Gypsy Queen

Some people will feel trapped in their homes while some people will feel priced out living the life of a Gypsy.

36 Vintage Irvine, CA 92620 kitchen

Asking Price: $299,900

Address: 36 Vintage Irvine, CA 92620

Running seems like the best offense
Staying just don’t make any sense
No one could ever stop it now
Show the cards of the gypsy town

Sign of the gypsy queen
Pack your things and leave
Word of a woman who knows
Take all your gold and you go

Sign of the Gypsy Queen — April Wine

Running seems like the best offense; take all your gold and go… Isn’t that the story of California real estate?

Are we going to become a split society? Is one group of people going to be encased in their debt bunkers while another group rents like Gypsies floating from one opportunity to another without roots beneath their feet? A home is supposed to be a solid foundation, a place to store wealth, and a place to live your life. Will it ever be again?

For many it has become a casket buried beneath a pile of debt entombing them, draining their monthly cash, and leaving them feeling trapped and despondent. Who wants to live that way?

For others it has become a symbol of stability and security they may never obtain. They worry they might be priced out forever, so they lose patience and overpay. Those that have the patience wait silently for the time when they too can have a place to call their own. The Gypsy life will someday end.

{book5}

I had an interesting experience yesterday related to patience. I have been waiting to buy a home for quite a while, but there is something I have been waiting for even longer: a hole-in-one playing golf. I started playing golf 33 years ago at age 9. I played much golf in junior high and high school, and I got my handicap down to 4 at one time. In all those years, I never had a hole-in-one. Yesterday, my 190 yard tee shot on the 3rd hole at Strawberry Farms was all I needed. My long wait is over.

36 Vintage Irvine, CA 92620 kitchen

Asking Price: $299,900

Income Requirement: $74,975

Downpayment Needed: $59,980

Purchase Price: $430,000

Purchase Date: 2/14/2006

Address: 36 Vintage Irvine, CA 92620

Beds: 1
Baths: 2
Sq. Ft.: 1,050
$/Sq. Ft.: $286
Lot Size: –
Property Type: Condominium
Style: Villa
Stories: 1
Floor: 1
Year Built: 2006
Community: Woodbury
County: Orange
MLS#: S583025
Source: SoCalMLS
Status: Active
On Redfin: 1 day

Bank Owned Beauty! Enjoy the relaxing lifestyle that will come along
with this beautiful single level home. Property features rich wood
flooring, stunning crown moldings, upgraded kitchen that boasts a
spacious breakfast bar. Inside Laundry Room and attached garage. Large
spacious rooms. This home is perfect for the tech savvy and is wired
and ready to go! Enjoy entertaining your guests in the relaxing court
yard, take a dip in one of the many association pools, roast marsh
mellows in the fire pit and end the evening soaking in the association
spa at sunset. Close to shopping and award winning schools!! Home Sweet
Home! Near shopping and Irvine Spectrum. Wheelchair accessible from the
garage.

If the bank owns it, it is a beauty…

This property was purchased on 2/14/2006 for $430,000. The owner used a $343,700 first mortgage, an $85,900 second mortgage, and a $400 downpayment. I imagine she spent more to move in than she spent on the downpayment.

If this property sells for its current asking price, and if a 6% commission is paid, the total loss to the lender will be $148,094.

This property is being offered for 30% off its peak purchase price.

88 thoughts on “Gypsy Queen”

  1. Freetrader

    Fooled me this time, IR. Based on your lede, I was sure that your musical number would be “Gypsy” by Fleetwood Mac.

    Oh, about that property — no matter how long I read your blog, I will always be amazed that somewhat actually paid, not so very long ago, $430,000 for a one bedroom apartment. Of course, it looks like it is the bank who is doing all the paying. What a special one bedroom apartment it must be. I’ll bet that ‘relaxing court yard’ is communal, no?

    1. Texas Triffid Ranch

      Of course it’s communal. Even better, having your bedroom window right next to it means that you get to spend the entire night listening to the idiot out in that courtyard yammering about how his frat brothers told him he could make a fortune off the Internet, maaaan.

  2. E

    When somebody pays the $150k-$200k that this is worth (maybe)…are the taxes reassessed for that purchase amount? Or do the new “owners” of REO’s have to pay the bubble taxes?

