It will be fun to spend my summer time in San Diego in a rent free REO. My relatives are busy right now finding the best REOs that are closest to the beach. After I pick my favorite, perhaps we can have a CR clam bake on the beach as sort of a house warming party.
rich,
You can be in charge of the Mexico REO clam bake. I'll be in charge of the San Diego REO clam bake. CR, should take on the Newport Beach REO clam bake. Anyone else?
Off topic but interesting...the FT had an article today about Apollo Group now paying in-kind instead of cash for its Realogy buyout debt. They bought it for 8.75 billion less than a year ago.
My BS sensor went off on these quotes from Leon Black: "We factored a substantial downturn in our original investment thesis and believe once the housing market rebounds, Realogy will benefit." As my teenage daughter would say, "Good Luck with that!"
He also said Realogy "is well capitalized from a financial standpoint and has significant breathing room in its only meaningful covenant." Um, hello? Are those other covenants just chopped liver? I am really sorry i missed out on this fabulous bond offering.
"has significant breathing room in its only meaningful covenant." Um, hello? Are those other covenants just chopped liver?"
Yes, they are; it was a "covenant-lite" loan package, with the toggle bonds as a piece of the financing.
The fact that the borrowers almost can't default is why the banks have been fighting against making good on their 1st-half '07 and earlier loan commitments.
The real import of this has yet to sink in with the traditional owner occupier reseller. The market has bifurcated. There is a REO/distress sales market and there is a traditional owner/agent/buyer market. The latter are fooling themselves to think inventory levels are 8 or 11 months. The duality of the market has sent them into a twilight zone of multiyear inventory as REO transactions record as if they were competitive sales.
Elvis writes:
How close to the beach?
Elvis | 05.02.08 - 2:28 pm | #
Not nearly close enough!
Still, I'm amazed...no, flabbergasted...that housing in San Diego is now cheaper than it is all the way up the coast in the rural north. We've always had a dismal affordability index just because the place is more desireable than prevailing wages can support, but it's gotten beyond ridiculous up here. Fewer than 15% can afford to own, and rents aren't as low as you'd think. Our housing price boom lagged SF and SD but not by much, and overshot those areas in the end percentage-wise.
Still, I'm amazed...no, flabbergasted...that housing in San Diego is now cheaper than it is all the way up the coast in the rural north.
It isn't racism swo much as classism. The Central Coast isn't teeming with a mix of culture and society. Too its detriment in my opinion but not apparently for the real estate investors willing to pay.
"The duality of the market has sent them into a twilight zone of multiyear inventory as REO transactions record as if they were competitive sales."
Rob Dawg |
Mr. Dawg, Correct, sir. REOs are comps. Despite other people's ramblings here, when REOs sales and non-REO sales are about equal, they do compete with each other and do form comps for the basis of making a home buying decision. Any other suggestion is rather foolish and poorly thought out.
In San Diego I think the first wave of foreclosures related to fraud or horrific underwriting is already over.
We are now at stage two, which is foreclosures of those who actually want to keep their homes, but had a payment bump (subprimes) or lost their real estate/construction job. (alt a/prime) Lots of the higher end foreclosures I see are realtors.
Stage three will be after the option arm resets, when even folks who haven't lost income will really need to decide if they can or want to continue paying the mortgage.
Do you know of any REOs or clam bakes in Tijuana?
rich | 05.02.08 - 2:22 pm |
Rich- actually, the Tijuana to Ensenda beach market will be a interesting one to follow the next few years. Tons of folks used their Socal home equity to buy into shiny new beach front condos- including one by some guy named Trump. I think the max mortgage you can get there is like 50% ltv, so there is a lot of cash at stake.
I suspect we might see some "equity birds" forced to fly from the overleveraged socal home into the one and only place they have equity- their Baja condo.
It isn't racism swo much as classism. The Central Coast isn't teeming with a mix of culture and society. Too its detriment in my opinion but not apparently for the real estate investors willing to pay.
Rob Dawg | Homepage | 05.02.08 - 2:40 pm | #
The Central Coast is another animal altogether. There never has been any sense out of the Santa Cruz/Monterey market.
