patrick.net

I had an excellent strawberry short cake on University Ave yesterday.

My grocer just told me, "they're not making any more strawberries".

1996: Randy & wife experience intense scrutiny when they borrow a little shy of $300,000 to buy a $365,000 house. They have $300,000/year in income.

$300,000 in 1996 equals $383,930 in 2006.

===

2006: (Maybe a tad earlier). Banks fall all over each other for the privilege of "loaning" over $700,000 to a strawberry picker who wants to buy a house. He makes $15,000 a year.

In 1996 his wages would have been $11,720.
In 1996 his house would have been $562,601.

===

Summary of the decline, in strawberries to strawberries comparison terms (1996 dollars):

Borrower Price Tag Wages Mortgage Lender's Behavior

Randy $365,000 $383,930/yr Given crap about being self-employed
Alberto $562,601 $ 11,720/yr Given a wheelbarrow of money

*correction, 1996 salary = $300/000/yr

This sort of thing is ridiculous. And if there is a bail-out, guys like this will get their 13k worth of counseling and restructuring.... and then lose the house. Somebody will reposess the house... and take a 50% haircut as prices tumble.

Then the gubberment will probably want to give them their 50% back to 'preserve the market' which means we're on the hook even more. This isn't going to be people losing their life savings/retirements in banks that should have been guarenteed like in the S/L scandal... this is going to be investors losing their shirts and people going back to renting.

The people are already getting screwed, no need to screw them again with badly thought out bailouts that won't work. The people that COULD be helped by a bailout are in a position to bail themselves out. If your ARM is going down in flames, but you point out to the mortgage owner that a 6.5% fixed could be managed by you, they'll bend over backwards to let you do that if 20% of their mortgages are going into forclosure. Let the bag-holders deal with it.

Randy, self-employed citizens are not viewed as favorably as illegally-employed document-challenged pre-unionized aliens.

If you haven't read the article it was actually TWO couples applying for the loan! (The other couple worked at a mushroom packing plant, or something like that). The agent said that she would help them with their payments until they got the loan re-fi'd in 2 or 3 months. WTF?

How much money did this gal make off the deal!?! She can afford to help you with your payments? The more I read, the more depressed I got. Oh and the agent was like a 24 year veteran in the biz. How long has this been goin' on? :(

Oh, and the agent was also hispanic:

They spotted an ad in the local magazine La Ganga for Maria Avila of Rancho Grande Real Estate and called her.

Well, at least it's reassuring to know that latin people can f**k over their own just as badly as white people.

Randy, self-employed citizens are not viewed as favorably as illegally-employed document-challenged pre-unionized aliens.

Disclaimer: I was not necessarily referring to any mentioned persons, real or fictional, in the article.

DinOR,

She probably hoped to help them unload it at a higher price... i bet she double dipped the first sale and was planning on double dipping the second sale.

This skyrocketing market was good for Realtors and MBs in that it allowed them to get serial customers with a timeframe in the months instead of decades. I bet if we look hard enough, we'll find strawberry pickers who've had 3-4 homes in the last 5 years, and made a little money on each one until this last one, and now need 'bailing out'.

I also recall that this $720,000 (now "worth" $520,000) home is outside of Hollister. Evidently they couldn't afford the bustling metropolis of Hollister proper so the home is at least close to their work. It should also be apparent that the long time residents view the new arrivals as being "there for the taking".

Back in 2000, we were looking to trade up to a bigger house from a townhouse. We made a little money from dot-com options and the stock market so the downpayment was substantial. I didn't want to use my wife's income and also wanted a 15 year mortgage. With that in mind, I figured the most expensive house we can afford was $650K. I was just not happy about what $650K would get us and refused to pull the trigger. There were many fights between the wife and I because she would say I am too conservative. I guess I am comparing to the strawberry picker and the couple who bought the 1.3M house on 200K downpayment.

SFBB,

In that light, it makes sense. Who knows how many otherwise decent people this lady ef'd over? And how many are there just like her?

This guy definetly deserves a bailout! After all, how could he have possibly known that he couldn't afford it?

I move to call any mistake, snafu, error, quagmire, etc. "Iraq."

Ex: The war in Iraq is an Iraq because it landed us in Iraq.

I reserve my judgment on Iraq. It is still too early to ascertain whether there might have been an error. Time will inevitably tell.

Just to clarify:

National Council of La Raza (NCLR) = hispanic/immigrants rights advocacy group
Lladró = Spanish manufacturer of fine porcelain figurines.

I reserve my judgment on Iraq. It is still too early to ascertain whether there might have been an error. Time will inevitably tell.

You've gotta be kiddin' me.

Sorry to have spoken in Greenish.

I hope the troops can come home soon. But I will let history judge any war.

Google buys DoubleClick, that's pretty evil.

