Wells Fargo 30 Year Jumbo Mortgage Rates at 9.2% APR
Submitted by
CalculatedRisk on Tue, 09/23/2008 - 12:37pm (318 comments)
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Wow, that's almost what the Fed charges non-banks for a loan...
First. CR, do you think Paulson's plan is a bailout of the Fed?
1st
Oh Nemo.
Paulson looks like the evil guy from children movies.
No way
Okay, way.
Just have Paulson pick up a $700 bil, 30 year fixed note at 9%. Win-win.
You're right Nemo.
AIG should have just taken a second.
Wait til there's a ten handle
Time to double the conforming loan limit.
Right?
9.2% sounds about right in terms of the risk profile of jumbo borrowers in CA.
Lets not try to artificially suppress pricing. Accurate pricing serves a purpose.
bye bye securitization!
See you again in...oh say 60-80 years.
Good ideas and lies - Paul Krugman Blog - NYTimes.com
Krugman calls Paulson a Liar !
see ya later Westside LA
this is the DAGGER
Also, 9.2% over 30 years may be cheap given the way Bernanke wants to fire up the printing presses!
Gary, I don't read it as a bailout of the Fed.
All, wow. Internet problems all day today. Luckily it was a slow day for news.
Best to all.
I can haz refi?
Crap. I think CR added me to his Greasemonkey/killfile skip list.
Ah well. This will not bode well for real estate prices in my Brooklyn neighborhood (where I rent, because I would need to work another ten years to afford at current prices).
Actually, it will bode well, as it will help accelerate the decline back to norms.
Let's see back in the day, that would be 1981, parents were at 22% interest on conforming 30 year.
Now if they will pay more on their savings accounts I'll be in good shape!
Yaay! I spoke to soon!
Nah, just refi out of it when rates go down. Get some nice cash back from your equity too!
So AIG is still a higher credit risk that an overextended yuppie in california.. good god!!
This would have been an appropriate rate in 2003 with 20% down in sonoma county.
You know they don't want to lend, dontcha?
At those rates, they can give you the mortgage and then turn around and send it to someone who's got cash and pocket the rate differential as fees.
CAN'T OVERSTATE WHAT THIS DOES TO WESTSIDE LA
That's gonna sting. Stink. Something like that.
That rate signals enforced demand destruction. Clearly, WFB does not want to lend, and those who wish to borrow at this rate will really really really have to want that particular tinderbox.
I wonder if this will put pressure on keeping the conforming loan amount at $729k and not drop it to $650, as was initially planned? I imagine NAR and NAMB are firing memos to their lobbyists right about now.
In my neck of the woods, here in Rancho Santa Margarita, this is gonna kill the market.
If we assume a 600K loan for 30 years, at 9.2%, that is $4,914/month.
Throw in the HOAs, taxes (on that monster), insurance (fire and/or earthquake) and you are talking some serious bling.
In other words, $819/month for every 100K borrrowed.
This is gonna be painful.
Dr. Evil was not a very smart person.. Instead of threatening to blow up the world for a few hundred billion dollars, he could just have worked for Goldman Sachs.
This just goes to show how much of a subsidy the US taxpayer is giving to borrowers. That 3% difference between conforming and non-conforming loans is huge.
The US government's Fannie Mae and Freddie Mac subsidiaries are going further in the red every day, and the stealth bailout is getting just that much larger.
Why would 20 yr. be more than 30 yr?
FYI, Bank of America branch here (Bay Area) was offering better rates than that... but not much better. They don't want to lend either.
Sure didn't look like the rates on bankrate.com... why is that? [snicker]
I think Goldman Sachs should change their name to a more WASPish name... just a good insurance..
Oh, for a moment I got ahead of myself and forgot about the LFKAJ's.
This is gonna be painful.
OCDan
Or bring some sanity back to RE prices?
(Not sarcasm, just wondering)
@Journeyman -
That's unusual, but might reflect lack of economy-of-scale at this point?
OCDan - conforming loan limit is $729k so RSM falls under that. Not that anyone would want to live there, or Ladera, anyways, when you can be closer to the water for a similar price and lower HOA.
This sounds about right for south Florida. Maybe a tad more. None of it matters because nobody is loaning anything, and nobody is selling anything. Heard that the median house could only be afforded in South Florida by 15% of the population. I think the fall in prices means that 25% could buy the median house. After anyother 20%, the median income will be close enough to be buying the median house, assuming the banks are willing to sell for mkt price,which they aren't now.
I traded a lot of GNMA 12's (12.5 on the underlying mortgage) and life went on.
That said, pricing on the homes will take a hit.
Give Dodd a call. He can get 8.75% through his Family and Friends plan.
Comrade Bagholders,
Ouch.
Buh Bye West LA. Buh Bye Santa Monica. Buh Bye Palos Verdes. Buh Bye Encino/Tarzana. Buh Bye O.C. Buh Bye Ventura County.
That's all folks!
Nostrovia,
iceman writes:
9.2% sounds about right in terms of the risk profile of jumbo borrowers in CA.
Thats edzachary what I was thinking. They've finally learned to price things correctly.
.....
This is a great and polite way for Wells Fargo cease making jumbo loans without actually going out and saying it. Another example of sensible standards coming back to the market.
OCDan,
Orange County jumbo limit is 729k
Finally an accurate pricing of risk. For years I have been saying to anyone that will listen that 5% loans would not create the yield necessary to cover risk. Turns out it wasn't and I'm not surprised the countries most conservative lender now agrees.
Well ... this is just the beginning of the meltdown folks ...
The banks are getting ready to freeze up ...
We need a bank holiday NOW ! out with the bad, in with the good, try to keep your food down ...
Around 7.5% seems to be the going APR at bankrate.com ($800k loan with $200k down). Wells Fargo is not exactly a "representative" choice of what is out there (at least not yet!) Funny thing, though, I've considered opening a WellsTrade account, yet I haven't considered moving to the Bank of GS/or MS.
OT (but this post reminded me)-- Anybody used to eat that hot ham and cheese sandwich at Burger King calle the Yumbo (I believe.) They were good.
Now that Wells Fargo has already passed their trash for cash at the Fed Window, they shouldn't be allowed to give any non-conforming mortgage in CA.
Right now in South Fla, the former jumbo amount will buy you something fairly palacial. But in the Land of Low Salaries, hardly anybody can afford to borrow at any rate, or a zero rate. Really for most people here borrowing 150k is a stretch.
AFTER the bailout bill is passed, D.C. will get to work on more home buyer subsidies.
Clearly this is unfair to those who cannot afford a home.
Comrade Baron Von Helmut III writes:
Give Dodd a call. He can get 8.75% through his Family and Friends plan.
LOL!!!!!
With friends like him who needs enemies....
....
Let's see what was it? Oh yes...
Old:
3% savings interest, 6% mortgage rates and on the links by 12.
New:
1% savings, 9% mortgages and 6-12 at Club Fed.
Lawyerliz
Florida's Property taxes are a killer ...
DAP ASAP.
Comrade Misean:
Add coastal San Diego to that list.
One more question.
Is Wells the only lender out there? Or do they set the rate?