I was talking about the North Coast...damn near Oregon. Six hours north of San Francisco. Behind the Redwood Curtain. A geographical oddity - at times winter rains bring landslides that literally shut out the outside world for days or weeks at a time. Four times in the last year and a half silly backhoe accidents have rendered us without broadband internet for days at a time. There are a LOT of reasons property should be dirt cheap up here, and yet I can't find a liveable three bedroom house for under $275,000. The only properties under $200K are literally teardowns.
To think that 15 years ago I could have had 40 acres for $40,000.
At least we don't have thousands of kooks in the lineup like down south. 48°F water and plenty of great whites keeps it real neighborly out there.
I have been covering the huge price declines in the San Diego RE market neighborhood by neighborhood. So far more than 40 examples of houses falling more than 40% in price, and a decent smattering of 50%+ declines.
I was talking about the North Coast...damn near Oregon. Six hours north of San Francisco. Behind the Redwood Curtain. ...
To think that 15 years ago I could have had 40 acres for $40,000.
ehhh? Early 90s the "no harvest land" approx 20 ac. properties with existing access and development rights were running $120-$150k. Had a retiring tech do just that and got enough money from the lumber "salvage" to build his house to pay for some of the land. Eureka region ca. 1993 bordering state forest land.
I was out in 4S ranch the other week. Pretty nice, but brand new, development. I was stilling at bar in one of the new developments restaurants.
There were three or four totally unrelated couples or groups of people talking about how they were hurting financially and cutting spending. In all cases mortgages were at the root of their hardships...
OT - I was having a discussion with the fund administrator for the most conservative fund in my 401k menu. She said that the managers are now actively seeking securities CDO/MBS/RMBS/CMBS/ABS that are priced "irrationally". I asked her if they were actively seeking them out to sell them out of their portfolio or to purchase. She laughed. She said those securities are massively underpriced and the ratings agencies have it all wrong and their fund managers do their own due diligence. I asked why she thinks they can use 3 managers to do due diligence and expect to achive better quality than Fitch with massive sets of tools experience and many analysts (the only one that's getting real). She laughed again.
Well obviously you couldn't get 40 acres right in Eureka, but there was plenty of land 20 to 40 minutes east (and that's beautiful traffic-free commuting) for $1000 per acre of raw land (admittedly undeveloped with little hope of ever getting utilities). I'm not misremembering; I have friends and family I helped move onto such properties.
For the 99.44/100ths pecent who have no idea. 4S is a development in North San Diego County that is in competition for poster child of the bubble. "4S ranch" plus an action word will google any number of horror stories.
Interesting SD condo market fact. There have been 1 closing on downtown condos in the 2M+ range since 2/22/08. There are 29 listed, so supply at the 2M+ range downtown is about 6 years. The supply of 1M to 2M condos is about 18 months.
The property changed hands several times over the next 100 years. In 1938, the property was sold to the Ralphs family, owners of the southern California grocery chain. In the early 1980s, the Ralphs family agreed to develop the southern portion of their property (what is now the 4S Ranch master planned community) and retain the northern 1,200 acres (4.9 km²) as a family retreat.
I guess you'd have to live up here, or want to, before you'd understand. There's steep terrain and water bubbling out of the ground you can capture and supply to your house with gravity. You can likewise harness that water for micro-hydro-power systems, or if you don't have enough slope just go solar. Humboldt County can reasonably claim the highest concentration of alternative energy power systems in the nation, at least on a per capita basis. Sure it's not cheap, but at one point the land was cheap enough that it was nearly a break even proposition. As energy costs continue escalating, it may again become so, even with property prices this high. Then there's septic systems instead of sewers, cell phones replace landlines, satellite for your internet...where there's a will, there's a way.
Then again, plenty of people really don't mind doing without all those things. We managed for a couple of millenia without them didn't we?
Ultimately it's about lifestyle and quality of life. Personally I'd rather have to light my house with whale blubber than deal with the daily commutes in most metro areas. The only thing that keeps me from moving into the hills is I want to surf every day.
A lot of 401(k) plans have a hidden provision called an in-service distribution. If you are over 55 years old, you may qualify.
It lets you make a transfer to a Traditional IRA even if you keep working, and it's not subject to hardship withdrawal rules.
The age trigger and rules would be written in your plan document.
Assuming you can't transfer or withdraw without hardship, I would send a certified letter to the trustees of your plan. I would tell them that since they have failed to provide a safe haven investment choice in a difficult market, you will hold them PERSONALLY liable for any losses. Just for good measure, I would CC the DOL.
