Friday, May 29, 2009

Please God No!

A new low in bankster tricks. This from "Bank of america" despite the Calabasas location. You know, Countrywide's lair. My comments are interspersed.
Bank of America Home Loans Announces New Program to Help Municipalities Purchase Bank-Owned Properties
Guidelines for use with new federal Neighborhood Stabilization Program funds

Calabasas, Calif. - As part of its commitment to stabilize communities hardest hit by foreclosures, Bank of America Home Loans has announced new streamlined capabilities for municipalities to purchase properties from its real estate-owned (REO) portfolio. The new guidelines are exclusively for local and state government departments receiving U.S. Department of Housing and Urban Development’s (HUD) Neighborhood Stabilization Program (NSP) grants, to more easily and quickly acquire foreclosed properties for resale to home buyers or to address other community development needs.

Exclusive? Great a new tier of preferred participants. Bad enough that the RE industry saves the best for their own use now government gets the second bite before the apple gets put on display.
Bank of America is proactively briefing eligible municipalities about the new guidelines, and has dedicated staff to work with the government officials, agencies and their nonprofit designees throughout the entire REO review and purchase process.

Great, more work for public employees in a time of fiscal crisis.

Specifically, the new guidelines offer to NSP grant recipients the following:

“First Look” Purchase Opportunity – Review of Bank of America bank-owned properties before being listed on Multiple Listing Services (MLS) and other public sites.

Multiple Property Purchase Opportunity – The ability to purchase multiple properties in a single transaction.

Individual REO Sales – A dedicated servicing associate at Bank of America to work with the city from start to finish.

Real Time Listings – Private access to a new Web site providing real-time listings of all REO properties owned by the bank. Lists of all REOs within a specific zip code are also available.

Nothing like "private access" to generate transparency.

“Helping our customers stay in their homes is a top priority for Bank of America. However, where unemployment or other situations have made sustaining mortgage payments impossible, and foreclosure inevitable, we are working with communities to help ensure these properties do not negatively impact surrounding home values,” said Steve R. Bailey, national servicing executive. “Our new guidelines help municipalities leverage federal grants to purchase foreclosed properties with greater ease and speed, so they and their nonprofit partners can determine the best use of the properties to meet local needs.”

Government is the only sucker left in the game at these prices.

Bank of America Home Loans services one in five residential mortgages in America. These new guidelines are part of the company’s overall commitment to help preserve homeownership and stabilize communities. This includes modifying mortgage loans for up to 630,000 borrowers over a three-year period, representing more than $100 billion in mortgages; and a $35 million neighborhood preservation and foreclosure prevention package announced last year in grants and low-cost loans/investments to nonprofit organizations for foreclosure prevention counseling and REO purchases. Bank of America also works with nonprofits to help create and offer training programs for cities and local nonprofits in communities impacted by foreclosures to buy REOs.

BAHL is actually the former Countrywide. Say no more, say no more, wink, wink.

First the State Parks

As long predicted, the State of California is proposing closing the State parks.

Pictured above Mugu Rock from the California Coastal Records Project.

SACRAMENTO, Calif. (AP) — Gov. Arnold Schwarzenegger's budget cuts could mean the closing of up to 220 state parks, among them the home of the world's tallest tree and other attractions that draw millions of visitors.
Schwarzenegger this week recommended eliminating $70 million in parks spending through June 30, 2010. An additional $143.4 million would be saved in the following fiscal year by keeping the parks closed.
"State parks draw tourism to California," State Parks Foundation president Elizabeth Goldstein said. "This proposal makes the budget situation worse."
The foundation estimates the state gets a $2.35 return for every dollar it spends on parks.
California spends roughly $400 million a year running 279 state parks and beaches, with roughly a third of the money coming from the state general fund. The rest comes from user fees, which account for slightly more than a quarter of the revenue; bond funds; gasoline taxes; federal money; and other sources.

As you can see from the numbers this isn't about saving money or even collecting more money, this is about punishing recalcitrant taxpayers.

California State Parks.

Wednesday, May 27, 2009

Tick tick tick

Jan 15, 2009 Listed $999,000
Oct 26, 2006 Sold $1,527,500

4 months on market and they can't even get $1m. 2 1/2 years and $600k losses and counting. Call it $600/day.

Heeee's Baaaaack!

Casey is trying to jumpthe shark twice.

Monday, May 25, 2009

High End Declines

It has taken far longer than we expected but the "high end" is finally getting back to merely expensive. Here's a fine example:

1324 Ramona Dr Camarillo, CA 93010
Sale History 12/30/2005: $910,000
Originally listed $825,000
Currently listed $650,000

Unfortunately this is in competition with a rental also on the golf course but includes a pool:

Let's do the math.
Rental: $4000/month.

