Friday, May 04, 2007

SL's Water Cooler - May 2007

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anon1137 said...

Layoffs at Marin brokerages a sign of the times

. . . Donna Barron, principal of the San Rafael-based investment mortgage strategy firm the Barron Group, agreed.

"I just see the market as being very changed," she said. "It's not the market it was. I have reps that have the territory from Healdsburg on down who say most of the [mortgage] brokerages have closed down. Clearly the ranks of the brokerage industry have been hit significantly."

Life is screwed up when you can't make a living off fraud. What happened to free and open markets, buyer beware?

a_builder said...


El dorado Hills is in wind exposure zone c.(UBC 97)

Almost all of the builders submitted for, and were approved and built to wind zone exposure "B"

Some think the ridge top view lots are actually exposure zone "D"!!! Those houses won't last much more than 7 years without major structural deterioration.

a_builder said...

SAw this on another blog, PPP's ARE illegal in CA!

"thought many of you would like to know there is a loophole on pre pay penalties for CA ... this is legit and legal directly from the CA Civil Code section 1916.5((a)(5)) when a brrwr is within 90 days of adjustment:

"The borrower is permitted to prepay the loan in whole or in
part without a prepayment charge within 90 days of notification of
any increase in the rate of interest."

notice it doesnt state whether its a 30yr fixed or a 1 month fixed rate... that is the key to helping some people out that may be threatened by a ppp, there are lots of option arms out there where it was fixed for short period of time yet has a 3 yr pp on them...

now im sure many of you are thinking wait a minute i had to do a refi on john/jane doe where they were 2 months out and had to pay the prepay of 10K (or whatever) what does that mean? it means there may be a good chance they can sue the lender that charged them the prepay! Now as far as actually putting this law to work on a current deal good luck i havent met anyone who tried to fight it from what i understand the borrowers gonna have to fight the lender on it and odds are pay the prepay and hope the lender will refund... i think getting an attorney to send a letter for $500 on behalf of the brrwrs explaining the code would suffice but who knows, lenders are getting clobbered on secondary, to do this and have them lose more money tells me they will fight the brrwr to no end but the law is the law, and they ARE violating if they are in fact charging a prepay within the 90 window!

of course one still needs to check their note to see what is in the fine print but i remember using this as a selling technique at ameriquest selling bandaid loans we were never told of the law just told as a selling technique that "we can refi people again if they stay with us".. yada yada
"do the 2/28 and before its up ill call you and refi you without you being charged a prepay penalty"

Gwynster said...

I have one of the fun research questions y'all love.

Checkout 1213 L street in Davis. The place sold for 395k last Fall and a realtor bought it to rent out. He wants 1400/mo. He hasn't paid his supplemental tax bill but that was just due at the beginning of the week so the county may not have posted it yet.

My question, is there any way in hell he can rent this place out and not loose his ass. I can't see the finance terms so I can't tell. I really don't want to end up on the street if he ends up having to sell or gets foreclosed on.

The rental market is getting really interesting in Davis btw - I can get a 3/2 in Mace Ranch now for 1600 a month - wow.

Patient Renter said...

"My question, is there any way in hell he can rent this place out and not loose his ass."

He won't lose his as if he threw down a pretty chunky down payment. I'm actually renting for about the same amount, a home that sold for about the same price. I was iffy on the entire thing too, but I decided to go for it knowing that the owner bought the house new with the intention of renting it out long-term. A landlord such as this is probably (hopefully) more interested in rent prices than the actual home value.

Perfect Storm said...

So, everyone has heard by now that the jobs number came in at 88,000 –a disappointment from the consensus of 100,000. But you have to look into the birth/death adjustment to get the full story.

For those that don’t know, the Labor Department uses something called the birth/death economic model in its monthly jobs tally. The "birth" part of this model is a guess by the department on the # of jobs created by newly-formed companies that are outside the reach of its survey, and the "death" part is how many companies have gone out of business. The adjustment is the net of the two.

So, with everyone talking about an economic slowdown, what does the Labor department estimate as the birth/death adjustment for the April jobs report? Would you believe 317,000 (here: ) … the highest upward adjustment in the history of the Birth/Death adjustment. (here: ).

So, without the record birth/death adjustment, the raw number was -229,000.

Gwynster said...

Great catch PS

Patient Renter said...

PS, there's been a lot of coverage over this data the last few days, but you summed it up best. It's kind of like a dataset where the margin of error is bigger than the actual datafindings - in this case, way bigger.

Gwynster said...

Weird and slightly morbid market update:

During the last week, we were contacted by 4 people to rent their 3/2 in Davis for cheap. 3 of them were going to be first time rentals because the owners died recently and the survivors don't want to put the house on the market for a while.

