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bearishgurl
Participant[quote=spdrun]Why bother calling the FBI? Reduced comps are good for ALL buy-to-rental investors . Enjoy it while it lasts, and kick the bums out!![/quote]
The problem, spdrun, is that the “bums” aren’t “kicked out.” Many have been allowed to stay in “their” homes for free for 30-60 months. Then, instead of filing a notice of default, their first TD lenders try to do a “workout” with them. When that (invariably) doesn’t work, they are receptive to accepting a short payoff. The “bums” put their properties on the market in ANY condition because they DON’T CARE how much they get for it or how long it takes to sell it (remember, they’re living for free). After its finally sold, that “short sale comp” often comes out 20-60% lower than comparable neighboring properties are worth and sometimes just land value (as if the property was a vacant lot).
Piggs (as a microcosm of RE buyers in the general public) have been lamenting about lack of decent inventory to choose from for at least the last 20 months. The lack of inventory is a direct cause of too many recent sold comps from REOs and primarily short sales which were fraudulently sold FAR under what the property was worth … in ANY condition … and even FURTHER under build cost.
As a nearby homeowner to these shenanigans, if you didn’t HAVE to sell, would YOU put your property on the market with surrounding sold comps which were (often fraudulently) very deeply discounted?
Participant[quote=CA renter]FWIW, I called the FBI quite a few years ago regarding these short sale scams. They flat-out told me that they didn’t think it was prevalent enough, and that they didn’t have the resources to follow up on this type of crime.
It sucks, but there it is. Crime really does pay. :([/quote]
In my example, this Chula Vista family simply borrowed too much off their property in order to vastly improve it. Most of of their cash-out refi/HELOC went into the property. The property was WORTH spending that kind of money on but they should have done the improvements slower, as they had the cash.
But it worked out so that their family had enough “connections” to get a family member to list it as a SS and another family member standing in the wings to quickly purchase it all cash and lease it back to the “owners” who were about to lose it.
The end result is property stayed in the family and essentially had 70-75% of it’s debt stripped from it! Wa-laa! All those expensive materials (aside from the “free” stonework from the family biz) were for free, they got a ~2500 sf rambling ranch cosmetic fixer for free and essentially just paid for the large flat lot in a coveted area.
How’s that for self-serving machinations (and no one even had to file for BK protection)?
Moral hazard or effect on neighbors values be damned!
Happy Thanksgiving, Piggs!
November 21, 2012 at 12:16 PM in reply to: OT: Newark Mayor Cory Booker to live on food stamp budget #755073ParticipantMy household of 1.5 people has a grocery bill (incl non-food items and pet food) of $165 – $200 month, depending on what is needed for that month. In November and December, that bill is about $225-230 for extra holiday food.
I rarely dine in restaurants and do not eat fast food. So AN’s budget can be done. I have Navy commissary privileges but this budget can work without them …. with a little more footwork.
Participant[quote=SD Squatter]I think it’s ridiculous that banks accept such obvious fake attempts at salesmanship as legit. It’s right there in the open, all it takes is to look at the listing.[/quote]
They don’t CARE because they’re being paid (or are going to be paid) for the defaulted loan by the PTB. They are planning on giving any jr lienholders <=6% of what they're owed ... or nothing. Their mindset is, "Take it or leave it. Foreclose yourself." The "sellers" listing agent is only required to furnish the 1st TD holder (who will approve or not approve any SS offers) with a "legitimate" MLS number. They do not usually prove their "marketing strategy" because they were actually hired by the "sellers" and have no fiduciary relationship to the sellers lender. A MLS number is assigned to the property when the LA "markets" it online in the MLS at midnight for a minute and a half, at which time he/she e-mails the "online listing" to the defaulted-upon lender (or prints it out for later use). When LA's friend or relative's cash offer is miraculously presented to the lender the next day, the LA has used sold comps in their SS pkg that may be in the same zip code but are not legitimate comparables to the listed property sought to be deeply shorted. They may be of comparable sf but that is where the comparison stops. They are on busy streets, in much worse shape, are lacking garages, have unpermitted additions or have structural problems found by buyers' inspectors which caused them to be sold for much less. A distant lender doesn't know the difference and accepts the deeply shorted offer to get rid of the "deadbeat" sellers whom they have let squat for months/years. In doing so, the lenders themselves have created their own problem and were complicit in the depth and breadth of how bad they allowed the problem to get. I'm not currently active but this is my take on how a lender (usually distant and ignorant of the local market) is bamboozled into accepting an offer >=40% below market. Even if they order a “local broker opinion” before accepting offers, they are not completely in control of who that broker is and their relationship, if any with the LA. In each micro-market, most of the longtime brokers and agents are VERY well acquainted with one another and some even know each other from as far back as HS! A distant lender is in the dark about all this and just wants to get the deal done and get out of it.
