Would you still remember me?
For I must be traveling on, now,
‘Cause there’s too many places I’ve got to see.
Did you know the bank Lynyrd Skynyrd got their name from their gym teacher Leonard Skinner? I have no idea where the Irvine Company came up with the street name Skinner. The Ranch neighborhood was done in the 70’s. Perhaps one of the early project managers was a fan…
Asking Price: $725,000
Purchase Price: $825,000
Purchase Date: 6/14/2005
Address: 5252 Skinner ST, Irvine, CA 92604
1st Loan $650,000
2nd Mtg. $175,000
Downpayment $0
Beds: 4
Baths: 3
Sq. Ft.: 2,326
$/Sq. Ft.: $312
Lot Size: 6,000 sq. ft.
Type: Single Family Residence
Style: Other
Year Built: 1972
Stories: Two Levels
Area: El Camino Real
County: Orange
MLS#: P566766
Status: Active
On Redfin: 160 days
Unsold in 90+ days
From Redfin, “SUPER PLAN 102D! UPGRADED UPGRADED! GRANITE KIT COUNTERS, HUGE LOT WITH A BEAUTIFUL POOL AND SPA, COVERED PATIO WITH POOL TABLE, NO POPCORN CEILINGS, LAUNDRY IN GAR WITH A FULL ENTERTAINMENT CENTER IN GARAGE ALSO WITH BEAUTIFUL NEW FLOORING AND NEW CABINTES, HARDWOOD FLOORS, BONUS ROOM, WITH WET BAR, M U S T S E E !! NO DUES OR MELLO ROOS! Appraisal was done 8/15/2007 hurry!!”
When you read “SUPER PLAN 102D!” did your mind go to the same place mine did? That Lynyrd Skynyrd is the devil.
ALL CAPS and exclamation points — definitely written by a realtor.
Would you want a full entertainment center in your garage? I guess you don’t park there.
Notice the reason to “hurry” is because the appraisal is recent. What does that say to you?
Hurry and buy now because we can qualify you with a bloated appraisal and if you wait the values will drop to the point you can’t finance this property?
That is what it says to me. It doesn’t make me want to hurry…
.
.
The bank is going to get crushed — again. Are we seeing a pattern here? Are you surprised about the credit crunch? Do you see why we are having one?
The seller has nothing to lose because they have nothing in to the transaction. The bank will probably not approve anything that imperils there first mortgage, so they have $175,000 to work with. If this sells for asking price, minus a 6% commission, the bank stands to lose $143,500. There is some negotiating room here. Of course, since this house will probably go for $475,000 at the bottom, there isn’t enough negotiating room to pique my interest.
So concludes another week’s exploration of “the seventh circle of real estate hell.” I hope you have enjoyed our posts this week. Come back again next week — it is only going to get worse.
“Did you know the bank Lynyrd Skynyrd got their name from their gym teacher Leonard Skinner?”
Was that a Freudian slip there, Irvine Renter? I hope you are planning a post outlining the practical effects of the President’s “Subprime Initiative” when he announces it today. I suspect it won’t help the FBers here in OC because most of them certainly aren’t poor.
Carl
—–
Interesting how there are no pictures of the bedrooms (BDRMS in Realtor (TM) speak, nor the entertainment center / garage, nor the bonus room with the exalted wet bar… and no pic of the covered patio’s pool table!
What’s up with putting a pool table outside, anyway? Even if it has a cover it is still gonna get moldy what with mildew and humidity. As Homer Simpson would say, M U S T N O T S E E!!!!!!
Here in the Orlando area circa 2000, I could have bought houses like that within 2 miles of the university brand new for 130K! Even at the peak they were maybe 350K. I guess your sun must be better than ours 😉
By the way, we are outta this state before the end of 2008…
What an ugly looking front elevation. I would not but regardless!
Oh, WTF did Bush said this morning about helping homeowners that are in default. Does he even know how to help? Does anyone know how to help these folks who are in trouble because of their own deeds? I didnt buy just because I knew I would get into trouble and now I am glad to see I didn’t get sucked into this mess, however WTF about helping these folks? Majority of these folks are flippers.
