Got It Under Control?

Most Americans simply don't. Your average, everyday red, white and blue American citizen has over $9,000.00 of ongoing credit card debt.

We've probably all heard about the idea of a "cashless society". No need for bills. Charge it to a card. Swipe it or just wave it in front of a contactless smart card reader. Ease. Convenience. Speed.


But is the United States of America - the absolute worst moneysavers on the face of the planet -ready and willing to reverse the tables and move to a "cash only" way of life?


Some have already made this personal choice, because they took inventory of their financial situation and recognized an interesting weakness: a lack of self-control.

Dana Capital Update

As a follow up to the April 27th story on The Rancid Truth blog regarding Irvine, California's own Dana Capital Group, Orange County Register's investigator and mortgage industry blogger Mathew Padilla's now reports that Dana Capital has decided to close its doors yesterday, May 8th, 2007. The company leaves behind regulatory intrigue, unpaid fines and an army of angry brokers. All of it far too much for the CEO to rectify.

And so another big mortgage lender bites the dust.

So What Do Lake Forest Realtors Say About The Market?

Since some little bird told me that real estate is local, let's check in with Realty Times and 4 key, local real estate agents for the local market conditions in Lake Forest, California (Orange County) with my comments in blue text:

REALTOR No. 1: Ms. Vicki Lloyd, Realtor with an MBA
"Since we are now into our "normal" buying and selling season, it is not surprising that more listings are coming on the market, but someone forgot to invite the buyers to come out of hiding! The decline in the total escrow number includes both closed sales and cancellations. I have noticed a much higher than average rate of properties coming "back on the market" due to buyers failing to qualify for their financing. With the recent tightening of lending standards and meltdown of the subprime mortgage market, fewer buyers are able to qualify for financing"

SINGLE FAMILY HOMES:

Active - 148@ $789,650 average list ($396/sqft)

Range from $574,000 to $1,890,000

In Escrow - 31 @ $803,500 average list ($383/sqft)

Range from $579,000 to $2,500,000

Last 30 days Closed - 15 @ $686,600 ($372/sqft)

Range from $569,000 to $899,000

Taken off market (expired, cancelled or withdrawn) - 23

Probably the most informative realtor comment on local market conditions I have read before. No bull-shit or fluff. Things are slowing down and Ms. Lloyd demonstrates the cajones to call it like she sees it. That kind of candor earns respect and is appreciated. Constructive data on the numbers - prices, volume, median levels, etc. - this lady appears to know her shit. She has the confidence gene that helps certain realtors survive shit storms.

Nice, open acknowledgement about the subprime fiasco too and the impact of basically eradicating her Lake Forest customer base. Afterall, most of us unimportant Lake Forest residents on the income bell curve only pull down$75,000 per year max. Not exactly what you'd call "conducive to the profile" of purchasing any of the 148 homes currently on Ms. Lloyd's active sales list. Unless, of course, you like leveraging yourself 10 times your annual gross income. One would have to be a financial moron to do so.

REALTOR No. 2: Mr. John Daniel ("doctor of real estate" and tri-athlon athlete)

"..many of the properties are still dated. And if your are trying to sell, this weak market is going to hurt you. For the near future, buyers have an opportunity to negotiate hard as the Lake Forest market is very slow. But eventually, I believe they will benefit greatly from their secret weapon. The irvine Great park will be on the northern boarder of Lake Forest. This premeir park should be one of the best in the country. And since the irvine company and developers are damanding increadibly high prices on high density new homes surround the park, Lake Forest should directly beneficiary.."

Mr. Daniel too acknowledges a slow market and more of a buyer's market status in Lake Forest. He even issues a stark warning that the market "can hurt you" right now. I liked that. Then he loses me. We are led to believe that a new theme park in Irvine and the ongoing land development of the old El Toro Marine Base is going to cause home values to rise again. Well, "Doctor", not unless median incomes in Lake Forest increase by a factor of 10, or median home prices plummet in the same fashion. And not unless mortgage lenders see a greenlight to issue ARM and interest-only loans to anybody on the street that has a pulse. Mr. Daniels provides no acknowledgement as to the possible causes for the weak market. It's just weak, OK! He said it was weak! Are you gonna just stand there, or are you gonna buy a home from Mr. Daniels! Jesus Christ! You people and your questions, questions, questions!!

REALTOR No. 3: Ms. Ginger Bohland-Aliotta

"Look at the weather around the country... who wouldn't want to live here! We have plenty of inventory, giving Buyer's more to choose from. Homes are sitting on the market longer these days, but we are not seeing drastic price reductions. Those that are priced right and are in good condtion ARE selling. Now is not the time to "flip" properties, but rather to focus on building equity and enjoy the tax benefits of home ownership. Densely populated Orange County is still one of the fastest growing counties in the nation, a great place to live and a great place to invest in your future"

Man, I sure wish somebody would do something to stop all of these house flippers here in Lake Forest, California. I mean, they are an out-of-control menace!

OH, there! Wow! Thank God! Ms. Bohland-Aliotta just declared that now is NOT the time to "flip" properties!

Really? We shouldn't be flipping houses? No flipping of houses? Because I'll flip houses anyway I can flip them!

And don't forget the weather. Man, if I could only charge 6% of every realtor in OC who has ever used that line....

Somehow I feel less informed after reading Ms. Bohland-Aliotta's opinion of the local market conditions. Some realtors possess that mysterious power.

REALTOR No. 4: Ms. Victoria Craig Robles

"The median price of all homes in Orange County recorded in February, 2007 was $620,000, slightly lower than one year ago. The median price in February of Lake Forest homes was $610,000. Total sales in February dropped to 45 homes, down by 36.6% compared with one year ago. The market is favoring buyers at this time as inventory is higher than normal and interest rates remain low."

After reading Ms. Craig Robles' viewpoint on the Lake Forest market, I'm now more convinced than ever before that the California Association of Realtors doesn't license people at all.

