patrick.net

I heard today that the market was flat because people are waiting to see who has loaned money to the people who are now bailing out of the subprime loan industry. Apparently there was a lot of money lent to those folk from unexpected places.

GC,
San Francisco has several good museums. The Legion of Honor has good European art, Monets, etc. The De Young is in a really amazing new Herzog and DeMeuron building and has some very interesting new collections, including an amazing Papua New Guinea collection. The Asian Museum and the Museum of Modern Art are also quite good.

We will soon have an absolutely astounding natural history museum. The new California Academy of Sciences will open spring 2008 in an amazing Renzo Piano building.

The British Museum is wonderful. It is one of those amazing, enormous museums with something for everyone. They have enclosed the courtyard and opened the reading room up to be part of the museum (it was private to scholars when I was in grad school). It is worth a trip to see.

If you don't like the Met or Louvre type museums the British might be overwhelming for you, though.

Hot off the presses:

Countrywide Financial ends no down-payment lending

I am still not buying the argument that has often been made here that BA housing prices are strong and will remain strong. Statistics never tells the complete story.

I am not the only one. Here is a supporting view.

Here is Realty Times
http://realtytimes.com/rtcpages/20070309_lowervalues.htm

Calhoun says the month-to-month price jump likely doesn't signal the flat and falling prices trend is changing.

"There's a huge geographical diversity in how fast properties are selling. The expensive geographic areas are making up a large percentage of sales and they are selling with multiple offers. Other areas are having price depreciations. It shows you the market is not in equilibrium," Calhoun added.

It is physically impossible for Bay Aryan house prices to go down. Just look at the typical BA first-time buyer:

Countrywide Financial ends no down-payment lending

I can see some anal-ist pulling this out ...

"We are encouraged by the steps taken by CFC to reduce risks in the face of rising uncertainties. Our model indicates that this move will lend a good support to the bottom line on a going forward basis. We reiterate our buy rating. CFC continues to be our top pick in the mortgage industry."

(Then turns around and whispers ... "Mr. Mozilo, you can now proceed to place your sell order with us.")

EBguy, sorry ’bout that. I was referring to the irrationally exuberant graph…
A copy of which I carry around in my wallet...

Very interesting.

Debt is like using drugs – useful and constructive if used properly. But destructive if abused. Addictive and pleasurable while using - and painful or deadly in withdrawal or overdose.

ROFLMAO!!! The current banner ad is:

Mortgages at Countrywide
Fast Home Refi, Good Credit or Not.
Countrywide 4 out of 5 approved!

What poetic irony! The keywords in this thread have summoned the very sleazy demon we've been bashing for days! And here it is, touting its incredibly low lending standards for all to see...

Astrid,

I took a cruise to Alaska on the inside passage... in fact, I asked my wife to marry me on that cruise. Maybe that biases me in favor of it, but I highly recommend it. Did I mention bacon at every meal plus all you can eat lobster night? ZING!

Miami-based Related, the nation's largest condo developer, has trotted out a rebranded "affordable housing division," to build condos for buyers priced out of the market.

The firm has presold 497 of 500 loft condos in a planned downtown Miami high-rise. They're priced from $159,000, about half the median price of existing condos. That's a fraction of the price of many new condos, which often now go unsold.

Related expects to make a return of around 15%. That's about half what its luxury units typically fetch, but the company's not complaining.

"You make less money, but the demand for this type of housing is so great that the volume you can do justifies the concession on the returns," said Oscar Rodriguez, senior vice president of Related's affordable housing division.

http://biz.yahoo.com/ibd/070301/realestate.html?.v=1&.pf=real-estate

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

Sad. We need more funding in breast cancer research

dear peter,
check this website out
www.komensacramento.org.

They are doing a fund raising for breast cancer.

OT, but perhaps interesting to credit market watchers...

On Friday China's Finance Minister Jin Renqing announced the formation of an agency similar to Singapore's Temasek Holdings to invest his country's currency reserves. Last year Renqing indicated his ministry would seek to diversify its holdings which have to date been concentrated in ultra-conservative assets.

Our print and broadcast media brushed off Renqing's 2006 comments as a move to preempt protectionist sentiment here but, while they may have been useful in that regard, yesterday's statement makes clear China's intention to take on the role of global investor.

China is a major purchaser of US Treasury bonds and other government securities both here and abroad, and its investments have tended to hold intrerest rates down in recent years. The country's reserves comprise some $1 trillion, and are rising at an estimated $20 billion each month.

It will be interesting to see China participate in the ownership of foreign holdings in addition to its long-held policy of extending credit to its export markets.

While regulation is bad in Theory, I know of other theories that work on paper, but not in practice. Communism is the best thing since sliced bread if you ever read the pamplet:) Govermnet regulation should be minimized, but they should also protect the money supply from the poison we now see. Protecting the value of our money should be the first priority for the Federal Reserve. They should be regulating the money supply.

