The market has a funny way of dealing with financial folly: crashing house prices have turned off the housing ATM and stopped HELOC abuse… for now.
Irvine Home Address … 43 LEUCADIA #76 Irvine, CA 92602
Resale Home Price …… $539,000
She dreams of cheap land, children,
Towels labeled his and hers
Plaster ducks in pairs
Flying up the stairs
Some of that piggy bank lovin'
Some of that piggy bank lovin'
Some of that piggy bank lovin'
Piggy bank love
Piggy bank love
The Bonzo Dog Band — Piggy Bank Love
Everyone in California loves that Piggy Bank in their house. Most people here are so kool aid intoxicated that they take the free money for granted. It is just another California entitlement.
Americans Tap $8.3 Billion in Home Equity, Least in a Decade
Americans in the second quarter tapped the smallest amount of home equity in a decade, showing households are focused on repairing tattered finances.
No. It shows that households don't have any home equity left and that the housing ATM has been turned off. The writer of this article is implying the lack of mortgage equity withdrawal is a prudent choice of wise financial managers. Do any of you believe that?
Owners took out $8.3 billion while refinancing prime home loans as borrowing costs dropped from April through June, down from $8.4 billion in the previous three months and the least in 10 years, according to a report today by McLean, Virginia-based Freddie Mac. Twenty-two percent chose to reduce loan principal, matching the third-highest rate since records began in 1985.
Hurray! People are paying down their mortgages. Paying down debt is always the wisest choice. Debt is not tool, and sophisticated people do not use it to finance their daily lives. Posers do.
Instead of extracting cash to binge on everything from cars to vacations as in previous recoveries, owners are refinancing to improve terms and reduce mortgage payments. The mending of household balance sheets means consumers will be in a better position to join the recovery once employment picks up.
“It’ll put consumers on firmer ground going forward,” said Michael Bratus, an economist at Moody’s Economy.com in West Chester, Pennsylvania. “It’ll give consumers more confidence.”
If it were only true. In reality, it will provide a litte more capacity to hold and service debt which is what most fools will do.
A report yesterday from the Conference Board in New York showed confidence dropped in July to a five-month low on concern about jobs and wages. Americans may eventually become less pessimistic as they repair balance sheets and their financial situation improves.
So-called cash-out loans, in which borrowers increase their loan amounts by at least 5 percent, accounted for 27 percent of all refinanced loans in the three months to June, capping the lowest three-quarter share on record. Cash-out refinances peaked at 88 percent in mid 2006.
OMG! Eighty-Eight percent of refinances took out cash in 2006. Does anyone still doubt that we had a HELOC Economy?
No ‘Cash-Out Boom’
“This is a rate-and-term refinance boom as opposed to a cash-out boom,” said Michael Larson, a housing analyst at Weiss Research in Jupiter, Florida. “Five years ago you had people liquidating equity to finance debt-fueled consumption. Now, refinancing gives them breathing room.”
Figures from the Mortgage Bankers Association signal the drive to take advantage of record-low mortgage rates has accelerated this month. The group’s refinancing gauge for the week ended July 16 reached the highest level in a year. Refinance applications accounted for 79.4 percent of all mortgage requests, the most since April 2009.
This is a misleading use of statistics. There has been no acceleration in refinances. The reason refiance applications accounted for a higher percentage of total applications is because applications for purchase are at record lows. That is also why interest rates keep falling. The supply of money available exceeds the number of applicants that demand it, so competition to put that money to work is forcing interest rates lower.
Ron Keating, a 50-year-old federal employee in Woodbridge, Virginia, said he lowered his monthly mortgage payment by about $150 after refinancing.
“The less I pay, the better,” he said in a telephone interview.
Borrowing Costs
The average rate on a 30-year fixed mortgage fell to a 4.56 percent in the week ended July 22, the lowest since Freddie Mac, the second-biggest buyer of U.S. mortgages after Fannie Mae, began keeping records in 1971. At that rate, monthly payments for each $100,000 of a loan would be about $510, down about $40 from a year ago when the rate was 5.2 percent.
The median homeowner cut their mortgage rate by 0.9 percentage point in the second quarter, according to Freddie Mac. On a $200,000 loan, that would lead to a savings of $1,300 in the first year.
