patrick.net

I remember working in loss mitigation this one time a guy pissed me off by breaking so many payment arrangements. He would waffle between 90/120 days late (foreclosure dept would take over after 120 days late. But it never went to foreclosure because he would always send 2 payments and get back to 60 days late, then no money for 2 months and repeat.

So this one time he missed the deadline again and I had another 120 day delinq in my portfolio. So I mailed him back his 2 payments uncashed and sent his loan to the foreclosure department(yes the can do that sometimes! he was pulling my numbers down every month!) but they kicked it out of foreclosure when he called my supervisor and complained about me being a robot with no heart. (which is true of course, but the real reason they didnt foreclose was he sent money)

The bank only wants to foreclose if they absolutely have to, I was being selfing of course. He refused all the usual advice to catch up (sell your crap, get second job, take on roomate, borrow from some other chump, etc) and that pissed me off. There is no excuse to be 2 months late chronically, really if you want to keep the home sell your car and drive a junker to catch up your mortgage. Damn FB's.

HK,

Totally funny story. Yer' thinkin' this guy had learnt ta' milk the system just a little? I know my younger brother was 1 month behind for a whole year once. He'd recently become a single parent and without the extra income and 2 kids it was tough, but he got caught up.

What is different about this crash and its a MONUMENTAL difference is the dollar amounts involved now are staggering on every single home. Back in 96 a typical distressed borrower paid about 200k in late 80's and the home was worth 150k in the mid 90's foreclosure boom. 50k underwater (usually much less, that is the 'worst case') seemed like financial armageddon and 'ruined forever' to these people.

And anyone undwater 200k back then was a doctor or famous movie star who paid 600+ for thier home. We forclosed on a lot of them. A 600k to 1m home was exclusively for the wealthy back then. Today its for janitors, office workers, programmers, EVERYONE. There is simply NO WAY to ever recover from being 200k+ underwater - the old days of 20k upside being considered a disaster seem so silly and quaint now. But it was very very real, just 10 years ago people were upside 20k and getting mad at the bank, tearing out the counters and selling the toilets and walking away. for 20k. Being under 200-300k (which is probably average) will devastate the banks when they go to write off these losses after the foreclosures.

HelloKitty we *know* you're a robot, in fact you're a synthetic cute character invented under the name Sanrio, Sanrio because it's a word inoffensive and generally cute under all the major languages.

I love HelloKitty stuff!

Now, I like the neologism "selfing" but you should use it as in, you're "being selfish" or you "are selfing". I like that. Selfing. And I would advise the horrible, smelly, white-trash, deadbeat, El Camino-drivin', t'baccy-chawin' LOSER to just bail and I mean right away. Leave the banksters and RealtWhores hanging, or, hangin'.

There's no excuse to be 2 months late for a year, get out NOW and save your skins, rent a trailer or no-tell-hotel room and starve the oligarchy out.

If Carhartts and stray-cat stew are the path to freedom, then that path we should follow!

Yep Kitty I'm old enough to remember when $20k underwater was considered horrible, HORRIBLE.

Now $200k under is the new Little Black Dress.

I've managed to get $100k under and not even been owned by a house, just a small biz. And it may be $200k by the time they're done with the imaginary numbers on paper pertaining to me.

FB's certainly were casual about MEW'ing out 100-200k? Now they're walking away from it. See? Real... casual-like.

Perhaps folks in the mid-90's were exaggerating a bit, but it's definitely a set back. In my case to be "down" 200k my place would have to given away by the bank for free. So if they're giving it away, well then why not me?

This is illegal under some antitrust laws namely the Robinson Patman Act. It is illegal for a business to give preferential treatment to certain customers in a similar class; meaning that the opportunity for the lower rates is not available to everyone in the group no matter how the group is defined. This is so outrageous I hope it leads to some sort of revolt. I literally am shaking I'm so angry.

I want a recall NOW!

Happy Thanksgiving, everyone.