    1. Freetrader

      Tax assessed value should be reset for the purchase price. In fact, in a declining market such as we have, property taxes should be reduced as OC will pro-actively reduce the taxable value of your home to reflect their view of market conditions. That is one thing the OC tax asessor’s office seems to do very well — they seem to do it pretty fairly and, unlike some other counties (e.g., Santa Clara) they don’t require that home owner ‘request’ a reduction.

      1. buster

        Sell for the asking price. For a ONE bedroom. Baahaaaaaa…… thanks for making my day. I almost pee’d my pants with that joke.

        You should take your comedy on the road — you’ll kill ’em in stand-up!

        2. Geotpf

          $286 a square foot is “cheap” for an Irvine condo; average (for sales) is $315 a sq ft. Zillow and cyberhomes both value this condo at about $440k. Redfin’s automated sold comps value it at $330k.

          This is, believe it or don’t, underpriced.

    1. Geotpf

      I don’t either. In any case, I haven’t quite figured out why crown molding is such a big deal. It’s a piece of wood stuck to the ceiling. Whoopie-do. Ok, it looks nice, but it’s not exactly a huge project to add it if you want to.

  4. granite

    “…there is something I have been waiting for even longer…”

    Will the Chicago Cubs win the World Series before I can afford a house in Irvine?

  5. AZDavidPhx

    “Take a dip?”

    Are adults writing these descriptions?

    Am I the only one who thinks that this kind of slang is inappropriate for a professional description?

    Wouldn’t a simple “enjoy the many pools” work without trying to get all cool and break out the slang?

  6. winstongator

    What do similar units rent for? An interesting phenomenon going on is the utter failure of apartment-to-condo conversions, and the reverse of condo construction being converted into apartments.

    The apartment owners liked the conversions because they could instantly obtain a lump sum instead of the stream of rent. As long as they sold the condos & got out, the conversion works for the original owner. If they were still holding units in 2008, they were screwed.

    The condo ‘buyers’ were motivated by the rising prices of their condos and saw them as good ‘investments’. They were aided by loose financing to rig the payments to be in line with rents.

    The idea that asset price inflation can replace savings is dead. With the abysmal savings rate, how much integrated savings have we lost, and will need to make up? If the natural, needed savings rate is 8%, and the period from 1990-2008 marked a movement from 8% to 0, the total savings is 72%-yrs. If we ‘needed’ 144%-yrs, we would need to save an extra 4% a year – above the natural 8% – for 18 years to catch up. This will bear out as boomers delay retirement and drastically cut their spending.

    1. NewportSkipper

      Whoa buddy, you are way off base here. I’m going to just dismiss the reference to no growth since 1990 because it’s nonsensical. You’re lucky if Irvine is 25% off the peak. We can quibble over numbers, but the Irvine median in 2000 was $316,800 and it is (depending on who you ask) $550,000+ today. If you paid cash in 2000 (excluding taxes and maintenance) your return to date is 6.3% per annum (tax advantaged I might add). If you leveraged up by using 80% financing, the return on your $63,360 down is 15.6% per annum. This is the problem I see here. I’m sure I’ll get some naïve comments back about interest payments, etc, but we’re talking about appreciation (which I hate to tell you is not “dead”). If a goal of this site is education, then I must say a great disservice is being done by letting misinformation reign. I guess everything really is good/bad, black/white because the idea that 100% of people who own are debt slaves is a little extreme.

      1. Eat that!

        So if I bought a 2bd starter condo/townhome (using the very common 3.5% FHA loan) right now would I expect to be able to sell for large enough profit to move up to a SFH in say 4-5 years?

        If the answer is no, then that’s a reason not to buy right there. I can rent cheaper, save more money and I’m not stuck in my starter home. Also, if I am early in my career I have the option of taking other opportunities when/if they should come up. Lastly, I am not stuck with maintence and, in particular, if I start a family, kids can be very hard on homes, thus my rental takes all the abuse in the early years and then I can just move to a new rental or buy.

      2. winstongator

        The reference to 1990 is to the SAVINGS rate and it had gone to 0. Irvine is not the nation, and the apartment conversions I’ve observed in FL, and the condo market in general there has been decimated.

        The price of an individual home can stay constant, while the median price for a home in an area can increase. If the new homes added to the local stock are above median, then the median will rise with no change to the existing home prices.