I am a strong proponent for making a 20% downpayment mandatory for all home loans. For the longest time you were required to have 50% of your money in the pot if you traded on margin in the equities. 20% down is not unreasonable to require if people want to play with other people's money in the home markets. Leverage is a bitch only if you have something to lose, I expect many $0 down people will simply walk away from their mistake and never pay $1 back to the bank that is forced to eat it.

I am wondering if/when the derivatives markets that are intangled in the stock market will be the next smoldering hole in our economy. Buffet is a smart man and he is very afraid of the derivatives.

Space Ace Says:
Miami-based Related, the nation’s largest condo developer, has trotted out a rebranded “affordable housing division,” to build condos for buyers priced out of the market.

Very interesting. How do they do that, given they have to purchase land or a building at inflated prices first? Building affordable housing isn't as easy as just building and selling for less -- unless you achieve it with smaller floorplates...

astrid Says:
PS - Anyone here (other than GOOG employees, you know who you are) played around with Google’s new custom search? I would love to build a patrick.net housing bubble metasearch…if you guys are willing to help…

can't patrick just embed some HTML code from GOOG somewhere on the home page?

PAR, it is tough to be an unloved troll. Without any attention they shrivel up into tiny little yapping dogs. And as we all know, most dogs less than 24" make a lot of noise, but generally don't have a point.

I think he's actually trying to get back on board with the theme of the blog, though. We do complain a lot about over-leveraged boomers in McMansions. :)

Is it complaining about? Or laughing at? I think we may be switching from one to the other.

PAR, it is tough to be an unloved troll.

Is there a loved troll?

I do miss MarinaPrime, aka The Troll. :)

Sometimes trolls are witty. Perhaps those trolls are not loved, but they are not entirely hated either. Their entertaining posts offer a small redeeming quality.

From Yahoo! Finance article "Debating Standards for Mortgage Lenders" by Ruth Simon on March 1, 2007 (http://tinyurl.com/2y8yhr):

Some 2.51% of mortgages were delinquent in the fourth quarter, the highest level since early 2002, according to Equifax Inc. and Moody's Economy.com Inc.

This little factoid escaped me earlier. 2.51% of mortgages were delinquent in 4Q06? How is that even possible? I would expect a much higher foreclosure rate across the nation given that number. Does the delinquent payment number not really correlate well with actual defaults and foreclosures?

Did anyone catch last week’s announcement by Freddie Mac that they would no longer buy loans where there is a “high likelihood” that borrowers cannot meet their monthly payments and which are “highly vulnerable to foreclosure.” Is'nt that tantamount to an admission that Freddie Mac formerly bought loans knowing full well that they would likely end in default?!

http://www.freddiemac.com/news/archives/corporate/2007/20070227_subprimelending.html

"McLean, VA – Freddie Mac (NYSE: FRE) today announced that it will cease buying subprime mortgages that have a high likelihood of excessive payment shock and possible foreclosure. First, Freddie Mac will only buy subprime adjustable-rate mortgages (ARMs) – and mortgage-related securities backed by these subprime loans – that qualify borrowers at the fully-indexed and fully-amortizing rate."

Perhaps they knew full well that the loans were very risky. More likely, Freddie Mac just dispensed with the proper oversight. When so much cash is sloshing around, it's easy to get reckless within a huge organization.

A common meme of this board is that as housing prices keep going up, employers will seek to move to other places to get lower operating costs.

Well, check out what facebook is doing:

http://www.nytimes.com/2007/03/10/technology/10google.html?ei=5070&em=&en=750fa2a750111af9&ex=1173675600&pagewanted=all

Instead of making it easier for employees to live far from work, Facebook, the social networking site, makes it easier for them to live nearby: it offers a $600 monthly housing subsidy for those who live within a mile of the company’s Palo Alto headquarters.

Instead of trying to reduce their costs, they've recognized the importance of people living nearby. $7200 a year - pretty good perk!

Really? “It will be terrible” to deny you a 100% after you’ve been unemployed twice recently? Will it really be so “terrible” for your to rent for a bit, fix your f*cking credit by paying your bills, and potentially save you from foreclosure by having you save up a freaking downpayment?

Not necessarily. If he can afford it, he can afford it. Short periods of unemployment are sometimes out of people's control. I don't see why the risk management processes of the bank, heavily loaded in their favour, should dictate whether someone can own their own home or not. Credit scores are a pretty robotic and punishing system which don't make much allowance for circumstances such as these. Of course, if he's immediately underwater on his mortgage payments and starts to fall behind, that's a different story...

2.51% of mortgages were delinquent in 4Q06?

