patrick.net

Of course they don't care about your kids.

Bap33 Says:
January 24th, 2008 at 4:50 pm
"a lanlord license - $500 per unit, per year.
a rental tax - 10% of total rental GROSS income
each county / city will designate “rental districts” that will be levied a tax to off-set the high cost of police and other public services (grafitti removal for example) that come from rental areas - $2 per square foot, per year.
All SFH’s built in the last 5 years, and going foreward from hence MUST be OWNER OCCUPIED for the first 10 years of occupation. Period. "

Great ideas, they are very easy to pass on to the renters. I'm all for that.

"I like my ideas because nobody has to fund the game that is not involved. Let the rich pay-2-play."

I like them too, they make barriers to entry difficult for my competitors and then I just recoup from the tenants.

OO you are correct, the "band gap" between the rich and everyone else in the US is widening rapidly. And the "band gap" between say, working-poor and lower-middle-class is widening at least as fast.

It really is becoming a matter of become rich if you CAN or stop beating yourself up working so hard and become a happy bum.

People who can save for a downpayment and want to remain in an area should buy houses. Everyone else should continue to rent.

If the the gov sponsored cheap credit and emphasis on "everyone should own" did not occur, both the costs of renting and the cost of buying would be lower. People would still be loathe to spend more than one third of take home on straight housing costs.

each county / city will designate “rental districts” that will be levied a tax to off-set the high cost of police and other public services

I distinctly bought my rental SFHs in predominantly "ownership" areas, so I guess I would miss paying the levy. Also, no SFH area is completely rental, so those who are owner/occupiers in such a "rental" SFH area would get hit.

Just scrap Section 8!

Just scrap Section 8!

Agreed.

I hate fake compassion anyway. Let's all agree that self-interest is the driving force of humanity.

But I really do not understand liberalism. :(

It is pointless to debate the merits of any proposal to lower housing prices. No politician that wishes to be re-elected would ever dare utter such a desire in public. Thet'd be better off getting caught in a public restroom with Larry Craig, Britney Spears, and a bag of crack.

As a practical matter, lowering housing prices is easy: stop the enormous volume of subsidies and taxpayer risk underwriting (GSEs, FHA loans, MID, 1031, 24-month club, etc.) and let Mr. Market do his thing.

Preventing a NEW housing bubble from forming in the future is also easy: ban stated-income, $0-down, I/O and neg-am loans altogether. Basically, reinstate Glass-Steagal. Oh, and don't allow the Fed to push short rates below general inflation, or do something even more stupid and reckless, like instituting ZIRP a'la Japan.

Too bad housing prices isn't a practical matter --it's a political matter.

There is another nice article by Jon Markman on MSN Investor site. Some time ago he wrote about the whole CDO/CDS mess based on his talk with Satyajit Das. This is also based on his talks with the same person. Highly recommended.

HARM, are you in the Bay Area already?

But I really do not understand liberalism

Compassion overcome by greed. If I see a person I think is needy, I can use my personal resouces to help. But if I do not want to share, I can claim compassion by voting for people who will promise tax money to help.

HARM & family are now in the Mighty Bay Area. We are homeless renters living in temporary housing. Does anyone in the East Bay have a refrigerator box they can lend us?

Why do people even want to have compassion? Do they sleep better at night? Why don't they get a white-noise generator instead?

Blog party?

As soon as the HARM family has secured adequate rental accommodations, such as aforementioned refrigerator box, or a nice, toasty freeway underpass, then yes, a Blog Party sounds like a plan.

HARM :

Welcome to Bay Area. May you buy a home using the stock options and start your unstoppable journey on the road to limitless wealth.

Thanks, SIBA! I feel richer already --just being near Google, Yahoo, Apple, etc. However, I'm not close enough to Marin & the Marina to get a full dose of smug. We'll chat later --gotta go put another nickel in the meter so my "house" doesn't get towed away.

