LA Times article today on surging rents

[ctr70]

http://www.latimes.com/business/la-fi-renters-nightmare-20120506,0,7137775.story

I get so tired of these articles in the national media talking about “foreclosure victims”. The whole media coverage of this housing and mortgage meltdown the last few years has been so one sided demonizing lenders and painting homeowners as these “poor victims”. What a bunch of BULL! Don’t drink the Kool Aid!

Many of these “poor victims” have been sitting in their house for 3-4 years not making a payment on the “free rent” program. And then have the balls to ask for cash for keys when they finally get foreclosed on as if they are entitled to that. And many of these “poor victims” did cash out refi’s at the peak to buy the Escalade and the RV or lied on their loan app and put zero down. What a shame that our national media never seems to mention this. This whole victim thing and demonization of lenders is the biggest freaking charade in the history of this country. And you expect me to feel sorry for them because they have to pay high rents now??? Puuulease!

[EconProf]

I love the sense of entitlement from the 22-year old searching for something “clean and new” and costing around $1500.
Surely this can’t be a typical expectation of 22-year olds. At that age, they need to learn to be frugal, live with roomates, discover cheaper neighborhoods, and tough it out.

[bearishgurl]

I’m so there with you on this, ctr70. I feel if a newly-minted “short-seller” or foreclosure “victim” is having problems paying rent, then they should move to their parent’s back bedroom (IF they’re still welcome) or to a lesser-expensive housing market. In mobile-home parks in America’s heartland, one can still hookup an RV or single-wide trailer long-term for about $200 mo (incl trash pickup) in many locales!

The reason why all these folks now thrown back in the rental market are now complaining about rents is because they’re not used to paying anything (except utils) to live, having successfully “squatted” for (likely) the last 28-38 months. One would think they were able to save up $$ during their long “strategic default” stretch. But this is a bit hard to do when you’re still paying Cox Cable $271 mo and you have once weekly tee times, nail appts, massage appts, personal trainer appts and the household has $1500 mo in collective auto-loan payments (for their gas guzzlers). So these “victims” finally move out of “their” (lol) house broke (or near broke), plunking down their $3K “walking $$” towards a damage/security deposit on a house. These “victims” can’t possibly go back to living the way they were (renting a Spring Valley condo, etc) before easy money flowed in the streets (enabling them to fog a mirror and buy the house they never really “owned” and then use it for their personal ATM) because their housing “expectations” are so much higher now.

I’m sure many of them are finding out that their $3K “walking money” only got them INTO a rental house, what with their security deposits, pet deposits and such. After that, they actually have to pay RENT every month to stay there. RENT is a disruption of their current “lifestyles” but such is life.

This isn’t the problem of the homeowners/tenants/landlords living within their means. It is a “new world” out there now. I’m of the notion that the “rest of humanity” only need to sit back to watch Darwinism in action unfold in the CA coastal housing markets from here on out.

As it should be, lol … I-10, I-40, I-15 and I-70 beckon eastward …

[bearishgurl]

[quote=EconProf]I love the sense of entitlement from the 22-year old searching for something “clean and new” and costing around $1500.
Surely this can’t be a typical expectation of 22-year olds. At that age, they need to learn to be frugal, live with roomates, discover cheaper neighborhoods, and tough it out.[/quote]

I can’t imagine that it is, either, EconProf. My kid(s) have always rented 85+ yo apts/flats SF where they must now feel fortunate to have at the price they have them for (“clean” or not)! SF now has a pronounced shortage in rental units causing prospective tenants to fight over the available ones and try to outbid each other on rent and deposits. It’s absolute insanity.

None of my kids will be interested in *newer* properties or “new construction” when they get ready to buy a home. It’s not the “newness” that turns them off. It’s the grossly inferior location of *newer* areas to where they’re currently working and living.

I think moving to SF/SV is a GREAT experience for a college student and young worker. They are immediately thrust into “reality” and whatever “sense of entitlement” they thought they were entitled to in their suburban SD “cloistered” existence flies out the window within days of setting foot out the front door of their apt/flat.

I believe rich rewards lay ahead for young graduates who have the fortitude to stay the course and live within their means for years in a place like SF, unsupported by parents. Had they stayed behind in comfy parents’ homes on SoCal, they would have never had the jobs they were able to get there. NEVER in a million years …

[ctr70]

And have you heard the new thing that some deadbeat owners that haven’t paid their mortgage payments in 3 yrs and are doing short sales are now getting $30k-$40k checks from the lender for doing the short sale?

What a disgrace this all is. From the crazy loan mods to the principle reductions to the Robosigning settlement. And our CA attorney general Kamela Harris drinks the Kool Aid with the whole “homeowner victim” thing lock, stock and barrel. I can’t believe we are putting up with all this nonsense in this country. The Robosigning settlement was another big joke. No one ever mentioned in the national media that NO ONE WAS GETTING FORECLOSED UPON WHO WAS MAKING THEIR PAYMENTS!!!

