Wednesday, October 03, 2007

Blaze of Glory


If you are gonna go down you might as well go down in style.

We see again the mortgage lates, NODs, NOTs, REOs continue to increase and lenders unwilling to refinance putting people even further underwater. If the lenders and their servicing agents think a workout is expensive just wait until they start getting entire neighnborhoods going striaght from performing to REO with absolutely no efforts by the borrowers to do anything except not cooperate. No late pays, no penalty payments to cover additional expenses just a balance accrual that willl make it impossible to break even. People do some amazing things when faced with crisis. A relative needed a transplant several years ago. They went to a financial advisor first. Their choices were lose everything and die early due to complications of poverty or spend it all on children and cars and misc qualified purchases and go on Medical and get the transplant and have wealth and lifestyle preserved. Some choice. We are about to see the same thing with a flood of housescapees.

26 comments:

Max said...

Some interesting moral hazards are beginning to emerge as well. I've been reading reports that suggest that lenders aren't willing to consider a re-work until the borrower is behind on payments by at least two months. So the family that struggles to make huge payments month after month gets no help, while the one that stops paying gets a refi? What would you do in that position?

Akubi said...

A telling anecdote from Marin Real Estate Bubble:
I was up at the Novato Target the other day (because I am too cheap to pay South Marin prices if I don't have to) and guess who I saw working at a cash register? A former Marin real estate agent acquaintance of mine. How sweet it is! I didn't have the heart to ask if she still had the leased Lexus.

Arthur Wankspittle said...

I'm sure it's been said on here before, but you could have the scenario where a newish estate was completed say 2 years ago and a significant number of homeowners are on ARM resets. Appraiser doubts the values and not only will the reset cause an interest rate rise but the LTV will cause a rate rise. It then becomes a game of Chicken as to who of the lenders holds off foreclosure longest assuming they have the money to stay in the game.

Sac RE Agent said...

Dawg, atleast Thelma and Louise had a reason to drive off a cliff.

Actually read an article in the Oregonian about the servicer (not the lender) of a loan, not agreeing to a restructuring of loan payments unless they got paid $3,000. Crazy.

Arthur Wankspittle said...

Actually read an article in the Oregonian about the servicer (not the lender) of a loan, not agreeing to a restructuring of loan payments unless they got paid $3,000.
A cynic would say they are after their money now because they doubt they will see their income from the loan servicing.

Rob Dawg said...

A servicer is the entity that has to do the actual work in a workout. They want to get paid. Right now they get their points and keep penalties and fees. What you are suggesting they do is negotiate at great effort a deal with lower points to them and less likelihood of penalties and fees to them. They have the worst form of conflict of interest.

Quillian said...

I haven't posted here before, but the story I hear so far is that you take a lender (Say cfc), they are the servicer to a loan that they already sold that's now been divided up in baskets of investments, so the loan holder doesn't even really have any contact to their loan. Now, since CFC is the servicer and their's a bunch of different loan holders, the theory goes CFC gets more from foreclosure fees than it does by allowing them to refince. The cynical among you might surmise a brilliant plan would be to:
A) Finance a Mortgage
B) Sell the mortgage to an investor.
C) Collect fees for servcing the mortgage.
D) Collect fees for foreclosing.
E) Go back to A)

But that's now how they think they are going to operate now, is it? Surely not...

HauspocalypseNow said...

2 years supply of homes in Simi/Moorpark

Lowest pending sales ever, lower than september 2001.

The last 2 months have been 'the crash' that all the bubble bloggers have wet dreams about. Now we just have to wait for prices to drop more. Its awsome watching new low comp crushing sales happen.

Rob Dawg said...

HauspocalypseNow,

I disagree. There's a lot more to go. Sellers are going to start "acting in chorus" and that is when the real plunge occurs. Watch listings expire, a flurry of home improvement and "simplifying lifestyles" follwed by a rush in the spring. Yep, 4 months of everyone holding their breath. There is no money to be made in real estate ownership this year or next. The only sales will be of the "getting rid of" variety. Simi/Moorpark are a double special case. Most of their housing stock is "new" and thus loaded down with HOAs and Mello-Roos. Their housing types are also too high-end for the new market conditions.