The money will contribute to a pickup in growth over the next two years, according to a forecast by economists at Moody’s Economy.com. They project consumer spending, which accounts for 70 percent of the economy, will grow 3 percent in 2011 and 4.5 percent the following year. Purchases are likely to climb 2.1 percent this year.
I would be remiss if I didn't point out that not everyone thinks that consumer spending is 70 percent of GDP.
The effect of HELOC abuse — and now the lack thereof — has been obvious here in California. The chart below from Calculated Risk shows just how dramatic the decline in MEW has been:
U.S. “Home Equity” Loans Revealing
A Bloomberg headline today read “Americans Tap $8.3 Billion in Home Equity, Least in a Decade”. This is indeed a very news-worthy figure. Sadly, you won't learn anything about this issue from reading Bloomberg's ridiculous “spin” of this news.
At the peak of the U.S. housing-bubble, Americans were initiating more than $800 billion/year of such loans. They are now on a pace to take-out loans amounting to less than 5% of that gargantuan figure…and yet this same, propaganda-machine talks about a “recovery” in the housing market.
Wow! A 90% reduction in MEW. No wonder the economy is sputtering.
“It'll put consumers on firmer ground going forward. It'll give them more confidence,” quotes Bloomberg, from an “economist” named Michael Bratus. Note the use of contractions to make his statement sound like a “cheer”. The only thing he forgot to add was “Rah! Rah! Rah!”
If only Americans were getting on “firmer ground”, and thus had any reason to be more “confident”. Here's what is happening in the real world. After going on the most insane borrowing-binge in the history of our species, based upon all the “home equity” which Americans thought they had, that “equity” has all evaporated – but the trillions in debt remain.
The result: Americans hold less “equity” in their homes than at any time in history: not during the Great Depression, nor at any other time. Indeed, for the first time in history U.S. banks hold more equity in U.S. residential real estate than American “homeowners” themselves. U.S. “home equity” loans have collapsed not because Americans are “repairing their balance sheets” (as the Bloomberg propaganda suggests).
Instead, U.S. homeowners (except for the small minority with full-ownership of their homes) are leveraged-to-the-hilt with debt – and can't afford to borrow one more penny. Secondly, the banks won't lend these over-leveraged consumers any more money. And third, there is no “equity” to borrow against. You can call this process “repairing balance sheets” – as long as you include the observation that it will take a full generation to “repair” the damage of the Wall Street-induced credit-stampede (for those homeowners who survive the process).
Then Bloomberg gets plain silly. “This a rate-and-refinance boom as opposed to a cash-out boom,” quotes Bloomberg, this time citing a suit-stuffer named Michael Larson (identified as a “housing analyst”).
“Hello” Mr. Larson! Home-equity loans collapsed to less than 5% of their peak, which at least 95% of English-users would describe as a “crash”. One can only wonder what numbers it would take to cause this “housing analyst” to use the word “crash” instead of “boom”. One might even suspect that this “housing analyst” makes more money in a strong real estate market – and so his characterization might be a tiny bit biased.
The only truth in Larson's statement was his observation that the only activity taking place this in this market is respect to the (small number of) credit-worthy borrowers who are able to take advantage of the zero-percent-panic-interest-rates to refinance a minute piece of this mountain of debt (no more than 1%). Other than that, this market is dead.
The problem is that these over-leveraged “homeowners” are now about to face a worse, and much, much longer collapse in the U.S. housing market – which will make the collapse after the first housing-bubble look like nothing but a passing, bad-dream. What is ahead will be nothing less than a waking nightmare. There are no surprises here. A second collapse of the U.S. housing market was always 100% certain – but the Obama regime can be "thanked" for making it worse, courtesy of the second "bubble" they created in this market.
All of this has been detailed in recent commentaries, so I won't bore regular readers by re-hashing it. Instead, it is time to once again remind readers where this is leading. As I have maintained since shortly after the U.S. housing burst, and hidden facts began to emerge, this was a deliberately manufactured bubble (i.e. a deliberate scam) – which was designed to do exactly it has done: to rapidly accelerate the transformation of middle-class, Americans to poor, 21st century serfs.
