A New Low in High College Debt

Kelli Space (-cadet)
This is absolutely beyond belief. The ignorance in believing an education justifies this kind of expense and debt is mind-blowing. But to help defray the cost of this degree in sociology, she has a website where you can contribute to paying off her debt. Her site is called twohundredthou.com -- how sickening. Perhaps I should start a site where people could contribute towards the purchase of gold bullion, for myself, of course.

The USA truly deserves a hyperinflation event to wipe out debt, pensions, savings, etc. It will take a life-changing event to wake people up to reality.

As she states on her site:
I was 18 and the first person in my family (including extended family!) to attend college. Therefore, not only was excitement consuming me, but my parents didn't exactly know how college would or wouldn't affect my salary in the future.

Therefore? Huh? Clearly, the family needed someone with an accounting degree. Hopefully, she's the last to attend college, and perhaps they took the manual from her family on procreating.

2010-12-03: Is the College Debt Bubble Ready to Explode? (YES)
Kelli Space, 23, graduated from Northeastern University in 2009 with a bachelor's in sociology — and a whopping $200,000 in student loan debt. Space, who lives with her parents and works full-time, put up a Web site called TwoHundredThou.com soliciting donations to help meet her debt obligation, which is $891 a month. That number jumps to $1,600 next November.


In creating the site, Space, of course is hoping to ease her financial burden, but it's "mainly to inform others on the dangers of how quickly student loans add up," she said. So far she's raised $6,671.56, according to her site.

Space is just one example — albeit an extreme one — of a student loan bubble that may be about to burst. Over the last decade, private lenders, abetted by college financial aid offices, eagerly handed young people hundreds of thousands of dollars to earn bachelor's degrees. As a result of easy credit, declining grants and soaring tuitions, more than two-thirds of students graduated with debt in 2008 — up from 45 percent in 1993. The average debt load is $24,000, according to the Project on Student Debt.
...

Going, Going, Sweet Equity Gone!

It's the final chapter for Mr. Marshall Whittey. He was one of the poster children for better living through tapping home equity, telling his story on the pages of the NY Times. But his story is not unique. The sweet home equity of the housing bubble created a thriving economy, enabling an entire nation to live beyond its means. Unfortunately, all ponzi schemes must come to an end. And now, three years after the NY Times story, Mr. Whittey must give up his primary residence, which is deeply under water.

2007-11-10: Marshall Whittey
2009-08-23: Sweet Home Equity Gone Sour

Personal Residence:
404 Alysheba Ct, Reno, NV 89521
4 beds, 2.0 baths, 2,017 sq ft

Pending Sale: $235K

06/08/2005: purchase $283,900 with Universal American
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)

Gonzalo Lira Makes a Call

Well, these are some bold predictions by Gonzalo Lira. Let's track them and see how it goes. But if it goes this way...


2010-10-26: Economics Isn’t a Dismal Science—It’s an Ersatz Religion
This will bring hyperinflation by December 2011; severe social disruption starting in Q3 of 2011 and accelerating through Q4, before really exploding in Q2 of 2012; the dissolution of the European Union by December of 2012; and very likely—insane as it might now sound—a de facto dictatorship in the United States.

...

Chris Dodd, Racketeer Lawman

Chris Dodd, Part 3, Part 2, Part 1
Senator D-Connecticut

Let me see if I understand this...

Chris Dodd, saviour of the US Citizen Consumer, is responsible for hearings on the foreclosure racketeering.

Chris Dodd, friend of Angelo Mozilo, is responsible for hearings on the flawed mortgage paperwork.

Chris Dodd, friend of Fannie and Freddie, is responsible for bringing the criminal banks to justice.

Just checking.

2010-10-09: Up to 40 states plan inquiry into foreclosure data
WASHINGTON – The attorneys general of up to 40 states plan to announce soon a joint investigation into banks' use of flawed foreclosure paperwork.
...
And Sen. Christopher Dodd, D-Conn., the chairman of the Senate Banking Committee, said he would hold a hearing on the issue next month.

Sonoma Canary, Part 3

Sonoma Canary, Part 1, Part 2

Where is the recovery?

Notices of Default and Foreclosures in Sonoma are showing no signs of slowing. And we have an impressive increase in foreclosures, with 52 more in September than August. The NODs also score a high for 2010.



