David Crisp, Part 2

David Crisp
Formerly of Crisp & Cole
(Part 1)

Crisp's actions "epitomized the rampant greed that contributed to the market collapse," Real Estate Commissioner Jeff Davi said in a statement released Monday. "He should not be allowed to work in any capacity related to finance or real estate."

Amen!

2009-11-23: David Crisp banned from real estate for three years
The California Department of Real Estate has barred former real estate agent David Crisp from working in any real estate-related field for three years.

The ban applies to all real estate firms, including lenders, banks, escrow companies and title companies. It became effective at noon Monday, the same day the state announced its order.

Crisp had initially intended to fight the order and two hearings were set, but he failed to show up to either one and lost by default, according to Department of Real Estate spokesman Tom Pool.
...
In September, Jerald Allen Teixeira, a loan officer who worked for Crisp and Cole for more than a year, pleaded guilty to being a part of mortgage fraud. He was offered leniency in exchange for promising to assist federal prosecutors. (Part 3 is coming for Crisp, I'm sure)

Strategic Defaults

Strategic Default: Heather Baker

I don't fault Ms. Baker for walking away. It's the right financial decision, she had no skin in the game, and the banks got exactly what they deserve. However, can she really afford it? Using traditional guidelines for affordability, Ms. Baker should have yearly earnings of...
$465K * 0.36 = $167K
It's possible she earns this, but I seriously doubt it. Can she truly afford a $465K mortgage? She was nothing more than a house debtor that got caught in the middle of a massive housing bubble.

2009-12-25: Walking Away From The House She Can Afford
Many homeowners who are tens thousands of dollars underwater on their mortgages — meaning they owe more than the value of their homes — have decided it's just not worth it. Some, like Heather Baker, can even afford their payments, but they're walking away anyway.

Baker is done with being a homeowner. Last month, she stopped paying her mortgage.
...
She figures the house she bought for $465,000 won't sell for more than $225,000 now. That lower figure is what a house down the street went for earlier this year in a foreclosure auction. Like a lot of people, Baker bought her house with no money down. The mortgage broker she worked with told her she qualified for the loan based on her credit score alone.

9100 Granite Ct, Waldorf, MD
5 beds, 3.5 baths, 2,302 sq ft

Sale History
07/28/2006: $465,000
11/12/2003: $289,000
11/24/1998: $199,948

Wendy Zhang

Wendy Zhang, Mortgage Loan Officer / Seller
She's a mortgage loan officer and the seller of a property to Daverena White (story below). It's amazing how she can take someone earning $15K/year and put them into a loan for $698,000. At what point does "helping" become criminal? The house and story are below.

Here is the house:
13222 Catawba Manor Way
Clarksburg, MD 20871-4335

Sale History
05/28/2009: $400,800
12/20/2006: $698,000
01/12/2005: $494,508

Calculated Risk Discussion: WaPo: A Liar Loan Example

2009-11-27: The $698,000 mistake
There was also Wendy Zhang.

Zhang, then 39, was the seller, and she worked as a mortgage loan officer in Rockville. She and her husband had bought and sold a handful of other properties in recent years.

What exactly was it that Zhang understood? "She wanted to buy the house," Zhang would say later. And so she helped find White a lender -- a finance company owned by General Electric called WMC Mortgage that specialized in sub-prime lending and would soon go out of business -- that would allow 100 percent financing.

Even better, as White recalled: Zhang told her that she could get cash back at the closing and that in a beautiful place like Clarksburg her day-care business would thrive.

"You buy this house," White remembers Zhang saying, "and you will be rich."

Across the country, thousands and thousands of such loans were made. White's papers cited income of $163,320 a year, even though she says her 2005 income-tax earnings were less than $15,000 and she relied at times on food stamps.

After owning the house for 22 1/2 months, Zhang and her husband sold it for $203,000 more than they had paid. "In that market, the profit is very, very reasonable," Zhang would say later. Her only mistake, she said, was helping White. "I tried as much as I could to help her. Believe me, I did."

Karenn and Steve Oropeza, Part II

Karenn and Steve Oropeza, Home-ATM Users, Flakes

The Oropeza's are on the move again.

Recall their case of robbery through home refinancing: Oropeza, Part I

Dr. Housing Bubble even discussed this sickening case study in sweet home equity extraction:
Schadenfreude: The Psychology of Housing Retribution and Justice

They fled their home-ATM escapade in California to move into a McMansion in Katy, TX. But the Texas dream is fading, as their McMansion is up for sale. And according to the listing site, the house is also available for rent. Something tells me that the Oropeza's aren't too concerned about losing their down payment, considering, of course, that the down payment was taxpayer dollars.

Enjoy the pictures of the Oropeza furnishings that OUR TAX DOLLARS ARE PAYING FOR.

Karenn Oropeza
1414 Baldridge Ln
Katy, TX 77494-4713
4 br, 3½ ba, 3,372 sqft

Price Paid: $283K with $28K down
List Price: $329K (Listing Website)
Days listed: 80
(Recently de-listed)

This nearby house might give them some trouble:
2103 Monona Dr
List Price: $280K
Days listed: 163

Fort Bend Assessor

Lori Polin, Part II

Lori Polin, Realtor
From Realtor Hall of Fame to Housing Bubble Hall of Shame.
Part I

Our realtor sweetheart is up to some bizarre trix. (Thanks, Mav)


2009-10-28: Agent accused of real estate fraud at center of bizarre condo foreclosure
Foreclosure proceedings on Alejandro Salazar's Tampa condo had dragged on so long he finally called the bank this summer to ask why.

Because, the bank told him, your attorney has been fighting us for a year.
...
In a bizarre case, Harlan confirms that he listed himself as Salazar's lawyer even though Salazar hadn't retained him. The person who did, Harlan acknowledges, was a real estate agent who had acquired the deed to Salazar's vacant condo, moved in and wanted to stall foreclosure because she hoped to buy the unit in a short sale.

