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December 2, 2011 at 1:00 PM in reply to: People who can’t afford their house but get to keep it?! #733903December 2, 2011 at 11:58 AM in reply to: People who can’t afford their house but get to keep it?! #733879
bearishgurl
Participant[quote=Jacarandoso]Some people are fairly convincing that the loan mod is about them doing their very best to uphold their “obligations” or to maintain their pride in paying their bills. I believe some of them…plus they don’t have to move, or face up to “losing” the house.[/quote]
LOL…you can’t “lose” something you’ll never own, right?
December 2, 2011 at 11:47 AM in reply to: People who can’t afford their house but get to keep it?! #733876Participant[quote=jameswenn] . . . I’ve talked to to other parents at the schools and i’m not alone. We all seem to have this irrational fear of the public school system as well as a need to control our children’s environment.[/quote]
jameswenn, believe it or not, every … single … public … HS in SD County graduates hundreds of seniors every year, the majority going on to UC, CSU, private and out-of-state universities. A minority will begin college in their local community college campuses (a higher percentage of students may first be enrolling in CC since CA public college fees have risen so much in recent years).
The entire function of a public HS in CA is to ensure students fulfill the requirements for graduation and the A-G requirements for getting accepted into a CA public college. EVERY parent and student in EVERY public HS has the SAME goal. The teaching standards are ALL the SAME in EVERY CA HS. It’s the law!
Parents overtly impose their OWN irrational fears on their students when they seek to control every facet of their student’s environment and existence, IMHO.
December 2, 2011 at 11:16 AM in reply to: People who can’t afford their house but get to keep it?! #733870Participant[quote=jameswenn]Bearishgirl
Guilty as charged. My wife being a public school teacher has to have control over our kids education. So she unilaterally decided to enroll our kids in private schools and i’ve been paying for it for the past decade and i don’t have much of a say in the matter even though we go through the motions and act like i do.
Yes I can pay the cash each month, but I can’t really afford it. Due to the expense i’m not contributing much to our savings or my 401K as well as the time lost from the commute of the children that’s on top of the regular work commute.
I’ve talked to to other parents at the schools and i’m not alone. We all seem to have this irrational fear of the public school system as well as a need to control our children’s environment.[/quote]
If this is the case, jameswenn, then you surely can live wherever you wish, perhaps even in an area that would save time on your commute to private school and even your worksites! Congratulations! YOU don’t have to stand in line to overbid on an overpriced, underbuilt traincar sandwiched between two other “mcmansion” traincars with 3 feet to spare on each side so you can hear your neighbors’ toilets flush, just to live in a particular public school attendance area. For the same $$ or LESS, you can get a nice 1/2 AC+ spread with room to hook up your in-laws RV to utilities when they visit and an 85 yo tree to hang a tire swing on! Fvck exorbitant MR . . . nearly all of it is going to schools you’re NOT using, anyway!! If you already own and live in MR/HOA-encumbered (gated??) exurbia in lizardland, list your property NOW and GET OUT if you can do so above water! Put your kids in after-school tutoring/activities offered by their “private” campus until you or your spouse can pick them up (to assuage her “control issues”). This would be cheaper than exorbitant HOA/MR and extra gas daily for yours and the kids’ commute.
I’m sorry your spouse has such a dim view of public schools. She must be assigned to one of the (NCLB) underperforming campuses. Perhaps when she gets a little more seniority under her belt (15 yrs+?), she will be able to put her name in with her district for a better assignment. Every educator’s gotta pay their dues first. These “dues-paying” years are a “package deal” along with tenure and a 100% defined benefit pension after 30 yrs svc. You must know that this is how union contracts work. ;=]
Participant[quote=briansd1][quote=Rich Toscano]
I am hard pressed to think of a more backward-looking decision than choosing a variable loan over a fixed rate loan right now. (Except maybe to lend someone money for 30 years at 4% fixed). Just because something worked in the past doesn’t mean it will work in the future. Looking at economic fundamentals will serve you better than looking in the rear view mirror.[/quote]
I hear you.
I was just reminiscing that for the last few decades, a variable rate mortgage would have saved a lot of money over a string of refinancing (with costs associted) to fixed-rate mortgages.
In my case, the property is no longer owner-occupied which would make refinancing not at the lowest fixed rate.
I will take my chances with that property. I see the savings at the lower variable rate as an offset to possible future rate rises.
