Grinding More than His Organ

Sadder than an organ grinder who can't wake his monkey. The monkey is just "sleeping" right? Dance monkey, dance. Man, when they find out that the credit card you used as a security deposit is declined this could be more entertaining than the time we stole Casey's car speakers.

No money to pay back millions but enough money for a high speed evasive driving course. Casey is giving troll lessons.

The Next Domino Falls

The secret is out and the consumer is listening. The Conference Board has the latest consumer confidence figure out this morning.

Countrywide REO

This sweet deal is in Moorpark this time. Good news is that this one doesn't appear trashed. Bad news is they need $1,462,900 to make their nut.

12146 Palmer Dr
Moorpark, CA 93021
MLS ID# 70018290

Love the landscaping.

Countrywide took this one back 08/06/2007: $1,545,750. Here we are almost 3 months later and they've knocked a whopping 5%. Near as I can tell this predialian manse was sold new in 2005 for the princely sum of $640k. You gotta wonder what the owners were doing with all the MEW.

No, It's Not the ABX

The falling dollar? No, this is the low end (25th percentile) of the Sacramento housing market.

Last: (10/26/2007) $239,500
52wk Range: 239,500 - 299,999

1 month -$10,400 (-4.2%)
3 months -$29,500 (-11.0%)
6 months -$45,200 (-15.9%)
12 months -$60,499 (-20.2%)

Gotta love poking around Housing-Watch.

Countrywide Holds A Conference Call

No Duh

Burned, gone, up in flames. Built in 2002. Any guesses why a house 50 feet away from a raw canyon with limited access would catch fire?

You can use the LATimes database to search for destroyed homes.

Personally I'm thinking the devil. She did it. Actually this is a classic failure of planning but if I said that I wouldn't be able to put up this picture.

Hat tip to MaxedOutMama for both her recent concern and for reminding me that we need the occasional nekkid lady to keep things exciting.

Lesser of Two Weasels

Well, Damoin and Casey have "launched." Launched what I have no freakin' idea. Should we even bother? Surprisingly, I say yes. I say we collect all the pertainent data on their new operation and dump the whole mess on the Phoenix bunko division. Then we ignore them with a clean civic conscience.

Epicaricacy

Mozillo under investigation. Casey's 6 month tax delay ran out last week. Naked swimmers everywhere. Homebuilders on their last legs. The IBs tanking. Slightly used BMW M5 (obo/take over payments) anyone?

HR 3609

HR 3609 (The Emergency Home Ownership and Mortgage Protection Act Of 2007)

Sounds compassionate. All the bad ideas get the best titles. You all know the details by now. This allows BK judges to modify loan terms for people in Chapter 13. It doesn't much matter if it is principal or interest or both but it looks like it is an interest rate modification program as of the latest. I will not comment on all the things you know I think about this. Instead I thought it useful to see the limits of such a program.

Say for instance there's this young couple, call them, C&G. C&G have a 2005 era 3/1 ARM LIBOR +3.5% with intro rate of 5.125% on their modest Sacramento $550,000 starter home that they paid only $5,000 up front to cover some closing costs. The full rate kicks in Spring 2008 at ~9%. Payments go from $3000 to $4400. They are busted. They have to do something. Sell? NFW. the place is worth $450,000 now. Bankrupt? Let's try. Chapter 13 looks like a way out. The judge needs to get them bank to $3000 mortgage payments. Well gee, the math is easy, return to 5.125% rates, a full point below all those idiots with good credit and fixed mortgages trhey can afford. Good deal for C&G? Not hardly. They owe $550k on a $450k house. At the new interest rate they can pay in until October 2017 before they are back to even with no contributed equity. That's if prices are flat. That same $3000/mo over the next 10 years using $2000 generous dollars for rent and banking $1000 would have them up $160,000 in double tax free munis. They would pay a lot less for the type of house that cost $550k in Spring 2005.

Wrap Up Wednesday?

Tome to pick up the messy yard and water all the plants. Still the "Ranch Fire" that started in Castaic has crossed to central Ventura County and may proceed to Piru, Fillmore and possibly Ojai and Santa Paula. For now however pay attention to San Diego. They are far worse off.

Blustery Tuesday

The map shows no fires nearby and while the wind is as bad as ever it is expected to die out this afternoon.

One thing I found interesting is the myths about SoCal that build up in peoples minds. Lou Minnati observed: From your post yesterday (34.251,-119.081) I see that you have farms just north of your house. I thought they plowed under all the farms in your neck of the woods.


The Dawg Pound is extreme lower center, the rest is farmland. This is real farmland not some developer owned fields waiting for the bulldozers. In fact Agriculture is the #1 industry in the county dwarfing even biotech giant Amgen. The myth is that a region the size of New England is in anyway homgenous. After the fires are old news we'll revisit the planning successes and failures that led to why some places are still nice and others uninteresting urban sprawl.