The agent? Lori Polin, named by Florida's attorney general last year as a key player in an alleged $37 million mortgage fraud scheme.

FHA + 21 =

More foreclosures.

With a loan amount of $183,000, Miss Tejada should have gross earning of...

$183,000 x 36% = $65,000

for a responsible loan that can be properly serviced.

According to Scott Jagow:
She makes $2470 a month. 54% of her income goes to service the mortgage. Here’s what she says about that:

… I’m left with $1,142 per/month, which is plenty for me.


2009-10-22: Of 21 Year Old With The Underwater FHA Loan
Denise got an FHA loan to buy her home for $155,000. She took out a second loan (called a 203-K loan) to refurbish the place. The total loan amount is about $183,000. She says, “In total, I gave the bank $5,087 + $1,500 which were all deposit and closing costs.”

So her “down payment” was no more than 4% of the value of the home when she bought it. She will get all of that back and then some with the first-time home buyer tax credit.

In other words, thanks to the various government tax breaks, Denise put absolutely no money down on her home. If she has to default on her mortgage, she'll lose nothing except her credit rating. Of course, since she's only 21 years old, there's plenty of time to recover from that.
...
Don't you feel awesome for helping Tejada achieve the American dream?

Barney Frank, Part III

Barney "I tawt I taw a putie tat" Frank, United States Rep, Mass (D)

Part I
Part II

Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that the defaults were, in essence, worth it.

“I don’t think it’s a bad thing that the bad loans occurred,” he said. “It was an effort to keep prices from falling too fast. That’s a policy.”

Raping America... it's a policy.

Everyone wants a piece of this SOB.

Denninger:
To The States: Should We Talk About Secession?
Government Violates The Citizens (Again)

Calculated Risk:
A Policy: Supporting House Prices

How is that "Policy" working?
U.S. Homeowners Cut Asking Prices $27.8 Billion
Aug. 14 (Bloomberg) -- U.S. homeowners cut their asking prices by $27.8 billion with some of the biggest reductions in Nevada and Florida, states hardest hit by the property slump, Trulia Inc. said.

FHA may be setting up repeat of housing bubble
The percentage of FHA loans that are delinquent or in foreclosure climbed to nearly 8% at the end of June, from about 5.5% in early 2006, according to the Mortgage Bankers Assn. And in the weeks ahead, its reserves for loan losses are projected to slip below federally mandated limits.

FHA Shortfall Seen at $54 Billion May Lead to Bailout
Oct. 8 (Bloomberg) -- The Federal Housing Administration, which insures mortgages with low down payments, may require a U.S. bailout because it has $54 billion more in losses than it can withstand, a former Fannie Mae executive said.

“It appears destined for a taxpayer bailout in the next 24 to 36 months,” consultant Edward Pinto said in testimony prepared for a House committee hearing in Washington today. Pinto was the chief credit officer from 1987 to 1989 for Fannie Mae, the mortgage-finance company that is now government-run.

First Failed State?

It's been very quiet on the California economic condition. Are we getting closer?

How about a 50% vacancy rate in Sunnyvale for office space?

2009-09-01: Empty office buildings dot Silicon Valley

Green Shoots, anyone?

On a side-note, but related, I'm noticing California municipal bond funds rising in price. This makes no sense to me. The risk of holding these bonds seems way to high.

Hat tip to 'Coming Economic Depression', for the link to the story.

2009-10-04: Will California become America's first failed state?
But the state that was once held up as the epitome of the boundless opportunities of America has collapsed. From its politics to its economy to its environment and way of life, California is like a patient on life support. At the start of summer the state government was so deeply in debt that it began to issue IOUs instead of wages. Its unemployment rate has soared to more than 12%, the highest figure in 70 years. Desperate to pay off a crippling budget deficit, California is slashing spending in education and healthcare, laying off vast numbers of workers and forcing others to take unpaid leave. In a state made up of sprawling suburbs the collapse of the housing bubble has impoverished millions and kicked tens of thousands of families out of their homes. Its political system is locked in paralysis and the two-term rule of former movie star Arnold Schwarzenegger is seen as a disaster – his approval ratings having sunk to levels that would make George W Bush blush. The crisis is so deep that Professor Kenneth Starr, who has written an acclaimed history of the state, recently declared: "California is on the verge of becoming the first failed state in America."

Time ARM Bomb - Silicon Valley Style

Time ARM Bomb - Silicon Valley Style
Calculated Risk picked up on this article.

What I don't understand about Mr. Amacker's story is why he would add 2 bedrooms and 1 bathroom to his home when he was only living with his two sons. I wonder if the loan exceeded the cost of the addition? Inquiring minds want to know. (house details at bottom)

2009-09-20: $30 billion home loan time bomb set for 2010
Thousands of Bay Area homes have a ticking time bomb embedded in their mortgage. The homes were purchased with loans known as option ARMs, short for adjustable rate mortgages.
...
Joey Amacker of Newark, who works as an account manager for a catering company, refinanced his home with an option ARM for $624,000 so he could pull out money to build an addition. The friend who sold him the loan assured him that an option ARM was a safe and affordable product, he said.

Amacker said he initially made only the minimum monthly payment of $1,800, which covered part of his interest and none of the principal. The amount he owed grew to $660,000 by November 2008, according to loan documents.

Meanwhile, payments that would cover both interest and principal also escalated above his reach, said Amacker, a single father of twin teenage boys. Although he wanted to pay more than the minimum, "it was a struggle, borrowing from Peter to pay Paul," he said. His 21-year-old daughter moved in to help out, and he rented out the addition he'd built. But he couldn't keep up with the payments. He's been trying to get his bank to modify the loan, but says it doesn't get back to him. The bank did not respond to a request for comment.

