$100 Bills = Toilet Paper?

John Williams of Shadow Government Statistics provides some insights into inflation and a sign to indicate that hyperinflation has arrived. His advice to prepare: physical gold, hold assets outside of the US dollar, and have bartering goods (e.g. scotch).

Video: $100 Bills = Toilet Paper?
(click link or image; use right-mouse click to open in new window or tab)

Revolt Brews in California Counties

Not your everyday, normal recession, now is it?

2009-02-09: Revolt Brews in California Counties
Counties in California say they've had enough – and they aren't going to take it anymore.
In what amounts to a Boston Tea Party-style revolt against the state Capitol, they're threatening to withhold money.

Los Angeles is considering such an option. And Colusa County supervisors said they authorized payment delays for February.

"We didn't vote on it, because I don't think anybody wants to go to jail," Colusa County Supervisor Kim Vann said.

Closer to home, Sacramento County is planning to file a lawsuit this week against the state and Controller John Chiang for withholding millions of dollars – much of it for social service programs.

"The Legislature authorized those expenditures, and (the controller) has decided to withhold it," said Susan Peters, chairwoman of the Sacramento County Board of Supervisors. "I believe it's possible other counties will be joining in the action."

Riverside County is looking at a similar lawsuit but plans to go one step further. It authorized going to court to relieve it from having to provide state-mandated services without state funding.
...

College/University Bubble...

...CHECK.

U.S. Housing Slump Has ‘Just Begun'

2009-02-05: U.S. Housing Slump Has ‘Just Begun,’
Says Forecaster Talbott

Feb. 5 (Bloomberg) -- Let’s say you own a $1 million home in Santa Barbara, California. The house seemed like a steal when you bought it with that adjustable-rate mortgage in 2005. You still love the white beaches and those yachts bobbing up and down in the harbor.

Then you awaken early one morning, troubled that your monthly payments will soon double. You go out to pick up your newspaper and see for-sale signs on five houses on the street. One identical to yours just sold for $500,000.

Are you going to pay the bank $1 million plus interest for your place? John R. Talbott, a former investment banker for Goldman Sachs, poses that hypothetical question in his latest book of financial prophesy, “Contagion.”

His answer: “I don’t think so,” he says. “If I’m right, then this housing decline has only just begun.”
...
Five More Years
Talbott’s latest predictions are sobering. The U.S. is only halfway through the total potential decline in housing prices, he says. Home values will continue to deteriorate for four to five years, he forecasts. Adjustable-rate mortgages issued in 2004 and 2005, for example, are only now resetting for the first time, he notes.

Bankers may “try to blame the crisis on poor Americans with bad credit histories, but that is not the real cause of the housing crisis,” he says. “The greatest home-price appreciations and the homes most subject to price readjustment are in America’s wealthiest cities and its glitziest neighborhoods.”
...
How did we get into this mess? Talbott blames everyone from average Americans who caught “the greed bug” to hedge funds and credit-default swaps. The single biggest error, he says, was for U.S. citizens to allow their national politicians to take large campaign contributions from big business and Wall Street -- a theme Kevin Phillips developed in “Bad Money.”

‘No Accident’
“This crisis was no accident,” he says. It began, in Talbot’s view, because the U.S. government was “co-opted” into deregulating the financial industry. Politicians were “paid to deregulate industry,” taking billions of dollars each year in campaign contributions.

His investment advice for this prolonged recession: Hang on to cash and invest in gold or Treasury Inflation-Protected Securities, or TIPS. If he had to invest in stocks, he would put his money in China.

Crazy Carnes - Final Chapter(?)

Chandra & Michael Carnes, Loco House Buyers Debtors Renters
(Part 1)

The final chapter of the Carnes' has arrived... for this bubble, that is. They started their real estate adventure by "purchasing" a million dollar abode (5903 Mountain Hawk ) under the guidance of super realtor, Chris Nunez. When the benefits of interest only payments disappeared, they managed to sell at a small loss and "purchase" another house (1086 Elsbree Ln ). This, however, was a price too far, and a little over a year later they were forced to sell using a short sale. But here is an alternative thought: they purchased this house for its peak sales price and then months later put it back on the market. Hmmmmm...