Indeed, we are already very close to the definition of a “serf”: someone who toils for a mere “subsistence” living – where all they are able to do is barely buy enough food to survive, while they pay “rent” to their “landlords” (the banks).
The banks “own” these homes, not the “homeowners”. For at least 25% of these “homeowners”, the balance owing is either so large that they could never pay-off their mortgage, or only do so through ultimately paying two or even three times what these homes are worth. The extremely modest number of “mortgage modifications” only seek to stretch-out the length of these mortgages. While that results in lowering current, monthly payments (and may make it possible to “service” the mortgage), it can add up to $100's of thousands of dollars (in extra “interest”) on what the “homeowner” must pay – to actually become a homeowner.
In short, for a rapidly growing segment of the U.S. population, they can either never become true “homeowners” (and are thus destined to always be “serfs”); or, their “freedom” from their banker/landlord can only be “purchased” by paying many times what these homes are really worth. Now, with the “second bubble” having burst, this trend is going to accelerate exponentially: as housing prices fall, “equity” continues to evaporate, loan-terms get stretched-out, wages continues to fall, and more and more simply lose their jobs; the transformation from “homeowner” to “serf” will progress relentlessly.
I love that rant. I have nothing to add.
I am not quite as bearish and as pessimistic as the author of that piece, but I share his attitude toward debt and the impact this mountain of debt is having on our economy and our society. Besides writing about the perils of debt, I do the only thing I can — I don't have any.
Another HELOC implosion
- The previous owner of today's featured property paid $520,000 on 12/1/2003. She used a $389,925 first mortgage, a $77,985 second mortgage, and a $52,090 down payment.
-
On 11/2/204 she obtained a $145,000 HELOC.
- On 4/15/2005 she refinance with a $487,500 Option ARM.
- On 6/24/2005 she got a $102,900 HELOC.
- Total property debt was $590,400.
- Total mortgage equity withdrawal was $122,490.
- Total squatting time was about 18 months.
Foreclosure Record
Recording Date: 07/24/2009
Document Type: Notice of Sale (aka Notice of Trustee's Sale)
Click here to get Foreclosure Report.
Foreclosure Record
Recording Date: 03/16/2009
Document Type: Notice of Default
The flipper that bought this property was probably counting on a further bump in prices this summer. It didn't happen. They have been lowerin their price and reducing their margins. Like the another property they bought in Irvine, they did nothing to improve it. We are still a pergraniteel market, and flippers who don't make the necessary improvements don't get the prices they want.
If you would like to learn how you can get involved with trustee sales, please contact me at sales@idealhomebrokers.com.
Irvine Home Address … 43 LEUCADIA #76 Irvine, CA 92602 
Resale Home Price … $539,000
Home Purchase Price … $465,600
Home Purchase Date …. 5/25/2010
Net Gain (Loss) ………. $41,060
Percent Change ………. 8.8%
Annual Appreciation … 60.0%
Cost of Ownership
————————————————-
$539,000 ………. Asking Price
$107,800 ………. 20% Down Conventional
4.60% …………… Mortgage Interest Rate
$431,200 ………. 30-Year Mortgage
$106,579 ………. Income Requirement
$2,211 ………. Monthly Mortgage Payment
$467 ………. Property Tax
$120 ………. Special Taxes and Levies (Mello Roos)
$45 ………. Homeowners Insurance
$282 ………. Homeowners Association Fees
============================================
$3,125 ………. Monthly Cash Outlays
-$371 ………. Tax Savings (% of Interest and Property Tax)
-$558 ………. Equity Hidden in Payment
$186 ………. Lost Income to Down Payment (net of taxes)
$67 ………. Maintenance and Replacement Reserves
============================================
$2,449 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$5,390 ………. Furnishing and Move In @1%
$5,390 ………. Closing Costs @1%
$4,312 ………… Interest Points @1% of Loan
$107,800 ………. Down Payment
============================================
$122,892 ………. Total Cash Costs
$37,500 ………… Emergency Cash Reserves
============================================
$160,392 ………. Total Savings Needed
Property Details for 43 LEUCADIA #76 Irvine, CA 92602
——————————————————————————
Beds: 3
Baths: 3 baths
Home size: 1,826 sq ft
($295 / sq ft)
Lot Size: n/a
Year Built: 2002
Days on Market: 50
Listing Updated: 40374
MLS Number: S620673
Property Type: Condominium, Residential
Community: Northpark
Tract: Mont
——————————————————————————
TURNKEY STUNNER IN HIGHLY SOUGHT AFTER NORTHPARK COMMUNITY! Can close in 30 days or less. Not a short sale or REO. Freshly painted throughout and NEW carpet. The room design of the living room, kitchen and dining area allow for maximum enjoyment of this open floor plan with soaring ceilings. Enjoy preparing meals in your gourmet kitchen with an abundance of cabinet space and breakfast bar. NEW 18×18 Ceramic tile in Kitchen, bathrooms and upstairs laundry room. Master suite boasts walk-in closet, vanity area, dual vanities, large oval soaking tub and separate shower. 