NODs:
. . '08 . '09 . '10 . '11 . '12
Jan 451 . 394 . 255 . 339 . 281
Feb 513 . 468 . 380 . 293
Mar 498 . 553 . 407 . 379
Apr 509 . 497 . 354 . 275
May 505 . 491 . 389 . 285
Jun 492 . 562 . 303 . 300
Jul 460 . 615*. 275 . 228
Aug 482 . 425 . 383 . 422
Sep 191 . 399 . 419 . 355
Oct 178 . 379 . 328 . 372
Nov 241 . 320 . 346 . 353
Dec 500 . 319 . 320 . 212

* New Monthly Record
* Sep '08: CA Law SB 1137 takes effect
* Dec '08: CA Law SB 1137 FAILS

Trustees Deeds:
. . '08 . '09 . '10 . '11 . '12
Jan 164 . 166 . 181 . 190 . 179
Feb 238 . 151 . 155 . 180
Mar 221 . 121 . 209 . 207
Apr 236 . 123 . 215 . 182
May 280 . 149 . 184 . 175
Jun 324 . 271 . 169 . 179
Jul 341 . 202 . 179 . 228
Aug 372 . 231 . 188 . 204
Sep 303 . 183 . 240 . 175
Oct 195 . 210 . 192 . 161
Nov 184 . 218 . 120 . 143
Dec 229 . 195 . 162 . 145

Two (2) Owners, Whole Lot of HELOC

Foreclosed Home Sold to Two Separate Buyers
* Partying bachelors... I don't think so.

What is more bizarre and comical about this is that the reporter states that the house was initially $712,000 (video link at bottom). The current owners paid $365,000. But there is no record of a $712,000 sale for this house. THAT IS THE REAL STORY!!! MSM, WAKE UP!!!!

Here is the house:
42 Vista Encanta #42
San Clemente, CA 92672
03/11/2010 Sold $365,000
05/30/1997 Sold $168,000

There are no records of a $700K+ sale of this house. And you know what that means... livin' High on the HELOC. I would love to see the details on this because it's hard to believe they hit the home ATM for $544K!!!


2010-09-17: Foreclosed OC Townhome Mistakenly Sold Twice
SAN CLEMENTE -- A paperwork mix-up is being blamed for a real estate snafu that resulted in one townhome being legally sold to 2 separate parties.

It all started in March when Douglas Garhartt and Brandon Lively closed escrow on a foreclosed townhome in San Clemente.

It was a great deal: three-bedrooms for $365,000, well below the $712,552 owed on the loan.

Just days later an investment group, Saint John Trust, bought the home at auction.

Video: FORECLOSED HOME SOLD TO TWO SEPERATE BUYERS

A Gift From Jim Sinclair - Part 2

In December of 2008, Jim Sinclair offered a Gift to all CIGAs. I posted that here: Part 1. What fascinated me at the time was that he was willing to make such a bold prediction about the price of gold, well in advance. Since that time, Gold has risen about $370/oz (price chart at bottom), and I am very pleased with my accumulation. Faced with skepticism and scorn, I'm sure, Jim responded today with his absolute belief in what lies ahead for Gold.

I am not a gold bug. What I am is someone that is averse to risk. The risk I detected several years ago was in the very thing that was supposed to be our store of "wealth"... the US Dollar. The only question I'm asking myself right now is, "How much more?"

2010-09-07: Strapping In For The Big Move
Dear CIGAs,

Now that expectations for Gold at very significant prices are being offered by various rational sources, there is one thing you can be sure of. That one thing is $1650.

I am getting many emails asking how it is possible for the gold price to reach $1650 by early January.

I suspect these are far out in time, out of the money call option buyers that have done exactly what I have warned against. That is the using of options with an investment outlook.

Options are speculations that you never hold past the half way to expiry point, but instead switch to further out months if you believe in what you are doing.

Those that pre-offer gold cannot trade it at $1650 in January because of the short time versus the big moves. They clearly have never experienced the gold run in late 1979 and early 1980.

I will stand with what I have said for nearly 10 years. Gold will trade at $1650 on or before January 14th, 2011. That never made me want to buy expensive in time call options.