Between the negative amortization and his missed payment and penalties, Amacker's total debt has ballooned to $725,000, while the house is probably worth about $500,000, he said.

"I feel so ashamed of how I could have gotten myself in such a bad situation," he said.

Like Amacker, most option ARM borrowers owe much more than their homes are worth, so they cannot refinance their way out of trouble.

------------------------
6589 Fountaine Ave, Newark, CA
5 beds, 3.0 baths, 2,070 sq ft
Zestimate®: $548,500

Sale History
02/16/2001: $425,000

What in the hell did he create? (click image to enlarge)

Interest-Only Insanity Part II

Moller Interest-Only Insanity

Right on queue, the interest only idiots are coming forward and admitting the world how foolish they were. Didn't they learn from the subprime crew? You don't have your foolish antics published in the mainstream press. You just don't do it!

San Diego, you have a world of hurt coming your way.

2009-09-09: As an Exotic Mortgage Resets, Payments Skyrocket
Edward and Maria Moller are worried about losing their house — not now, but in 2013.

Like millions of buyers during the boom, the Mollers leveraged their way into a house they could not otherwise afford by taking out a loan that required them to make only interest payments at first, putting off payments on the principal for several years.

It was a “buy now, pay later” strategy on a grand scale, meant for a market where home prices went only up, and now the bill is starting to come due.

“I’m praying for another boom,” said Mr. Moller, 34. “Otherwise, we’ll have to walk.”

The Mollers bought in 2005, paying $460,000 for their three-bedroom, thousand-square-foot house. A quick refinance a few months later supplied cash to pay debts. Now the house is worth perhaps $310,000. After their interest-only period is up, they expect their monthly payments to increase 20 percent if not more.
-----------------
Where do you think this house will be at bottom?

My estimate... $200K, barring total economic chaos.

8429 Dallas St, La Mesa, CA
3 beds, 1.5 baths, 1,054 sq ft
Zestimate®: $334,000

Sale History
04/29/2005: $460,000
04/11/2001: $203,000

Interest-Only Insanity

Interest-Only Insanity
Courtesy New York Times and Calculated Risk.

2009-09-08: The House Trap
“I understand I took a risk,” said [Dean Janis, a Southern California lawyer who bought a $950,000 home in 2004] “But I did not anticipate that the real estate market would go down 30 percent.” He talked with Wells Fargo about his options, and the lender said he had none.

Ok, let's check out this McMansion...

4371 Piedmont Dr San Diego CA 92107
2 beds, 1.0 baths, 1,073 sq ft
Zestimate®: $782,500

Sale History
06/14/2004: $956,500
12/27/2001: $515,000

2bed/1bath and he PAID $950K!!!
What is wrong with people?!!!

This place should go right back down to $400K at the bottom. Until then, just rent and save yourself a sh*tload of money, assuming our money retains any value by then (see A Gift from Jim Sinclair). However, it is about 1.7 miles from Point Loma Seafood, but it's getting way too crowded and expensive--that damn fish sandwich is now $8.32. I can remeber paying around $3.50 for one. More inflation we can attribute to foolish house buyers, perhaps?

Juergen and Lois Kempff

Juergen and Lois Kempff, Home ATM

It seems as though the OC Register and Calculated Risk are getting into the business of hall of shamers, and this family wrote the book on shameful housing acts. Perhaps you can take comfort in knowing that your tax dollars are going towards a college education for the Kempff kids. Without our help, how could they overcome the College Bubble?

Even in the face of hardships, a house is NOT an ATM.

25231 Del Rio, Laguna Niguel, CA 92677-1517
04/09/2002: $433,000

Current amount owed: $786,000!!

2009-09-07: One Family: Option ARM, failed Modification, Health Issues, Bankruptcy, and more

2009-09-06: Family faces loss of home amid health crisis
LAGUNA NIGUEL – When Juergen and Lois Kempff received a notice of default in the mail saying their home was now in the foreclosure process due to missed payments, they figured it was junk mail.

The notice came from a company they didn't recognize, and to be honest, they had some heavier thoughts on their minds.

...the Kempffs' option adjustable-rate mortgage payment skyrocketed to $4,300 a month from $2,500 last December. Seeing no way to afford the new payments, the Kempffs opted for a loan modification from their bank, IndyMac which was later purchased by OneWest from the FDIC in March.
...
The unpaid amount on the Kempffs' loan is $786,802.59, short of qualifying for a modification by about $60,000.

Since the Kempffs purchased their home in 2002, they took out loans and refinanced their mortgage. The equity from those transactions enabled the Kempff family to fix their cracked pool, remedy a slipping backyard slope by putting in three retaining walls, help three children pay for college and pay for the medical bills of their youngest son who had malignant melanoma.

College Bubble?

I briefly mentioned a college bubble in the Welcome to 2009 post, and on another occasion, College/University Bubble, linking to a video on the subject that was removed by YouTube. Mainstream media (and Denninger) has decided to weigh in. Welcome to debt hell, students.

2009-09-03: Denninger - Is The Light Flickering On?

2009-09-03: Students Borrow More Than Ever for College
Students are borrowing dramatically more to pay for college, accelerating a trend that has wide-ranging implications for a generation of young people.

New numbers from the U.S. Education Department show that federal student-loan disbursements—the total amount borrowed by students and received by schools—in the 2008-09 academic year grew about 25% over the previous year, to $75.1 billion. The amount of money students borrow has long been on the rise. But last year far surpassed past increases, which ranged from as low as 1.7% in the 1998-99 school year to almost 17% in 1994-95, according to figures used in President Barack Obama's proposed 2010 budget.
...
The new numbers highlight how debt has become commonplace in paying for higher education. Today, two-thirds of college students borrow to pay for college, and their average debt load is $23,186 by the time they graduate, according to an analysis of the government's National Postsecondary Student Aid Study, conducted by financial-aid expert Mark Kantrowitz. Only a dozen years earlier, according to the study, 58% of students borrowed to pay for college, and the average amount borrowed was $13,172.