HARM - just look alongside the 101 just south of Mathilda. Look for the Silicon Way Inn. Then go next door, to the place that's owned by the same family of chindians and a few bux a night cheaper. It'll be about $40 a night and they really won't care how big a family you cram in there. Turn the TV up so the endless drug deals at night don't bother you. I spent a week there when I first arrived in Silly-Con Valley and it was a good intro to BA culture. Oh, the ppl running it are really nice (white family who are doing pretty well getting to clean rooms, that's a good job for white folks) but the guy manning the desk drinks and gets MEAN at night so just shrug off anything nasty he says to you when the sun's down - all will be forgiven and it will be peaches'n'cream in the morning.

Congrats on your move - suckers.

PeeterPee 'n' Headset - I knew someone on Section 8, she had a huge apartment for which she paid about $350 a month, ok so far as that goes, but then she turned around and spent another $350 a month on storage for a bunch of..... utterly useless shit. I mean, that stuff was not worth dollar one. So, she was still shelling out $700 a month, and probably could have rented something OK for that. Plus her place was full of junk, there's such thing as having TOO MUCH room I think!

Guess I'm just bitching because with my WASP last name I'll never get Sec. 8 even if I might need it sometime.

Welcome HARM!

Welcome HARM to the mighty Bay Area, please get yourself acclimatised to the price tag.

Oops, I just realized that the conforming for the Bay Area could be $729K, because we are "high cost" area.

It looks like the US government is very determined to make our median home price as close to $1M as possible.

What shall we do now? Shall we join the dark side, go out and borrow as much as can? Idiots have hijacked America, let's join the idiots.

Looks like 20 days of recession are over. Happy days are here again. I will continue to rent for the rest of my life, while my interest only buddies keep refinancing their 800k condos.

I feel like crap for moving my 401k etc. to money market/treasuries. What madness!

Also, why don't they mail prepaid VISA cards instead of checks? That way people will not risk saving the money and will spend it for sure. Heck, a $1600 Walleymart gift card would rock.

625k is still insane conforming limit. 7 years ago it was 220k!

Median price in CA tracks the conforming limit loosely. But now that prices are going down they have too goose the limit up to keep housing growing to sky.

So long term what is the effect of 625k jumbo limit? everyone in the world will 'fix their credit' temporarily to qualify for a conforming loan. Then FNMA and FREDDIE will be stuck with 'a paper' with sky high defaults. But thats 2 years from now, who cares right?

While we are making pointless suggestions to modify the tax code to fit our own self interest I propose LOWERING the conforming limit to 200K. And it never ever ever goes up from there.

HelloKitty,

you can move to France now, I misread it, we are most likely going to have $729K as conforming limit.

Might as well move to France. If im gonna rent 4evar paris sounds nice.

Im basing that on the vegs casino verson of paris - how different could the REAL city be?!

729?!?! Why doesnt the gubbermint just underwrite the loans too, I should be able to go direct to FNMA and not pay all those fees to CFC and Wells...no one is proposing THAT. Again only losses get shoved to taxpayer.

There's a place in France
Where the ladies wear no pants
And the men don't care
'Cause they like to see them bare...

People ....

Increasing the limit is one thing, but the real problem is QUALIFYING.

Common, the conforming part only reduces the interest rate. That is not the problem why people cannot refinance to avoid foreclosure. The real reason is they cannot qualify due to tighter requirements.

This will definitely help people with solid credit, who have saved large down payment and are WILLING to buy at these prices in this changed world. Yes, it will help all 7 of them.

It will definitely fool BA sellers into thinking that they can now get their wishing price and give a false sense of hope for a while.

Most likely the lenders will find some way to off-load their unwanted toxic junk on to Fannie Mae. Not sure how true that speculation is. We will know soon.

Start worrying when the agencies relax the qualifying criteria. It is very much within the realm of possibility.

@Randy H, Bap33, OO, Peter P, SIBA, etc...

Thanks! I'll be in touch soon, once we're a little more settled.

It looks like the US government is very determined to make our median home price as close to $1M as possible.

What shall we do now? Shall we join the dark side, go out and borrow as much as can? Idiots have hijacked America, let’s join the idiots.