The only way to help these folks would be to forgive their debt that is under water. Lowering of interest rates will not help much as Bush at the same time is asking for toughening of lending standards, this means subprime folks who wouldnt have qualified otherwise will fall into this category again. I dont trust this administration.
First, they lowered the interest rates to 1%, let the merket get out of control. Squeezed US Citizens savings and got them into deep debt.
Second, they knew the consequences of fallout so they banned bankruptcy.
Now, with this mix signals, they are trying to make it all look good. Hey, interest rates are still historically low and markets are historically high, it needs correction to get back to fundamental values.
Does anyone know what this homeowners bailout means and what the steps could be?
“Does anyone know what this homeowners bailout means and what the steps could be?”
IMO, It means very little, and nobody knows how to really do it. Tanta over at Calculated Risk has had numerous discussions on the nuts and bolts of a bailout. There are no easy answers.
Bush’s concern for the poor was evident in his response to Katrina. I doubt he is now going to push through a multi-billion dollar bailout of subprime borrowers — unless of course he can funnel this money to the Wall Street contributers who helped elect him.
So, you really believe the bottom will be half a million?
Maybe you are right, however I just don’t see that.
The only homeowner bailout I would support would be one that helps everyone – including people like me, who are hardworking homeowners who bought the home that they could afford and didn’t use their equity as an ATM. Sure, I live in a cheaper area, both housing & cost of living are less. But I deserve a break, too! Don’t we all?
That being said, I feel sympathy for those people who were treated unethically by RE Brokers & Mtg companies. 6 years ago when I bought, my realtor tried to get me to buy her daughter’s home; when that didn’t work she kept pushing to get me to buy at the upper limits of my financial abilities, and was horribly negative when I bought a little home for $140k rather than in the $200k range. Her reasoning was that I’d be sorry when RE jumped & I didn’t make as much. If I didn’t have a heart, it would be poetic justice to see that her home was just repossessed.
I hope that Bush comes up with a fair solution. But he’ll probably appoint Michael Brown (ex fema head) so he can say “Good job, Brownie!” while people are drowing in debt.
I think you will see older properties in these neighborhoods hit $200/SF or a bit lower.
When I saw the laundry and entertainment center were in GAR, the devil that popped into my head was Wayne and Garth.
I imagine Bush would be as successful at bringing “relief” to the homedeptors as he was at bringing “liberty” to Iraq.
Quite a legacy.
The only appropriate “bail out” would be to let the market work things out in the normal course. Sucks, but there it is.
From here: http://www.usatoday.com/money/economy/housing/2007-08-30-fha-subprime_N.htm
It looks like the plan would allow a defaulting homeowner to refinance through FHA guaranteed loans if the homeowner has 3% equity and was current on payments before their loan reset. The current maximum that could be guaranteed is $362,000 in Califonia.
This plan does not need congressional approval. However, Bush wants to increase the maximum amount of the guarantee up to $417,000 and eliminate the 3% equity requirement, which would require approval.
But, it’s not a bailout.
Actually, I think all the politicians are in for a rude surprise when they start springing for “relief” and realize that they’ve disgruntled the majority who still bought long enough ago and didn’t abuse the housing ATM and are scrimping but can afford their homes.
Currently, 20-30% of foreclosures are empty house speculators.
IR you would be correct on the lender loss had it not been for the cash out refi on 11/30/2006–1st $768,000 & 2nd $144,000 for a total of $912,000! Using your 6% marketing selling for the $725,000 will give the lenders (the same for 1st & 2nd) a $230,500 short sale!
Hey IR, did you get the mortgage info for this property off of FastWeb? It’s a bit out of date.
On November 30, 2006, the owners refinanced and took out a 1st for $768,000, and a 2nd for $144,000. So they owe $912,000 for this cr@ppy house. Lender is Platinum Capital Group.
S Lyon beat me to the punch… 🙂
Does that mean that the FHA guaranteed loan would be at a lower interest rate than their reset ARM? Would that rate be lower than the FED rate?