Sale History
07/29/1994: $241,500
09/21/2007: $640,000 - peak sales price
Feb 2008 - back on market - why so soon??
01/23/2009: $525,000

Zillow: 1086 Elsbree Ln Windsor CA 95492
Price Paid: $640,000
Days on Zillow: 292
For Sale: $669,000 $659,000 $599,000 $540,000
Recently Sold: $525,000

On the sale price of $525K, the buyers are foolish. Unless they have money burn (which is what they're doing), they'll watch the value of this house fall to under $400K. My guess is that they sold a few years back and have been renting, waiting for that "bottom", but most people still don't grasp the magnitude of the economic problems this country is facing.

This story is probably repeated hundreds of thousands of times all over the country. What made the Carnes' story unique is that they openly discussed their insane spending spree on PBS--NOW Part 1, Part 2.

3552 Kendell Hill Dr
173-400-037-000
494 Quince St Windsor CA

California Unemployment

The rate at which things are unwinding is even shocking me. I watched gold and silver climb $50 and $0.50 today, respectively, and I'm wondering if this is a sign of the next leg down in the stock market. I say this because a number of forecasters have been calling for large drop in the market in February; the stars may be aligning for that event. I was even a little disappointed because I've been contemplating another purchase of both metals, but I'll probably do it anyway.

California unemployment rate jumps to 9.3 percent
By SAMANTHA YOUNG, Associated Press Writer
Friday, January 23, 2009

California's unemployment rate jumped to 9.3 percent in December, capping a tumultuous year of massive job losses and a housing slump that has struck most of the country.

The jobless rate announced Friday by the state Employment Development Department represents a jump from the 8.4 percent figure in November 2008.

Excluding farmworkers, California lost 78,200 jobs in December as employers sliced payrolls to deal with the slowing economy.

California's unemployment rate hasn't been at this level since January 1994, when the state was coming out of its recession in the early part of that decade, said Stephen Levy, senior economist for the Center for Continuing Study of the California Economy.

"California, like the nation, is in the midst of a terrible and deepening recession," Levy said. "We all expect the job losses to continue and unemployment rates to go higher."

Tsunami of Foreclosures to Come?

Ivy Zelman of Zelman and Associates predicts a tsunami of foreclosures yet to come over the next few years, and the only solution she recognizes is nationalization of the mortgage industry. Wouldn't that be a great solution, 'Comrade Blogger'.

Hope for Housing? Not a fu**ing chance.

California Property Tax Shortfalls

This is not surprising but it's interesting how fast things seem to be unwinding as we enter '09. The MSM is starting to write about the dwindling property taxes. If you look at the NODs posted previously, you can imagine it's only going to get much, much worse. This is gonna be ugly.

2009-01-10: Property tax assessments could plunge across California, worsening fiscal crisis
California's plunging property values have already clobbered homeowners, but now the trend is promising pain for struggling counties, cities and schools that rely upon property taxes — a downward shift unseen in decades.

"It's the first time since the Great Depression that we've had a negative growth in property taxes that are the heart and soul of local government services," said Paul McIntosh, executive director of the California State Association of Counties.
...
Santa Clara County's property tax roll is projected to show low-single-digit growth, down from 7 percent last year. But that could well change as a growing number of properties are evaluated, said longtime county Assessor Larry Stone. Final assessed values will not be sent to property owners until mid-May.

"I've never seen an economic downturn as significant and pervasive as this," Stone said.
...
Shrinking property tax funding "exacerbates the need dramatically," said Santa Clara County Supervisor Liz Kniss. Applications for safety net programs here have increased almost 40 percent in the last year, as county leaders wrestle with a $220 million budget shortfall.

Homeowners whose properties are devalued "may be getting a break on their tax bill," Kniss said. "But they're going to feel it in the health care arena, in schools, and in what we are able to provide in services for the homeless."

Kern County Canary

(purple line is '08, tan is '07)
Hat tip to Bakersfield Bubble. Yet another county in Kalifornya with increasing NODs, which will eventually lead to many more foreclosures. 2009 has only begun and the news is grim on retail sales, unemployment, taxes, commercial real estate, and housing, in general. Buckle up.

Welcome to 2009

Here are my concerns/predictions going into 2009. Similar concerns led me to exit the stock market last year, and I'm trying to position myself for '09, but it's difficult to find safety.

What am I missing?

Also, I added many links to '09 predictions.