Sweet Home Equity Gone Sour

In the aftermath of better living through tapping home equity, what are things like for the Home ATM users? We may not have the detailed answer to that question, but we can certainly see how they're doing on the home-front. Let's go back and look at an example from '07.

In 2007, Mr. Marshall Whittey openly admitted to better living through sweet home equity in the pages of the NY Times. Lavish wedding, trip to Tahiti, flat screen TVs (the ubiquitous home ATM purchase, I might add), shopping sprees, new cars, ... nothing was beyond financial reach if you "owned" a house during the peak bubble years.

How have the houses of Mr. Whittey fared since the article appeared in the NY Times? Let's take a look at the "investment" property and the personal residence.

Investment Property:
915 Demos Ct, Reno, NV 89512
-- 2006-01-03: $444,000 ARM with CTX mortgage
-- 2006-01-03: $111,000 2nd with CTX mortgage

Sold: $215,500 on Mar 31, 2009
4 br 3 ½ ba 2,960 sqft $73/sqft

From $555K to 215K. Wow!!!

Personal Residence:
404 Alysheba Ct, Reno, NV 89521-6274
4 beds, 2.0 baths, 2,017 sq ft
06/08/2005: purchase $283,900 with Universal American Mortgage
03/01/2006: $30,000 HELOC with Countrywide
11/20/2006: $375,000 REFI with First Magnus
06/08/2005: $355,000 (unsure about the sales history vs HELOC/Refi)

Zestimate®: $259,000

Here is a similar property in the neighborhood, currently listed for $249K, and it has been on the market for 114 days: 470 Miesque Ct

Investment Property Loss: $340K
Residence Property Loss: $100K (conservative estimate)

We're looking at total losses of approximately $440K. When/if he walks away from his current under-water situation with this residence, the number should grow. You might ask, who carries the burden of these losses. The answer is simple, it's right HERE.

Barack Hussein Obama, Part 2

Barack Hussein Obama, Commander in Chief Thief

First we had George W. Bush with his "homeownership plan". Now we have Obama with his "home rentership plan".

Having your government as the landlord is a great thing, isn't it.

Ahhh, yes, change!

2009-08-16: Rentership Society
WASHINGTON - The Obama administration, in a major shift on housing policy, is abandoning George W. Bush’s vision of creating an “ownership society’’ and instead plans to pump $4.25 billion of economic stimulus money into creating tens of thousands of federally subsidized rental units in American cities.

The idea is to pay for the construction of low-rise rental apartment buildings and town houses, as well as the purchase of foreclosed homes that can be refurbished and rented to low- and moderate-income families at affordable rates.

Alt-A Bomb II

2009-08-06: Deutsche Sees 48% of All US Mortgages Underwater in 2011
By AUSTIN KILGORE
August 6, 2009 4:18 PM CST

Deutsche Bank (DB: 66.83 +0.97%) believes continued declines in home values will increase the number of US mortgagors with negative equity from 14m in Q109 to 25m in Q111.

According to a report Deutsche released this week, the 25m represents a projected 48% of all US mortgages. While subprime and option adjustable-rate mortgages (ARM) are the biggest source of underwater borrowers in the current market, Deutsche said a larger percentage of prime conforming and prime jumbo borrowers will join the fray.
...
By 2011, Deutsche predicts 89% of option ARM borrowers will be underwater, up from 77% in 2009. The rate of underwater subprime borrowers will increase from 50% to 69%, and underwater Alt-A borrowers will increase from 49% to 66%.

Carlos Justo

Carlos Justo, Superstar Real Estate Agent
Can this guy strike a similar pose or what??

snkjorge recommended this guy for the Housing Bubble Hall of Shame. I couldn't agree more.
Cheers!

2009-08-01: A superstar real estate agent plots his comeback
Justo is $20 million in debt. He is five months into a massive bankruptcy filing. The IRS is after him for $6 million.

And yet, he dreams.
...
In 2005, Justo was worth $20 million. He and the agents who worked for him sold $200 million in real estate in a single year. He was also the owner of 12 multimillion dollar estates in the county's most exclusive enclaves; he intended to eventually flip them and make a profit. Justo and his business partner, Irving Padron, were awarded a prestigious Sotheby's franchise and opened its offices in one of the few historic mansions in downtown Miami.
...
"I knew the market was going to crash," he said. "It was irresponsible what we did, what all of us did in the United States. We took out huge loans, we bought things that people had no business buying."

For three years, Justo had tried to avoid filing Chapter 7, even borrowing $15,000 from his 85-year-old mother and $75,000 from his 83-year-old aunt to pay his monthly debts.

2009-02-06: Connected, Fabulous ... and Broke
.

Sacramento Sorrow

Ok, here comes the Prime and Alt-A whiners. The bubble was obvious; if you participated you put yourself, your family, and your savings (assuming you used any for a purchase) at risk. Now we get a whole new breed of Shamers!

Ya' know, I remember a time when $500K was a LOT of money. But here's a guy that drank the kool-aid deeply. Go out and buy that $600K house on the golf course; live large; prices only go up; don't worry about the future. Well... it's time to give it all back.

Food for thought:
At the ripe old age of 55+, why would anyone want to take on crippling debt? As you approach your "golden" years you should be seeking security and zero debt.

2009-07-11: Mortgage defaults spread as even 'safe' borrowers falter
No longer is the real estate bust simply the result of exotic, subprime loans that doubled payments and blew up in homeowners' faces. As the Sacramento economy buckles, even the safest mortgages have become part of a new wave of loan defaults, experts say.