For what 100 years in California if you missed payments for about 6 months, you home got auctioned at trustee sale and you got booted out of your home with no cash for keys, nuthin’! Why did that ever have to change???? Why did we ever have to even have all these garbage entitlement loan mods (which like 70% fail), principle reductions, letting people live in their house for 4 yrs not making a payment? For criss sakes we now have a housing shortage and people who are well qualified can’t even find a house to buy.

I know a guy that buys foreclosures at trustee sales. He is always amazed by the balls of the ex homeonwer who squatted for 3 yrs has no shame at all asking for $10k cash for keys. They have no shame at all. They know the drill. Total entitlement mentality we have created in this country with this garbage.

[ctr70]

Bearishgirl…I’m happy to say I am 100% with you too and I agree with every word you said:)

[bearishgurl]

Lender malaise is truly the “elephant in the room,” here, ctr70. I’ve gotten the short shrift a few times for pointing that out here. Of course you are correct that lenders wasted no time in years past commencing the non-judicial foreclosure process in CA, and the defaulting trustors were given a few days after the recordation of the trustee’s deed to vacate or were evicted by the County Marshal (now Sheriff’s Dept). These defaulters knew their time was up and left without their hand out.

One of the properties on my “default tracking list” finally went back to bene last Thursday after 9 postponements since 2010. Opening bid amount on 5/3 was $924K. Market value is about $500-510K (IF cleaned up, painted and the junk hauled away). It didn’t have to be this way. This lender (a Big Bank) made its own bed here. I will await the trustees deed this week to promptly buy and use for another purpose. As far as I know, the defaulting (opportunist) trustor is still living in the property and its anyone’s guess where he’ll move to.

There is absolutely no excuse for lender malaise. The Big Banks could and can hire competent experienced collectors in short order and make ONE PHONE CALL to their trustee to get each foreclosure process started. That’s what all these homedebtors signed up for when they “bought” their homes.

[ctr70]

It’s like we don’t want anyone to feel any pain in this country anymore. We don’t want anyone to face any consequences for their bad decisions. It’s like we want to baby everyone and give them these never ending handouts. Real Estate is an asset, it goes up and down. When it goes down you should just have to live with those consequences.

When my dotcom stocks crashed in 2000, how come I wasn’t to get a “stock modification” from E*Trade for that asset????

[scaredyclassic]

Anecdotally rents do seem to be creeping up a bit in temecula, according to a friend looking for a place.

[sdrealtor]

Angry bear……just sayin

[flyer]

Thanks for posting this along with your thoughts ctr 70–my sentiments exactly!

This phony “entitlement society” in which we now live is disgusting on many levels, and it seems to be extremely prevalent in CA–and I’m saying that as a native.

Sadly, for those who buy into living beyond their means–which, in many cases, is what really put them where they are–there will come a day when it will all be over. You just can’t live a lie forever–as many are learning the hard way.

[briansd1]

I don’t see anything wrong with expecting new and clean. He may not get it but he can expect it. Isn’t that part of supply and demand and the markets?

Why are you guys so enraged by private party actions? If the banks don’t foreclose it’s their own problems.

If someone owes you money and you don’t take action to collect, it’s your own business.

[EconProf]

Brian, you completely miss the point, which is about moral hazard. That is when a government, or in this case a company, has a policy that encourages wrong, inefficient, or immoral behavior by another party in a transaction. In this case the squatter profits by delaying departure, perhaps trashing the place, hurting the (foolish) bank that made the loan. Government policies that enable/encourage squatting cost the general public plenty: neighborhood deterioration, houses kept off the market that could lower prices for honest buyers, and the general injustice of deadbeats living free for years.
Brian, you seem to dislike the big bad banks, but the cost will be spread out to all of us. The banks’ losses will be made up over time via higher interest rates or more stringent lending standards, freezing out young families wanting their first house who should be capable of buying now. You think this is OK? Try thinking beyond superficials and look at the deeper implications of what kind of behavioral results occur from the entitlement society you seem to like.

[HLS]

We are witnessing the slow painful breakdown of the largest Ponzi scheme in the history of the world.

So many people still don’t get that BANKS do not own most of these loans, they are SERVICERS.
They make more money by dragging out foreclosure due to contractual agreements.

I completely agree with the outrage but what nobody seems to understand is that if foreclosures
were all completed ASAP and homes were put on the market and listed at current market prices, it would push prices down further leading to even more underwater borrowers which would lead to more people walking away leading to even more distress sales.

There are not enough QUALIFIED buyers to buy these homes at current levels. At lower prices houses will get sold.

It’s a vicious cycle that if allowed to happen would cause the economy to collapse.

It’s a Catch-22 for the govt. They are counting on more people to be stupid & worried about their credit scores and having an emotional attachment to a house rather than being financially intelligent.

There are govt idiots making decisions but even they are aware of what the consequences are.

The money simply does not exist to buy all these homes. The derivitives market has been built on a shaky house of cards, based on risky loans.

[jstoesz]

BG, you said the word Utils! My affection for your long winded posts has grown exponentially. My sailboat in SD is titled Utils. It’s a great word that deserves it place in common vernacular.

[Author]

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