[ucodegen]

Credit report is not required for a deposit.. but social-security/EIN/TIN is.

There is no purpose for the credit check on a CD because you are not dealing with ‘over-draft’ protection. You might want to check with the bank manager of the San Diego County Credit Union you were dealing with. I suspect someone was confused. There are ‘flex’ CDs at some banks that act more like checking accounts.. add overdraft protection and you have a need for a credit check.

Also ask if you are going to be charged for the credit check. (ulterior motive?)

One thing that the credit check could be used for would be to allow the credit union to ‘help’ your debtors.. which is also questionable legally (breaks due process, assumes the bank records are right w/o proof, also allows the banks to drain money directly making fighting them in court harder–how do you pay your attorney?–insidious).

Also see the note on FDIC insurance on a previous post. I would recommend you be aware because the sub-prime meltdown may end up hitting some banks.

[ucodegen]

ok, how about a bunch of old fogies getting together and setting policy so that their wealthy business friends don’t have to endure a recession and selling out the younger generation in order to do this?

Actually, wealthy old fogies can handle a recession fine. All they have to do is put money in assets that would not deflate during a recession and then transfer them back in when it bottoms. It is the people with few liquid assets that get burned during the recession (generally middle class). The wealthy have access to hedge funds, particularly those that specialize in profiting from downturns and recessions (min deposit $100k or more). The statement you made is inaccurate and misleading.

It might have been instead to avoid being ‘voted’ out of office. Recessions are not popular with the general populace.

[ucodegen]

Yes, the letter was meant to be satirical.. particularly since http://bubbletracking.blogspot.com/ is run by OCrenter…

But I wouldn’t put it past the people who bought 27 houses to write Senator Dodd etc. (and join in on the chorus of realtors, mortgage brokers, sub-primes etc) to write a letter like this.

[ucodegen]

For policy makers it means that taking smaller hits sooner is better.

That is kind of what I took out of it, when reading through the Market Oracle article (http://www.marketoracle.co.uk/Article541.html). It would also tend to match what we already know. If the lending standards were not loosened to allow easier financing in an already tight environment (close to critical slope), we would not be looking at this kind of meltdown in the future.

Going back to the sand, it would be like changing the grains to be grains that were slightly ‘stickier’ when a significant amount of the slopes are approaching critical. This may help hold these new grains to the surface, but the underlying sand is still weak. The resulting ‘cascades’ end up being much larger (because they will also involve more of the underlying sand).

[ucodegen]

Last week I highlighted the excellent piece by Paul McCully of Pimco. His thesis is that subprime buyers are the plankton of the housing ocean.

I don’t know if I agree with the sub-prime plankton idea. What I do know, is that PIMCO is exposed to dollar devaluation (most of their foreign funds are dollar hedged, so they do not benefit from dollar decline), and has a large securitized mortgage holdings. I think there may be a bit of a slant on this one. (I’ll see if I can get some time to read these through).

[ucodegen]

I don’t understand how come the media seems to give a lot of mercy to the subprime borrowers???? They have bad credit and borrow with zero down. They have nothing to lose if their houses are being foreclosed.

It is due to poor/non-existent financial education in high school combined with traditional liberal arts degree weak in hard science/math or business. It may also have something to do with authors of those articles not wanting to spend the time and check the facts.

Many people think that having the government spend more on specific services will not effect them in the pocket book.. forgetting where the government gets their money in the first place. If the gov spends more, it has to collect more (in taxes).

[ucodegen]

Here is a blog tracing Irvine…

http://www.irvinehousingblog.com/

[ucodegen]

Americans (despite their reputation) aren’t stupid….

I go back and forth on this.. I see something like this
http://www.makezine.com/blog/archive/2007/03/sub1000_spectrograph.html

and I would agree.. Then I see things like this..
http://www.iamfacingforeclosure.com/
http://cityrag.blogs.com/main/2006/02/kentucky_fried_.html
and of course the people on Jerry Springer….

After which I would have to say they are extremely stupid.

I think the truth is that Americans span the gamut. We have very bright and very stupid.. Not much in between, and the media seems to make fun of the bright and idolize the stupid. This does not help the motivation for a highschooler debating whether to sneak out and party or stay in and work on the homework..

[ucodegen]

Ever heard of IIT? Probably the best engineering school on Earth, and IIT grads are some of the world’s biggest movers and shakers. IIT applicants who can’t quite make the cut frequently end up at MIT and Stanford.

Actually it is the other way around. If they can’t make it at Stanford/Cornell/MIT, there is a good chance of getting in at IIT. One advantage IIT has, from the corporate viewpoint, is that IIT teaches more directly to application. Not much theory is taught. While this allows the graduate to apply the knowledge quicker, it also hinders them later if they move into strict R&D. That being said, teaching direct to application allows an educated workforce who are desired by companies looking to relocate parts of their operations to cheaper locales (part of why IIT was formed in the first place). Several IIT graduates actually do follow on to higher education at Standford/Cornell/MIT.