Bush is proposing to help, but no bailout. To my understanding, help and bailout are not mutually exclusive. Nice play on words. Too bad, I am not dumb enough to fall for that. How can you help someone without some sort of bailout? It is just not possible in my opinion. They made the choice to spend whether they understood the contract or not – being stupid is not a reason to spend my tax dollars that way. They must live with the consequences.
I oppose any form of assistance to these “you had a coming” types. Unless the government is willing to write me a check for the same amount of “help” plus interest for being responsible. Owning a home is not a right, but reflects your ability to maintain it.
I am in complete agreement. I looked at housed also. in San diego. in Feb 2006. of course i was demoralized by prices. I did not want to do 100% financing however it was offered. Common sense. I just did not see how I would get ahead that way.
Also I was not comfortable with the idea of spending a large amout of my income on houseing 2,600 a month on mortgage.
I concluded I needed to save a bigger downpayment regardless of price.
bob
I agree with ph and ibilis: No taxpayer bailouts and this correction is going to have to just work it’s way out! I am in the mortgage business and have close ties with the foreclosure and REO markets due to my loss mitigation work and by and large, most of the people defaulting at least here in S. California are those who just stopped paying due to their home losing all equity. Many were speculators (I don’t say investors because investors do not buy houses they are not going to make cash-flow on) in fact I would say almost half. It is a powerful psychological thing to pay a mortgage payment on a home with negative value. It has been my experience in workout discussions that of the non-speculators, over half of these defaults are people who’s attitudes are simply: “Well, I am basically paying rent since my home has no value so I’ll just stop paying and when I get kicked out, then go rent elsewhere”. What these simpletons don’t realize is the EVERYONE is only a “renter” until a mortgage is paid off and that there are the same tax and ownership benefits whether you have equity or not….you only can’t use your home as an ATM! Of well, winners win and losers los…there is a reason most people work their whole lives and still end up with no money…fear and financial ignorance!
No Bailout? Is that just like No Amnesty?
thank you bob, cause i am staring at this house from from somewhere other than Cal or NYC, and i think lets see, do i want to commit the next 30 years of my working effort primarily to make interest payments on this.
nah, i want a laundry in the house and a GAR for my car, not my entertainment center, kitchen is below average for the price to, the buyer, if she arrives, is welcome to it
Ben said said today that he would “do all that is necessary” to protect the economy from the credit mess, but that he wouldn’t save the lenders and flippers. One of the people behind the Bush plan said something to the same effect. I’m not sure if I have a problem with them demonizing the lenders or not – it takes two to tango and the fools who got into the suicide loans are equally responsible. On the flip, at least one responsible party stands a chance of being dealt what they deserve.
That being said, I doubt that the Bush plan will have little, if any, effect. This is them wanting to look like they are doing something, right before an election. As someone mentioned earlier I’m sure they would like to push it out another year, but at this point that simply isn’t possible.
I want my 30 year fixed at 6 1/8 % lowered to 3%!
Besides, after taxes, that will be more like a 4.25%… but hey! As you said….
I think it would be lower than their reset ARM, but higher than the Fed Rate. The current FHA rate is about 6.6% for a 30 yr adjustable rate loan.
(http://www.fha.com/adjustable_rate.cfm)
Here in Idaho, we get “relief” by visiting the men’s restroom.
This means that So. Cal, specially OC will have no benefit of what Bush said as home values are almost twice of what the limit is.
The entertainment center in the garage is illegal and a liabiliity. It could not have been built to City Code nor with a permit.
The City of Irvine Code requires a 9 by 20 foot spot for every car in the garage. Since this house has a two car garage, that means it requires two 9 by 20 foot spots.
I know this by heart because during my rebuilt I had to bite the bullet and move one very expensive wall because otherwise I was gonna have a 9 by 19.5 second spot. Mind you, those six inches cost us like 25K, one more permit, an additional mechanical engineer’s drawing, two months, etc, etc… Currently we do have my kid’s band equipment there, but that’s one entertainment center you can move out the way to park your car.
I suppose the neighbors of this property will be happy when the entertainment center in the garage disappears and the car under the car cover (eyesore) moves back into the garage.
