Friday, January 05, 2007

SL's Water Cooler - January 2007 (2)

Post off-topic links, observations, and stories here. Please read the comment policy before posting.


Perfect Storm said...

Hey Sippin,

It looks like were back. Time to debate, what you got on your plate. Please come up with something new.

Oh I think we left off with population adjusted record inventory and you disagreed with that.

Sippn Gatoraide said...

I got the flu. Nuthin on my plate.

Did feel like Lander got tired of us though.

Guess I'll have to skip the Gov's party, but...

I'll be back!

Lander said...

Did feel like Lander got tired of us though.


[Warning: Boring admin stuff follows]

Actually, just experimenting with the placement of the discussion thread. Think I'll try posting a weekly thread for awhile. It won't stay on top, but there is a direct link on the top of the right sidebar.

There are several ways of skinning this cat, but I haven't found one I really like in Blogger. See examples here, here, and here. I'm open to suggestions.

Lander said...

For those interested in the Natomas market: Another shock for Natomas

Perfect Storm said...


FBI Field Offices, Mortgage Fraud
White Collar Crime Supervisor
11000 Wilshire Blvd., Suite 1700, FOB
Los Angeles, CA 90024-3672
Phone: (310) 477-6565

White Collar Crime Supervisor
4500 Orange Grove Avenue
Sacramento, CA 95841-4205
Phone: (916) 481-9110

White Collar Crime Supervisor
Federal Office Building
9797 Aero Drive
San Diego, CA 92123-1800
Phone: (858) 565-1255

White Collar Crime Supervisor
450 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102-9523
Phone: (415) 553-7400

jeff said...

Lander, is anyone really that shocked at the Natomas article?, I hope not. I'm not that old but I recall two major floods in the Natomas area in the past 20 years. No brainer, they shouldn't have been allowed to build/buy out there.

Anonymous said...

hey, let's have a real estate sign picture contest, as your going out and about this weekend take a picture of the most for sale signs in one frame you see. I dunno 'bout y'all but in my neighborhood the signs are growning faster than the early spring weeds! mebbe Lander can post them here or we can put them on Craigslist RR (theres lots of Real Estate cheerleaders on the Sac Rant&Rave forums- they hate bubblers..)

jeff said...

more mortgage fraud:

jeff said...

try this one instead:

Sippn said...

Hey is Max on vacation? retired? Charging rent?

Sippn said...

Another shock for Natomas...if you don't read.

Kinda makes Lincoln Xing look desirable.

Gwynster said...

from the News10 site:

Prospective buyers now get a cd/dvd. Flood ins. is expensive. This is going to really hurt all those buyers who had to stretch affordability with voodoo loans.

Southport is another area that has been touting no flood ins required as a selling tactic. Wonder if they'll get hit by this next.

Perfect Storm said...

Real Estate Agents By Day, Prostitutes By Night

Lisa Taylor, AKA Melissa Wolf

Lisa Ann Taylor and Nicole A. Probert

Related Video
Real Estate Agents By Day, Prostitutes By Night

E-mail This Story
Print This Story

Created:1/4/2007 9:10:58 AM
Last Updated:1/4/2007 11:19:23 PM

(WXIA) - Two Gwinnett County women were arrested Wednesday for what police called "high end prostitution."

Investigators said the women were real estate agents by day and prostitutes by night, operating out of one of Gwinnett County’s most affluent areas.

The two women, 42-year-old Lisa Taylor and 30-year-old Nicole Probert, were charged with prostitution, racketeering and conspiracy to possess cocaine and they were allegedly operating out of a home in the Sugarloaf subdivision in Gwinnett County.

Taylor also goes by the name Melissa Wolfe and is said to be a former Penthouse Playmate.

Investigators said the pair was running a high-end prostitution ring out of a home at 2800 Sugarloaf Club Drive and charging prices up to $10,000 for sexual acts.

Please report realtors/prostitutes to the proper authorities. Thanks for all your support.

Sippn said...

About time you guys woke up!

Not sure Southport has as big a problem as Natomas. (flood waters would have a place to go - down hill towards the bay) Anybody know?

PS - interesting - probably not discount brokers!

drwende said...

The Southport levee situation is funny if it's not your house at risk. Here's what happened...

In 1997, West Sacto learned from the floods and decided to invest in upgrading levees to 400-year quality. This work was done in 1998.

When levee standards were revisited after Katrina, W Sacto discovered its levees no longer met the 400-year standard and started funding studies to look into the matter. (And they had some leaks, too.)