NOTE: By ‘educated workforce’, I don’t mean corporate drones. The top graduates have very similar qualities to top graduates of U.S. undergraduate colleges (which is why they can transfer to Standford/Cornell/MIT for graduate studies).

Effectively IIT makes a good undergrad college for Indian nationals, allowing transfer to Standford/Cornell/MIT for graduate studies.

[ucodegen]

Although I make around $80,000 out of school working for a large telecommunications company and my wife also works in finance we are completely priced out of the market. With an income that many envy we couldn’t even afford a tiny condo following traditional lending standards!

Be patient, build up cash and wait. You may want to look at investing in offshore companies with the cash. (dollar is likely to devalue). Many sellers are holding on hoping for a bailout. The problem is that they are against a wall. 100% financing means that they will have to sell for losses AND get a 1099 for loan forgiveness (which is taxable.). Banks have to approve the short-sale, unless the seller can pony up the cash for the difference (not likely if they used 100% financing).

[ucodegen]

Raise the salary and Americans will be lined up around the block for those jobs. We have good engineering programs here in the US, but kids don’t choose engineering as much as they used to because the pay is viewed as being not that great, layoffs are very likely, and yes, it is very difficult.

Fascinating comment.. I am one such engineer, salary $100K/yr +, not including company copay/contrib into 401K.. I think you have the facts warped. During college classes, 56hour straights were not uncommon. Not everyone wanted to do those. In general, those who study hard work hard are painted as idiots, losers, geeks and nerds. The Kiyosakis, Trumps, Casey Serins of the world supposedly have the way to make money. Little work and concentration with the right spin would make a lot of money for you…

Compare how education to get ahead is viewed in countries like India, Thailand, Japan, China.. and compare against the views in America. “American Idol just because you can sing and dance..” makes me sick.

[ucodegen]

Good job. Don’t need another way. For the uninitiated, here is a quick way to put it in Excel..

Select the block of text for LA or OC, paste into notepad, save as a text file (make note of location and filename)
Bring up Excel, select File->Open. Set the view in the ‘chooser’ to all files (*.*). Navigate to the file you saved and select and ‘open’ it. You will get a menu for import wizard.
First page of import wizard:
Select Delimited, start at row 1 File Origin should be 437:OEM US.
Hit Next

Select delimiters as ‘tab’ and ‘space'(last one usually not checked). Make sure that you treat consecutive delimiters as one.
Hit Next

Treat first column as date, MDY..
Second through last should be general..
Hit Finish.. and play (the numbers should now be in Excel).

Having it in the single space separated format is great.. I can suck it into other programs as well as ones I write, without any problems. The only concern would be with longer data sets.. Maybe a web page on somewhere for the full sized /updated as we go form? One year will have 365 rows per area.

[ucodegen]

What is the best strategy if I am a buyer and would like to get the best deal ?

Wait another year?

I have to disagree with you… Referenced is the cascade of resets.. “we have only just begun”…

http://www.irvinehousingblog.com/wp-content/uploads/2007/03/reset.PNG

One year will place us at about month 14, just after the first peak (data starts January). You might get a decent deal here.. but look at the oncoming peak of neg-ams. I worry about these more, because the holders are already under water because of the loan. They were betting on appreciation.

Evaluate how badly you need to get a house. I would recommend holding out for a bit.. This looks like it will get bloody. How bloody depends upon how the fed acts and what they do. Make sure that when/if purchasing, you leave enough spare cash for yourself for emergencies, temp job loss, etc. An HELOC will probably not be able to bail you out in an emergency right now.

[ucodegen]

Sharon is a Realtor® and she was the Realtor® of record on the fraudulent sales.

But the public still think Sharon Lewis is a poor homeowner that needs a federal bailout because of LA Times’ irresponsible reporting.

How about informing brain dead Dodd about this, as well as the LA Times editorial section.. and also hint that a lot of the people are in those dire straights may be the ones partially responsible for the problem.. and they had their hand still in the cookie jar when the lid came down..

For those that don’t know OCrenter’s site:
http://bubbletracking.blogspot.com/

[ucodegen]

Say some subprime borrower lives in a $400k house in one of the big metro areas. Getting gov’t assistance in recasting their abusive mortgage into a fixed rate mortgage isn’t going to make up for the fact that the declining market in that area is going to lower the amount that can be financed, regardless of terms.

Actually, it might help support these insane prices. So while the responsible buyers are waiting to build up a down payment and have income to support the loan, they are having to bail out the irresponsible who have overextended and bought into inflated housing. Just doesn’t seem right.

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