Can we be a little more vague to prospective buyers as to why it's a buyers market, why inventory is higher than normal, and why total sales are down by a whopping 37%?

Thank you at the very least for not making any of us even a little bit more informed, and for not saying something completely stupid like "It's a great time to buy".

Let's search for a home in Lake Forest, California - Part I

I'm currently renting a 4 bedroom, 2.5 bathroom home in Lake Forest, California.

The reasons I'm renting are pretty logical and obvious:

1.) 4 Bedroom, 2+ bath single family home prices in Lake Forest, CA cost approximiately $500,000 on the low end to a cool $1,000,000 on the high end.

2.) The only way for someone like me to finance such a balloon purchase is through unconventional financing mechanisims that leave me as a potential borrower at significant risk should market interest rates change even slightly. These options include ARM loans and interest only loans.

3.) A fixed rate 30 year mortgage loan would require anywhere between $3000 to $5000 per month. I make good money, but I cannot afford such an outlay each month. There are now 40 year and 50 year fixed mortgages, but still the mortgage payment per month would be prohibitive.

4.) While I understand that I am throwing out he window almost $25,000 in rent every year, and that as much as 5 to 7% of my (2 deeds of trust) hypothetical mortgage payments would be tax deductible, this still doesn't solve the problem of monthly cashflow and meeting mortgage payments with ease.

OK. So that's the situation.

But I am open to buying a home if it could fit into my monthly budget, and assuming market conditions are favorable to owning a home.

I decided to do online search today, May 9, 2007 for a 4 bedroom, 2+ bedroom, single family home between $500 and $700k on several different online services. This is what I found out:

ZipRealty.com

Total found: 35

Lowest Price Home: $609,0000

Highest Price Home: $700,000

Estimated Average Price:$654,500

Realtor.com

Total found: 36
Lowest Price Home: $549,000
Highest Price Home: $700,000

Estimated Average Price: $624,500

Redfin.com

Total found: 40

Lowest Price Home: $536,990

Highest Price Home: $700,000

Estimated Average Price: $618,495

Zillow.com

Total found: 13

Lowest Price Home: $599,000

Highest Price Home: $699,900

Estimated Average Price: $649,450

OCExecutives Multiple Listing Service (MLS)

Total found: 30
Lowest Price Home: $520,000
Highest Price Home: $699,900
Estimated Average Price: $609,950

First of all, there do not appear to be that many single family homes available for sale in Lake Forest right now that meet these requirements. It must also be said that after reviewing some of the home for sale ads, 5 to 10% of these homes aren't fit for human habitation. I mean a number of homes would require serious work. I don't consider 35 units to be an earth-shattering inventory number, nor dreadful enough news to induce home sellers to disregard convention and slash prices.

However, I do believe that the Lake Forest single family home inventory trend is going upward because I have performed this same exact search many times before and come up with matches of only 10 or 15 homes max. Inventory is definitely climbing.

Secondly, the low-side of home prices remains too high. There was one house at the low-ball $520,000, which turns out to be a shit-hole house. But even if it were immaculately clean, the affordability/risk for me as a buyer is too much to shake. While I am saying that the prices are too high, I can also report that the prices are headed downward. It was not uncommon just 3 to 6 months ago to find 4 bedroom, 2 bath homes priced at $750K, $775K and even $800k. Not so much anymore. Most are in the $600-$700K range, so there's plenty of room to go.

Sometimes We Must Swallow Our Pride

Sometimes we must swallow our pride and what we believe we are entitled to and just say "thank you" for not making me one of your long list of financially screwed victims.

Mr. Lawrence Yun of the N.A.R. Weighs In Again

Mr. David Lereah was the Chief Economist of the National Association of Realtors (N.A.R.). Now that Lereah is pulling the ripcord and escaping the N.A.R. before the house literally burns down, Mr. Lawrence Yun, the Senior Economist of the N.A.R. steps up in his new flame-retardant suit.

He's not just a "senior economist". He's the freaking Managing Director of Quantititative Research for the National Association of Realtors.

OK, but who is this Mr. Yun really?

Does he have some fresh or even forthright comments about the state of the American housing market?

Will he come clean about the N.A.R. being a cartel driven by realtor sales commission earnings and sales strategies, not consumer education, market principles, business ethics, and operating as "trusted advisor"?

The answer is a resounding no.

Mr. Yun is a Lereah lacky. In February of 2007, he echoed Lereah's comments about the true state of the American market. If one were to follow this N.A.R. quantitative propeller head around all day, he'd have real estate consumers believing that the market bottom was hit 4 months ago and that everyone should get ready for a recovery later in the year:

"Sales will recover gradually over the second half of the year and prices will begin to edge up again"

Mr. Yun was wrong in February. He and the N.A.R. are wrong again now.

The U.S. economy is slowing down significantly, the U.S. dollar is approaching an all-time low in value versus the Euro and the British Pound, U.S. inflation remains completely unchecked by the United States Federal Reserve Commission, fuel prices in the United States are approaching unchartered territory at almost $4.00 per gallon in California, a jaw-dropping number of mortgage lenders have been completely or partially destroyed, surviving lenders have restricted their lending standards substantially, HELOC loans are down by 20% year to date and subprime and Alt-A loan foreclosures are rocking the entire industry - and we haven't even explored the probabilities that prime loans may also weigh in badly before the year is out.

To Mr. Yun and members of the National Association of Realtors: It's time for someone from your decrepit organization to step up to the plate and tell it like it is.

The Rancid Truth - Mortgage Lenders Make More Commissions By Screwing The Borrower

From California's North County Times:

California mortgage brokers, most of whom are licensed by the state Department of Real Estate, are legally obligated to act in the best interest of the borrower.
"However, there is no enforcement mechanism in place to ensure that they (do so)," said Paul Leonard, director for the California office of the Center for Responsible Lending. Leonard told a state banking commission earlier this year that mortgage brokers "have strong incentives to make abusive loans that harm consumers, and no one is stopping them."