There is a house a couple of blocks from me that sold for ~$620K in 2006 to a buyer whose family owned a quarry. Not only did the “sellers” do extensive iron and stonework inside and outside of the property, it was situated on a 10K+ lot and the extensive work done to it in recent years was really quality. The LA (a relative of the “sellers”) took pictures of a flooded easement that was NOT part of the property, set the sellers (and the neighbors) trash, recycle and yard waste bins in the front and lined them up in a row so as to block the stone facade on this ~100′ wide perfectly flat lot. Then they took two more photos of a deep hole dug in the unfinished backyard. Of course, no photos were shown of the fabulous granite kitchen with 12′ island, floor to ceiling stone FP and extensive wide-plank rustic wood flooring. Of course, those listing photos (mentioned above) were only displayed online in the MLS for a day. Miraculously, the property sold for $265K all cash in 2011 after a 22-day closing to a person who didn’t have the same last name of the “seller” but was likely another one of their “relatives.” The “sellers” still live there today. Obviously, they are now “renting” the property they used to own (and worked so hard on) from the new buyer. Maybe they are finishing the improvements in lieu of rent :=0
The subject’s lot alone (if vacant) was worth more than $265K. A property next door to the subject is worth approx $1.8M.
This type of fraudulent transaction deeply harms the value of the surrounding properties, at least for the six months the appraisal stemming from the bogus SS is used as a “sold comparable.” In this case, the surrounding properties varied widely in value from $400K to $2M. Until the PTB will no longer make up (or come close to making up) the short difference to 1st TD holders of FF mortgages, this travesty will be allowed to continue.
ParticipantI saw that the supes were going to vote on it a few days ago. I’ve walked up and down Market St numerous times and never saw nude people. Actually, Veteran’s Day wknd (2nd Mon in Nov) is traditionally quite warm up there. But it can get c-o-o-o-ld and windy there from Dec-May. I would think it would be a little chilly to parade around nude 6 mos out of the year.
It’s okay. There are plenty of places these folks can join their nude brethren:
http://www.nps.gov/prsf/planyourvisit/baker-beach.htm
http://www.parks.ca.gov/?page_id=528
http://en.wikipedia.org/wiki/San_Gregorio_State_Beach
And if they can travel south close to 100 mi or just cross a bridge, there are dozens more!
Meanwhile, around the homefront, they now have to wear a loincloth (females incl) :=]
Participant[quote=spdrun]…Lastly, it’s funny that the surname of the “sausage” pushing this law is “Wiener.”[/quote]
Wiener’s devoted the last ten years of his relatively young life to public service in SF. He has quite a few ordinances under his belt (pun intended).
http://en.wikipedia.org/wiki/Scott_Wiener
He’s actually from your neck of the woods, spdrun!
Participant[quote=squat250]…Personally, i would feel kind of odd walking around temecula naked.[/quote]
Given the political/religious bent of most of the residents there, you should :=]
Participant[quote=flyer]Going forward, regardless of what jobs they take, it will be very interesting to see the stats on what percentage of young people make enough money to support themselves–especially those who were raised in CA–and aspire to continue the lifestyle their parents have provided.
As I mentioned before–my kids were lucky–but, from what we’ve seen and heard from friends–it’s not a pretty picture out there for kids trying to make the “big bucks,” AND live where they want to live.[/quote]
Obviously, people have to live where they can afford to. If that means 5+ miles from the beach, so be it. If it means buying a <1500 sf house to be as close to parents as possible or live closer to the coast, so be it. I've brought up on this forum dozens of times, that, for the most part, Gen Y housing "expectations" are thru the roof! I have no doubt that their expectations for everything else are also extremely, unrealistically high.
Even though I am a staunch low or no-growth advocate, I realize we have the Mello-Roos Community Facilities Act (1982) to thank for keeping our young people in the state (or causing them to return after attending college elsewhere).
Government money in CA for new infrastructure in new subdivisions ran out decades ago. If it wasn't for MR, there would have been very little building since 1987 in SD County and ALL (yes, ALL) of the properties already built at that time would be so much more expensive today. The only building that would have occurred would have been been infill and on smaller parcels adjacent to and between long-developed areas, as well as the individual spec or custom homes scattered throughout the county.
I have come to the conclusion that if all SD Co had was higher-priced older homes (like SV), Gen Y (and likely a good portion of Gen X) would have left the county, never to return. Even if they could qualify to buy a smaller, older home, they don’t want it. The only reasons they buy them in SV are because the daily commute across bridges is brutal and they make a lot more money working there (as opposed to here). Given the choice, 95%+ of Gen Y want ~newer or ~new construction over a more desirable location for the same or lesser price. MR allows them to have those choices.
Participant[quote=craptcha]A friend of mine is a trucker. He used to spend weekends at home and go coast to coast during the week. He now spends one week at home then three weeks on the road. He has a wife and two daughters.
Another guy I know came here with his wife and two sons about 10 years ago. The wife and the kids went back to their home country after few years. He spends 8-9 months trucking in the US (lives in the truck) and 3-4 months with his family.