The biggest help will be in the Inland Empire. If the markets in San Bernardino, Riverside, Moreno Valley, Temecula and the Antelope Valley settle down, it will have a calming effect on the “move up” market.
A lot of the problems in the “jumbo mortgage” homes are related to the lack of “move up” buyers.
agree IR, I use a very simple calculation. I found houses that sold in 1999 in OC, average price per square foot was somewhere between 130-140. if we add 4% per year thats an additional 40-50 per sf which leads me to believe houses should be around 200 per sf, ofcourse prices will vary up or down depending on other factors. also looking at incomes in the OC, 200 sf would be in line with incomes. I know alot of people dont want to hear that but with credit getting tight, rates going up, incomes are going to become an important part of the equation.
How fast prices will return to fundamentals, I have no clue but THEY WILL.
Brings a new meaning to the term “toe tapping song”.
🙂
Remarks by Chairman Ben S. Bernanke
At the Federal Reserve Bank of Kansas City’s Economic Symposium, Jackson Hole, Wyoming
August 31, 2007
Housing, Housing Finance, and Monetary Policy
http://www.federalreserve.gov/boarddocs/speeches/2007/20070831/default.htm
Just read this over on calculated risk;
“Mr. Bush also will ask Congress to suspend, for a limited period, an Internal Revenue Service provision that penalizes borrowers who refinance the terms of their mortgage to reduce the size of the loan or who lose their homes to foreclosure.”
Doesn’t that in effect make the problem worse? To me, that effectively says that hey, if you’re a speculator or homeowner and are looking at losing upwards of $100k or more by selling your crappy and poorly timed investment/purchase, the IRS and GWB are going to bail you out by temporarily suspending the tax penalty on the “gain” you would realize from the foreclosure. Is it just me or is the going to add more bank owned foreclosure properties to the market? Other than the hit on your credit report (which yes I realize is still substantial in itself), there would be absolutely no repercussions from simply handing the bank the keys and saying “here, you deal with this, I’m out.” That to me is unbelievable!
please knock off the politial whining, one of the pleasures of this blog is the intelligent commentary, rather than Bush did this, Congress did that that clogs up EVERY other current event site these days.
Isn’t the LAW directly related to all markets…including the real estate market. You have a very small minded comment.
The same area Cramer suggested “plowing under.” I think hope is in short supply around those parts. Someone made a video on youtube (I think I found the link here) where they are driving around and there is a throng of for sale signs.
The only reason there was any sort of demand for the IE is that it’s closer to Los Angeles than Phoenix is. I have a bunch of friends that live out there, and I love to grill them about it.
If the problem he was trying to fix was falling home prices, you would be correct that it would make the problem worse. Bush’s aim is to offer financial relief to homowners who can’t handle their mortgage; that’s the way they’re spinning it anyway.
I can definitely see this increasing the rate at which forclosures are added to the market.
And we’ll still be your friend!
Please explain why it’s ‘small minded’. Which ‘LAW’ are you referring to?
On the positive side, it could speed the drop in prices. The sooner prices normalize the sooner this crisis will be over.
The El Camino development is a classic. I wonder if they intentionally named it after the car…erm truck. I drove through there recently and it is worthy to note that the majority of the neigborhood is decaying (very un-Irvine). There are a small number of “improved” homes, however most of them are fairly hideous. I mention is because compared to some of the other houses in the area this one looks like gem.
As for the Bush bailout, just remember that any attempt by the government to intervene in the housing correction will affect us twice. First on the tax side, Second on the housing price side. Obviously, additional tax revenue will be required to fund any new program (Bush has a strong record on spending). If the Fed’s are able to intervene in the market to any significant degree, it will only serve to artificially prop-up prices. Of course I am assuming no one here is going to eligible to receive a mortgage subsidy.
FHA Plan:Bring a water gun to fight a fire.
http://thegreatloanblog.blogspot.com
I’m guessing that the Inland Empire is the closest to LA that these people can afford. From my experiences visiting SoCal in summer in a non air conditioned car, I’m not sure I’d ever want to live inland…
Yes, I get my mortgage info from FastWeb.
