I agree....It's crazy that owners think that if they put $5000 of cosmetic updates into their home they should get $10,000 back!

Stve, that's a lot of thoughts for a late night in Wisconsin, eh?  You are right, real estate is crazy, but you know what they say about crazy houses, they only become that way when the inmates take over.  Who are the inmates?  Who are the guards?

Our legal system is what's crazy.  There's no justice unless you happen to be able to afford the highest priced lawyers.  Criminals have more rights than society or their victims.

(Sorry, I wasn't logged in before.) 

The PA lawsuit is a joke, but not a funny one.

They sued Google because they saw deep pockets and they are probably saying, "These mega-corporations are like Big Brother and I'm going to make it stop."  Congratulations on your Andy Rooney moment.  I find myself doing that all the time.

Hi Steve, love having coffee with you every morning.  And watching you twittering is even more fun. 

William,

All sellers know they should make some inprovements to their home, especially in this market.

There is no doubt that the days of paint and flip are much fewer now that a couple years ago.

Steve

http://obeoman.blogspot.com

Brian,

Of course, the legal system has its problems. Thaks for your comment, and I just want to encourage you to contact your state bar association or visit their website, if you wish, to let them know what you feel can be done to improve our legal system.

Steve

http://obeoman.blogspot.com/

Rebecca,

in this market I would TOTALLY agree with you. Fortunately, I still sleep well as chasing these crazy thoughts tires me out.

Steve

http://obeoman.blogspot.com/

Robert,

Having lived in PA for Five years, I am not that suprised by this particular lawsuit. They get some real interesting ones out there-RE in PA is crazy sometimes with a capital C!

Steve

http://obeoman.blogspot.com/

Peter,

It is very interesting as there seems to be different levels of privacy for different situations.

Where will it stop?

Steve

http://obeoman.blogspot.com/

Susie!

My wife has me on decaff. Thnks for sharing your coffee with me vicariously. Twitter is a great way to keep in touch and find ideas.

BTW-Frog Level ROcks! - You should enter it in the AR contest!

Steve

http://obeoman.blogspot.com/

Life is full of weird stuff. Thats what makes life fun, interesting, and that is exactly why I get a competitive advantage over my colleagues.

Dave,

How true: Hunter S. Thompson said it: When the going gets weird, the weird turn pro.

I would have to say being slightly crazy in RE gives you an edge!

Steve

http://obeoman.blogspot.com/

Nothing surprises me anymore. Best wishes to you.

Christina,

I am almost to where you are. Hopefully!

Steve

http://obeoman.blogspot.com

I guess Tylenol and the like will have nothing to worry about. My head hurts too.

Steve- Where are you....did one of those crazy Real Estate people find you ......LOL :)  I loved your Title, and yes the rest of it was pretty good too.  Amazing the things that people think, say, and do isn't it :)

Steve,

You always crack me up.   These are great observations.

Hey Steve, Always nice to read your blog.  Thanks for the post!

April! Thanks for stopping by and sharing a laugh!

steve

http://obeoman.blogspot.com

Steve!

That silly grin in your profile pic killls me! Thaks for stopping by!

Steve

Hey Steve,

Real Estate is crazy...the hunt is on!

Allison Maida

RE/MAX Preferred

608-277-2732

This will make all taxapayers head spin:

Saturday, May 10, 2008

Just $300 Billion? Are You Sure About That?

 

This past week, the House approved the much talked about $300 Billion Mortgage Bailout Bill. Specifically, it plans to "will expand the FHA (Federal Housing Administration) program so that borrowers in danger of losing their homes can refinance into lower-cost, government-insured mortgages."

How would this work? "For a homeowner to get a new FHA-backed loan, the holder of the current mortgage would have to accept a loss and take a payment totaling no more than 85 percent of the home's [current] value."

Let's see how this would be applied in real life:


As you all remember, Horizon Court in San Elijo Hills currently has quite a bit of distressed inventory, 6 out of 22 homes on this street are either REOs, NODs, or delinquent in property tax. Some of the homes were purchased for nearly $1 million but now the REOs have pushed the value on the street down to the low $600,000 range.

For simplicity, I'm going to average out the purchase price of these homes to $950,000. And we'll put the current value at $650,000.

Three of the distressed properties are currently pending, so I'll take them out of the equation.

The Bailout Bill's intent is to help with the three remaining homes in distress by making each of the mortgage holder on these properties eat $400,000, or $1.2 million for the three homes.

Then, the FHA-backed loans would kick in and each of these three lucky homeowners, two of them REALTORS, will end up with $550,000 loans. Costing the American taxpayers $1.65 million in loan guarantees. (two of the loans would probably bounce as the out of job REALTORS will remain underemployed even for $550,000 in loans).

Now here's the unintended consequence of this bill:

There's still 16 homes on the street that are underwater!

Assuming 50% of the remaining 16 homes have little or no money down, that means 8 additional homeowners jumping on the delinquency bandwagon! Suddenly mortgage holders now have to eat an additional $3.2 million to bring the value down to the current pricing.

As for the taxpayers, instead of guaranteeing $1.65 million, now we are looking at $6 million in loan guarantees on one single block! Assuming just 1/3 of the loans default, We The People are out $2 million on a single block!

Somehow I don't think $300 billion is going to be enough if this plan really goes into effect.

Here's how you can make a difference. According to the article, Bush says he will veto the Frank-Dodd bailout bill.

Let him hear your voice! Please call the White House to show him your support of a veto of the housing bailout bill:

Ph:               202-456-1414        or               202-456-1111       

Just say, "I am calling to ask you to veto any housing bailout that comes out of Congress." A live operator actually picks up and directs you to a comment line. Our democracy is counting on you!

 

That's the problem with all these bailouts, they just encourage other homeowners to default to get their due now, and next time around people will be even more reckless investing in the next house bubble. Heck, as a renter with excellent credit, somedays I just want to go buy a house so I can default, live there for free, and then get my bailout. It's all rather sickening.

Hey - Steve Real Estate is crazy! 

April Hayden-Munson

RE/MAX Realty 100

262-787-3043

Luis Carus
Re/Max Towne Square Realty
1601 10th St
Monroe Wi 53566
MonroeAreaRealestate.com

Scavenger Hunter.

Not just real estate, but life.

Luis!

Thanks for stopping by-I will be calling you soon!

Steve

Sandra

-too true-hang in there and laugh along with us here!~

Steve

Steve, I enjoyed reading your blog while sipping my after dinner beverage!

Greg!

Thanks - I hope it was a crisp and refreshing beverage!

Steve