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bearishgurl
ParticipantI haven’t read the writer’s book, but I’ve got a few observations about the writer’s story, the way he describes it here.
…There was this enormous window that looked right in on the kitchen table, and through it I could see my wife, Cori, and our four children eating dinner. It was dark outside, so they couldn’t see me, and I just stood there looking at them.
After a while, I pulled up a bucket and I sat on it, just watching my children eat. I found myself wishing that I could get back there, connected to the simple ordinary stuff of my family’s life. And as I sat and watched, filled with longing and guilt, two questions kept arising:
How did I get here?
And how am I going to get out of this?…The writer has a family of six and he has to ask this question? Was his spouse employed? If not, why not?? (LV is one of the few cities one can make good money w/o a college education.)
…Like most financial stories, this one is personal. It starts with me getting into the financial services industry more or less by accident. I answered an ad in 1995 that I thought was for a job related to “security” (as in security guard) but was in fact related to “securities.” That’s how little I knew about the stock market. A few months later I found myself working a phone at a Fidelity Investments call center.
Things went well, and by 1999 I was a Merrill Lynch financial adviser and a certified financial planner. By then, we also owned a house in Salt Lake City. We’d bought it two years earlier, with a $25,000 down payment.
A few years later, an opportunity arose to form a partnership with a successful Merrill adviser in Las Vegas. The place was on our top 10 list of never-move-to cities because we had always associated it with the Strip. But Cori and I were looking for an opportunity to have an experience somewhere else, and we met some great people when we visited the city. I took the job, and we moved down there.
That was May 2003. Housing prices were already crazy, so we rented. But our neighborhood had zero character and lots of cookie-cutter houses. Within a few weeks, we were looking for a place to buy…
He is unclear here if they ever sold the SLC property or rented it out, but in any case, they didn’t have it to occupy when they moved into his in-laws SLC basement in ‘09 (see below).
…one day in September 2003 Cori spotted a for-sale-by-owner sign in a really nice neighborhood. We ended up buying the house and paid the asking price of $575,000. (When we tried to negotiate on price, the owners were amused; it just wasn’t that kind of market.)
We borrowed 100 percent of the purchase price. In fact, I was told I could borrow even more if I wanted…
Sounds like they bought the place because his spouse found it and liked it. From the photo provided it ALSO looks like a “cookie-cutter house.” Would he have done this if HE (instead of his spouse) picked out a more “conservative” property and financed it with a downpayment they could afford?
…As for our spending, we told each other that we’d catch up later, as my income and the value of our home continued to rise. As late as February 2006, a comparable home in our neighborhood sold for $998,000. We made the classic mistake of projecting recent trends — even extreme ones — into the future…
Why wouldn’t this “sophisticated” writer SELL in ’05/’06 if he saw his local market jump through the roof right before his eyes? (I don’t think I’d hire him to manage my investments.)
…It was my job to assist them (his clients), but I found it incredibly stressful. It didn’t help that we were in increasingly dire straits ourselves. My income fell about 20 percent because my take-home pay depended on the amount of money I managed. At the same time, our cost for health insurance and property taxes kept increasing, and the payment on our mortgage reset higher as well…
Why wouldn’t this “sophisticated” writer appeal the tax assessment on his property? And why did he begin working for himself in NV when he had six people to insure monthly?? This tells me the that even if his spouse worked, she had no benefits.
…By then, housing prices in Las Vegas were falling quickly, and the bank had cut off our home equity line of credit. We quickly got rid of a car and stopped taking trips. I moved into a smaller workspace and cut back on my administrative and marketing costs. Even so, we found ourselves using credit cards as emergency stopgaps.
Then, the sickness set in. The pain would start in my stomach, and then I’d spend six hours vomiting. It happened once, then three months later it happened again, then one month later it happened yet again. Eventually, it was happening every couple of weeks. The doctors couldn’t find a physical cause.
Right around that time, it became clear that we might need to get back to Utah, where 90 percent of my (still nervous) clients lived. We spent the summer of 2009 living in my in-laws’ basement in Salt Lake City, while I tried to stabilize my financial planning business. By that fall, I was convinced we had to move back permanently to save the business. But that meant we faced the question of what to do about the house.
By then, we owed over $200,000 more than our original loan balance…
Was the writer’s (stress-related?) “mystery ailment,” due to the fact that he was responsible for a family of six (in the manner they had recently become “accustomed to”) all by himself? Their decision move back to UT sounds purely “voluntary.” It’s only a 368-mile (all interstate) drive between LV and SLC – abt 6 hrs. (I’ve driven it at least 75 times.) There’s also “cheap” Southwest Airlines, lol.
…Somehow, even in that horrid market, we sold the home for $531,000. That was in late August 2010. In exchange, the lender released us from both our first and second mortgages. Today, Zillow estimates the home’s value at $505,000…
Purchase Price 9/03 = $575K (100% financed)
Sold Price 8/10 = $531K
Payoff Amt 8/10 = $503,489
Excess = $27,511
5% RE Commission = $26,550
Balance left for other closing costs: $961It’s almost a wash. Had they never “cashed out,” I feel they could have hung on or sold at break-even in 2010.
