patrick.net

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.

Allah, I left a post on that website also. That lady is a lunatic.

About Countrywide, from a comment posted at Calculated Risk:

"New Countrywide rate sheet out, I still see 100% financing, it just jumped up a lot in one week. 100% 1 loan increased 650bp-1100bp depending on score, 80/20 increased 1350bp on the 80.

"The other loans increased 250-300bp-ish.

"I wonder where the news got the 'no 100% financing' story"

Cal | 03.10.07 - 6:20am | #

Malcolm,

I agree that crime rate will definitely go up during a recession/depression.

BUT I'm far less convinced that currently nice parts of the SW and FL will turn into unlivable gangland during said recession/depression.

AND I'm completely unconvinced that the frigid winters of Upper State New York would protect me from violent gangs of brown people. ESPECIALLY if the recession does cause currently nice parts of the SW and FL to turn into unlivable gangland.

In 2005, Buffalo has a higher crime rate than any large-ish SW or FL city. Detroit and Baltimore, two cities not particularly inundated by Spanish speaking immigrants, have the highest crime rates in the country.

Perhaps I would feel differently if I watched the local 11 o clock news every night...

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

Well yes, actually. The secret to happiness is decreased expectations. You must not be Buddhist, or you would already know that.

I think America is going to have to learn to live with a lot of decreased expectations in the next few decades, as we have to learn to share the world's resources with the 1.1B Indians and the 1.3B Chinese. There is going to be a lot of populist, Michael Savage-type backlash, like from our most recent troll, but we will muddle through somehow.

Oh, welcome back Zephyr. Haven't seen you in a while (though I have been pretty busy myself, so I may have missed you).

Jimbo,

The Buddhist *high church* believes in no desire and embracing all experiences as karma. The Buddhist *low church* asks Buddha for special favorites and use their faith as a crutch through life. I don't think I've ever met a lay Chinese Buddhist who actually grasps the concept of nirvana.

http://www.mercurynews.com/ci_5411822

"The harsh side of the housing boom"

http://www.nytimes.com/2007/03/11/business/11mortgage.html?_r=1&hp&oref=slogin

Who will be left to buy nasty little $800,000 houses in dangerous SF neighborhoods with the subprime lenders scaling back?

I'll throw in my political two cents: I feel that Hillary Clinton is a pro-choice neocon. She was right alongside the neocons calling for this war when it was politically expedient to do so, and now she wants it both ways. She won't admit her war vote was a mistake, but she also wants the pro-choice progressive women's vote.
She is a war-hawk in sheep's clothing.

spike66 Says:

> Guiliani win in all 50 states…never happen.
> No New Yorker would vote for that jerk.

I’m no fan of Guiliani, but I still think that he would beat Hillary or Obama. We may be ready for a woman or black president here in San Francisco, but most of America will not pull the lever to vote for a “lady” or a “colored guy”. I forget the exact number but on the national news last week they were talking about a big survey where most women would rather work for a male boss. I had an interesting conversation about racism with a business school classmate who grew up in Mississippi. He said that there is less racism in big cities since most people in big cities know at least a few smart hard working blacks. Since smart hard working blacks get out of rural America as soon as they can most Americans have never met a smart college educated black guy.

> Of course, if you want a prez who is utterly reckless
> with spending, prefers cronyism to competence, and
> is of course utterly hypocritical

Sounds like our current prez…

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

Can you name anyone currently running for president that sounds like that?

I don’t think I’ve ever met a lay Chinese Buddhist who actually grasps the concept of nirvana.

Does nirvana involve a Lexus? :)

I am all for a life of minimal possessions, so long as I can have books.

astrid, at one point I was listening to Jim Cramer's podcast daily. I know, I know, most people here hate him. But if you can get past the ridiculous antics, the guy has some intelligent observations. He stopped that podcast now.

On my current list are Coffee Break Spanish and LearnItalianPod.com. The former is a little slow and the latter a little hokey, but they are useful (mostly as a refresher). I've tried Nature, but their podcast doesn't really lend itself well to words.

Brand,

I don't think those Lexus driving people are practicing Buddism. What do you think?

Just recently, Paulson assured foreign investors that US assets were safe and would not crash.

