Oooops: California man losing 9 (nine) homes in mortgage mess

[Demon-Xanth]

The biggest problem with real estate investment like that is that it raises prices for anyone that actually wants to LIVE in the houses. So you end up with an artificially higher market because a chunk of people are sitting on a supply without it going into the market.

...just like people ebaying PS3s in 2006...

 

[Amused]

Had he done it 10 years earlier he would have made millions.

 

[Vette73]

I don't feel bad for him. Its people like him that caused this mess.


I remember watching all those flip this house shows. Funny how when they went back after 6 months either they sold for a lose, still had the house, or at best sold it for what they had in it.

me and my wife had to pay $360k for a fixer uppper that sold for around 200k only 5 or so years ago. Mind you at the peak it solf for $550k so our 360k looked cheap compared to that. I think the value is in the low to mid 400k range now.

 

[Greenman]

Originally posted by: 1prophet

Originally posted by: Greenman

Originally posted by: Common Courtesy
Once the banks take over the properties, are they going to take a bath to bring the prices back in line, or will they to support the inflated price and let the property degrade?

Banks are not going to let a $600K house that has been foreclosed go for $300K.

After they have held onto it for6 months, they might consider it; by that time, who knows what damage/vandalism may have been done if the place is unoccupied.

Banks do not like to be landlords

That seems to be the case. There are a couple property's around here that are bank owned and have been sitting empty for over six months, the banks refuse to budge a dollar off the asking price.
I assume it looks better on the books to have a property listed as an asset and sitting empty rather than taking the write off? I'd like to know how they make that hold/sell decision.

How a potential asset can turn to a liabilty very quickly.

I only got through the first page, almost total tripe.

 

[Nitemare]

I'm glad the banks will bail out morons and pass the costs on to their customers....


Yay for 0 accountability and the ability to always pass the buck!

 

[Slew Foot]

Originally posted by: Greenman

Originally posted by: 1prophet

Originally posted by: Greenman

Originally posted by: Common Courtesy
Once the banks take over the properties, are they going to take a bath to bring the prices back in line, or will they to support the inflated price and let the property degrade?

Banks are not going to let a $600K house that has been foreclosed go for $300K.

After they have held onto it for6 months, they might consider it; by that time, who knows what damage/vandalism may have been done if the place is unoccupied.

Banks do not like to be landlords

That seems to be the case. There are a couple property's around here that are bank owned and have been sitting empty for over six months, the banks refuse to budge a dollar off the asking price.
I assume it looks better on the books to have a property listed as an asset and sitting empty rather than taking the write off? I'd like to know how they make that hold/sell decision.

How a potential asset can turn to a liabilty very quickly.

I only got through the first page, almost total tripe.

Christopher B. Leinberger is a visiting fellow at the Brookings Institution, a professor of urban planning at the University of Michigan, and a real-estate developer. His most recent book, The Option of Urbanism

The dudes got an agenda to push. Rising gas prices may force people into cities, but they wont go quietly.

 

[Slew Foot]

Originally posted by: Marlin1975
I don't feel bad for him. Its people like him that caused this mess.


I remember watching all those flip this house shows. Funny how when they went back after 6 months either they sold for a lose, still had the house, or at best sold it for what they had in it.

me and my wife had to pay $360k for a fixer uppper that sold for around 200k only 5 or so years ago. Mind you at the peak it solf for $550k so our 360k looked cheap compared to that. I think the value is in the low to mid 400k range now.

Unless youve gutted the place, if no one wanted it for 400K when you bought it, its unlikely to get that price now.

 

[Vic]

Originally posted by: IGBT
..property flippers are a pariah to the realestate community. Require 5 year owner occupancy to get rid of em.

:roll: This guy wasn't a flipper.

Originally posted by: Nitemare
I'm glad the banks will bail out morons and pass the costs on to their customers....


Yay for 0 accountability and the ability to always pass the buck!

Who is getting bailed out? Read the OP, his stupidity is costing him everything.

Yay for knee-jerks, eh?

 

[1prophet]

Originally posted by: Greenman

Originally posted by: 1prophet

Originally posted by: Greenman

Originally posted by: Common Courtesy
Once the banks take over the properties, are they going to take a bath to bring the prices back in line, or will they to support the inflated price and let the property degrade?

Banks are not going to let a $600K house that has been foreclosed go for $300K.

After they have held onto it for6 months, they might consider it; by that time, who knows what damage/vandalism may have been done if the place is unoccupied.