(Ok, so it's two questions.)
Elvis
Definitely remember the Yumbo. They were good. Very funny time once in the drive thru with my mom ordering one.
ades
I'd rather have the Dodd than the Paulson ...
Anyone want to bet that if a bill isn't passed this week they blow WM on Friday in a last ditch effort to get hysteria going again?
mm--not if you've had homestead for a while and are capped out. I filed a bunch of tax appeals for people. Value is as of Jan 1st, which nobody complained about while prices were going up. Now complaints.
Hard to find ANY comps, because there've been so few sales.
--
Evidence keeps pouring in...
One Bloomberg reporter asked a guest, Why cant govt give money to those who are not making their mortgage payments to solve the crisis?
What sort of country breeds such morally bankrupt dopes? Only America can. I bet that no one in China or Sweden would ever think of such as solution.
America is doomed because Americans are doped.
Jas
Face It ...
Bank Holiday Ahead ...
either called or with chaos ...
Jas, you are my idol. I used to dislike you, but you're one of the few people making any sense these days.
"Dr. Evil was not a very smart person.. Instead of threatening to blow up the world for a few hundred billion dollars, he could just have worked for Goldman Sachs."
Throw him a frickin bone people...he was frozen for 30 years!
This won't last. Seriously.
These rates will be 5% next week.
If not, Bush will sign an executive order.
We pay the banks. The banks let everyone re-fi. A mini-housing bubble ensues and everyone is happy again.
Except my kids, my grandkids, my great grandkids, and my great grandkids (who get to pay off the debt).
Jas is back!! Didn't mp say he was going to be unavailable for a while?
And bacon dreamz, where is he?
"Krugman calls Paulson a Liar"
And Krugman was expecting anything less?
Let's Play "WALLSTREET BAILOUT" The Rules Are... Rep Kapture
YouTube -
bacon dreamz is putting lipstick on his dinner.
Waiting for the Paulson / Dr. Evil photoshop with the "$700 BI-LLION DOLLARS" tagline at the bottom.
Paulson Johnson is right!
Barley writes:
"Krugman calls Paulson a Liar"
And Krugman was expecting anything less?
~~~~~~~~~~~~~~
But Krugman put it in print, in the NYT ... and proved it for all the world to see ...
we are close to a crash, IMHO
EITHER WAY
Actually the rate is down from yesterday:
Wells Fargo Home Mortgage - Today's Rates
I've never seen bacon dreamz post in a thread that wasn't Tanta's.
Tanta doesn't chime in on Economic matters. At least I've never seen it.
people in west la will continue to use other, more 'toxic', mortgages to finance their purchases until those options dry up, if they dry up
I'd rather have the Dodd than the Paulson ...
Hearings are ritualistic in DC. Today's was mostly handing BB and HP's asses back to them for a three-page proposal for a trillion dollars (an instant classic here).
It's hard to know where we're at without any vote counting yet, but what is for sure is that the Paulson proposal is dead and soon they'll be working from Dodd's as the model.
Mother of God.
9.2?
Well that does it for me, folks. Since I will never be able to sell my shitbox in OC, I have no choice but to stop paying months before I need to move.
F this. There is no honest way out. Time to gather what you can, burn what you must, and face the new reality.
How long are we expected to play by the rules and pull our weight with no benefit whatsoever? How long are we supposed to watch the cheaters and liars get the cake while we eat dookie? What incentive is there to building anything of value anymore?
F this. Time to retire, get a sweet gig as a barista, and forget trying to keep our heads above water in a system designed to drown the honest folks.
I gotta punch another hole in the wall now. GODFREAKINGDAMMIT
Is this the clearest sign yet that Treasuries are gonna be sold and sold hard? There is a reason why Rubin called the bond market more powerful than the President.
Jas, you are my idol. I used to dislike you, but you're one of the few people making any sense these days.
Too Close to the Sun
If Jas is your idol, you need help.
jed,
they already have, homey
I'm still trying to understand how lower (normalized) house prices are bad.
Bets ?
Bank Freeze or Bank Holiday ?
CSC
least yer high
CSC,
Swim away and take your fixtures with you.
Those talking about a Bank Holiday - can you give me some historical parallels of when something like that might have happened? Thanks
I am also starting a new philosophy here. It is called Fundamentalist Jas Jainism. The old Jasites are too soft, too optimistic.
All hail Jas Jain!
All hail the hoopajoop!
Comrade BDiego,
Yep, forgot.
Nostrovia,
I think the Super Heroes took a Super Hero Holiday once. Didn't work out so well for the rest of us...
the Paulson proposal is dead and soon they'll be working from Dodd's as the model.
~ asl hearts lenin
~~~~~~~~~
I pray you are right ... Congress should just pass the "Dodd Bill " and go home ... F Paulson and Bush , take it or leave it ...
Banks will freeze with or without a bill ...
x-man, have they? there aren't option arm's available. interest only payments? seems like it's still going on from what i can tell, but i'm not in the mortgage industry
Noble
FDR 1933 ...
OT:
UK: Halifax reports house price inddesx falling 11% anually in august.
http://www.hbosplc.com/economy/includes/04_09_08_HousePriceIndexAugust2008.pdf
Might need a bank-holi-quarter
Kneel_before_Zod
A derivative workout and freeze until regs are done ...
OT-
scalar (from a previous thread):
When Odysseus (Ulysses) was on the isle of the Cyclops he told Polyphemus his name was Nemo (no man). After the Cyclops ate one of his men, Odysseus got him drunk and blinded him. When Polyphemus's brothers asked him who had hurt him, Polyphemus was only able to say "Nemo"
BTW- Nemo meets CR in person and suddenly he's on fire. Somebody needs to dredge up those posts last year where Nemo was positively fawning over Ben Bernanke and take him down a peg or two. Well, maybe not fawning.
Bets ?
Bank Freeze
or
Bank Holiday
?
Noble, my best 30 second answer is like other credit and liquidity squeezes in the 30's and in other countries.
Go back a week and ask us the last time 3 MM funds blew up or how many IB's would be left. Uncharted waters IMHO.
I'd rather have some $$$ tin canned at home than waiting in line for gas money.
In a 'bank holiday', would ATMs be shut down?
Would credit cards still be good?
Wait until all the Treasuries that will be issued to pay for this mess start hitting the market and driving all of these rates UP. This is going to get a hell of a lot worse kids.
Is there any way that 700 billion request could be considered extortion? Add Bernanke, Bush, et al. and a conspiracy? Attempted extortion?
I hesitate to hope that this might actually kick some sense into the hold-out bubbleloons in Carmel Valley (coastal San Diego). But if other lenders follow suit, they will have effectively capped the buying power off all but the uber-wealthy below $1M ($730k-ish loan + $200k DP). That's absolutely going to leave a mark in a community where Pardee is still asking (and getting) the high 9s for ~2600sf stucco-boxes with 3kV power lines in the backyard.
"Krugman calls Paulson a Liar"
In fairness to Paulson, Krugman is mixing apples and oranges here.