Laundry room conveniently located upstairs. Within walking distance to Beckman High and Northpark square Plaza for shopping! TUSD schools share an excellent reputation for education and have a top notch staff. Association Ammenities include, Basketball Court, pool, Children's play areas, park, picnic and barbecue areas!
Hey IR, you forgot the gourmet kitchen graphic. š
Thanks, I can’t believe I missed that one. I was distracted with laughter by the “TURNKEY STUNNER” opening….
TURNKEY STUNNER, I love it!
open floor plan
http://img.dailymail.co.uk/i/pix/2007/11_03/hole22211_468x372.jpg
(did the image tags disappear?)
I’m glad you instantly took the falsehood out that it was a choice. Also, many of the GSE refi’s probably are lowering principal because they need to in order to qualify the loan.
The idea that MEW would be continually available and increasing was not easily seen as false during the run-up told me a lot about the people analyzing the data.
Even without a cash-out, a refi can still be misused.
By default, aren’t most re-fi’s for another 30 years? If you refinance after a year into another 30 year loan, you are effectively extending your loan for another 12 months, which makes the payment go down even without a rate change.
I would wager that most people who refi think of that payment reduction as part of their savings, even though it costs them more in interest over time to keep extending the loan.
principal 500000 500000
rate 4.25% 4.25%
term 348 360
payment ($2,501.88) ($2,459.70)
Not necessarily.
You can take the 30 year but then make accelerated payments. It takes discipline, yes, but the end result is that you do pay a lot less.
Or you can go to the 15 year.
As an aside.. or perhaps right on the money for today’s topic, we just got a flyer yesterday offering us 4% on a 15 year refi and something like 4.5% for the 30 years. Both are GSE backed.
Since we refi’d last year into 5 1/8% we’re not too much of a hurry, but honestly, if rates keep dropping, and if we can get a 4% on the 30 year we might just refi.
So long as we can fight the fees -which we did last year.
The pisser, of course, is the racket with the title insurance.
Those of us with sufficient equity on our homes are really doing well. Heck, the way Obama is going, soon they’ll give us a negative interest loan just to stay in our houses and spend money. š
Of course, those who bought into the bubble or went nuts with HELOCs and option ARMs… well, they’re screwed, as they should be, IMHO.
If you’re willing to pay points you can get 3.875% on a 30-year fixed conforming.
What happened to rising rates?
It’s quite evident that rates have not risen but have come down. Who are you trying to bait into an argument?
@JustAstute:
Your response is more baiting than my comment.
If you’ve been following this blog… it has been said by many people that once the rates rise, the pressure will reduce prices. And that rates can’t keep going lower.
Well… they have. And I have consistently contended that even if they do go up, prices will not lower proportionally and you may end up even paying more.
There has been several cites about how rates have to go up… but it’s been 2 years and rates have moved in the opposite direction… what is the explanation for that?
The more bullish commenters are celebrating the total lack of buyer demand which has caused interest rates to temporarily drop. This drop in rates is interpreted as a sign that rates will continue to drop forever and make properties more valuable and justify the bullish argument. Plus, a few simply enjoy poking me because I said interest rates will go up off historic lows.
fed cheap money
flight to dollars as perceived safety
lack of buyer demand
the first 2 are temporary and in my opinion, more heavily weighted in their effect on rates.
