San Diego Housing Bubble News and Analysis

We have friends who are planning to buy there at some point in time, and they have heard that those who purchased their homes in 2004-2006 probably paid in the $800's+ for homes that are now selling in the $600's--a loss of around $200K.

In one development, they know of people who paid $850K for a 3000SF home in 2005, and someone who recently closed on the same size home across the street for $675K!

When did your friends buy in 4S? Did they go in with a zero down? If so, the lender may be correct, but it's still amazing to me that they would suggest walking.

She bought near the peak. Paid $729k for a 5br/4.5ba 3200 sf. Countrywide told her the house is now worth $620k.

How much was her down payment?

I'm speculating, but Countrywide may be the loan servicer in this case, not the lender. They are unable, or unmotivated, to modify the terms of the loan. It's someone else's loss, after all.

She said she did an 80/20 loan which I believe means she has one loan for 80% and another for 20% and put nothing down. I know little about loan terminology as I'm an old-school fool who only knows 20% down payment with a 30-year fixed.

She said it was the "countrywide office" that she called, perhaps you're right it was just the loan servicer. Maybe we have a bear (pig) as an insider!!!

You're assuming that the person on the phone and Countrywide both represent the same interests. While I'm sure the managers at Countrywide hope for that, it's more than likely that the staffer will only get more work dumped on their desk if your friend wants to renegotiate their loan.

In a similar situation, I was in a motorcycle accident a number of years ago, and the insurance rep for the guy that hit me did everything he could to get me to go get a lawyer and sue them. When I got so frustrated with him that I did go get a lawyer, I told my lawyer my experience, and he said it was normal. In an injury accident the insurance rep doesn't want all the work, and if he can get you to go get a lawyer, the case gets taken off his desk and passed onto someone in legal.

I suspect it's a similar situation at Countrywide. The person your friend talked to probably wants nothing to do with all the work your friend was going to turn into, so they encouraged your friend to walk, thus making your friend someone elses problem.

XBoxBoy

wow xbox, bureaucracy at it's finest. While that seems outrageous I think you are probably correct in what it is.

How did your motorcycle case turn out?

It's someone else's loss, after all.

That might be the answer. Since the mortgage has been sold off and probably securitized into a million bits, Countrywide has no self interest in helping her out. It is a complicated legal hassle to get all the financial stakeholders to agree to new terms; it is better to go through the standard repo process. This also explains why there will be mountains of foreclosures and walk aways - sheer complexity of contracts involved.

Ahahah, and the second wave hasn't even started yet! Oh but wait, areas like 4S and Carmel Valley are immune...LMFAO....

This is all so revelatory to me. Sounds like repo is becoming the new black, when even reps for the lenders are opting to recommend walking.

Nostradamus - My motorcycle case turned out even more bizarre. We ended up going to trial, because there were two insurance companies covering the guy who hit me. (There was no question of fault, the guy who hit me admitted he was talking on the cell phone and didn't notice the red light until it was too late. The only aspect in contention was how much should be paid for medical bills, pain and suffering, etc) The amount we wanted exceeded the limits of the first insurance company, who hired the attorney. Thus the opposing attorney decided his paying client had nothing to lose by going to trial. He could either settle for the full amount of his paying client's policy limits, or go to trial and who knows maybe get a surprise verdict that would let his paying client pay less than his policy limits. I even sat in on the conference in judges chamber when this was discussed, and everyone, my lawyer, the judge, the opposing lawyer, was open about it.

In the end, we won and the first insurance payed full amount up to policy limit, and the second insurance came in to cover the rest. So I guess the lawyer's strategy didn't work.

Ironically, ever bit of evidence, all the medical bills, etc and my testimony all had to be wiped of any fact that anybody had insurance. I still shake my head when I think of myself getting on the stand and swearing to tell the truth, the whole truth and nothing but the truth, knowing full well that there were plenty of aspects of the case that I could not mention, least I cause a mistrial. It's just one more example in my mind of how hypocritical our justice system is.

To add to this, I felt like a pawn in a lawyers game once I lawyered up. I would have settled with the insurance company for the cost of the motorcycle. I grew up believing that you don't sue people for accidents. But the system is not set up like that at all.

XBoxBoy

The system was set up by lawyers, for lawyers. They are always the winners. Like you I learned about the "features" of our legal system when I was in a 3-year suit as executor of an estate. That is a long story.

When you won, did their side cover your legal costs? Did you lose anything out of pocket? Have your injuries healed? Did you get a new bike?

I ride but am single without family and have been lucky in that nobody has hit me. If I had a family to take care of I might reconsider riding these mean streets (see the SUV discussion and how smug people are that they won't be hurt when they cause accidents from behind the wheel of their suburban).

Ironically, ever bit of evidence, all the medical bills, etc and my testimony all had to be wiped of any fact that anybody had insurance.

