Appraisals…an inside look at ‘The OC’
There is a shift happening in this country in the ways that people get information. No longer are people held ‘captive’ by the big 3 network news shows, and a handful of national newspapers. The TV news ratings are slowly dropping, along with newspaper circulation of the ‘big name’ newspapers. This is due to the internet, and the fact that people can get information from other places. Sure, anybody can start a blog, and say whatever they want. We have also seen that the major media outlets will say what they want as well. My point is that you need to look at all the information available to you, and make an informed decision.
Why am I bringing this up? Because there is a lot of good information on this blog and in the comments posted by readers of this (and other) blogs. Sometimes you have to look beyond the major news headlines to see what is ‘really’ going on. Like I have said before…the media is a lagging indicator.
I want to share some information from an Appraiser that specializes in the Orange County area. This persons comments were buried way down in the comments on another thread, but I think they deserve to be read by more people.
Sometimes you can get a better picture of what is going on by listening to a few quiet voices that are whispering solid information against the background of an industry that is screaming “EVERYTHING IS FINE!” at the top of their lungs.
Here are the first comments from an OC Appraiser:
—————-
As an ethical, professional appraiser in OC, I can tell you all that YES, I have been checking the declining values box when the market warrants such an action. I am doing many more foreclosures now than ever before. I just did one in Trabuco Cyn (Wagon Wheel). There are 4 REO’s alone within the same development, and a couple actives that were purchased in 2005 for more. Kind-of eary driving around. Nice cars in the drive-ways, with “bank-owned” for sale signs in the lawns. How could this happen in South Orange County???
Looking at public data indicates no shortage of “underwater” borrowers in this area (Wagon Wheel Cyn). To make matters worse, the last contract (pending) was signed 3 months ago. This, in a market that usually sees 2-3 contracts (sales) per month.
Yes, the sky appears to be falling in this sub-market. The scary part is that I see the same thing across most of OC.
I have not seen a market with “valid” price increases in over 10 months. I’ve been doing foreclosures from the Santa Ana markets, to the higher end Coto Markets, and all areas in between (Mission Viejo, Laguna Niguel, Dana Point). Not seeing so much REO work in the high end $3M+ markets, as those buyers have appeared to be more well healed. A lot of REO work in the $1-2M range, where I suspect it was move-up buyers biting off way more that they could chew, especially in the way of higher property taxes. Be careful you guys, there is still a lot of fraud and it seems to be picking up. I get several call a week now from local brokers asking me to pump values, as they go down their list of appraisers in a given area. Sad part is, they always find someone willing to commit fraud. No shortage of appraisers in OC that is for sure. And since most are really new, they dont know what they dont know. So they actually think they are giving their clients “good customer service”, when they phish for comps to hit a predetermined value. Just be careful out there.
The OC real estate market is currently in decline and the mommentum appears to be shifting into high gear.
At least from my vantage point.
—————-
So that this second comment by the same OC Appraiser makes sense, another poster asked for more specifics regarding some of the areas talked about. The Appraiser could not give specifics because of confidentiality reasons. But here is some more information:
—————-
Thats correct, enforcement is lacking, and its just too damn easy to make money as a crook in the real estate business. The thing I dont understand is why someone would be willing to commit a federal offense for a measly $350.00 I guess it goes to show you that the many appraisers in California and namely OC arent very bright, and are just looking for the easiest way to make money, with the least amount of effort. How hard is it really to find a slimmy broker in OC? They are practically on every corner. All the appraiser has to do is knock on the door with a smile and a wink to be assured a steady stream of business. I’ll be interested to see how long these relationships last with the fraud investigations starting to gain traction. In Colorado and N. Carolina, appraisers are going to Federal Prison, just for being stupid. One trainee even tried to plead ignorance. Sorry, up the river you go. Now we just need the wave to hit California and they should be running scared. Hopefully they will go back to working at Del Taco, or whatever else these sorry bunch of characters did before they got their appraisers license.
On the REO side: In WW, they are located on Charokee, Raindance, and Longhorn. For confidentiality purposes, I did not include the street name of the appraisal I did as a pre-foreclosure. Some of these are already bank owned, and others are just active for less than original sales price.