Now city officials admit they don't know what protection they have. That gives ya faith, doesn't it?

W Sacto at least tried to do the right thing, however ineptly. The Natomas problems have been known for at least a decade, and development was allowed anyway.

Perfect Storm said...

West Sacramento City government knows what they are doing and try hard to accomplish the tasks before them. They have some really good people over there.

City of Sacramento wants to worry whether the Kings have a new stadium.

patient retner said...

Have you guys seen the latest SacBee article from Wasserman?

"From bottom, housing looks up"

"Real estate officials predict brighter 2007"

Why does it matter what real estate officials think? Their incomes depend on them saying that tomorrow will always be a better day.

""We don't expect any significant decline unless there's some major economic shock, and we don't anticipate that," CBIA chief economist Alan Nevin"

"Thursday, Nevin acknowledged he didn't see the depth of 2006's downturn when offering predictions a year ago that in hindsight proved overly sunny"

Lets see if history (Nevin's worthless prediction) repeats itself.

Max said...

Hey is Max on vacation? retired? Charging rent?

I wish. Just needed a little holiday break. Got a new post up this afternoon, but not a lot of excitement on th statistics front this time of year anyway.

What do you guys think of all the broker/originators going under? Definitely the big story so far. Crispy just posted about another one:

Its Official: Secured Funding

AnalysisGuy said...

Just shotup the Phoenix Report and changed the entire website. Additionally, the website contains new Sacramento historical data. And I've updated the reports for another 20+ cities. Check it out...

patient renter said...

"What do you guys think of all the broker/originators going under? Definitely the big story so far."

Yea this is huge news. I recently saw a list of the top 50 brokers in the country, ranked (by sales volume I think). I'd love to see that list as they slowly drop like flies this year.

Sippn said...

Economists are a funny sort... they would rather be credible with other economists than please the boss... why? because they are usually looking for jobs every few years. Now if the forecast "highlights" were given by the association executive or top home builder, I might expect it to be a spin, but an economist? They don't take classes in PR or marketing. Think bowties are cool!

Max said...

Yea this is huge news. I recently saw a list of the top 50 brokers in the country, ranked (by sales volume I think).

Check these guys out:

The Mortgage Lender Implode-O-Meter

Crispy linked to this story over at Mish's blog:

Kass: 10 Rumors That Could Rock Stocks:

6. A medium-sized private homebuilder and two more prominent subprime mortgage originators/servicers will shortly announce bankruptcy.

Sippn said...

Hey Analysis Guy,

Since you're advertising your services on many blogs I read, what expertise, experience or education backs up your analysis?

Perfect Storm said...

Cleveland “Going After Mortgage Fraud Like Going After The Mob”
January 5th, 2007 · 1 Comment
Mortgage fraud in Cleveland has gotten so bad that the courts are going after mortgage scammers like they are mobsters. RICO and racketeering laws that were on the books to break up the mafia are now being used to go after these mortgage fraud participants.

And it probably is the right move. Mortgage fraud has gone from a small crime to a virulent and organized way to make money for criminals. And the courts are just catching up with it. Instead of selling crack, guys are out there duping the elderly and clueless and reaping high rewards with very little fear of prosecution. So Bill Mason and your team, go get ‘em!

Anonymous said...

Natomas Flood Rating = Plunging property values???

Read this article and some of the comments.

patient renter said...

"Check these guys out:
The Mortgage Lender Implode-O-Meter"

Thanks Max. That was EXACTLY what I was looking for!

"8. ...There will be an attempt by the Democrats to introduce legislation that will subsidize first-time homebuyers"
I heard about this over on Ben's blog and the idea makes me sick. This is just what we DON'T need, more homes being sold for more than they're worth, further prolonging the bubble. They need to just let the market do its thing.

AgentBubble said...

Hey folks, I just updated the "Distressed Property" stats over on the Sacramento Real Estate Statistics website. In short (no pun intended), short sales, pre-foreclosures, and REO properties are on the rise as inventory continues to shrink.

Read about it HERE.

drwende said...

1 in 8 properties are "distressed"? Yikes. That's higher than I would have thought, this soon.

It's already enough to drag asking prices way down in some neighborhoods -- you see a bank-owned house not-selling at a 20% discount from the peak, accompanied by identical normal houses not-selling at 10% below peak. This doesn't show up in median sale prices because none of the houses actually sell.

I like your 1 in 6 as the true tipping point when things fall apart, though.d

HappyinSF said...

Where's Happy Renter?

patient renter said...

" inventory continues to shrink."