With capital-area job losses reaching 45,000 in the past year and unemployment at 11.1 percent, lenders, bankruptcy attorneys and debt counselors all say they're seeing rising delinquencies among prime borrowers with fixed-rate loans and good credit. Many of those slipping into trouble are state workers, the mainstay of Sacramento's economy.

There are 3.3 million of them in California – 56 percent of all mortgages. But nearly 4 percent were delinquent in the first quarter,

Already in the foreclosure process is Ron McClure of Roseville. He bought a $600,000 house at Sun City Roseville in 2003, using a prime, fixed-rate loan that cost him $3,200 a month.

That worked until the housing market collapsed. McClure, partner in a small home-building business, saw his income collapse with it. Six months ago, he stopped making payments on the house.
--------------

Here is the house:
7681 Rosestone Ln, Roseville, CA 95747
3 beds, 2.5 baths, 2,538 sq ft
Zestimate®: $455,000

Sold 08/15/2003: $600,000
2008 Property Tax: $6,757

Kern County - Record Foreclosures

Lets continue the Kern County NOD and Foreclosure record tracking for Bakersfield Bubble.
Record NODs HERE.

California Insolvency is Here (?)

We're insolvent, I guess. Let's see what happens.

2009-07-01: California Prepares to Issue IOU's
Sacramento (myFOXla.com) - California's controller will start paying many of the state's bills with IOUs as soon as Thursday after lawmakers failed to close the state's worsening budget deficit, adding a new measure of indignity to a state sinking deeper into dysfunction.

2009-07-01: BofA to accept California IOUs
Bank of America said Wednesday that it will accept IOUs from the State of California from its customers through July 10.

“To support our customers, while giving the government additional time to pass a budget, we will accept California state-registered warrants - or IOUs -from existing customers and clients,” the bank said. “Based on state disbursement estimates, we will accept the registered warrants through July 10.”

California Insolvency!

2009-06-30: Federal Judge Blocks Bankrupt California from Reducing Wages of State Workers
U.S. District Judge Claudia Wilken halted the wage cuts on June 25 in response to a lawsuit by the Service Employee International Union (SEIU) on behalf of 250,000--out of a total of 440,000--home care workers that it represents in California.

The judge ordered the state to keep paying the workers, referred to as In-Home Supportive Services Workers (IHSS), up to $12.10 in wages and benefits. [IHSS? WTF?]
...
The union argued that the IHSS program actually saves the state money because it keeps its users from going into nursing facilities that tend to be more expensive.

However, according to a California Senate Office of Oversight and Outcomes report this year, the IHHS program “lacks sufficient oversight and suffers from fraud and abuse.” [How shocking!!]
----
Ok, let's do the math... (assume 1000 work hours/year; half-time)

440,000 workers x $12.10/hour x 1000 hours/year = $5.3BILLION

2009-06-30: California poised to issue IOUs to vendors
So far, no banks have committed to honoring the IOUs, said Hallye Jordan, spokeswoman for state Controller John Chiang.

She said banks are probably waiting to see how much interest the state will pay on the IOUs – a figure that won't be decided until Thursday, the same day Chiang is scheduled to issue IOUs. The notes will total $3.36 billion, with about $500 million targeted for the private sector.

2009-06-24: California set to issue IOUs
"Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression," Controller John Chiang said in a statement announcing that he would be forced to use IOUs to pay the state's bills beginning on July 2.

Kendra Todd - The Lawsuit

Kendra Todd, Uber Real Estate Pumper
(see also, Part 1, Kendra Todd Meets God)

If guilty, perhaps behind bars she will convert to Islam.

* Hat tip Johnnie

2009-06-21: Kendra Todd accused of fraud in lawsuit over homesale
...
But homebuyer Diane Harris probably wished Todd had a different show - perhaps one entitled, "My Closing Costs Are Worth What?"

Harris said Todd used her Apprentice success "to lull unsuspecting victims into her scheme to defraud," according to a Palm Beach County Circuit Court lawsuit filed against Todd by Harris earlier this month.

More specifically, Harris claims Todd defrauded her by inducing her to buy a Texas home in a deal stuffed with financial extras for Todd, "including overcharges and illegal charges, none of which were disclosed." As a result of the added closing costs, plus a high interest rate mortgage Harris couldn't afford, the property is in foreclosure and Harris' credit is ruined, the lawsuit claims.

Harris is suing Todd, mortgage broker Michelle Caldwell, and Todd's company, Kendra Todd Group, a dissolved Florida corporation formerly based in Hypoluxo. The suit, which includes allegations of fraud and breach of fiduciary duty, seeks unspecified money damages.
...
In her lawsuit, Harris claims Todd called the Obra purchase "a fantastic investment opportunity" and that only a few lots still were available for sale. Swayed, Harris said she gave Todd a $7,500 deposit for the purchase of a $88,820 home, the lawsuit says.

Things went south soon after that. Harris's suit said she was told the home would be equipped with appliances. But when Harris went to see the home, she learned the appliances weren't included - but could be purchased through the mortgage loan. So another $1,000 was added to the mortgage, the lawsuit says. (Before it went bust, Obra gained a reputation for luring home buyers in with low-cost home prices and the promise of free appliances.)

In addition to the appliance snafu, other nasty surprises awaited Harris, including an extra $2,000 in deposits owed, the suit claims.

Harris claims she later learned Todd received "kickbacks" from Obra for bringing buyers to the homebuilder, the lawsuit alleges. But Harris' suit said Todd wasn't licensed as a broker in Texas, and therefore couldn't receive kickbacks - or brokerage fees, as Todd described them in closing documents, the lawsuit says.