A mortgage broker's incentive "is to close the loan while charging the highest combination of fees and mortgage interest rates the market will bear," a 2004 study prepared by Harvard University's Joint Center of Housing Studies concluded.

Brokers can earn higher commissions -- up to 3 percent instead of the typical 1 percent -- by having customers buy loans with interest rates that are higher than market rates, with prepayment penalties charged if the loan is paid off before a certain date, and with little or no verification of the borrower's income, known as "stated income" loans. That's the difference between a $12,000 and a $4,000 commission on a $400,000 loan.

But why will the home finance market bear high fees AND high mortgage interest rates? How can structuring loans that promote perpetual financial serfdom be acceptable to the borrower? How can reckless underwriting practices as well as tried and true "bait and switch" tactics be acceptable to loan consumers?

The answer is the 21st century financial retardation of the American consumer. Sure, one can certainly blame mortgage lenders and realtors for all of the hell breaking lose in real estate. It's almost too easy to do so - much in the same way one might blame ants for showing up at a picnic.

Compensation schemes like the ones described above might make one's blood boil, but the truth is that none of these incentives would ever be that attractive or effective, if the American consumers fueling the insanity weren't so incredibly illiterate when it comes to their own money.

We are approaching the middle of 2007 and millions of American home borrowers (not homeowners) are now paying the price with personal bankruptcy and home foreclosure - harsh lessons to learn that will likely affect their financial lives for years to come.

Realtors and the IRS

Some of America's home realtors are getting audited by the IRS because they can't seem to prove that they are not passive real estate investors dabbling in house flips (flops) on the side, but that they are indeed full-time real estate sales professsionals active in a full-time annual job.

For the hundreds of American realtors being audited this year, it's very frustrating and incredibly expensive experience. Many drown in legal fees being because they are considered by the IRS guilty until proven innocent.

"It takes hundreds and hundreds of hours out of my time to provide all these details. I just feel like I'm being harassed."

Divine Intervention Saves Lake Forest Man from Jaws of Foreclosure

His prayer telephone has been literally ringing of the hook as of late, but Almighty God decided to take a nano second out of his manic day to intervene divinely in the life of Arturo Peña, an Orange County homedebtor.

Mr. Peña has been working 3 jobs trying to make ends meet while at the same time facing foreclosure on his Lake Forest, CA home. His life Olivia probably doesn't recognize him anymore, since he is never home. Instead he works his tail off trying to muster together enough dough to meet the monthly mortgage payment.

But not anymore.

Today Arturo Peña won the California Lottery Big Spin ticket for $1,000,000 from a local Albertson's grocery store in Lake Forest.

God knew that Mr. Peña previously only brought down about $30,000 gross per annum. Thanks to the lightening strike at Albertson's, Arturo and his family can add another $37,000 after taxes to their take home earnings.

Great story, and a nice faith-builder for those around the country who need help - any kind of help to prevent their own foreclosure and bankruptcy.

God was not available for extended comment following Mr. Peña check holding ceremony, but was rumoured to have requested "a word or two" with N.A.R. chief economist, David Lereah.

If you trust realtors, you are delusional.

Here's why:

If the NAR chief economist David Lereah, realtor posterboy extraordinaire, and the more prolific cheerleader of the American real estate industry boom over the last 5 years, author of infamous books like these:

then stated in late 2006 that the market was now in correction mode, but that we were all certain to experience a "soft landing", who then stated in late December 2006 and again in February 2007 that "we've hit bottom" already.

Now it is May 7, 2007. Mr. Lereah already has his bags packed up, ready to leave the real estate big leagues of the National Association of Realtors, and join a new, hole-in-the wall, real estate sales organization called Move, Inc.

But the final act in the play has not yet been shown. Prior to providing his last major NAR speech at an upcoming Washington real estate conference, the Bob-Saget-Look-Alike, Mr. Lereah, had the audacity to make this admission - probably the most damning one ever about the current American real estate market.

"Ask him in a couple of weeks", indeed! I think by now, Mr. Lereah, we already know what your duplicitous reply will be.

Bob Saget

Also, Bob Saget

So, I ask you: how can any prospective homebuyer in America today turn to a home realtor in good faith anymore for "help"in purchasing a home, assist them making the right choice, and work to protect his financial interests?

I submit to you that he cannot. Not anymore. The game is up.

Bob Saget has played you all, the home consumer, the realtor, the mortgage lender.

Time for the theme music to start. This really is America's Funniest Home Videos.

Got Hummer?

If you do have one, I'd like to know: Are you still enjoying your ride? I imagine by now you either hate the monstrosity with a passion or remain completely enamored with it.

If you live where I live (Lake Forest, CA) right now per gallon 87 octane gasoline is running at about $3.51 per gallon. Hummer owners are probably not only the most-frequently-seen customers at the local gas stations (8 miles per gallon city!), but they are likely dropping somewhere between $81.00 (H3) and $112.32 to fill it up all the way!

Holy crap!

I don't own one. I rented one (not by choice) on a business trip in Denver and was pretty unimpressed. Power, handling, driver comfort, road visibility...no good. But maybe that's just me. I drive a 2000 Honda Civic. But a number of people in Orange County do own Hummers, Exploders and Escalades, etc. A number of them are realtors...but don't get me started there.

But I guess you don't even need to have a Hummer to experience a coronary at the gas pump these days. Today, May 7, 2007, gasoline prices in the United States of America are only cents away from the all-time highest per gallon price in our nation's history.

And unfortunately, my opulent Orange County friends, there are few reasons to expect any future price declines as we approach the summer months and then the cooler fall and winter seasons.

So, I really do hope those of you are enjoying that gigantic beast of inefficiency and impractical machinery! Enjoy it, for the sake of the rest of us, who ride in your wake.

Now for all of you Hummer owners, if you ever see someone you've never met before at the gas station or on the road tell you to "f*&% off!" by flipping you the bird, view this site and it will help you with some background information as to the reasons why.