        There will be appreciation and return on investments, but it is no substitute for saving – spending less than you earn.

      3. winstongator

        Random condo selected in Pompano Beach, FL – most recent sale in a development I know residents in. Sale history
        1987: 75k
        2009: 120k
        Inflation takes 75k in ’87 to $142k in 2009.

        1. Freetrader2

          Good example, but to be fair, you are comparing a twenty year old market peak (’87) with the current market bottom (and I’m not saying it won’t go lower). Of course, someone who bought in 1993 might have purchased at a lower price than the ’87 price. in Anything experiencing a growth trend would have fluctuations like that…the share market as well. The question, I guess, is whether the prices will ever recover from the current lows. I don’t have an agenda here, I’m just pointing out how discrete data points should be taken into context.

    1. AZDavidPhx

      The first and last time I golfed – I successfully landed a house-in-one. Made quite the BAM! I am sure whoever was inside quickly dove under the nearest coffee table. I’ve never understood why people buy houses on golf courses.

      1. CA

        I don’t get it either, golfers at my buddy’s home tend to use his fence as a urinal. Horrible.

        1. AZDavidPhx

          There is a hilarious prank in the movie Jackass where the guys blow airhorns right as the golfers are Teeing-Off causing them to completely biff their shots. One golfr even hurls his club into the bushes where the pranksters are concealing themselves laughing wildly. It reminded me of the scene in Caddyshack where the judge throws his club and knocks down the old lady.

          Priceless.

          3. tonyE

            I used to live next to the Navy/Marine golf course in Pearl Harbor. Big Shot Naval and Jarhead Officers played there. Some of the greens were right next to Radford Drive.

            Of course, being a kid I had a honking air horn on my bike. Summer of 75 I had a job at the Navy Commissary and I’d ride my bike home from work along Radford Drive.

            As you can guess, I used to make a point of honking my Big Horn every time a Big Shot teed off on the greens… slow down, slow down, HONK!, ride away fast, fast, faster…

            They never caught me. 16 year old are fast. 😉

          5. CA

            My old golf instructor told us one time someone got so angry they hit a tree with their golf club baseball-style, and the head came around the other side and whacked them in the face, knocking a few teeth out in the process.

            I really wish I were half decent at golf…because I really like grass. No, really, one of the reasons why I go to baseball games is to stare at the grass and how nice it is.

    2. IrvineRenter

      “I’m still waiting until I get my first birdie.”

      I was playing “skins” with my father when I got the hole-in-one. He managed to roll in a 20 foot birdie putt and still lose the hole.

    1. no_vaseline

      Mish, on occasion, can be a little short sighted. Not this time.

      I like the comment from EH at the end of MCIO”HH”P where the knifecatcher claims he can now rent for half what his mortgage/HOA is. An oppournity that didn’t exist two years ago. Huh?

      Two years ago in my ‘hood that number (to own) is/was TRIPLE not double rents. Today we are just barely below double.

    2. Shannon

      It seems that the unethical part enters into things when underwater homedebtors and their lenders want to push the cost onto the rest of us via taxes. This is also the government’s fault, of course. Obama et al. could just say, “Thanks, but no thanks.”

      But that’s naive of me.

      1. HydroCabron

        I don’t know what I’d do if I were president. If you let everything collapse, then it will be swift and brutal. Is it better to slow the collapse through unfair bolstering of banks, or stand aside and watch everything seize up at once?

        Add to this the habit of all media outlets – and even most self-described free market believers – of looking to the President and Congress to fix everything, and you understand why political leaders meddle. Even Fox News, with its pretensions to laissez-faire ideology, was asking “Is Bush Doing Enough?” when the housing crash began, and continues to act as if it is the government’s job to run the economy. Weird.

        I suspect they’re peeling the huge Band Aid off millimeter by millimeter, even though the Band Aid is three feet long and covers an extremely hairy patch of chest, pubic, and inner thigh area.
        Is it better or worse to hold your breath and yank the whole Band Aid off in one horrifying moment?

        I have spent too many hours of my life trying to understanding macroeconomics. I suspect a slow collapse is better, but I fear what the consequences of a plateau on the way down could be. Politicians and the media may end up thinking that we can just find the next bubble, or inflate the currency at the proper rate, or reinflate another phony credit pyramid, which would be the same wrong conclusion we have been drawing for at least 20 years.