It has given me the courage to invest in gold without margin both in shares and bullion.

There is no doubt in my mind that $1650 will occur in early 2011. I have told you that Martin Armstrong, a master timer, feels that gold will trade higher and face a reaction in middle to late June of 2011.

The gold banks are throwing blocks to the price as we approach $1262. This is a major waste of time and money as gold is going to and through that price. The only argument is whether gold will hit $1650 in January 2011 or $3000-$5000 in June 2011.

Do you have any idea how much money has been made by those that bought gold modestly and in cash only on every reaction and sold into the rhino horns? It sounded stupid when I suggested this tactic for the wannabe traders.

I ran 22,000 long gold contracts in the New York and London markets in 1978 to 1980. Back then that was a big number. Today if I have a conviction, I simply play with everything I have and screw credit. The only credit I would use as a pro trader is options.

Those of you who follow me closely know that I am NOT kidding. This is the time when PRICE and TIME meet each other.

This is the time now as it was in 1979 that I went throttle to floor.

This is the time now as it was in 1979 that I am committing 100% of all the cash I can accumulate to what I believe in.

This is the time when all I have planned for is falling into place for the final and enormous pay day. However, I will not and you should not violate discipline, as I have always tried to teach you.

Option are never held past 50% of time left when you purchased them.

If I am wrong about gold at $1650 on or before 14/01/11 it only means gold will trade much higher than $1650 five months later.

As far as being long and wrong, that is something I definitely am not.

Respectfully,
Jim

Gen-X/Y, Clueless again - Kerrie Tidwell

Allison Brooke Eastman & Kerrie Tidwell

What is really interesting about these stories is that these women are willing to air their dirty and stupid laundry for the whole world to see. Yes, Ms. Tidwell, more cleavage and your boyfriend will pay off your debt. Someone needs to teach her about Return on Investment.

2010-09-03: How Debt Can Destroy a Budding Relationship
Nobody likes unpleasant surprises, but when Allison Brooke Eastman’s fiancé found out four months ago just how high her student loan debt was, he had a particularly strong reaction: he broke off the engagement within three days.
...
But as the couple got closer to their wedding day, she took out all the paperwork and it became clear that her total debt was actually about $170,000. “He accused me of lying,” said Ms. Eastman, 31, a San Francisco X-ray technician and part-time photographer who had run up much of the balance studying for a bachelor’s degree in photography. “But if I was lying, I was lying to myself, not to him. I didn’t really want to know the full amount.”
...
These were the questions that weighed on Kerrie Tidwell. A third-year student at the Medical College of Georgia and an aspiring emergency room doctor, she doesn’t worry so much about her ability to pay back her loans.

Ms. Tidwell, 26, is involved in a serious relationship with Stefan Kogler, an architect who is a native of Austria and living in Vienna. To Europeans, who often pay little or nothing toward their university studies, the idea of going deeply into debt to get educated is, well, foreign.

Ms. Tidwell feels no guilt about the $250,000 in debt she will probably run up, including some from a master’s degree program she completed in London, where she and Mr. Kogler met. “I didn’t acquire it because I go out and shop a lot,” she said. “It’s because I’m doing something that I’ll love for the rest of my life.”

Sonoma Canary, Part 2

Sonoma Canary, Part 1

In light of the recent articles about banks dragging their feet on foreclosures to avoid flooding the market, the NODs for August '10 are not forecasting a rosy picture for Sonoma. These are not healthy numbers.

And with 250,000 active Option ARM mortgages in California, this debacle has a long time to run its course. Here are 13 Charts from Dr. Housing Bubble on the weak housing market--use it wisely.

I thought this was interesting. Checking NODs and Foreclosures for September, the following name came up, repeatedly: CARINALLI. Doing a little search on the name gave me this article:

2009-09-30: Carinalli creditors respond to bankruptcy filing
One day after real estate financier Clem Carinalli declared bankruptcy, the longtime Sonoma County families whose investments helped him build a real estate empire for the most part remained either publicly supportive or silent.
- All totalled, there were about 5 foreclosures and approximately 20 NODs over the past several months for this family of investors.

43 Foreclosures to start September (through Sep 3) is a fast pace. That would yield about 301 for the month if it remains steady at that pace.