I would not offer list price in this environment. A prudent buyer will attempt to take advantage of a sellers desperation. Afterall, like I said, not one buyer has been willing to sign on the dotted line in the area in 3 months. If that is not a RED flag, I dont know what is. Do your research!! Oh yea, Coto REO’s: Look in the “Tanglewood” tract, streets: Charleston Ln, Raleigh Ct, and Westchester Ct. There are some folks underwater in there, as well as many other area of Coto. I could list these all day long, they are all over OC.
Maybe later I’ll come back and give you guys some from some coastal communites. Hot tip: if you have access to public data or the local mls, you can see when someone bought something, for how much, and best of all, how many times have they refied and for how much and when. This is the key. Find someone who is totally underwater, and there is a good chance it will be an REO at some point. Find multiples in certain neighborhood, and you will be well served to hold out for the firesale that will soon follow, as the banks will all dump these at the same time. In my opinion, right now is too soon to get anything at a “percieved” discount, for more will follow.
Good luck, and watch you backs. Dont trust anyone you dont go out and hire yourself. And even then, be careful.
—————-
Here is some more information that OC Appraiser shared with me via e-mail:
—————-
I think it is important to at least inform the public about the shadiness of the business. I think about how much business I have lost over the years due to my integrity and how my good name has been tarnished amoung people I thought were my friends, who work as mortgage brokers, and its real sad. The public needs to know that when mortgage brokers refer to an appraiser as a “good” appraiser, its because the appraiser has a reputation for making the deals work, all the time, without regard to a property’s true market value. This is fraud.
“Deal killers” are appraisers who go out and do their job, which is to collect data, analyze, and form an opinion without bias. The appraisal is to help protect the lender against losses. Problem is, brokers arent lenders, and many lenders today sell their loans, so they really dont care about the quality of the appraisal either. They all get paid when they sell the loan down the chain. Its like a big pyramid scheme, with the debt holder (borrower) as the stooge holding the bag. Not a problem when your house is going up 20% per year, but take that away, and you are in serious trouble. I think the overall mentality of a person having debt needs to change, and it typically does throughout market cycles.
In my opinion there are 2 kinds of debt: Bad debt, and worse debt. Lets take a typical senerio I run into all the time: Home is purchased by local area agent. Its fixed up, listed way above market value. The same agent brings in a buyer, uses the “in-house”, or “favorite” lender/broker shop, who has a list of “good” appraisers. Agent pushes the house on a buyer as a “great deal”, and claims to have “access to lenders”, funding will be “no problem”. Take away the shady appraiser and this deal is dead in the water. But there is too much money at steak to let this deal die. Its much easier to find a “skippy” appraiser, pay him $400 bucks to sign the appraisal report with the predetermined number and collect the commission check. If you refi your house, the broker will usually ask you what you think your house in worth. They draw up the papers using this number, and find an appraiser who will “get” this number. 9 times out of 10, the appraisal will come back at exactly that number. Its a miracle!!
The public needs to not be fooled. These people are not your friends. Sure they may appear to be getting you out of a jam, but in reality are digging you in deeper, and screwing you because now the asset that you “own” is worth less than what you owe the bank. Try selling your house now. It wont happen. You will eventually be in foreclosure and probably bankrupt, while your so called “friends” are off closing more deals. Folks need to take control and do their own research first before allowing these “snakes” in the door. I know its difficult for most folks, but I think for the sake of your future, and that of your family, you need to get educated. Do your own research! And if it sounds to good to be true, it most certainly is.
—————-
So, you have heard me mention appraisal fraud along with some of the other types of fraud that are being committed in the mortgage industry. Here is an actual appraiser that has been in the business for a while telling you their side of the story and what they see on a daily basis. Now is where you have to ask yourself, should I belive this information even though it is not being told by the major media outlets or the real estate experts? …yet
Use this site as one of the tools to help you make an informed decision. Remember…2007 is the year when things will really start to get interesting. It takes time for all of the creative financing, fraud, and people living maxxxed out beyond their means to take its toll on things and work its way through the system in a way that is finally reflected by decreasing home prices.
Stay tuned…
SoCalMtgGuy
November 15th, 2006 20:04
Thanks for the info. This blog, along with Ben’s, and Housing Panic are keeping me sane having to sit on the sidelines living with roommates through all this. If only we could push the fast-forward button on the housing market.
November 15th, 2006 20:05
Been reading your blog for a while. Just wanted to say I enjoy it and it’s much appreciated. Keep up the good work.
November 15th, 2006 20:34
Just a question. What will happen to all those folks invested in REIT when the downturn comes? What do you think will be the effect on the overall economy???