Section 8 reads:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Which basically means that the Secretary's decision is immune from review by the Judicial branch ("court of law"), other members of the Executive ("administrative agency"), or extra-governmental entities (FDIC, Fed). Nowhere does it say that the Secretary is immune from Congress; methinks that such a setup would be quite unconstitutional under the whole "checks and balances" thingy.
Comrade Clueless Dufus writes:
In a 'bank holiday', would ATMs be shut down?
Would credit cards still be good?
just guessing : No and No ...
I say watch the CP market closely. That may be the first to lock up.
Got ARS?
Clueless D--are you joking?
During the FDR bank holidays banks were closed. No ATM machines then. Closed is closed.
This is why everybody should have some cash for tiding over purposes.
COF, COF.... catching a cold here....
wow,
Dean Wormer dropped the big one.
That is it, the upper end housing market is now officially dead.
Now, we start inflating seriously, as it will take several years of 15% inflation to make these housing prices look reasonable.
Someday this war's gonna end...
this is a rate sheet for public consumption
the real rates for those who are actually credit worthy are currently around 7.0 through Wells for a jumbo.
But credit is super tight, so qualification is near impossible.
Oh and I wrote to Feinstein, Boxer, and pelosi. First time ever for me. No bailout. Not in any form, certainly not in this one.
Comrade Bagholder CSC,
Come on, tell us how you really feel.
Can't sell mine right now either.
I'm just numb at this point.
Nostrovia,
In many area of California, these publicized rates are more of window/wall decorations in banks.
Many lenders are simply not making any jumbo loans.
Tanta doesn't do economics unless she's commenting as "Clyde".
rowen
So Paulson just does what he wants as long as he tells Congress afterwards ?
rowen....it says it right there in the passage you quoted....
Going to hurt more in January when the "jumbo conforming" drops from 729 to 650.
"That is it, the upper end housing market is now officially dead."
It has been officially dead for at least a year. On August 2 or 3rd, 2007, Wells Fargo did the exact same thing with jumbos. Some people need to recharge their memories. I bet most don't even remember the Yumbo.
I agree--this will positively kill yupscale markets I'm familiar with: SLO, SB, Monterey, Marin, Napa, etc. Next spring will be brutally quiet--and crush the foreclosure flippers.
No bailout. Not in any form, certainly not in this one.
~ monta's ankle
cheers !
What we all need now is a good song parody. So here is the proposal...
I will write and sing a song parody about our situation with a video to be posted on YouTube.
CSC is now taking suggestions for songs to parody in this project. Links will be posted as soon as it is on YouTube.
rowen writes:
"Krugman calls Paulson a Liar"
In fairness to Paulson, Krugman is mixing apples and oranges here.
Section 8 reads:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Which basically means that the Secretary's decision is immune from review by the Judicial branch ("court of law"), other members of the Executive ("administrative agency"), or extra-governmental entities (FDIC, Fed). Nowhere does it say that the Secretary is immune from Congress; methinks that such a setup would be quite unconstitutional under the whole "checks and balances" thingy.
rowen | 09.23.08 - 5:33 pm | # [kill][hide comment]
That covers everyone...including Congress.
CSC,
I'd rather have you just buy us all a drink.
I say they pump this proposal so full of oversight, guidance, and punative measures for the CEOs that the WH just rejects it. Then everyone bitchslaps each other, the market forgets to crash, shit levels out, and we save 700 bill.
Yes, that plan took about as long to formulate as Paulson's...
YUP...you are right. Upper end flippers were just delivered a loss.
Glad to see it. I want to buy a house in south OC next year or early 2010.
Elvis: Thanks, brother. Much love.
The hub, who was a state prosecutor under Janet Reno, was much more sanguine about section 8. He said his decisions to prosecute or not were not subject to court review, and that this is common.
Not big on song titles, CSC, but Woodie Guthry would be a candidate to rummage through.
Finally. Trickle down economics explained.
Sinfest
I paid 9.5% on a house from 1979 to 2003. Paid it off in 2003 when the interest rates on CDs got down to 1%. The payment was only $298 month and I still couldn't afford the house when I bought it.
Mark Twain said, " History doesn't repeat but it does rhyme." Anybody else see Treasuries going above 10% like in the late 70s and early 80s.
sdtfs
thanks for the info
When was the last bank holiday?
I'm almost thirty and never remember one. Of course I spent the first 29.25 years with my head you know where...
......
Except that this is different, Lawyerliz. Isn't it?
Paulson wants to spend unconscionable amounts of money in secret.
the last bank holiday was Labor Day.
ades
1933
"CAN'T OVERSTATE WHAT THIS DOES TO WESTSIDE LA"
As potential buyer with income, DP, reserves, no debt and excellent credit. . . I'll believe it when I see it.
The Westside market is a zombie that will not die. I can't wait for the wails and gnashing of teeth. Hasn't happened yet though...
scalar - LOL i guess i used the wrong expression.
mmckinl - thanks.
Put me in the one-month's worth of necessary expenses camp. I pulled it from the bank yesterday.
The only problem is I don't drink crappy coffee, so I don't have anywhere to put it.
Comrade Bagholder CSC,
What genre?
What specifically...Interest rates or bail out?
Nostrovia,
I love preparing for deflation & hyperinflation at the same time. Good times!
Yeah, it's different. Tho victims whose perps the hubs refused to prosecute were as mad as you guys are.
Sometimes he refused because he felt it was impossible to prove the case.
There is something wrong in a country when a movie villain (Dr. Evil) appears less of an extortionist than the treasury secretary (Hank Paulson)
Here is the youtube clip
Austin Powers - 100 billion dollars (500 - Internal Server Error
Played call a congressman today.
Couldn't get out of hold at Casey's office.
Got a person on first ring @ Frank's office and was so surprised that all I could blurt out was "kick ass!" - really, I felt like an idiot - and then told the stunned staffer that I was pulling for Frank. Whodathunk?
Did have a longer conversation with my rep's staffer, who's also his finance specialist. He sounded surprised that I was going against Paulson's plan and inquired why - like "you know we're all going to die if it doesn't pass".
We then had a pleasant conversation about section 8, the rise of the debt limit by $1.5T and the probable destruction of the currency if this goes forward. Forget the populist exec bashing stuff...key on the currency. He actually listened and asked questions.
Coincidentally, my rep's also on the Congressional-Executive China Overview Committee and that connection came up as well.
He demurred to give the rep's position, so we'll see. Probably for the plan. Eh...
Let's see,
Using FHA's calculator, I only need to make $226k/year to afford a $729k loan.
Wells Fargo is only charging about 10.5% on credit cards (beyond introductory offers)
9% for secured debt means that they're essentially betting that the assets used to secure the debt can't actually be used for repayment.
Comrade Misean: Anything that is available on karaoke. It will be about the mess in general.
It doesn't matter if I can actually sing it, since skills and performance are no longer factors in America.
JBR--
Go to the MLS.com. Click on Sunset Strip/West Hollywood. Read the first 2 or three pages of listings.
Imagine what those pages looked like ONE YEAR AGO.
Imagine what those pages look like in ONE YEAR.
$700 Billion is more than what Iraq cost up to this day.