When rates go up, and up they will go, prices will fall. You’re argument is that people, in this continued recession, will have the ability to pay higher monthly payments.
Prices are dictated by the monthly payment a buyer can afford – that’s it.
The low interest rate forever crowd simply ignores the fact we have borrowed and spent all the money. If your neighbor HELOCd himself into oblivion and knocked on your door asking to borrow money to make his boat n motorhome payments, would you lend him money? And if you did would the rate be 4%, 12%, or 30%?
@IR:
I should clarify myself.
I am amazed that rates keep going lower. I did not think they would get to 4% but they have. That does not mean I think they will go lower or stay there forever.
I do think they will be low for a while.. at least through the next election. What I do wonder, is for the reasons you think there were supposed to go up, why have they not?
@matt138:
They will go up… but I don’t think they will have the downward effect on pricing as much as you claim. Other factors will have to kick in and if they don’t, then rates alone won’t do it.
Does anyone have data that when rates were lower and went up, that prices adjusted accordingly so that the monthly payment was the same? I just don’t think it’s that easy.
Prices adjusted accordingly when rates were on their way down, so why not the other way around?
I think given enough time it will work out that way for ‘normal’ areas, but we’ve established that Irvine is far from normal. Whether we like it or not, Irvine is a ‘premium’ area and you may very well be right that prices won’t adjust proportionally. That only means that monthly carrying costs will be higher; which the market might be able to absorb as long as people have the income and the desire to pay a premium to live in Irvine.
I’m a believer that “interest rates must rise” but I’m starting to question that. What purpose would higher interest rates serve? The old thought is that it’s to combat inflation, however I don’t think we have much evidence of inflation right now. I can’t find the exact reference, but I recently read somewhere that all this newly-printed money isn’t contributing to inflation because the real money supply isn’t increasing. Banks are hoarding the cash to clean up their balance sheets; regular people don’t have much access to this newly printed money.
@lowryder:
Like you said, it depends on the premium. Low rates didn’t keep prices higher in the IE or other places in Orange County.
It’s called the Anti-Gravity Effect… what goes up quickly, doesn’t always go down as fast.
“I just donāt think itās that easy.”
It will be that easy this time. In past booms, debt-to-income ratio guidelines were thrown out the window to inflate another Ponzi scheme. Given the slew of loan modifications required to bring DTIs down, and given that the market is completely controlled by the GSEs and FHA, house prices are going to be determined by people’s actual income when applied to conservative DTIs. And since there is no move up market due to a lack of appreciation, the first-time homebuyer is going to set pricing. This will likely be what the market faces until inventory is cleared.
@IR:
Are you talking general market or just Irvine?
I’m referring to Irvine and I don’t think it’s that easy. Check my past comments with the math, for homes trading at the $800k-$900k price… if interest rates were to go from 5% to 7%, you’re looking at almost a $150k drop in price (much worse from 4-4.5%).
And there are still move-up buyers in Irvine… not everyone sold or HELOC’ed during the boom and since some prices are not far off from the peak… they can still make a penny or two (also taking into consideration that many of these owners were high down or all cash purchases back in the day). Do you think those 500+ buyers in Woodbury/WBE were all first-timers?
Interest rates have been surprising to many. the fact that the Fed has so far gotten a free pass on inflation expectation despire $2T+ in Q.E. shwos just hwo dire the macro environment really is. Also, the European mini-meltdown in Q2 helped rally rates and spreads on high quality agencies.
Agreed – Let them have their moment. Just accept that we have reached a permanent plateau as far as interest rates go just like how house prices reached their permanent plateau back in ’06.
“Do you think those 500+ buyers in Woodbury/WBE were all first-timers?”
None of them were buying contingent on selling another home. There is no move up market.
Let me start by saying that I was one who was saying that interest rates would rise and prices would fall. And as I have said in the more recent past, I was wrong.
But, only temporarily.
“There has been several cites about how rates have to go upā¦ but itās been 2 years and rates have moved in the opposite directionā¦ what is the explanation for that?”