NODs:
. . '08 . '09 . '10
Jan 451 . 394 . 255
Feb 513 . 468 . 380
Mar 498 . 553 . 407
Apr 509 . 497 . 354
May 505 . 491 . 389
Jun 492 . 562 . 303
Jul 460 . 615*. 275
Aug 482 . 425 . 383
Sep 191 . 399 . 400 through Sep 29
Oct 178 . 379
Nov 241 . 320
Dec 500 . 319

* New Monthly Record
* Sep '08: CA Law SB 1137 takes effect
* Dec '08: CA Law SB 1137 FAILS

Trustees Deeds:
. . '08 . '09 . '10
Jan 164 . 166 . 181
Feb 238 . 151 . 155
Mar 221 . 121 . 209
Apr 236 . 123 . 215
May 280 . 149 . 184
Jun 324 . 271 . 169
Jul 341 . 202 . 179
Aug 372 . 231 . 188
Sep 303 . 183 . 224 through Sep 29
Oct 195 . 210
Nov 184 . 218
Dec 229 . 195

"Maybe it will go away"

Shawn Schlegel, uber-Realtor / Tiny-Trump
"Maybe it will go away"... say it three times, and it will be so.

This realtard is quite a piece of work. And he's doing himself quite a disservice by airing his dirty laundry. If you're the lender and you see this story, you go out of your way to nail his ass, right?

2010-08-11: I won't pay it back
“I am not going to be a slave to the bank,” said Shawn Schlegel, a real estate agent who is in default on a $94,873 home equity loan. His lender obtained a court order garnishing his wages, but that was 18 months ago. Mr. Schlegel, 38, has not heard from the lender since. “The case is sitting stagnant,” he said. “Maybe it will just go away.”

Mr. Schlegel’s tale is similar to many others who got caught up in the boom: He came to Arizona in 2003 and quickly accumulated three houses and some land. Each deal financed the next. “I was taught in real estate that you use your leverage to grow. I never dreamed the properties would go from $265,000 to $65,000.”

Holycow on Holyoke

I'm sure this is a story repeated thousands of times... people buying houses, thinking they're getting a great deal, really proud of their decision. One of our favorite Housing Bubble Realtors Agents wrote about such a purchase, and how smart they were for it. It's easy to write with praise about these decisions when they happen, but how do they turn out in the long run? Let's take a look.

Here it is, courtesy of Sacramento Real Estate Gal:

2007-07-16: One Sacramento Neighborhood has Newcomers!
These are my new clients that just bought a home in Sacramento. They moved here from Florida and have the cutest accent.

It was such a pleasure working with them because they weren't the least bit jaded about the real estate market. They realized they were getting a good deal and jumped on it with no hesitation. The market analysis confirmed their happiness. Of course, it helped that they had done their own research online and knew the style and neighborhood of the home they were looking in.

They actually made an excellent purchase because of the following:
- they bought in a slow market
- they had done a lot (I mean A LOT) of research beforehand
- this one is the most important: the market analysis showed that homes in their neighborhood in a half-mile radius sold for anywhere between $30,000 more than they paid for their home to $200,000 more than they paid. Which means that every dollar they invest into the home will have more potential returns than say a neighborhood with a ceiling of say, $20,000 under all comps.

This is an excerpt from one of their emails:
"Thank you for all of your help and patience with this property and me! Thanks again. You are a wonderful agent."

Here is the house...

5001 HOLYOKE WAY, Sacramento, CA
4 beds, 2.0 baths, 2,155 sq ft
Year built: 1970
Sale History
11/09/2006: $326,000
Zestimate: $224,500 (Aug 8, 2010)

And here is the great big problem...

5009 Holyoke Way, Sacramento, CA
4 beds, 2.0 baths, 1757 sq ft
07/15/2010: $189,000

5101 Hemlock St, Sacramento, CA
4 beds, 2.0 baths, 2,126 sq ft
02/23/2010: $160,000

4910 Holyoke, Sacramento, CA

03/19/2010: $185,000

4906 Holyoke, Sacramento, CA
05/27/2010: $179,500

And I count no fewer than 7 foreclosures in the neighborhood, two of which are on Holyoke.
Put simply, this purchase was one of those life-impacting, bad decisions.

