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The Galindo Mystery


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2007 Mar 8, 9:14am   21,954 views  221 comments

by HARM   ➕follow (0)   💰tip   ignore  

Most of the posts here tend to pretty much revolve around posting housing/economic news stats, debunking REIC propaganda, ranting about the NAR/Fed, sharing stories, parodying ignorant FBs, etc. This time, I have a genuine mystery for you to help solve.

A recent San Francisco Chronicle article, "ECONOMIC DEEP FREEZE
January cold spell inflicts hardship on the state's citrus workers" contained the following excerpt:

Ruben Galindo, 44, Castanon's neighbor and a LoBue worker for 15 years, said, "Whatever little savings that we have, we are just not spending any. We are saving our pennies and nickels just to get us through the year.''

Galindo, with a wife and three kids, also has a mortgage and thinks he can handle two months of unemployment, but no more than that. He bought his house in Lindsay in 1995 and has thought about moving to El Paso, Texas, where housing costs are lower.

"But when prices of homes here go down, I won't be able to sell,'' Galindo said. "And they're already starting to come down.''

Ok, now here are the facts:

  • Galindo bought his house in 1995, so that's 12 years of (presumably continuous) mortgage payments, at a much, much lower cost-basis than today
  • Galindo was a LoBue worker for (again, presumably continuous) 15 years

    • Yet...

  • Galindo has very little savings, in fact no more than two month's worth
  • Galindo cannot afford to sell if/when house prices here come down

    • I really need your help here, because I just can't seem to reconcile the first two statements with the last two. From 1995 to 2007, house prices throughout virtually every part of California have at least tripled. So, even assuming Mr. Galindo took out an interest-only loan back in 1995 (not likely, as they were very rare back then), he must have at least 66.67% equity in his home by now, right? And if he has been more-or-less continuously employed since 1992 (with a very, very low housing cost basis), then how could he have almost zero savings? Even with the wife + 3 kids and assuming his job is of the low-skill/low-pay fruit-picking variety, and that his wife never works, this all seems somewhat hard to understand.

    Has Mr. Galindo cash-out refinanced his house each year since 1995 and used the money to take his family on annual round-the-world luxury cruises? Has his family dined exclusively on Chateaubriand, Maine lobster, pâté de foie gras, Italian black truffles, Kobe beef and Dom Perignon for the last 12 years? Is he single-handedly putting "Kitty", "Amber" and "Bambi" at the local gentleman's club through college?

    Unfortunately, this mystery is beyond my limited amateur-sleuth abilities to solve. Please help me out here.
    Thanks,
    HARM

    #housing

    « First        Comments 49 - 88 of 221       Last »     Search these comments

    49   Peter P   2007 Mar 8, 3:04pm  

    BTW, back to the subject, I keep getting called by mortgage companies for refinancing. Looks like rentor can get HELOCs very soon.

    50   Peter P   2007 Mar 8, 3:04pm  

    Yellow cake with chocolate frosting rocks.

    Will that be similar to Black Forest cake?

    51   Malcolm   2007 Mar 8, 3:06pm  

    Hey, just do 'what everyone else does' forge your name on a grant deed, then go crazy. Or even easier, just assume your landlord's identity.

    52   sfvulture   2007 Mar 8, 3:07pm  

    Did someone mention blog party? When? Where?

    53   Malcolm   2007 Mar 8, 3:08pm  

    Now, I'm going to have to make a cake tomorrow, you've got me craving a moist yellow cake now.

    54   Malcolm   2007 Mar 8, 3:09pm  

    Sheez, I was the one who proposed Bubblepalooza. That would be awesome.

    55   Peter P   2007 Mar 8, 3:09pm  

    you’ve got me craving a moist yellow cake now

    I did bring a moist yellow cake (with cream outside) for the last blog party. :)

    I bought it from a Danish bakery though.

    56   Malcolm   2007 Mar 8, 3:10pm  

    Peter are you up in San Francisco? Where do you all meet?

    57   Peter P   2007 Mar 8, 3:11pm  

    who gives a shit.

    Good question! You should ask yourself.

    58   HARM   2007 Mar 8, 3:11pm  

    Did someone mention blog party? When? Where?

    Probably my place - maybe next month - Pasadena area.

    59   Malcolm   2007 Mar 8, 3:12pm  

    Cool, I'm in San Diego.

    60   Peter P   2007 Mar 8, 3:12pm  

    Peter are you up in San Francisco? Where do you all meet?

    Last blog party was down in Santa Barbara. It was a good labor day (?) trip.

    61   Peter P   2007 Mar 8, 3:13pm  

    San Diego is lovely. Which part are you in?

    62   HARM   2007 Mar 8, 3:14pm  

    We can use "Reality" as the Piñata.
    (kidding, of course)

    63   Malcolm   2007 Mar 8, 3:14pm  

    North County. City of San Marcos.

    64   Malcolm   2007 Mar 8, 3:15pm  

    Good night everyone.

    Reality bites.

    65   sfvulture   2007 Mar 8, 3:17pm  

    Good night folks....keep me posted on the party.

    66   Peter P   2007 Mar 8, 3:17pm  

    Reality bites

    Well, Patrick set this up as a "reality parser." :)

    67   e   2007 Mar 8, 3:39pm  

    Who is Malcom?

    In the middle.

    har har har har

    68   astrid   2007 Mar 8, 10:26pm  

    A Black Forest cake is a multilayered (though not necessarily multi-tiered cake made with a dark chocolate batter, filled with sour cherries, kirsch syrup, and whip cream, then topped with dark chocolate shavings.

    69   DinOR   2007 Mar 8, 10:48pm  

    Valerie Plame,

    Val,

    No hard feelings? :)

    Scooter

    70   astrid   2007 Mar 8, 11:03pm  

    Scooter Libby was not convicted of outing Valerie Plame. He was convicted of obstruction of justice.