If we have anemic growth like Japan, we could have low interest rates for a long time.
I read that capital is not really a problem like it was in decades past. The world is awash in liquidity. Central banks are keeping rates low to help their economies grow.[/quote]
Absolutely variable rate mtgs which floated with the market closely (NOT the 1 yr T-Bill program) over the last 25 years or so were a better deal than obtaining fixed rate mtgs at a higher cost and then serially refinancing to obtain lower rates (and NOT removing equity). This is true whether one is entering the 26th year of payments on a property purchased in 1986 or has bought and sold 10-12 times since then, taking out an OPTION ARM each time up until about 2003.
These types of mtgs always had 0 points and cost $1200 to $2800 out the door in purchase/refi closing costs (the lower range if property qualified for a short-term title policy). Doc drawing was $150 (the borrower chose the payment-day-of-the-month) and there were no other lender costs but recording fees (which have now gone thru the roof). Typical closing time was 10-30 days with an average of 21 days. It is very sad that the era of local “direct lending” has gone by the wayside. I am in hopes that it will come back.
The vast majority of these loan programs did not participate with PMI companies. The borrower had to have 20% down and no impound service was available. “Tax service fee” was $50-$75.
I think it is self-defeating for a homeowner to serially refinance, fold the closing costs into the new mtg every time and start all over again every 1-3 yrs, but that is just me :={
Participant[quote=walterwhite]i think it would be quite comfortable to wear justa fig leaf.
we named one of our dogs fig.
the sec did seem kind fo lame with the madoff thing.
Having done some big law firm work dealing with financial prospectuses and medium size transactions, sometimes it seems like the SEC is primarily there to ensure disclosure in unbearably long, complex, unreadable and ultimately misleading prospectuses. Or at least teh appearance of disclosure. Actually, I tend to go with the whole fig leaf metaphor.[/quote]
lolol . . . scaredy . . . :=D
Participant[quote=Rich Toscano][quote=bearishgurl][quote=briansd1]bearishgurl, the reason I say that Greenspan was right, is because I have a buddy who went with adjustable in 1989 (he bought at the high back then but rode it out). He has not refinanced even once…. And all along he’s enjoyed the lowest rates because rates went down the whole time.[/quote]
Understand this, brian. I myself have used adjustable-rate mtgs since 1986 . . . continuously. If I could get another one on my next purchase with the same or very similar terms as the one I have now, I would do it again . . . in a heartbeat. But that’s probably not possible. The “FB” of late (who had a “subprime” version of the same mtg) has given them a bad name so they are likely no longer available to prime and alt-a borrowers who understand how to use them responsibly :={[/quote]
I am hard pressed to think of a more backward-looking decision than choosing a variable loan over a fixed rate loan right now. (Except maybe to lend someone money for 30 years at 4% fixed). Just because something worked in the past doesn’t mean it will work in the future. Looking at economic fundamentals will serve you better than looking in the rear view mirror.[/quote]
Rich, in my case, I intend on putting my property on the market in 2.5 years. I am already more than 10 years into my current mtg and it is amortizing faster now. My interest rate is current +/- 4% and has a 2% annual cap. My current monthly PI is $1200 mo.
It is a fairly large home on a larger than std lot.
If I end up turning it into a rental instead of selling in 2014, I will simply retire the mtg at that time if interest rates go thru the roof and place the property into rental service.
Participant[quote=briansd1]bearishgurl, the reason I say that Greenspan was right, is because I have a buddy who went with adjustable in 1989 (he bought at the high back then but rode it out). He has not refinanced even once…. And all along he’s enjoyed the lowest rates because rates went down the whole time.[/quote]
Understand this, brian. I myself have used adjustable-rate mtgs since 1986 . . . continuously. If I could get another one on my next purchase with the same or very similar terms as the one I have now, I would do it again . . . in a heartbeat. But that’s probably not possible. The “FB” of late (who had a “subprime” version of the same mtg) has given them a bad name so they are likely no longer available to prime and alt-a borrowers who understand how to use them responsibly :={
Participant[quote=briansd1] . . .Along the line of interest rates, I think that Greenspan was right. In the last couple decades, adjustable was better and would have saved at lot of money. The 7-fixed mortgage on on my properties just reset to adjustable at 2.75%. I’m delighted, for now. But who knows that rates will do in the future.[/quote]
That’s awesome, brian! Congrats on your new (annual?) setpoint for your 30/7 mtg!