Purchase: $140,000 upfront, lost opportunity @4%; $700/mo.
Mortgage $530,000 @6%; $3200/month
Taxes plus special assessment: $800/month.
Homemoaner Total $4700/month.

Now, I know the neighborhood. You can get the rental for $3500 or less easy. While they aren't common an equivalent rental would run $2400-$2800. So, even at a 50% decline from peak these places don't yet make financial sense in the new era.

Memorial Day

Saturday, May 23, 2009

Overflow Parking

This is the Camarillo airport. They've run out of space at the Port of Hueneme. And the South Oxnard processing facilities are full and the leased space at the closed industrial parks nearby so now they are filling up the tarmac in Camarillo.

The future is brand new 2009 BMWs sold in 2012.

Tuesday, May 19, 2009

California Fails

Props 1A-1F are on the ballot today.

1A Extends the sales tax increase from 2 to 4 years. Did we have any say in the first 2 years? No. FAIL

1B Something about actually funding the schools with money allocated currently to schools starting in a few years maybe. FAIL

1C Sells the State Lottery and leases it back to "save" money. FAIL

1D Shuffles money around in children's programs. FAIL

1E Takes money from mental health programs and kinda promises to probably pay it back someday. FAIL

1F Symbolically suspends pay raises when the budget isn't balanced. PASS

I'll post an update at the first calls. Results page

Sadly, the message will be lost on the Legislators in Sacramento. We spend more on the 170,000 prisoners than we do on the far larger State College/University/Community College systems. Probably has something to do with paying guards more than Associate Professors. It isn't just spending less, it is priorities.


I love the C.A.R. They provide no end of amusement. Take this recent press release.
Entry-level housing affordability reached 69 percent

For release:
Thursday, May 14, 2009

Quick Facts:
· C.A.R. First-time Buyer Housing Affordability Index stood at 69 percent in the first quarter of 2009 compared with 46 percent (revised) in the first quarter of 2008
· The median price of an entry-level home in California was $213,040 in the first quarter of 2009
· The estimated monthly payment including taxes and insurance was $1,270 in the first quarter of 2009
· The minimum household income needed to purchase an entry-level home in California in the first quarter of 2009 was $38,090

Let's do that math. $213k/$38k is a gross multiplier of 5.6. They assume a 10% down so the debt multiplier is 5.0. Whatever happened to 2.5-3 times your gross? Never mind, moving on. The $192k mortgage at prevailing rates 5% per bankrate is $1050. Taxes in California @1.3% are $230. Apparently PMI and insurance are free in CARworld™. And that $1280/mo relative to the gross monthly take home pay of $3174/mo? 40%. Am I so old that I remember 28%?

Saturday, May 16, 2009

Post Apocalypse Real Estate

Pasted from the Redfin listing (unedited):Looking for a perfdect home with great privacy? Here it is a Brand New Custom built home with a spectacular view. 7000 sq ft home on a 2.5 acre lot with a beautiful radius entry way with dual staircase leading to the second floor. 5 bedrooms 5baths. Master bedroom with a jacuzzi and leading out to 20x5 balcony. formal living room with a wet bar, formal dining room den, office and a theater room perfect for entertaining. Granite counter tops trough out the entire house. Custom home asking only $142.14sq ft.. Buyers have a choice of picking the interior paint and some allowable interior changes.

And where is this deal?

That's the California Aqueduct at the top and the Antelope Valley Freeway to the left. Here ate the directions:
Travelling 14N take Angeles Forest Hwy Exit Pearblowwom Hwy. Merge into Sierra Hwy stay straight go into Pear Blossom Hwy. Turn Rt. onto Small Rd. Turn Left Old Nadeau Rd. Turn Rt. onto Rolling Pines Rd. (portions unpaved) end at Jumping Cactus Trail.

Thursday, May 14, 2009

Location Location Location

One is $550k. the other is $265k. The difference? One is in Camarillo on 3,039 sf lot and the other on a 9,464 sq ft lot in Palmdale. No points for putting the correct asking price to each.

Wednesday, May 13, 2009


Seven hundred and fifty nine percent. It doesn't quite roll of the tongue but that's how much California Bank & Trust has in outstanding commercial loans relative to their net worth. Details in this LATimes report.
As commercial loans go bad, it will be particularly hard on regional banks, said Joe Morford, a San Francisco-based analyst for RBC Capital Markets, because their main customers are the small and medium-size businesses whose ranks include many developers.

"They exist for the small-business customer, the real estate developer and the entrepreneur," Morford said, a role that makes their health crucial for the greater economy. Morford has warned investors to be cautious about all three of the biggest L.A. County-based banks: East West, City National, and Cathay General Bancorp of Los Angeles.