Harris's suit said she also paid mortgage broker fees to Caldwell, even though she wasn't a licensed mortgage broker in Texas. Caldwell could not be reached for comment, and the company she worked for, Benchmark Mortgage Corp., is listed as a dissolved Florida corporation, according to state records.

Todd, who still owns a Boynton Beach home appraised at $219,276, also could not be reached for comment by presstime. Her publicist said she was in Seattle.
----
34 Baytree Cir, Boynton Beach, FL
3 beds, 2.0 baths, 1,577 sq ft
Zestimate®: $180,000

Sale History
04/23/2004: $207,000

Property Appraisal

Barack Hussein Obama

Barack Hussein Obama, President, USA
As if the housing debacle couldn't get any worse, along comes the Commander in Chief Thief to bring "financial rape" to the American Public (The Dumbest Thing I've Seen Yet, Denninger).

2009-06-19: Obama’s Mortgage Program
June 19 (Bloomberg) -- President Barack Obama’s program to help more homeowners refinance may be expanded to include borrowers who owe more than 105 percent of their homes’ values, Federal Housing Finance Agency Director James Lockhart said.

The Obama administration is considering allowing Fannie Mae and Freddie Mac to refinance loans with current loan-to-value ratios of 125 percent or higher, Lockhart said at a National Association of Real Estate Editors Association conference in Washington yesterday.

Roxie Chilcott, Part 2

Roxie Chilcott, Mortgage Broker??
(Part 1)

Well, well, well, what do we have here? I was perusing some old HBHS® posts and after seeing Roxie I thought I would do a little internet search to see if there was any new, publicly-available information on our mortgage broker sweetheart. And what do I find...

Link: Foreclosure Listing

And, San Diego Source: PUBLIC NOTICES (then select "Trustee's Sales")
Notice is hereby given that RECONTRUST COMPANY, N.A., as duly appointed trustee pursuant to the Deed of Trust executed by ROXIE ANN CHILCOTT, AND KEVIN RICHARD KELLY, WIFE AND HUSBAND AS JOINT TENANTS, dated 11/10/2006 and recorded 11/17/06, as Instrument No. 2006-0820873, in Book, Page 11705), of Official Records in the office of the County Recorder of San Diego County, State of California, will sell on 01/22/2008 at 10:00AM, AT THE SOUTH ENTRANCE TO THE COUNTY COURTHOUSE, 220 WEST BROADWAY, SAN DIEGO, CA at public auction, to the highest bidder for cash or check as described below, payable in full at time of sale, all right, title, and interest conveyed to and now held by it under said Deed of Trust, in the property situated in said County and State and as more fully described in the above referenced Deed of Trust. The street address and other common designation, if any, of the real property described above is purported to be: 4046 CAMINITO ESPEJO, SAN DIEGO, CA, 921071521.

Reviewing the house details, it was purchased in '95 for $160K and it sold for $415K after the foreclosure. But the loan amount shown in the foreclosure listing is $468K. Livin' high on the HELOC? Out of curiosity, would this loan have legal recourse?

What is even more fascinating about this foreclosure is that it occurred near the same period of time that Roxie was serving as Pres. CA Assoc of Mortgage Brokers (San Diego Chapter) and was being quoted in the San Diego Union-Tribune (Dec. 07).

4046 Caminito Espejo, San Diego CA 92107
3 beds, 2.5 baths, 1,434 sq ft
Recently Sold: $415,000

Sale History:
06/13/2008: $415,000
02/28/1995: $160,000

Kendra Todd Meets God

Ever notice that when people reach bottom and they can't pimp their BS anymore, they turn to god. Go check out some of Kendra's more memorable past remarks, HERE.

Kendra Todd: "Money is God" (see below)
WTF!!!

Kendra Todd: "the Lord will guide us through this financial crisis"

Wait a second, didn't she help guide people INTO the crisis??

700-Club Video

Kendra Todd: Turn Passion Into Prosperity
“I’m a real estate investor, but that’s just one facet of one part of a bigger picture – teaching people how to develop a healthy attitude and mindset towards money,” she said.

Her best selling book, Risk & Grow Rich targets the challenges and importance of taking risks to create wealth, and directly confronts how our relationship to risk affects our lives.

Her team's main mission is to match buyers with properties that fit their goals, and to help people grow one step closer to financial freedom. And, although Kendra has an in-depth background in real estate, her main goal is equipping people with the knowledge that success and wealth comes from God.

“I’m a strong Christian, and I’m getting ready to launch a Christian biblical based approach to making and saving money, tithing and giving,” she said. “I am getting ready to do what I am passionate about. I want to empower people to create a real positive relationship with and perspective on money, and realize it’s all God.”

Kendra also specializes in financial literacy and believes that it’s important to learn how to save and not be indebted to anyone; learning the biblical foundation on how to approach money and setting yourself up for retirement is key, especially during this current economic crisis. (Hey, what happened to tapping sweet home equity? See: My House is Worth What? )

“It isn’t about you. It’s all God,” she said. “That’s something that I really put out there as one of the fundamental approaches to developing a successful mindset. Turn off the television; the Lord will guide us through this financial crisis. Don’t get overly excited about what the news is saying. Don’t let that dictate how you feel about your current situation.”

Santa Clara Fishing

Is it really a good time to buy?
Is SillyCon Valley really immune?
Answers: No and No

Fasten your seatbelts, SillyCon Valley, the day of reckoning is appoaching.

Here's a random example of the insane bubble.
$630K at the peak.
He $HOOT$, he $CORE$!!!
(but they better convert some of that fiat profit to tangible assets; one way or another, it all has to be given back)

3173 Cabrillo Ave (or Movoto)
Santa Clara CA 95051
3 beds, 2.0 baths, 1,078 sq ft

Sale History
06/25/2008: $500,605 *
05/19/2006: $630,000 (Buy now or be priced out forever! Really?)
06/29/1995: $210,000

For Sale: $430,000

Got Gold?