There's going to be a lot of shellshocked homemoaners out there.

H Simpson said...

watch these TV ads for GMAC/Dietech where they
say "People are smart" and proceed to screw the clueless lambs a 2nd time.

These morons don't even notice the cartoon is a genie doing smoke and mirrors to take their money.
Though most the rubes would miss a skull and crossbones provided the happy jiggle was playing.

Sooner or later the arrogant lenders are going to have cornered the market on useless/underwater housing and figure out maybe their strategy was not so hot after all. Sweet!

The banks that did some of these toxic loans but kept them are a lot more flexible. I have a friend who works in a mortgage dept and she tells me they do as much as they can to keep the borrower's in the house as they don't want the asset.

These servicers and lenders are sort like the 1st generation of CEOs who offshored all their jobs and then wondered why nobody was buying their products in the US.

I see stupid people and they are everywhere...

HauspocalypseNow said...

Well the last 2 months were really the 'start' of the crash like when the plane blows an engine and its on fire. Engine on fire isnt 'the crash' really.

Anyway, I remember the last recession the words 'living simple' were heard a lot.

This time is cool because you are saving the planet from global warming by renting a room and riding a bike to work! awsome! too bad no one will that voluntarily.

Rob Dawg said...

"Living Simple" is going to be a shock for these people. "LS" is not the same car for 5 years, it is sharing a single 9 year old car. It's a freezer full of chicken bought on sale. It's your divorced sister and her kids coming to "visit."

Peripheral Visionary said...

Hauspocalypse Now: "This time is cool because you are saving the planet from global warming by renting a room and riding a bike to work! awsome! too bad no one will that voluntarily."

Umm, how about renting a room and riding the bus, does that count? And yes, completely voluntarily. And my income is above the household median for my metro area.

It's not much of a lifestyle, but it's amazing for cash flow. I'm paying off the student loans very quickly, and even building the savings a bit. As an official Bitter Renter™ / Buyer in Hibernation™ I would not say that "life is good", but I would say that I'll be well positioned to take advantage of the deals that will be coming along in a couple of years.

Lou Minatti said...

We came within a pube's width of losing our house when I was in high school. I don't think anyone here other than me was in Texas during the 1980s oil bust, so when I hear people's stories from SoCal circa 1993 I can only laugh. It was easily 2x worse here during the oil bust. We lived in a nice subdivision near Compaq, which was just starting up. Every other house on our street was vacant. I remember the day a guy from the bank came to our house. Nice guy, very sympathetic. He said he was extremely busy dealing with families just like ours.

I put college on hold for a year, went to work, and we ran a fireworks stand for two weeks. My mom held on, and now the house that she paid $87k for in 1979 is now appraised at $165k. This is a good part of town, the home of lots of HP people. The house is paid off and she just retired with a good teacher's pension that I am sure has a load of toxic waste buried somewhere.

I am not sure how a California family staring down the twin barrels of a loaded $500k mortgage shotgun can stick it out. No point in wondering, they won't stick it out. Jeebus, California is sooo fawked. I am not bashing you guys, I like California.

Lou Minatti said...

BTW, we cleared almost $2,000 running that stand for 2 weeks leading up to the 1985 July 4 holiday. I had to sleep inside the stand so that the little bastards in the neighborhood wouldn't break into it at night. You gotta do what you gotta do, a lesson that many people are about to learn, unfortunately.

Lou Minatti said...

The SDCIA people are contemplating doing a Snowflake.

http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=2195684

TK said...

Lou,

Disturbing. Truly. And these people really are Lowest Common Denominator, the guy that started that post is plugging MillionsR.us??

hee hee...

Anyway here in New York, the shit is FINALLY hitting the fan. And of course, all the dumbasses feel they were prey to ruthless, lying, EVIL mortgage brokers. You know I'm sick to death of people looking for a life line because they're too god damned stupid to do their due diligence.