Wind Damage

The cabana didn't like yesterday's 70mph gusts.

We are in a small window of "good air." 20-25mph steady winds with mild gusts. Things are better but it will be another 24hrs of watching and waiting. And in case you are wondering, no, there is nothing "wrong" with the picture. That was the color outside yesterday.

Akubi Is Right

Why be all serious all the time? If you can't find something pleasant to think about today you'll be arrested by this nice officer and MADE to think of something pleasant.

Windy Monday

Just in case anyone was wondering, yes it is windy. 20-30mph steady and blows to 50 and gusts some unknowable number above that.

Ignore Kalifornia At Your Peril

They should call California the "Granola State": what ain't fruits and nuts is flakes. - Gallagher

Our very own "The Scum" with no particulat malice gives voice to a common attitude: Yet another fire destroying overpriced shit boxes in Klownifornia...just like EVERY year. The rest of the country just doesn't give a craptacular shit about a few California fires. You choose to live there you deal with the consequences.

I hope yours and your loved ones are all okay (yes I do have personal empathy even while questioning mob pity seeking).

There are some areas of the country that don't burn up every year. Of course they might not meet your 'lifestyle' needs.

Nothing I haven't heard or possibly said myself for over 30 years. Truth is that Kalifornia is still America writ large. If you want to know where the US is headed look to the tip of the spear.

As to the specific issues; We may have an earthquake and we may have a firestorm but we will have temeperatures averaging 70 degrees for the next 4 months and 90% sunshine. Excuse me now as I check the lawn for any avocados or oranges that may have fallen in the winds last night.

At Last An Excuse

We've got steady 30-35mph winds here at the Dawg Pound with gusts to 55-60mph. We lost a cabana (~$300) to wind but no big damage of threat of fire yet.

Malibu (Rockwell Research/Pepperdine) is burning and spotting, jumping PCH no hope for containment. Another small fire in Chatsworth and a forest fire in Castaic.

It will be interesting to see if this is the straw on the back of recession and inflation fears.

Update: "The Castle" is no more. Mixed feelings. Go to Curbed LA for background.

The Island of Misfit Debt

...WASHINGTON, Oct 19 (Reuters) - The U.S. Treasury Department on Friday said it is seeking bond dealer advice on whether it should change its auction schedule to be in line with current fiscal and economic conditions.

Here, let me make it clear. Nobody, and I mean nobody wants US denominated debt anymore. Look at the ABX, look at exchange rates individually. Now the Treasury can't even keep printing the paper they've been recently been pawning off as money. The jig is up.

Good Politician Bad Politician

Property is the fruit of labor. Property is desirable, is a positive good in the world. That some should be rich shows that others may become rich and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another, but let him work diligently to build one for himself, thus by example assuring that his own shall be safe from violence. – Abraham Lincoln

I should know better by now than to do such irresponsible things as keeping track of those weasels in D.C and Sacramento. Don't worry, it's sunny and I'm enjoying some landscaping in my tiny plot in deepest darkest dense Los Angeles. If this becomes a habit then feel free to send out the wagon and butterfly net. First the bad politician.

Norm Coleman (R, MN) [apologies for previously calling him G] has this gem:

In an effort to provide relief to homeowners who are facing foreclosure due to difficulty with their mortgage payments, Senator Norm Coleman yesterday introduced the Home Ownership Mortgage Emergency Act (HOME Act). The HOME Act would allow homeowners who are 60 days late in their mortgage payments to withdraw penalty-free up to $100,000 from their retirement accounts through 2009 for the purpose of refinancing into an affordable mortgage or avoid foreclosure.

Used to be not so long ago that your home was your retirement. The worm has turned and your retire is your home.

But wait... that's not all. Young Coleman is not so much a pie-in-the-sky dreamer. He's already "helped":

Additionally, he is a cosponsor of the Mortgage Cancellation Relief Act of 2007, which will make mortgage debt forgiveness tax-free.

Gives flesh to the words: "No man's life, liberty or property are safe while the legislature is in session." [poss. attr. Judge Gideon J. Tucker]
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All may not be lost however. There are still honest politicians. Ooops, sorry about all that beer that just ruined your keyboard. I don't know how it happens but occasionally it seems there are a very few able to avoid the lure. This is California State Senator Tom McClintock. He had his 15 minutes as the man who lost to Da Governator in the recall election a few years back.

McClintock has this refreshing bit of common sense from the land of fruit and nuts:

The True Cost Of The Global Warming Farce
Excerpt:
Last year, in the name of saving the planet from global warming, California adopted the most radically restrictive legislation anywhere in the nation, including AB 32, which requires a 25 percent reduction in man-made carbon dioxide emissions within 13 years.

To put this in perspective, we could junk every car in the state of California RIGHT NOW – and not meet this mandate.
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Sorry to be so long winded, seems to be a hazard of exposure to politicians.

