My family and I have been extremely moved by the out-pouring of support from blog readers over the last week concerning my dad’s passing – thank you so much for your thoughts and prayers!Â
Though it was a very sad few days, we did have a great time talking about Pops and all the good times we had. I also went through a couple of hundred old photos, and was able to appreciate his life from start to finish – there were several photos of him as a kid in the 1930s!
Because both of my grandfathers were in law enforcement, we had several discussions about law and order during the last week, which made me think of old what’s-her-name:
What state should do about underwater mortgages
EDITORIAL:
http://www.fresnobee.com/opinion/story/1768591.html
1/5/2010
California is the blue lagoon in the mortgage mess. We are a leader in underwater mortgages, where the home’s value is less than what is owed on the mortgage.
In this new year, the governor and lawmakers have an opportunity to ensure that California leads the nation in getting homeowners above water. Federal measures have helped, but they don’t fully address California’s situation.
With 35% of California mortgages under water, it’s in our interest to be a national leader in dealing with this issue.
Law professor Brent T. White, in a new paper, “Under Water and Not Walking Away,” describes the problem: A professional couple with good credit and a good income bought a three-bedroom house in Salinas for $585,000 in 2006. Their monthly payment is $4,300. Now their house is worth only $187,000, but they still owe $560,000 on the mortgage.
The problem for them — and 2.4 million of 6.9 million California mortgage holders (the most in the nation) — is that lenders failed to ensure that homes were actually worth what they sold for. Lenders phonied up appraisals, and made loans if the borrower seemed able to make monthly payments.
So what can these homeowners do? In White’s example, the couple could continue to pay $4,300 a month. Or they could go into foreclosure, rent a place for $1,000 a month, and in a few years buy a home selling at a pre-bubble price of $180,000 with monthly payments of $1,200. Or they could approach their lender and attempt to get a loan modification that reflects the home’s real value.
The latter is the best solution for everybody. But these loan modifications just aren’t happening.
Wow, the story of the bubble here. Great video as always and best wishes!
Love the transparency you bring to the real estate market. I hope your fellow agents do too since it is clear these comps destroyed more value in the long run than they created.
Glad you’re back Jim.
Nice article about shawdow inventory in Los Angles on doctorhousingbuble.com January 3.
He breaks it down for expensive, middle and cheap housing for about 10 zipcodes in each category. He has a column for mls, notice of default reo, etc. Then he has sold property for a month in that particular zipcode. You can get a general idea of how much the shawdow inventory and sales will take in a month.
19,000 listing with another 80,000 in shawdow inventory.
He also mentions that there has to be a lot of people who are past 90 days and are not making any payments without any notice of default. Especially high end house.
A suggestion on the photos if you have not already done so, consider getting a scanner and digitize them, so that all in the family can have a copy. It avoids fights over who gets what physical pictures.
My new brother-in-law did just that, and gave us all a copy of the 25-minute video collection of photos of Dad’s life. A real tear-jerker too.
Jim,
Welcome back and it’s refreshing to hear an “old-school” attitude. Your Pop was right about this country today.
To Nathan: As a renter that has been waiting for an opportune time to jump in the market, I have a problem with either lenders, or judges, lowering the principal amount on a loan. It may sound calloused, but these people underwater can rent just like me if they can’t afford their place.
Owning a piece of property is not an entitlement, rather a privilege. Not everyone was meant to own a piece of property and for those that do, they should only own what they can afford, not what they want…cost be damned.
Everyone’s convinced the bottom is in, but not me. And I’m patient. And even if I’m wrong, there’s absolutely nothing — looking forward — that suggests to me an impending bull market, so I have time. The government can continue to try and prop up an unsustainable market, but as soon as the government’s tit is pulled back, valuations will further pull back.
The only intangible in my scenario has to do with Californians’ obsession with their RE. There are no limits to irrational behavior and some will overpay for bragging rights. Cest la vie.
Good to have you back Jim.
Lovely sound of the Detroit river in the background….