Sub-Prime Bailout: Where will the money come from?

New York Democratic Senator Chuck Schumer has the answer. He wants $300 million in Federal money to help subprime borrowers keep their homes.

So the answer to the question is: you.

You will pay for it.

Unfortunately 70% of Americans believe that the "Federal Government" is some giant building with arms and legs that walks around and "does shit".

Wrong. The government is us! We fund it. Federal money is the people's fucking money!

Will someone in New York please explain that 7th grade Civics fact-of-life to their idiot senior senator?!

$300 billion dollars. Why?

Where will this "federal money" come from?

Why now interfere on the side of arrogance, stupidity and financial ineptitude in a market economy?

Why now interfere to help people keep their homes, who lied on their stated income loans and who, for all practical purposes, have no business whatsoever owning a home in the first place?

What economic and legal precedence are we trying to establish?

How will market's react?

What message does this federal government interference send to renter and homedebtors who pay taxes, who controlled their greed, who ignored the overexhuberance of the corrupt real estate industry, who chose to live within their financial means and who chose not to carelessly mortgage away their futures?

In case you have forgotten, Mr. Schumer, the above described individuals are your constituents as well.

The correct answer is to allow the market to correct itself. Indeed such a serious correction is economically painful and catastrophic for many American families, some of whom had only the best intentions - wanting to own an abode to live and raise a family. But the correction serves other import functions. It shakes out the investment crooks, flippers, liars, illegal opportunists and - to be frank - the financially inept. Good people and financially inept people are, in America, not mutually exclusive.

This comes across as cold and perhaps Darwinesque to say. I don't mean that subprime borrowers get no help at all. But I don't like the idea of allowing loan do-overs that, under normal market lending standards, would make no business sense at all.

Most of us support and believe in the merits of a laissez faire capitalist economy. Hard times like these remind us how imperfect that system can be.

Taking money away from people who didn't gamble to bail out other people who did, is irresponsible and unrepresentative of Senator Schumer and any of his supporters.

Of all industries in the United States, the real estate market is the one in most need of a market correction. Only the American oil industry makes as serious challenge from second place.

The real estate industry also requires a healthy dose of cartel-smashing government regulation.

That, alongside grand jury hearings of the N.A.R. for fraud, are the only government interference worthy of discussion right now.

Housing Crash Leads to Tragedy in Orange County

For California realtors Joni and Kevin Park a "black cloud" of real estate worries and financial stress led them down a tragic path to self-destruction last week. After wielding a gun and threatening security officers at a high-end Laguna Beach resort, and later charging police officers on the scene, Joni and Kevin Park were shot dead by OC police while their children watched.

Now all that remains is an expensive room sevice bill, and a young family in grief asking themselves just how and why something like this could ever happen to their own parents.

Are more tragic stories like these likely to increase as the housing bubble bursts in 2007 and the Ponzi scheme comes crash down around us?

Irvine's Own Dana Capital Group Facing Legal Smackdown

Orange County's own Dana Capital Group, one of the country's largest mortgage lenders, has been issued a cease and desist order from New Jersey's State Banking and Insurance Commissioner, Mr. Steven Goldman, prohibiting the financial lender from using unlicensed facilities, taking mortgage applications from unlicensed sales people, and charging inappropriate fees.

Rumour from the mortgage grapevine has it that regional Dana mortgage brokers who sent funded files into Dana Capital in the last several months have not been paid their commission, or are being paid only in trickles as the beleagured company tries to re-organizes itself.

Yes, there appear to be a considerable number of unhappy (read: fed up) Dana Capital brokers out there!

The New and Badly-Needed American Mantra

Afraid of falling behind on that subprime mortgage that "got you in" on that ever so not-massive 3 bedroom, 2.5 bath for $700,000? Can't keep your credit card debts under control? Is the refrigerator empty of food and your mailbox full of bills? Are you worried about just making monthly ends meet?

Well, stop and look no further!

And don't be CONFUSED!

Here's a never-fail program that will lead you back from the pits of budgetary insolvency and the brink of bankruptcy to the green pastures of financial freedom and family happiness!

Good Wages, Low Unemployment Preventing Full Blown Recession

By now it should be clear to everyone "with a pulse" that the U.S. housing market is in the shitter - and it is getting progressively worse.

The Economist this week objectively points out two key factors keeping the U.S. economy from going into a kamikaze nose-dive altogether: Low unemployment at around 4.4% nationally, and for the most part, good wage earnings across the American nation.

We Americans continue to spend like there's no tomorrow, saving as little as f***ing possible, and running up massive debts that can be easily repayed by an anemic and declining U.S. Dollar.

Meanwhile fuel prices are rising and inflation remains uncontrolled.

For now people living in the United States must hold out hope that there will not be a substantial drop in employment in the coming months, despite serious job hits in the real estate, building, construction, raw materials, finance sectors. Substantial jobs losses might be more than enough to send the current teetering-on-the-brink economy over the edge and into full blown economic recession.

But alas, summer is coming, so bring on the bounce of summer employment figures! But it won't necessarily mean a rise in wage earnings - and that is what fuels the insatiable spending that keeps the titanic-sized American economy afloat.

There's a New Mortgage in Town

Washington Mutual is promoting a new type of mortgage vehicle under their MortgagePlus program that would allow a homedebtor to switch from a fixed rate mortgage to a variable/adjustable rate mortgage and back again for a nominal fee.

And the mortgage creativity hits keep coming!

Underestimating the breadth and depth of the Housing Crash

Slate.com's article about the American "Housing Market Catastrophe-in-the-Making" helps to shine a wider light on multiple economic sectors and businesses that are reporting substantial negative impacts as a result of the housing dive.

Who can now say that no one was really hurt by the housing industry deception, lies and the shameless, incessant pumping by realtors?