If you borrow the maximum amount allowed (50% up to $50,000), this money will not be exposed to losses while it is borrowed. Contrary to what some have written here, there is no tax consequence or penalty for borrowing from a 401(k). It's the same as borrowing from a bank, except you are borrowing your own money and there is no third-party lender.
It will be fun to spend my summer time in San Diego in a rent free REO. My relatives are busy right now finding the best REOs that are closest to the beach. After I pick my favorite, perhaps we can have a CR clam bake on the beach as sort of a house warming party.
Elvis
"...On the heels of earlier data suggesting at least some encouraging trends for investors, it turns out that April was a very good month for at some investors in the MBS marketplace and the first strong sign of life in a secondary mortgage market that has been all but locked up since the middle of last year.
The proof? Merrill Lynch said that excess returns for MBS over Treasuries were the highest theyve been since at least 1997..."
I'm not making a case for buying them (since I think there's more money to be made in equities), but it's not like it's a totally off-the-wall idea, either, for someone who's proactive, thinks independently and can play past current conditions.
You can be in charge of the Mexico REO clam bake. I'll be in charge of the San Diego REO clam bake. CR, should take on the Newport Beach REO clam bake. Anyone else?
Elvis | 05.02.08 - 2:26 pm | #
Not many Clams here in Chicago, although the beach is very nice (water to friggin cold though). Perhaps some deep dish pizza by the lake.
Elvis- if you're on the beach in SD, make it one of the nights the grunion run, the fish come up on the beach to be caught- and I doubt if you'll have any luck clamming on our beaches. Or swim with the leopard sharks in La Jolla in August.
BTW- I called the bottom months ago, I'm just waiting for the data to catch up. I can wait,...years if I have to.
Foreclosures in SD are concentrated in just three or four areas.
Hmmm, depends on what you mean by concentrated. I'm fairly certain I can find a foreclosure within a quarter mile of any place in the metropolitan area. That map is of foreclosure rates, since they're not selling, the properties are piling up even in the lower rated areas.
seb: I'm not making a case for buying them (since I think there's more money to be made in equities), but it's not like it's a totally off-the-wall idea, either, for someone who's proactive, thinks independently and can play past current conditions.
Being able to pause before acting, and certainly before impulsively proacting is an essence of independent thinking.
As this is serious business, not playing is absolutely necessary to avoid the disatrous group think that destroys the outlyers of the herd.
Recognizing the magnitude of the mistakes made when misallocating precious and scarce resources over the past century will underscore the potential for correction that is occuring. Dreadful and morbid as it seems, the study of 'Die Off' is proactive; makes for an interesting table-topic game.
But, allowing for a game or sport metaphor, 'a great defense always defeats a great offense.' Against systemic collapse, we'll want to survive first. 'If they can't score on you, you'll win.'
Life on earth is a closed entropic system save for sunlight energy temporarily overwhelming the long term trend. In the mid-term (decades to centuries), I submit, we're on a downward slope.
"Foreclosures in SD are concentrated in just three or four areas"
So, it's contained? LMAO!
Great to look into the rear-view mirror to see where this mess is going. It's like a plague. It'll spread until the areas that now are showing the most foreclosures start to see declines and other area start getting hammered. The great leveling field of containment.
BottomCallTabulatorMatrix writes:
Any bottom spotters have a date certain?
puravidavid
Stocks:
dotcom was 25 months. IMO worse than dotcom, not least because low interest rates will not pull us out. Not clear from here what will.
GD was 33 months. IMO not as bad as GD, hope we don't need WWIII to pull us out.
Say 27 months, beginning 9/9/07, maybe ending early with santa rally mid dec 09. (each quarter = 1 inning for baseball fans, so we are in top of third)
Housing later. Wave of option arms resets ends spring 2012, foreclosures from same end late 2012, probably stable 2013. (Option arms will have the largest neg equity from rising mtg/falling price; virtually none of these loans will be paid off early because virtually all are already underwater. Banks will experience greatest losses)
CR... how about making some guesses on coming ARM losses?
Yal writes: Redwood, why would anyone buy land that has no utilities ?
Here in Southern California, people fight for off-grid land... it's your only guarantee that you'll be left in peace without a 4-bed 3-bath McMansion popping up next door.