$700 Billion would pay every Americans gasoline costs, utilities, even cable TV and internet with plenty left over.
$700 Billion could give 11 million unemployed Americans $60K in income or pay for higher education or retraining.
However, $700 Billion is not enough to subsidize failed business models back to life. The worst of these banks are worth far less than zero.
But the fact is, this $700 Billion doesnt actually exist in the first place. Its a $700 Billion pay-option ARM loan - the very kind of loan thats destroying our financial system. Weve mortgaged America to the fiscally responsible Chinese, and have balooned this pay-option ARM year after year under Bush. And here we are taking out a second mortgage on top of that.
There comes a point where the rest of the world will stop lending us this money because of the rapidly deflating dollar, or are simply be unable to.
China paper urges new currency order after financial tsunami
| Reuters
What does "... and committed to agency discretion" mean in the context of Section 8?
I'm curious but I suspect it's a moot point as in the hearings today Paulson was pretty much told this Section wasn't going to fly.
Barney Frank is NOT on your side.
scalar writes:
Barney Frank is NOT on your side.
scalar | 09.23.08 - 5:47 pm | #
Is he behind us?
Cannibus....Talking or "Lying" Heads....Burning Down the House is a catchy tune for the occasion or how about AC/DC-Ditry Deeds Done Dirt Cheap:)
He is if he messes with Paulson's mind long enuf.
It means that the Treasury makes the calls. Period.
It doesn't have to get permission from anyone before making transactions.
Dont ever let a politician get behind you....
ever.
....
CSC, I suggest Dionne Warwick's "Do you know the way to San Jose."
Burning Down the House might work.
I was also considering a remake of REMs "It's the end of the world as we know it." It might be too tough though.
No sweat. Piggy-backs will make a comeback.
Cannibus: AC/DC's "Downpayment Blues"
avyfederal has 30 year conforming at 5.35%, I should probably hop on that while I still can.
CSC,
He is the one pissing on your back and telling you it's raining.
Frank is beholden to bankers.
Ba de ya - say do you remember
Ba de ya - Crashing in September
Ba de ya - never was a debt to pay
CSC,
"Is he behind us?"
You are a bad person.
Anywho, those rates suck &%%. I just closed a 15-year conforming at 5.375 this morning.
I like anything by REM.
CSC--are you gonna be wearing a mask?
Mearle Haggard--Take this "plan" and shove it....Anything that says screw you to the government would suffice. Check out some old 60-70's vinyl....MM
Another lie disclosed today by the White House about the 'Paulson' plan:
Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.
(sez: White House Deputy Press Secretary Tony Fratto)
So Paulson, Beranke and Cox were lying when they said this just came popping out of the box for the administration. They've been waiting to drop this on Congress in the last week before adjournment, just like they did with prior laws (think: Patriot Act).
Notice they are sending Cheney and his goons to the hill to threaten the GOP guys back into line....
As to banks. Repeat from this AM other thread.
Local corner bank had to give me large denomination bills as very short of smaller bills (think twenties). I think that J6P is starting to pull safety money - I'm recommending to friends - but I wonder if it's going to be enough.
Bank holiday? That would probably happen if they were going to consider bank nationalization and had to cull through all the crap to see what was salvageable. Sound about right or am I off base?
"No Shelter" - Rage Against the Machine
Gary --
Here you go:
Host your images for free: Pixentral.com - Error
Lawyerliz: It will be my voice over a video montage. I'm very unattractive and don't care to prove that to the world.
The roof ...The roof...The roof is on fire...Let the Mutha' Fca burn...can't remember the artist but that is a good message.
Anon,
There are several RATM songs which are apropos to our predicament.
Cake. Yeah.
Merle is good too.
It is our predicament that inspired them.
Schumer hinted at it today, but look for talk on funding a part of that $700 billion before the election. Paulson will have to work with the transition team for more appropriations afterward.
In my area, Wachovia is charging 7.75% and Bank of America is charging 7.375% for jumbos.
How many times and how many different ways do I have to explain that the California real estate market is unique and not truly representative, except in the sense that it's representative of the worst market conditions in the country?
Sebastia
March 6, 1933 my mom's natal day so I don't dare forget it.
Song suggestion, California Dreamin' morphed into Foreclosure Screamin':
All the lawns are brown
And my equity fey
Ive been for a walk
Now I'll walk away...
On a foreclosure day
Id be safe and warm
If it weren't for Bernake
Foreclosure screamin'
On a bank holiday
First presidential debate is Friday in Oxford, MS at
Ole Miss. Don't think they would shut down WAMU
till after the debate. We may have to stay up late.
Sorry if already posted:
House leader urges Bush to explain bailout on TV
Yahoo! 404 - Page Not Found
If Mr 19% Approval rating gets on TV, then this thing is completely doomed until the new administration shows up.
Much ado about nothing, their fixed rate portfolio pricing has always been terrible, the jumbo market is primarily a hybrid market, why don't you show those rates? Plus, at Wells, you can get up to 0.50% knocked off the rate if you have a relationship with them.
Seb...It's the poster child for Mozillo and Co. and is the root of all the evil in the world! The last bit of gold was pulled out of there in the 1870's. Sell it to Mexico....
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion
That covers everyone...including Congress.
Kneel_before_zod:
No, it doesn't. Like I said previously, people are comparing apples to oranges. "Review" and "agency discretion" are terms of art that differs from "oversight." here is the section that I quoted:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Emphasis added.
Those are two branches of government. Notice the immunity does not cover oversight by the thrid-Congress.
So Paulson just does what he wants as long as he tells Congress afterwards ?
Umm. This is how all Congressional delegation of authority works. For exmaple, Congress creates the FDA and says "make sure the drugs you approve are safe and effective." Congress doesn't provide guidelines or rules. The FDA determines what "safe and effective" means and rolls with it. Congress, as opposed to the courts, can unilaterally step in and say "wtf, you guys at the FDA are morons; you're doing it all wrong." If Congress stays silent, then the agency's decisions and rules hold unless a reviewing court finds that the decision was "arbitrary and capricious," which is a ridiculously low standard.
Anyways, even if the language says that the decisions are non-reviewable by a court of law, they can still be reviewed for constitutional questions. And to the best of my knowledge, Congress can not relinquish oversight when it delegates its authority to another branch.
Dawg,
LOL!
.......
I love it when Sebastian gets condescending.
Bush can't explain how to operate a f&(kin ziplock bag, much less the bailout.
CR,
what's going on in the housing market now? # Home prices fell 5.3 pct in July, gov't says- AP
thank you.
FDIC News:
Flowers, Buyout Investor, Gets Approval to Buy Missouri Bank
Flowers, LBO Investor, Approved to Buy Missouri Bank (Update1) - Bloomberg.com
U.S. FDIC plans significant bank premium increase
U.S. FDIC plans significant bank premium increase
| Reuters
Millennium Trust Sweeps Client Cash to FDIC Insured Bank Accounts
MarketWatch.com
Alliance Bank Offers $50 Million FDIC Insurance Coverage Through CDARS
MarketWatch.com
FDIC chairwoman wants home loans to be part of bailout plan
The article requested is no longer available.