Greg Swann Needs Our Help

Everyone remembers Greg right? The guy who wants to be Realtor 2.0. Well turns out he's been staying up late some nights. He joking asks what people think he's been doing. He is my reply:

And here all this time I thought Greg stayed up late adding to his 21 reasons to bank on the Phoenix real estate market list.

What "bank" do you recommend? Countrywide? Wachovia? BofA? Citi?

Excerpt:
Realistically, how overvalued are Phoenix home prices?
Obviously, I consider this a profoundly silly question, but to lurk among the BubbleBloggers and their seething commentariat is to acquire an education in a slice of America invisible from this side of the sewer gratings.

Which side of the sewer grating was that again? All those flying monkeys you saw. All those Nazis. Ohhh... I've got it. You are making a list of all the people to whom you have been less than fair. How's your effort to educate those troglodytes going?
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Add your comments here.

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Nobody has to tell you that he's not going to apologize. Indeed you should don your Nomex underwear as he lasks even the most basic level of human decency on these matters and will no doubt think he is being clever as he drips acid from his keyboard in an attempt to compensate fot whatever it is he feels he needs to compensate for. Still could be fun. Stay tuned.

Cul-de-Sacs Then and Now

1960s:

1970s:

1990s

(N.B. all to the same scale)
The top is c1961 and the middle c1973 and the bottom c1998. What happened in that first dozen years? Planners happened. Which to do think is the nicer place to live? Which way since then has planning pushed us even further? Developers will build the second kind of crap so that they can live in the first kind of neighborhood. No, it is poor planning policies that are responsible.

Oh and just for reference from a mere 3000 miles away, the 1950s version:

There are three things that should most strike you. First FAR or floor area ratios. Second intensity of grading and concurrent uniformity and impermeability. Third the percentage of public to private space.

Woe to us what a half century of planner agenda hath wrought.

Laugh of the Day

The normally sane and balanced Daily Mortgage Reports has slipped off the tracks with this one: Why The Terrible Housing Starts Number Could Be A Signal Of The Housing Market's Recovery

Just because Housing Starts plunged last month and the chart looks like The Beast, it doesn't mean that the U.S. Housing Market is any worse off than it was.

On the contrary, things may finally be starting to improve.

Yesterday, the government released September 2007's Housing Starts data for the country. A "Housing Start" is a new home on which construction has commenced.

Versus August 2007, starts are down 10.2%
Versus September 2006, starts are down 30.8%
The headlines are saying that this is bad news for the U.S. economy, proof that the "nightmare" is ongoing.

I say, "Wasn't taking Econ 101 a basic job requirement to be a business writer?"

If Housing Starts are down, folks, it means that the housing supply will be down shortly, too.
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The picture? Hey, I figure that if Mortgage Reports can whistle past the graveyard the least I can do is give form to their fears.

Smartest Guy In The Room

Another thing for potential sellers to consider. This isn't polite and it isn't easy to hear and it isn't good news. It is almost a sure thing that the buying person and their agent are smarter than you and your sales agent. All the stupid people already have houses. Any stupid people left houseless or just not stupid merely newly in the market to buy are not going to be qualified buyers for a long long time.

These are hard truths. If you as a seller today knew then what you know now you would have sold in Spring '06 right? Okay, you accept that you aren't the smartest guy in the room. Now, anybody who can buy today was certainly able to buy in Spring '06 right? See the problem? The only way you can sell to the people who are buying now is to give them a deal that is homage to their skills.

Casey Tries Again

Fliptard the Wonder Child is testing the waters again. Hardly news to this audience. I've been deliberately slow to put up a top level post because I'm fascinated by his "organic" responses. I'm thinking we may have the first documented internet idiot savant on our hands. Autistic no less. Think about it.

Don't let that "mild" diagnosis fool you. He is still a vicious lying coniving criminal. He is still free plying his antisocial wares.
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Casey Serin Oct 16, 2007 at 12:45 pm

I started to compromise so certain posts and comments have been removed. Part of the process we’re going through is figuring all this stuff out: policies for blogging, topics to cover and topics to stay away from, tolerances for certain things, etc.

The policy on comments and posts:

Nothing about marriage or too personal or hateful.

I don’t want any more “gray area” on my promises. I’m either keeping them or I’m not. I justify and split hairs too much. Enough said.
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Enough said? We aren't gong back to any level of Casey tracking here. This is just a periodic check in to see just how little he's changed his spots.

Sample Post

No pictures this time. There might be copyright issues. ;-) Still, I'm confused. Apparently the following post is threatened with of some form of legal action. What do you think?
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Jenae Peckham
The lease-option program that Super-Jenae has been offering has been well-documented on ocrenter's blog, so let's get an update on how it's working.

It's a simple plan, sell houses to clients, then find people to rent them until they can qualify for a mortgage to buy. She advertises "no credit score minimum" and "credit scores not an issue" - just the types of tenants you want in the house you just paid a million-plus for.