Addendum:
Calculated Risk just posted on a story about real estate Northeast of Silicon Valley. While it didn't touch on Sacramento, it does illustrate the continued problems in housing and unemployment in California. We've got a long way to go.
2010-08-09:

East of San Francisco: 20% Unemployment, House Prices off Sharply
In Stockton, which had one of the highest foreclosure rates in the nation, the median home price of $100,500 is down from $397,000 at the height of the boom — a stunning 74% drop.
-

Gen-Y: Stupid is and stupid does, I guess.

$100,000 in student loans and it's not even from a "coveted" Ivy League skool (sp).

Three words...

RETURN ON INVESTMENT.

2010-07-29: Gen Y: No jobs, lots of loans, grim future

Jordan Hueseman, 25, accrued roughly $100,000 in student loans at the University of Denver earning a bachelor's degree in international business and a master's in business administration. On the job hunt, he found his graduate degree sometimes hindered more than it helped.

“At one point, I applied to Whole Foods, hoping they might see some potential for me to move to some type of management position,” Hueseman said. “The e-mail I received from them said I was far too overqualified for any of their hourly positions and as such would not be considered for a position.”

Hueseman said that after one job application, he was told he should leave his degrees off his resume. Hueseman said he was tempted to follow the advice but couldn’t bring himself to do it.

College Bubble Hitting Mainstream

Carmen Gardiner, College Graduate

Psychology degree from Louisiana state and all I got was $80,000 in debt.

The MSM seems to picking up on the college bubble. It's nothing really new, though: College Bubble.

2010-06-10: My future is gone
...
Carmen Gardiner, 25, a 2007 graduate of Louisiana State University, is weighed down by her private student loans. Her debt is now about $80,000, and her monthly payments are more than $600. Gardiner's undergraduate degree is in psychology. She lives with her husband, who is still in college, and earns $13 an hour at a call center in Atlanta. They have a 6-month-old daughter.

She hasn't defaulted on her student loan. But she doesn't see much hope. Bankruptcy would not discharge her debt.

"I'm completely sour about the whole idea of going to college," she says. "My future is gone before I have a chance to make one. But if I could discharge this using bankruptcy, it would be better than winning the lottery."

Mo' Munna!

Ms. Cortney Munna,
College Debtor

Hey, at least she acknowledges the poor return on investment.


2010-06-01: More on Cortney Munna’s Student Loan Tale

First and foremost, I openly acknowledge my responsibility for my current situation, as well as the naïveté in my estimation of the return on investment of a “high quality” education and a liberal arts degree. My only explanation is that once I was in school, I didn’t think much about tuition beyond filling out the paperwork, and I did what I always had done: focused on my education.
...
In retrospect, it’s absolutely clear to me that I should have thought more about the cost of the education versus career prospects. I didn’t think of it as a purchase. It was always just the next step to take: Get into good school. Get decent scholarship. Work hard.

And have it all pay off in the end.

College Shame Edition: Ms. Cortney Munna

Ms. Cortney Munna, College Debtor

This gal could possibly be the College Bubble Poster Child.

A college degree, alone, is not a key to success. Obtaining a useful, practical degree that justifies the cost is imperative. And a "higher education" for the purely intrinsic value is reserved for the truly wealthy.

What does $97,000 in college loan debt buy you?
How about an interdisciplinary degree in religious and women's studies. WTF!!!

2010-06-01: Buried in Debt
Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she's been enrolled in night school, which allows her to defer loan payments.
...
How many people are like her? According to the College Board's Trends in Student Aid study, 10 percent of people who graduated in 2007-8 with student loans had borrowed $40,000 or more. The median debt for bachelor's degree recipients who borrowed while attending private, nonprofit colleges was $22,380.
...
Cortney could move someplace cheaper than her current home city of San Francisco, but she worries about her job prospects, even with her N.Y.U. diploma.

She recently received a raise and now makes $22 an hour working for a photographer. It's the highest salary she's earned since graduating with an interdisciplinary degree in religious and women's studies. After taxes, she takes home about $2,300 a month. Rent runs $750, and the full monthly payments on her student loans would be about $700 if they weren't being deferred, which would not leave a lot left over.

Janet Speer

Janet Speer, Home-ATM

Why are people still willing to come forward with their B.S. stories for all the world to see???

