flipbot

I’m utterly disgusted by this site: http://www.youwalkaway.com/

* Are you stressed out about your mortgage payments?
* Do you have little or no equity in your home?
* Have you had trouble trying to sell your house?
* Is your home sinking under the waves of the real estate crash?
* What if you could live payment free for up to 8 months or more and walk away without owing a penny?

Your lender WILL NOT be able to call you in attempt to collect!
Your lender WILL NOT be able to collect any deficiency or loss they may receive by you walking away!
You WILL be able to stay in your home for up to 8 months or more without having to pay anything to your lender!
You CAN have the foreclosure REMOVED from your credit!

Looks like they have reduced the prices at Centex Fusion South Bay a bit that I mentioned in an earlier post.

I stopped by today to get a price sheet and give Google Docs a shot, so I put the prices in a picture:

Granted there’s not that many units left, but its interesting to see the price trend.

Ah, I’ve heard that before.

“Housing prices won’t go down here. Everyone wants to live here.”

Uh huh. I think Orange County is a nice place to live. Who wouldn’t want to live in Huntington Beach, a.k.a. Surf City USA? Here’s some lsitings I just pulled off RedFinin 5 minutes:

Sold 05/18/2005 for $680k, now $599k, -12% reduction link

Sold 10/18/2005 for $637k, now $589k, -8% reduction link

Sold 4/05/2006 for $575k, now $450k, -22% reduction! link

Ok so home prices are going down, so what? Doesn’t matter if I’m not moving! Well that may be true, but the problem is that a lot of home owners “feel” rich since they have so much equity. So they spend money on home equity withdrawals. How much do they spend? Well here’s a graph:

And for kicks, I’ve seen these graph a billion times, but for those of you that think the worst is behind us, the mortgage resets are just beginning:

New BMW E92 M3 races a Bugatti Veryon!

[autojunk.nl]

With all this talk of the Fed, Alan Greenspan recently appeared on the Daily Show with Jon Stewart:

[Wall Street Journal Blogs]

Found this article from Ben Stein for the New York Times.. What’s that saying, those who don’t know history are doomed to repeat it? (or something to that effect)
—
New York Times, August 17, 1981
A word to the wise: The great Los Angeles housing boom is over. The real estate price explosion in southern California, which sparked a national boom still continuing elsewhere, has stopped. The bubble that everyone said could never burst has burst. All over Los Angeles and Orange County, home buyers can buy a property for less than it would have cost a year ago, although there are exceptions. Buyers who can pay cash can almost steal houses and real estate. The days when ordinary citizens got rich from buying houses are gone, at least for the time being and at least in southern California.
Read the rest of this entry »

Housing seems to be a hot topic lately in the news. This week’s cover of the Economist:
And according to this week’s BusinessWeek, “by rushing into the mortgage business big-time, homebuilders helped fuel the housing crisis.”

With all this mess with the mortgage market going on right now, banks are jacking up rates on jumbo loans:

From Wikipedia: In the United States, a jumbo mortgage is a mortgage with a loan amount above the industry-standard definition of conventional conforming loan limits. This standard is set by the two largest secondary market lenders, Fannie Mae and Freddie Mac. … …. As of 2006, the limit is $417,000, or $625,500 in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.

So that means if I want to borrow more than $417k, I have to pay a higher interest rate. Well, here in sunny SoCal, $417k doesn’t buy you very much. So how much higher are the interest rates? Well according to CNBC,

As an example, Cohn says that even someone with a high credit score could pay as much as 8.25% for a jumbo 30-year loan. That’s well above the conventional 30-year fixed mortgage rate, which currently average 6.26%, according to Bankrate.com.

Ah, 2% isn’t very much is it? That’s only 2 more pennies per dollar! Let’s do a quick calculation in Excel, assuming I want to buy a median priced house in Los Angeles for $530k what do my payments look like if I had the average mortgage @ 6.26% (A) or if I had to get the jumbo loan @ 8.25% (B). There’s a couple of interesting points:

• With the higher interest rate, your payments increase $700/month
• If you fix your monthly payment, the higher interest rate is equivalent to buying a home $95k less (Loan C)
• If you’re buying an average house in California, you’re screwed. Hell, even if you want the Fusion Plan J at the sale price, its still considered a jumbo loan.

These all all quick calculations I made in Excel using the PMT function

7/31 Update

According to DeanJonesTrader @ Los Angeles South Bay Beach Cities Housing Bubble, the prices have been reduced! Still overpriced, but not a bad start…

• Model ‘J’
  $723,000 to $604,000 (-17%)
• Model ‘D’
  $611,000 to $554,000 (-10%)
• Model ‘B’
  $537,000 to $469,000 (-13%)
• Model ‘A’
  $525,000 to $449,000 (-15%)

————————————————————————————-
This is an ad for the new Centex development in the South Bay. Hawthorne, CA, to be exact, not exactly the nicest city in the world. You could call this “Manhattan Beach adjacent” if you like.

I was reading this ad carefully, and like a lot of real estate ads, you really have to read in between the lines. I am curious about these, so I do actually want to do a walk-through to check it out in person.

I circled 3 major areas on the ad:

From the Low 500s

Quick trip to the Centex website shows Plan A

• $520k
• 1,003 Sq.Ft.
• 2 Bedrooms, 2 Full Bath

Interest Rate

That’s a teaser rate for an interest-only ARM. At least its not a negative ARM!

Misc Terms

I was going to type them all out, but OMGWTF, look at all that crap!

• $51k Downpayment
• 1st : $410k 7/1 ARM Interest Only 4.875/6.267%
• 2nd: $51k on 30yr amortized, balloon in 15 years 7.25%/APR 7.459

I think I’d rather stick with a 30 year fixed.

Is this a big suprise to anyone? From Investopedia

Foreclosure:

A situation in which a homeowner is unable to make principal and/or interest payments on his or her mortgage, so the lender, be it a bank or building society, can seize and sell the property as stipulated in the terms of the mortgage contract.

From the LA Times:

Foreclosures soared to 17,408 for the three months ended June 30, an increase of 799 percent from the same period last year. The current rate handily exceeds the previous foreclosure peak set in 1996, when the state was in the final throes of six-year slump.

The rising foreclosure rate is tied to stricter lending standards and weakening home values. With housing prices flat or falling, lenders are less willing to refinance loans — especially to borrowers with shaky credit who are most likely to miss payments.

I really do feel sorry for people who are losing their homes, but in the end I do hope housing becomes more affordable.

Saw this on Autoblog. I don’t build cars online that much, its too depressing to see exactly how much nice cars cost and how much I can’t afford them.

But this is one sweet car-configuration-thingy. Here’s my first attempt, in a nice dark gray:

Or what about in regular black?

[Maserati GranTurismo Configurator]