Thanks for:

- MEW
- FBs
- Alan Greenspan
- Hank Paulson
- Ben Bernanke
- David Learah/Lawrence Yun
- Hedge Funds
- America's debt addiction
- Realtors
- Shady mortgage brokers
- Goldman/Merrill/Lehman/Bear Stearns/Citi/WAMU/WF/CFC
- Angelo Mozilo
- Casey Serin

Harm says

Have the lenders/MBS note-holders agree to re-write the underwater loans setting the PRINCIPAL owed at 35¢ on the dollar. That is, if the mortgage is for $800,000, a typical price for your average 900sft L.A. shitbox, it’s now instantly downsized to $280,000.

If that counts as a "sale," would it give a new lower Prop 13 basis?

Happy Thanksgiving Skibum and all.

@skibum,

You forgot the "no" before "thanks" ;-)

Happy Turkey Day everyone!

As inept and beholden to special interests as Schwarzenegger, he would have to do something really amazingly idiotic, like let the lights get turned off for the whole state, before he would get recalled.

It will be amusing to see where he is going to raise $10B, which is going to be the budget shortfall next year. Maybe he will try and raise some more bonds, after promising last time to cut up the credit card. That is my guess.

Driving home late tonight, I heard an ad on the local AM radio for some chap who will "help you eeeliminate debt". Any idea what this scam is?

I have heard it before on KCBS radio while driving. I am pretty sure it is some sort of slick scam, just curious what the angle is.

SP those "eeeeliminate debt" ads have been on the radio in the Bay Area for years. Because the Bay Area is so Special.

It's sure to be a scam.

I'm sure it's the standard debt-consolidation con, you send 'em money and ostensibly they're paying off your creditors, in reality they take your money'n'run. After the Statute Of Limitation (only 4 years in California) you're free and clear.

I myself have what I view as massive money problems and even I'm not dumb enough to fall for their ploy.

hmm, gummint 'intervention' at last... I'm not opposed to the intent of the intervention, in fact in my utopia there would be a hell of a lot more intervention in housing and a lot sooner. There used to be a time, so I'm told, when mortgage interest rates were fixed low by govt fiat (although you had to go cap in hand to the bank and they were very prudent), before they were deregulated and starting offering ARMs...

I've just added a post at the top of my blog on some suggestions for lowering housing prices, it's hopelessly naive and good for a laugh... although the Labor Party here is now looking at doing cost-controlled development on ex-gummint and Defence land, one of my suggestions...

TOB,

Good call. Securitization appears to be a general method for getting paid now, before the shit hits the fan at a later time.

In this particular case, where does this sudden interest in infrastructure projects come from? Was it the Minnesota bridge that fell down, or is there something systemic going on that the general public has not caught on to yet. My guess is that there is,

Related: It always bothered me that there were private contractors out in force driving piles into the bottom of the bay (for the new SF Bay Bridge) before the ink was even dry on any contract to build the new bridge. This project was really railroaded, if you ask me, I bet someone on this blog has some insights on what happened there...

Thank you gov!
Cost of money is higher than
the revenue on loans the banks
are bringing in...LOL
Arnold will be able to claim he destroyed
all of the CA banking single handedly...

ex-sunnyvale-renter Says:
I’m sure it’s the standard debt-consolidation con

That's what I first thought, but the ad actually says "we don't consolidate debt, we eeeeliminate it"... which is why I am very curious wtf their angle is.

BTW, one of their 'testimonials' says he will be able to pay off his 15-year mortgage in two years.

ex-sunnyvale-renter Says:
I’m sure it’s the standard debt-consolidation con

That’s what I first thought, but the ad actually says “we don’t consolidate debt, we eeeeliminate it”… which is why I am very curious what their angle is.

I apologize for going OT, particularly as this thread has remained so very much on.

I've seen two or three stories in the past several hours regarding the lending freeze in China. One of the likely outcomes is repatriation of dollars to the US. As there are some here involved in FX, I thought I should send a heads-up.

