patrick.net

OO

Thanks for the updates on the market. The last time you noticed the yen strengthening, I made some money on your observation.

Quick before it's gone.
Kevan Barlow (49ers running back?) is being foreclosed on in Santana Row in San Jose.
http://www.foreclosure.com/listingdetails.html?st=CA&ci=san%20jose&tab=p&cno=085&z=&listingid=9333120
He's a good kid so I feel bad for him.

How long do we wait until there is a celebrity foreclosure thread?

skibum

I'm still figuring that out. Actually, I've just been too busy lately to get things going. I had originally planned to move to a more open format, but I've rethought that since. I think a blog needs a core theme even if discussions tend to wander. This thread has caused me to think maybe the subject of tech entrepreneurship is in needing of some love.

Btw,
Howdy everyone! I've been reading here for years (since before there was a blog or news, just the housing crash page and maybe the rent calculator) and I posted very seldom. Er, um, exactly once before today.
But I've read what all of you have had to say for quite a long time now and I must say you guys made the waiting much more bearable.

Anyway, after the ups and downs of the long wait, doesn't it feel good now that we find ourselves on this side of inevitability?

My FB anecdote:

In 2004 my neighbor moves in next door with his family of 7 (!). He doesn't speak much English, but that's OK since I speak fluent Spanish (I went to univ. in Mexico). We get along fine, I hang out with the family, go to dinner every once in a while, etc.

In 2005 he moves to a house a short walk down the street. They mortgage it under his common law "wife"'s name. The new place costs around 600k.

First I should mention, that they're probably not prime credit material:
There were 7 people living in a 2/1 condo - my neighbor, his "wife", 2 kids and a rotating set of cousins of dubious legal status. They work in a cafeteria at a senior home (x2) and at a car wash (x2). I'd say he's low skilled but his BBQ Arrachera is fantastic so I won't.

Anyway, when he moves to the new place, they make a half ass attempt to sell the place next to mine for WAY over fair market value - I remember how bored that realtor was every sat+sun when there were no visitors at all. The first weekend he was there I was walking from my car and I could see his eyes get big when he saw me walk in his direction, until I walked right by him to my door. A few months later, no more realtor.

So fast forward to 2008. My former next-door neighbor's place is up for auction (trustee's sale), and probably reverted to the lender (I'll have to check when the data comes out). I really doubt he has been making payments for the last 3 years that the place has been vacant since he could barely afford the place when he was there, with 4 incomes combined, and they were paying on a new mortgage.

Last month he stopped by to get something out of the garage and I chatted with him. Guess what? They're asking the lender for permission to short sell the *new* house, which is in his "wife"'s name.

How many months of free rent will he get this time before the lender forces the sale?

It seems lenders have been incredibly reluctant over the last couple of years to take their lumps and force a sale, and that's why I believe the biggest wave of pain is coming up soon as lenders capitulate on distressed properties and REOs.

And I really don't mean to make this a racial thing - I'm just pointing out how insane the lenders were to lend him money and how much my neighbor gamed the system to his advantage.

Suck. It. Up!

Get your ("Want to fix the Housing Crisis?" Suck. It. Up!) bumper sticker at www.michellemalkin.com

Too funny! Evidently some of the readers lived on The Other Side of CleansingSphere!

I thought what makes the BBQ Arrachera story so funny is that even in 2005 there were people ALREADY gaming the system! Oh and that it sat vacant for THREE freakin' years! This is something of a nightmare for me as I'd worked off the assumption that all of the "flip, flop and FLY" routine was confined to the east coast BEFORE the subprime meltdown went MSM!

"Low-skilled"!? Pffftt. The guy's a virtuoso!

Flip

Flop

Fly... I don't care if I die...

Dear Senator and Presidential Candidate Hillary Clinton:

Please go away now.

If I hear you tell me how you're going to raise my taxes to "protect" all those innocent subprime borrowers one more time I think I'll need to check myself into an institution.

At this point, I'll vote for the craziest, looniest, cult-leadin-ist, morality hypocrit-ist whack-a-mole before you so long as s/he agrees to leave the free market alone.

Thank you for your understanding.

Randy H

Let's hope Hillary loses the primary.

Better yet, let's hope Ron Paul wins the election!

I have a proposal:

Why don't we tax Democrats progressively all the way to 70% and charge Republicans a flat tax of 15%?

If someone wants more tax, I say let him pay more!

"cult-leadin-ist" LOL!

Yeah, don't blame me! (I voted "Uncommitted"!)

I just got a kick out of Michelle saying she would vote for whoever had a "Suck. It. Up!" policy toward subprime borrowers!

Peter P,

There are those among us that would insist "that" policy is already in place!