For the 401K issue, the MBS play is not a bad play on your administrator's part if they are any good. However, I would worry as most fund administrators have found that they typically come out on the wrong side of the trade with wall street.
On the other hand, you could take a loan out as previously suggest. At the current time, my 401k loan rate is 6% which is great than a money market and could be used to pay off a loan that you are currently paying. In my case, I have a car loan at 6.2% that is over in two years. I could take out a loan at 6%, reduce my payment, and pay myself the interest. Pretty interesting if you think about it.
The short sales explains why the median listed housing on the San Diego MLS has not really change for seven weeks. But the median house sold has kept going down the last couple of months. The median prices since last May had been going down $10,000 per month.
Home prices have held up along I-5 between Pt. Loma and Carlsbad.These are upper class home that used the option arm. Wait in the next few years as these explode. There are already some of these people walking away.
I am one house back from the oceanfront. Maybe in three years i will be on the oceanfront. There have been a ton of new condos built along the boardwalk at $2 million for 1500 square feet.
First.
Sub-first.
Hope now has failed
Hope now for some. Pain for everyone else. Does anyone know what this is going to do for resale values.
I see a trend.
I'll ask a question: How is the local government going to cope with what might be, at the very least, lagged tax payments?
In a REO who is responsible to maintain property / earthquake insurance?
It will be fun to spend my summer time in San Diego in a rent free REO. My relatives are busy right now finding the best REOs that are closest to the beach. After I pick my favorite, perhaps we can have a CR clam bake on the beach as sort of a house warming party.
Elvis,
I would like to attend the clam bake, and I will even pay my share of rent.
Do you know of any REOs or clam bakes in Tijuana?
S&P downgrades Countrywide Financial to 'BB+/B' (marketwatch.com)
In other news...ABK is still AAA.
Elvis clams are going to be about 10 bucks a piece by then. Anyone notice the activity on Walmart? Looks like a rollover before playing dead.
rich,
You can be in charge of the Mexico REO clam bake. I'll be in charge of the San Diego REO clam bake. CR, should take on the Newport Beach REO clam bake. Anyone else?
Off topic but interesting...the FT had an article today about Apollo Group now paying in-kind instead of cash for its Realogy buyout debt. They bought it for 8.75 billion less than a year ago.
My BS sensor went off on these quotes from Leon Black: "We factored a substantial downturn in our original investment thesis and believe once the housing market rebounds, Realogy will benefit." As my teenage daughter would say, "Good Luck with that!"
He also said Realogy "is well capitalized from a financial standpoint and has significant breathing room in its only meaningful covenant." Um, hello? Are those other covenants just chopped liver? I am really sorry i missed out on this fabulous bond offering.
Tim,
It is a BYOCR. Bring your own clam rake. If what you say is true, I'm not buying. We'll just have to harvest them before we eat them.
San Diego HUD home
Address : 5865 Reo Terrace # F
Listing Price : $259,500
SQ. Footage : 1,240
Bedrooms : 3Bathrooms : 2
Type : Single Family/Vendee Financing
Nice address.
How close to the beach?
this just in
:20S&P downgrades Countrywide Financial to 'BB+/B
JW:
"has significant breathing room in its only meaningful covenant." Um, hello? Are those other covenants just chopped liver?"
Yes, they are; it was a "covenant-lite" loan package, with the toggle bonds as a piece of the financing.
The fact that the borrowers almost can't default is why the banks have been fighting against making good on their 1st-half '07 and earlier loan commitments.
Reverse Okie phenomena engage.
The real import of this has yet to sink in with the traditional owner occupier reseller. The market has bifurcated. There is a REO/distress sales market and there is a traditional owner/agent/buyer market. The latter are fooling themselves to think inventory levels are 8 or 11 months. The duality of the market has sent them into a twilight zone of multiyear inventory as REO transactions record as if they were competitive sales.
Elvis writes:
How close to the beach?
Elvis | 05.02.08 - 2:28 pm | #
Not nearly close enough!
Still, I'm amazed...no, flabbergasted...that housing in San Diego is now cheaper than it is all the way up the coast in the rural north. We've always had a dismal affordability index just because the place is more desireable than prevailing wages can support, but it's gotten beyond ridiculous up here. Fewer than 15% can afford to own, and rents aren't as low as you'd think. Our housing price boom lagged SF and SD but not by much, and overshot those areas in the end percentage-wise.