The truth is that many industries will be hurt by the housing market crash - and seriously hurt. It is not too difficult to see many American workers (and even illegal immigrant workers) losing their jobs, and then wondering to themselves, after years of growing sales and business growth, how and why could this now happen?

The depth and breadth of the housing crash is likely more profound than anyone first believed.

Mr. Lereah, you have a credibility problem.

In case America's real estate agents haven't figured it out yet, they need a new spokesperson because the one they have, Mr. David Lereah, has lost credibility.

After consecutively denying the existence of a housing bubble in 2005 and 2006, then later retracting and insisting in 2006 that a "soft landing" surely awaits the American housing market, then going back on his previous market hype to forecast a down year in 2007, but one that will still grow at historic levels over 2006 results, to then in February 2007 insinuate a recovery for the American real estate market, to today - forecasting a real estate market recovery only sometime in 3rd quarter 2007 following devasting news that existing home sales declined 8.4%, the worst sales performance for the real estate industry in 18 years.

By now it should be obvious to prospective American homebuyers, future home sellers, economists, mortgage lenders and even realtors themselves that the N.A.R. cannot be viewed as a trusted advisor any longer with respect to the real estate market. It's motivations are completely and utterly duplicitous. There is no interest in sharing with the public full and unfettered, objective housing market data.

The N.A.R. continues in April 2007 to promote the idea that today is no less a "great time to buy" than it was in 2006 or 2005 - despite completely different real estate market growth patterns, rising inventories, declining home values, declining home prices and heavily restricted real estate market financing conditions, not to mention completely different economic circumstances, not the least of which is the all-but-decapitated U.S. Dollar!

It's about time for people to quit their bitching and come to accept the National Association of Realtors for what they are. The N.A.R. is simply a pseudo-public relations organization for realtors whose sole motivation is to sell property and earn commissions on the value of that transaction. The N.A.R. is constantly trying to sell. Once that relational vector becomes well understood by the American public and the mainstream media, it might call into questions some of the assertions made by it's President, posterboy spokesman Mr. Lereah and its 1.3 million members.

Some realtors have been in the industry a long time and have worked their asses off, surviving by referrals through the roughest of markets. Before you select a realtor, I recommend you ask them what they did from 1989 to 1999. Many have obviously proved themselves, demonstrating strong business ethics, and have chosen to help people objectively. They know the ins and outs, and are even more fed up with the N.A.R. than the lay person.

But the majority of realtors, I submit, are unlicensed or poorly licensed, poorly trained, inexperienced, opportunistic, self-centered, easily corrupted, and dead-focused on earning that 6% commission check. To hell with convention, business ethics and regard for your fellow man, they want that commission check! How else are they supposed to make payments on that f*** off huge Hummer they drive around town with their realty website and cell number painted all over it?

Realtors are basically all about a business transaction. Many prefer to portray themselves as some sort of societal counseling service for America: to go that extra mile to "help you and your family find that perfect dream home - just for you. It's all about you".

Bullshit!

Realtors want the transaction done and they want their freaking money! Period. And all of the stupid questions you ask, repair demands, price offers and counter-offers during price negotiations are nothing but Tourette's-inducing irritations obstructing the path to THEIR commission check.

The mere idea that the N.A.R. is somehow of help and "looking out for the interests" of prospective homebuyers and homesellers is so ridiculous anymore, it no longer is funny. It's infuriating. Ask the thousands of subprime homedebtors about their realtor experience. They'll tell you, and in detail, exactly how helpful they were in getting that loan to secure their dream house.

If there is a positive to the 2007 U.S. housing crash and David Lereah's repetitive PR goofs (read: lies) as to the U.S. real estate market's true condition, it is that some daylight might now expose the N.A.R. charlatans for what they really are, and might convince more Americans to show vigilence when selecting a realtor - or even first determining whether a realtor is even needed!

Remember today's quote: "There is no way to spin this news" - David Lereah, National Association of Realtors, April 24, 2007.

If that is the really case, Mr. Lereah, then perhaps you're no longer as useful to he N.A.R. as you used to be?

Greed, ignorance and financial illiteracy hits America's wealthy and well-educated too

The following article in Bloomberg paints a pretty bleak picture as to the state of the U.S. housing market. Even a well-educated woman with a Master's Degree - smart, intelligent, hard-working can fall victim to financial illiteracy, greed and ignorance too.

If there can be one take away from this article, it might be never to sign anything, ANY-THING, without reading it, reviewing it, fully understanding it and ALSO accepting the consequences of it.

How has the United State of America regressed from a nation of industrious, rugged individualists into to a country of overgrown children - financially incompetent, greedy, self-centered individualists who, only after realizing the folly of their delusional decisions, look to the a parental federal government to take away other people's money, in order to lift them out of a financial deathpit of their own making?

Don't answer that question. I don't want to know the truth anymore...

A Little HELP From My.......Friends?

Well, it's about time!

I mean, when you're financially strapped and upside down on your home mortgage, there's absolutely nothing wrong with raising your heavy hand and asking for a little help.

Those California homedebtors microns away from going postal due to pending foreclosure and bankruptcy should be relieved to learn that H.E.L.P. will indeed be arriving!
Home Experts for Loan Preforeclosure, that is.

A stellar organization of H.E.L.P.ers will soon be opening offices all over the country in the coming months, including lovely, sunny, everyone-wants-to-live-here, 15%-home-value-growth-is-in-the-bag-for-2006-because-Gary-Watts-said-so-California.

What fantastic news for those strapped homedebtors! When you're in deep financial trouble, it's just great for someone to take the time out of their busy day to bend down, extend a hand and lift you out of the cesspool of real estate hopelessness.

I mean, just read what the article has to say about these unfortunate souls:

"There is a burgeoning of news items of home owners having to sell their properties as rising tide foreclosures of the collapsing subprime mortgage market. These generalities and statistics often obscure the real human tragedies that lie behind such stories. HELP works to make sure people can stop foreclosure, and raise funds against their properties to settle with pressing creditors."