• Enter 2009 in a RECESSION
• Credit Card Debt and Credit Contraction
• Alt-A, Prime ARM, Option ARM resets coming
• Increase in cost of borrowing money (eventually this must happen)
• Freddie Mac and Fannie Mae will be given unlimited access to the U.S. Treasury
• Continued House Foreclosures (6M-12M by 2012)
• House prices falling, and must still fall 50% in some areas
• College/University Costs (another bubble?)
• Retail Sector Collapse
• Commercial Real Estate Collapse
• Manufacturing is Falling
• Destruction of the United States’ domestic manufacturing capacity
• Rising Unemployment
• Rising Healthcare costs; medical care for unemployed; healthcare bubble?
• Tax Increases (talk has begun)
• Civil Unrest / Protests / Tax Revolution
• Increase in Crime
• Corporate Contraction
• Reduced State/Government Tax Revenue
• Existing US Debt is massive
• Capitalism is dead, they are looting the treasury
• State Debt and Municipal Bond Default
• Hedge Fund Implosion (unknown dollar amount); CDS Risk
• Rising Food Costs (deflation for other goods, but food is up)
• Weakening US Dollar leading to Devaluation? Collapse?
• Fed 'Quantitative Easing' (money dropped from helicopters)
• Rampant Inflation Possible (long-term)
• Intentional Devaluation of US Dollar
• US Dollar as the worlds reserve currency at risk; Russia and China announcing they no longer consider it the worlds reserve currency; G20 meeting in '09 will be interesting
• US Bond Market Collapse
• Bank Failure Risks
• Loss of Economic & Dollar Confidence
• US Markets Likely to Drop 25-50%
• Markets Crashing Around the World
• Foreign Currencies in Trouble (e.g. Ruble)
• Wars/Troops in Iraq and Afghanistan; billions spent every day
• Turmoil in Pakistan and India
• Iran Nuclear Capability
• Gold/Silver to rise (Gold ~$2000, Silver ~$30)
• In the not-too-distant future, 500 oz of silver will be able to buy the average house, and 1 oz of gold will be equivalent to 1 share of the DOW
  

Other Predictions:
Where We Are, Where We're Heading (2009) (Market Ticker)
Our 2009 Predictions (Roger Wiegand)
10 Predictions for 2009 (Jason Hamlin)
Top Trends Of 2009 (Gerald Celente)
10 Worst Real Estate Markets of 2009
8 really, really scary predictions (Fortune)
Outlook '09: Forget Good, Economy Is Bad Or Ugly
What will 2009 bring for Gold?
10 worst real-estate markets for 2009
Golddrivers 2009 - Bullish outlook for gold (Eric Hommelberg)
2009 forecasts in a nutshell (Peter Cooper)
Prospects for 2009 (Jim Klinge)
Time to break out the crystal ball (golfer_X)
Gold and Silver in 2009 (James Turk)
2009 Real Estate Forecast: Troubles Spread
Forecast for 2009 (James Howard Kunstler)
The Year Ahead: 2009, Part 1 (Glen Allport)
2008 Year Review and Outlook For 2009 (Peter Grandich)
Outlook for 2009 (Monty Guild)
Ten Things We Might Expect to See in 2009 (Jesse's Cafe)
Predictions for 2009 (Jim Otis)
25 Predictions for 2009 (One Salient Oversight)
California 2009 Economic and Housing Forecast (Dr. Housing Bubble)
2009: Managing The Shift From Deflation Back To Inflation
Forecast 2009: Deflation and Recession (John Mauldin)

Video/Audio Predictions:
Gerald Celente on GoldRadio - 12/23/2008
Marc Faber predicts economic disaster in 2009 part 1 of 2
60 Minutes: The Mortgage Meltdown - Coming ARM Resets
Analyst: One Third Of Banks Could Collapse In 2009
What is Gold Telling Us? (Oil/Gold Price Ratio is broken)
Marc Faber on CNBC - 12/29/2008
CNBC Healthcare Bubble Next to Collapse
Tech Outlook 2009
John Rubin - Gold 2009