Banks do not like to be landlords

That seems to be the case. There are a couple property's around here that are bank owned and have been sitting empty for over six months, the banks refuse to budge a dollar off the asking price.
I assume it looks better on the books to have a property listed as an asset and sitting empty rather than taking the write off? I'd like to know how they make that hold/sell decision.

How a potential asset can turn to a liabilty very quickly.

I only got through the first page, almost total tripe.

Here is some more tripe and it's only going to get worse, and that doesn't include the devaluation of nearby homes.

Crime scene: foreclosure

As Foreclosed Homes Empty, Crime Arrives


Cities Seek Help with Foreclosed Homes

 

[Miramonti]

Another reason to do it now is rental markets are generally very strong since so many have lost their homes.

 

[HannibalX]

Forgaard bought a house in Santa Cruz, about 60 miles (100 km) south of San Francisco, in 2000. Four years later, using $800,000 in stock options, he began snapping up investment properties, putting 10 percent to 40 percent down on negative amortization loans -- in which payments do not cover the interest so that a borrower's balance grows over time.

What a fucking idiot.

 

[alkemyst]

Originally posted by: Greenman
I know several people that made millions doing exactly what he did, some of them still own a lot of property and they will just sit on it until the market rebounds. This guy's problem is that he didn't have the reserves to weather a downturn.

He actually did, but it relied on a possible refi. Once his property tanked in value, no one wanted to write a real loan.

IMHO this guy was one of the people that were trying to do it write.

 

[FDF12389]

Now the smart people are going to buy those same houses and actually make money. Buy low sell high. Not buy high and hope to sell higher while my mortgage balance is growing.

 

[lokiju]

So this is what I'm trying to understand when I read all these news reports and stories about people losing their homes.

Is it all specific to people that had Adjustable Rate Mortgages?

I can understand it sucking to have a home that is now worth less than you paid for it, but it's not going to change how much you pay for it per month if you're on a fix term.

Is it that there were really just that many people out there that had ARM's that have ballooned out of control?

 

[halik]

hah idiot

 

[halik]

Originally posted by: Greenman
I know several people that made millions doing exactly what he did, some of them still own a lot of property and they will just sit on it until the market rebounds. This guy's problem is that he didn't have the reserves to weather a downturn.

Those people actually "bought" the houses. This guy levered himself to idiotic levels without having the least bit of money to cover it - at no point did he have any equity in those properties.

He needs to stick to IT and have someone else manage his money... that plan was about as good as putting 800,000K in one penny stock. Especially in California, people were bitching about that bubble since 2000

 

[halik]

Originally posted by: Vic

Originally posted by: IGBT
..property flippers are a pariah to the realestate community. Require 5 year owner occupancy to get rid of em.

:roll: This guy wasn't a flipper.

Originally posted by: Nitemare
I'm glad the banks will bail out morons and pass the costs on to their customers....


Yay for 0 accountability and the ability to always pass the buck!

Who is getting bailed out? Read the OP, his stupidity is costing him everything.

Yay for knee-jerks, eh?

Did you miss the part where he bought 8 houses with neg am mortgages? I'm sure he wasn't a flipper, he just bought 8 houses expecting a loss in the future :roll: The only way that plan would be profitable is if he flipped the houses in future and only if the appreciation rate > growth rate of the mortgage balance.

 

[LegendKiller]

Originally posted by: TastesLikeChicken

Originally posted by: IGBT
..property flippers are a pariah to the realestate community. Require 5 year owner occupancy to get rid of em.

Flippers take beat-up property and remodel it. They aren't pariahs, they preform a service. It's the speculators, like the guy from the OP, who buy houses solely in hope of turning them around for profit in a booming market that are the pariahs.

Many flippers do nothing but slap a veneer on the problems and put "fixes" in at bottom-rate prices to maximize revenue. They make profit by doing this in a never-ending ponzi scheme. Another part of the problem is that they "fix" homes out of alignment with the neighborhood, bringing more problems.

In most cases they perform a decent service (albeit, overpriced), but when a period like this hits, they too often do nothing but destroy value.

As far as the guy goes, I hope that even one of the mortgages has recourse. I'd love to see a bank take everything he has.

 

[BoberFett]

This poor guy. He definitely deserves a bailout.

 

[waggy]

Originally posted by: LegendKiller

Originally posted by: TastesLikeChicken

Originally posted by: IGBT
..property flippers are a pariah to the realestate community. Require 5 year owner occupancy to get rid of em.

Flippers take beat-up property and remodel it. They aren't pariahs, they preform a service. It's the speculators, like the guy from the OP, who buy houses solely in hope of turning them around for profit in a booming market that are the pariahs.

