Saturday, August 11, 2007

"Havens for Criminals"

From CBS 13 (also video):

Properties under foreclosure can be a mess with overgrown weeds, unkempt backyards, and be the cause of neighborhood blight. "As more of these houses unfortunately pop up the more break-in's were going to see," said Sgt. Matt Young, Sacramento Police.

Many people are defaulting on their home loans, the real estate industry is struggling, which has caused some local abandoned homes to turn into havens for criminals. Police say it's hard to keep them out. "What comes with that is their friends come by, the drugs, the prostitution and things of that nature," said Sgt. Young.
From the Lodi News-Sentinel:
Ron Meidinger and his mosquito fish are busy these days. And the veteran mosquito hunter — and his fish — aren't just touring the area's bug-infested sloughs or ponds. They're visiting your neighborhood, and perhaps the abandoned, slimed-over pool next door.

"This place is really clean," said Meidinger on Friday morning after dumping about 50 mosquito fish into a murky, lime-green swimming pool in north Lodi. "I've seen places trashed, with windows knocked out," noted the San Joaquin County Mosquito and Vector Control District employee, who treats pools, ponds and anything infested with mosquitoes in the Lodi area.

Meidinger is busy because the housing market is still slumping. More and more homes in the city and across the county have been abandoned through foreclosure, leaving mosquitoes to breed by the million in pools of water near you.
From the Associated Press:
Andrew Villaruz, a 43-year-old hospital administrator...said he refinanced into an option-ARM late last year without understanding what he was getting into. His loan balance quickly grew from $364,000 to $370,000, a shift that become even more disturbing to him as he watched more foreclosure signs go up around his Sacramento neighborhood.

Coupled with other costs lumped into the loan, Villaruz figures he lost about $25,000 by the time he found another lender willing to refinance him into a more conventional mortgage. He sheepishly acknowledged he had never heard of a negative amortization loan until he had one. He knows enough now to stay away from them. 'They might be good for people who make a lot of money, but they don't pan out for the average person,' he said. 'They just don't make sense.'
...
[R]efinancing into a more manageable mortgage is becoming increasingly difficult as suddenly leery lenders stop accepting application in an effort to avoid further headaches. 'It's a perfect storm that is going to lead to more foreclosures with severe downward pressure on home values,' said George McCarthy, a housing economist with the Ford Foundation.

24 comments:

ralphk said...

A hospital administrator didn't understand what he was getting into...rrrriiiiiiggggghhhhtttt. Makes you wonder how financially stable his hospital is.

America - land of the free and home of the blame.

Cmyst said...

Just got off the phone with my daughter.
My ex's plumbing business is on the tightrope. They are owed in excess of 200K by a company that hired them to do some work on some apartments that they were going to sell as condos. Only, they aren't selling them, and they aren't paying their bill.
This has put the ex behind the 8 ball on paying employees. And those employees are in trouble, too -- about half of them bought homes with ARMs in the past 2 years. One is foreclosed on already, and two more or heading that way.
Their one hope is for the ex, who can't take any more $$ out of his home, to get a loan. They hadn't heard about the credit crunch.
My daughter says in her mind and in the minds of "the guys" (plumbers)this is akin to The Great Depression. Especially since inflation of food, energy and fuel is high, too. She says there is very high anxiety out there in blue-collar land.

dvobell said...

'It's a perfect storm that is going to lead to more foreclosures with severe downward pressure on home values'

Um...GOOD. Let the long overdue carnage continue!

*setting up a lawn chair and snacks, singing softly to myself...
'Every time it raaaains, it rains pennies from heaven...'

http://tinyurl.com/2gmo8u

It's the best thing for der Sheeple, though, isn't it? Let's take our licks before it gets any worse. Kickin' the outrageous liquidity, Cold Turkey.
Call it 'Extreme Dollar Makeover.'

'Hey Fed Driver: Raise -- That -- Rate!

-- hey wait. why is he in a helicopter?
Oh noooooooooo.....

wannabuy said...

My daughter says in her mind and in the minds of "the guys" (plumbers)this is akin to The Great Depression. Especially since inflation of food, energy and fuel is high, too. She says there is very high anxiety out there in blue-collar land.