So when can we expect inventory to start climbing again? I've heard more than enough anecdotal evidence that people are waiting till Spring to list their properties...

Anonymous said...

Rumor has it more subprime's going down.

WaitingNElkGrove said...

Is Elk Grove different? This is from an email from a Sales Manager from one of the new Maderia communities... I guess I'll be renting a while longer!
" waited to respond as the market changes frequently and I did not know the price range until recently. Our homes are always competitively priced. As the market changed last year we offered incentives on all of our inventory homes, although we did have way too many homes available that no longer is the case. We only have 5 homes ready to move in Anatolia and I think Belavida is about 2 -3. And we will continue to offer discounts on those. Elk Grove has been an exception to any national trends and there are very few new homes available, resale homes a different case for sure. Madiera is the only new homes project approved in Elk Grove. The demand is already huge. I have 600 names on the interest list as of yesterday. I know many of those will not buy a house. But I have spoken with more than 50 in the last month alone that are virtually ready to buy, at the set price. The range will be in the $600K I do not believe we will be offering incentives, but we will of course do what the market trends are. Building a new home, especially ours are expensive, are costs do not go down when the market goes down, so we also have to price the home accordingly. Thanks and if you have any questions please email me and I will be happy to respond back. I hope we will be able to find you a home, but if the pricing doesn't work out for you, I understand.


Community Sales Manager"

patient renter said...

WaitingNElkGrove: I'm going to call BS on that e-mail, including the 600 name waiting list. Granted, there are a lot of fools... but nowadays they've mostly already been fooled. So, I'll say it's BS.

drwende said...

I second Patient Renter's call of b.s. What's his interest sheet -- everyone who's signed up to get the SacBee's real estate promotions?

Elk Grove has more empty investment properties begging for renters than West Sacramento, about on a par with Natomas. Unless the place has a special appeal for stupid people, there aren't 600 people -- or even 60 people -- prepared to beg for new homes.

Perfect Storm said...

Elk Grove is the flippers elephant graveyard.

Perfect Storm said...

Nationwide, nearly one million (970,948) foreclosure filings were reported for the year, up more than 51 percent from just over 641,000 in 2005, according to’s internally compiled numbers. The company does not reveal its data methodology.

This is only the beginning.

Houisng doom 2007.

Perfect Storm said...

Here’s a BusinessWeek link that supports some of the more bearish sentiments of the fellow bloggers in regard to Real estate:

Perfect Storm said...

Beautiful graph in USA today, the “Money” section, lower left corner of page.

The image shows the price first-time homebuyers pay for a home:
19% Less than 100k
45% 100k - 200k
20% 200k- 300k
8% 300k- 400k
10% 400k and up

Conclusion: Good luck Florida, Boston, DC, California, Washington, Chicago etc. First time homebuyers are DONE with your market. See you at the bottom.

Sippn said...

There are 100's of homes under $150K in the region, 1000's under $250K.

Median price means 1/2 are below, 1/2 are above.

Yea you can buy a home in Nebraska for $50K, and get a job for $9.50/hour and watch the weeds grow...

But yes it is a problem that for new homes, just the fees are more than most 1st time buyers can pay for their whole house.

No one is "entitled" to a new home.

patient renter said...

Mish has a new post about a Roseville company:

"Mortgage Payment Deferral, Inc., in Roseville, California has just released a patent pending mortgage program that allows homeowners to defer anywhere from 3 to 36 months of their mortgage payments"

Lander said...

From the Bee:

Gov. Arnold Schwarzenegger released a plan Monday that would dramatically re-shape the way health care is delivered and purchased in California....[I]t would require employers who do not provide coverage to pay a 4 percent payroll tax that would go to an insurance pool.

Sean Fisher, the owner of three Tile Outlet stores in the Sacramento area, said the slumping housing market has already taken a toll on his business and forced him to lay off some employees.

"Something like this job tax would really, really hurt my business," Fisher said. "I would probably close my door."

Anonymous said...

sippin is sippin some whiskey. there's not acceptable housing in nebraska, or otherwise for $50k as there aren't houses in this area for $150K. You can't even buy a pos house in plumas lakes for less than $250k, you're smokin crack too.

jeff said...

DR Horton posted bad Q4 numbers today as well...just keeps on going.

jeff said...

more fraud:

Sippn said...

Anon ... here's your opportunity in Omaha Nebraska for $19,000. It doesn't even have wheels. Its a real house. .

Gees, Lander, these guys are a lot of work, you take them to the water and you got to drink it for 'em too.

drwende said...