She inputted three listings this week onto the MLS:

1011 Greenway was just purchased for $629,000 last month, but a mystery how it came together because it wasn't on the MLS. Jenae puts it back on the market this week for $629,000 to $729,000, offering the lease option program, with $5,000 commission to buyer's agent upon lease inception and 4% once the purchase is consumated.

Except Jenae has TWO other listings on the same street. One at 1103 whose owner just bought in 3/07, financed 100% and he just received his NOD last month. The other listing is her assistant's house who also financed 100% of her $620,000 purchase in March. All three are listed for sale/lease-option, all about the same size house for the same approximate price.

2872 Vista Acedera in La Costa Valley is 3,542 sf, and was purchased in 4/07 for $1,250,000 by one of Jenae's people, who financed it 100%. First Magnus was the lender, who just went out of business.

It sits vacant, and she listed it for $1.25 to $1.35 million - the last sale on the street was 8/7/07 for $1,065,000 for 3,344 sf, but it was across the street. On her website they have it available for rent for $7,000 to $10,000.



The third listing is 6239 Lismore, the former model in Bressi Ranch. Jenae had sold it in 5/07 for $1,350,000 (originally listed for $1,199,000-$1,225,000). It too was financed 100% by First Magnus. In her new listing she is calling this the "Please Purchase Program", for sale at $1.35 to $1.45 million.

This is the third sale Jenae has procured in Bressi this year at an inflated price. The last one, 6344 Huntington, was listed for $1,199,000 and sold in June for $1,300,000 to an agent who works for Jenae. Now she has it for sale for $1.3 to $1.4 million, sitting there since July. The other on Discovery she represented both buyer and seller, and threw in the MLS 'sold before input' at $1,350,000 for 3,480 sf in March of this year - and a for rent sign went up the next month.

The effect Jenae has on others has surfaced as well. Once Jenae listed Lismore this week for sale, or for rent at $7,000 to $10,000 per month, two other neighbors took notice.

This house on Alverton was being offered for rent for $5,000 per month, and once Jenae put hers on for much higher, those owners increased their asking rent to $9,750 per month.





And these owners nearby who had their house listed for $1.315 million, RAISED their price to $1.4 million.

How do you know the sellers in Bressi might be too optimistic? Currently there are 27 active listings, and ONE pending.

What's up? Monica Kang, one of Jenae's listing agents according to their website, paid me a visit the other day while I was doing open house. Her first question? "Will you pay me $100,000 commission if I bring a buyer?" That's on a house listed for $799,000. Once I starting asking a few casual questions, she got dumb in a hurry, confessing to knowing nothing and the money just goes into a different division.

Who is running the show?

The kingpin is John Borzellino, aka John Ross, who is currently on tour. He recently spoke at the Alpha Kappa Psi business fraternity at SDSU, and has engagements coming up in Chico, Miami, and Carlsbad - that's right, if you want to catch up with John, you can see him here locally on November 7th at 7pm at the Carlsbad State Theatre at 2822 State St.

Here is the ad for the Miami speech:

$ - Here's an opportunity to learn from the best. This Seminar will be free to

all military personnel. There will be no charge for entrance, nor for the

materials available at the end of the seminar. The material covered will show

you how to purchase real estate and receive cash at closing instead of cash

out of pocket.

All material will be free to all military at the end. These materials are valued

at over $500.00. Just be prepared to show your active or retired military at

the door.

Join us as John Borzellino, President and CEO of The Roman Group, Inc., a national real estate consulting and acquisitions group, discusses Perspective Change and Lease Purchase America.

Mr. Borzellino will introduce you to his perspective change programs that have been taught at a variety of universities, governmental organizations, Fortune 500 corporations and police training facilities. Mr. Borzellino will discuss how new patterns of thought and action may be required to make a radical change in your current level of income and success. Getting from where you are to where you want to be often requires fundamental shift in the way you operate – utilizing unconventional behavior and new methodologies. This will be an “education only” meeting.

John Borzellino has almost three decades of experience consulting one on one with clients in over 60 major cities in 20 states. He has written 5 books: Rags to Destiny; Change is Power/How to Unlock Your Energy Vector, Lease Purchase America and Peakwalkers.

Posted on Saturday, October 13, 2007 at 07:19AM by Jim the Realtor | 30 Comments | Email | Print
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The original post is no longer available and this is not a post but a post about a post. Hat tip to Akubi. There's no reason to even read the content or even give it any credence. The purpose of this post is to ask if there is any reason to believe what is said is in any way a legal gray area. Personally I see nothing except a conversational presentation of the facts.

Try Try Again

A golf fanatic had always dreamed of playing at St. Andrews, and finally got the chance. Going with his wife, they teed off and he proceeded to play the best game of his life. After 9 holes, he was 5 strokes under par,and was on cloud nine. On the back nine, he started playing even better,even getting an Eagle on the 16th hole.