I, too, have enjoyed playing that evil OPTION ARM game over the years. The 11th Dist COFI (FHLBB in SF) has been more than fair to me over the years :=]
December 1, 2011 at 1:40 PM in reply to: Confused about Bel Etage vs. Ivy Gate in/near 4S ranch; other similar area suggestions? #733789ParticipantEve, I just went over a few sold listings in Palisades Poway and it appears its subdivision map was filed in 1987 or prior. The first phase appears to have been completed in 1988. Even though legislated in 1982, the first year that the Mello Roos bonds debuted in SD County was 1987. This occurred in a then newly-annexed portion of Chula Vista in a master-planned community known as Eastlake Shores (91913). No CFD’s were formed in Poway until 1991-1992, I believe.
Palisades Poway has no Mello Roos.
December 1, 2011 at 1:03 PM in reply to: People who can’t afford their house but get to keep it?! #733779ParticipantAgree, pencilneck. The ones in quiet desperation have 1-3 yo defaults on their record and their credit report is pockmarked by 30/60/90/120-day lates on one or more notes secured by trust deeds (by possibly multiple creditors).
I think having an SS or foreclosure on one’s record and having one’s FICO score fall by 150-300 pts is due comeuppance for being stupid (simply buying at the peak) but not necessarily enough for extracting equity. As for whether this is enough “punishment,” ask yourself if YOU would want to be in the position right now of having only ridiculous credit terms offered to you, if any at a time of tight money, a time where UI benefits of 99 weeks are now history and a time when food and gas combined are at all-time highs?
Most of the FB’s who extracted equity during the “millenium boom” (esp copious amts) and have defaulted since 2007 have now been foreclosed upon.
The ones who accepted mods in order to stay in their properties are trapped. The only way they could qualify for the trial mod was to have a steady source of income that is not already attached by garnishment. Even if these “owners” lose their jobs and/or are offered better jobs somewhere else in the coming years, they can’t move without selling short and taking a big hit on their credit report. If their mod agreement even allows them to rent their properties out, it is such a negative cash flow every month for them to do so that it doesn’t make sense to take the better job elsewhere!
I think a lot of underwater “owners” who accepted mod terms in the past couple of years did so out of FEAR. Their credit was already shot due to late payments and/or default so a foreclosure wouldn’t have made that much difference on their credit report, if any. This fear lies not with singles or older/retired underwater owners but with parents-of-minor-children underwater owners. Many of these parents absolutely REFUSE to send their children anywhere else to public school but the one the they are currently attending in the area they purchased their white elephant (that they could never afford in the first place). This fear is irrational, IMO, and is prolonging their pain and preventing them from moving on with their lives and allowing their credit scores to eventually heal with time.
Perhaps they think they can “hang” long enough with their “mod programs” until their kids graduate. If their kids are currently in HS, this might be doable. But I don’t think agreeing to these loan mods is either feasible or even smart for the long haul. These parents who do so are shortsighted as the older their children get, the more expensive they become.
From this blog, I’ve come to the conclusion that the vast majority of Gen X and younger parents have extremely high expectations in that the majority of them seek to control their families’ environment to the nth degree. This phenomenon is prevalent regardless of the parents’ current capacity to pay for it and the current demand in the local economy for their services.
These FB parents are simply prostrating themselves in the name of their children but at the expense of their own lives and future … just to maintain this illusion of “control” over their families’ “environment.” Not only does this place their children at a distinct disadvantage in coping with the everyday world when they go to work and move out on their own, it causes the parents to have to pay PITI (+ HOA dues, if applic) into a bottomless pit into eternity when they could no doubt rent for far less money every month and put the difference towards college or retirement funds.
In SD County, unchecked urban sprawl in the last 10-15 years is partly to blame for this grandiose mindset of homebuyers now in the prime age for purchasing a home (25-45). In attempting to outbid each other for the “new-construction crap in the stix,” they helped and are still helping (along with loose-lending practices of late) to screw themselves out of having a RE market to choose from that is in line with fundamentals.
Even though painting these families somewhat as “victims,” Elizabeth Warren stated the above so eloquently in this (reposted) video of her 2007 speech at UCB, where she refers to this phenom in SD (SEH). Start listening at 40.00 minutes in:
Parents of earlier generations didn’t have all of this crap in the stix crammed together like sardines to choose from when deciding where to raise their families, lol ….