Goldman eyes IndyMac to build bank network
Goldman Sachs is targeting the assets of failed banks, including IndyMac, as a means to build its own banking business as it converts to a bank holding company.
Goldman eyes IndyMac to build bank network - Crain's New York Business
The other bailout: Main Street
The other bailout: Main Street | csmonitor.com
PrimeVest Launches FlexInsured Account
http://www.earthtimes.org/articles/show/primevest-launches-flexinsured-accountsm,551887.shtml
Afternoon Reading: Panning Paulsons Bailout Plan
Afternoon Reading: Panning Paulson’s Bailout Plan - Deal Journal - WSJ
CSC - "I wanna be sedated" by the Ramones
Houses (not in CA) above the conforming limit:
ZipRealty, Inc. - Sign In
ZipRealty, Inc. - Sign In
ZipRealty, Inc. - Sign In
--
Too Close to the Sun,
I am just a public servant (as in free public service) doing my little bit by warning people of the FIX we are in and why.
Jas
WF Jumbos have been over 9% for like 6 months...nothing new here.
Seb, once again you underestimate how far WFC has spread- they are nationwide- and their rates are too!
Wait until Walkalloverya bank jacks your azz!!!
Someday this war's gonna end...
Wheeeeeee!!!!!
We are working to put the house on the market in October and this is a price killer. Anyone who thinks about buying the place, who requires a loan, will have to pay this interest rate. Bah Humbug!
Thanks family members who are making us do this. Grrrrrr
What about the 'Fat Cat Strut' by the Stray Cats?
AllenM...sounds framiliar...HMMMM. Are you a right wing appraiser type?
CSC,
War Pigs comes to mind:
Bankers gathered in their masses
As treasury to cover their asses
Evil minds that plot destruction
After funding all that construction
Or something like that. That one kinda writes itself.
Nostrovia,
Keep up the Good Fight, Jas!
mmckini,
There was one bank that did not close for FDR's
bank holiday. It was the Fahey Bank in Marion, OH.
Seems they never got the order to shut down. It is
still in business.
Sebastian writes:
"How many times and how many different ways do I have to explain . . . ."
Please stop explaining to us.
Seriously. You have no credibility here.
So stop.
FDIC: Chief Financial Officer's (CFO) Report to the Board
FDIC
Chief Financial Officer's (CFO) Report to the Board
Second Quarter 2008
In an effort to streamline the financial reporting process and provide the Board with more timely and meaningful financial information, the finance team consolidated and redesigned most of the financial reports being forwarded to the Board. Specifically, in the past, the Board received three separate quarterly reports, often at different intervals:
Investment Portfolios Status Report investment activities and results for the DIF and the National Liquidation Fund;
Financial Analysis Report (FAR) financial statements for the DIF and FRF; and
Budget Variance Report year-to-date budgeted vs. actual results, broken out both by major categories of expenditures as well as by divisions and offices.
While these reports provided a good deal of useful information, there was no attempt to integrate this information and provide it at a more summary level. By doing so, we believe that the Board will have a better sense of what our overall financial results imply about our performance as a financial steward. As a result, we believe that the attached consolidated financial report will be much more useful to the Board in that regard and we welcome your comments on what we view as a work-in-progress.
lawyerliz:
1. the hub never had $700 billion at his disposal
So it's not completely w/o oversight.
X-man wrote: "Go to the MLS.com. Click on Sunset Strip/West Hollywood. Read the first 2 or three pages of listings."
I've been following listings in about 10 ZIP codes around there almost daily for almost 2 years. I agree that there has been some price movement lower... 2 years ago in 90048 there was nothing under a million $$, now there are 4 or 5 houses between 700-999k. Everything else in a million and up to the moon. Think is... these houses were selling for 250-500k less than a decade ago. ~1 million for a 1800 sq ft 3/2 on a 6000 sq ft lot isn't a price I'm interested in. When the really nice ones hit 700k, I'm in. Maybe...
Second verse, not like the first verse:
Stopped into a bank
I passed along the way
Well, I got down on my knees
Got down on my knees
And I pretend to pray
I pretend to pray
You know the banker likes the tale
Banker likes the short sale
He knows Im not gonna stay
Knows Im not gonna stay
Foreclosure Screamin'
Foreclosure Screamin'
On a bank holiday
so does it mean when we finally receive our ponies they will be all TARPed up?
So when banks can't dump the loans to Fannie or Freddie (or idiots trying to compete with F&F) they get a little bit more careful.(no regulations needed) What a surprise! Too bad Tanta doesn't seem to be capable of understanding that.
Don't think they would shut down WAMU till after the debate. We may have to stay up late.
Actually, the debate will make a perfect cover for shutting down WM. Everyone will be watching the debate (or drinking if they know what's good for them), and no one will notice that big old WaMu finally was laid to rest.
Feels like a gerbal stuck in Richard Gere's butt. There is a way out... but he would probably die trying to find it.
Does not bode well for any real estate in the more expensive NY burbs, either. Inventory keeps rising because expensive houses keep sitting.
Non-expensive houses? Well, there's a few of those, too.
Here are Citi's wholesale Jumbo 5/1s...now this is shocking
5/1 LIBOR - Section 314
Margin: 2.250 Caps: 5/2/5 Index: 2.950
Rate 15-Day 30-Day 45-Day60-Day180d
9.000 1.764 2.219 2.417 2.612 4.265
8.875 1.974 2.429 2.627 2.822 4.475
8.750 2.196 2.651 2.849 3.044 4.697
8.625 2.433 2.888 3.086 3.281 4.934
8.500 2.684 3.139 3.337 3.532 5.185
8.375 2.951 3.406 3.604 3.799 5.452
8.250 3.235 3.690 3.888 4.083 5.736
8.125 3.533 3.988 4.186 4.381 6.034
8.000 3.826 4.281 4.479 4.674 6.327
First they came for naked short selling, but I said nothing. Then they came for short selling, but I said nothing. Then they came for selling, but I said nothing. Then they came for Sebastian, and I said, "Here he is, right over here!"
Bank holiday? That would probably happen if they were going to consider bank nationalization and had to cull through all the crap to see what was salvageable. Sound about right or am I off base?
~ homedad43
Yep .. that's the only way to clean up this mess ...
Without dealing with ALL the paper the banks don't trust one another no matter how much money Congress throws at them ...
Missed Information writes:
so does it mean when we finally receive our ponies they will be all TARPed up?
Sort of. They will arrive in an insulated box labeled "Omaha Steaks".
Paul Simon's Slip Slidin' Away
Slip sliding away, slip sliding away
You know the nearer your destination
The more you're slip sliding away...
There is obvoiusly no honor among thieves.....
Money man, are you trying to insult me?
An appraiser?
No, worse yet, an economist.
Howls of derisive laughter ensue!
Someday this war's gonna end...
For the record joking aside this is not 1933. There can be no bank holiday. This is a 24/7 picosecond world. Think "Ghostbusters" when they shut down the containment field.
Dawg: I just tried that at full volume. I can do that one.
The reviews for the Hank and Ben show are not looking good.