Wow, I thought it was a bad loss before. The bank is really gonna eat this one…
Amen! I enjoy this site — it’s become part of my daily regimen, but the Bush-bashing and the comparisons to Katrina or Iraq just distract from the rest of the conservation.
Nobody, let me repeat, NOBODY forced these people sign to buy that home at a teaser rate that they couldn’t afford in the future. NOBODY forced these people to go to closing without an attorney to advise them of what they were signing and the future consequences. I’m not a big fan of lawyers, but they do have a time and place to be used, and certainly when your buying a piece of realestate for hundreds of thousands of dollars that is the time.
Dick Cheney, oops I mean President Bush through is actions of the past 6 12 years has made it pretty clear that he has little concern for the welfare of the non-wealthy. Thus I think it perfectly appropriate to point out how odd it is that he would propose assisting ailing homeowners. Sounds like another feable attempt to salvage his ‘legacy”. The republicans won’t allow this to go anywhere unless the lenders are the primary beneficiaries.
If I am going to be asked to contribute my tax dollars to people who made poor decisions where does it stop? These people played an active roll in the bubble which has resulted in me not being able to afford to purchase a home thus I’m afraid I have extemely little sympathy for them. If the market isn’t allowed to correct I will never be able to purchase a home.
One of the proposals is to change the tax treatment of forgiven debt in a short sell. Right now, you are better off just going to foreclosure and declaring bankruptcy if you are underwater- a ‘short sell’ only means you have a tax bill you can’t pay anymore than you could pay the mortgage, so what’s the point?
Of course, “help” means flooding the financial system with more liquidity, sort of like treating a heroin addiction by giving the addict more smack. All that will happen is that you and I will pay for it in the form of higher prices for goods and services as our currency is decimated.
And all of these things are just bandaids on a gaping wound. We are buried in bad paper. You would think that the wise heads would just try to keep the rest of us from being contaminated by the spreading blight, but it looks like all they can think about is making the rest of us pay even though we did not contribute to this by borrowing beyond our means.
I totally agree that the market in California is way screwed. What really gets my goat, though is real estate investment scams like Foreclosuresdaily.com that charge thousands and promise people can make millions from their homes part time without ever having to look at or see the properrties or without any experience. Here is a great article on this scam and full of great tips and links of where to go to get your money back if you get taken. It is a absolute must read for anyone in real estate investing!:
Bestbraindrain article on real estate investment scams like foreclosuresdaily.com
M. Long
Craig quote…”I have a wide stance when I go to the bathroom”. So THAT explains everything….
creep.
Housing trends front page news
http://www.sun-sentinel.com/news/opinion/columnists/sfl-emcol02nbsep02,0,6002104.column
Citigroup to absorb remnants of Ameriquest
http://www.latimes.com/business/la-fi-ameriquest1sep01,0,5480991.story?coll=la-home-center
Bush is an idiot. Deal with it.
Speculators drive up defaults, report says
Many troubled loans belong to investors who don’t live in the homes.
http://www.latimes.com/business/la-fi-homes31aug31,1,332198.story?coll=la-headlines-business
Blame it on the speculators.
That’s what the Mortgage Bankers Assn. did Thursday in a report showing that as many as 1 in 5 mortgages in default in California belongs to borrowers who are not living in the homes with the troubled loans.
Some states, South Carolina, require an atty at every residential real estate closing.
Fed Gets `F’ for Failures on Housing, Leamer Says (Update2)
http://www.bloomberg.com/apps/news?pid=20601087&sid=asQ4NoH14X3E&refer=home
House prices in some U.S. cities may fall by as much as half as the housing bust continues, according to an earlier paper delivered to the conference, which is organized by the Kansas City Fed. Yale University professor Robert Shiller, who wrote the article, said the slump in home values could be “much more” than the 15 percent drop in the last housing recession.
Slump in Prices
Leamer said in an interview today at Jackson Hole that some former “hot markets,” such as pockets of California, may see declines of 30 percent to 40 percent.