I hope to hell the inverse proves true as well...
Downgrade of Countrywide debt!? What happened they opened their books for the first time? How many % of CFC's loans are non performing?
Still, I'm amazed...no, flabbergasted...that housing in San Diego is now cheaper than it is all the way up the coast in the rural north.
It isn't racism swo much as classism. The Central Coast isn't teeming with a mix of culture and society. Too its detriment in my opinion but not apparently for the real estate investors willing to pay.
"The duality of the market has sent them into a twilight zone of multiyear inventory as REO transactions record as if they were competitive sales."
Rob Dawg |
Mr. Dawg, Correct, sir. REOs are comps. Despite other people's ramblings here, when REOs sales and non-REO sales are about equal, they do compete with each other and do form comps for the basis of making a home buying decision. Any other suggestion is rather foolish and poorly thought out.
Sweet! I may just have to pick up a few homes. Turn them into clam-bake boarding homes.
5865 Reo Terrace # F
It's in Chula Vista, and sounds like a condo, and it has a nice view of the freeway.
"Downgrade of Countrywide debt!? What happened they opened their books for the first time?"
No, BofA implied, in a SEC filing, that they may not assume all CFC obligations.
In San Diego I think the first wave of foreclosures related to fraud or horrific underwriting is already over.
We are now at stage two, which is foreclosures of those who actually want to keep their homes, but had a payment bump (subprimes) or lost their real estate/construction job. (alt a/prime) Lots of the higher end foreclosures I see are realtors.
Stage three will be after the option arm resets, when even folks who haven't lost income will really need to decide if they can or want to continue paying the mortgage.
About 2 miles west on the South Bay Freeway, then south on the San Diego Freeway, then back west on ... etc. etc.
Nice address.
Anonymous
View??
Do you know of any REOs or clam bakes in Tijuana?
rich | 05.02.08 - 2:22 pm |
Rich- actually, the Tijuana to Ensenda beach market will be a interesting one to follow the next few years. Tons of folks used their Socal home equity to buy into shiny new beach front condos- including one by some guy named Trump. I think the max mortgage you can get there is like 50% ltv, so there is a lot of cash at stake.
I suspect we might see some "equity birds" forced to fly from the overleveraged socal home into the one and only place they have equity- their Baja condo.
Rob Dawg writes:
It isn't racism swo much as classism. The Central Coast isn't teeming with a mix of culture and society. Too its detriment in my opinion but not apparently for the real estate investors willing to pay.
Rob Dawg | Homepage | 05.02.08 - 2:40 pm | #
The Central Coast is another animal altogether. There never has been any sense out of the Santa Cruz/Monterey market.
I was talking about the North Coast...damn near Oregon. Six hours north of San Francisco. Behind the Redwood Curtain. A geographical oddity - at times winter rains bring landslides that literally shut out the outside world for days or weeks at a time. Four times in the last year and a half silly backhoe accidents have rendered us without broadband internet for days at a time. There are a LOT of reasons property should be dirt cheap up here, and yet I can't find a liveable three bedroom house for under $275,000. The only properties under $200K are literally teardowns.
To think that 15 years ago I could have had 40 acres for $40,000.
At least we don't have thousands of kooks in the lineup like down south. 48°F water and plenty of great whites keeps it real neighborly out there.
Oh- and here is the clambake location. It goes to auction on May 5th.
SDLookup.com | 7455 Hillside Dr - MLS# 076094055
"5865 Reo Terrace # F
It's in Chula Vista"
Nope. North of the South Bay (54). It's in San Diego or perhaps National City--can't quite figure outcity limits around there.
I have been covering the huge price declines in the San Diego RE market neighborhood by neighborhood. So far more than 40 examples of houses falling more than 40% in price, and a decent smattering of 50%+ declines.
San Diego housing market « Greg’s Law & Economics Blog
I was talking about the North Coast...damn near Oregon. Six hours north of San Francisco. Behind the Redwood Curtain. ...
To think that 15 years ago I could have had 40 acres for $40,000.
ehhh? Early 90s the "no harvest land" approx 20 ac. properties with existing access and development rights were running $120-$150k. Had a retiring tech do just that and got enough money from the lumber "salvage" to build his house to pay for some of the land. Eureka region ca. 1993 bordering state forest land.