"I said, 'They know what they are doing. They wouldn't hurt me,'" Munoz said. "I put my trust in them."

Munoz said her mortgage broker lied about her income to get her a loan to cover the cost of her $500,000 home and tricked her into buying something she could never afford.


Oh shit that makes me mad.

Not to worry though, my dickhead Senator from NY Chuck Schumer (who has thrice gotten an earful from me) has a plan.

Fannie Mae and Freddie Mac, the largest U.S. mortgage-finance companies, would be allowed to expand their $1.5 trillion mortgage portfolio to buy subprime loans under a Democratic plan to help struggling borrowers...The two government-chartered companies, which are barred from increasing their portfolios by more than 2 percent a year, would be required to use at least 80 percent of their new $150 billion in spending authority to help homeowners with poor credit records refinance into more affordable loans, Schumer said.

ASSHOLE. Pay my rent. Loan me some money at a retardedly low rate. I promise you I'll make better use of it than the morons you want to bail out.

aaron said...

anyone else here noticed the new infomericals? The ones' talking about making money real estate foreclosures. The rats have scurried for the next 'boom'. Sorry I wouldn't touch any foreclosures for at least a few years and I sure as hell wouldn't need some foreclosure 'school' for it.

TK said...

Definitely. The shift has occurred and they all have the same "feel" as the get rich in real estate ones did.

Sac RE Agent said...

Nigel has summerized a 'private' email on his blog that was sent to Keith at Housing Panic.

So Nigel, drop Casey a line and start a conversation. We all would like a more indepth update on the guy.

Duane LeGate said...

here is the email...

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




On 10/3/07, Casey Serin casey@serin.us wrote:
I'm planning to start a new blog... mostly likely tomorrow.

On 9/28/07, housingpanic housingpanic@yahoo.com> wrote:
> Casey
>
> I hope this finds you well.
>
> It's time to tell people how you're doing and what you've been up to.
>
> Write me a note here and I'll post as a guest post verbatim. Just
> let everyone know how life is post-iamfacingforeclosure.com. And
> give us your thoughts on the housing crash and mortgage meltdown.
>
> Cheers
>
> Keith
>

Property Flopper said...

Well, that answers a lot of the questions. Casey is still dumber than a sack of rocks, he hasn't given up becoming wealthy while being alergic to work. He seems to have learned very little (other than to avoid attention - that exposes the lies).

The wife left him, good for her. Hopefully she can rebuild her life with someone better.

I love the thoughts about chapter 13. Casey is happily ignoring the fact that debt due to fraud is not dischargeable. Filing chap 13 will also bring his financial records into court system - he can't hide behind "I don't remember the exact numbers, I'm not a details guy" at that point.

He's had his fun, now he gets to pay the price. The last year of fun will haunt him for many years to come. He will spend his 30th b-day much like he spent his 25th, broke and alone.

His only hope for better birthdays after that is to learn the truth to the old saying, there's no such thing as a free lunch.

Property Flopper said...

By the way - no mention of the giant sinkhole threatening million dollar homes? Such a nice metaphor for the housing market right now.

Rob - Was it just too easy, not worth a post?

Akubi said...

So he simultaneously writes:

... this is the last the online world will hear from me for a long long time.

And:
On 10/3/07, Casey Serin casey@serin.us wrote:
I'm planning to start a new blog... mostly likely tomorrow.


Am I missing something or have I already forgotten how bizarre fliptard's logic is?

Ogg the Caveman said...

On 10/3/07, Casey Serin casey@serin.us wrote:
I'm planning to start a new blog... mostly likely tomorrow.


Oh yes, please oh please come back and entertain us some more...

Ogg the Caveman said...

@ Akubi:

It's a gray area. You see, if he realized that starting a new blog meant that the online world would hear from him he never would've done it. The blog brokers told him that everyone does it and it's not really such a shady deal.