Well, a great many of these human tragedies could have been avoided with a little financial literacy, a whole lot less stupidity, and greed by the dolts who signed the dotted line, ......but let's not get into that now.

This development is super-duper, and I don't want to sour the moment.

Gee, I wonder who these Experts are, and where they have been for the last 5 years prior to the train derailment that is the real estate industry as we are coming to know it?

You know, far be it from me to ask a dumb-ass question here, but could it be...I mean, is it just possible that these so called freaking "Experts" are the same kind of goofball "Experts" that got you into this f'ed-up financial suicide mess in the firstplace?

Unfortunately at this point in the game, it's not like the upsidedowners have a Disneyland-long line of ethical, real-estate professionals to turn to for help right now.

"No, I get by with a little help from my friends. I get high with a little help from my friends. Could it be anybody?......"

138% Percent Jump in Orange County Default Notices

And so the misery ensues.

Californians More Frequently Using F-Word

As in "foreclosure".

It's not looking good folks.

Tragedy in Blacksburg, Virginia

Prayers go out to the victims, their families and the entire Virginia Tech university and local community on this very dark, nightmarish day.

C.A.R. Goes On Offensive: $2.3 Million "We Get It" Ad Campaign for California REALTORS (R)

In an effort to convince the nation that yeah, real estate agents do add value to a home transaction, the California Association of Realtors will commence a new radio and internet advertising campaign costing approximately $2.3 million dollars entitled:

"California Realtors (R), We Get It."

The internet ads take you to a website called: www.yourpieceofcalifornia.com where it is explained ever so clearly the top reasons to use a REALTOR (R):

1. REALTORS® subscribe to a strict Code of Ethics—a set of obligations that often go above those mandated by law. Known as the REALTOR® Code of Ethics (bwahahahahahaaha), these principles embody a strong commitment to fairness, integrity, and moral conduct in business relations. Under the Code of Ethics, REALTORS® put the needs and well-being of their clients above anything else. (But not above that holy 6% commission check!!! Bahahahaha! Oh man, you C.A.R. guys are killing us! Good one!)
2. As members of C.A.R., California REALTORS® have access to confidential legal counsel, innovative marketing tools, and an extensive repository of market data. (Market data which you will not share with the consumers because its so C.A.R. IP-ish, right?) With these resources, REALTORS® are equipped to help you make important decisions throughout the home-buying or –selling process, such as how much home you can afford or what information you must disclose to the other party. (Wait a minute. REALTORS (R) have been convincing thousands of homebuyers to sign up to non-standard mortgages in order to buy more home than they could really afford. Are you sure what you are claiming here is true?)
3. Among the top skills REALTORS®’ bring to the table is the ability to negotiate a favorable price. REALTORS® are knowledgeable about the small repairs and improvements you can make to enhance the “salability” of your home. According to the NATIONAL ASSOCIATION OF REALTORS®, the median price of a home sold using an agent is 16 percent higher than a home sold without the guidance of an agent. (Hmmm, so why utilize a REALTOR (R) real estate agent if I am buying a home? You forgot to address the other side of the transaction that affects your duplicitous profession. As a buyer I don't want to pay 16% more for a house plus 6% commission. That's 22% of b.s. money down the drain. You know what would be impressive? Convince me that by working with a realtor one can negotate price decreases of at least 17% every time to cancel out the efforts of the seller's realtor! Sorry, but this item 3 is crap in terms of explaining REALTOR value to the buyer.)
4. Your REALTOR® acts as your advocate during each step of the transaction. Whether evaluating buyer proposals or preparing counteroffers, your REALTOR® saves you time by serving as a liaison between you and the other parties of the transaction, prepares and reviews necessary paperwork, and guides you through the process to make sure everything is handled appropriately. (Such as encouraging you to not make insulting, low-ball offers for overvalued homes, and hand carrying you as a prospective buyer to "recommended" mortgage brokers and appraisers that will knock down the pins and help close the sale - all in an effort to secure that holy 6% commissions)
5. REALTORS® are well-versed in up-to-date market data, such as inventory levels, time on market, and ratios of list-to-sold prices. Backed by education and experience in the real estate industry, your REALTOR® and can help you leverage this market information to aid in your decision-making process. (Here's a news flash for REALTORS(R): All of this information is now available on the internet at Zillow, RealtyTrac, Foreclosure.com, etc., - and anyone with a brain and a pulse can decipher the amount of leverage available to them on a given. But even if one chose to hire a realtor anyway, how do any of the above items consistute a value-add worthy of 6% commission based on the home sale value? The rancid truth is, none of them do.)

These ads will run through October 2007.

Nice move, C.A.R. Tip of the hat to you.

I mean, it is wise to go on the offensive at this stage, since Americans who are, or will be, losing their homes are about to start calling out so-called professional mortgage brokers and real estate agents by name in the press. Yes, those who cajoled them into signing the dotted line of subprime and Alt-A mortgages back in 2003, 2004 and 2005 will likely start to receive that free word-of-mouth advertising on national TV! Sheer bliss for any a real estate professional!

But how will those that are undergoing home foreclosure, bankruptcy and homelessness view these new ads?

The answer? Well, it doesn't matter to real estate agents. You see, they have their money. They've been paid already - and can move on to the next sucker.

The idea that agents must act ethically in all transactions, or lose their professional reputation and potential future customer base, is a myth. If the Housing Bubble of 2006/2007 has taught us anything is that there is almost always a greater fool, until it's too late. So the "we're always ethical" line is just bullsh*t.

Real estate agents are sales people who do not care whether a home sells at price x or price y, as long as either price x or y is a high price, because their sales commission is a factor off of the final sales price.

But it is good for the C.A.R. to respond with something to counter the growing national disgust for real estate industry professionals as the U.S. housing market, the participative businesses within it, and it's customers proceed to financially unravel during the course of 2007 and 2008.

As far as the ads go, though - Great Stuff!