Is this going to be a growing trend???

Things are getting very, very interesting.

And did you see silver bust through $16?

2009-06-01: Northwestern Mutual Makes First Gold Buy in 152 Years
June 1 (Bloomberg) -- Northwestern Mutual Life Insurance Co., the third-largest U.S. life insurer by 2008 sales, has bought gold for the first time the company’s 152-year history to hedge against further asset declines.

“Gold just seems to make sense; it’s a store of value,” Chief Executive Officer Edward Zore said in an interview following his comments at a conference hosted by Standard & Poor’s in Brooklyn. “In the Depression, gold did very, very well.”

Northwestern Mutual has accumulated about $400 million in gold, and Zore said the price could double or even rise fivefold if the economy continues to weaken. Gold gained 10 percent last month, the most since November. The commodity has more than tripled since 2000, rising for eight straight years. Gold futures for August delivery slipped $4.80 to $975.50 at 4:03 p.m. in New York.

“The downside risk is limited, but the upside is large,” Zore said. “We have stocks in our portfolio that lost 95 percent.” Gold “is not going down to $90.”

Alt-A Bomb

I haven't done this in a while, so lets do some detective work and poke at house debtors.

Here was the story:
2009-05-30: Alt-A Loans, Second wave of foreclosures ahead
Refinancing three years ago into a pay-option loan allowed Kristi and Marvin Laron to avert a jump in the monthly cost on the original loan the couple used to purchase their Cloverdale home. The loan’s minimum payment was $400 lower than their previous mortgage payment.

“Our whole goal was to pay less,” Kristi Laron said. “We figured we were going to refinance again. Who knew what was going to happen.”

Now the Larons are stuck with the loan and face a $1,000 hike in their monthly mortgage payment, boosting it to about $3,200. The couple can’t refinance because they owe more than the house is worth. Their lender has denied requests to change the loan and avert the payment jump, primarily because the couple has not fallen behind on payments and doesn’t have a financial hardship.

“We’re trying to avoid foreclosing on our house. We’re trying to do the right thing and nobody wants to help,” Kristi Laron said. “We both have jobs and we can’t really complain except for wondering what the future holds.”

Here is the house:
433 Reisling, Cloverdale, CA
Z-Estimate: $340,000
Sold: 1/20/2005
Sale Price: $400,000
2008 Property Tax: $5,361

There is a house for sale in the neighborhood for $300K. As the bomb starts going off, how many houses in this neighborhood will succumb to foreclosure? And check out the property taxes; the price of "ownership".

Was their long-term plan to continue refinancing to keep their house ponzi going?

Final Question: Who will help the Larons?
(click HERE for answer)

Pink-Slip Capitals

2009-05-19: America's Pink-Slip Capitals

#4: Los Angeles, Calif

Mass Layoffs: 100
Workers Affected: 10,594
A state budget crisis is hurting government budgets. In April, the Los Angeles Unified School District voted to lay off 5,000 teachers, school administrators, counselors and other employees.

#6: San Francisco, Calif
Mass Layoffs: 50
Workers Affected: 7736
The City by the Bay is being hit by market turmoil as financial heavyweights headquartered there, like Wells Fargo, Barclays Global Investors, Charles Schwab and Visa thin their ranks to survive hard times.

#10: Riverside, Calif
Mass Layoffs: 19
Workers Affected: 4,107
Collapsing home prices have caused mayhem in the inland empire economy leading to sweeping reductions in payrolls. State budget cuts have hit construction projects and government workers, too.

Silicon Valley: Cracks in the Foundation

Silicon Valley... it's different here.

No, not really, but that is the kind of ridiculous thinking that permeates the mentality of people living here.

Silicon Valley, AKA 'Self-Entitlement Valley', 'Silly Valley', etc...

I know someone in Santa Clara that paid $850K for a house in '05--one of those new, packed-in, little communities. They owe $750K and the Z-est is $600K; maybe it would sell for $550K today. I then searched 18 houses immediately surrounding this one; all purchased in '05 for $750K-850K. Unless they put massive dollars down, every house debtor is seriously underwater and ALL should walk away. But this is Silicon Silly Valley, it's different here. Wrong. At bottom, these boxes should be priced around $350K. Things are just starting to get interesting, but most of the debtors are in serious denial.

After the dot-com garbage and now the exploding real estate debacle, where will the next phony injection of wealth come from for Silicon Valley?

2009-05-24: Recession suddenly humbles high-tech sector
Five miles away, former indoor plant specialist Michael A. Jones is having what he calls "a humbling experience" at a nonprofit food pantry, choosing dented cans of corn and tuna, a crunched box of Rice Krispies and some soon-to-expire milk to supplement his food stamps.

Jones used to gross $12,000 a month as an indoor horticulturist for high tech companies, restaurants and car dealerships (SAY WHAT?? $12K/month for a glorified gardener?!), although not Silicon Valley Auto Group. Then "everyone cut back all at once and we had to shut down," he said. "It happened fast."

The Associated Press Economic Stress Index, a month-by-month analysis of foreclosure, bankruptcy and unemployment rates in more than 3,000 U.S. counties, shows that last year, as the national economy tanked, high tech economic centers from California's Silicon Valley to North Carolina's Research Triangle were apparently "recession-proof" with increasing jobs and stable housing prices.

Last fall, everything changed. When previously invested funds petered out, there was no new capital. Bankruptcies, foreclosures and unemployment in high tech regions spiked, and are now at some of the highest levels in the country.