A cousin of mine has been working on oil drills (Middle East, Africa, Northern Sea) for almost 30 years. 2 months at home, 2 months in the field since more than 20 years ago. They have one kid. They wanted to have more but he lost fertility along the way.[/quote]
craptcha, I think a lot of the scheduling issues your truck-driving friends had in the past have been addressed by the major transportation firms in recent years. If you watched the video in the OP, it stated that drivers were being used regionally and trading off to other drivers as they reached the end of their “region” for just the retention reasons you mentioned. And 4 day on, 3 day off schedules and other quality-of-life changes have been made. The industry is trying to make the profession more “palatable” to potential drivers. The current cohort of drivers is aging fast and it is not uncommon to see a whole table full of drivers at a truck stop all OVER the age of 70. These road warriors won’t last forever and the industry is desperate for new blood.
I don’t think a oilfield laborer is a good job for a parent, either. It is a good job for a young adult who is just starting out in life and needs to save up money to get where they need to go. Five years married to a rig is about as much as anyone could be expected to do. That would net enough money to buy vehicles, a house, have a savings account, pay for some job training (all debt free) and even get married!
The petroleum engineers and other professionals in the field don’t usually spend more than ten days per month away from home, unless they accept a long-term assignment on an offshore rig or an overseas assignment (in which they may be able to move their families, as well).
I just found this short video on a career in petroleum engineering (which appears to be CA-based).
MCEE Fall 2012 Magazine – wait to load:
http://www.ou.edu/content/dam/mcee/magazine/MCEE-MagazineFall12.pdf
Plus these great videos.
ETC.
It all seems so v-e-e-ery interesting … and lucrative, as well!
Participant[quote=kkun]Bearishgirl- Your argument makes sense. It’s more driven by the buyer perception, information gap, etc. Otherwise from a pure financial sense paid off MR should add value (by an amount equal to NPV of the MR payments stream, in a prefectly rational market)[/quote]
Even in a “rational market,” (however that differs from today’s market), buyers who won’t pay MR won’t shop where it exists. And I don’t think appraisers would or could add value to a property where the bonds were paid off if that is not the “norm” for the area. It could be compared to wasting money on $12K windows in a $300K-ish neighborhood where all other comparable properties have $4K windows. The over-improving owner isn’t likely to recover at least $8K of his window investment upon sale.
Participant[quote=squat250]i figure i’ll get a little warning before they shut down.
i stopped by again to do my dastardly plan. problem; i got waylaid and started grabbing a bunch of books. next thing i knew I was at the checkout losing money on the whole transaction.
i love to buy all kinds of books.
like to leave them scattered around the house to entice children to peruse.
this deal is not going to work out. I will go in, buy gift cards, buy even more moneys worth of books today, get all caffeinated up, buy a nook and they’ll be bankrupt in january.[/quote]
LOL, scaredy, I’m sure you’ll be able to spend all your GC $ by then.
I like your idea about leaving books lying around for children to pick up and peruse 🙂
I’m guessing your kids don’t have iphones. If they did, they probably wouldn’t touch a book unless a grade depended on it :=0
ParticipantTo be clear, I never intended to imply that ER was “foolish” to pay off his MR. If he knows he will own the property more than ten years from the date he paid it off, then he got a BIG discount by doing so. He will save himself ~$6K for every year he owns it past 10 years, until the bonds are paid off (2033? not sure). So the payoff made sense for him and he was able to do it :=]
Participant[quote=kkun]I wonder why paying off Mello Roos doesn’t increase the resale value?
When I was looking for house, the areas without MR clearly had a premium compared to similar home in an area with MR. In some places MR amount is ~$400- $500 per month. So why won’t a potential buyer pay the premium for a house for which he doesn’t have to make the payment?
One thing I can think off is the standard appraisal process won’t assign any value to “MR paid off status” in a MR area. So buyers will have to make larger down payment.
Is there other reason why paid MR status does not increase the house value?[/quote]
I think your comment about the appraisal process not having any mechanism to take into account paid off bonds on a property in an area where 99.5% of properties are not paid off is true.
I don’t agree that properties in areas without MR are commanding a higher price than for a comparable MR-encumbered property. I believe if you ARE seeing a higher price in the older area for a similar sized dwelling, it is because of the better location of the properties there, very often bigger lots, mature landscaping, and, in many cases, much better access to local services. The higher price is NOT because it doesn’t have MR.
Simply put, buyers who will not pay MR will not even consider looking in an area that has it. Since the MLS is sorted by zip code and often most of or entire zip codes have MR, these potential qualified buyers will never actually know the MR-pd-off property exists on the market.
Participant[quote=squat250]…Judge Glenn added that allowing the gift card holders to file late claims “would have a disastrous effect” on Borders’ effort to pay its creditors from the fruits of its liquidation. After all, Borders’s records indicated 17.7 million outstanding gift cards with unredeemed balances of some $210 million as of June 2011. The judge said adding these claims to the list would hurt the general unsecured creditors whose claims would rank below the gift-card claims; unsecured creditors are already slated to recover between 4% and 10% of what they’re owed.[/quote]
scaredy, you answered your own question. In the case of BK and assuming arguendo you timely FILED a creditor’s claim for the value of your unused BN gift cards, it is VERY likely you would recover little to nothing when all was said and done.
After reading Mish’s take on this, my advice is to not buy anymore and have lots of hot toddys with your family and guests there over the holiday season. IF BN decides to file for BK protection, it will be AFTER the new year, when their holiday proceeds are tallied.
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