He was so excited that he ended up slicing the shot on the 17th tee,and as he walked up to it, saw that his ball was behind a small shack for the groundskeepers.

Now he started to worry that his score would go up, but his caddy came up to him and said “Sir, this may sound like a tough shot, but if you put it through that window, the ball should go through the window on the other side, and if you’re lucky, the ball will roll onto the green. The way you’ve played today, I think you can make it.”

So the guy takes a look and sees that it’s a tough shot, but possible, so he tries it. But his shot just misses the window, hits the window frame, and strikes his wife right in the head, killing her instantly.

Years go by and the man can’t forget that horrible day. People he tells the story to all sympathize with him, but he just has no will to live. But then he realizes what he must do - Face his nightmare!

He travels back to Scotland and plays another round at St. Andrews,and miraculously, he is playing another stellar game. He starts to feel better about himself as the round goes on, but when he approaches the 17th hole,he gets so nervous that he slices his shot to the same damned spot.

As at his ball lying there behind the shack, his caddy says “Sir, the way you’ve been playing, why not try a trick shot. Some of the other caddies say if you can get it through that window, it will follow through the one opposite it and roll onto the green.”

The guy says “Are you out of your fuckin’ mind? The last time I tried that I double-bogied!
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Anyone who thinks this isn't about restarting the wild credit era isn't paying attention.

Proclaim the Good News

Check this out. A family has had some tough times. Now it appears they were saved by their house. I tell you great. Here's their story folowed by my response:
Our Story: My wife Grace, my daughter Beth and I have lived in our dream home in the Santa Cruz mountains for over 10 years. We were devastated when Grace was diagnosed with cancer 4 ½ years ago. She spent a year in and out of the hospital battling the disease and struggling with the cure. The treatments required her to miss work as an elementary School teacher for an entire year. Before we could regroup and get back on our feet again, I was diagnosed with a different type of cancer. With surgery chemotherapy and radiation, I was also unemployed for over year. Due to the financial burden caused by this long term debilitating disease, we were forced to take two equity loans on our home just to stay afloat. Our daughter had to leave college, working a part time job and running us back and forth to cancer specialists at Stanford just to help us survive. Now with the interest rates going up we are unable to pay the higher payments. We have tried working with both of our lenders to no avail. They have no programs to work with people who are trying to restructure their loans and forestall foreclosure. I was told by one of the banks that the best they would do is make it “less painful” when they took our home from us. We are trying desperately to recover from the hardships imposed on us by cancer and save our home. If you have any suggestions, contacts, donations, or prayers all are welcome. I know there are others that have been in our position that can help and I would like to share any information I gather to help those finding themselves in this position as well. So please spread the word and if we work together, maybe we can help each other to survive with dignity. Thank you for your help.

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My response: I am so pleased that you were able to trade your house for your health. Not everyone is given such a gift. I share your joy at being so lucky after so much bad luck. With your restored health and supportive family and backgrounds it is a sure thing that you will be able to afford a different house in the near future. I join you in thanking those banks for their willingness to take a risk and help save you both. One question; why do we need to give money to two healthy people who cannot afford their mortgage? This isn't a "trick" question.

Credit: The artwork is http://www.hankgross.com/Evicted-53K.jpg

Why $86 Oil?

Ans: Commodities Bubble. [Bubble Claire in the new naming convention ala hurricanes and "Turmoils"]

Seriously, there all kinds of excuses floating around. There's the peak oil myth that gains traction after any supply event. There's the Chindia demand issue. There's the lagging infrastructure concerns. And certainly the impending dollar/petro divorce deserves mention. The new international investment vizier of Qatar had the gaul to state that the correct price of oil is $125 but that the OPEC nations were suffering the shortfall in the interests of their friends in the West. Look, oil has an energy investment alternative ceiling of about $100. Any suggestion that oil will get to and stay above that price for any time kicks in any number of alternatives; solar roofs, shale oil, nuclear, even the whacky ones like hydrates and hydrogen. The point being the oil suppliers are playing a dangerous game of chicken. They think that anytime an alternative threatens they can merely collapse prices to whatever point is necessary to crush any potential competition. The mature and developing nations are not going to let that happen.

Oil is $86/bbl because there are speculators who are doing exactly with oil what until recently speculators were doing with houses. There still remains some core worth to houses as housing and oil as raw material but those values are lost deep inside the frenzy of speculation surrounding them. Heck, I just bought a package of 4 tulip bulbs at the 99¢ store.

Big Lies Repeated

Pam O'Connor, Los Angeles Metro Board Chair will be "answering" questions about traffic busting. Yeah right. She'll be whacking softballs. Here's the list of questions I submitted:
#1 Chairwoman O'Connor: Currently Metro collects 16 cents via fares for every dollar spent on transit.