Everyone is willing to rent below the market because no one wants students in their house.

ralphk said...

The Washington Post has an interesting article on some of New Century's tactics.

Gwynster said...

Nice article on Forclosure "experts" on Sacbee.

Also, the McLatchy house is now for sale at 1.8m. Everyone seems to be looking for a way to leave the sinking ship.

Patient Renter said...

$9500 for a seminar - I'd sure like to think they're experts for that kind of money.

Gwynster said...

Notes from the People's Republic of Davis:

I just found out that an Aggie Village went to some new faculty through the lottery here. Normally I wouldn't be too pissed except that I have been trying to get onto that list for 7 goddamn years. Signed up for it numerous times, get a thank you then nothing. The only reason I heard about it was because a rental came back open because this new faculty, that doesn't even live here yet apparently, won.

The Office of the President has no clue about the shitstorm that is coming his way via one very pissed-off pissant.

Patient Renter said...

Another pathetic sob story:

"Two years ago, she took out a re-finance mortgage to cover her existing car, home and student loans. She borrowed $170,000, the value of her home, at an interest rate of 7.6 per cent (or $1,076 a month). She knew that rate would increase after two years, but planned to take out another loan at that point to avoid the extra charges. However, when she had her house revalued a few months ago, it was worth $125,000, falling with the slowdown in the market.

She has now signed up to a campaign by Acorn, a lobby group for low-income families, calling for a moratorium on foreclosures, a rescue fund and new laws to clamp down on predatory lending techniques."

This pisses me off to no end. I'd love to extract magical money from thin air to pay off my student loans too, but I'm not so foolish. Everything comes with a risk, and if you want money for nothing, chances are you might get burned.

I wish the media would stop covering this sort of pathetic crap. As much as I love truthout, they shouldn't have reprinted this.

Gwynster said...

More evidence of dropping prices-

I just received this email from West Coast Auctions. They were the auctioneers that cleared out those SP new builds last Febuary.

At first glance, they are nice reductions. Problem is none of them are located in an area I'd ever want to live.

tgif332006 said...





part 1

part 2

part 3

Gwynster said...

from the SacBee
Housing market, car sales decline together

Sippn said...

So Gwynster, how do you like the manipulated Davis market up close? Think about what good it is doing for those who win these lotteries - they can sell their position or subsidized affordable home for big profits later - thanks to all others.

Could drive you to drink?

Gwynster said...

I'm not getting your point Sippin.
I thought everyone knew I hated Davis.

norcaljeff said...

I got an email on that condo auction in Elk Grove...they've already lowered opening bid below $150K.

Gwynster said...

Allstate is pulling out of the state too

California's third-biggest home insurer cites fear of natural disasters

Seems they are pulling only new home policies but I wonder if they are also worried about the upcoming "fire sales".

Patient Renter said...

From what I hear, fire sales are going to be the new black.

Gwynster said...

I think we've moved into anger. I think it happened at 7:25 am pst.

I received a call this morning in response to a CL ad I have.

The woman says she has a home for rent 3/2 with a workshop in the older part of West Sacramento. I say that I'm probably not interested because that's the bad part of West Sac.

She goes on to tell me that I must be mistaken since she lived there for 45 yrs (she's calling me from NY).

I mention the gang problems and she flies off the handle! According to her there are no gangs in her part of West Sac, that I'm thinking of Bryte and Broderick, and that the real problems are in Southport since everyone there is upside down on homes and renting them out.

I agree with the last part and have to ask to slow down since she's ranting a mile a minute at me - at 7:30am I might add.

I tell to slow down and let's discuss it. "what is the address?" to which she relies in that agreesive NY way, "I don't think I want to rent to you now because...."

I hung up on her. It seemed like the only natural response.

I'm sure the home is listed on CL, I just can't find it.

norcaljeff said...

I found two intersting RE postings today I had to share. One is of a new condo development near EDH. The realtor mentions "nearly instant equity" in her written sales pitch. Unreal! That should actually be a criminal statement in this market. The other, well, I'll just post it here since it speaks for itself:

Brand New 4 Bed, 2 car attached garage with granite counter tops, Includes stainless steel appliances, washer, dryer and Shutters through-out. (Approx. $9,000 value) Within walking distance to Club Lincoln recreation facility.

1 Year lease with $8,000 non-refundable deposit if purchase option is not executed. Monthly rent is $2,000 a month with $500 a month going towards purchase!

Flexible terms: If next year the home appraises for $500,000 (I have appraisers who will work with me) Then you get a 90% loan for $440,000 and I will carry a note of 10% for free. For those with less than perfect credit.

Patient Renter said...

"$8,000 non-refundable deposit if purchase option is not executed."

Sounds great, where do I sign up?

"I have appraisers who will work with me"

In other words, I have appraisers who will commit fraud.