XBox - Can you explain that a little? Are you saying that the lawyers conspired with you to commit perjury? I didn't know things have gotten that bad in our judiciary.

What XBox says is true. The jury is NOT to hear of any insurance information - or even talk of settlement, from what I understand.

Sorry, but we seem to have hijacked this thread a bit....

When I "won" my lawyer got 35% of the take. That was his "fee". I was out of pocket nothing for legal fees.

My injuries have pretty much healed. Despite being broadsided by a pickup truck going probably 35-45mph, all I had was a torn ACL. If I had been a foot slower, I would have had a crushed leg, two feet slower, and I probably would have been simply run over. So, despite two surgeries to repair my ACL and remove scar tissue, I'm pretty good shape. I was a runner, and had run a marathon. Every since the accident I've been a much slower runner and can't run over about 8miles without my knee aching. But, trust me I don't moan about that, I always count my lucky starts that I have a knee to ache. (Oh and the fact I was wearing a full face helmet and a leather jacket with armor in it definitely helped)

After my knee regained it flexibility, yes I got another motorcycle - a Ducati Super Light. But as the freeways grew more congested, I sold it and never bought another. Now I'm married, and I don't think my wife would tolerate me having another rocket.

bsrsharma - In a injury accident, the jury is not allowed to know anything about any party having insurance. The thinking is, that if a juror knows there is insurance, they will be more likely to give a judgement that awards the insurance's money, whereas if they know the person doesn't have insurance, they would be awarding the defendant's money and less likely to make a big award. The juror is supposed to be making an award based on what the damages are worth, not what/who can pay.

All the attorneys, and the judge are clear to you before you go into the court room to testify, that you are not to mention anything about insurance, and the lawyers don't ask any questions that will give you the opportunity to say anything about insurance. This isn't a conspiracy in the evil sense, it's all very out in the open. And there's no perjury, because you are never asked about insurance, so you never say anything about it. So, no lie told, only omission.

In my case, all the medical bills had to have "co-payments" whited out since they aren't allowed to be shown. So, your medical bills that you claim are reduced by your co-payments, and you don't get to sue for them. But it gets covered because the jury typically awards more than the actual medical bills. (And in my case they awarded three times medical bills. In the end, my health insurance got reimbursed a third, the attorney got a third and I got a third for putting up with this charade.)

The part that rubs me, and that I find so hypocritical is that we select these people to be on the juror because we trust them. Then we make speeches about how "everything" is going to be brought to the court and the truth will prevail. Except, "everything" excludes a variety of things. (Based on the arguments of the lawyers to the judge about x and y not being relevant, and thus inadmissible) Well, if we trust these people to decide on the verdict, why don't we trust them that if we tell them everything they will in the end decide on something fair. I guess, because in truth we don't trust the jurors. After all, they are 12 people who couldn't think of an excuse to get out of jury duty!

Just my cynical 2cents worth,

XBoxBoy

If the Countrywide is just the servicer and not the lender, they get to bill a fat servicing fee the foreclosure work.

Servicing fees are now like the origination fees of yore.

The financial services industry lives on fees. They need to generate fees no matter what.

It's just like Realtors telling buyers that foreclosures are "great opportunities." Everyone is looking to make lemondade out of lemons.

Thanks patiently, that's very insightful. I'll ask when I see my friend again if it was the loan servicer, probably was.

xbox, it's my thread, you can hijack it all you like! Besides I like to chat about whatever comes out, which isn't necessarily always in line with the OP. You have a great attitude, even though your running career was shortened you see the glass half-full in that you still have a knee to gripe about. Those Ducatis are fun but I think you did the smart thing to give it up for your family. You never know when you're going to get blindsided. My bike doesn't have that kind of acceleration being a 453 lb cruiser so I take it easy but still I've had my share of close calls both with other vehicles and with gravel patches.

Had case where rear ended at 40mph, totaling both cars. Mercury Ins, tried to bribe me with $500 first week, mentioned that what if there are injuries, they said your HMO will cover it. (Is that not outright fraud, only 1 year to file claim in CA) Didn't sign, unfortunately there were back injuries and hired lawyer, and he and chiro made most of the money.

Heard story of someone's vehicle was broadsided, he saw doctor once, but had recurring pain. Wrote "sob" story to Allstate or Statefarm, stating that make $100/hr, hurts 3 hrs a day, give me 6K. They sent a check for $5K the next day with No documentation. No wonder Allstate rates are high. Both examples show regardless disregard for customers and/or shareholders. Moral of story is to drive a big ass vehicle, and drive safely. If you do get hit, hope that other party has generous insurance.

This is strange. Telling a borrower something like this is something a lender should never do. In her dissatisfaction in being underwater, I suspect this woman may have bugged the hell out of countrywide concerning her best course of action. They may have just gotten fed up hearing it and told her to walk.

That's one hell of a way for banks to "negotiate" w/homeowners!