What, in your opnion, is a "fair share" of costs that should be each borne by the riders, the community and the taxpayers?

Even with advance notice of ths question you all know the answer. "Things are about right." She's gong to talk about the need for more investment but she won't tell us who gets the bill.

#2 Chairwoman O'Connor: For the last generation Metro has disproportionately invested in transit at the expense of roads. Over that time congestion has gotten much worse. In fact the more transit the greater the congestion. Why after nearly a quarter century of failed policy do you think things are about to reverse?

You all know the answer: "We cannot build our way out of congestion." The bigger the lie, the more often repeated the less it is questioned.

#3 Chairwoman O'Connor: Why should drivers be expected to pay more for what is unquestionably worse service?

Again, the answer is "obvious." Depite paying more than their costs we all "know" roads users are "subsidized." Nevermind the facts, the myth cannot be questioned.

Chairwoman O'Connor I remind you of Metro's Misson Statement:

"Metro is responsible for the continuous improvement of an efficient and effective transportation system for Los Angeles County."

The word is TRANSPORTATION not transit. Depending on how you count anywhere from 78%-87% of your budget goes to transit oriented activities that provide some 3% of all passenger mobility and a miniscule fraction of all transportation in the region. Why is this not a fundamental abbrogation of your mission?

Any bets as to whether she replies?

Buy My House!

Well, I guess it is better than "Buy My Book!"

The Conspiracy Crumbles

I knew it wouldn't be long before Realtors® started getting hungry. Locally we have these wonderful people who will sell your house for "just" 1.5%.

This is where it starts getting fun to believe in karma. The wolves are starting to turn on each other.

I See a Trend

Understand that nobody who got a high interest rate loan in 2005 refinanced in 2006 into another high rate loan. $5.7 billion in the last two years. Those kinds of numbers are hard to grasp. Think about it instead as $40,000 of debt per household for every family in the metro area. 18,128 loans. $5.766 billion. $318,000 average. One out of eight households. Talk about swimming naked.

The Stock Market Jumps the Shark

With so many stocks and so much information trading near 24x7 it isn't hard to find those mysterious moments. That said there is still every once in a while what appears an action/reaction so perverse that even tinfoil-hat conspiracy theories cannot come close to explaining what is going on. Case in point. Beazer Homes. This morning they announce some... ummm. errr... "adjustments" to well... past earnings.
Beazer Homes USA Inc. Thursday said it will be required to restate financial results due to an independent internal investigation into its mortgage origination business and other practices.

The company (BZH) said it will be unable to precisely quantify the impact on previous results until the probe is completed. However, it expects an overall increase in profit, but a decrease in earnings for fiscal 2006.

Beazer has determined it will have to restate financial statement related to fiscal years 2004 through 2006 and the interim periods of fiscal 2006 and fiscal 2007. The restatement is also expected to impact results for fiscal years 1999 through 2003.

The investigation found evidence that workers in Beazer's mortgage business violated U.S. Department of Housing and Urban Development regulations, specifically related to down-payment assistance programs in FHA-insured loans originated back to at least 2000.

The story is timestamped "October 11, 2007: 11:06 AM EST." This is today's stock reaction:


Clearly somebody got the news ahead of the announcement. And what did they do? Freakin' bought the pig. Paid extra no less for the fancy lipstick and dress. Gosh, if accounting errors going back 8, e-i-g-h-t years can generate a 2+% bounce imagine what land writedowns will do.

Tin-foil opinion: This isn't a market where being smarter than the average idiot is an advantage. This is batsh¡t crazy idiocy that is sure to go postal on anybody unlicky enough to be in the room when the medication wears off.

Too Stupid To Own

“I feel burned,” she said. “I’ve always been one who paid the bills on time. I always did things the right way. If they had counseled me (correctly), I could’ve made my payments.”

We will get to the story in a minute but It is my story and I get to rant first. Hell No! Listen stupid and listen good. You got lucky. You are still stupid but at least you are no longer sinking deeper. You made bad decisions, you overspent your income, you lied. "Counselling" doesn't work when you lie babe.

Here's the MSN story. Additional excerpt:
How to lose your home in a few easy steps

Toothman ended up buying a $415,000 condo in June 2004. The mortgage was entirely under her name, since her sister could not qualify. But the two agreed to split the monthly payments of $2,400.

For a year, Toothman struggled with her half of the payment. Her monthly take-home pay was $2,000. She started eating at her savings to pay the mortgage.

Toothman tried to refinance the loan to lower the monthly payment, but she was unable to qualify.

In late 2005, Toothman decided to sell. But prices were already falling, and by early 2006, the condo was worth less than the outstanding balance of the mortgage, putting her "under water." ...

Toothman’s nightmare got worse. In July 2006, the monthly payment on the two loans jumped nearly 50 percent to $3,600. For two months, Toothman maxed out her credit cards to meet the payments.
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It's The New Economy Again Stupid

Peripheral Visionary noted so very corretly...
Google at $620/shr; current valuation puts them above Wal-mart.