Back on topic, the HARM workout protocol with DinOR's refinement is just absolutely admirable. The irony is that lenders would quite possibly come out of your plan better off than they will on their present trajectory. Nice work, guys!

Malcolm-

www.teaparty07.com

I wonder if Marina Prime has a comment on this:

http://www.socketsite.com/archives/2007/11/when_good_comps_go_bad_in_the_marina.html

It looks like even people in the Marina will need a payment freeze...

"anon" strikes me as a great Marina Prime candidate. Avoiding a permanent nickname is his style; after all, what's to do when your predictions keep crashing into the bay?

Or "fluj". Definitely the RE cheerleader type...

SP Says:

> Driving home late tonight, I heard an ad on the local
> AM radio for some chap who will “help you eeeliminate
> debt”. Any idea what this scam is?

The ad I hear a lot on AM radio in the Bay Area is not a scam per se, but is just a program that gives simple tips that many stupid Americans don’t know like “you should pay down your 18% credit card debt before the 8% HELOC” and “you can pay off a home mortgage years early by just making one extra payment a year”. It is kind of like an ad promising people an easy way to lose weight and eliminate fat forever that recommends "eating less and exercising more"…

HelloKitty Says:

> What is different about this crash and its a
> MONUMENTAL difference is the dollar amounts
> involved now are staggering on every single
> home. Back in 96 a typical distressed borrower
> paid about 200k in late 80’s and the home was
> worth 150k in the mid 90’s foreclosure boom.

In Southern Cal many homes that sold for ~$150K in the mid 80’s went to $300K in 1990, then back to $150K in 1995 (dropping $30K a year).

Here in the Bay Area many homes that sold for $300K in the mid 90’s went to $1.3mm in 2005. I think that we will have a lot more people running for the doors to rent if we get year over year drops of $100K+.

P.S. Like HK I was also working with bad (commercial) loans in the mid 90’s and would try to make a deal with guys that I liked who tried to work with me and played hardball (and tried to financially ruin) anyone who was an idiot and played games with me…

SP - by "eeeeeeliminate it" they mean they take your money while you wait out the California 4-year statute of limitations. Sure, if you have assets they can be seized/garnished, but you can always do a BK and maybe get out.

It's all very complicated and I feel like a young Lincoln "reading law" in the law library when I go into town, but that's the basic outline of how I think these outfits work.

Looks like a "freeze" on posting lately....

Joe's Murk actually lead with a bear story today. www.mercurynews.com/ci_7547448 Will wonders never cease?

Meanwhile, the NY Times discusses where real mansions - not McMansions TM - are going for cheap. A friend of mine paid $1.5million on a tract home in Los Altos not long ago....look what that gets you now. www.nytimes.com/2007/11/25/realestate/25nati.html?_r=1&oref=slogin There's only one problem, which I'm sure the more astute posters here will quickly recognize. :)

Here's just a pathetic intro to the Chron's coverage of "Black Friday":

"The get-up-and-go spirit that helped America settle the West, win two world wars and put a man on the moon isn't dead.

It's just gone to the mall.

Millions of Americans woke before dawn Friday - some never bothered going to sleep at all - to storm the country's shopping centers in search of bargains, hot but scarce products and general shopping fun."

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/24/MNBVTHTKM.DTL

I was hoping the opening was tongue-in-cheek, but sadly, as I read on, I realized it was not. We are a pathetic, sorry-ass country.

Believe it or not, some of us in San Francisco, bought a house last fall, took a boring 30-year fixed rate mortgage at 6.5% (a historically low rate), and avoided the whole adjustable ARM / option ARM / negative amortization BullSh*t altogether. I had so many friends (some of them in finance managment positions with leading firms) and even the banker, telling me I should really consider an ARM…and I told them…absolutely not. I bought a $650K townhouse in SF, after the owner dropped the price about $55K, and then agreed to pay half my closing costs. So then I bought it. San Francisco county just saw a 4.3% increase YOY from '06 to '07. After a year's worth of paying my mortgage, I have about 40K positive equity...but I WILL NOT take out a Home Equity loan, even though the bank sends me offers weekly. There are ways to win in any market...just do NOT follow the herd....too many sheep out there...and now the WOLVES are out to feast...

good_guy,

Congratulations on the home purchase. At least you had the sense to avoid an ARM and/or other exotic mortgage product.