November 15th, 2006 21:10
Socal:
Good post. I am glad that you picked up on OC Appraisers posts. I found them interesting and insightful. Wow, I guess you really get to see the power of blogs like yours when you can get some good info about the whole appraisal process and scams going on in the business off of a couple of
comments.
OC Appraiser gives another angle to the whole lending fraud going on just like you do from your posts as a mortgage banker.
Please invite him back to post again in the future.
Keep it up.
BB
November 15th, 2006 21:29
Bubble Butt,
Thanks! I have been talking with OC Appraiser on e-mail…and although I can’t speak for them, I’m pretty sure they will have future posts/information to share.
OC Appraiser feels strongly as I do, that people need to know what is REALLY going on out there.
Thanks for being a loyal reader/contributer…I really appreciate it.
SoCalMtgGuy
November 15th, 2006 21:30
Socal… Glad you’re posting again!. To me, the best info comes from posts like these by people in “the biz”. Selfishly, i hope some L.A. specific folks will show up. They appear on other blogs, but sometimes get sick of all the “realtwhores suck” (which I don’t agree with!) kinda comments, and don’t post often. Anywya… Keep ‘em coming!
November 15th, 2006 21:57
Thanks for this new post!
I read these stories, and I shudder to think of how many people have gotten burned. I feel sorry for them on one hand, but at some level, I really believe everyone knew what was going on, and just turned a blind eye. So, while I feel sorry, I also think to myself, ‘they really had it coming.’
Like your post says, if it’s too good to be true, it probably is.
November 15th, 2006 22:38
Hello
Excellent post, Is there any way to find an honest appraiser since you brought up the subject, I always wonder how to find an honest appraiser and someone to do an honest inspection.
Thanks
November 16th, 2006 00:05
Excellent insights!
The tidal wave of lower prices may be coming. Sellers may still be in denial, as I’ve mentioned before. But I work with a couple renters who nodded in agreement when I advised, “save your pennies and wait a couple years.”
Panic buying (before prices go higher) will slowly but surely become panic selling (before things get worse). It’s just a matter of time.
November 16th, 2006 06:43
Thank You for all your efforts…
We all knew that something funny was going on. (Personally I can feel it) I just never really understood how all these crazy deals were happening.
In OC laws need to be inforced. Throw a couple of token appraisers in the clink and the problem will solve itself.
Where is the FBI in all of this?
November 16th, 2006 07:15
I used to be a news junkie, and tho I still read the nytimes, I find this blog, ben’s and mish’s to be far more credible and informative. The issue of mortgage and appraisal fraud has barely been raised in the nytimes or on the networks. Standard news outlets are just beginning to hint that the housing “slowdown”" may go on longer than just this winter. However, the amount of fraud has been a constant theme,especially on this blog; it’s been analyzed and discussed over the past year. Goldilocks economy be damned, it’s not just the mortgage resets and foreclosures, it’s the mortgage and appraisal fraud, from top to bottom, including the nightmare that is Fannie Mae, that will rock us. OC Appraiser, thank you, honesty and informed warnings are much appreciated. Even those of us not wanting to buy now or for years need to know to move our money defensively. Of course, it’s too much to expect state AGs to take note of whats been going on for years. It’s not just ugly, it’s dangerous out there.
November 16th, 2006 08:17
Excellent post and this is the 100% truth about the industry. One reason for sale by owners(fsbo’s) often get a lower price is that they don’t know that shady appraisor to hit the number.It is all about the connections that the agent has.The system as it is now is very corrupt.
November 16th, 2006 08:50
To SoCalMtgGuy and OC Appraiser:
Many thanks for sharing your insights and observations from the “inside”!
November 16th, 2006 08:51
MD,
As far as a honest appraiser, you may want to get an appraiser to do a “private or restricted use” appraisal on any property before you buy or list. Do your own interview of the individual, how long have you been doing this?, etc. If all of their references are only from brokers and not direct lenders that may be a warning sign. Why would you not spend $325 - $500 (typical tract residential appraisal fees) to avoid a $10,000 or more mistake. This is the way its often done on the east coast by the way.
For most homebuyer’s a lot of their decision is made on emotion. Now what we are really paid to do as appraiser’s is to take the emotion away and show market reaction for the bank. For example, linoleum and travertine have the same exact function - they both function as floor coverings. For your typical buyer the travertine would win out but can you quantify through market examples what the market pays for it? Most often not, or if you can show it in an appraisal it would be a lot more research and analysis than the $325 -$500 fee dictates. You can quantify the obvious - location, lot size, house size, age, etc… but too often as a review appraiser I’ll see adjustments for stuff that is emotion based. When the adjustments are ridiculous the appraisals get kicked back for further proof or value is cut to reality.