Morford said in a report last week that commercial real estate and business lending problems are worrisome at Zions Bancorp, a Salt Lake City lender that is the parent of California Bank & Trust and operates in 10 Western states; and Umpqua Holdings Corp., an Oregon bank that operates from Napa, Calif., to Bellevue, Wash.

Monday, May 11, 2009

Because That's Where They Keep The Money

State proposal could borrow millions from cities
The plan would affect cities, counties, towns and some other local districts. Under a ballot measure passed in 2004, the state would be required to repay the money in three years with interest.
The 8 percent loss would come as local agencies are already cutting police, public works, parks and other services.
The League of California Cities alerted local leaders to the proposal last week. Chris McKenzie, the league's executive director, called the borrowing plan irresponsible, saying it would make more public safety cuts likely because local governments are already burdened with cutbacks. The league is urging Gov. Arnold Schwarzenegger to reject the idea.

It isn't their money. Thus ends civilization.

Chase That Market

The details of this particular property are almost irrelevant. Poor location, noisy, no privacy, flood prone, etc. don't matter. All we are concerned with is the listing history:
May 10, 2009 Listed $225,000
Apr 08, 2009 Delisted
Mar 09, 2009 Price Changed
Aug 02, 2008 Relisted
Jul 21, 2008 Delisted
Jul 04, 2008 Relisted
Jun 19, 2008 Delisted
Jun 03, 2008 Relisted
May 26, 2008 Delisted
Mar 19, 2008 Listed

Chasing the market defined.

Silly Selling Season

The second best part of watching this real estate disaster is when somebody shows up late to the party. Here's an example:
A BEAUTIFUL setting with an incredible flat lot of over 1/2 an acre. Rich and warm with woodflooring and wood accented walls. 6 bedrooms, one used as an office, 3 baths, large laundry room, includes appx. 600sqft room, which could be in-law quarters-kitchenette possible. Double garage in front, plus second double garage with 850+sqft added space that would be ideal workshop or craft area. 2-forced air units, 2 water heaters. Storage under house.

Seems like a nice place. And I know the 'hood. It is fine. i wouldn't raise teenagers in the area but other than that good 4 season weather, lots of recreational opportunity, a great place to retire as well. What's the problem? Price. This time traveller missed the last three years and upon emerging from the capsule expects to collect their appreciation.

May 09, 2009 Listed $549,000
Dec 10, 2008 Delisted *
Oct 25, 2008 Listed *
Jul 12, 2006 Sold $360,000

I mean if anyone bought at the top wouldn't this be it? Prices in Wrightwood are 2002 not even 2004 anymore. Come on. $549k buys entire neighborhoods "down below" in the desert communities. It doesn't matter what the "needs price" or the "worth price" are. And there's our new meme. "Worth price." Be very careful. These are the same jerks who on the way up were saying; "it doesn't matter what it is worth, this is the price." Don't let them turn the tables now.

Chew Toy Sighting

Major Hat Tip! to Serinitis for this huge news:

Saturday, May 09, 2009

Bloodhound Off The Leash

If this doesn't creep you out nothing will. Notice all the traits Casey hoped to develop?

Greg Swann We Can Go Bigger!

The Bloodhound is on the scent. The scent of "sweet passive income!" This from December 14th, 2006:
For now, our earning goal is $1,000 a day, each, call it $700,000 a year, gross. Obviously our expenses are huge, as are our taxes (grr!). Worse yet, we’re not hitting that goal yet. And to put things in perspective, Russell Shaw’s annual broadcast advertising spend approaches our total earning goal.

In the near term, I think we can double our numbers to something like $1.5 million a year, before taxes and expenses. From there, with a couple of assistants each, we might be able to push things to that amount, gross, each. In other words, without growing our head-count very much, we might be able to knock down $3 million a year in gross commission income. The net from that might not be all that great, considering, but it will still be a lot of money.
Sound familiar? And how'd that work out for the guy who called the bubble bloggers of the time "flying monkeys?"
Our choice was to keep the doors open at the risk of those doors themselves. I could see an upswing in our business activity, to the extent that I expected to catch up on the mortgage by the second quarter of 2009, and to catch up on everything by the fourth quarter.

I still expect this to be the case.
Wiat until you hear the blessing of God in the upcoming videos I'll post.

Black Swann

Surprise, it turns out Greg Swann is just Casey Serin with a Mac and a head start. From his newly revamped blog:
For the past three years, our outflow has exceeded our inflow. This is not an unusual story in the real estate business, and we have been lucky to have enough high-paying work to at least keep us within reach of profitability. During this same time, as you have seen here, we have completely reengineered everything we think about marketing, with the ultimate test of those ideas beginning only now.

But our debt load became severe enough last year that we had to make some hard choices. I elected to take a chance on our mortgage payments, since there was a plausible threat that we might lose the house anyway. Our choice was to keep the doors open at the risk of those doors themselves. I could see an upswing in our business activity, to the extent that I expected to catch up on the mortgage by the second quarter of 2009, and to catch up on everything by the fourth quarter.