Okay, I read about what that Roseville company is offering. If I understand the article, you're essentially taking out a HELOC to pay your mortgage.

So the plan depends on having equity. If your house is losing value, do you have equity? Only if you originally put 20% down and the bank isn't being too picky about appraisals in a market that has dropped at least 15%.

People with existing piggybacks presumably wouldn't be able to use this product, either, since they've already used a HELOC or a second to replace their down payment.

If people who use it then spend the money on treats -- the way they spent their rising equity -- this is another exotic loan product that may postpone the bottom of the market but will ultimately drive it lower.

Sippn said...

It will be Spring soon..

That sounds like a good name for a new boat...


or maybe


Cmyst said...

Thank you, Lander, and all you regulars for providing me a lot of food for thought as I've lurked here for the past few weeks. This is a great local blog and I've given the link to friends, as well.
I feel pretty good about selling my condo and renting a house, now. Originally, I did it because I didn't think we'd be staying in Sacto past October, but it's worked out well for us. We're renting a pretty nice place with a gorgeous terraced yard, trees, bulbs, and decks for quite a bit less than I'd be paying if we'd bought a similar place. We're saving quite a bit, too, most months. You all have made me feel good about this situation.
I make 100k a year, and the real estate agents keep telling me that I can afford homes that I know I can't afford. Truthfully, I can afford (on a conventional mortgage) a home around 300k. Since that would put me in some pretty decrepit neighborhoods at this point, I'd much rather just rent this lovely 3 bed/3bath/den/2 car garage/fireplace/gardens home in El Dorado Hills, thanks, while saving money and living comfortably on what I earn. This blog is a lifesaver.

Perfect Storm said...

cmyst said

Truthfully, I can afford (on a conventional mortgage) a home around 300k. Since that would put me in some pretty decrepit neighborhoods at this point, I'd much rather just rent this lovely 3 bed/3bath/den/2 car garage/fireplace/gardens home in El Dorado Hills,


Anonymous said...


are you freaking kidding with that link? it's 100 years old and would never pass an inspection. if i sneezed it would blow the place down like little red ridding hood. try again.

Anonymous said...

Click on the implode-meter, another subprime has bit the dust.

It looks liquidity is tightening.

jeff said...


still waiting on these examples in this area....
"There are 100's of homes under $150K in the region, 1000's under $250K."

Perfect Storm said...

"From Keeping It Real Blog"

After agreeing to a purchase price on one my listings I received a fax from the buyer’s agent. It read as follows:

Before faxing over the counter offer #2, I am to request 3% commission. With the market condition, we can help our client to find quality home for lower price, plus 3% commission. We did our best to sell your home, and ask for only half percent more. Would you rather pay $x,xxx extra, and close it within 30 days?

Please fax over your adjustment of 3%, so we can move forward.

Since when does the agent dictate the terms for his buyers and apparently without their knowledge? Clearly, in every profession there are low life participants who only think about making an extra buck even if it hurts the client they are supposedly serving. By the way in this case the scum sucker is a lender who is making a second fee for putting the loan together.


Perfect Storm said...


Posted - 01/10/2007 : 4:15:16 PM

We are no longer doing 100% stated purchases
Max 90% LTV on stated Wage Earner
Max 95% LTV on stated self employed
We are still doing 100% stated refinances with a middle score of 640 and required tradelines
We now require 12 months seasoning from purchase date to use new appraised value
We are no longer doing seller held seconds either.

It looks like another subprime is getting tighter. A far cry from stated income FICO score 580.

This means less borrowers will qualify and less homes purchased. See you at the bottom.

Perfect Storm said...

A recent study by the Center for Responsible Lending suggests that 2.2 million American households in the subprime mortgage market will lose their homes due to foreclosures. (Subprime loans made up 24% of the total loan picture in 1998, but they make up most of it, at 62%, today.)

If this is true then this market is toast.

Sippn said...

Jeff, ANon,

check out link to mls - it has your answers. Gave you the link with original.

Do I need to have a Realtor come pick you up and show you?

Anonymous said...

Comment by what appears to be an honest loan officer. 1/10/07

This is whats driving me nutz right now and making me look bad, I get to many w2's that were overstated for income originally or referral from realtor of which no way borrower was going to qualify w/o overstating and go somewhere else who gets teh deal closed quickly (and in the process gives the guy a fake job in one case).

I closed 1 deal in November, and 1 deal only in works right now, why...I do marketing, leads, and some realtor referral, this what I'm constantly running into, that or people have value cut on appraisals. I had 5 referrals in Decemeber how many did I close, none, again all were W2' and originally overstated. Two of them full doc would have been 65 dti, ran DU not accepted.