    Why isn't Robert Novak in prison?

    71   DinOR   2007 Mar 8, 11:06pm  

    So, no hard feelings?

    72   DinOR   2007 Mar 8, 11:17pm  

    PAR,

    LOVE the "top 10" list!

    I realize you intended it primarily in jest but #9 isn't an entirely bad idea. I met our local District 18 Rep (really by accident) and afterwards left a msg. with his asst. If we're not talking about, who will?

    Don't get me wrong I'm a free market guy but why is it that we continue to have bubbles that won't quit until AFTER they've hit the wall?

    I have client appts. all day so please do keep up the good fight! :)

    73   DinOR   2007 Mar 8, 11:18pm  

    Valerie,

    All the love! Don't forget to write!

    Scooter

    74   SFWoman   2007 Mar 8, 11:27pm  

    astrid,

    Why isn't Robert Novak in prison? Must be that famous liberal media protecting him.

    Instead of reporting on sob cases like Mr. Galindo (there must be tens of thousands of these in California alone) I would like to see some actual investigative reporting going on. I'd like to see some solid investigative stories about Doug Feith, about Avigdor Lieberman, about CEO pay/board relations, about the actual facts around the housing bubble, about Hillary Clintons voting record up to and after the war in Iraq (she just seems like a pro-choice neocon, IMO), about Halliburton's sales of nuclear technology (from their office in Tehran)in Iran into 2002.

    But no, the 'liberal' media has given us such great, investigative reporting on the death of Anna Nicole Smith and Brittany Spears haircuts. The NYT reports on the Libby trial, but ignores real investigative reporting and has stories by Judith Miller that are basically just propoganda pieces for the VP's office.

    Democracy can't survive without a functioning free press.

    75   Peter P   2007 Mar 9, 12:41am  

    I got my latest issue of SFO magazine (Stocks, Futures, and Options). Guess who is "SFO's 2007 American Hero" ?

    76   Peter P   2007 Mar 9, 12:49am  

    Eat ramen with caviar

    Huh?

    Cold udon with salmon "caviar" is pretty good though.

    77   SFWoman   2007 Mar 9, 1:11am  

    PAR,

    The Realtor(TM) I used to buy my condo basically did your #7. We would go through a place and she'd comment 'Ugh, what a dump. You'd expect my client to pay for your clients' bad taste and remodel? Ugh' Or she'd say to the seller's agent 'Pacific Heights? You've advertised and priced like Pacific Heights but we're practically in the projects (Pine Street, in 1994).' Or my favorite 'I wouldn't let you buy this dump. Leased parking- hmph. I'll call your mother and talk to her if you try to buy this place. Your parking lease could expire and you'd be stuck parking and walking the streets at night. I won't let you buy this dump.' Right in front of the selling agent.

    She probably wasn't too popular with other agents, but her clients loved her.

    Unfortunately she died of breast cancer. She was a hoot.

    78   sfbubblebuyer   2007 Mar 9, 1:15am  

    SFWoman,

    She sounds hilarious! I bet the other agents tried to hide their open houses from her. :D

    79   Peter P   2007 Mar 9, 1:26am  

    Unfortunately she died of breast cancer. She was a hoot.

    Sad. We need more funding in breast cancer research.

    80   Allah   2007 Mar 9, 1:50am  

    Anyone hear about a show called hidden potential? So this is the kind of crap that people are watching on TV? They take a POS house and turn it into something liveable. Such BS propaganda!!! Is this show funded by the NAR?

    81   SFWoman   2007 Mar 9, 1:56am  

    Did anyone else get this sent to them? Guiliani is toast, there's no way the Christian right will back this man.

    http://tinyurl.com/yptrpt

    82   skibum   2007 Mar 9, 2:04am  

    I'm sure many of you have heard this already, but the #2 Subprime lender stopped issuing loans as of last night. They are expected to likely file for bankruptcy soon:

    http://money.cnn.com/2007/03/09/news/companies/bc.newcentury.shares.reut/index.htm?postversion=2007030912

    83   tsusiat   2007 Mar 9, 2:12am  

    PAR:

    Personally, I like item # 4 from your list

    Pay your bills (since most of you actually can).

    If jbrs are going to do well in a downturn, of course we can't be in debt on VISA and Mastercards when the time to buy comes!

    OT can I mention I am starting my own cheaprealty website? It is nothing in the league of Patrick.net, but I can try.

    No this is not spam, I have been posting here for several years, but if the moderators don't want me to say I have a web-site, delete my post!

    84   Peter P   2007 Mar 9, 2:14am  

    No this is not spam, I have been posting here for several years, but if the moderators don’t want me to say I have a web-site, delete my post!

    Huh? :) Congrats.

    85   Peter P   2007 Mar 9, 2:19am  

    tsusiat, I love the Victoria area.

    I believe that any RE correction up there is not going to happen for a while though. BC is now a highly international market.

    86   sfbubblebuyer   2007 Mar 9, 2:26am  

    Did you see that NEW announced last night it's not originating any more loans as nobody will give them extend them a thin dime. They're the institutional equivilant of a FB now. The subprimes going bad are much like an ARM reset to them. And they can't get any more credit much like the FBs can't refi their no-longer appreciating homes.

    87   EBGuy   2007 Mar 9, 2:37am  

    From the CNN story on New Century. The have arranged to refinance $710 million of loans. I am assuming this is to get the FBs more favorable terms so they don't default... oh, and to get them out of purchase money, non-recourse loans. (Here Mr. FB, let me handcuff you to your front door.)

    88   Peter P   2007 Mar 9, 2:46am  

    So I guess October 2007 may be the start date of the bubble burst.

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