To be blunt, they really bombed at instilling any credibility or sincerity.
They should have had a better coach.
Part of their problem is the fact that they hyped the economy and markets for two years as things worsened, so now nobody quite believes them when they preach doom.
Paulson really screwed himself with his big unilateral power grab. It was a horrible political move, and somebody who's been around as much as he has should know better. It reinforced all the bad stereotypes about Wall Street greed and him.
It doesn't help Hank and Ben that Bush came out briefly on their side and then disappeared. There's no way that a relatively new cabinet member can have the clout of a U.S. President.
Of course, that's in normal times, not now.
Anger is rising in the land...
everything over 700K is toast.
lawyerliz -
Um, aren't prosecutions "reviewed" by grand juries and/or courts?
Haven't read through all the comments yet, BUT,
this is NOT the death of the jumbo market. not yet anyway.
It is simply Wells Fargo stating that they don't want to lend to the Jumbo markets. At this point in time there are many others who have much lower rates (yes, even today) for Jumbo 30 year conformings.
but overall, Wells is theoretically a "strong" and a conservative bank, and thus doesn't want to put itself in the Jumbo hoopajoop.
Yes, I purposefully stressed the word "theoretically", so no need for anybody to try to clarify to me about their ARM or second loan/HELOC problems... They are a conservative and strong bank compared to almost all the other banks, which have far worse problems.
Hey, Jas, you went from wacko to prophet in, what, a week?
but of course that is not to say that a 9 handle on Jumbos isn't interesting news.
AnonAnon said: "I love it when Sebastian gets condescending."
So now I've been called both smug, for pointing out that there's a huge amount of prime lending going on out there that clearly isn't "frozen", and now condescending for pointing out (again) that real estate conditions in California are so far removed from what is normal in the rest of the country.
That's okay, though, I've got a sense of humor about it.
The Irony: So many posters here have railed at the fact that Paulsen and Bernanke are essentially trying to frighten Congress into passing their plan immediately, yet this blog concentrates its attention on the scariest markets and the scariest headlines.
Y'all are too much.
))
S.
SEB--
California is 40% of the housing market debt homey. It is not an ISOLATED MARKET.
The triangle will get hammered too, homeslice.
Even though you seem like a nice guy you've been 100% wrong since the beginning. Give it up.
GODFREAKINGDAMMIT
Currently Smoking Cannabis
Currently, you are not smoking enough.
For the record, I am awaiting armageddon and I dig Sebastian. Nobody wants to discuss in an echo chamber, and the dude keeps a good check.
This bowl's for you, S!
Commissar Rob Dawg writes:
For the record joking aside this is not 1933. There can be no bank holiday.
~~~~~
Really ? When libor hits 10% ...
It may not be a holiday but nothing will be moving and we will be in worse shape than if we had declared the holiday.
with HSBC, you can pay
30 day
7.250% 7.072%
for par on a 30yr fixed Jumbo
Went to the bank and withdrew cash yesterday. Pretty much all they had was twenties. Told me that they get their "shipment" on Wed and would have more large bills then.
Yearning To Learn
Wells has trillions in level 3
Cramer thinks the bailout is a great idea! We're saved!
incidentally, 9% is still pretty cheap comapred to crude's appreciation over the past 6 years.
we really need a good 5 or 6 years at 15% to digest just the commodity inflation since shrub took office.
CSC,
Yeah but when he makes comments these days he just seems like an idiot.
When the facts change I change my mind. What does Seb do?
NOTHING. He keeps drooling. Its old.
How bout a mea culpa on all the things you've been wrong on Seb?
I like having contrary views, but at this point the discussion should center on reality, not thoroughly discredited wishful thinking.
comrade rew writes:
Gary --
Here you go:
I love this place. Thanks.
rich writes:
The reviews for the Hank and Ben show are not looking good.
To be blunt, they really bombed at instilling any credibility or sincerity.
They should have had a better coach.
And as appointments of Preznit Bullsh, this is a surprise because?
Oh shit, I rescind "I wanna be sedated" since it doesn't really need to be parodied. I was just thinking something punk is fitting.
Roger--nope. There are grand juries.
I am not and never have been a prosecuter. In a normal prosecution the prosecutor decides. Maybe consults his/her boss. Coupla time Janet asked him to explain himself (after some political heat). He explained she said ok and that was that.
The hum is very smart but not capable of dealing with 70k much less 700b.
he's smart enough to know it tho.
x-man: Fair enough. It was beginning to look like a lynch mob in here though. Sebastian is like O-Joe with staying power. He might be wrong, but he isn't a fool. And the dude has guts at least.
FWIW, you can still get a Jumbo 5/1 ARM or 7/1 ARM at sub 6% rates in Cali.
Is there a karaoke version of Suicidal Tendencies "Institution?"
Did I just date myself?
mmckinl writes:
Commissar Rob Dawg writes:
For the record joking aside this is not 1933. There can be no bank holiday.
~~~~~
Really ? When libor hits 10% ...
It may not be a holiday but nothing will be moving and we will be in worse shape than if we had declared the holiday.
Really. What are you gonna do? Take an axe to the fiberoptics and pour sugar into the diesel generators and refuse landing to the FedEX planes and cut the phone lines and coordinate this across 95 countries in 22 time zones? And to what purpose? To utterly destroy confidence for half a century in order to buy 24 ineffectual hours?
No, we really cannot close the banks.
of course there can be no bank holiday. In 1933 there were no credit cards, people paid cash. How much cash does an average american keep around these days? I know I never carry more than like 50 bucks.
You try bank holiday for a week and you will have a new government by the end of it.
The hum is very smart
Freudian slip?
the song is actually institutionalized, and i believe the answer would be no. pretty hard to make the free-flowing nature of the verses work with karaoke structure. i am still hoping for the pepsi commercial based on it.
Nice lyrics Dawg.
CSC
Money - Pink Floyd
Commissar Rob Dawg - ain't gonna happen.
But I'll admit I can't prove it. Just a bet.
The interest rate mentioned in the article just means they do not want to sell jumbo mortgages at all right now. It is easier to say "Come get it, availabe now at 2x market price!" and know no one is going to bite than say "We are not lending right now because we have a capital problem".
Let's not get excited about this one.
Alan writes:
FWIW, you can still get a Jumbo 5/1 ARM or 7/1 ARM at sub 6% rates in Cali.
It's worth a lot: Californians aren't generally the kind of folks who take out 30 year fixed mortgages.
When the short term mortgage products start to lock up, that's when California's markets will cease to function.
"i am still hoping for the pepsi commercial based on it."
That's all I wanted. But she wouldn't give it to me.
...to be a young derelict skater punk again...
x-man writes:
"SEB--
California is 40% of the housing market debt homey. It is not an ISOLATED MARKET...."
Spoken like somebody who doesn't understand the difference between real estate markets.
California, along with New York, has some of the most ubiquitous rent-control in the country, which has a huge impact on housing markets.
California has huge boom-and-bust swings in its housing market, enormous trough-to-peak price swings.
And if memory serves, California has a net outflow of people.
North Carolina doesn't have either one of the first two factors, but we have a large net inflow of people.