        Whatever we do, we have to have a collapse in GDP, credit, and asset prices. Fast or slow?

        Please pay attention the next time the media asks “Do Voters Think Congress is Doing Enough About the Economy?” and think about how this trains people to believe in central planning.

        1. QualityPicks

          I keep asking myself the same things 🙂 Even though I’m all for free markets and all, I don’t even want to think what happens if you let everything collapse.

          My mayor complain is “why the heck did we let it get all this bad in the first place?” But anyway, we did.

          Now, my major complains have been about what is fair and what isn’t. Why is the government or the Fed giving out so much help and getting little in return? Why is the Government/Fed helping those that caused the problems the most (e.g. Banks)?? Why does the government keep throwing good money after bad? Why do they keep supporting institutions like the Fanny and Freddie and FHA loans? etc.

          So my main problem with government intervention at this point is that a lot of it is not fair and some even borders with or is plain fraud.

        2. avobserver

          Instead of huge band aid analogy, I would prefer to evoke the less playful imagery of a choice between (1) death by guillotine, or (2) death by a thousand cuts. Debt deflation will run thru its course to squeeze out the excess built up during the credit bubble expansion era. The accumulative social cost will be huge no matter what we do. But “death by a thousand cuts” is always a more preferred choice in any political system where policy makers’ decisions are more heavily influenced by election schedule than anything else to come up with a short term fix to relieve the imminent pain. How many in Washington (White House, both Houses, Fed…) do you think actually believe loan mod or banking bailout will do this country’s housing market and economy any good in long run?

          Now we understand why Japanese did what they did back in 90’s, and why we chose to follow their footsteps in our policies to ensure the air does not get out too quickly.

        3. Shannon

          I know exactly what you mean. I’ve heard so many different stories about what’s best for the economy given that it’s f’ed that I don’t know what Obama should do. I call myself a libertarian, and libertarianism dictates a pretty clear policy of government non-interference in anything but the enforcement of contracts and protection of fundamental rights, but more often that not I find myself reflecting that nothing about our situation is or was libertarian. Given that we never had a policy of non-interference–that the government itself was partially to blame, through its tax credits and general policy of encouraging homeownership, whatever the cost or consequences–what should happen now?

          I guess I’d say this about the housing market, at least: it needs to clear. We can either endure that slowly, or rip off the band-aid, as you say. I tend to think the latter is as good a prescription for macroeconomics as it is for big hairy wounds.

    3. AZDavidPhx

      His grounds for calling that e-mailer a hypocrite do not wash.

      The e-mailer had a very valid point that people are choosing to not pay their bills even though they made a conscious decision to borrow X amount of money. Many of these people can still afford to make the payments but are choosing not to. The emailer is right on target.

      Mr. Shed then goes on to say:

      “On the contrary I have been remarkably consistent. People have the right, but not the obligation to do what is in their best interests.”

      I am afraid that the Supreme Court would not agree with this assertion.

      If you sign a contract stating you agree to repay a debt, there is no stipulation in the law that I am aware of that allows you to default when you feel it is in your best interest.

      He also goes on to call the person a hypocrite because he sold at the peak of the market and then had to nerve to become indignant that people who bought at the top of the market should not be held to account. The hypocrisy being that this person dumped his “garbage” onto someone else and then expected them to pay every last penny.

      Saying that the person dumped his “garbage” onto someone else is 20/20 hindsight. If the guy who sold at peak had been wrong and prices continued to rise then in hindsight it would not be considered garbage. The fact of the matter is that the person who bought at the peak made a conscious personal decision to borrow a sum of money and signed a contract to pay it all back. There were plenty of people who made similar calculations and came to the conclusion that it was not affordable and refused to borrow those sums of cash.

      I have read Shed’s writings in the past and think that his analysis is usually pretty dry but not totally off the wall. But his accusations of hypocrisy on that emailer don’t hold up. He is just trying to win the argument with the guy by taking the conversation to the public and win by tarring and feathering.

      1. AZDavidPhx

        LOL

        I sent my thoughts of the matter to Mr. Shedlock and he exploded Napolean-style. Someone switch him to decaf.

