[AK]

IMO Suze was much too easy on him, but gave him some good (and frickin’ obvious) advice which we all know he won’t take.

The first few responses on Casey’s site went like this:

Why do you want people to comment on whether or not you should follow her advice? You’re not going to follow it either way. You are notorious for that.

Yes. No. Do whatever you want. It’s your life, we’re just passing through. I personally have no interest in doing your homework. It’s all good though… but probably not for you in a couple of months.

Her financial advice is not always top-tier, but I’d rate her far above Robert Kiyosaki. I’d rate her below John Bogle, Ben Stein, and William Bernstein. That said, and not even having heard her specific advice to you, I think you should take her advice, because it will probably be the best you’ve gotten so far, and because you probably won’t.

[AK]

Thanks for the information, especially the breakdown. I’m surprised that only 2% of defaults go through a short sale, though I guess that may change in the future! I’m also guessing that many of the informal payment plans fall through.

[AK]

EMC could be a special case because Bear Stearns is the originator, servicer, and (bag)holder of the loans.

What happens when securitized loans goes into default? Is loss prevention up to the discretion of the servicers, or do the owners of the mortgage securities participate actively? Do servicers have any real economic incentive to keep people out of foreclosure?

It seems to me that if foreclosure prevention were all that simple, Countrywide wouldn’t be stuck with thousands of REOs.

[AK]

I’d be tempted to buy at $350K … if your neighbors seem like long-term residents.

As others have noted 100% financing may not realistic these days. But at that price I think you’d be just under the FHA limit, which might get you to 97% LTV.

[AK]

I suspect Silly Valley prices will be a bit sticky on the way down. But I agree with those who say there’s little upside potential. And while the job market is “on fire” right now, that could change in a heartbeat.

Consider the various commuter trains. I think Caltrain runs south from San Francisco and north from Gilroy, while ACE runs east-west between Tracy and San Jose.

[AK]

LEND is actually *up* in after-market trading … go figure. Still I wish I’d had the intestinal fortitude to buy puts on LEND, NEW, etc.

Seems they’re trying to bury the news with more releases about their cash-out refi … um … I mean the Farallon Capital deal.

[AK]

Been off Zip for a while … it disappeared once before but I think it actually sold this time. Interesting to see what it went for.

Another (upgraded) unit in the complex is at 144 DOM and playing silly pricing tricks:

Price Reduced: 12/06/06 — $325,000 to $310,000
Price Increased: 12/12/06 — $310,000 to $315,000
Price Reduced: 01/26/07 — $315,000 to $314,000
Price Reduced: 03/09/07 — $314,000 to $313,000

[AK]

Real estate in that area has gone through many boom-bust cycles, and it’s likely to crash again. I understand that some of the subdivisions in that area were planned and laid out in the late ’80s, but were shelved for a decade or more during the last real estate bust.

In the pre-bubble days the rule of thumb was: buy if you’re staying for five years or more, otherwise rent. I’d go by that rule in today’s uncertain market. Plus you’re in a unique situation … if you find yourself seriously upside down in a few years and unable to sell, a vindictive lender could go after you for failure to pay just debts under the UCMJ.

For $2200 or less you should be able to find a very nice rental home. Just make sure you’re not renting from an upside-down investor who is likely to go into foreclosure at the worst possible time, say when you’re TDY to South Succotash.

I say put away cash reserves now and build a bulletproof credit rating. Someday, when the right buying opportunity comes, that VA loan puts you in a great position as you’ll be one of the few buyers eligible for 100% LTV financing.

[AK]

Thanks for your insights Temeculaguy. Location is everything as they say …

Here’s another brown-lawn special … seems to be a Countrywide REO. Interesting because it seems to indicate that some lenders are starting to “get it” … This one listed immediately after foreclosure at $339,900 or $230/sf (roughly “loan balance plus 6 percent”) presumably in hopes of a quick sale. Zillow comps (such as there are, it’s a slow year) seem higher though are probably distorted by the usual factors. Interesting to see how low this one goes …

List Price: $339,900

33282 AVENIDA BICICLETA, Temecula, CA 92592

Bedrooms: 3
Full Baths: 2
Partial Baths: 0
Square Feet: 1,457
Lot Size: 6,969 Sq. Ft.
Year Built: 1994
Listing Date: 03/01/07
On Market: 24 days
Type: SFR
Status: ACTIVE
MLS #: T704899

Zillow sale history:

02/13/2007: $321,057 (foreclosure?)
07/13/2001: $183,000
05/28/1999: $136,500

So somewhere between 2001 and 2007, something happened to $138K. I guess a burn rate of $25K/year is pretty modest compared to other examples we’ve seen.

Edit: Found the loan info on a foreclosure site.

Loan amt: $304,500
Loan date: 10/15/2004

Default recorded: 10/04/2006
Delinquent amount: $9,609

Notice of sale: 1/09/2007
Trustee sale: 1/26/2007
Minimum bid: $318,912

[AK]

I read about that … supposedly $100 million in muni bonds to refi an estimated 1,000 homedebtors.

Drop in the bucket, but just enough to say: “I did something … vote for me!”

[AK]

Creative help? Maybe Casey has some ideas.

Seriously though:

1. If he/she can’t afford the carrying costs now, he/she couldn’t afford the carrying costs three months ago.

2. One more reason not to rent from a flipper.

3. One more reason to avoid lease-option deals. (As if there weren’t enough reasons already.)

4. Credit score of 735 isn’t “great.” Good, but not “great.”

5. “Trying to work on other deals” you say? *bangs head against wall*

[AK]

Ton of user comments on that article … sounds like a HUGE layoff in O.C. This brings back memories of following FC.com back in 2000-2001 during the dot-com bust.

Advice to any ex-Ameriquesters out there: Take the first good job you can find. There will be plenty of people behind you in line.

[AK]

Now trading on OTCBB a.k.a. Pink Sheets … down to the price of a candy bar.

http://finance.yahoo.com/q/bc?s=NEWC.PK&t=5d

[AK]

It is, and isn’t, a Democratic proposal.

It is a Democratic proposal because the proponent is a Democratic senator who also happens to be a presidential candidate.

It isn’t a Democratic proposal because the REIC has bought influence in both parties, and just happens to be using the party in power as its mouthpiece.

[AK]

As posted in another thread here is a partial list of Sen. Dodd’s PAC campaign contributions from the 2004 cycle:

New Century: $9,000
Goldman Sachs: $14,000
National Association of Realtors: $6,000
Morgan Stanley: $4,000
Bear Stearns: $2,000
Countrywide: $2,000
Fannie Mae: $5,000
Washington Mutual: $6,000
Centex: $1,000
UBS: $5,000
Wachovia: $7,000

[Author]

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