. . . because Google is where everyone goes to buy clothes, food, electronics and toys for the kids. But even if their retail arm suffers, they've still got wireless services, and their broadcasting and entertainment arm, and of course their full range of financial services. Why, it makes perfect sense that they're one of the biggest corporations in America by valuation!

GOOG, AAPL, RIMM. Mien Gott! The only questions remaining are how big the stock splits are going to be. It's like Mar 2000 never happened.

I'm scared enough to not have anything in the GOOG arena but isn't some 30% of their revenue RE and financials related internet advertising? I'm getting increasingly uncomfortable with Google. I wanted to buy some mondo grass spigs for the gardens so I did what 70% of the world does. I googled "mondo grass" and got dozens of hits. Now I'm not the average dawg and I don't just clic through the top hit. Instead I checked out a few discussion threads and discovered there is a website mondograss.com. Strangely they weren't in the google hits. Maybe it was just a compound word search error so I went back and googled "mondograss" as all one word. Hits number 8&9 and those were to the "about us" pages and such. Now the kicker. They are cheaper by far than any of the google associated top hits. I am distinctly uncomfortable with these trends. I am also noticing a crowding out of anything non-commercial from the results. I often search for transportation and urban data and the quality of the results is rapidly deteriorating in favor of tangentially related paid placement.

What say ye all? Am I being alarmist?

Higher Taxes Equals Affordable Housing

I swear, there must be something in the water up in Sacramento. Da Governator just signed on Friday AB 929:
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THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 51350 of the Health and Safety Code is amended
to read:
51350. (a) The agency may, from time to time, issue its bonds in
the principal amount that the agency determines necessary to provide
sufficient funds for financing housing developments and other
residential structures, the payment of interest on bonds of the
agency, the establishment of reserves to secure the bonds, the
payment of other expenditures of the agency incident to, and
necessary or convenient to, issuance of the bonds, and for the other
purposes provided by Sections 51065.5 and 51365.
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So what "Health & Safety" issue is being addressed with $2,000,000,000 in bonded debt? Affordable housing. Got that? More money chasing the existing stock of housing is going to make it cheaper to own a house in California. Not that this is a new idea. The California Housing Finance Agency has been around since 1975? How's that worked out?

The Next Bubble

Bubbles beget bubbles. So what's next? The picture gives away the answer but the numbers are so unbelieveable I don't know why this one has escaped notice. By 2011, 34 new cruise ships are scheduled to be delivered. Some will be as large as 5400 passengers.

At the same time in February Norwegian Cruise Line's America division (the only cruise line allowed to offer cruises that start and end in Hawaii), will reduce its presence in Hawaii due to significant financial losses in that market. Their new ship "Pride of Hawaii" will be reassigned. Not surprising as hotel occupancy rates in Hawaii continue to fall.

Man if you thought being under contract for a new house in Las Vegas was a tough proposition imagine being on the hook for one of the half billion dollar babies.

My solution? Affordable housing.

Right on Schedule

NYPost October 6, 2007 -- Ellington Capital Management, the country's largest mortgage-backed securities hedge fund, sent a letter to investors notifying them that redemptions and withdrawals in two of its funds would be suspended because of a sharp decline in the liquidity of certain mortgage- and asset-backed markets.
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This is one of those "thousand point Monday" events. First we see the huge loan loss provisions from WaMu and Merrill and Citi. Now the real big shoe; the consequences of hedge fund redemption deleveraging the credit markets. This is when the containment field starts to break down. No amount of liquidity infusions (helicopter drops) can save the credit markets. Unbfortunately we have a Fed that mistakenly thinks it is its' job to protect those markets and thus has a plan to make things worse. Phase One is nearly complete with the lowering of rates. One Shot policy. There's a bunch of people out there who are suspecting that all the financials and all the homebuilders are massively overvalued and they are begining to realize that if they don't get out -now- it will be too late. How would you feel if you were an Ellington customer above? And let's face it. Ellington is lying. There is no "liquidity" issue. They lost all the money plain and simple.

Gas Prices Frozen at 2002 Levels

Heck if the bimbo at the FDIC can call for ARMs to be frozen at their teaser rates why can't I call for the EIA to do something for me?

No creeping moral hazards in the halls of government. No siree.

BofA: deposit king; mortgage king; fee king.

For about what seems the eleventeenth time Jim Cramer has reported/started the rumor of BofA buying Countrywide. He thought is was a good deal at $30bn so he certainly pushes even harder at ~$13bn. Ignore the fact that BofA would be tens of billions to the poorer had they listened the first time.

Casey Interim Update

The excellent source, friend and confidant has told us what Casey is up to:
Duane LeGate reports as reputedly from Casey Serin:

Keith, just kidding... I'm not going back online. But I guess I can give you "final statement".