You may as well be arguing that MSFT stock is going to crash because AIG is in trouble, as big a difference as there is in the two real estate markets.
Sebastia
CSC
Offspring - The Kids Aren't All Right
homedad43
What you describe sounds more like a cash management issue.
Wouldn't you be more worried if the bank didn't have the large bills for your withdrawl?
Paulson is just a Bush tool who has no ethical problem with pulling off a huge wealth transfer to Wall Street. But I did feel sorry for Bernanke. He made a fool of himself today with his economic assertions. There's no way he believed some of the things he said.
Dawg: Would a market holiday be just as unlikely?
I always thought a bank holiday was do-able...so this is news to me.
Banks just don't keep that much cash in their branches. they never have.
How is hum a Freudian slip? Hooo hummm might be. I actually like the bub, err hub after 42 years of marriage.
CSC...DANZIG...Parody of "Mother":.....Paulson so you wanna' bang heads w/me...So you wanna' take money from me.....Pauslon...Bend over...I'll show you what it's like.....Melody continues with massive screaming......I think it has potential to capture the essence of the moment.
CSC - How about "Sympathy for the Devil"
"California, along with New York, has some of the most ubiquitous rent-control in the country"
no offense, sebastian, but you really don't know your elbow from your rectum on that one.
the parts of CA with rent control are minimal, and the rent control that IS in CA almost never applies to SFRs, which is a huge chunk of the rental stock. in SF, it only applies to 4-units and up. SF is the only town where it is a significant economic force, and that town represents about 2% of CA's population. It isn't even the biggest or most economically important city in the bay area. we also have a net INFLOW of people, they just tend to come from other countries (though we have a big domestic outflow).
Seb--
I'm speechless. If you don't think that astronomical default rates for 50% of all available mortgage capital in the US will affect lending rates in the triangle you are high. Period. Best of luck buddy.
Ahhh yes...Sk8ter daze again...This moment is like dropping in off your first 10+ foot vert half pipe. You don't know weither or not to close your eyes and take the fall or go ball out screaming....hoping you can catch air on the other side....
Oakland and Berkeley also have rent control. Just sayin.
I should have mentioned, I wont do Pink Floyd, Phish, or Bob Marley. It's a respect thing.
Dylan is a maybe.
"Oakland and Berkeley also have rent control. Just sayin."
so do santa barbara, LA, and a few other towns. but SF is the only town where it is signficant, because its the only town where apartment living is considered remotely desirable AND renters form a majority.
Financials are booming in AHs..something going on?
I still can't believe people bite on Sebastian's trolling.
I haven't been reading his comments for a year.
How is hum a Freudian slip? Hooo hummm might be. I actually like the bub, err hub after 42 years of marriage.
Lawyerliz | 09.23.08 - 6:22 pm | #
Watch out for LL - she offered to spank me last week!
Gil Scott Heron - The Revolution Will Not Be Televised
In the next 3-4 months FHA will up the limit to $1,500,000. It will be called FHASupraSecure or FHASS.
P.S. It will require a $200 D.P. though!
Maybe because I am the young generation and I have been dealing with trolls since early childhood?
Currently Smoking Cannabis writes:
Dawg: Would a market holiday be just as unlikely?
I always thought a bank holiday was do-able...so this is news to me.
Market holidays are easy. We did it in 2001. Thing is markets "close." Banking never closes, there is no mechanism in place. Worse, I don't know how you'd start it up again. Besides the potential for abuse is so huge the accidental and deliberate manipulation on the edges could crush people and businesses. Are you going to suspend any accruals or disbursements? Cascade liquidity defaults radiating out from the "pause."
Call me stupid [ No, forget that invitation ]. When I line up who has the money and who doesn't, I'm thinking China and {if you will} Arabia have it, and the US and G8 don't.
When I play this out in my head, I am hard pressed to come up with an answer that benefits China and Arabia that also allows the US to fall into a full blown depression.
I dunno where the bottom is, but I can't see the benefit to China and Arabia if this gets much worse.
"I still can't believe people bite on Sebastian's trolling."
well, the mechanics of CA real estate are somewhat interesting. whether or not the rest of the world likes it, we are the future of the country and have been for the past century. this bubble is more of a CA creation than the TV industry.
callous writes:
It's worth a lot: Californians aren't generally the kind of folks who take out 30 year fixed mortgages.
When the short term mortgage products start to lock up, that's when California's markets will cease to function.
On a related note, I actually know of a lender that is ADDING new jumbo lending products starting next month (5/1s and 7/1s to start), so it suggests that jumbo loans are loosening up, not tightening.
Of course, talk to me in a week, and everything could be different...
This just goes to show how much of a subsidy the US taxpayer is giving to borrowers. That 3% difference between conforming and non-conforming loans is huge.
This statement is incorrect.
The 3% difference in the rates is caused PARTIALLY by the "subsidy", but also partially by the increased risk that jumbo loans have compared to conforming loans. Read Tantas ubernerd posts and you'll see why Jumbos cost more than conformings, with or without subsidy.
There is an old political saying so goes CA so goes the nation....just a thought. I still say sell it to Mexico.
in response to: "California, along with New York, has some of the most ubiquitous rent-control in the country"
bgates said: "no offense, sebastian, but you really don't know your elbow from your rectum on that one."
In total contradiction to economic principles regarding artificial government restrictions, and never mind that California and New York have some of the highest housing costs.
You got me there.
I've have absolutely no idea why housing prices should be so high in California and New York, while they're so reasonably priced in places like North Carolina and Texas where the conditions are different.
Sebastia
Breaking news: cause of the crisis finally established
(hum, short for hummer)
I was being a disgusting pig, Ll. Nothing new about that.
I actually like the bub, err hub after 42 years of marriage.
I've gathered as much from your previous postings.
23 years of bliss here - 15 of them in legally sanctioned harness.
mmckinl writes:
Yearning To Learn
Wells has trillions in level 3
sheesh! I wish people would READ and comprehend posts before they start typing.
Mmckinl: please go back and read my post. Specifically the part I HIGHLIGHTED in italics, and the last sentence.
Yes I know they have a lot of level 3 assets. So do most of the major national banks. That has nothing to do with my point.
No, we really cannot close the banks.
~ Commissar Rob Dawg
~~~~
Yes, we can close the banks ... stop all trading
And we had better do it before all shit breaks loose.
ew thread
Dawg: Thanks so much for clearing that up. I've got enough stuff to suicide over.
"I've have absolutely no idea why housing prices should be so high in California and New York, while they're so reasonably priced in places like North Carolina and Texas where the conditions are different."
this seems consistent with the image in your head where california largely consists of SF townhouses and hollywood.
for starters, we have tons of universities, high-paying jobs, every major tech company to be created in the past 40 years, the best weather in the world, more agricultural output than all but a few nations, etc.
we also are generally free of creationists, horrible humidity and bugs bigger than your fist, at least on the coast.
incidentally, there are plenty of places in CA where you can buy a SFR for under 200K these days.
I was a landlord in SF until about 3 months ago, and I can guarantee that everything is rent controlled except for single family houses and condominiums and apartments built after 1979.