Yet more and more subprime lenders are falling by the wayside because they did not hedge their risks. Instead, they sought after and leveraged risk with no regard for the potential consequences. And they made a lot of money doing so. But few things last forever.

Hedge funds have also been making a lot of money. And they have been doing it the same way as those subprime lenders... chasing risk with no conscience. That's because they had to attain those lofty yields and justify the hefty expenses.

Paulson could be right. But I just wonder who owns all that debt in the subprime area or the $2.5 trillion worth of equity value that disappeared last week. If Paulson were wrong, would anyone care to guess where the crash will manifest itself next. You have probably guessed my suspicions.

Re: Violence & Crime

My only point in starting this is that the AOL article talked about how crime had fallen to very low levels from the early 2000's and was spiking significantly in 2006. It was funnily enough going up in all the bubbliest areas. The other interesting crimes to consider that are literally out of control are identity theft and credit card/mortgage fraud

I didn't imply that nice areas are turning into ganglands, but changes are happenng, There are some very nice areas that are now overgrown ghost towns. Some of Patrick's news links talk about neighborhoods with 200+ vacant homes. I should send a pic of the half completed project across the street from my neighborhood still with the sign up saying 22 beautiful homes coming in 2006! Construction has basically stopped and the only people around there are the sign twirlers on weekends. Speaking of which, they are getting older and older. It used to just be a fun job for a few young hip kids, now I see guys my age and older doing it.

A huge percentage of the guys stung by the subprime meltdown are minorities like Mr. G, but the largest $ crimes are by whites. These people make me sick, and are an embarrassment. Ever since it came out, I have told people to go see "Fun with Dick and Jane". That type of stuff is what I predict will happen. A bunch of overextended FBs who can't live anymore when they don't have their silly Yukons & Escalades, and have no more credit cards to wave in their waiters' faces.

Like everyone else, I'm enjoying this equalizing paradigm shift, but I have a real concern for what happens to these kinds of peole when they lose everything.

sybrib says: I don’t think those Lexus driving people are practicing Buddism. What do you think?

I think most people in California struggle with sarcasm. I'd love to chat about that more, but I'm off to meditate about a McMansion in gangland. ;)

Malcom: Speaking of pathetic sign-twirlers, there are a few middle aged guys that walk the streets here dressed as the Statue of Liberty, waving a sign for Liberty Tax Service. Like I would entrust my finances to a bunch of dorks in costumes.

I doubt that most FB's would turn to criminal activity in high-cost areas. The people who bought those homes have no idea how to rob anyone. However, I would expect to see a spike in white collar crime--embezzlement, tax fraud, office theft, insider trading--as those middle class folks try to save themselves from a foreclosure.

I don’t think those Lexus driving people are practicing Buddism. What do you think?

But even Ford's new CEO said that Lexus is "the finest car in the world."

What is wrong with driving a Lexus?

Didn't say there's anything wrong with driving a Lexus. DIdn't say there was anything right with practicing Buddism.

Driving a premium car CAN be a fashion statement.

Kind of like, non-Christian Chinese buying a "traditional Christian wedding" from a willing pastor. Lifelong resident of the Bay Area, I've been invited to a few of these.

A "wonderful" article on Yahoo! about neighborhoods that are great buys. Their algorithm was to take the places where the median house had experienced the greatest gains in the last 5 years. What's that word that goes with savant? Because these "journalists" are definitely savants of some kind...

http://tinyurl.com/2bwmz3

fremontrenter Says:

> Guys, I am currently a renter in CA. So I have to pay
> after tax money to landlord every month. I claim standard
> deduction on my tax return, but still have to pay AMT.
> I was wondring if buying a ($780K) house (with a $130K down
> payment) would solve both of these problems.

Fremont Renter needs to talk to a CPA since if he has $130K in cash and is making enough to even think about buying a $780K home he should not be taking the standard deduction. The California taxes will be more than the standard deduction at just over $75K a year in income (about $70K salary + the 1099 interest on the $130K). I’m not a CPA, but I didn’t think it was possible to take the standard deduction “and” pay the AMT…

Does nirvana involve a Lexus?

not usually. Enlightened Buddhists are supposed to practise 'the middle way', just like Tony Blair... The middle way would probably be a Camry, then...

(Buying a Camry would probably prove you have renounced all desires...)