Gwynster said...

My giggle of the day was someone wanting a $500 deposit per pet.

Gwynster said...


This is so typical of Davis's clueless hand-wringing.

If you want business downtown, you need to not gouge the customers. The windows arguement has no bearing.

Patient Renter said...

"My giggle of the day was someone wanting a $500 deposit per pet."

Sadly that's the norm around my neck of the woods. One place we used to live at decided they were going to impose "pet rent" on top of having to give a deposit (for our little cat, all of which we got back BTW). I whipped out my lease and couldn't find anything in there that would allow for such a change or for such a change to be made, so I notified the manager that I wouldn't be paying the "pet rent". I was expecting a big battle being that the place we lived was corporate owned, but she basically said okay and left it at that. Everyone else paid though from what I could tell.

Pet rent? Give me a break.

Patient Renter said...

I forgot to mention, the funniest part about the pet rent thing was watching the assistant manager try to explain what it was for when she first told us about it (before I had a chance to check out my lease agreement).

"In case of damage".
"That's what the deposit is for, what is the pet rent for?" I responded.

After squirming for a few seconds she muttered something about everyone else (other housing places) imposing it and that they had no choice but to follow suit. I'm sure this pained them greatly. I was going to wait for a real answer but my wife felt bad for the girl in the tense moment and interjected.

Gwynster said...

Well there is a property management co that specializes in West Sac. I told her the 500 was a deal killer.

I really really really really hate property management companies. They are right up there with RE agents for slime of the earth.

Patient Renter said...

"I really really really really hate property management companies. They are right up there with RE agents for slime of the earth."

Yeah, I hate them too. I'd prefer to deal with a saavy owner, but I think those are very very rare. In that sense, there's not much difference between a property manager and a crappy owner who is on your case about everything. Luckily I haven't had to deal with that.

norcaljeff said...

I received FOUR emails from four different builders about the "best sale ever" today. Most I've ever received in one day/weekend. DRH even had the b@lls to say "Rock Bottom Pricing" and "Hurry Before Prices Go Up" Yea yea yea, I remember the exact same ad last March and last August only to see prices fall even futher. Can anyone spell F-R-A-U-D?

norcaljeff said...

I'm seeing a ton of resale homes in ElDoHills on Craigslist.

Cmyst said...

One thing that bothers me about this bubble is that it seems to me that refinancing and HELOCs really came to the fore in this one. It makes sense, of course, to refi when interest rates drop as much as they did. But I don't remember people doing it so much the last time around, or draining all the equity from their homes like they have now.

Do any of you who lived through the last bubble have any memory of people draining equity?

Banks will eventually unload their REOs, and builders will unload their inventory. Business is business, and sometimes you have to take a loss. But homeowners, who in many cases nearly had their homes paid off and now owe more than their worth --- I don't think they can drop their prices. I just wonder if this is going to factor in to the mix in a big way, and at what point. For instance, will they start losing their homes when they retire? Will they work until they fall over?

Patient Renter said...

"But homeowners, who in many cases nearly had their homes paid off and now owe more than their worth --- I don't think they can drop their prices."

This is a misconception I've posted on a few times. After the 90s crash, people DID give in and sell their homes for a loss. You have to understand that at that point in a downturn, the market psychology is completely such that nobody wants to touch real estate, and people are willing to lose money just to get out.

Cmyst said...

PR, I hope you're right.
But as I mentioned, I don't recall in previous bubbles that people actually drained all the equity (and more) from their homes. About half the homes I'm tracking were originally purchased for half (or less) of what the asking price is now. I've been in homes all over Sacto and I can tell you that people have been cashing out equity to buy cars and furniture like there is no tomorrow. There is a particular style of heavy, over-stuffed, Italianate furniture that is ubiquitous across all income and culture groups and it isn't cheap. I have seen entire sets of this stuff from Oak Park to Serrano.
I have never seen so many older people buying so much stuff and I can only imagine that it is HELOCs.
If you have to "lose" and it's only a psychological loss, that's bad enough, but eventually if you need to move or you want to retire to another area, you'll take the "loss" -- that seems logical. But now, what worries me is that it isn't just a psychological loss and it isn't just a few thousand $$. It is a couple hundred thousand, that everyone seems to have cashed out of their homes. The only thing that I can imagine is that people might just walk away from the house (even if they lived there 30 years) and the bank will eventually sell it for the loss.

Gwynster said...

Anyone have any info on foreclosures in Dixon? I have co-worker who is convinced she's a genius because prices will never go down in Dixon and that all those empty houses are just smart owners waiting for the right offer.

Her husband is a realtor. Argh, I really hate the koolaid drinkers.

Cmyst said...

How can I find out the prior asking price on a home that has been relisted?