        ————————————————-
        Subject: Re: Housing Hypocrites
        From: “Mike Shedlock”
        Date: Thu, July 30, 2009 10:51 am

        Don’t be ridiculous.
        Of course people have a right to do what is in their best interest, as long
        as it is within the law.
        I even stated that somewhere. But it is pretty ridiculous to state (as long
        as it is within the law at the end of every such sentence).
        I m sorry to be blunt but you must be reading challenged to not understand
        that after the followup.

        The law stipulates what the penalty is – Correct?
        Someone has the right to pay that penalty – Correct?
        By law – Correct?

        The supreme course would sure agree with me on this and you are stuck in a
        view attempting to blow smoke, or you are reading challenged. – Correct?

        Mish
        ————————————————-

        1. flyover country

          What you *and* Mish are missing is the term judgement proof. It’s like someone on public aid causing a car wreck and having a million dollar judgement entered. So what.

          When you owe $600k on a property worth $350k, so what if you’re sued for the deficiency. You’ve already lost everything if the loan is recourse. If nonrecourse, you just take the hit on your reputation, the FICO score, and just go on with your life.

          Someone who is judgement proof is unreachable as far as punishment is concerned. Banks used to worry about this situation, but now that they can sell the loan in a securities bundle, who cares what the borrower may do next decade, or even next year.

      2. lawyer

        “I am afraid that the Supreme Court would not agree with this assertion.

        If you sign a contract stating you agree to repay a debt, there is no stipulation in the law that I am aware of that allows you to default when you feel it is in your best interest.”

        Stick to your photoshops and snark, David, your legal analysis is worthless. Care to cite your Supreme Court precedent forbidding breach of contract? People and companies do it all the time. Do they go to jail? Does the court grant injunctive relief forcing people to perform in every case or do we leave that only to circumstances where irreperable harm is likely to result? Ever heard of liquidated damages clauses? Compensatory damages? There is an entire body of law discussing the concept of an efficient breach.

        You are harmless enough when you post your populist drivel and those cute little pictures, but leave the real analysis and conversation to the grown ups.

        2. AZDavidPhx

          Stick to your photoshops and snark, David, your legal analysis is worthless. Care to cite your Supreme Court precedent forbidding breach of contract?

          I take exception with people claiming “rights” that do not exist. Stealing your wallet and taking your money is in my best interest. I would have a tough time finding something in the Bill Of Rights to use as a defense against subsequent criminal charges though.

          There are remedies for dealing with the default of a contract – but there is nothing out there that says you are not liable for defaulting because it was in your best interest. Whether the consequences are having your assets liquidated or salary garnished – those are penalties or as your teacher had you write on the chalkboard “damages”.

          Care to cite your Supreme Court precedent forbidding breach of contract?

          This is a straw man argument. You have taken my argument and changed it so you can stuff together a straw dog and dramitically rip its head off and spit it out for all to see.

          I agree that the courts are there to enforce contracts. My point is that borrowers cannot claim some right to absolve them of the penalties for defaulting.

          My exception is with him claiming some “right” absolving borrowers who default on their contracts. You took it a step further and took the opportunity to start popping off about all that lawyer lingo you were taught last semester. I’m really impressed. A+

          1. lawyer

            Nice duck and cover, David. You are retroactively rewriting your argument to make it about absolution from consequences, and not the act of default.

            But that misses Mish’s point, and revises your original post, where you said: “If you sign a contract stating you agree to repay a debt, there is no stipulation in the law that I am aware of that allows you to default when you feel it is in your best interest.”

            See, that’s why I quoted you, David, you slippery snake you.

            What say ye, IHBers, is David being intellectually dishonest? I think so. My point stands, legally speaking, that you are an idiot.

            Hey, can you make a KFC reference in your next retort? Those are always good for a chuckle.

          2. AZDavidPhx

            Yup. You got me trying to slither away. EEK! Keep studying for the bar exam, lawyer. I better be seeing you on local television commercials in the next couple of years wearing a chicken suit and promising to get me the good settlement that I deserve.

            It has definitely been fun, everybody.

          3. NOT

            I honestly don’t know who is right or wrong on this one but I hope it continues as it is really good for a laugh. And I have to agree with the KFC comment.