We're all waiting with bated breath I can tell you!

Landlord informs MarkusArelius of Rancid Truth: "No Rent Increase" in '07!

YES!

And there was much rejoicing!

Yes, some sweetness to life can be found, even during a colossal Orange County California real estate industry meltdown!

CANNONBALL!!!!

Mortgage Philanthropists!? Come out, Come out, wherever you are?

So exactly how much will it cost to rescue those financially illiterate cretins who were so-called "bamboozled" and "hoodwinked" into sub-prime mortgage loans by mortgage brokers and realtwhores in order to purchase homes that they could otherwise never afford?

How about $US 120 Billion?

Thank goodness all of our nation's schools are leading the globe with world-class education!

Thank goodness all of our nation's roads have been completed - and let me say, smooth as a baby's bottom!

Thank goodess that Ben Bernanke has brought inflation under control!

And thank goodness that our nation's borders are secure, and that the war on that noun called "terrorism" has been won, because man, I was starting to get worried about the price of gas, which is now at a record $3.36 per gallon in Lake Forest, CA!

Thank goodness for all of that, because now we can drop everything we have been doing in our busy lives in order to experience the pleasure of raising taxes on those who saved their money and went without, in order to bail out nimrods who decided not to read nor fully understand a mortgage contract before they signed it, and who could not bring their consumer greed, arrogance and financial incompetence under control!

I guess, with Mr. Shumer's advocacy, every homedebtor in the country can just declare mental ineptitude and stop paying their mortgage!

I swear, if any such bailout plan passes Congress and is signed by moron Bush, then America has officially lost its way completely.

Golden State Ranked No. 1 in March Foreclosures

We're No. 1! We're No. 1!

...uhh, Hey, wait a minute guys, uhh...what are we celebrating again??

California March Foreclosures: 32,692

- OR-

1 filing for every 373 homes, out of 158,000 foreclosure filings nationwide

California lenders, mortgage brokers, and real estate agents: Damn, you guys rock!

And you got paid!

Way to go!

The Rancid Truth: 1 in 54 Californians Is A Licensed Realtor

How appropriate for Friday the 13th. See the recent article from The Desert Sun newspaper out of Palm Springs, CA:

"...despite a generally sluggish housing market in recent months, California continues to add 200 to 300 new real estate licensees every week, with some 560,000 licensees expected statewide by year’s end.

“At least it’s not 1,000 a week like it was a year ago,” said California Real Estate Commissioner Jeff Davi, who oversees a $43 million budget and 342 employees in five offices who currently regulate about 535,000 licensees across the state...

...Along with the boom in licensees has come a surge in enforcement action for those who break the rules, Davi said. The department is on pace for 9,000-plus enforcement cases this year.... Based on cases filed during the first half of its fiscal year, about 36 percent will involve criminal convictions, 21 percent will involve trust-fund handling or recordkeeping violations, and 10 percent will involve supervision and negligence violations."

Realtor Transaction Survival Kit

Some great tools from the CAR, the California Association of Realtors.

Realtors, in case of emergency, break glass!

Transaction Survival Kit (Silver) Member Price: $44.00 A Basic Necessity for Every New Agent Keep these handy reference publications close to you at all times! Kit includes: Minimizing Legal Problems While Completing a Successful Real Estate Transaction The Relationship Between You and the Buyer in a Residential Real Estate Transaction The Residential Real Estate Transaction Guide Cutting Through the Confusion on Disclosures First Aid For Hot Market Burns Your Guide to the California Residential Purchase Agreement So You've Been Sued...Now What? Sold separately, the items cost over $92.00. As a kit, you save over $45.00. Sold as: 1 Package

Qty :

Got Groceries?

Professor Cathy Lesser Mansfield of Drake University Law School reported to NPR news that the housing market slowdown and the rise in home foreclosures are starting to impact the ability of families to pay for other basic needs. Groceries. Clothing. Gasoline. Health care.

America's Largest Homebuilder: "It's official. 2007 is sucking"

You got to hand it to D.R. Horton's CEO Don Tomnitz. Almost exactly 30 days ago he so eloquently predicted the probable business results of 2007 for America's largest of homebuilders.

Mr. Tomnitz was one of the few business leaders within the real estate industrial complex (REIC) with the cajones to just tell it like it is: 2007 "IS GOING TO SUCK" for America's homebuilders.

Funny quote at the time. But is anybody laughing anymore? I mean, Don was right on.

D.R. Horton's second quarter results ending March 31 have been talleyed. And they sure do SUCK!

D.R. Horton's year on year orders are down 37%.

Net sales orders fell to 9,983 homes from 15,771 a year earlier.

Perhaps worst of all - and very telling in terms of new pressure on home sale prices and the cost of incentives- the dollar value of home orders sank 41 percent to $2.6 billion from $4.4 billion.

Holy crap! For America's largest homebuilder, this is one major sucker punch below the belt! And if this is what's happening to the big boy on the block in terms of building homes and flogging them to the nation, how will the smaller home builders cope?

And the most painful kick in the groin? The state of California - where orders fell 59 percent to 1,107 homes. California was also the market that saw the biggest dip in dollar value of orders, down about 57 percent to $533.5 million.

Unbe-freaking-lievable!

I don' t know.

Maybe it's the quadratic pastel tie that says "I don't give a damn what you think!".

A tip of the hat to you, Mr. Tomnitz. Good call.

Blacks, Latinos Deserve Forgiveness for Signing Sub-Prime Loans

Mr. Wade Henderson, President of the Leadership Council On Civil Rights and Ms. Janet Murguia of the National Council of La Razza want loan forgiveness and special conditions for blacks and latinos in America who signed sub-prime loan agreements of their own free will.

Apparently, these loans were designed by greedy lenders and pumped by unscrupulous real estate agents to dupe, hoodwink and otherwise fool black and latino Americans into buying more home than they could really afford, thus causing the mass of foreclosures in American communities.