As highlighted in SoCalMtgGuy’s and OC Appraisers posts with the example of the flipping agents they frequently try to show me $40,000 worth of Home Depot and Joe Blo contractor’s receipts and think this justifies a $65,000 increase from their previous purchase price. Direct costs or expenses do not equal market price, especially in a falling market.
Get informed like SoCalMtgGuys says get ready for a wild time in RE in 2007.
November 16th, 2006 09:07
I’ve been trying to do my part by sending emails and calling local newspapers, to no avail. Several months ago the Wall Street Journal ran an article on appraisal fraud that I found to be very accurate. Unfortunately, it did not gain much traction. Currently, I have activly been in contact with honest, professional, appraisers throughout the country.
One of these appraisers has contacts with the FBI and Justice Department in Washington, amoung other agencies. A database is being put together listing all suspicious addresses and names of participating appraisers and brokers nationwide. From what I hear it is beginning to yeild results. Point being, (we) are trying to clean things up and rid the industry of the bad players. It just takes time. Wish we had more media help, then things would snowball much faster, and crooks would most likely run to another profession.
One way to find an honest appraiser, or at least one that you know is NOT on the take, is to go out and personally hire him/her yourself. DO NOT call to find an appraiser from a list that the agent gives you. Just search yellow pages, or go to www.asc.gov for the national registry of licensed and certified appraisers. On this registry you can search by city, county and state, and it will give you all the appraisers in that city, as well as if they have active licenses or not. You can also search www.orea.ca.gov for the California list, and narrow it down to your city. On this site (OREA - Office of Real Estate Appraisers), you can also search to see if appraisers have ever been busted for any wrong doing. Other tips: Find an appraiser who is Certified, and check their ID, so you can check the websites to make sure they match. In Orange County, most of the appraisers running around arent even licensed. They are trainees who are working for some other licensed appraiser who just signs off on the report, more often than not, that the supervisor also inspected the house, when in fact he did not. There are tons of “skippy mills” in OC, for this is the fastest entry into the profession, and the easiest. The scary part is these trainees learn nothing but how to “pump” value, and their goal is to become newly licensed so they can go out and hire a hand full of trainees themselves. They typically give the trainee 50% of the fee, and the cycle repeats itself. That is why more than half of all appraisers in OC are either trainees or newly licensed, and mostly unqualified to do anything. If an appraiser comes to your house or calls before coming and asks you what “you” think your house is worth, or what “value” you are looking for, find another appraiser. This guy is just looking for a baseline starting point so he knows what values to look for in the area. Thats because he doesnt really know how to appraise, rather he conducts searches by value, not by property comparability.
This is NOT appraising. Competent, professional appraisers do not need a starting point or target value. They go to your house, analyze the data, and form an opinion, applying various methods and technical analysis. The value may come in high, it may come in low, it may be right on target. But rest assured, what you at least have is an unbiased professional opinion.
November 16th, 2006 09:49
OC Appraiser:
If everything you’ve said above is correct. Websites like zillow are going to end up taking over your career. Which is unfortunate for everyone that is on the up and up.
November 16th, 2006 10:14
Is an appaiser the same as a house inspector?
I hope the Feds put in jail all the corrupt mtg brokers realtors appraisers out there.
The system is a corrupt system that absolutely noone in gov’t is willing to clean up.
November 16th, 2006 10:16
Thnaks for the great article. It is getting very difficult listening to moronic realtors telling me that the spring is going to rebound. I can;t wait for the spring to literally bust so I can laugh at these same realtors.
What a corrupt fraudulent bunch.
November 16th, 2006 10:19
Thanks for the great post - this is truly exceptional. I’ve thought for a long time that appraisal fraud is like the elephant in the room. Without this constant book-cooking, the entire re-fi scam comes immediately crashing to a halt. This is the reason that we are STILL innundated with mortgage ads on TV and radio in spite of the fact that most rational people realize that prices are now below what they were in 2005 and anybody that bought in late ‘04 or ‘05 really shouldn’t be able to re-fi at all!! This makes me sick just thinking about it.