Even without rent control, you cannot evict a tenant on a month to month lease without a very narrow list of approved causes. If you jack the rent up on a SFH or condo, the tenant will sue you for constructive eviction and there are piles of attorneys in SF that will take on the case on a contingency basis.
Not that it makes a difference, but I just wanted to correct the statement that only 4+ units are rent controlled in SF.
@x | 09.23.08 - 6:04 pm |:
Those Citi rates are an improvement from last week. I interviewed a mortgage broker last week who said Citi was quoting 8.5 percent on a 5/1, plus 3.25 points.
SF is about 800K. CA is well over 30 million.
incidentally:
"2-4 unit, landlord occupied buildings used to be exempt from rent control. Pursuant to 1994's Proposition I, these buildings have had full rent control protection since May 1, 1994. "
San Francisco Tenants Union
smart move selling, btw. being an SF landlord is a tough game.
"being an SF landlord is a tough game."
Takes nerves of steel, but has been profitable on a capital gains basis, but certainly not on a cash flow basis. The legal fees will eat you alive.
Those gains, though, are history, I feel sorry for anyone who continues to be a landlord in SF. I escaped in the nick of time.
yup, 20 GRMs are insane. prop 13 is the differentiator. cute city, though.
i just have a pet peeve about people conflating SF with the state as a whole. it is hard to imagine a stupider take on california.
People will still take out these mortgages if they can afford the payments. They won't care about the rate. After all, what do they pay on their credit card balances?
Of course, the more you pay the bank, the less you can afford to pay for the house itself. Result: prices go down.
x-man writes:
If you don't think that astronomical default rates for 50% of all available mortgage capital in the US will affect lending rates in the triangle you are high. Period.
I live in Durham, NC which is part of the "Triangle" (Raleigh, Durham, Chapel Hill, although you can easily include Cary and a growing Apex into that mix).
I bought a house here in 2000 and sold it this past fall. I had to spend a lot to get it all fixed up, but that's mostly because I never did anything in 7 years to upkeep the house so it needed new carpets, paint, etc.
I had paid in the neighborhood of $225k for it. The original appraisal came in at $325k, but I knew that was a pipe dream of peak 2006 thinking. I did manage to sell it for roughly $280k. A gain of $55k over 7 year; 24% total price increase, or roughly 3.4% annualized.
Compare that to price increases in CA and NY, and you will notice a huge difference.
I personally think that home prices here will decline, but that it will be small compared to the average RE market, and a tiny blip compared to the crazy RE markets (CA, NV, AZ, FL).
"Compare that to price increases in CA and NY, and you will notice a huge difference."
CA as a whole has lost 30% in just the past year, so most of those relative gains are gone.
also, much as conflating SF and CA is a bit stupid, it is also off to conflate NYC/LI with NY as a whole. plenty of places upstate have never been worth more than 300K, or even anywhere near it.
In a way that just doesn't make sense. I understand the jumbos do not fit the box, but in our area there is much more risk in the $100,000 loans than there is in the $1,000,000 home loans.
You have guys that make mid six figures, rock solid credit, money in bank, 401k, etc. and they pay a premium. The guy making $30,000 a year with a car note, child support, etc, etc, living paycheck to paycheck borrows $100,000 and gets a better rate, because it is a conforming loan size.
"You have guys that make mid six figures..."
I know a guy who makes an easy 200K with the most secure job in the world who is probably going to walk away from his mortgage on a mcmansion in riverside county. that's why those rates are higher.
Farmer-
and the banks lose 80k on a 100k home. they stand to lose 800k on a 1M home. all it takes is one to make up for 10 others.
But as a general rule do the non conforming loans walk away more frequently? Does anyone know what the statistics are with regard to defalt rates on jumbo loans compared to conforming.
for starters, we have tons of universities, high-paying jobs, every major tech company to be created in the past 40 years, the best weather in the world, more agricultural output than all but a few nations, etc.
also a 7.7 unemployment rate and the 2nd highest level of inequality in the u.s.
Tech is a thin foundation for an economy. Google has less than 10,000 employees.
The universities are obscenely expensive even for in-state students.
There is negative net migration , excepting immigration from out of the country. And most of those new immigrants are getting pulverized in this housing crash. The old money is fine.
California has nice weather, but it's no place for a family. Unless housing drops by 50%.
Just spoke to Wells rep. These rates are buckshot marketing to whole country via their website. Different deals exist in different markets, for different buyers. For example in LA, with over 700 FICO, jumbo rates are 6.875, 5 ARM is below 6.
OrangeMan writes:
"Let's see,
Using FHA's calculator, I only need to make $226k/year to afford a $729k loan."
3:1 back to historical norms.
CSC is now taking suggestions for songs to parody in this project. Links will be posted as soon as it is on YouTube.
Ah, heck, I've been sitting on this for a couple weeks waiting for a Tanta offering to post this against, but who can resist a request like this?
So, CSC ... you feel like singing Whitney Houston for us?
Hoocoodanode?
(to the tune of Whitney Houstons How Will I Know?)
For five years we loaned, faster than we dreamed of
Option ARMs, subprime, 10 times income and above (mm-hmm),
NINJA loans, Alt-A, couldnt write em fast enough,
And were safe, cause really, housing prices just go up
Ooh, sales would slow (dont stop believin) hoocoodanode?
Resets would grow (never in this region) hoocoodanode?
Hoocoodanode house prices could decrease?
The loans were made with easy money,
Securitized and dumped on the Street,
Wed make a bid, but who knows about these things?
Hoocoodanode you couldnt trust Moodys?
"These CDOs? Why, theyre triple-A (risk-free)!"
Blowing a hole in our balance sheet
We say its strong, check back in a week
Dont blame me for chasing a little bit of yield now (uh-huh),
'Cause well soon be taking, another quarter of writedowns
Ooh, tell me, credit would slow (its just a feeling) hoocoodanode?
Defaults would grow (it must be the season) hoocoodanode?
Hoocoodanode our assets were fuzzy?
We leveraged up with easy money,
We passed the buck and raked in the fees,
It modeled great, but who knows about these things?
Hoocoodanode all our counterparties?
"Too big to fail" is our new cry (trés chic)
Lets ask the Fed for more Treasuries
Then take this debt, and play hide-and-seek
Ben Bernanke will you bail us out (mm-hmm),
Hey Henry (ooh) b-b-bail us out,
Fred and Fannie gotta bail em out,
Hey, hoocoodanode? Hoocoodanode? (Who-o-o?)
Hoocoodanode bank failures would increase?
Theres two or three new victims each week,
Call in the troops from FDIC,
We could be next, 'cause who knows about these things?
Hoocoodanode the markets could all freeze?
Can't sell our loans, 'cause theyre too far (off peak)
So here they sit on our balance sheet,
A big black swan, swimming up Shit Creek ...
Hoocoodanode? (We couldnt know) Hoocoodanode?
Hoocoodanode? (It isn't fair) Hoocoodanode?
Hoocoodanode? (The quants were stumped) Hoocoodanode?
Hey, hoocoodanode? ... (fade out)