The largest part of the explanation is not the Federal Reserve’s lowering of the overnight rate. It is not lack of demand for mortgages as some moron said on Lansner’s blog. It is the interest rate swap market.
http://online.wsj.com/article/BT-CO-20100804-712705.html
I said temporarily wrong, because the IRS market is holding interest rates down like someone or someone’s pushing harder and harder on a spring. At some point the spring will explode or the rubber band will break and interest rates will move so fast no one will have any clue as to what is happening or what to do about it.
1. Number of interested potential buyers who can afford the product
2. Necessity and Cost of substitutes
3. Cost of complementary goods
4. Time to purchase
5. The emotional factor
For number 1. If interest rates rise, it increases the costs associated with people borrowing money to be able to afford a home loan at a particular price. The pool of people who can afford a 10, 15 or 30 home loan to finance an 800-900 thousand-dollar house decreases sharply decrease. Considering the fact that there are very few people who can afford these types of properties in the first place it screens out many of the previous potential buyers.
Demand is based on 5 simple things. (I could be missing something, it has been a while since my last Econ Class)
For number 2. While everyone needs shelter. There are many substitutes to owning a house in Irvine.
A. You can rent a house in Irvine for a lower cost of buying a house. This naturally reduces the number of people willing to purchase a home in Irvine and yet allows them to enjoy all that Irvine has to offer at a lower price.
B. As a replacement for Irvine Schools. You could buy a comparable house in a neighboring area for a lower price and then send your kids to Private school/Online Learning/Tutoring programs/stay home and home school/etc. for the difference. Once this dawns on most home buyers, it will make the great public schools line in the listings moot.
C. A person could just opt not to buy a more expensive house and stay in the one they are living in. There is much less uncertainty in living in a house you know you can afford at an interest rate that is more advantageous. This attitude will also reduce the number of interested home buyers.
For number 3. The simple fact that IR states often is the dramatic reduction in HELOC. For many people a drawing factor of a house is the ability to draw money from it to improve it. This is a significant compliment to the house, because it gives the equity that a house builds up over time a physical manifestation. (Or more accurately a financially liquid manifestation.) Now that HELOCās are becoming harder to attain at potentially higher interest rates, this also reduces demand for housing, especially if interest rates were to rise.
For number 4. There are a number of properties in Irvine and elsewhere that are simply sitting around. The real question is that are these houses being sold in a matter of months or are sellers giving up after months of disappointment. When people feel that the time to make a decision is more open the price of a good falls. Creating a false sense of urgency can address this factor (scaring people about rising interest rates, I believe that IR once talked about this), but there are few credible entities that can successfully pull this off. (Most people really do not trust realtors.) Most consumers are skeptical these days and for good reason.
As for number 5. To many Irvine is perceived as being a special place. (You could call this the āIrvine Premiumā) This factor can drive up or down the price of a good. The problem with this factor is its unpredictability. Trends and tastes change. At one point bell bottoms and ascots were popular along with shag carpeting and beanbag chairs. Changing interest rates may not really effect this factor. Yet given the fickle nature of people, it is reasonably foreseeable that Irvine or certain communities in Irvine will not be popular forever.
Just my thoughts.
@IR:
“None of them were buying contingent on selling another home. There is no move up market.”
Did you just word-jitsu me? Just because they were non-contingent does not necessarily mean they were not move-up. They could be renting out their current home or even buying an additional home (it is Irvine after all and FCBs own multiple properties). Or like at least one example I know of, they sold their home once they knew what the Woodbury build-out date would be, stayed with relatives… and moved up.
“None” is a big word… so you honestly believe none of the buyers in Woodbury were move-up? You wanna’ bet some JT Schmid on that?
IrvineRenter,
Looks like you owe me some nachos:
http://www.talkirvine.com/index.php?topic=1058.0
Again… “non-contingent” does not always equal “non move-up”.
Oh, I agree that refis can completely make sense and be very smart to do it. And anyone who does accellerated payments or re-fis from a 30 to a 15 is the kind of person who will maximize the benefit. I think you can also specify the term on your refi… Ex If you have 25 years left on your current loan, specify a 25 year term on the refi, that makes for an apples to apples comparison.