This fraud is very wide spread and literally permeates the entire mortgage finance system from top to bottom. It’s useless to call for any kind of reform, though. Any toughening of standards or penalties at this point ammounts to closing the barn door after the cows have left. As usual, all kinds of regulation and hand-wringing will happen after the total melt-down and then everybody will say, “gee, I guess all of this mortgage/appraisal fraud was a bad thing after all…”
November 16th, 2006 10:19
Web sites like zillow are currently facing litigation by homeowners who relied on zillow for accurate valuations. The problem with web site valuations, BPO’s and all other desk-top valuations, is that they do not account for subject location. Zillow cannot tell if a property backs a freeway, which in some markets can account for a 15% discount. AVM’s cannot tell a panoramic catalina ocean view, from a peek thin southern coastal view, which can be as much as a 20-30% difference, depending on how close to water the house is. Computer and desk-top valuations cannot tell the difference between higher end Bosch, Viking and SubZero appliances, versus the Sears specials. Computer valuations cannot determine over-improvements, superadequacies, physical, function or external obsolescense influences, who’s value contribution or discount cant be as high as 40%. Now I dont know about you, but if I am borrowing 100’s of thousands of dollars to buy something, you better believe I want to make damn sure its worth what I paid for it. And I aint gonna trust the appraiser who is hand picked by people who stand to gain a commission when the deal is closed. $350+ dollars, to potentially keep from making the biggest financial mistake of your life seems like a no brainer to me. I’m not worried about the appraisal profession or my role in it. The cream always rises to the top, and profesional investors (lenders and others who actually loan out their own money and keep the assets in their portfolio) always want an actual qualified professional appraiser doing the inspection and analysis. Shadash, I can certainly understand how you think appraisers will be replaced because they cant be trusted. But the fact of the matter is that professional money managers and debt holders do understand the importance of a professional valuation. Its just that in recent years they have been more risk tolerant and because they have been shuffling the loans down the line, they did not need accuarate valuations.
I suspect however, that this packaging of loans, and passing the buck down the line will cease, when the end holder does not get paid what he thought he was supposed to make. Look at it this way. If you loan money to someone, even if its not your money, you will stop loaning out the money if you stop getting paid. Because if you dont get paid, how is the guy who loaned you the money going to get paid? And so on and so forth. The only way to insure coverage is to know that the collateral will cover the debt burden. And the only way to sleep soundly at night as a lender, is to have full faith in the value of the collateral. Computer valuations will be around to do the low loan to value deals, but with people continuing to borrow again their homes, inceasing loan to values, there will always be work for the honest appraiser. Its all about being selective in the clients you have. The clients that I do have all loan out their own money and want real valuations. I quite doing work for brokers 12-18 months ago, because they just stopped caring, and their competition heated up.
November 16th, 2006 10:35
Shadash,
Things like Zillow and AVM’s (automated valuation models) have been threatening appraiser’s livelihood for years. Serious appraisers are not worried about these services. Watch as loans default and this market crashes how quickly the stock prices of large lenders and banks that made decisions based on computer generated data only (no actual house inspection) fall into the toilet. Same goes for mutual / bond / hedge funds that have mortgage related stuff in their portfolio.
The problem with zillow is that it bases its values upon county tax records. As an appraiser if I do 25 houses, 15-21 of them will vary significantly from what is on county records. County tax records are about as accurate as the DMV is an efficient organization.
Grind,
Appraiser mainly deals with valuation of the house. A home inspector deals witht the condition of the property, its structures and mechanical systems. Condition certainly affects value so apppraisers are required to report on things that are “readily observable” - water stain ceilings, pooling water, health and safety issues, etc.
November 16th, 2006 10:36
Grind Them, NO, an appraiser is NOT the same as a house inspector.
The inspection is meant to uncover any fundamental flaws in the house. The appraisal is meant to determine the best value for the bank, so that the bank does not make a loan for more than the property is worth.
To illustrate, imagine you have a 70-year-old building on 20 acres of land. The inspector will tell you whether the structure is sound (to the best of its ability), whether the electrical system is working properly/is grounded, if the plumbing is leaking, and if there is any glaring damage to the property. The inspector makes no judgement as far as fair market value for either the property or the building. The appraiser’s job is to look at that building and that property, taking into account condition of the property (e.g. sparkling will be worth more than a mould-infested teardown), zoning (is this agricultural land or a ranchette in the ‘burbs?), etc and make a judgement call as to what that property is worth. The appraisal is then forwarded to the lending institution. While a bad inspection may make a big difference on appraisal, they are not anywhere near the same.