This sucks, how are you guys closing 10+ a month lol. In my cases its not like 500-1K a month over, one lady was at 5K a month had to refi and I couldn't do it and found somebody that did it at 10K a month when I talked to her and even after I explained the risk, they don't care, they got their refi and cash and could careless. But what sucks is these guys doing this stated W2 income bs are making the money and not getting caught really (very few compared to how many in the biz).

And damn near none of them can meet no doc/no ratio requirements, and the ones that did would not accept teh rate and went elsewhere "stated".


Anonymous said...

Some reporters never give up hope

<<<<<"Foot traffic — the early indicator of growing strength in home sales — has picked up in the past three weeks.
A Bulletin survey of a half dozen new home builders in Manteca shows that the number of people interested in looking at new homes has picked up steadily since Christmas. It’s a trend that is borne out with home sales at one of Manteca’s newest neighborhoods — Florsheim Homes’ Valley Park — off Woodward Avenue southwest of the Highway 120 Bypass and Airport Way interchange.

“We’re seeing more and more people each week,” said Michele Zaragoza, a sales representative at Valley Park.....

Tom Wilson of Wilson Group Realtors also has seen an up tick in potential buyers in the resale market as well.

“I’ve had a lot more potential buyers in the past few weeks,” said Wilson. “In checking around, everyone (in real estate) is seeing an increase in showings.”

Wilson said that bodes well for the housing sector since it traditionally signals an upswing in offers and then sales.

You know it is a tough market when they start to quote sales agents on such an IMPORTANT statistic (a "leading indicator") such as foot traffic.

patient renter said...

I've been noticing lately when talking to my friends who are either looking to buy or just bought, or are considering selling sometime soon, that they ALL are under the assumption that prices will stabilize very soon and will resume to go up in X months.

It's astounding to see so many people with a collective opinion that is so wrong. Everyone knows that the market is not doing well right now, but from what I can tell, they still are clueless as to the extent of this thing. I'm wondering, is everyone getting their information from realtors, because those are the only people I see who are saying that things will pick up again soon. Why would anyone believe what a realtor tells them about where the market is going, being that their well-being depends on people thinking it's going to go up?

Anonymous said...


I call bs. So to answer you, no, don't send me a realtor, I don't want to listen to their bs too. I'm sure you're reator friend will tell me how undervalued the market is and how I need to get in NOW. I queried MLS for Roseville properties under $150, came up with a big fat 0. Then did Citrus Heights, a less than desirable town with nazi cops and is part of Sac Co. eeew. Same query, come up with 8 total properties, all in the same exact neighborhood, all in the same bad area, all rentals, all "condos" all 800 sqft and under. Please stop exaggerating on here, it doesn't do the readers any good. Stop sippin and start thinkin.

Sippn said...

What, you're looking in 2 nice cities? Citrus Heights and Roseville, Placer County? Aren't we picky...

How about the area south of downtown and highway 50 - there it is.

Is location important?

patient renter said...

"What, you're looking in 2 nice cities? Citrus Heights and Roseville"

Citrus Heights is not nice. Check your standards. Roseville could be considered nice, if you're into overpriced tract home farms.

"Placer County?"

Citrus Heights is in Sacramento county, I believe.

Don't play into the realtor's stigma of an area being 'nice' or 'desirable' just because builders are throwing up millions of overpriced houses there.

Sippn said...

If you see no difference, then please look for your $150,000 homes where they are ....not in Citrus Heights and not in Roseville.

If location is important to you, there is a price to pay.

Cmyst said...

This is the craziest commentary I've heard. Of course location is important!
Sure, there are homes in Oak Park and in depressed/wasteland going Section 8 suburban tracts in Citrus Heights and South Sacramento. I'm not going to buy there. Home ownership is not that important to me, that I'm going to live in a place where a backfiring car makes me dive to the floor, and where crack dealers and hookers hang out on the street corners. I'll rent forever if that's the kind of neighborhoods I can afford.
So, there are homes in Sacto under 200k, you made your point -- kind of. But who will purchase them? Not me. Not most other folks in my income bracket, which is middle class. Unless the middle class can afford to buy decent, well-maintained homes in safe, clean neighborhoods they aren't going to buy them, period.
(BTW, I don't think all of Citrus Heights, or South Sac, are bad areas. The problem is that any place that has homes selling for less than 300k is, at this point, a bad area.)