Other Links:
‘Pay option’ mortgages could swell foreclosures (12/10/2008)
Fitch: Alt-A Mortgages Deteriorating More Rapidly than Expected (12/15/2008)
Option ARM: No one saw it Coming According to the Mainstream Media. The Alt-A and Pay Option ARM Tsunami Quickly Approaches. Charting the Option ARM and Alt-A Wave. (12/16/2008)
Quantitative Easing: FAIL (Denninger, 12/24/2008)
Russia Devalues Ruble for Third Time in Week (12/24/2008)
Bleak economic picture emerges from new data (12/24/2008)
Year Stained By Insolvency (12/26/2008)
The deflation that many analysts describe is actually a systemic liquidation that will be difficult to reverse, a necessary step by producing the critically important inflation. ... THE ENTIRE MORTGAGE INDUSTRY, COMPLETE WITH MILLIONS OF HOME MORTGAGES, AND PERHAPS COMMERCIAL MORTGAGES, WILL BE NATIONALIZED WITHIN THE NEXT 12 TO 18 MONTHS.
Dollar Devaluation To Fix The Great Recession (12/09/2008)
Ponzi Nation (12/26/2008)
Retail Sales Plummet (12/26/2008)
Consumers fall deeper into debt (12/23) Consumers, not PEOPLE.
U.S. Home Resales Fall (12/23/2008)
China to begin yuan-settlement trials (12/25/2008)
China to allow freer yuan trades (12/25/2008)
U.S. debt approaches insolvency (12/19/2008)
US urging calm over possible Pakistan troop moves (12/26/2008)
Retailers Brace for Major Change (12/23/2008)
Hospitals Ill from Bad Debt (12/27/2008)
Getting Excited about 2009
The Global Economic Crisis - Bad and Worsening
2008: A Year in Review, Part I (Daily Reckoning)
2008: A Year in Review, Part II
Is recession behind spike in bank robberies?
Economy Down, Theft Up
False Diagnosis of Deflation (Jim Willie)
Manufacturing index drops to 28-year low
Cash-poor states eager for a piece of Obama plan
44 States Face Huge Budget Shortfalls
U.S. governors seek $1 trillion federal assistance
California governor offers new budget fix plan
Is Social Security a Ponzi Scheme?
Late December Economic Rant -Roger Mason
How Deflation Creates Hyperinflation
*****Ten Major Threats Facing The Dollar in 2009*****
Dollar, Treasuries, Gold, Silver, Oil, Banks, Home Inventories/Delinquencies, Vacancies
Legislature to consider college tuition freeze

A Gift from Jim Sinclair

Ok, Jim Sinclair says write this down, so I'll note it right here. I consider the 'replacement' of the US dollar a low probability event, but it's not zero, and a lot can happen between now and June 2012. What really fascinates me is that he not only says it will happen, but that he provides a date.
Jim Sinclair's MineSet

Next year is going to be very interesting and the economy deserves close attention and scrutiny, particularly if your plan is to survive and possibly thrive as we emerge from the recession. My goal is survival and I emerged from '08 relatively unscathed, but I'd like to come out of the overall recession in better shape than when it started.

2008-12-28: A Gift From Jim
Dear Friends,
Here is my New Years gift to you, my extended family.

There is no way that the CONSEQUENCES of the largest creation of paper money since it was invented can be avoided or even modified. Odds now favor Alf Field’s price objective (Elliott Wave Gold Update 23, bonus article Crisis Cogitations).

January 14th 2011 to June 21st, 2012:
The best part of this gift is not the one you already know, which is January 14th 2011 (Sinclair: gold will trade at a minimum of $1650 on or before January 14th 2011), but rather the date that a new currency form will replace the form of the US dollar as you know it today which is the third week of June 2012.

Don’t laugh! Write this down and do not forget about it!

Happy (sort of) New Year,

Jim

Santa Claus Bailout Hearings

realrant 50% Watch

Roy 'realrant' Merlino, Real Estate Guru
(Part I)
Back in November '07 at a Sacramento Land(ing) post, I left the following comment (see below), which drew a response from a local realtard. He believed that a median price drop of 50% for Sacramento zip code 95864 was impossible. Well, the impossible appears to be on its way. Lets start the 'realrant 50% Watch'. We're already at 40%.

And there is a lesson to be learned from this. First, you cannot trust realtors, and second, this housing bubble was far larger than most could imagine and it is not over. House prices will continue to drop in California until 2011. The toxic ARMs are starting to reset and the economy is tanking. When things reach bottom, the words used to describe the devastation will be 'shock' and 'awe'.