My point was just that there are a lot of math impaired people who only think in terms of payment. And don’t realize the impact of extending their loan period every time they refi.
Section 8 renters renting nice places in Las Vegas
http://online.wsj.com/article/SB10001424052748703954804575381270905814374.html?mod=WSJ_RealEstate_LeftTopNews
wow… 25% rate of return.
Meanwhile, up in LA, the local politicians (and the likes of Maxine Waters) are using hundreds of millions of dollars to go build a new tenement.. when the money would be much best spent on Section 8.
Actually, it makes sort of sense. Use the money to provide subsidized rent on exiting homes for low income people… just make sure they don’t own an Escalade.
Off topic, but interesting
Irvine Co. chairman Bren’s $1.4 million tax refund stolen
http://www.ocregister.com/news/bren-260473-check-complaint.html
The guy posing as Bren deposits a $1.4M check and lists his occupation as smoke shop.
Did they throw in free checking?
Not really off topic. I see this as very similar to what people were doing when they tapped their Heloc’s and walked away–only difference is it belonged to a bank, not an individual. It’s not like most of these people really thought about paying their helocs back unless they sold the house, right?
Squatting is the new housing ATM, right?
I went to Vegas last weekend–no obvious sign of a recession on the strip. I’m wondering how that is even possible. Were they all squatters or people having their last hurrah before declaring bankruptcy?
It’s the Squatters Stimulus. Without that pesky $2200 mortgage payment, Shoot, a fella’ could have a pretty good weekend in Vegas with all that.
I was in LV a few weeks ago and was also shocked to see all the activity. Even more shocking were the room rates at most of the places on the strip – definitely not recession prices.
Love the Slim Pickens as Major King Kong reference.
Vegas room and show rates are off by about 50%. For example I got a room at one of the nicest hotels for the fourth of July for $110 a night. Two years ago that room would have been $260. I don’t even have players cards. If you do and are even a minimal gambler you get constant offers of free rooms, tickets and meals including weekends. The strip is busy but not that much spending going on. Most of the shops and restaurants are dieing.
Survival kit contents check. In them you’ll find: one forty-five caliber automatic; two boxes of ammunition; four days’ concentrated emergency rations; one drug issue containing antibiotics, morphine, vitamin pills, pep pills, sleeping pills, tranquilizer pills; one miniature combination Russian phrase book and Bible; one hundred dollars in rubles; one hundred dollars in gold; nine packs of chewing gum; one issue of prophylactics; three lipsticks; three pair of nylon stockings. Shoot, a fella’ could have a pretty good weekend in Vegas with all that stuff.
I have a players card from MGM, but there weren’t any special offers the weekend I was there, for any of the affiliated properties. Riviera and Circus Circus were the cheapest, but they’re dumps and that section of the strip is stale for someone under 60. Luxor was the cheapest at the southern end of the strip, but at $160 it’s not worth it. With the MGM card I never paid more than $89 for a non-holiday weekend night, and that’s always a super clean room with drink/meal coupons and free slot play.
I don’t gamble nearly enough to get any rewards, so I don’t usually bother with the cards. I was at Planet Hollywood and one of the pit bosses asked me to apply but I declined, which was too bad for me. I ended up at a very lively table gambling outside of my zone and wagering a lot more than normal, probably enough to get me a free sandwich. On the bright side, I left after the weekend with 3x as much as I came in with and got more than a fair share of tasty beer.
Wow, is that really their idea of a “gourmet” kitchen? Ugly!
The quoted rant refers to “the small minority with full-ownership of their homes”.
I thought that just under half of homeowners owned their places outright, with no encumbrance. I have always assumed that those with no mortgage were heavily concentrated in the mountain and central timezones, or in rural communities.
This may represent a small fraction of the total dollar amount of residential equity, but it does not represent a “small minority” of owners. The statement may hold in Florida, California, and Manhattan, but not for the United States as a whole.
Am I mistaken here?
The percentage is between 30% and 35%. Calculated Risk has mentioned it several times, but I can’t find the links right now.
What was that picture of the nearly naked woman on the picnic table from?
I want an invite to their next party.