Many flippers do nothing but slap a veneer on the problems and put "fixes" in at bottom-rate prices to maximize revenue. They make profit by doing this in a never-ending ponzi scheme. Another part of the problem is that they "fix" homes out of alignment with the neighborhood, bringing more problems.

In most cases they perform a decent service (albeit, overpriced), but when a period like this hits, they too often do nothing but destroy value.

As far as the guy goes, I hope that even one of the mortgages has recourse. I'd love to see a bank take everything he has.

i was shocked watching shows like flip this house/flip that house where they would replace windows, appliances and paint. thats it.

or come in and expect to totaly redo the house on $10k and 3 weeks. then get pissed and suprised when they are over budget and time.

 

[rh71]

"investment" is just the term to make yourself feel better about gambling.

 

[Vette73]

Originally posted by: Slew Foot

Originally posted by: Marlin1975
I don't feel bad for him. Its people like him that caused this mess.


I remember watching all those flip this house shows. Funny how when they went back after 6 months either they sold for a lose, still had the house, or at best sold it for what they had in it.

me and my wife had to pay $360k for a fixer uppper that sold for around 200k only 5 or so years ago. Mind you at the peak it solf for $550k so our 360k looked cheap compared to that. I think the value is in the low to mid 400k range now.

Unless youve gutted the place, if no one wanted it for 400K when you bought it, its unlikely to get that price now.

Its biggest value is the land. It has .56 acre which is not a lot from where i am from but here in Springfield VA (N.VA near DC) that is a lof of land.

But yea we took it down to studs in the master bedroom and bath. Tore out all the ceilings. Installed all new jap. cherry hardwood. and so forth.


The land alone will keep it from dropping to fast, let alone all the upgrades we did. We also paid the full listing price first day it was on the market. By the time we signed the papers the bank had 4-5 more offers.

 

[Vette73]

Originally posted by: lokiju
So this is what I'm trying to understand when I read all these news reports and stories about people losing their homes.

Is it all specific to people that had Adjustable Rate Mortgages?

I can understand it sucking to have a home that is now worth less than you paid for it, but it's not going to change how much you pay for it per month if you're on a fix term.

Is it that there were really just that many people out there that had ARM's that have ballooned out of control?

ARMs = a lot of fees and kick backs to the sales people that sold them. they were pushed HARD!!! Oh you wish you could get a bigger house... well you can if you... and so on.

 

[Nitemare]

Originally posted by: halik

Originally posted by: Vic

Originally posted by: IGBT
..property flippers are a pariah to the realestate community. Require 5 year owner occupancy to get rid of em.

:roll: This guy wasn't a flipper.

Originally posted by: Nitemare
I'm glad the banks will bail out morons and pass the costs on to their customers....


Yay for 0 accountability and the ability to always pass the buck!

Who is getting bailed out? Read the OP, his stupidity is costing him everything.

Yay for knee-jerks, eh?

Did you miss the part where he bought 8 houses with neg am mortgages? I'm sure he wasn't a flipper, he just bought 8 houses expecting a loss in the future :roll: The only way that plan would be profitable is if he flipped the houses in future and only if the appreciation rate > growth rate of the mortgage balance.

yes, he will declare bankruptcy, stick the bank with the houses, they will sell for a loss. He'll get a new clean credit score in a few years.

 

[Vic]

Originally posted by: halik

Originally posted by: Vic

Originally posted by: IGBT
..property flippers are a pariah to the realestate community. Require 5 year owner occupancy to get rid of em.

:roll: This guy wasn't a flipper.

Originally posted by: Nitemare
I'm glad the banks will bail out morons and pass the costs on to their customers....


Yay for 0 accountability and the ability to always pass the buck!

Who is getting bailed out? Read the OP, his stupidity is costing him everything.

Yay for knee-jerks, eh?

Did you miss the part where he bought 8 houses with neg am mortgages? I'm sure he wasn't a flipper, he just bought 8 houses expecting a loss in the future :roll: The only way that plan would be profitable is if he flipped the houses in future and only if the appreciation rate > growth rate of the mortgage balance.

Flipping by definition is buying and selling a home within a short timeframe, usually defined as 3 months.

This guy was just another idiot speculative investor, not a flipper. And hey, while you're attacking me for no reason, try to keep in mind that I was replying to comments suggesting that it should be a law that every home purchase be owner-occupied for 5 years, and that this guy is getting bailed out somehow when the article says he is bankrupt and having to move out of the area over this.