Sacramento Landing Post: November 16, 2007

Tyrone said...
If that "best deal" isn't a mark-down of 30-50%, forget it; you're just a sucker, otherwise. Price-to-rent ratio has a long way to come down in Sacramento.

RealRant said...
Hey Tyrone. Re: If that "best deal" isn't a mark-down of 30-50%, forget it...So I want everyone to remember that Tyrone says that the median price in 95864 needs to be $194,000 before anyone but a sucker would buy. Hey... do I get some kind of membership card or T-shirt for the Housing Bubble Hall of Shame? What are the criteria for induction?

This is the 95864 Percent (%) Drop Watch:

Sacramento 95864
Nov '07 $388,000
...
Oct '08 $271,000 -30% (DQNews)
Nov '08 $234,000 -40% (DQNews)
Dec '08 $425,000 xxxx (DQNews) Low Sales?
Jan '09 $218,000 -43% (DQNews)
Feb '09
Mar '09
Apr '09 $325,000
May '09
Jun '09 $317,000

Target $194,000
.

Leslie Appleton-Young, Part II

Leslie Appleton-Young, Chief "Economist", California Assoc of Realtors
(Part I)

Hat tip to Captain Credit Crunch.

This is classic NAR propaganda. You can't make this stuff up; it's absolutely priceless! Are these the kind of people you want to listen to when you make 'the most important purchase of your life.' Absolutely no accountability for their false statements.

DataQuick: Bay Area median home price sinks to 8-year low

2007-04-10: Economist sees Marin holding its own in housing slump
"It's God's country, what can I say," Leslie Appleton-Young, chief economist for the California Association of Realtors, told an audience of agents Tuesday in Terra Linda. "When is the 30 percent decline in Marin County's market going to happen? Not in my lifetime." (Is she dead?)

"It's important to keep it in perspective. Do you really know anyone who thinks, 'Gee, I'm so sorry I bought in the Marin market?'"

Despite the problems in the housing sector, Appleton-Young noted that the economy is growing at a moderate pace, interest rates are relatively low and job creation has been steady in California. Also, the commercial real estate market has been "on fire," suggesting brisk job growth and investment, she said.

"It doesn't look like there's a recession coming any time soon," she said.

2008-12-18: Another month of plummeting home sales in Marin
Another month of plummeting home sales in Marin included a price drop of nearly 30 percent from November 2007, as discounted foreclosure sales continued to drive the Bay Area market.

The median price of a single-family home in Marin last month was $790,000, down from $975,000 last year, and 104 single-family homes were sold, down from 160 in November 2007, MDA DataQuick of San Diego, a real estate information service, reported Thursday.

Yvonne Herrara, Part II

Yvonne Herrara, House ATM User
(Part I)
Yvonne was featured in a Whittier Daily News article* back in Feb '08. She tapped $300,000K of her home "equity" for home improvements, a pool, expenses for your kids, and who knows what else. Since then, she was foreclosed upon and had to vacate the house. I received a comment at my original post (Part I) about the recent purchase. In a nutshell, the comment stated:

• The house was in shambles
• It had no pool
• It seemingly had no improvements
• It Was in Complete Disarray!

Can somebody point out the $300K pool? BWAHAHAHA

18820 E Laxford Rd, Covina, CA 91722-2004
3 beds, 2.0 baths, 1,122 sq ft

Sale History:
01/29/1998: $132,000
06/17/2008: $225,802 *back to the bank
10/31/2008: $280,000

I hope the Herrara's made the most of their $300,000 party! This country is f'ed.

On a final note, does the bank have recourse on their debt? I believe it does. The bank could sell their debt to a collection agency for pennies on the dollar, and the collection agency could harass them forever. They could have taken a lesson from the Oropeza's; after raiding the bank's 'treasury', the Oropeza's moved to Texas, which has homestead laws that can protect them.

* The original article can no longer be found at the Whittier Daily News, not even in their archives. Very strange.