Honestly, at the rate the R&S bailouts are coming (and growing in scale/magnitude), I'm starting to wonder why I'm *still* solvent and responsible. I know it's really all about bailing out the banksters, not Joe Homedebtor, but there are times when I feel like saying "F**k it --let's go out and get Mr. & Mrs. HARM the biggest McCrapshack we can find with a $0-down NINJA-ARM --while we still can!"

The people that predict BK for FNMA and freddie will be glad to see the conforming loan limit rise- this increases chance of huge losses for them. Even if the 'genuises' and FNMA can see thru the crap loans CFC will refi in conforming and deny them.....in declining housing market Prime borrowers default in high rates too....and declining market with recession and job loss? 5% down payment doesnt give you any security- they should only take 25% down payment loans/75% max LTV.

But we all know conforming loan standards will be eased and ez to lube your way into the rear of. Hopefully not.

But we all know conforming loan standards will be eased and ez to lube your way into the rear of. Hopefully not.

Xactly. Everyone who keeps insisting that 'There Will Be No Bailout' (including, strangely, Ben Jones) forgets that the same asshats who are jacking up the conforming loan limits can *also* change the rules re: borrower qualifications at will.

FHA/GSE underwritten neg-am $0-down NINJAs? Not impossible.

HARM, welcome. What are you doing in South Bay, do you have a job there?

People, you're forgetting a few things. Not only are there not that many potential buyers who will qualify for conforming loans at higher limits (as SIBA said), but there's another huge factor this BAILOUT doesn't address. Most of the forced selling, foreclosures, and the like are occuring before ARMs have even reset. These sellers who are creating downward price pressure on homes will not be helped one bit by the government's cockamanie proposal. And on top of that, say the government were stupid enough to "encourage" looser lending standards ala 2000-2005. What bank will be willing to take on yet more toxic mortgage crap after all these writedowns? They'll still be busy trying to pawn off the crap they already have on their books to FNM and FRE. Finally, say FNM and FRE are mandated to accept looser lending standards - in the short term, this will grease the mortgage market, but given how near-insolvent FNM and FRE already are, taking on this extra crap will likely be the final push that puts the GSEs into complete insolvency once it all blows up on them.

In some sick way, I'd love to see that, just to see what our brainiac leaders come up with to deal with it.

and HARM, Welcome to the Bay Area. Be sure to stop by your local government office to pick up your standard-issue Prius, iphone, bluetooth headset, "Keep Tahoe Blue" bumper sticker, and NIMBY attitude.

@HARM, Welcome and ditto what skibum said at 12:43.

Mercury in SF Bay is a problem, for real. The New Almaden mine near what's now San Jose was one of the top producers in the world:

http://en.wikipedia.org/wiki/Almaden_Valley,_San_Jose,_California

coretexity,

Yes, the payday and nigh on a week recession certainly was harrowing wasn't it? I agree, the prepaid VISA cards would be a stroke of genius!

But the increase in the GSE limit _will_ gum up price declines in the Bay Area. Mark my words. This is for both fundamental and psychological reasons:

* It gives wait-it-out sellers hope for a quicker, stronger rebound and further reduces inventories and/or prolongs wishing-price listings within that price-band. I'm not talking about the sub-$1mm homes for sale in working/middle class neighborhoods. Those are doomed to chase down the market. I'm talking about the upper-ish neighborhoods of +$1mm homeowners, a lot of which can hold out for many months or longer (by hook or by crook).

* It gives agents something to sell. Agents love Fed rate cuts, government bailouts and things like GSE limits not so much because they really have a direct effect, but because they give them something to sell. And agents have a shitload to sell all the sudden. Almost enough to whip up a little bit of buyer-fear in certain quarters. I've already heard from 1 agent we talked to a while back, who called yesterday evening with a "you know, now's your chance; better jump on it before it's too late and prices come back this spring!"

Don't be surprised if we start hearing about isolated bounces in prime areas. I expect said bounce to last only a few weeks, but we'll get a rush of postings here resuming the ridiculing and sneering at us "bubbleheads". You know, "ha ha, you ''loosers''* are still renting and paying for your landlords mortgages, and we're still all getting rich!".

* this time [SIC] ala Casey