After all, it was your HousingPanic blog that gave me the first spot-light (and the first "haterz"), so I'll pay you back the favor.
I hope this message is taken as sincere. I have no more reasons to "spin" anything...

I'm working a stable consulting job for an experienced entrepreneur.
Consulting is a generic term which means I'm doing whatever needs to be done. The best part is I have a slice of ownership in the venture.
So its the best of both worlds - the stability of a 9-5 with weekly paychecks while still giving me lots of flexibility, a chance to build something and share in the profits. Very much a blessing. So I'm getting back on my feet financially, though very slowly.

Trying hard, REALLY hard, to not get distracted too much by "pie in the sky" stuff and my temptation to go back online and in media.
Turning down the Dr. Phil show recently was a very tough one! I have to remember that it was the online/media over-exposure that was the "last straw" in my marriage breakup, amongst many other things.

Its obvious that I cared much more about my "fame" and potential sweet deals/opportunities that might come as a result, than the concerns of my wife and our unity. Also there was that hand-written promise I made to her to shut down the blog, get a job and lay low for 2 years or more. I want to keep that promise, even if I never get back with her. It's the right thing to do and will teach me to honor my word.

And yes my wife and I are still separated, unfortunately. I am learning some really really hard lessons about how fragile relationships really are. As I'm sitting here all alone typing this email at 4:48am (all nighter), I'm thinking back to a time when she was right here by my side. Man, how stupid I was to ruin such a great thing! Now I can only work on making things right in my life and pray that God gives me another chance with her.

As you've seen, I sold the blog for 50K - huge thanks to Aaron Krowne of www.ml-implode.com. I finally did the right thing (though reluctantly at first) by paying off all the debt that was in my wife's name as well as most of our private loans. It was really my own debt.
She trusted me with her credit to use for the real estate deals.
What did I do? I ruined it and broke her trust (not the first time unfortunately).

Paying off that debt took a little over 40k. Plus there were a couple of previous "partners" that I had to pay to make things right -- more painful lessons on promising too many things to people and not keeping those promises. The attorney fees to undo some of those entangling relationships took a big chunk. G kept the Jetta so I also bought a cheap used car for myself for 3K. So that's where that 50 grand went.
All gone, but for a good purpose.

Not sure what I'm gonna do about the approx 500K of debt still in my name. That figure includes both credit cards, deficiencies on mortgages and a private loan. Its just an estimate as I won't know until all my bank-owned properties get sold. My desire is still to find a way to pay back "every dirty penny", but I also have to be realistic. I am considering Chapter 13 bankruptcy. It forces lenders into a repayment plan and I can start cracking away at it. But I'm not sure yet if that's the right plan. Too much things are still up in the air. We'll see.

As far as FBI and "mortgage fraud "investigation goes, I don't have any news. Last I heard they still have a file on me and perhaps they're just taking their sweet time. I do have a defense attorney and plenty of proof to show I did not have any criminal intent and had plenty of reliance on professionals.

Of course I made some bad business and ethical decisions with the loans. Then I was naive enough to blog about it in vivid detail and let people blow it out of proportion. It was fueled my idealistic desire to help others by sharing my experience of what "not to do". I sure hope my story helped some people, both those facing foreclosure and especially newbie investors to be more careful.

I am not excusing my behavior and am ready to do whatever I can to "right the wrongs", like attempt to pay off the debt. All I know is I have to continue doing the right thing and let the "chips fall where they may". Living in fear is not going to do me any good.

Man, do I wish I didn't have to go through all this crap but I was blinded by my reckless pursuit of financial success. It was definitely fun and adventurous at the time (like the Australia trip), brought me some great contacts and relationships, etc. In the end it was much more harm than good. Loosing my wife that is.

Having said that... I'm not giving up on my dreams of financial success. God gave me those desires for a reason. Instead I am even more determined to pursue it but in a safer way - even if takes
longer. Biggest thing is I must put my loved ones first. For it is
because of them, my family and friends, that I want to become financially independent. I'm looking forward to that day when I can share my abundance with them. But in the mean time I have plenty of non-financial abundance I can share - love, caring, quality time, etc.

About 3 weeks ago my 25th birthday came and went. I did not accomplish my goal of 5K/mo passive income - a goal I set 7 years earlier. I'm OK with that. The truly tough part was not being with The One whom I really wanted to share that special moment with. I guess we take for granted the things that truly matter (relationships), until they're taken from us.

Anyway... this is the last the online world will hear from me for a long long time. All in all, the past year has been some of the craziest times of my life. That's for sure. I thank both the haterz and the supporterz. Everybody played a role.

In closing, I will say my favorite line.... "Its all good!" I'm
still an optimist but (hopefully) getting wiser through painful lessons and many lonely nights.

Casey Serin
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I know better but I also know we need to talk about this first.