It’s a moot point, but I wouldn’t count on Zillow being very accurate as it doesn’t allow margins for improvements made on a particular property.
Again, in comparison to a short sale we just discussed ad nauseum here:
http://piggington.com/buying_again_2_years_after_short_sale_questions_for_you_pros
This story is just another “borderline case”, IMHO. Again, I feel this family could have hung on, refied it to a lower rate in ’04, ’09 or ’10 (the last two yrs, they may have had to put a small amt down to obtain an 80% LTV mtg) and never taken cash out. The writer states they had “perfect” credit before they “strategically defaulted.”
Instead, this family spent their home equity on (probable) exorbitant “cash out” refi costs plus whatever else they did with the approx $200K+ (plus the months they “squatted) of their equity they extracted .
This family is just one of many thousands who contributed to the now 80%+ distress rate of LV residential properties. Now their credit is shot and this writer is supposed to be setting an example for his clients, lol!
I’m sure his book spells out the lessons he’s learned but I just don’t feel too sorry for this individual. He made his own bed. Piggs, you can call me judgmental if you wish but I just feel that, at “first blush,” all these homeowner “sob stories” seem designed to elicit public sympathy, but when you actually take the trouble to look into the facts, it often reveals that yet another opportunistic family was using the home they and their children were living in for an ATM machine to enable them to live way beyond their means.
Thanks for posting another “strategic short-seller” story here for me to chomp on, AK! I continue to maintain that a very large percentage of them should not be approved. Instead, the opportunistic “strategic defaulter” should get the foreclosure ding on his credit, without further ado (as it was BEFORE 2003).
edit: this writer claims he and his spouse decided to “leave all his clients behind” and move their family to LV because they “wanted a different experience.”
If they “wanted a different experience,” they should have dumped the kids in grandma’s basement and flew to LV for $112 RT and stayed at the Sands!! (Uh, the “Venetian” now, sorry, lol…)
Bad, bad move on his part…
Participant[quote=walterwhite]I read some med research that said u can only max metabolize about one extra oz of muscle per day or a couple pounds a month. Not much in one sense but on the other picture 2 pounds of hamburger spread out all over you. Not bad
like saving for a down payment. No one month makes a huge differencejusg gotta keep going.
I am frequenting a lot of muscle type chat groups and may have to drop piggington for testosterone nation or bodybuilding or some other group.[/quote]
scaredy, I’m really glad to hear this. I’ve found that spending eves/wknds at the gym keeps me from frequenting the “Big House” as often and indulging my “boxed wine habit.” And it’s much better for your health!
http://www.bighousewines.com/wines/
Of course, in your case, you may not be able to stay away during the business day, lol :=]
ParticipantIs that in “recycling?” ;=]
Participant[quote=sdrealtor]Dude,
It sounds like the pressure of the biz is getting to you. This is just entertainment for me. I actually earn aliving in this business instead of pretending to….[/quote]Actually, acc to one of your recent posts, you actually earn 40% of your “living” in this “business.”
Submitted by sdrealtor on November 5, 2011 – 7:40pm.
…BTW, 40% of my real estate sales income this year was from short sales and I generate income from a few other endeavors outside of being a realtor so its not close to my primary source of income.
see: http://piggington.com/buying_again_2_years_after_short_sale_questions_for_you_pros
Pray tell, sdr, the Piggs are waiting with baited breath . . . how do you make the “other 60%” of your “living?”
ParticipantOh, he’s speaking for another Pigg, now, lol! The comment below doesn’t merit a response except to say that upon reading it, just consider the source.
Don’t you have some recycling to do about now, sdr? Those bottles are piling up. Get busy!
November 7, 2011 at 10:43 PM in reply to: OT: Washington Corrupted to the Core by Lobbyists – 60 Minutes Piece #732430Participant[quote=gandalf]Hedgecock interviewing Abramoff on corruption?
Is this for real?
Send them both back to jail.[/quote]
Sounds like the pot calling the kettle black. I’ll listen :=]
I called him “Roger baby” for years.
ParticipantI’m totally on board with you about the hellholes about to be marketed that you described, UR. I’ve seen a few of them first-hand (and even purchased a couple of them myself in the [distant] past).
They’re not for everyBODY.
Hence, the response to your post today …
Participant[quote=joewhite]Was not a rental, and actually owned by a real estate agent (maybe broker?). From private conversations with well-versed agent, they know this was a bogus transaction. Unlike a place a few doors down which has been completely gutted, this place was not completely rebuilt. I would be shocked if more than 100K was put into it.[/quote]
If this is actually the case, joewhite, the new sales price will likely reflect that as buyers in that particular area aren’t typically “first-timers” OR “dumb.”