[end of rant]
November 30, 2011 at 10:08 PM in reply to: 4S Ranch feels like Curry Campground to me. Anyone else? #733697Participant[quote=AN]How many people actually put down 25%? I don’t know the statistics, but I would assume it’s not that many. Especially people in the $400-600k range.[/quote]
Of course, it’s anecdotal, but I believe at least 40% of homebuyers put down at least 30%. We in lower-priced properties (this includes YOU, AN and ME) don’t see this because we don’t come into contact with it, like a RE professional would. In properties above $600K, I believe that the majority of current buyers put down 30% to 50%. Of course, this didn’t happen during the “millenium boom.” During that time, lenders routinely approved unqualified buyers to borrow far more $$ than they could ever pay back and also routinely made 100% LTV mortgages using 2nd TDs. This enabled purchasers who could qualify for a $150-$300K purchase on a bright sunny day (in a “normal” lending environment) to qualify for a $500-$850K purchase and drove up the prices of properties that should have been $200-$600K less under normal circumstances.
Participant[quote=tugg49]Just signed the docs.
Close on Monday.
Occupant has packed and house is empty.
Agent did a great job.
Bank says no extension. Deal is dead if it doesn’t work.
It worked. Moving in next week.
Got a lot of info on the the tax forgiveness.
Any piggie give accurate info about the tax forgiveness details when you short sale. What I heard told me that if I was upside down I’d bail and wait three years for credit remedy and move on.
Am I off the mark?
THANKS PIGGIES IT WORKED!!!!!!!!!!
132 bucks a s/f….argue with that![/quote]CONGRATS, tugg!! Happy early Holidays!!
Are you asking the tax forgiveness question for yourself (if you feel you need to SS in the future?) or for your “seller?”
If it was you that you were asking about, the only place I can see where you might be a little off the mark is that you won’t be able to “guarantee” that your credit score will come all the way back to where it was before you “strategically” defaulted/sold short at exactly the three year point. Depending upon the amount sold short and the extent of default, I believe it wildly varies how long it takes the credit score of an owner who sold short to completely recover from it, assuming they have no other credit issues.
Your agent sounds very competent and professional, even though acting in the capacity of dual representation. It appears he didn’t try to slip in a friend or relative-buyer AFTER your offer was approved by the lender. And he was able to control his client-seller. This was his most important function in this long SS saga, IMHO.
I’m very happy for you, tugg!
November 30, 2011 at 4:32 PM in reply to: Confused about Bel Etage vs. Ivy Gate in/near 4S ranch; other similar area suggestions? #733665Participant[quote=Eve]…Ramona felt too isolated and wouldn’t be ideal for the commute either…[/quote]
Eve, just for fun, why don’t you suggest to your spouse he go out to Ramona to be there at say, 6:30 a.m. before work, grab some coffee and drive into Poway via the SR-67 at the normal time he would leave for work. He should position himself at the at the bottom of SDCE to start the trip.
I think he (and you) might be surprised.
November 30, 2011 at 4:22 PM in reply to: Confused about Bel Etage vs. Ivy Gate in/near 4S ranch; other similar area suggestions? #733660Participant[quote=Eve]About what bearishgurl said, since we have two kids, Chula Vista wouldn’t be ideal due to the schools despite the no/less Mello Roos.[/quote]
Chula Vista has excellent schools. Eve, have you been listening to the misinformed who have no knowledge of Chula Vista and have never been there themselves or have you actually researched Chula Vista schools yourself??
And portions of Chula Vista have MR as high or almost as high as 4S (although probably not for as long of a length of time).
In any case, Chula Vista is not an ideal location for a Poway worker. The commute can take more than an hour, one way.
Ramona is not “isolated” anymore. Have you been out there lately? It is self-contained now and has everything one could want except a mall. The Weisfield Parkway Plaza has been remodeled in recent years and is very nice, as are all the new “big box” stores in Santee that Ramona might lack.
My post was just to get you off the “nothing-but-new-construction-will-do-mindset” and get you to “think out of the box” a little to open up your options. Exorbitant MR aside, not everyone wants to live in a sterile cookie-cutter environment devoid of mature landscaping with no usable lot to speak of . . .
Not meaning to sound condescending here, Eve, but may I ask how long you have resided in SD County?
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