November 16th, 2006 13:08
OC Appraiser
I agree that there’s probably things zillow doesn’t account for. But, zillow doesn’t make up the numbers real estate agents need to make a deal either.
It’s a double edged sword. On one side you don’t get a perfect estimate with zilow. On the other side you don’t get a completely inaccurate “paid for” estimate.
Personally I view zillow as a tool to get a general valuation of a specific home and a non zillow estimate better come somewhere close to the same number. Depending on how current the comps zillow used are.
There has to be some way to keep estimaters honest. Right now zillow is the only thing I’ve seen.
Ps. The lawsuits against zillow are B.S. put forth by a scared sh*tless Realtor/Broker/Estimator monopoly.
November 16th, 2006 13:32
Anaheim, CA, has had a massive amount of groundbreaking for CONDOS! CONDOS! CONDOS! in 2006. I see them every day on my drive to work.
1) “Downtown” development roughly bordered by Lincoln Ave, Harbor Blvd, Broadway, and Anaheim Blvd. For the past year, there’s been a lot of construction of 3-4 story “loft” condos with the first floor given over to retail. (Anaheim allows mixed-use zoning.)
2) Anaheim Stadium area, W of State College Blvd along both sides of Katella. For 1/4 mile from State College, the area along Katella looks like North Korea tested their nuke there. EVERYTHING has been razed to bare dirt and replaced by construction fences touting CONDOS! CONDOS! CONDOS!
Most of the condos in (1) are still under construction; those in (2) are just holes in the ground. With prices poised to crash, will I have to drive by half-completed frames and concrete pours for the next 10 years?
November 16th, 2006 13:37
OC Appraiser
Good work on your honest evaluation of the appraisal business.
Zillow is just a comparison tool at this point. I would not use this as your only evaluation of value. An on site investigation is definitely needed as the oc appraisor notes.
November 16th, 2006 13:40
Very important discussion here. Like the example stated at the top about Orange County, I am seeing some of the same in my own neighborhood in coastal LA county.
My bank hires independent fee appraisers, typically very small or one-man offices. The appraisal order comes from a central department and the loan officers cannot contact the appraiser. The appraisers work is reviewed and monitored over time and the appraisers get regular consistent assignments.
The advantage to the bank in this arrangement is obvious. The advantage to the bank’s customers is that they are getting a fair market appraisal which is important when purchasing a home. Several times in the sellers market in 2004-05, I had appraisals come in low. Each time, I gave the appraisal to the customer and asked them to drive the comparables. Each time, they agreed that they over-offered and cancelled the contract. They all were very thankful and happy, found a new house, and bought it for a better price.
Most people did not know that they overpaid in the last few years because of the situation described regarding the relationship amoung RE agents, mortgage brokers and appraisers. Many RE agents refer their customers to mortgage brokers who get the deal done, even when not in the buyers best interest. I see constantly, buyers/borrowers paying high rates and fees to mortgage brokers when they could have a better deal from a bank such as mine. A very large percentage of agents really do not care if their clients get a good mortgage deal. Many of them prefer the kickback. It is very important for people to shop lenders.
I am not afraid of rate shopping because my bank beats the competion most of the time. The other problem is the advertising that promises a rate and borrowers just can’t get it. My favorite escrow person tells me stories of people at her desk signing loan docs with rates and fees much higher than promised. They are down to the wire and need to close their purchase, so they sign, while lowdly cursing the mortgage broker.
When you shop, look at the rate, how long it is fixed, when it changes, the size of the margin, the prepayment penalty, direct lender fees, points, rate lock period. What you want is no points, no pre-payment penalty, a 60 day rate lock (at no additional fee/same rate), rate and payment fixed for 7,10 or 15 years, low direct lender fees, a lender that keeps all of its loans, no rate or fee add-on for: condo or high rise condo or low doc, same rate for loans up to $2 million. I know a bank that has these……….
November 16th, 2006 13:43
The anonymous post above is mine.
November 16th, 2006 14:07
I live in Anaheim Hills, and the prices are coming down (slowly but surel). I sold last year, and am a JBR
. Anyhow, it is happening slowly, but here are some very personal observations:
6xxx E Paseo Rio Verde AH listed about 6 months ago for $687K, dropped to $674K, then relisted at $649K. It recently sold for $610K.