Also, they may catch up on their payments. Falling behind in even 1 payment may set the delinquency flag, possibly even due to errors such as delays in processing or submitting payments... So it could be a somewhat bloated statistic...

"Well, check out what facebook is doing..."

I would venture a guess that that $7200 is coming out of their employee's compensation in one form or another.

They only give it to people who live within a mile of their campus. Guess who gets the call when something goes wrong at 2 in the morning?

astrid asks:

> Why isn’t Robert Novak in prison?

Then SFWoman Says:

> Must be that famous liberal media protecting him.

The “press” (both right and left) tends to “protect it’s own”, but I don’t get why it is not a bigger deal to print a “government secret” (or confidential grand jury testimony) on the front page of a paper than it is to tell secret information to a reporter.

> But no, the ‘liberal’ media has given us such great,
> investigative reporting on the death of Anna Nicole
> Smith and Brittany Spears haircuts.

The “conservative” Examiner now has an “American Idol” section.

> Guiliani is toast, there’s no way the Christian right
> will back this man.

The far left is no fan of Hillary, but most will still vote for her. I predict that Guiliani would win all 50 states in the biggest landslide in modern history if he went up against Hillary (or Obama) next month…

New Yorkers will tell you that Guiliani is a corrupt showboat. I would much rather vote for Bloomberg. (Actually I would be very happy with a president Bloomberg).

theotherside Says:

> Another look at what it will take to push a family
> making a haha who bought WAY too much home
> in 2004 into foreclosure

> 1- Household making 1 HaHa ($160,000), with a 30% tax rate.
> $160,000 * 0.7 (Tax) / 12 = $9,330 (net monthly take home)

You forgot State Taxes, Social Security and other deductions take home pay (without any deductions) will be closer to $8,500.

> Assuming a 30year Fixed @ 7% (APR) in 2007 when
> they refinance (a bit high due to credit crunch!!!),
> New housing costs = $6,590 * 0.7 (Tax) = $4,613 or about
> 51% of they take home.

In the Realtor world “Housing Cost = Mortgage Payment”. In addition to the mortgage payment the person (with the $990K mortgage) will also have a tax bill of about $1,000 a month and other housing expenses (including insurance of $500 a month).

Without the tax deduction cash available after ALL housing cost would be about $400 per month, but after the tax deduction (on just the interest and taxes) you will have almost $2,500 a month left over to live it up…

Giuliani did WTC...

Cody Red, where exactly are you living that such danger has arisen from a few subprime lenders going bust? Most hoodlums couldn't even spell subprime, let alone grasp its economic significance.

Although I admit, I am highly amused at the thought of speculator hotspots in Florida turning into some sort of gangland of snowbirds riding Harleys and firing shotgun blasts into empty retirement McMansions...

Gimme mah false teef, ya young uns! Chik-chik-BOOM!

Is this the same train of thought where we later conclude we should go to Buffalo, NY because the bone-aching cold makes it safer?

Anybody want to mix it up on a realtor's blog? She's writing about how much higher net worth you'll achieve being a homeowner rather than a renter. I know some have all the data and facts....anyway, here's the link:

http://activerain.com/blogsview/55466/Homes-Not-just-a

Brand,

http://en.wikipedia.org/wiki/United_States_cities_by_crime_rate

"Giuliani did WTC…"

Huh? Did you mean he built it? Financed it? Torched it? *Did* a la Debbie Does Dallas???

Anybody want to mix it up on a realtor’s blog? She’s writing about how much higher net worth you’ll achieve being a homeowner rather than a renter. I know some have all the data and facts….anyway, here’s the link:

http://activerain.com/blogsview/55466/Homes-Not-just-a

Every single post on that blog was bullish towards real estate; I just had to add some negativity :evil: I wonder if she'll remove it like I've seen other realtors do.

We should mellow out and be less hostile...through the magic of diminished expectations.

Say we expected to live our lives as impoverished Russian serfs...that way every morning we wake up to something better than moldy potatoes and back breaking work of manure picking would be a good day.

Diminishing my expectations is un-American. :)

I have often wondered how few possessions I could really get away with. I figure it's about two packframes worth, excluding furniture.

The FB recruiter kit

The mortgage business is not only booming, but it's one of the few industries [such as realtors] that doesn't require a college degree to make lots of money. In fact, as a mortgage originator , the only limit to income potential is your [willingness to put innocent sheeple into dangerous loans with your] own effort and ability. But how can you break into this lucrative business? The Mortgage Originator Success Kit is a one-of-a-kind resource dedicated to helping you make the leap into an exciting career in the mortgage business. This comprehensive resource gets you started with expert advice on [how to trick buyers into signing up for toxic loans which make you more money than traditional loans in] virtually every aspect of the business.

[emphasis] by Allah