Cmyst, listening into the blue-collar folks at work has shown me that they are already in deep trouble.

I'm still trying to get over my coworker who HELOC'd to buy five big FORD trucks and SUV's. (You know, the ones that went for $40k...).

Hopefully your ex gets paid. If for no other reason than the people who did work for him can be compensated.

Its really going fall apart fast if work goes to a "cash first" basis (when no one has cash).

Got popcorn?
Neil

Cmyst said...

Is that Neil from HBB?
Did they run out of popcorn, lol?

norcaljeff said...

That sounds like Lennar's MO. They have a contractor do a ton of work and an agreed to price and when the work is all done, they tell the contractor they need to reduce the price by at least half or lose the account. Sounds like more blackmail and fraud to me.

jaye said...

I went grocery shopping the other day (long lines and people's carts were full). I overheard a conversation between two people and it went like this:

Person #1: "My brother is a tile contractor and he's begging for work. All the subdivisions that were set to be built here have closed down. He's desperate and will take any kind of work."

Person #2: "Yeah it's bad everywhere here. Even the big box home stores are hurting. My niece works at ___________ and customers are complaining that they can't find anyone to help them cuz they have cut hours on employees."

I remember the economies of the 70's, 80's, 90's, to now, and this one will be unlike any that I have ever experienced.

My SIL is a licensed electrical contractor. He is still getting jobs only because he has cut his hourly rates.

Sippn said...

Next week, stay tuned for more mosquito stories, overeducated professionals who didn't read their loan docs, and people who can't pay their bills.

Bush I lost his reelection due to one issue - the economy... wonder if W figured it out yet.

Gwynster said...

On the topic of ancillary evidence:

Getting an mani-pedi at my favorite salon last Tuesday. Normally busy place was empty except for me! This place used to be packed and difficult to get an appt.

My boss's neighbor has just defaulted. They bought in 05 and haven't even tried to sell. They're just letting it go to the bank. They plan on staying until they are forced to move.

That was just this week's events

norcaljeff said...

FYI - W isn't up for re-election and his low ratings are around the war, not the economy. BTW, the economy is fine for now. It's the banks involved in subprime lending and the builders who are in trouble, the rest of the market is fine. Last I checked GE, Exxon and the other mega cap companies are setting profit records quarter after quarter.

HappyinSF said...

Sippn,
If you are board, leave. Don't let the door hit you. Besides, shouldn't you be busy investing in real estate? Why, in this buyers market do you have time to post on multiple bubble blogs?

Diggin Deeper said...

This mess is going according to plan...Excesses are blowing off, people are paying the price for the greed created by money that was too cheap, and jobs are going away. Recession is just around the corner if we're not in one right now. Expect those in charge to sweet talk the economy for as long as they can, in hopes of creating a "soft landing". It won't happen as this bird's coming down fast.

This subprime mess has become a world problem that's far from over.

Diggin Deeper said...

dvobell...

In complete agreement with your post.

The fed is injecting $38B into the money markets and in essence is saying "I'll buy your junk, since no one else will". I read a report that likened the Fed's action to being a "high priced pawn shop set up for well dressed bankers"

Is it a bailout? Sure does look like it.

Sippn said...

Happy - no, I'm bored.

Are you protected from the fallout? Even government is now looking at shrinking due to sales tax rev shrinking - rapidly.

Cmyst said...

Well, all I can say is it's a shame that these big financial brains didn't figure out years ago that if you base an economy on people buying stuff and people moving money around, it might be a good idea to make sure that the people who are supposed to buy stuff continuously also make stuff that other people want to buy. Instead of just borrowing, ya know.
Cause it appears to my economic pea-brain that we are now out of money to borrow, we can't buy any more stuff other than basics (and that is a stretch for many)and the whole massive juggernaut is screeching to a halt.

roger said...

Stockton made the gray lady.

http://www.nytimes.com/2007/08/13/us/13stockton.html

smf said...

"Bush I lost his reelection due to one issue - the economy... wonder if W figured it out yet."
Probably not. I can guarantee he won't be re-elected...