A comment left at the story says it all:

---- start -----
Let's look at the facts here with the key one being #2:
1) She bought the house at $100,000
2) It went up to $154,000 and she refinanced it at $154,000 which means SHE TOOK OUT $54,000 in cash.
3) Its now down to $120,000 and she cant afford mortgage so she is walking away.

So basically she bought the house with a loan, took out $54,000 in cash to do as pleases, now walking away. And we wonder why banks have struggled. This person took all of the upside ($54,000 cash out) and then walked away when it went down.

There are many sad stories of people losing their house. This is not one of them. This person got somewhere to live and $54,000 cash out over a period of years. They are the example of why the people are to blame for this problem just as the banks have a lot of blame to take. This is an example of a case where you should be just as mad at this person as you are at the banks as they both caused problems by their behavior.
---- end ----

Commentary at Calculated Risk: Is this really "Walking Away"?

2010-01-31:I'm walking from my underwater mortgage
-or- How I tapped my Sweet Home Equity and Now I'm Bailing
I stopped paying my $1,450-a-month mortgage on my 200-year-old, four-bedroom home in September 2008 -- after making the hard decision to walk away from my mortgage because it is hopelessly underwater.
...
This house originally cost $100,000. In 2005, as the housing market heated up and I needed cash, I refinanced it. An appraiser said it was worth $154,000 -- which I thought was too high but nonetheless accepted. I cashed out the house at that value.
-----

And here is the house...
327 church st, Royersford, PA
4 beds, 1.0 baths, 1,577 sq ft

Sonoma Canary

Below are the Notices of Default and Trustees Deeds for the county of Sonoma, as taken from the Sonoma County Assessor. I thought I would regularly post these as indicators of the real estate situation and "recovery" in California.

Note the drop in NODs and Trustees Deeds as the new California law (SB 1137) went into effect. It effectively delayed the foreclosure process, offering no real benefit or solution for house debtors. The numbers below appear to support its lack of effectiveness.

NODs are down in Jan 10', but Trustees Deeds are up. Lets watch that Alt-A bomb explode.

Sonoma Story: Calculated Risk article on the Alt-A bomb exploding in Sonoma.

July '09 sets new record for NODs!!

NODs:
. . '08 . '09 . '10
Jan 451 . 394 . 255
Feb 513 . 468 . 380
Mar 498 . 553 . 407
Apr 509 . 497 . 354
May 505 . 491 . 389
Jun 492 . 562 . 303
Jul 460 . 615*. 275
Aug 482 . 425 . 252 through Aug 20
Sep 191 . 399
Oct 178 . 379
Nov 241 . 320
Dec 500 . 319

* New Monthly Record
* Sep '08: CA Law SB 1137 takes effect
* Dec '08: CA Law SB 1137 FAILS

Trustees Deeds:
. . '08 . '09 . '10
Jan 164 . 166 . 181
Feb 238 . 151 . 155
Mar 221 . 121 . 209
Apr 236 . 123 . 215
May 280 . 149 . 184
Jun 324 . 271 . 169
Jul 341 . 202 . 179
Aug 372 . 231 . 123 through Aug 20
Sep 303 . 183
Oct 195 . 210
Nov 184 . 218
Dec 229 . 195

David Crisp, Part 3

David Crisp,
Formerly of Crisp & Cole

The noose tightens!!!

(thanks, fraudyouwant)


2010-01-25: Fourth guilty plea in Crisp & Cole case entered
FRESNO -- An almost imperceptible pause was the only apparent emotion displayed as 31-year-old Megan Balod pleaded guilty to felony wire fraud and other charges in a Fresno federal courtroom late Monday afternoon.
...
"The investigation is continuing," Assistant U.S. Attorney Sheila Oberto said after the proceeding, referring to the overall federal mortgage fraud case related to Crisp & Cole operations. Oberto said she could not comment on specifics of the open investigation.
...
Balod's sister, Jennifer Crisp, is married to David Crisp, the former co-owner of Crisp & Cole along with Carl Cole. Both men have had their real estate licenses revoked by state regulators and numerous civil lawsuits are in play against Crisp, Cole and their failed company.

No criminal charges have been filed against the Crisps or Cole. (YET!)