000 down, $1,000 in closing costs, and $1,000/month for 5 years. The only trick is that the loan amount would be between $500K and $600K, and would negatively amortize. For 3 grand, they let people into over $500K of debt for homes. EVERY native CA drank the cool aid and talked incessantly about how no one pays off a house -- you pay off the loan when you sell it. The fact that they knew they had plans not to pay off the loan amount was proof to me that they had done the math, and knew they weren't amortizing their loans, and, in fact, had no intention of paying off their loans. Meanwhile my parents in the midwest made their last mortgage payment at the age of 66 in 2006. Californians my parents age were taking out HELOCs and believing they never had to pay these loans off! During my stint in Sac, I've stayed in my 900 sq.ft. apt. (which I'm never in anyway)paid off small stupid loans I never should've taken, and saved. I feel like Warren Buffett who says never follow the crowd -- especially if the crowd is from CA! (isn't Buffett from Nebraska?) Let's hear it for the fly-over state people!
So you're saying that my wannabe neighbor from New York, who's been late on property taxes, didn't have all those millions of dollars to buy 6 luxurious properties? I'm totally flabbergasted.
EVERY native CA drank the cool aid and talked incessantly about how no one pays off a house
You mean all the Mexicans and hicks that migrate from other POS red states like AZ, right?
The Realtors employed APPRAISERS the APPRAISERS over valued the properties to have the house sell at a higher price, everyone won as long as prices continued to go up. It was a ponzi scheme, especially in Upstate Pennsylvania in counties like Monroe. Many of those realtors are GUILTY of organized crime. They formed trusts with mortgage brokers, appraisers, and their own inspectors all cooperating to inflate prices to get big bucks. Doubt it? TAKE A LOOK AT POCONO building groups, especially POCONO COUNTRY PLACE, Take a look at all the properties for sale. They are DIVING and owners are desperate on those homes to sell. Several factors came to bear. Illegal management practices, real estate fixing of prices, luring unwitting New Yorkers down to buy, development of gangs from children being left alone with both parents working in NY during the day, taxes, etc. I saw one advertisement "NO MORE WALK THRU'S" So many people looked at it the owner has now refused to show it anymore and demands a price without looking! Boy are things in bad shape! Empty houses all over the place. Some are as low as 50K to 40K-a real bargain if you don't mind NYC gangs.
It's all coming together now. I honestly believe that tons of these McMansions will simply be bulldozed into the ground. No one will be able to afford to buy them, and no one will be able to afford the upkeep and energy costs. Since they are too far away from cities and public transport, they cannot be sub-divided into apts like those old Victorians from the 19th century. This is the only way inventory will be realigned with demand. This country is going to look very very diffent in 20 years.
Are you kidding me or what? The government will bail out these people by placing a "freeze" on the interest rate charged on their credit card bills and the government may even reduce people's credit card bills.
Everyone should remember that Bankruptcy as we used to know it does not exist any more. Now we have wage garnishes and payment plans till you're in the grave (and most probably collecting from whatever estate you may leave). Welcome to Serfdom 2.0.
"For those who utilized home equity loans for five to ten years to finance their lifestyle, the chickens are coming home to roost," said Chicago-based real estate agent Marki Lemons.
It's interesting to hear a realtor now imply that HELOCing your home was a bad idea.
3 years ago realtors were stating that house prices do nothing but go up.
I wonder why CNBC pulled the video from their website? Anyone have a copy somewhere? Pissed off Proctor and Gamble?!?!?
SAC Renter: Native Californians living in California are about as rare as Amur Lepards. Everyone in California is from somewhere else just like you.
You got it bobby... no heat during the winter and searing summer heat are making these shatbox houses fall apart. The walls are cracking as the big warp takes hold. Hey, face it. These McMansions are pieces of shat anyway. Suburbia and strip malls are toast. A check will only allow the criminals time to get out of dodge before the masses of cheez doodle seekers revolt.
The Americano is as toasted as a snapper turtle skewered on a stick from head to butt all sizzling, juices dripping, fat popping, roasting nicely over a bed of white hot charcoal grill.
Americano = Grilled Snapper Turtle
Heeeee... Haaaaa... Arrrrr...
The mentality of the average Americano is just amazing, if not stupefying.
A Circuit City Sale Associate is able to buy a house.
A Shoe Sale Man is driving an Audi.
An uneducated, illiterate, ignorant Ford factory auto-assembly worker makes $40/hour.
The Iraqi has Weapon Of Mass Destruction.
Talk about brain-dead zombie, blind-as-a-bat crapper. Maybe that is the reason why there is such word as "Trailer White Trash"...
andrew hac said-
Talk about brain-dead zombie, blind-as-a-bat crapper. Maybe that is the reason why there is such word as "Trailer White Trash"...
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I think you are the illiterate one my friend.......and you sound a tad jealous
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