"Are you protected from the fallout? Even government is now looking at shrinking due to sales tax rev shrinking - rapidly. "

No one is and no one will be, but cleaning has to happen whether we like it or not. The sooner we get to a balance, the faster we can recover from this mess.

And guess what? If home prices go down, people will have more money to spend in other commodities, instead of spending so much on a mortgage payment.

HappyinSF said...

Sippn,
So, are you saying you are posting on the bubble blogs in a hope to prop up the economy?

What is your position these days, I seem to recall that your thing was that the high end was impervious to any sort of price declines, yet whenever somebody presented you with a million plus home that had lost a few hundred grand you'd say it wasn't big enough or custom enough or the koi pond wasn't big enough so it didn't count.

While I'm not sure exactly how well we'd fair another great depression, we have about 3-4 years living expenses saved in various CDs. Plus, I imagine our expenses might go down even more if nobody had any money. I certainly wouldn't choose to go through a major recession, it's not my fault that a bunch or greedy dill holes screwed us all, I have nothing to do with real estate so I had nothing to do with the run up or the financial ruin of thousands, but I'll have to live with this crap just the same.

I don't work for the government, but yeah, Sac will be screwed since they have so few other employment options.. especially if/when the troops come home and re-enter the work force including taking back there various federal jobs they left behind My mom worked for the national guard in Sac and they had to hire hundreds of temps since everyone, literally everyone, was in Iraq. They even sent my 60 year old network admin. uncle who was in the N.G. to a FOB in Iraq, that is how desperate they were for warm bodies.

buying time said...

My recent conversations....

Had bunko on Saturday with 12 other moms. Two had hubbies who were no longer mortgage brokers, two others were moving out of the area due to cost of living/quality job issues. Also heard numerous stories of other moms they know all having RE related problems.

These conversations are vastly different than the ones we were having in January/February. I think the reality has finally set in for many of your average buyers in Sacramento.

buying time said...

opps..meant to say average inhabitants of Sacramento....are we called Sacramentans?

Sippn said...

Happy - Coupon clipper are ya? We'll have Ben keep those interest rates up there for ya!

Don't know how I offended you before, but maybe this will....

A most recent post I stated I thought these blogs have very little significant impact on the market. We'll see as consumer confidence is up (I don't know why - maybe gas prices).

My thing is location and uniqueness. Haven't criticized any $million dollar RE unless there were 5 identical on the same street.

I don't like the "0" down society we've created - no skin in the game.
Think that just by preventing the fraud associated with the RE bubble - owner occupied loans and overstated income - would have kept 75% of the flippers from the market.

But with all that, thank your uncle for me.

smf said...

"Haven't criticized any $million dollar RE unless there were 5 identical on the same street."

But that IS the problem. I have made a habit of looking at RE thru the internet for 5 years, and the more I have seen the more I have disliked the current batch of houses. Most of them (applying to the high end only) follow the same template.

Crown moulding, wood floors, granite, stainless steel, columns, window treatments, etc.

And there ARE very beautiful decorations you can place on a house, but the vast majority chose the 'safe' route and built houses with generic materials and colors.

I mean, we took a look at a million dollar property, and it had the same granite we have in our house!

The current crop of houses follow a certain template, that will make it easy for a person to figure out, just by looking at it, what time period that house was built.

I have seen very, very few houses that make really have impressed me with their uniqueness.

"Think that just by preventing the fraud associated with the RE bubble...would have kept 75% of the flippers from the market."

And if that had actually happened, we would not be talking about the high home prices now.

Sippn said...

This might hurt me more than it hurts you...

I agree.

When you make a piece of RE into a commodity, it acts like one.

norcaljeff said...

Happyinsf, great points on Sippin, glad to read that I'm not the only one who has figured out he's got an interest in promoting higher prices and encouraging people to buy RE in this horrible market. You're right, if the market is so bad and prices are too low, he needs to buy everything in site, but he won't b/c he knows the real truth despite his remarks. Also, and I've mentioned this previously, Sippin always says that good locations and high end homes won't crash but Toll Brothers stock has completely fallen apart and they build high end homes in good areas.