(But I definitely see what you mean)

I'm so confused. Don't you have to be already "uncommitted" to check yourself into a loony bin?

Evidently they have very crowded looney bins in MI!

Question:

If Democrats are so good at "helping" poor people how come their strongholds (Detroit, Oakland, DC) tend to be mega-crime-capitals?

The answer to Peter Ps question would be called racist therefore I wouldn't expect one Peter.

Actually the real crowded loonie bins are in Canadian banks.

One thing I also like about Ron Paul is about HR 1146. I think UN has outlived its usefulness. Just the condo-conversion potential of the HQ alone would justify its immediate disbandment. :)

Do we really want an "international" organization to ban us from ivory and Caspian caviar?

Peter P Says:

> Question: If Democrats are so good at “helping” poor
> people

The Democrats are not good at helping poor people, but they are good at making poor people “think” they want to help them and get their votes (Most Democrats care as much about poor people as Al “Gulfstream:” Gore and John “Five SUV” Kerry care about the environment) …

> how come their strongholds (Detroit, Oakland,
> DC) tend to be mega-crime-capitals?

As Malcolm Says: “The answer to Peter Ps question would be called racist” so I won’t actually answer it and just say that Detroit, Oakland and DC are mega-crime areas for the same reason that Darfur, Rwanda and Ethiopia are mega-crime areas…

I hope San Jose and surrounding environs are bracing for all those BEAllionaires.
Business software maker Oracle Corp. agreed Wednesday to buy BEA Systems Inc. for about $7.85 billion, a compromise price that ends a months-long dispute over the value of the company that pioneered Web services software.

In other sad news, housing porn 'aka shelter magazines' are the latest casualty of the downturn.

EBGuy,

I heard it was $8.5 bil?

Most Democrats care as much about poor people as Al “Gulfstream:” Gore and John “Five SUV” Kerry care about the environment.

Well, a Gulfstream is very fuel efficient compared to a private A380.

Five SUVs? It is bad only if he drives them all at once. :lol:

Shall we bet when they will stop talking about "global warming" and shift the focus to "ice age" again?

Peter P,

As predicted by this blog and it's readers back in late 2006, the war is already taking a back seat to "the economy".

As to Randy H's question yesterday, I think I have a possible answer:

When "I" get roll around naked in BIG FAT STACKS OF MEW CASH (it's an "economy"). When my teaser loan re-sets and I'm flat busted (it's a "Ponzi scheme")

Like it or not global warming is becoming a faint whisper. The only ones still ranting about GW are so far to the left they're now safe to ignore completely.

They were talking about a new ice age back in the 1970s, so the political-spot cycle appears to be around 30 years. Unlike the sun-spot cycle which is around 11 years.

In order to cut down on carbon emissions, I see there is a big push on now to tear down all the hydroelectric dams in the west.
http://www.nytimes.com/2008/01/16/us/16klamath.html

Like it or not global warming is becoming a faint whisper. The only ones still ranting about GW are so far to the left they’re now safe to ignore completely.

Good. I was getting worried about green fascism.

I love open space myself and I want to own a ranch with mountain view someday.

Can I install solar panels on your ranch Peter? I'll connect your house to my grid for free.

Can I install solar panels on your ranch Peter? I’ll connect your house to my grid for free.

LOL.

I think energy independence is a valid concern. I think solar energy will be cheap enough to compete in Californian markets.

I think it is not very viable in places with much fewer sunny days.

Peter P,

Your problem is that there are few nice ranch areas with mountain views that have good sushi restaurants nearby. Life is all about compromises.

I'd suggest a ranch around Melba ID, but what do I know.

Your problem is that there are few nice ranch areas with mountain views that have good sushi restaurants nearby. Life is all about compromises.

True. But there are trouts, right?

Melba abuts onto the Snake River. You might get lucky and get a ranch with riverfront property so you can just go out in the backyard and cast for trout, salmon, and bass.

Places like Jackson Hole and Sun Valley are sadly already taken by too many Hollywood millionaires.

We have a friend that lives off-grid in E. OR and even as a retired ME (mech. eng.) he struggles to maintain year round power. He has panels, batteries and recently installed a windmill generator and STILL barely has a decent recharge rate!

Then it comes up that their mother-in-law lives w/ them and demands the central a/c run 24/7 during the summer. Well... YEAH!

For colder climates they now have freezers that draw in cold ambient air and save a TON!

I needed some clarity on a recently passed bill in OR and got a call back from the economist/committee administrator and he said there was quite a bit of conversation about cap. gains exemption at the Federal level.

"Uh, uh.. they're aware of the abuses"

From your mouth to God's ears mister! :)

See what $500K gets you in Melba. http://www.melbavalley.com/ The snow capped mountains are the Owyhee Mountain range southwest of Boise.