Ventura County Blues

Exactly one year ago on December 16, 2007, the Ventura County Star ran a story on a young family, desperate to "own" a house at any cost. And now, what a cost it has been. The latest numbers from DataQuick show a 32% drop if median price for Ventura County, and interestingly enough the numbers are close to the numbers for this particular family's house. The original story is posted below, along with a video and the Zillow numbers. At what cost is home "ownership" worth? It's going to take a lot of coupon clipping to make up for $126,000 lost, so far. ($512K-$386K)

Ventura County: DataQuick
Nov '07: 516 $521,250
Nov '08: 729 $355,000 -31.90%
Dec '08: 876 $338,000
Jan '09: 578 $335,000
Feb '09: 545 $327,000

1793 Wolverton Ave, Camarillo CA 93010
3 beds, 2.0 baths, 1,229 sq ft

Sale History
05/25/2007: $512,000
Zestimate®: $358,000 5/22/09 Time to walk away (see house below).

Nearby houses for sale:
2793 Munson St Camarillo CA 93010
3 beds, 2.0 baths, 1,391 sq ft
For Sale: $379,900 (easy buy at $340K, if you're into falling knives)
Days on Zillow: 142

Temple Ave Camarillo CA 93010 (Foreclosure)
4 beds, 3.0 baths, 1,950 sq ft
Foreclosure: $369,900
Days on Zillow: 8

2007-12-16: Families finding struggle to stay in pricey state
Owning a house was a top priority for Mark and Marianne Moise. (Do you really think it was his top priority?)

Both of them were born and raised in Ventura County. They wanted to stay close to family and friends. Even with the high cost of homes in Ventura County, they wanted a house with enough space for 7-year-old Cody and 18-month-old Maddison.

"We were both worried we weren't going to be able to afford a home," Mark Moise said. "It was real discouraging looking at housing prices. Even fixer-uppers were out of our price range, but we found one."

With the loan, their monthly mortgage on the $512,000 home is $3,500 a month, $200 less than what they would have paid for a $475,000 home they looked at previously at a two-year fixed rate that would adjust upward after that period. The Moises are grateful for their fixed rate, as they watch people they know lose their homes when adjustable loan rates increase. (They would be more grateful had they WAITED for the bubble to pop. The price of ownership per day: $126,000/575 days = $219/day LOST.)

Art Laffer, Part II

Art Laffer, Economist, B.A. Econ Yale '63, MBA/Ph.D. Econ Stanford '65/'71
This one is for you, seyelda.
(Part I)

Not only does he refuse to pay the penny, he won't be sending that 'nice note' to Peter Schiff. He also says you basically cannot forecast the economy beyond 9 months into the future. Funny that I don't recall him giving this disclaimer in the first video. What a complete and total bum.

At 4:00 in the second video, Peter mentions the ARMs resetting. This is all over the news right now. I guess the mainstream media decided to inform the sheeple, although the MSM and the sheeple can't seem to look forward more than a month ahead, which makes Laffer's forecasting (9 months) look pretty good compared to morons.

YouTube Videos:
Art Laffer Refuses to Pay the Penny
Schiff vs Laffer

Gregory Paquin

Gregory Paquin, President, Gregory Group
(hat tip to Sacramento Land(ing))

2006 Prediction:
"I would suggest on the new-home side that we haven't reached the bottom point yet, and I'm optimistic we will in 2007. ... I think next year is going to be very similar to this year. I don't necessarily think it's going to go down a whole lot more. I think new-home sales are going to be relatively the same as this year."

"I think sales on the new-home side are going to be pretty consistent with this year. I think we'll see a little bit of a bump in '08 in terms of sales volume. In terms of pricing we may see a consistent level. Maybe a little lower next year, not significantly by any means. And then maybe net pricing is a little bit up."

2007 Prediction:
Paquin believes the average price of a new home – $404,689 this year – will fall to $374,337 next year. His good news: Builders will find a bottom in 2008. "

With the spring sales season of 2009, you will start to see some positive movement in sales rates," he told a gathering of the North State Building Industry Association.

2008 Prediction: Real estate expert predicts '09 bottom
Question: It's been the slowest year yet for home builders. When do you anticipate that the market will hit bottom?

Answer [Gregory Paquin, president, Gregory Group]: It is our expectation that the Central Valley will hit bottom during 2009 and begin to see the signs of recovery in 2010 and 2011, although some areas - Sacramento and some northern Central Valley communities - may experience the recovery sooner than others (some mid- and southern Central Valley communities). Several things will need to happen before the housing recovery can begin: a slowing of foreclosure activity, less fear about job losses, the stabilizing of the overall economy and the easing of credit markets - a swing of the pendulum back to the center.

