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Ouch, they’re not DOA yet, but dang close.

New Century Loans Halted

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Yeah, I hear they’re having trouble moving the MBS of their refi’d employee mortgage paper even though it has the attractive terms of 10% neg-AM, I-O with a ten years fixed 0% teaser rate minimum payment. 😉

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Meanwhile, Greenspan calls the bottom…

http://news.yahoo.com/s/nm/20070307/bs_nm/usa_economy_housing_greenspan_dc_1

Anybody have that in context? I’m guessing he’s talking about volume and not pricing.

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Only a first for 568k.

I see three possibilities.

1. The sale price is misreported (FSBO transaction)
2. The 2nd mortgage hasn’t hit the books yet.
3. It’s a new kind of fraud where the seller credits the buyer for 20% down so they can get financing.

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He’ll either be really right and sitting on a condo/loft in a revitalized downtown or be really wrong sitting in the middle of failed projects.

Personally, I think the condo/lofts are massively overpriced downtown now. More importantly, I think the revitalization is doomed to failure. NYC is NYC, slapping condos up around a stadium and building a downtown Disney of generic ‘entertainment’ isn’t going to cut it. In addition, the SoCal lifestyle is about being outside enjoying the weather, if you’re going to trap yourself in a concrete expanse, go for NYC, London, Paris, Barcelona.

My final thought, the waiting lists for the condos will evaporate as the 10-20% annual appreciations evaporate.

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LostCat, what I’m saying is from an employee and even business standpoint, the difference between laying off 1/3rd or 1/2 the workforce and closing the doors is largely a technicality.

They are arguing that they aren’t closing.

You are pointing out that they aren’t making money and going to be laying off virtually everybody.

So in the end, if they layoff 10% of the staff, that’s minor correction, call it a ‘soft-landing’. If they layoff a 1/4, 1/3 or more that isn’t trimming, that’s bare survival. In effect, the entity that was WMC during the boom is dead.

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Gentlemen,

Kyle, Stan and Kenny identified the true conspiracy in the “Mystery of the Urinal Deuce” documentary.

It is documented on wikipedia.

[no_such_reality]

In NSR’s scenario, it looks like about a $1300/mo. rental discount, but note that the calculation is based on 100% financing.

I assumed 100% a 6% interest because it benefits the owner.

If you put 20% down, you’ll still only get a loan at 6% currently. Unless you ARM it. If you actually finance 100% you’ll probably pay more than 6%.

how much does $120,000 invested earn a year? 10%? do you want to CD it and make 6%?

Putting the downpayment in a CD and paying 40% taxes on it the numbers are still 67% and 81% depending on the range of rent. For monthly out of pocket cash it is 44% to 53%.

If you make more on your investment, say 10%, the numbers are much worse, out of pocket is 37% to 45%, expense is 53%-64%.

I know several homes in my neighborhood asking $3500 or less for rent and trying to sell at $1.4M or more.

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Well, the key figure is the % spread post-tax benefits, not pre-tax.

The townhome I rent in OC near the beach.

Purchase price $620,000 (similar unit sold in Feb ’07)
monthly costs
Pmt at 6% $3717. (No money down)
HOA $ 300.
Taxes (1.25%) $645

interest portion of payment ~$3084.

Pretax Expense portion of owning $4030. Pretax Cashflow of owning $4663.

Marginal tax rate 40% combined. Effective expense of owning post tax $2542. Cashflow $3205.

Cost of rent? $1600-$1950. Prices vary greatly according to time of year.

Costs of renting assuming a 40% combined marginal tax rate before other special HOA assessments or ownership expenses like maintenance after taxes is 63 to 75 percent.

Another similar unit has been advertised since October 1st was available Nov 1 and is still empty at $2150. Two other units have become available.

I may need to ask for a rent reduction. 🙂

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The stats on 100% financed are pretty poor. Few loans are done 100% financed on a single loan. Often the 2nd mortgage is a hidden rider that the first isn’t counting in their calculations for credit worthiness. Hence, pairing the loans in aggregate calculations typically doesn’t happen.

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I’m sure the pink slipped employee give a rat’s behind if they are technically closed and out of business.

That being said, rightsizing the staff and trimming 10-20% is one thing, slagging more says something else.

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It means four homes sold.

Where the sales arms length?

Did the buyers use 100% financing?

Did the buyers get rebates on the close?

Houses will always sell. Someone will always be buying. The key isn’t whether or not they sold, the key is what did get for what it sold for and how was the purchase paid.

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It’s all program trading. When the market does something unexpected, the computers take over and start exiting positions.

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With as many mistakes as live news broadcasts makes, this is the best you can do for a conspiracy?

If the BBC knew, how many people would need to know?

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The amount of people “waiting to buy” when the bubble crashes is something I’ve never seen before.

There are an awful lot of people waiting to buy, we’ve also never seen prices so far deviated from underlying incomes and rents and that causes me concerns on few fronts:

1. How many are like me, capable of buying but not choosing to because renting is 1/4th of the TCO of home buying.

2. How many need prices to drop to be able to afford.

3. Latent demand is obvious from the amount of people touring. Is it possible that a majority ‘real’ buyers are out of the market?

4. So many vacant houses. Who did all the buying the last two years and what is their staying power?

The last is my biggest concern. I read posts like the renter that is in the middle of a rent skimming fight between ex-lovers and their RE Agent owning multiple houses in the OC Scam

Or the articles on Temecula Murrieta scam

Or like at all the pattern fraud on Bubble Trackers Inventory blog. Like the junk happending down in Ladera Ranch, nicknamed Fraudera Ranch in the blogs.

Or the failing flipmeisters on OC fliptrack.

And I wonder, what percent of the housing sold over the last one, two, three years wasn’t bought to be owned? I wonder about their staying power. And I wonder about the how many are apparently just grifting like the semi-landlords of our renting poster.

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