I always wondered what happened to Jenae. I guess times have changes — or maybe they haven’t. Having Realtor@ after your name is a warning not an endorsement. Dr. Housing Bubble’s latest post ties in exactly with what you are saying
http://www.doctorhousingbubble.com
Once people wake up to the fact that a small minority are getting a huge benefit for their bad decisions, there will be a tidal wave of push back from renters, mortgage payers, and true home owners. The sympathy defaults will push this over the edge. How long can the ponzi scheme keep going?
To Nathan: As a renter that has been waiting for an opportune time to jump in the market, I have a problem with either lenders, or judges, lowering the principal amount on a loan.
I’m not sure I agree with a bankruptcy judge not being able to lower the principal of a home loan, when they have broad powers to do so on other loans.
Anyways, what Jenae did was outright fraud and shouldn’t be lumped in with everyone who bought a house and now finds themselves in trouble. A bankruptcy judge generally has a fine tuned BS detector and would do a better job than any bank or other government program. It would also allow honest people who became victim to fraudsters like Jenae to re-coup some of that. Her fraud not just impacted properties bought and sold to her, but houses sold based on those comps.
Definitely glad to have you back, Jim!!!
Nathan, why does any buyer that overpaid for *anything* somehow have the right and/or privilege to it at anything less than what they agreed to? There’s no better example of “moral hazard” than that.
Welcome back Jim.
glad to see you back Jim.
it really is quite unfortunate that folks like Jenae are getting away with it all. seems like law enforcement just wanted a couple of high profile cases to show they were doing something. i guess Jenae is too small of a fish to fry.
btw, can you do a update on this one?
https://www.bubbleinfo.com/2009/10/10/carlsbad-squishdown/
the home was listed for $890k, looks like that created a bidding war and the ultimate loser ended up with the house for $990k.
meanwhile, we got this one, similar sqft but much better lot, listed for $980k and ended up selling for $950k.
proving once again that buyers need to go out and create their own bargains, and never get caught up into a bidding war!
http://www.sdlookup.com/MLS-090055982-6823_Helenite_Pl_Carlsbad_CA_92009
sorry, forgot to include the link on the prior comment.
Great to have you back, Jim.
My best to you and yours.
Look forward to your perspective on another year of the fallout…
Jim,
Glad to see you back.
It’s disgusting how much corruption and charlatanism the financial and RE system in this country has in it now. These people need to fry but they never will.
The reason why people like these and in Wall Street go scott free is because the people above them are even bigger crooks.
Never has this been more clear than in the last few years with industries like RE, the NAR, etc and Wall Street with people like Paulson, his buddies, all the hedge fund managers (the biggest crooks of all), etc.
They have become part of the system and will never be eliminated. If you haven’t watched the movie “The International”, I suggest you do…the message of that movie comes at no better time.
Welcome back, Jim. You were missed.
There has always been a substantial amount of shadiness in real estate speculation in America. In fact, it was one of the forces leading to the revolution. To keep peace with the Indians, the Crown did not want settlers moving west, displacing the Indians. But the land owners wanted to subdivide and sell to immigrants. Read Freedom Just Around the Corner, a general history of the founding of the country, but one which deals with the founders as hustlers, in all senses of the word. And we still are.
A realtor with a Law Enforcement background. Now it all makes sense.
jim,
why isnt super jenea in jail?Great to have you back and sorry about your father.
Glad you are back Jim. So sorry to hear about your Dad.
Jim, can you tell us what Ginay(sp?) changed her business name to? I’d like to add her to realtorratingz.com with a link to your video.
Good to see you back.
Great to see you back, Jim.
Thanks for the Jenae update. I’d wondered how that one was going to play out. Like you, I’m sorry and angered to see that the perpetrators of that whole mess have had slight setbacks, but are still conducting business as usual. What’s it take to get a little justice around here anymore?!
Thanks for your honesty…It is nice to know there are still some good guys out there..like you!!! Welcome back
This just makes my blood boil. Did the buyers ever know they put an extra $100k in Jenae’s pocket? Have any of them spoken up?
That house isn’t worth $800k.
@Nathan;
You have to remember that the money the bank is lending out for a mortgage belongs to someone else.. possibly even your own savings, pension or health care dollars deposited at the bank or holding Mortgage Backed Securities. The bank has to pay back who they borrowed the money from, or do you think it is ok for the bank to dip into your savings account because the bank made a bad decision on a mortgage?