So, if you are an American taxpayer this means that we are all supposed to pony up the federal extortion bar and compensate ethnic minorities for being financial imbeciles!

This is almost too ludicrous for words.First of all, it might surprise black and latino Americans, who's eyes were too big for their financial stomachs when they went into debt to acquire those homes, to know that they find themselves in good company. Thousands of white Americans also signed on the sub-prime dotted line too. So where's the love for your equally stupid white American brother?

This compensation movement really insults the intelligence of every single ethic minority in this country.

It also suggests that it's ok to be a moron.

I'd much more prefer that We, the People, i.e. All Americans, take full responsibility for our actions for a change - even for the titanically stupid mistakes that cause us to lose our homes, sell our possessions and declare personal bankruptcy.

The answer is simple, Mr. Henderson and Ms. Murguia:

No, the Gub'ment ain't bailing you out, because Gub'ment is you!

You signed the mortgage. You took responsibility. There are no do overs. You break it. You bought it.

The sooner we stop acting like overgrown children, the better.

Now back to our regularly scheduled program of Americans who know how to live within their financial means.

American Realtors: "It wasn't me."

CNN Money reports that the blame game has started.

Check out blame target No. 6 for the 2006-2007 real estate market meltdown.

OC "Cultural Pathology" By IrvineRenter

People, if you live in Orange County, California, then this article by IrvineRenter is a must-read.

Like a house of cards. Just like a house of cards.

American Realtors: "Housing Market Has Bottomed Out"

The National Association of Realtors demonstrates again why it is America's trusted news source for national housing market trends. Thank God this week's story matches up with the NAR's pocket-lining strategic objectives.

Short Sales: A Good Way For The Market To Correct Itself

The Orange County housing market is broken.

It has been for several years.

Now, some OC homeowners (actually "homedebtors") facing foreclosure might be able to negotiate a settlement with their mortgage lender called a short sale.

When this happens, a new buyer assumes the property, and the mortgage lender forgives the leftover balance of the original mortgage.

But short sales often result in smaller price discounts than home auctions do.

Fewer homes going to auction could help keep prices steady in an uncertain housing market.

A slowing housing market could indicate that hundreds of thousands of borrowers being stuck in loans they can't pay or refinance.

OC Homedebtors To Make Tough Choices

Homedebtors in Orange County impacted by upcoming rate adjustments on their mortgage loans may be facing foreclosure in 2007. Many homedebtors will be biting their nails down to the nubs deciding whether to sell their homes at a loss rather than declare bankruptcy and carry on in life with an impossible credit rating and no money to purchase another home.

The following OC Register article describes several ugly scenarios and possible survival tactics for upside down homedebtors.

Will there finally be enough market pressure accumulated from these motivated sellers, combined with rising inventories, and declining home values to reduce for median home prices in Orange County?

Probably not.

Unemployment figures in Orange County remain very low at 4.8%.

Yet, today average single family home prices in Lake Forest, CA hover around the $625,000 mark (3 bed, 2.5 bath). Median income in Lake Forest is slightly more than 10% of this median home value at $76,000 per annum.

A Blown Mortgage - And The Deadly Shrapnel

The Blown Mortgage Blog posted an interesting article today about an interesting, if not disturbing, knock off effect on smaller, licensed mortgage brokers who otherwise plan to sell their closed mortgages to investors. But the foundational sands appear to have shifted with these investors, many of whom have decided to tightened their loan purchasing guidelines as a result of the recent fall of New Century Financial and a higher aversion to loan default risk.

So what is the potential knock off effect? Thousands of dollars in losses on loan sales for small mortgage lenders.

Too Little Too Late, Barney

OC police are arresting more and more illegal immigrants each month of 2007.

Those without ID are being investigated for immigration violations and deported when warranted.

While these kinds of arrest results might be encouraging to some OC residents, it is just as too little as it is too late. The time for crack down on illegal immigration was 5 years ago and even then, it should never have started with arrests in California.

It should have started first with tightly securing the border with Mexico (i.e. 20 foot fence along the border, surveillance equipment, enforcement personnel and equipment).

This article states that 591 individuals were detained under suspicion of immigration violations in February. During that same month, well over 5,000 illegal Mexican immigrants crossed the California and Arizona borders.

Whether you support a tougher line or softer line on illegal immigration, it doesn't matter. One must concede the truth - that these arrests do not constitute an effective use of precious OC county law enforcement resources when U.S. borders remain essentially wide open the most common illegal immigrant - the Mexican migrant worker.

Here's an novel idea: Patch the hole in the hull first. Then commence bailing out the water.

The Achilles' heel of the United States of America is not a lack of resolve to correct what is wrong and make it right, but a failure to utilize critical thinking skills and common sense.

Whew! At least California is safe!

Thank God for the UCLA Anderson Forecast!

The sluggish real estate market is definitely dragging down the California economy, but strong job growth in the state at a whopping 1.9% year-to-date is keeping the California economic boat afloat - and preventing a recession.

New Century Financial Corporation: Officially Toast

New Century Financial Corporation of Irvine, California has declared Chapter 11 bankruptcy, agreed to sell off most of its assets and decided to lay off some 3,200 employees.

No surprises here.

For anyone who in the future wishes to question the reasons why their 2008, 2009 and 2010 federal income taxes increased substantially, bookmark this story now.

Your future tax dollars will not doubt be utilized by that all powerful, massive building with arms and legs that walks around and "does shit" called the Federal Government.

Your money will be used to bail out the reckless and greed-ridden actions of these NCF dolts who handed out high-risk mortgage loans to financially illiterate American families across the country like it were candy at a Labor Day parade.

Aren't you were glad you lived within your budget? Aren't you pleased how you lived within your means?

Do you not yet realize that you will be effectively paying off your neighbor's Ford Mustang Saleen that he bought for his wife with that HELOC!

Now, on to happy thoughts!

Take me to a safe place where there are happy thoughts, happy thoughts, happy.......