Comments on: Real Homes of Genius: Today we Salute you Compton, El Monte, and Downey. Four Examples of Foreclosure Alley. The Hesitant California Housing Market.

By: L

Sat, 21 Nov 2009 17:20:32 +0000

Dude! High Five! Seems one of the “partners” doesn’t even have a regular job. Gotta love that down payment, it shows a real commitment. Real estate is a no brainer, especially as foreclosures mount and unemployment rises. When and if Frank gets the higher FHA loan limits through on a permanent basis, it will be interesting to see the FHA loans that get approved and the properties and parties involved.

Seems we’re in deep, dark water, folks.

By: martin

martin — Sat, 21 Nov 2009 01:06:56 +0000

Something like 12% of homeowners in S.D. county are behind on their payments.

The question is how many of those people purposely missed payments so that they could then get their lenders to negotiate lower interest rates/ payments or whatever? The word is you must be behind on your mortgage payments or else no negotiation.

By: gael

gael — Fri, 20 Nov 2009 23:10:55 +0000

Back to Business
With F.H.A. Help, Easy Loans in Expensive Areas

http://www.nytimes.com/2009/11/20/business/20limits.html?pagewanted=1&_r=3&ref=todayspaper

AN FRANCISCO — In January, Mike Rowland was so broke that he had to raid his retirement savings to move here from Boston.

A week ago, he and a couple of buddies bought a two-unit apartment building for nearly a million dollars. They had only a little cash to bring to the table but, with the federal government insuring the transaction, a large down payment was not necessary.

“It was kind of crazy we could get this big a loan,” said Mr. Rowland, 27. “If a government official came out here, I would slap him a high-five.”

In its efforts to prop up a shattered housing market, the government is greatly extending its traditional support of real estate, including guaranteeing the mortgages of middle-class and even upper-class buyers against default.

In 2007, the government did not insure a single mortgage in this city, one of the most expensive in the country. Buyers here, as well as in Manhattan, Santa Monica and every other wealthy area, were presumed to be able to handle the steep prices and correspondingly hefty down payments on their own.

Now the government is guaranteeing an average of six mortgages a week here. Real estate agents say the insurance is such a good deal that there will soon be many more.

Policy changes like the shift in insurance, while often introduced on a temporary basis, are becoming so popular that they could prove difficult to undo. With government finances already under great strain, the policy expansions are creating new risks for American taxpayers.

The Internal Revenue Service is giving tax rebates to first-time buyers, and soon to move-up buyers, in a program beset by accusations of fraud. And the government agency that issues mortgage insurance, the Federal Housing Administration, is underwriting loans at quadruple the rate of three years ago even as its reserves to cover defaults are dwindling. On Thursday, the Mortgage Bankers Association said more than one in six F.H.A. borrowers was behind on payments.

F.H.A. insurance was created for minority and low-income families who could not come up with the traditional down payment of 20 percent required by private lenders. Buyers receive loans from government-approved lenders and are required to document their income and assets. They must pay a substantial insurance premium of 1.75 percent of the loan. But in return, their down payment can be as low as 3.5 percent.

(more at link)

By: Laura Louzader

Laura Louzader — Fri, 20 Nov 2009 13:44:43 +0000

So much for responsible people who struggle to do right and pay their bills, no matter what the cost. I have met two people here in Chicago who are struggling with unemployment and underemployment, and they, too, have been turned down for loan mods under the HAMP program, even though they are not buried very deep, could make it with their payments only slightly slightly adjusted, and are committed to staying in their homes and paying for them even though the places are worth substantially less than at the time of purchase.

Mr. Latta of Ohio can take this much comfort, though, even though it’s a cold, bitter comfort: he has clearly developed skills and coping abilities that will serve him well and give him a distinct edge as we head down the slope of fuel depletion. He sounds like a real coper, someone determined to do whatever it takes to stay alive and pay his way.

By: compass rose

compass rose — Fri, 20 Nov 2009 09:17:08 +0000

Doug, this is why most small rural producers I know are keeping as much as they reasonably can off the books. Barter is the way to go with this stuff…though I have no doubt that both political parties will eventually joint to try to tax that as well.
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On-books approaches pull the producer into a miasm of regulations, taxes, and punitive outcomes such as the one mentioned in the Reuters piece. These are all designed to reward huge operations and literally outlaw small ones, and frequently have been planned and pushed into being by corporate powers and the politicians who serve them. I’ve watched with dismay as this has happened to certified organic farming, and most very small organic growers I know are no longer certified. They can’t afford to pay $500 or $1,000 a year when they are producing only about that much.
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There is no reliable way to get ahead at a micro scale with hunting and farming, no formula for that. It too has become a lottery. This person succeeds by selling yuppie chow to Alice Waters. That person succeeds by finding a bunch of New Agers who will pay $15 a gallon for unpasteurized milk. And so on. But any of these operations are at best hobby or sideline farms. Anyone hanging on to land is doing so by the skin of their teeth.
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In the decades where I worked with the remaining small farmers in my region (many of whom have since been driven out), their common plaint was that everything they wanted to do was illegal. They had better, more sustainable ideas, but every way they turned there was a government entity or agency telling them they couldn’t do it that way. And a passel of fat economists telling them it “wasn’t efficient.” “Efficiency” only meant “at a mega-industrial scale.” The efficiencies of small, local operations were completely ignored, as were the virtues of keeping money circulating locally rather than sending it to some far away corporation that turned local ecosystems into waste lands, extracted all the profit, and undercut local laws.
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I would show these frustrated small operators how it wasn’t just the economics that got ramped up into a mega scale with factory farming the sine qua non both at the research (Land Grant) and industrial levels. It was also the entire network of regulations and policies, reflecting a global New World Order in which only corporations can own and use land, mostly owing to their ability to float huge cadres of vicious, high priced lawyers. And where many layers of power infiltrate a person’s daily life and can interfere at any time.
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What this has in common with DHB’s RHG this time is that when small and humble lifestyles are outlawed and marginalized, then the best anyone can hope for is to a) win the lottery or b) be a serf. There is no longer any effective type of “home ownership” in this nation. Even those of us who have purchased our lien from the bank/lender are renting our homes from powerful municipalities who can tax us at whim and will, and frequently without representation. We cannot say no to these taxes; they are framed as “bond issues,” or they simply change the mil rate because they have statutory authority to do so. Say no, and your real landlord–government–takes your home away. So the current government socialization of home ownership is no surprise to me. It is the logical outcome of the path we’ve been on at least since 1980.
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In Thucydides’ history of the Peloponnesian War, he observes (3.19.1) how the Athenians, fighting war and also facing the rebellion of Mytilene, decided to levy an eisphora on their allies in 428 BCE–a direct tax. Donald Kagan notes in his book on these warshow Thucydides mentions this precisely because such a levy was notable and unusual, and not just for the risk of alienating much-needed allies. “A direct tax had not been imposed in a very long time. Strange as it may seem to modern taxpayers…citizens of the Greek states hated the idea of direct taxation as a violation of their personal autonomy and an attack on the property on which their freedom rested.” The eisphora fell on the propertied classes, which included yeomen farmers who also served as hoplites.
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Compare that to how Themistocles built the Athenian navy, 60 years before–a much more creative and insightful use of public and private funds and energies.
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rose