I still expect this to be the case. My one mistake was that I didn’t think IndyMac would pull the trigger this soon.

Yup, foreclosure.

More, much more later. Oh, and an important blog note. Greg Swann has taken to editing absolutely anything on his blog the least bit negative, just like Casey. So just like then, anything you want to say to Greg, say it with no fear of censorship.

The Elephant (Seal) in the room

As predicted April wasn't very kind to California politicians. Excerpt from the State Controller's Office:
Compared to April 2008, General Fund revenue in April 2009 was down $6.3 billion (-39%).
⇒ Sales tax collections year to date are short $327 million (-1.8%) from the 2009-10 Budget Act. Income taxes were $653 million lower (-1.7%) than expected, and corporate taxes were $788 million lower than expected (-9.5%). The State’s other revenue streams were $299 million below (-6.7%) the estimates. Because the 2009-10 Budget Act contained actual revenue through February 2009, these disparities only occurred in the months of March and April.
Better switch to Plan B:

Friday, May 08, 2009

Off The Grid

ONAN Generator - 60KW 3 Phase. Volts:480/440,240/208,120/110. Cummins Turbo Diesel, 50 Gallon Skid Tank. Cost $22,000.00 new. Selling for $5,895.00 OBO Call (805) 646-0xxx Location: Ojai, CA
When Arnold turns out the lights in two weeks you are going to remember this deal.

Did You Feel It?

A few mile north in Ojai.

Budget Crisis Cure

Rather all this spending and taxing and propositions and partisan politics and corruption:

It shall be illegal for sitting legislators to campaign or collect campaign contributions while the budget is in deficit.

Monday, May 04, 2009

Housing = Circuit City

Remember when CC had their massive bankruptcy sale? Did you see any bargains? Neither did I.

That's what we are seeing in the housing market right now. A bunch of consumaholics convinced they've been denied long enough and 20% off MSRP is a deal.


"Sometime between April 20 and April 21, two portable toilets were stolen from a field near Pleasant Valley and Fifth street."

-Sheriff's Blotter, Camarillo Acorn 01 May 09 edition.
Any ideas? Did they spirit these over the border before they were missed? Cleaned and parted out? Repainted and had their serial numbers removed for a quick aftermarket resale? What's the going rate for a stolen port-a-potty?

Sunday, May 03, 2009

1.5 Automakers or Less

DETROIT -- U.S. vehicle sales turned out even worse than expected in April, muting optimism that the auto market is poised to rebound.

Auto makers blamed the high-profile troubles at General Motors Corp. and Chrysler LLC for dragging down sales last month across the industry. Chrysler sought bankruptcy protection on Thursday.

"We've been fighting all these rumors left and right and it doesn't help," GM sales chief Mark LaNeve said. "I thought we were going to close much better than we did."

Shaky consumer confidence and high unemployment levels also offset benefits of increased credit availability, deep auto discounts and U.S. government backing of warranties on GM and Chrysler vehicles.

April sales totaled 819,540 cars and light trucks, a decline of 34% from a year earlier, according to market research firm Autodata Corp. The seasonally adjusted, annualized sales pace was 9.32 million vehicles, down from March's 9.86 million rate.

Actually I expect 30-40 automakers in 5 or so years. A new golden age of rolling innovation.

Zillow is Useless Now

When Zillow first came out it looked like a great idea. And maybe someday it will be but for now it's just floundering trying to discover the magic formula that lets you read a tax roll and determine a home value. Check out this example:

Little cabin in the woods.
Here's Zillow's take.
1319 Irene St WRIGHTWOOD CA 92397
1 beds, 1.0 baths, 782 sq ft Recently Sold: $146,250
Zestimate: $170,000 30-day change: -$8,500 Value Range: $112,200 - $190,400 Last updated: 04/29/2009

And now, the listing.
1319 Irene St Wrightwood, CA 92397

Still overpriced but come on Zillow, get within 100%.

Interesting Tidbits

Links from the intertubz.

Interactive Case=Shiller graph: NYTimes.

Dr. Martin D. Wiess, PhD does his own stress test.

Climate Change and California.

Second Lien Holders are screwed.

Ghost Malls of the future.

Executive Pay. The gift that persists.

General Growth Properties: then and now. Remember, contained to GGP.

Inventory Overhang.

And finally Wormsign!: Declan reports.

Saturday, May 02, 2009

Banks As Homemoaners

Here's the link

We couldn't get them to be responsible lenders but now that they are irresponsible homemoaners we're all over their behavior. This is why banks should never be allowed to get bigger than regional.

Friday, May 01, 2009

Pregnant Pause

So many things need to happen. So many things are not happening.