          4. NOT

            AZDavidPhx: don’t just walk away… Remember, you are here to entertain! (PS: That goes for you as well lawyer)

          6. lawyer

            What? That’s it? Mr. Talky-talky on the blog is giving up? Please, David, come back. We have so much more to discuss. I’ll even let you insult my profession more if it makes you feel better.

            You still have to cite your Supreme Court precedent. I know you tried to change the subject, but you did say “I am afraid that the Supreme Court would not agree with this assertion.” And you clearly thought that this was such a weighty statement that you put it in a paragraph unto itself.

            So pray tell, David, what support did you have for that statement? Tell me you at least wikipedia’d something before you wrote that? If you didn’t, one might start to question what else you make up out of whole cloth here on the blog. I’d hate to see what that does to your credibility with that handful of people here who think you have something useful to say.

            Remember me the next time you get a DUI! Se habla espanol!

          7. NickelDime

            When he resorts to personal insults, you know you’ve got him.

            Best thread of the month.

            And please don’t go away, David. You’re my new favorite.

          8. Alan

            “chicken suit” is edging towards it. Perhaps the “u” is a typo for the nearby “h”? I don’t want to see that photo though. 🙂

          10. Observer

            Wow! Another “I’m a lawyer so I’m smarter than you, better than you, richer than you, taller than you, et cetera”! Funny! Reminds me of the ex-Enron corporate attorney I met who — now unemployed — insists that Enron really was an excellent company, it’s just that the idiots at the SEC weren’t smart enough to see the genius in everything Enron was doing — everything would have been fine if the half-wits at the SEC had left Enron alone, no one would have lost any money at all! The only problem was that all the geniuses went to work for Enron so the SEC was left to hire dimwits. Yes, “I’m a lawyer, maaan!” (or should it be “duuuude”?)….

          11. DAve

            Well, you geniuses can go round and round all you want but you should realize without question that a quality society or civilization requires not only people to obey the letter of the law but much more importantly to act in honorable and trustworthy ways.
            What is actionable is important, and especially so to those who make it their professional focus, but it’s incredibly myopic to think that simply that is sufficient or even primary to anyone with a more comprehensive vision of a well-functioning society.
            You guys are also acting like pigs in IR’s house and that’s kinda annoying especially from newbies. AZ you must be having a bad day to get sucked into crap like this-

          13. Freetrader

            Very funny thread guys. While I can’t imagine why someone would use handle “lawyer” (if your arguments are any good you don’t need to flash “I’m a lawyer” for cred) David has a tendency overstate his case and then try to bully anyone who disagrees with him so he pretty much had it coming. He is funny though. And Observer bashing lawyers just because one won an argument kinda misses the point.

        3. CA

          yeah it’s not breach of contract, a walk away is written right into the contract. the home debtor decided to exercise his/her option under the contract to not pay.

          not paying is as legal as paying per the contract.

      3. diggity

        I have to disagree with you here. A non-recourse mortgage is just that. The lender is agreeing to take the risk of default. It is considered a 50/50 wash to the lender. Interest rates are set at a price that compensates them for that risk. If they feel that the rate is not sufficient or the borrower maybe cant pay they don’t do the loan. The bank has valued the collateral and decided that if the borrower doesn’t pay they are comfortable taking the asset. Its as bad of an investment for the bank as it was for the borrower. They are both agreeing to buy the asset at a particular price. For the Borrower its full purchase price, for the bank its for the value of the loan. If banks werent gambling on appreciation just as much as borrowers we wouldnt now be in this crisis.

        Just because banks badly misjudged their risk doesn’t change the dynamics of the mortgage contract. Of course it would be better for everyone involved if everyone just paid, but banks/investors get compensated for their risk.

        By contrast, most other contracts are strictly pay or else. If you agree to pay someone $1,000 a month for a year that is it. You are obligated to pay that at risk of the penalties of default.

        Different types of contracts = different obligations to the parties.

  9. SoOCOwner

    It looks like it from the exterior photo, but can someone confirm if this is a single level ground floor condo with nobody above? Just curious.

    1. Sue in Irvine

      I think they are showing a random picture of the courtyard trying to trick you with the beautiful fireplace. Last year we looked at some models at Portola Springs and they have condos like this. A group of condos are attached around a central courtyard. The neighbors all have windows or doors facing out to the courtyard where your neighbors will gather and have parties late at night. Or the kiddies will play and make tons of noise. No privacy at all. Plus the 2 sets of dues and mello roos.