The truth is that both the bank and the homebuyers in http://www.fresnobee.com/opinion/story/1768591.html made bad decisions. The usual result is that both the homebuyer and the banks take a hit.. the bank takes the property back at a loss that the bank has to cover from loss reserves and the homebuyers lose the house. To protect one at the expense of another creates a moral hazard.
AAACCK: I think the SPAM filter needs a tune-up. I was trying to explain to JordanT why tampering with how mortgages are handled on BK may not be a good thing (changes a secured loan to an unsecured loan with the resulting adjustment of interest rates for all).. and the spam filter seemed to pick up on certain phrases.. which I can’t mention because it would prevent me from posting.
# 18 makes a good point Washington was a land speculator having gotten a good bit of land in western pa as a result of his service in the French and Indian war. Of course at the time land was the only store of value in the country, and the only measure of wealth, just like England. If you read about the dealings post 1783 you see a lot of encouragement to sell large blocks of land to a “developer” who would resell it. In contrast you had the preemption movement where if you settled on government land before it went on sale you got first refusal on the plot of land up to some size when it did go on sale. Then you California the land of real estate crashes starting during the time of the Comstock, whenever it slowed down real estate in the bay area crashed. The the Santa Fe reached LA in 1887 and you had the great boom and bust of that time. Florida had a bust in 1926, AZ and NV are to new to have much of a history, recall that before the UP got to vegas it was basically a stage coach stop. In the plains you had the dust bowl which among other things was a real estate bust. A lot of ghost towns or near ghost towns around the US are also legacies of real estate busts.
So booms and busts in real estate are as American as apple pie, and crooks come with them as part of the deal.
ocrenter,
Guess your new handle should be cbowner (for Carlsbad). VERY NICE PLACE and a good deal at that! When’s the housewarming party? 😉
Jim, it’s great to have you back. As Mrs. Davis says (item #18), you were missed. Your dad was a man of integrity; and like father, like son. What a great, honest, hard-hitting exposé about the havoc wrecked by unscrupulous realtors. There was a time, back in you father’s day, when these people would have been made to pay for their crimes. This video tour tells the story no other realtor would dare tell. Glad to see you back in true form, which is what we love about you!
Welcome back, Jim the Realtor!
You’re back, Jim! And you’re here with your trademark integrity as evidenced by a video expose unlike any other.
Your nine-minute expose of Janae is what bubbleinfo is all about. You take the time to inform buyers, sellers, and yes, even lurkers about the pitfalls in Real Estate Land and the lack of integrity in “other agents”.
You have the courage to be truthful. What a novel idea in a profession where that character trait isn’t prevalent.
ANNOUNCEMENT! So without further ado, I present JtR with my own coveted “Oscar”. Sometimes I go weeks without presenting one, and I only can give this award once per day. It’s called: “Hero of the Day”. It’s not even 8 AM on Sunday, 1/10/2010, but you nailed it, Jim, not only because you are you, but because you have the courage to tell the truth about another agent–who should be in jail.
Remember, we are all here to support you. But please, Jim, be honest enough in your human-ness to realize you may need additional time away from bubbleinfo to grieve your dad’s passing. When that happens, you won’t need to explain anything. Just take the time you need. No worries, we will all be here not only waiting for your return, but cheering when you do come back.
My guess? Your own personal angel in heaven (your dad) is looking down and saying: “That’s my boy!”
JtR, you are (literally) one in a million!
The bank robbery analogy is only apt up to the point of most robbers don’t have the luxury of walking into a bank with a giant flashing neon sign on the roof spelling out: “Get boatloads of money from us, no questions asked!!” in 30 foot letters. But beyond that, it is apt.
Beyond that more still… this woman is still in business??!11111!?
Hi Jim,
Welcome back. Sorry to hear about your Dad’s passing. My condolences.
I’ve been a long time lurker, first time poster here. My market is in Orange County though I love San Diego and lived there for one year. Still there is valuable things to learn from your honesty and integrity. Keep up the good work.