patrick.net

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

10. Eat ramen with caviar.

I think I'll have some of Astrid's Black Forest cake instead.

Great comment about debt, Zephyr.

To my shame, I am a terrible cake baker. I haven't advanced beyond out-of-box cakes. My last attempt was so horrible that I was actually ashamed to throw it away, until the fungi forced my hand. (Hopefully it gets better once I get a mixer and some cake flour).

I would highly recommend adding about 2 oz of Microplane grated parmesan cheese to a bread recipe. Bake on a pizza stone for a really amazing bottom crust and very tender crumb.

PAR,

If foreclosures continue to rise at 14% per month, how long before every house in CA is in foreclosure? My mental arithmetic has it at about 4 years. :D

Astrid,

A (very tasty :)) fruit cake is incredibly easy to bake, either as a full cake or as individual serves, because it is not so sensitive to the degree of rise.

(The term for the individual serves in UK/Oz is Rock Cakes; I don't know how that translates into US-ese.)

Apart from breakfast stuff, it's the first thing my mum had me cook by myself when I was about 8.

An evil thought which probably applies more to a state like Texas than California.

Would it ever, from a purely financial perspective, be worth a state's while to subsidise a refi so the tax base stays up?

I'm thinking something along the lines of offering an OJF (Only Just FB) a I/O refi at 5% or so to get them out of the Reset From Hell (tm). The logic would be that the OJF would refi again when things got 'back to normal', and in the meantime the government would be collecting more in interest AND property taxes than the cost of the loan.

ajh,

I checked out a rock cake recipe and it sounds very similar to scones. I have heard of it a few times before, so I assume they are also Rock Cakes in US-ese. :)

Curse the world of carb filled world of interesting recipes! I'll never start on my Atkins diet.

"Me, I am hoping for reasonably intelligent candidate with fiscal responsibility and no appetite for militaristic adventurism."

Me too. A Bloomberg-Gore unity ticket would a welcome wake up call from our current national nightmare.

Astrid,

Bit more fruit and shortening than scones.

It just occurred to me that these days most people would probably bake the individual serves as muffins.

(ajh returns to the computer, coffee and muffin in hand.)

astrid, I did Atkins in college. Lost 25 lbs. And then once I started eating normal food again, it all came back, plus another 5-10. Plus I was constantly fatigued, probably due to low blood sugar. Unless you relish the thought of eating nothing but bacon, eggs and steak for the rest of your life, try exercise. People underestimate simple walking; I listen to podcasts and music on my evening stolls.

(astrid drinking her 7th mug of tea for the day and munching on prosciutto. Checking in between research olive oil and the death of Captain America.)

Brand,

Any (free) podcast recommendation? Right now my que is limited to Le Show (Harry Shearer).

I posted in that real estate lady's blog. Here is the post, in case she deletes it :

As somebody in the business, can you REALLY suggest buying in after one of the largest run ups in history? If you've already bought in the recent (2-3 years) history, hang on for all you're worth. In the long run it DOES work out. But for new buyers, it makes no sense. My wife and I have been looking at new homes, and it would cost us 20% down plus twice what we pay in rent. Historically, housing prices rise at the rate of inflation (yes, even on the coasts) and so even if you buy into the idea that housing WON'T go down where you live, it still has to cost less to rent than to buy to make sense putting 20% down given that you can do better than current inflation rates with short term CDs. My wife and I are 30 and 32, worth a collective 400K in assets, and wouldn't buy a house if you held a gun to our heads in the current market. Median and average house prices are 6-9 times media and average incomes in the bay area (california). Historically in 'expensive' markets, it's 3.5-4 times median and average incomes. Ergo, it's a bubble. People bought into the hype when interest rates dropped, and ARMS and relaxed lending standards let people who had no business committing to a debt 6-10 times their salary buy in with the idea that when they couldn't repay, they could still sell for a profit. Well... that time is over. It's not going to work anymore. My wife and I will continue to horde our cash until the inevitable crash occurs, and THEN will buy when prices are closer to a more maintainable level. We make almost twice the median income in some of the best 'upper middle class' areas, and yet even with a 20+% down payment can't buy a house without committing 50% of our income to mortages, yet IN THE VERY SAME AREA we can RENT an a Single Family House for 25% of our income? It makes exactly zero sense to buy now. Those 'net worths' you are quoting exist SOLELY from inflated housing prices, and when they refuse to rise, or even sink over the next 5-10 years, you'll find that prudent renters will shellac buyers in today's market. Claiming otherwise shows a lack of economic sense. Spending 2 weeks learning to be a Realtor(R) not only in no way makes you qualified to give investment advice about buying a home, it in fact makes you LESS qualified, as you now have a stake in making people think "Now is a great time to buy or sell." If you suggested your potential customers do research on buying vs. renting, and laid out the costs and break even points, your article would hold merit. As it stands if you can't be sure you're going to be in a house for over 10 years, you're likely going to LOSE money if you're in a bubble market. Only people who are 1) VERY secure in their job, 2) VERY happy with the neighborhood, and 3) VERY happy with the house in particular should be buying right now. Over 50% of people move in less than 5 years, and now that the market has doubled in 5 years, when historically it ought to be up 3-5% a year (about 15-20% in five years) and sales have flattened across the nation, you're looking at 5-10 years of stagnation. It happened to Japan (including, if not EVEN WORSE in Tokyo), so it can happen to any market.

If you are very financially secure, and love the house and neighborhood, however, you can get the house you want now. Just make sure you have a good reason, and good foundation, before doing so and in 30 years you'll be as happy as those of us who waited 5 years to buy. If you're frantic because you feel you're going to get 'priced out forever', take a deep breath and ask youself, "Just who the heck is going to BUY these overpriced starter homes if _I_ can't?" If you're priced out of the market and you have 20% down, rest easy knowing the the current market insanity will collapse back to normal within 5-10 years at most, and buy then. If you DON'T have 20% down, DO NOT let people talk you into betting your entire life on real estate perpetually appreciating. Rent cheap, save for that 20% down, and buy when you know you can afford it, and that mortgage will let you sleep easy at night, not cause insomnia.

Brand Says:

March 10th, 2007 at 7:27 pm
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

Murders and violent crimes (mainly robberies) are rising. They are up 10% last year. The crime stats are mirroring housing performance. We had someone kill their realtor here in San Diego. It doesn't matter that these people can't spell subprime. They didn't read their loan docs in the first place, no one said they were bright. People are getting desperate, and some are picking up guns. I sent Patrick a link, and have been concerned about this for the last year or so. This is not unexpected, and it could get a lot worse.

Allah, thank you for sharing the link to the website about the realtor.

If we can help to influence even one potential "buyer" or "investor" to consider that buying now can be risky, well, we can make a difference one person at a time.

I've already done that by referring a relative to this Patrick website last year. He was pressured by his inlaws to be an "investor" in San Joaquin County in what sounded like a Ponzi scheme to me.

Thanks to the tuition-free education he received from Patrick's links, he got the gumption to stay out of his in-law's schemes. Maybe the messages we post on that realtor's blog will encourage people to be healthily skeptical.