      1. jumpcut

        That should be the title of a song about Irvine homeownership: “Two Sets of Dues and Mello Roos” 😀

      2. thrifty

        Are the mello roos one of the 2 dues – or in addition to them? If an addition, what is the 2nd monthly dues for?

        1. Sue in Irvine

          Mello roos is in addition to the 2 association’s dues. AND in addition to your property taxes. One association will be the condo complex for grounds, trash, etc and the other from Woodbury to pay for the pools, parks and whatever else they have in Woodbury.

  10. winstongator

    Analyzing the analyzers
    Human fallibility being what it is, we can divide this universe into 3 buckets of observers:

    1) Those who get it mostly wrong.
    2) Those who can correctly describe a small slice of what happened;
    3) Those who understand the full boom and bust — how all the moving parts came together to cause the crisis.

  11. HOA Management Charleston

    Great idea for a blog. There are some great topics to discuss in there. I’ll be sure to check back!

  12. mike in irvine

    Nice article on loan modifications in NYT

    http://www.nytimes.com/2009/07/30/business/30services.html?_r=1&em;
    Lucrative Fees May Deter Efforts to Alter Loans

    A couple of quotes from the article are pasted below:

    Even when borrowers stop paying, mortgage companies that service the loans collect fees out of the proceeds when homes are ultimately sold in foreclosure. So the longer borrowers remain delinquent, the greater the opportunities for these mortgage companies to extract revenue — fees for insurance, appraisals, title searches and legal services.

    “It frustrates me when I see the government looking to the servicer for the solution, because it will never ever happen,” said Margery Golant, a Florida lawyer who defends homeowners against foreclosure and who worked in the law department of a major mortgage company, Ocwen Financial. “I don’t think they’re motivated to do modifications at all. They keep hitting the loan all the way through for junk fees. It’s a license to do whatever they want.”

    “Data on delinquencies reinforces the notion that servicers are inclined to let problem loans float in purgatory — neither taking control of houses and selling them, nor modifying loans to give homeowners a break. ”

    “The investors who own bad mortgages accept whatever is left. Investors typically do not notice how much they give up to the servicers, because fees are embedded in complex sales.

    “It’s under the radar,” Ms. Golant said.

    Ultimately, the benefits of delinquency erode incentives for mortgage companies to dispose of troubled loans quickly, say experts, allowing distressed houses to decay and fall in value — a fact of little interest to the servicer.

    “At the end of the day, it doesn’t matter what the house sells for, because they don’t take that loss,” said Ms. Golant. “Meanwhile, they are collecting all these fees.”
    “

  13. wheresthebeef

    That $400 down payment pisses me off. I slaved for years saving for a down payment because it was the right thing to do financially. Boy was I wrong. These people were the smart ones..especially if you bought in the early 2000s. Your rate of return probably would have put most internet stocks at their peak to shame.

    This is one of the few countries on earth where you can get rewarded for bad financial decisions.

  14. thrifty

    IR: Congratulations on the hole in one!
    I notice that your income requirement is 1/4 of the price of the unit. Do you generally recommend that an individual/couple spend 4 times their gross annual income for a home?
    Other bloggers: Would you personally spend 4 times your annual income for shelter if you were buying today with your current responsibilities?

  15. tlc8386

    I have lived in CA for 12 years now and I can honestly say the neighborhood dream is not here in CA. It used to be young families move into a development and their kids go to the local school you know your neighbors and you have life long friends. I had this in Fla. when housing was affordable and we all helped each other with landscaping and fixing items ect. Here in CA your neighbors can be embroiled in fraud as in the foreclosure fraud in Ladera Ranch–those friendly neighbors took money from their neighbors.

    In the Bay area my first home in CA very few neighbors even said hello to you. And I was on the homeowners board and we all fought for 8 years on useless spending. It was a nightmare and I was so happy to leave an HOA.

    Here down in Southern CA I see even more unhappiness everyone works you never see your neighbors, some are retired stuck in their homes because of taxes. Totally unhappy and others will never be able to buy a home. The fraud is rampant in CA. everyday I read of another person who has been accused of fraud. How could you even trust a neighbor?

    Once we retire we are out of here–

    1. ockurt

      Jesus!

      Is it that bad? I love it here.