What does $500K get you in Sili Valley anymore? Life is full of compromises. Idaho doesn't have the beach and surfing, nor the plentiful start-up environment of Sili Valley. But you can afford to live here and I'd wager that the downside on real estate here is much less than that in the BA.

Along with compromise, life is all about change. In my grandparents' time, Santa Clara county was paradise where you could live very well without undue effort. But that was 70 years ago.

Then it comes up that their mother-in-law lives w/ them and demands the central a/c run 24/7 during the summer. Well… YEAH!
Sounds like they need a geothermal heat pump!
Saw another E(squared) energy program on PBS a couple of days ago. It was about locally owned wind power in rural Minnesota (or was that Wisconsin?). Man those suckers are huge! Amazing how peoples attitudes about wind mills change... you mean I can put one of those up and generate a little extra on-farm income? They laughed at the first guy (took several years); now every one wants one. Wind mill manufacturer ended up opening a blade factor locally. The financing is convoluted as they have to bring in an equity partner to use up the tax credits for about ten years and then the equity reverts to the farmer. One windmill goes for a couple of million.

@DinOR, yes, it's $8.5 million (the earlier Reuters feed was incorrect). Another $650 million to drive up SillyCon Valley home prices!

EBGuy,

I'd read about that some years back and I believe the SW corner of MN has wind gusts consistent enough to make that feasible? So after 3 generations of farming "in" high winds the old timer IS farming high winds!

They had one of the Siemens propeller brake engage suddenly in the Columbia Gorge and it shattered the mast and killed one tech, seriously injuring the other. Still and all it was a pretty freak accident.

Yeah, I just glanced at the Reuters article early this morning, I wasn't knit-picking. Go Silly Valley!

EBGuy :

Did you hear what are the legislators in your back yard trying to do ? Heard this on KCBS today morning.

http://tinyurl.com/ypnknn

The six-month, voluntary moratorium on mortgage foreclosures approved by county supervisors would benefit the area’s entire economy and not just home owners, members of the board said Tuesday.

That will fix the foreclosure problem. I am glad they agreed to do this. Now if they can pass some measures to prohibit increases in Gas and food prices, that will go a long way as well. And while they are at it, install measures for minimum salary to be 150K across all fields.

Will the IRS tax FB's for the "income" which is the difference between the contract price on an ARM mortgage versus any moratorium-on-interest-rate increase price?

StuckInBA,

O.K...? I'm a sport! (Who's voluntarily doing.. what?)

Are the County Soups just saying they're not going to honor the process and demands of the lenders attorneys? I KNOW the FB's aren't volunteering to get current on their payments!

Oh and yes make that a fill w/ premium at 2005 prices please! :)

I think it was Ahhnold who perfected the voluntary moratorium, except he had better PR people. When 70% of the electorate is seeing their net worth evaporate (and in some cases, having their homes "reposessed" ), you had better look like you're doing something.

AP
Americans Pay for Housing Boom's Excess
Wednesday January 16, 4:37 pm ET
By Madlen Read and Joe Bel Bruno, AP Business Writers
U.S. Banks Seeing Higher Delinquencies on More Than Just Mortgage Payments

NEW YORK (AP) -- The bill for America's excessive borrowing during the housing boom has arrived, and more people are having trouble paying it.
JPMorgan Chase & Co. and Wells Fargo & Co., two of the nation's biggest banks, on Wednesday joined a growing chorus warning that the subprime mortgage mess is just the start of a sweeping lending crisis. And some fear that consumers falling behind on all kinds of loan payments could tip the economy's scale toward recession.

ADVERTISEMENT

Strapped consumers are having a tough time making payments on credit cards, home-equity loans, and even for their cars. This has caused three of the top five U.S. commercial banks that have already reported damaging fourth-quarter results to set aside some $12.5 billion to cover future loan losses -- and that number will likely grow as the year wears on.

Problems in the subprime mortgage market are rapidly spilling over into other areas of the economy. No matter what the experts call it -- a recession, slowdown or even the makings of a depression -- it's clear banks are under mounting pressure to be more cautious about lending.

"If consumption growth stagnates, the odds of a recession are incredibly high," said Andrew Bernard, director of the Center for International Business at the Tuck School of Business at Dartmouth. "All the pieces of household financial health are starting to be shakier, especially at the low end."

"I love open space"

Peter, just for a goof check out Modoc County, CA and even the Sprague River area in Southern OR. I've spent some time there and while not as trendy as some areas (it's definitely affordable!) Still a lot of property w/ views and great fishing for $500 an acre.

*Bring 4WD