Participant[quote=sdrealtor]WTF? How do you know what a property in Malibu is worth? $1M could be a steal for land value for all we know. It is so far outside our view it is irresponsible to make comments like you but then again thats what you do. Ready fire errrr …..aim?[/quote]
egads, we have our “resident wino” on attack again :=0. You gotta ask yourself if he could ever find another Pigg to “troll behind.”
Glad I could be of “assistance” in opening your latest (albeit, now inebriated) “diatribe,” sdr!
I merely stated that “the vast majority” of buyers don’t want to deal with the work that some short-sale properties and REOs engender, what with the “squatting sellers/defaulting trustors” possibly stripping the place and/or escaping with their “valuables” and leaving their filth and whatever they don’t want, behind. This is “typical behavior” more often than not, the same as it is with an “escaping tenant” who is behind in their rent and about to be evicted (and even an evicted tenant, lol).
I NEVER stated that this property “as-is” (or even the lot it sits on) wasn’t worth $1M! I am familiar with that beach and am headed back up there next month with one of my kids.
What I DID state is that it takes a certain kind of buyer, no matter where and what price range, to purchase a heavy fixer or a heavy cleanup project. The vast majority of buyers are turned off by a project such as this and will walk out of it, even if it is in their price range.
It appears this particular seller hasn’t spent any money in needed repairs/improvements in many years. However, it has obviously been successfully used for its owner’s “ATM machine” due to its “superior location.” Hence, the “short sale” earlier this year. Hail to the “drive-by appraisal” of recent years, lol! I wonder how “short” his/her lenders were finally paid in April of this year :={
Participant[quote=Diego Mamani][quote=AN]What surprises me even more is the $3662 median net worth. I have more money than that saved working during the summer in HS.[/quote] Not surprising at all. Some people have huge debts, and therefore have negative net worth. The $3.6K is only the midpoint: 50% of the people in that age group have higher net worth, and 50% have lower.[/quote]
Exactly, and a “kid” who “works during the summer in HS” usually does not have any living expenses as they are still living with mom and/or dad. So they can save everything they make, if they wish 🙂
Participant[quote=Allan from Fallbrook] . . . go for an hour walk everyday. That’s what I do and, in conjunction with a good diet, I maintain my ideal body weight. You don’t need a gym to do this. If you work an office job, go for a walk at lunch (I used to do this during my corporate days). It clears your head and relieves a great deal of stress at the same time.
Plenty of ways to go.[/quote]
Allan, I used to walk a lot around the neighborhood in the eves. I still walk my dog short distances. Even though I felt fine, the results weren’t there. For the average Joe or Jane, the plethora of free weights, circuit-training machines and classes (+ “free” utilities running the pool and jacuzzi) can’t be had anywhere but a gym. Most people don’t have storage room for all that equipment (even if they could afford to buy it) and don’t have the expertise to do a yoga class (for example) by themselves.
A gym membership is a GREAT VALUE, but only if you use it regularly.
November 7, 2011 at 12:29 PM in reply to: More cheese: Keep Your Home California Expands Eligibility and Benefits (again) #732382ParticipantWe’re now (delicately) calling homeowners who give a deed-in-lieu of foreclosure and the (more opportunistic) “homeowner” sellers who convinced (and coerced) their lenders to “take it in the shorts” to varying degrees transitioning out of homeownership.
Good L@rd!!
November 7, 2011 at 12:10 PM in reply to: More cheese: Keep Your Home California Expands Eligibility and Benefits (again) #732380Participant[quote=SD Squatter]More goodies from your friendly government (from the article):
In addition to the Unemployment Mortgage Assistance Program and the Mortgage Reinstatement Assistance Program, Keep Your Home California also offers a Principal Reduction Program that will lower the amount owed on mortgages by as much as $50,000 in an effort to achieve affordable monthly payments for the homeowner. The Principal Reduction Program requires the mortgage servicer to match the amount on a dollar-per-dollar basis, so the maximum benefit to a homeowner could be a $100,000 reduction in principal.
A fourth program, the Transition Assistance Program, provides as much as $5,000 in relocation costs for homeowners who have decided to transition out of homeownership through a mortgage servicer-approved short sale or deed-in-lieu of foreclosure.[/quote]I note that this is $2,000 MORE than most “squatters-until-the-end” typically rec’d in recent months and years!
November 7, 2011 at 12:07 PM in reply to: More cheese: Keep Your Home California Expands Eligibility and Benefits (again) #732377ParticipantI’m just curious about the “mechanics” of this CHFA program (the devil is in the details) :={
About these State Handouts to homeowners behind in their payments, to cure default, catch up on mtg payments, to catch up on their 2nd TD/3rd TD/HELOC payments (while their free-and-clear [name your luxury vehicle(s)] sit in their driveways and they have paying tenants in their “additional properties” . . . will these “transfer payments” be paid directly to the delinquent borrowers or to their lenders??
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