Anyway I think you are remembering a bit low.
Anecdotal but still interesting....
I was out in 4S ranch the other week. Pretty nice, but brand new, development. I was stilling at bar in one of the new developments restaurants.
There were three or four totally unrelated couples or groups of people talking about how they were hurting financially and cutting spending. In all cases mortgages were at the root of their hardships...
Alot of pain in those parts....
OT - I was having a discussion with the fund administrator for the most conservative fund in my 401k menu. She said that the managers are now actively seeking securities CDO/MBS/RMBS/CMBS/ABS that are priced "irrationally". I asked her if they were actively seeking them out to sell them out of their portfolio or to purchase. She laughed. She said those securities are massively underpriced and the ratings agencies have it all wrong and their fund managers do their own due diligence. I asked why she thinks they can use 3 managers to do due diligence and expect to achive better quality than Fitch with massive sets of tools experience and many analysts (the only one that's getting real). She laughed again.
My only other choice is equities.
HELP!
So far more than 40 examples of houses falling more than 40% in price, and a decent smattering of 50%+ declines.
Greg Weston
Walk away.
Apologies, I said "Eureka region" but meant north of there. The actual location being referenced is just outside of Crescent City.
Well obviously you couldn't get 40 acres right in Eureka, but there was plenty of land 20 to 40 minutes east (and that's beautiful traffic-free commuting) for $1000 per acre of raw land (admittedly undeveloped with little hope of ever getting utilities). I'm not misremembering; I have friends and family I helped move onto such properties.
anyone catch the BAC filing and now S&P downgrade of CFC ?
how much of all this is at the FED ?
Redwood, why would anyone buy land that has no uitilities ?
nades writes:
I was out in 4S ranch the other week.
For the 99.44/100ths pecent who have no idea. 4S is a development in North San Diego County that is in competition for poster child of the bubble. "4S ranch" plus an action word will google any number of horror stories.
Interesting SD condo market fact. There have been 1 closing on downtown condos in the 2M+ range since 2/22/08. There are 29 listed, so supply at the 2M+ range downtown is about 6 years. The supply of 1M to 2M condos is about 18 months.
Wow! Pretty cool
why would anyone buy land that has no uitilities ?
"Off The Grid", baby. Plus, see Michael Caine's compound in Children of Men. . .
Dawg, good point, a little obscure for 99%+, I think I just got excited about Diego being on the front page.
4S Ranch, California - Wikipedia, the free encyclopedia
The property changed hands several times over the next 100 years. In 1938, the property was sold to the Ralphs family, owners of the southern California grocery chain. In the early 1980s, the Ralphs family agreed to develop the southern portion of their property (what is now the 4S Ranch master planned community) and retain the northern 1,200 acres (4.9 km²) as a family retreat.
Thats a heck of a retreat!
Only another year and a half of resets ahead.
Any bottom spotters have a date certain?
Why buy land w/o utilities?
I guess you'd have to live up here, or want to, before you'd understand. There's steep terrain and water bubbling out of the ground you can capture and supply to your house with gravity. You can likewise harness that water for micro-hydro-power systems, or if you don't have enough slope just go solar. Humboldt County can reasonably claim the highest concentration of alternative energy power systems in the nation, at least on a per capita basis. Sure it's not cheap, but at one point the land was cheap enough that it was nearly a break even proposition. As energy costs continue escalating, it may again become so, even with property prices this high. Then there's septic systems instead of sewers, cell phones replace landlines, satellite for your internet...where there's a will, there's a way.
Then again, plenty of people really don't mind doing without all those things. We managed for a couple of millenia without them didn't we?
Ultimately it's about lifestyle and quality of life. Personally I'd rather have to light my house with whale blubber than deal with the daily commutes in most metro areas. The only thing that keeps me from moving into the hills is I want to surf every day.
I don't think that a bank has any oblication to purchase insurance for REOs. For that matter any free and clear owners don't.
Back in college one guy used to snorkel for oysters off of the college boat dock. 'Course now the MSX has killed most of 'em.
barely,
A lot of 401(k) plans have a hidden provision called an in-service distribution. If you are over 55 years old, you may qualify.
It lets you make a transfer to a Traditional IRA even if you keep working, and it's not subject to hardship withdrawal rules.
