Bubbleinfo TV – In The Beginning

by | Sep 24, 2011 | Bubbleinfo TV | 3 comments

Newcomers may wonder how this all got started, particularily the videos.  In Spring, 2008 the Bank of America selected me to be one of their retail REO listing agents, and within a month I was assigned a load of subprime-mortgaged dumps in Oceanside.

They were beat-up pretty good, so to document the condition I thought it would be smart to video the properties.  One thing led to another, and here we are. 

Here’s a look-back to the lowlights of the first couple of years:

ParaHawking

by | Sep 23, 2011 | Local Flavor | 2 comments

Hat tip to Mr. T for sending this along – from the website linked here:

We are pleased to show you our first official video. It was shot at the historic Torrey Pines Glider Port and Blossom Valley in San Diego County:

Gift-Tax Exemption

by | Sep 23, 2011 | Market Conditions, Thinking of Buying? | 2 comments

We see more homes being bought today for all-cash than ever before – how do you explain it? 

The MSM thinks it’s due to tougher mortgage underwriting, and we’ve seen in bidding wars that many buyers are using all-cash offers to help influence the seller’s decision.

But the raising of the gift tax exemption to $5,000,000 is probably playing a role too.

From the nytimes.com:

For estate planning, the big headline to emerge from the tax deal last December was that the estate tax exemption would be raised in 2011 to $5 million, or $10 million for married couples. Anything over those thresholds would be subject to a 35 percent tax.

That cleared up a good deal of confusion: There was no estate tax at all for people who died in 2010, but if Congress hadn’t acted, the estate tax would have been reinstated this year at a $1 million threshold — $2 million for married couples — and with a top rate of 55 percent. The new thresholds are in effect through 2012.

Yet for all the attention given to the estate tax, a less widely noticed change in the law could affect more families.

That is the lifetime gift tax exemption, now also $5 million — or $10 million for married couples. While the estate tax exemption gradually rose from $1 million in 2002 to $3.5 million in 2009, the lifetime gift tax exemption had not budged from $1 million.

Now that the gift tax exemption is back in sync with the estate tax exemption, families might rethink how they transfer wealth, said Jonathan Bergman, a financial adviser at the Palisades Hudson Financial Group in Scarsdale, N.Y.

“When the gift tax exemption was so much lower than the estate tax exemption, it made it more advantageous from a tax perspective to give away your money after death,” Mr. Bergman says. “Now there’s just as much incentive” to give during your lifetime.

(more…)

More Countrywide Fraud

by | Sep 23, 2011 | Fraud, Mortgage News | 13 comments

From iwatchnews.org:

In the summer of 2007, a team of corporate investigators sifted through mounds of paper pulled from shred bins at Countrywide Financial Corp. mortgage shops in and around Boston.

By intercepting the documents before they were sliced by the shredder, the investigators were able to uncover what they believed was evidence that branch employees had used scissors, tape and Wite-Out to create fake bank statements, inflated property appraisals and other phony paperwork. Inside the heaps of paper, for example, they found mock-ups that indicated to investigators that workers had, as a matter of routine, literally cut and pasted the address for one home onto an appraisal for a completely different piece of property.

Eileen Foster, the company’s new fraud investigations chief, had seen a lot of slippery behavior in her two-plus decades in the banking business. But she’d never seen anything like this.

By early 2008, she claims, she’d concluded that many in Countrywide’s chain of command were working to cover up massive fraud within the company — outing and then firing whistleblowers who tried to report forgery and other misconduct. People who spoke up, she says, were “taken out.”

By the fall of 2008, she was out of a job too. Countrywide’s new owner, Bank of America Corp., told her it was firing her for “unprofessional conduct.”

Foster began a three-year battle to clear her name and establish that she and other employees had been punished for doing the right thing. Last week, the U.S. Department of Labor ruled that Bank of America had illegally fired her as payback for exposing fraud and retaliation against whistleblowers. It ordered the bank to reinstate her and pay her some $930,000.

When federal officials announced Foster’s victory last week, Bank of America dismissed the case as “an old matter dating from 2008.”

(more…)

Rent vs. Buy

by | Sep 22, 2011 | Thinking of Buying? | 6 comments

The equilibrium between renting and buying was discussed by the three realtors in the last ‘Shop Talk’ video, and commenters thought we should look into it further.

Doug hangs out in Rancho Santa Fe, where the rent vs. buy comparison is extreme.

Recently there was a house in Rancho Santa Fe that the owner was willing to sell for $1,400,000 that had been rented for $6,900 per month.  I used this rent vs. buy calculator because it includes the extra expenses that we should all consider about homeownership:

http://realestate.yahoo.com/calculators/rent_vs_own.html

I used 1% annual appreciation, 20% down payment, 5% mortgage rate, $2,000 annual homeowner’s insurance,  $15,000 property taxes, $6,000 annual maintenance, 7-year comparison, 33% tax bracket (should be higher) 1% return on savings, and 2% projected inflation.

Buying came out $138,356 ahead of renting in today’s dollars.

But like livincali pointed out in his comment, the down payment is the sticking point for most.  People who pay $6,900 per month in rent have to be thinking about buying, mostly because they need the write-off. 

Are there enough higher-end renters that want to put down roots, commit to owning long-term, will take the write-off in trade for the extra expenses like property taxes, insurance and maintenance, and roll the dice on appreciation vs. depreciation that can save up 20% down payments?  We’ll see!

Here is the investor cash-flow evaluator featured here previously: http://www.finestexpert.com/

Another buy vs. rent calculator:

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

 

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