      Maybe we don’t have the same folksy charm as we did in TX, but there’s a-holes and con-artists everywhere. I’ve met a lot of great people out here, life is what you make of it I guess.

    2. Property Owner

      tlc8386,

      I felt so aligned to your statement of:

      “stuck in their homes because of taxes.” (not from retirement though)

      Before I decided to sell my house, I felt a bit ‘trapped’ in my home. This is because if I decided to sell it to get the home I needed for my growing family, I would lose my wonderfully low property taxes (bought in 2000).

      To avoid paying higher property taxes from a new home, I looked at adding onto my house as well as possibly offering my neighbor cash to grant me a portion of his land to build on (I wanted to build in that direction).

      Now that I am selling, I feel a weight lifted off of me as if I am free to get the house I actually need rather than make my needs fit the house I am in. Maybe that light feeling is just the assessor feeling around in my pocket to see what he is going to take from me in taxes on my new house soon.

      Oh well. You only live once right? (justifying decision, justifying decision.)

      1. tlc8386

        The inequities of this state due to prop 13 is one that has hurt as well as helped many stay in their homes. But it can get to a top where only the new homeowners are paying the majority of the property taxes and this is why we have mello roos so those young families pay for the schools.

        Our tax rates are so high here that only those who have lived here their entire lives or are very wealthy can afford to stay. So buying a house as an investment can really burn you and IR has shown many homes with very little appreciation in them. Especially for those folks who bought since ’05.

        Which is the entire point of home ownership–live and save equity. I don’t see it here in Southern CA. Unless you find a fixer or tear down. But even then you could over spend and lose.

        The majority bought their new homes to flip them as they walk away it’s very obvious they had no intention to stay and make a great neighborhood.

        How can you buy knowing your neighbor will leave an empty house sitting right next to you especially looking at those empty ones in Quail Hill? Buying here is really high risk for those hoping one day prices go back up?

        Until California balances the budget, cuts it’s costs, and repairs property taxes I can’t see myself investing in this state.

        1. Freetrader

          First of all tic, as Bruce Springsteen once said, “I’ve lived in poor neighborhoods and neighborhoods that weren’t so poor, and there were nice guys and a-holes on every block.” I hope your find your happiness when you move out of state when you retire, but if you become happy, it won’t be because of moving out of state.

          In the meantime, your comment about it being impossible to own a house and have equity doesn’t make any sense (to me at least). If you live in a house for 30 years, you will own it free and clear if you don’t do anything stupid. Nobody is requiring you to flip your house or move up to a McMansion.

          Fraud rampant in Califonia? Oh? Just because there is a fraud case in the newspapers once in awhile doesn’t make California less lawless than Iowa. There are 40 million people in California. A few of them crooks.

    3. thrifty

      Interesting! I grew up in south Florida during the 50’s and early 60’s. Lived in 2 houses within a mile of each other during the 12 school years. All of my friends lived within walking or bicycling distance until I could drive; even then most were within 1-2 miles. Went to the same grade, jr high and high school as everyone else. Only the “rich” kids went to private school. For spending money I cut our and our neighbors lawns, delivered newspapers, sold any number of things door to door in the neighborhood over the years. Perhaps it’s just me, but here in so cal it seems that kids not infrequently go to private schools and don’t cut theirs or any one else’s lawn, etc. With all the inherent expenses living the so cal lifestyle, I can’t imagine spending more than the traditional 28% for shelter unless other important areas of daily life are sacrificed to varying extents.
      Perhaps the most remarkable thing I’ve seen in so cal is the “instant communiity”. Homes, schools, businesses, etc, seem to spring up almost overnight.
      Why? I think Dr. George Fishbeck, weatherman for ABC(?) summed it up best decades ago, often at the end of his show, as to why all those people kept coming to California, “It’s the weather, folks!”

      1. ockurt

        Growing up in TX, I used to cut lawns and deliver newspapers. You probably don’t see much of that out here since there aren’t many lawns to speak of.

        And if you live within LAUSD limits, private school is a must! Here in NB some folks put their kids in private schools, which is probably more for status than necessity.

    1. Property Owner

      Hi Sue,

      Yes we did. We are in escrow now. We had a huge amount of interest and multiple offers.

      Now we are competing against other buyers for our next house and have been outbid twice already.

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