However, I should point out that the "4.3% increase YOY" in SF you quote is not what you think it is. The median price in SF county has increased by 4.3% per last month's stats. But as this board has discussed in the past ad nauseum, median price is a flawed statistic. Most, if not all of that increase you cite is due to a change in the mix of homes sold. Expensive home sales volume is holding up better than lower end sales, so the median gets skewed upwards. Resales of the same house/condo, which is arguably a better measure of the true market trend, has been going down in SF for quite some time now. This has been documented by the Case-Shiller index, and anectodally by sites like socketsite.com.

Basically, it is a fallacy to apply a "4.3% increase YOY" to your purchase price and assume you can now sell your place for $40k more if you chose to do so in today's market.

Welcome to the board, BTW.

skibum, if you had just busted out a credit card yesterday, you would be a respectable American, too. Those Black Friday shoppers stormed the mall like the beaches of Normandy, braving all sorts of inconvinience. It was like Iraq, only with less heat and longer lines. I bet that many liberated home equity on the way. Now that is a Real consumer economy Hero!

Of course, I will now feel compelled to point out---before you write off the rest of the country as a bunch of soulless, clueless fools, just remember that California has a disproportionate number of truly bizarre idiots. This journalist is obviously one of them. Which is why she writes for the Chronicle...

Those Black Friday shoppers stormed the mall like the beaches of Normandy, braving all sorts of inconvinience.

Well Brand,
So we've gone from the Greatest Generation to the Greatest Fool Generation.

God help us all.

Brand Says:
skibum, if you had just busted out a credit card yesterday, you would be a respectable American, too.

I busted out the debit-card... but only to buy petrol at Costco. Damn near $70 right there.

That is about all the 'shopping' you will get out of me... I can't imagine WTF people are still buying and why they think they need it.

good_guy Says:
I have about 40K positive equity…

How do you know? Did you sell it yet? Counting equity before selling is SO 2005.

skibum - good post!

I for one didn't spend a red cent.

I mended the hem (dental floss, yay!) on this fleece "Endwave" sweater I'm wearing, sure it was only about $4 at the Goodwill, and could be found out here for a buck or so, but it's hard to find one that's just right, well worth the mending. Then took a pice of heavy duty cloth I got for a quarter last week at a local Christian thrift, and made yes MADE, a laundry bag. With drawstring. Using dental floss. Punkers and the homeless know how to sew with dental floss, but I actually learned it from the archery folks - they'll repair all kinds of stuff with it. Now I can put my laundry in it and go to the laundromat and get some washing done when the truck's in use.

I not only deprived the "consumermaschine" of money, I created value for myself.

Oh yeah Juicy Local RE Dirt: A family here who've been holding a fairly constant yard sale, turn out to be moving to Florida. They say it's because they have "family support" there. Sounds like RE payment trouble. Family will take them in or at least it's better to be homeless in FL. than here.

Brand Says:
skibum, if you had just busted out a credit card yesterday, you would be a respectable American, too.

Yep, send that borrowed dollar to China. Maybe if enough heros do that, the dollar will get real cheap and spawn a new surge of American exports. After all, the loonie parity has caused a great anount of sales on the US side of the Canadian border. I understand that the stores up there have a hard time keeping enough stock on hand.

Not Serious

ex-sunnyvale-renter Says:

I for one didn’t spend a red cent.

That is no surprise to regular readers of this blog. If I read your posts right, you are a debt refugee who left a trail of stiffed creditors as you hopped a boxcar out of California. Your new austere lifestyle is evidenced by the variety of Hobo survival tips (such as making a laundry bag) that you now post. We would be surprised if you had a cent.

I jest, because you actually sound like a survivor who is keeping good humor about a temporarily down situation.