For example:
-- Santa Clara County, home to Silicon Valley, saw bankruptcies soar 59 percent in the past 12 months, and projections are that they're still climbing;

"We had hoped we might stay insulated from the global economic crisis, and for a long time we were," said Silicon Valley Network president Russell Hancock. "But then it caught up with us and now everyone is laying off."
Everyone?
"There isn't anybody who isn't laying off," he said, then draws a long breath before reciting this list: "Microsoft, Intel, Hewlett Packard, Sun, Yahoo, Apple, Google." He pauses a moment to consider that. "Google. When Google is laying off you know something is going very wrong." (What's wrong is Google, itself.)

"Folks believe that because we're in the Silicon Valley with million-dollar homes and billion-dollar businesses, hunger and homelessness don't exist. But in fact it's getting much worse, and it's just really frightening," he said.

Timothy Geithner

Timothy Geithner
And the taxpayer continues to pick up the tab for the mistakes, recklessness, and stupidity of others.

2009-05-20: Geithner Says Toxic-Asset Plan to Start in Six Weeks
May 20 (Bloomberg) -- Treasury Secretary Timothy Geithner said policy makers plan by early July to begin helping banks dispose of illiquid assets, in the U.S. government’s next step to end the worst credit crisis in decades.

“Working with the Federal Reserve and the FDIC, we expect these programs to begin operating over the next six weeks,” Geithner said in testimony to the Senate Banking Committee today in Washington.

The Treasury’s Public-Private Investment Program will use $75 billion to $100 billion of government funds to finance sales of as much as $1 trillion in distressed mortgage-backed securities and other assets. The effort has two components, which the Treasury will manage in conjunction with the Fed and the Federal Deposit Insurance Corp.

UCLA Anderson Forecast

Why does this group continue to be published? But if it's predicitions you want, here are 10 that are probably much more accurate than Anderson Forecast
America By 2012: 10 Dire Predictions

And follow the link for Mark Shniepp. Is this the kind of "expert" you want to follow?

2009-05-15: Home price fall nears bottom
Although 2009 will be a “throwaway year” for San Diego County, with double-digit unemployment, growing office vacancies and declining retail sales, local housing prices will hit bottom this fall, heralding an eventual recovery, UCLA's Anderson Forecast predicted in a report to be released today.

The Anderson Forecast, one of the state's most followed teams of economic analysts, predicted that housing prices will start rising steadily by the second quarter of the year, starting with a rebound in the price of existing single-family homes.

“When it is generally perceived that selling values have reached a bottom, sideline buyers will enter the market and conventional home sales will dominate the real estate recovery,” UCLA economist Mark Schniepp said. “Reported selling values for homes will reverse, slowly at first, and then rise more convincingly.”

Oh, yeah, Anderson Forecast?

2008-03-11: Experts' forecast sees no recession
UCLA's Anderson Forecast, which previously has been ahead of the curve in forecasting the downturn of the California housing market and the resulting decline in the economy, predicted yesterday that the state and nation would not fall into a recession.

“The data don't yet add up to a recession, and there is nothing to challenge the basic story of sluggishness that we have had for two years. Don't worry, be happy,” said Edward Leamer, director of the forecast, the state's best-known economic report.

Tell us more, WHORES!

2006-05-04: County home prices to flatten
With home sales sharply declining and values hitting a plateau, economists from the UCLA Anderson Forecast predicted yesterday that residential real estate prices in San Diego County will remain flat through 2011.

Ratcliff said no crash in prices is likely since the economy is so healthy. Generally, home prices fall only when large numbers of workers lose their jobs. [LIKE RIGHT NOW?]

“Home prices will plateau but not depreciate,” Ratcliff said. “Home prices only fall during recessions.”

Trampled Green Shoots

I like lists of things. Here is one from Jim Willie...

2009-05-15: Trampled Green Shoots
What follows is a laundry list that puts the USEconomy halfway between the Intensive Care Ward and the National Morgue:

• Endless War spending could subsidize every household in America with $1000 per year
• Income is trending down in the United States, England, and Japan
• US banks loan loss reserves are at a 20-year low while profound losses continue
• Of the nearly 9000 US banks, 1575 of them posted a Q1 loss
• Bernanke claims $2 trillion is needed by the big US banks, but they pass the Stress Test
• Municipal bonds and state finances are disasters, as they each appeal for USGovt aid
• A shocking 20% of US homeowners have loan balances greater than their home values
• Half of modified loans result in foreclosure within several months
• Jobs report for April revealed jobless level at 8.9% (massaged) and 15.8% (actual)
• Jobs Report for April included 66k worse revised job losses for March and February
• Continuing jobless claims at 6.56 million, grew 220k just last week
• CALPERS pension fund is insolvent, USGovt pension PBGC guarantee fund in deep deficit
• FDIC requested $500 billion in additional funds to cover bank failures (giant failure coming)
• Car sales still down 40% annually, with steep Japanese car sales declines also
• Detroit carmakers are closing down plants, with huge ripples through entire supply chain
• GM & Chrysler restructures are extremely likely to result in Chapter 7 liquidation in time
• GM burned $1.3B in Q1, burns $113 million per day, unable to transition to green cars
• Business investment down 38% in Q1, a RELIABLE LEADING INDICATOR
• Durable goods up 9% in Q1, but only after Q4 was pushed down from bank shock
• Inventory reduction not key, but rather inventory/sales ratio, since sales way down
• Economic contraction despite lower energy costs from crude oil, natural gas, gasoline
• Housing was false foundation since 2002, now in stubborn decline, the Giant Albatross
• Distress sales make up 40% of all housing sales, led by underwater sales and foreclosures
• Cramdown Law rejection means open season on foreclosures, more huge bank losses
• Banks admit that home loan are not modified after all, a revolving door to foreclosure
• Option ARMs, Jumbos, and Commercial mortgage defaults are ramping up fast
• Commercial mortgage bonds have $70-100 billion that cannot be refinanced, sure to default
• Staggering decline in consumer credit, -80% in Q3, minus $31.7B in Q4/Q1