The age trigger and rules would be written in your plan document.
Assuming you can't transfer or withdraw without hardship, I would send a certified letter to the trustees of your plan. I would tell them that since they have failed to provide a safe haven investment choice in a difficult market, you will hold them PERSONALLY liable for any losses. Just for good measure, I would CC the DOL.
If you borrow the maximum amount allowed (50% up to $50,000), this money will not be exposed to losses while it is borrowed. Contrary to what some have written here, there is no tax consequence or penalty for borrowing from a 401(k). It's the same as borrowing from a bank, except you are borrowing your own money and there is no third-party lender.
It will be fun to spend my summer time in San Diego in a rent free REO. My relatives are busy right now finding the best REOs that are closest to the beach. After I pick my favorite, perhaps we can have a CR clam bake on the beach as sort of a house warming party.
Elvis
in time for the US OPEN?
Windnsea would be nice!
@jim a - what is MSX? I Googled it, and all I see is old computer stuff, which I'm thinking is not killing any oysters.
barely said: "...She said that the managers are now actively seeking securities CDO/MBS/RMBS/CMBS/ABS that are priced "irrationally"..."
Did you read the story at CR's "Housing Wire" link?
Surprise: April MBS Returns Best in Over 10 Years : HousingWire || financial news for the mortgage market
"...On the heels of earlier data suggesting at least some encouraging trends for investors, it turns out that April was a very good month for at some investors in the MBS marketplace and the first strong sign of life in a secondary mortgage market that has been all but locked up since the middle of last year.
The proof? Merrill Lynch said that excess returns for MBS over Treasuries were the highest theyve been since at least 1997..."
I'm not making a case for buying them (since I think there's more money to be made in equities), but it's not like it's a totally off-the-wall idea, either, for someone who's proactive, thinks independently and can play past current conditions.
S.
S.
Any bottom spotters have a date certain?
puravidavid
bottom callers always called the bottom yesterday.
Imagine how many NODs have not been filed and are still being hidden on the bank's books.
You can be in charge of the Mexico REO clam bake. I'll be in charge of the San Diego REO clam bake. CR, should take on the Newport Beach REO clam bake. Anyone else?
Elvis | 05.02.08 - 2:26 pm | #
Not many Clams here in Chicago, although the beach is very nice (water to friggin cold though). Perhaps some deep dish pizza by the lake.
Foreclosures in SD are concentrated in just three or four areas. See this Union Tribune article and graph.
Page not found
so how do appraisors valuate homes when 60% or more of home sales are REO's?
I often hear "well, we don't count REO's because they're not a typical transaction"
but in this case the REO seems to be more than typical!
Elvis- if you're on the beach in SD, make it one of the nights the grunion run, the fish come up on the beach to be caught- and I doubt if you'll have any luck clamming on our beaches. Or swim with the leopard sharks in La Jolla in August.
BTW- I called the bottom months ago, I'm just waiting for the data to catch up. I can wait,...years if I have to.
sdtfs:
I wouldn't eat a fish out of the Pacific anywhere near SD/TJ/LA if it came out and paid me $100k to do it.
the pollution around there is nothing less than horrific.
every time it rains, they have to put out toxic flags on the beach due to the runoff from the cities.
I typically get sinus infections after swimming in SD or Coronado.
As Will Rodgers may have, or Yogi Berra could have, "You can call the bottom when no one's callin' the bottom."
Foreclosures in SD are concentrated in just three or four areas.
Hmmm, depends on what you mean by concentrated. I'm fairly certain I can find a foreclosure within a quarter mile of any place in the metropolitan area. That map is of foreclosure rates, since they're not selling, the properties are piling up even in the lower rated areas.
Too bad the clams don't run in the area. I guess it will have to be a grunion bake, then.
I typically get sinus infections after swimming in SD or Coronado.
That's why we have cheap TJ pharmacies,...oh, now you're going to tell me you don't trust foreign drugs. Physician heal thyself.
Redwood,
that sounds great . I wish i could join you guys in North Cal
seb: I'm not making a case for buying them (since I think there's more money to be made in equities), but it's not like it's a totally off-the-wall idea, either, for someone who's proactive, thinks independently and can play past current conditions.
Being able to pause before acting, and certainly before impulsively proacting is an essence of independent thinking.