I suspect there is more to the story than this. As SFBubbleBuyer pointed out, the plan was to “get in while the gettin’ is good” - rake in the commissions on the sale, and the fees on the mortgage and then flip the house for a profit after a while. Possibly with a sweet little gratuity for the strawberry-picker, for co-operating so nicely.

You forgot the last part, the backup plan in case things don't turn out the way they planned - The Taxpayer Bailout!

Nothing else actually matters with these modern wars since we stopped colonizing and adding square footage to the nation some time ago.

And they are not making any more land.

$120 billion is a lot of money, and even that probably won't even be enough!

Still economists say bailout could have the effect of causing more defaults. "If the plan is to pay off loans when people quit, then I plan to quit paying my loan," says Michael Englund, chief economist at Action Economics.

The Housing Bubble correction will be no Waterloo. It will be a freaking Dresden.

There, I worked in Vonnegut. (Slaughterhouse-Five for anyone wondering).

So it goes.

So these were the Deep Pocket Foreigners we all heard about.

How about that... Cherry picker buys a $750K home...
Didnt all the Shills keep saying this will continue to drive prices
higher...

Only people who have any “right” to hope the govt helps them out are true victims of fraud, e.g. where there was forgery.

Even if outright crimes where committed, the loan victims should not be bailed out.

If I get mugged on the street, can I get compensated by the government?

Prices in the city continue higher yet again. Very frustrating for buyers.

I do not want to live in the city. Rolling hills are more important.

I played my rainiest round of golf in Watsonville. It is just over the hills from Gilroy.

What is so good about the city anyway? Cities are bums magnets.

http://www.ranchogrande.com/San%20Jose.html

Cant understand a word on that page. Anyone care to translate what she is saying?

Peter P

Victims of muggings do often get some form of "bailout". Many times they qualify for various government assistance programs if they are truly in need. They also will receive various forms of help from private support non profit agencies.

This was from 2002...

MGIC executive: Homeownership will climb
By MICHELE DERUS
Journal Sentinel
Posted: April 23, 2002
Homeownership will climb to 70% or more of U.S. households this decade, giving the mortgage industry more than $1 trillion in business, an MGIC Investment Corp. executive said Monday.

Most growth is expected to come from immigrants and minorities, two fast-growing groups "who are significantly below the average homeownership rate - at about 48%," said J. Michael Lauer, the Milwaukee-based insurer's executive vice president and chief financial officer.

Many will have less than a 20% down payment and will require mortgage insurance, boosting the fortunes of companies such as MGIC, Lauer said.

Homeowners will generate between $1 trillion and $2 trillion in mortgage originations this decade, and nearly one in five loans will require mortgage insurance, he said.

Lauer's comments came at UBS Warburg's 2002 Global Financial Services Conference in New York, Webcast to the media and investment community.

America's homeownership rate, now at 68% of households, could hit 71% or more by 2010, Lauer said.

"We expect 15 million new homeowners this decade," he said.

http://www.jsonline.com/story/index.aspx?id=37251&format=print

And today they cant even pay due to resets....

BAHAHAHAHAHAHA

BigBrother

Thanks. I knew real economics was useless. From now on I'll be sure to follow your NARonomics.

Someone posted a while back that they thought rich white professionals would “gentrify” the barrios of San Mateo and Redwood City.

From what I have seen almost all the sales in crappy parts of San Mateo, Redwood City and the Bayview/Hunters Point have been to low income minorities who don’t speak English or understand the term “NegAm/IO”…

P.S. Almost all the Realtors and Mortgage brokers that have been “helping” these minorities “buy a piece of the American Dream” have been high income minorities who have been making boat loads of money (often selling property that they own themselves) since the minorities usually believe that someone from their country will not screw them…

Many times they qualify for various government assistance programs if they are truly in need. They also will receive various forms of help from private support non profit agencies.

Wow. I always worry that I will get robbed and then slapped with a gift-tax bill. :)

since the minorities usually believe that someone from their country will not screw them

LOL. Greed is the universal currency.

I think Prop 13 should be interpereted to make the 2006 buyers' property taxes grow at 2% a year. See how long until they pay the same as people who buy in a few years.

"What is so good about the city anyway? Cities are bums magnets."

I guess you never had a real Italian Cannoli ?
Saw 100 people running in the street buck naked on Saturday Afternoon?
Saw a live show (Rock, Pop, Opera in the ParK, etc etc ) ?
Went to a Art gallery ?
Went to a baseball football or Golf event ?
Been to a actual trade or hobby convention ?
Go to a night club, where the women actually do go back to your place for the evening ?

I dont see this happening in the SouthBay or San Mateo County, Did you...
... frankly one Wine Festival is all can tolerate for the summer?

I guess you never had a real Italian Cannoli ?

I beg to differ. SF doesn't have real Italian cannoli. They pale in comparison to those you can get in NYC, Boston, or Philly.