Zovall, ack chat crashed tonight, bummer!!
looks like everything but the blog crashed
Zovall is working on a fix that should be more stable. It seems to be a lot of work. I don’t know if there is anything we can do to help. There seems to be an issue with the chat and after this he will probably take it down for awhile to try to fix it.
I don’t know about you guys but the forums are down too.
maybe not having people sit idle on chat all day and night might help?
It’s a known bug in the chat software.. I’m looking into the fix (if any).
For the forums though, I think I need to disable some extensions and then it shouldn’t crash anymore.
Right now, both chat and forums are up. Hopefully they’ll still be up tomorrow morning.
Let me know if this happens again: zovall at gmail dot com
Thanks!
That’s great for the lawyers! For those of us who don’t feel like paying for some moron to “advise” I am glad California isn’t enough of a nanny state to force us, yet.
Have some sympathy for for the elderly victims who were coerced into a horrible refinance deal because they needed some extra money to fix their leaky roof . Obviously you can say it’s all their fault because everything is in writing, but little old ladies tend to trust people and believe what they’re saying.
It’s funny how you say, “NOBODY forced these people sign”. I have to wonder how many documents were forged by loan officers and not actually signed by the “borrower”, especially when you consider the number of illiterate field workers and day laborers who were able to buy homes.
I wonder if this house comes with that 1970’s antenna that they are trying to hide behind the chimney.
Sympathy baloney. I’m tired of the victim card being played by everybody on these loans.
If it’s a forged document, it’s fraud on the broker. Everything else, you signed and went along with. It’s your baby now.
All of you that are making comments about this home are sooo full of chit! I happen to know this couple and they both lost their jobs of 10 and 15 yrs. The house is fine the only idiots that are on this site making comments are the ones who do not know anything about the business.
Lender approved short sale and seller is not walking away from the remaining due and is ready to pay remaining balance once closed.
“All of you that are making comments about this home are sooo full of chit!”
What’s “chit?”
Carl you are an idiot. You do not know the circumstances that this couple lost there home from. fricken moron.
CalGal Chit means SHIT!!! Trying to be respectful.
Brian no one is trying to hide anything that is what came with the home. Dumbshit!!!
You are right Faceman, I don’t know anything about this business. It’s just so confusing to me. I was so confused in 2005 when I saw Brady Bunch pieces of shit like this going for over $800k, I just decided it was better for a simpleton like myself to stay out of your big boy business league. Dummies like me look at this and say “Gee, these people didn’t have the means to put one penny down on this house, so they probably could not afford it in the first place”. So you say they lost their job. But are they not going to get a new one? Or could it be that even if they get a new one, they STILL cannot afford it?
But like you said, I don’t understand this business, so best for me not to think too hard about it. Leave it to the high school dropout RE agents to understand the economic nuances of the real estate business. It’s way too complicated for the stupid masses.
I just want to know what I’m full of.
a chit is actually a small piece of paper.
& how is calling people full of small pieces of paper resepectful?
I did not see a comment from you so i guess you are not full of anything now are you?
You obviously did not read the whole thing – read again carefully before you comment
Hilarious Diana K! Sucks that your friends lost their jobs Face, but they were the ones that decided to buy the place and not put anything down right? Did someone force them to get that much of a house? If their jobs weren’t the most secure, why not just keep renting?
Jobs are temporary, debt is forever unless you pay it off, get it forgiven or BK. Prudent buyers aren’t going to count on the income stream for both earners just to make the monthly housing payment. That’s why you save some money, put 15-20% down, and buy as much as you can reasonably afford so you can save some bucks each month and build a cushion against job loss.
It’s great that your friends are willing to pony up to the bank for their mistake. Most people in that situation are probably trying to shelter as many assets as possible and walk away without losing any more than they have to. Bottomline is that this couple made a bad decision, and were part of the fuel on the fire that created the very problem they are suffering from now.
ipoplaya,
You are absolutely correct they made a mistake but all you jack asses on this site making comments about someones mistakes in life is certainly uncalled for. Like any of you have ever made a bad decision – think about it, maybe your mistakes were’nt as large. By they way they are pont up there own money the clear their own mistake. Lesson learned for them.