And then this gem...
2007-04-01: Mortgage defaults on the rise, but what's next?
Gregory Paquin, president of the Gregory Group, a real-estate information and consulting service in Folsom, said he doesn't anticipate a housing-market bubble because regional employment numbers are strong enough. "But clearly there are issues with sub-prime."

Sonny Kim

Sang-Min 'Sonny' Kim, Super-Flipper

Wow, this guy turned $100 into $300,000 in 3 months! Impressive!

And a 'Fraud Expert' stated that 'it was obvious the banks weren't paying attention'. Ya' think? Too bad they couldn't, or wouldn't, put a stop to this when it was 'obviously' taking place. They could have read some of the housing bubble blogs if they needed help.

Sonny Kim’s investment company bought this house at 4809 N 17th St., Belmont Heights, in April 2006 for a $100 deed and sold it three months later for $300,000.

2008-11-30: A case study in housing collapse
This husk sold for $300,000 in 2006 with the help of a no-money-down mortgage from a subsidiary of Washington Mutual Bank. The owner defaulted; WaMu owns it now. Listed for $52,000, the house could be yours for $35,000 cash.

"What we had here was an obvious case of mortgage fraud," said Josh Parker, a Coldwell Banker Realtor.

Most of the homes Sang-Min Kim sold are empty now. Many have code violations, and are clustered in impoverished neighborhoods such as Belmont Heights and Sulphur Springs.

The trail of foreclosures and blight is lined with the bad mortgages approved or assigned by Wachovia, Washington Mutual, Bank of America, National City Bank, Lehman Bros., Fannie Mae, Freddie Mac and Wells Fargo.

The loans — many made by banks now getting billions in a taxpayer bailout — dwarfed the true value of the properties. Some borrowers had no prospects to suggest they could pay off the loans. Multiple loans from the same bank branch sometimes went to a questionable borrower within weeks of each other.

"It's obvious the banks weren't paying attention, or worse," said Richard Hagar, a property fraud expert.

Dawn Aguiar

Dawn Aguiar, House Debtor/Deadbeat
Ms. Aguiar should not be seeking a write-down in her mortgage principal. Houses might be selling for $450-500K in her neighborhood, but at the bottom, $300K might be the price. And if this economy unfolds into a full-blown meltdown, they won't be able to give these houses away.


Dawn, this video is for you:
THE HOUSING BUBBLE EXPLAINED ** SPECIAL SHEEP VIDEO!

2008-11-25: Homeowners say no help from lenders
Customers of Countrywide, Wachovia and other lenders describe the firms as uncooperative, ineffective and rude. Borrowers say they must navigate a maze of phone banks. They say lenders won't offer good deals."They're supposed to be getting people into fixed-rate loans they can afford, reducing their principal," Aguiar said. "That's not what I'm getting from Countrywide."

"Countrywide says it wants to help people restructure? That's baloney," said Dawn Aguiar, who bought her Fremont home for $587,000 in 2005. "They have not been helpful at all." She financed the purchase with $586,000 in Countrywide loans.

Homes in her neighborhood sell for $450,000 to $500,000. Her house is "under water" — worth less than the loan.

Aguiar said she often hears Countrywide and other lenders are aggressive in finding ways to redo loans.

"They're supposed to be getting people into fixed-rate loans they can afford, reducing their principal," Aguiar said. "That's not what I'm getting from Countrywide."
Her adjustable rate loan balance increases monthly. She's behind in her payments.

"One lady I spoke to was rude, she had a real attitude," Aguiar said. "She talked down to me like I was a deadbeat."
===============
Ok, lets check out her house...

4343 Delaware Dr Fremont CA 94538
3 beds, 2.0 baths, 1,104 sq ft
Sale History
12/16/2005: $587,000
08/26/1998: $234,000

$587K for 1100 sq ft!!!
$533/sqft!!!

These are the idiots we're wasting tax dollars on. Lets do the math:
- assume 20% down
- $470K mortgage loan

Historical affordability guidelines are 3x gross earnings for loan amount. Lets use 3.5x...
$470K/3.5 = $134K

The Aguiar household must earn $134K, right?
(at 10% down, household income of $150K!, 0% down, $168K!)