As this is serious business, not playing is absolutely necessary to avoid the disatrous group think that destroys the outlyers of the herd.
Recognizing the magnitude of the mistakes made when misallocating precious and scarce resources over the past century will underscore the potential for correction that is occuring. Dreadful and morbid as it seems, the study of 'Die Off' is proactive; makes for an interesting table-topic game.
But, allowing for a game or sport metaphor, 'a great defense always defeats a great offense.' Against systemic collapse, we'll want to survive first. 'If they can't score on you, you'll win.'
Life on earth is a closed entropic system save for sunlight energy temporarily overwhelming the long term trend. In the mid-term (decades to centuries), I submit, we're on a downward slope.
Mene, mene, tarkel upharsin. http://en.wikipedia.org/wiki/The_writing_on_the_wall
That's why we have cheap TJ pharmacies,...oh, now you're going to tell me you don't trust foreign drugs. Physician heal thyself.
ROFL!
it's funny, I'm sitting at work and totally laughed out loud. My nurse asked me "what's so funny" and I had to say "nothing".
now I have to get to work since I've been busted!
"Foreclosures in SD are concentrated in just three or four areas"
So, it's contained? LMAO!
Great to look into the rear-view mirror to see where this mess is going. It's like a plague. It'll spread until the areas that now are showing the most foreclosures start to see declines and other area start getting hammered. The great leveling field of containment.
That just means more great deals. It really is a good time to buy. Isn't it?
They go pending, but THEY DO NOT CLOSE.
I've been tracking this since last fall.
Only .6% of all short sales close escrow.
They get a lot of offers, because they are priced cheap. Sellers don't care how low they price those homes, because it's the bank's equity being lost.
In this market, pendings are no longer an indicator of sales. Too many people can't get loans. So we follow closed escrows to get the true story.
Pendings do give an indication of the demand, what people WISH they could have.
BottomCallTabulatorMatrix writes:
Any bottom spotters have a date certain?
puravidavid
Stocks:
dotcom was 25 months. IMO worse than dotcom, not least because low interest rates will not pull us out. Not clear from here what will.
GD was 33 months. IMO not as bad as GD, hope we don't need WWIII to pull us out.
Say 27 months, beginning 9/9/07, maybe ending early with santa rally mid dec 09. (each quarter = 1 inning for baseball fans, so we are in top of third)
Housing later. Wave of option arms resets ends spring 2012, foreclosures from same end late 2012, probably stable 2013. (Option arms will have the largest neg equity from rising mtg/falling price; virtually none of these loans will be paid off early because virtually all are already underwater. Banks will experience greatest losses)
CR... how about making some guesses on coming ARM losses?
"Foreclosures in SD are concentrated in just three or four areas"
If you consider 1% of houses to be in foreclosure to be not siginificant. Seems almost the whole metro is in a category of up to 10/1000 of ALL homes.
Yal writes: Redwood, why would anyone buy land that has no utilities ?
Here in Southern California, people fight for off-grid land... it's your only guarantee that you'll be left in peace without a 4-bed 3-bath McMansion popping up next door.
OT- Berkshire profit sinks 64 percent on derivatives loss
Berkshire net off 64 percent on derivatives, insurance
| Reuters
I guess the old dude knew what he was talking about in regards to derivatives as WMD.
It's ironic that the people that need the closes the worst are the statistics in the "not closing" column.
For the 401K issue, the MBS play is not a bad play on your administrator's part if they are any good. However, I would worry as most fund administrators have found that they typically come out on the wrong side of the trade with wall street.
On the other hand, you could take a loan out as previously suggest. At the current time, my 401k loan rate is 6% which is great than a money market and could be used to pay off a loan that you are currently paying. In my case, I have a car loan at 6.2% that is over in two years. I could take out a loan at 6%, reduce my payment, and pay myself the interest. Pretty interesting if you think about it.
The short sales explains why the median listed housing on the San Diego MLS has not really change for seven weeks. But the median house sold has kept going down the last couple of months. The median prices since last May had been going down $10,000 per month.
Home prices have held up along I-5 between Pt. Loma and Carlsbad.These are upper class home that used the option arm. Wait in the next few years as these explode. There are already some of these people walking away.
I am one house back from the oceanfront. Maybe in three years i will be on the oceanfront. There have been a ton of new condos built along the boardwalk at $2 million for 1500 square feet.