6xxx E Camino Correr AH listed a few months back for $799K. It recently sold for $650K.
6xxx E Paseo Rio Verde AH listed several months ago for $799K. It was taken off the market and relisted recently for $729K.
I also noticed that the for sale signs have been coming down quickly. I always wonder for a few months if it sold, or if they were just testing the market. My friend Zillow always lets me know!
This is a pretty nice area, and so I know there is hope for us all!
VirtualChris-OC
November 16th, 2006 14:43
Great post…and I agree that blogging is changing the entire way in which information gets communicated. What I’m continually amazed at is why the mainstream newpapers (like the OC Register) don’t start reporting on these types of stories. You’ve got outright fraud going on in the OC, yet you would never hear about it if it wasn’t for bloggers. I grew up in the era of Watergate, Vietnam, and Iran/Contra…where have all the investigative reporters gone!!?
November 16th, 2006 20:35
Actually, the OC Register is reporting on it…albeit indirectly. Check out Jon Lanser’s blog. He has been posting unflattering stories about the OC market….and getting a lot razzing from the permabulls.
November 16th, 2006 20:48
You’ve got outright fraud going on in the OC, yet you would never hear about it if it wasn’t for bloggers.
It’s more than that..
Blogger real estate insiders such as SoCalMtgGuy, OC Appraiser, SOCALAPPRAISER, Loon Officer, Sensible Lender, subsonic22, wiseguy, and many others have done a tremendous service in providing helpful tips, information, insights, and observations into the workings of the real estate market.
And, it is IMHO, that blogs such as these are in fact ‘the wave of the future’.
November 17th, 2006 00:27
Friend is an auditor for a company that purchases debt. He mentioned that they kicked back 60 plus loans because they noticed that all were supported with the same documents, i.e. bank statements, etc. but each loan was for a different person.
Very strange indeed.
November 17th, 2006 07:44
Yesterday, my RE broker took me to see a house that, because it was “occupied” as opposed to vacant, required an appointment to view. The implication was this would not be a staged/investor property. Well, surprise, it was obviously yet another staged property but with more effort than usual put forth to make it look like someone actually lived there.
Bark chips were tastefully covering the meticulous landscaping in the backyard. But, as I discovered after stepping in dog-sh#t, it was merely a thin veneer hiding reality from view. My disgust was merely intensified by finding there were plenty of scented candles available (always in groups of three), but no soap, no toweling, no TP anywhere.
To me, it’s a metaphor for the whole real estate world in the West. Everything is made to look like a Pottery Barn magazine ad vignette to keep reality from view. I imagine realtors chanting, “Perception is Reality” as a nightly mantra. Well, blogs such as this are starting to let the sun in where the sun don’t shine and it’s mighty ugly. If the masses ever wake up, they’re going to freak. But I’m not convinced that’ll ever happen.
For that to happen, lenders will have to stop lending to dogs and the dead. Smaller down payments and a greater percentage of debt to equity are VERY long term trends. It may roll back a bit during corrections and crashes, but I doubt we’ll ever get back to a general feeling of “2 kinds of debt: Bad debt, and worse debt.” Any hint of trouble and the Fed goes from wildly pumping the money supply to insane levels of pumping and 1% rates. So there’ll always be players out there willing to lend. And it will stay that way until the loan risk sticks with the person who makes the loan. But NO ONE seems interested in that.
November 18th, 2006 06:20
Sensible Lender,
so they sign, while lowdly cursing the mortgage broker
Sounds like a combination of ‘loudly cursing’ and ‘lewdly cursing’. As you would
.
As I did many, many years ago when a similar scam was pulled on me (in Australia) by a ‘household name’ finance company. Their “only appraiser” was “sick” for weeks, and they “wouldn’t accept any other authority” for a mortgage loan, so due to time pressure I finished up having to get a personal loan instead of a second mortgage. 9.5% difference in rate, and the b*stards took a lien on the property anyway.
Fortunately there was some money coming into my family shortly afterwards from an estate settlement, and the beneficiary was willing to give me a private 2nd mortgage as soon as this arrived, so I could afford to just pay the gouge for 2 or 3 months and then repay in full. When I did the branch manager who had tried to screw me had the hide to comment that the company didn’t make any money on loans paid off that quickly (since personal loans had zero prepayment penalties). I replied that if they had given me the 2nd mortgage loan I had originally arranged, I would have run it for the full 10 years. Silence.