Sunday, August 23, 2009

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.

Sunday, August 16, 2009

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.

Monday, August 10, 2009

Alt-A Bomb II

2009-08-06: Deutsche Sees 48% of All US Mortgages Underwater in 2011
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%.

Sunday, August 2, 2009

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.

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