[benzoil]

$this->bbcode_second_pass_quote('TommyJefferson', 'Y')ou without sin cast the first stone.

He's a stupid kid who got caught up in the mania. He's hurting right now and will for many years. He deserves punishment. He is being punished. It is just.

That being said, it is a low and hateful thing to revel in watching a stupid person experience punishment.

[cube]

Look on the bright side folks.

There's no shortage of properties for rent.

You can rent a place for $1,200 where I live in Cali that would cost you at least $2,000 a month in mortgage payments if you bought the place.

[aflurry]

$this->bbcode_second_pass_quote('TommyJefferson', '
')That being said, it is a low and hateful thing to revel in watching a stupid person experience punishment.

[o2ny]

Yeah, tales from the front-line of the bust are starting to filter in now... here's a very telling piece from a real estate agent in florida:

No Hard Landing

To quote a couple paragraphs:

$this->bbcode_second_pass_quote('', 'M')any flippers bought multiple properties. When in the history of the world have we ever seen the housing industry conduct business like a stock exchange. We had bidding wars. We had lotteries on new developments, just like we had allocations for new tech offerings during the late 90's. And just like the tech boom, the buyers were not making decisions based on fundamentals. Take a look at the recent Vonage offering, where buyers don't want to pay for their stock, because the price dropped after the public offering. The same thing is happening in the housing market, with thousands of buyers walking away from deposits, refusing to close on homes. That adds to the woes of the builders.

And just like we saw a tech crash with everyone rushing to sell, we're now just starting to see flippers dump properties for 200-400% losses on their deposits. Add to the woes, the fact that interest rates are up and most flippers bought using creative financing and low rate ARMs.

[ClassicSpiderman]

$this->bbcode_second_pass_quote('TommyJefferson', 'Y')ou without sin cast the first stone.

He's a stupid kid who got caught up in the mania. He's hurting right now and will for many years. He deserves punishment. He is being punished. It is just.

That being said, it is a low and hateful thing to revel in watching a stupid person experience punishment.

[ClassicSpiderman]

$this->bbcode_second_pass_quote('aflurry', 'T')he whole thing smacks of engineering... and the fact that the engineers couldn't find anything more expendible to throw on the fire than our homes, suggests that we may be leveraging out last real asset against the diminishing energy curve.

[PrairieMule]

Sadly this is guy is one of many doomed souls.

Our company, a large well know mortgage company, has begun layoffs. California took the brunt of the layoffs. I survived this week but 12 of my coworkers here in Texas did not. The good news is I have friends in this town. I managed to line up a interview next week in a different industry.

I'm thankfull I am not up to my ass in debt and live simply.

[TommyJefferson]

$this->bbcode_second_pass_quote('ClassicSpiderman', 'I')n fairness, I am just expressing frustration more than anything and I tend to wear my heart on my sleeve, even when I'm online. ...The higher-ups will find a way to shift most of their losses on the coming housing crash on everyone else.

[joewp]

This guy is minor league!

Check out Solomon Dwek. He has to be the king of poor-timing flippers. 350 properties that have to be auctioned off to pay his creditors, and they'll still not get all their money. It's a real crazy story too, he's bounced a $25 million check and even bounced his state income tax check!

There's a sidebar with articles on this guy back to May, and this isn't nearly over. People all over the Jersey Shore are holding their breaths as this case could reduce prices by 10% single handidly.

[TreebeardsUncle]

Hi.

This is the comment I am leaving for this small-time sociopathic fool, the little flipper.

Have noticed that one of the things that has changed most over the last 30 years is that housing has grown unaffordable for an increasing fraction of the population. At the rate things had been going particularly in the mid 90's through 05 time frame, the "American Dream" (brought to you by the oil-auto-mortgage banking-real estate industry through television, newspapers, and the radio whose owners are beholden to these leading advertisers) of the detached single family house was destined to run in with the reality of ever higher debt service payments and energy costs. Incidentally, what the house in the suburbs generally gives one is a big debt load, a high operating cost, particularly for heating and cooling, a long commute, some degree of isolation, particularly for non-working mothers,
and, yes, some appreciation.

A couple things:

1. Character is destiny.

This guy facing foreclosure here based his activity on fraud as he misrepresented himself as intending to live in the houses when he had no such intention whatsoever. Incidentally, just because a lot of people are doing something that is wrong and illegal doesn't make it ok. It is still wrong and illegal. He also had a seeming blindness to the reality of the situation that the real estate markets in much of the country, particularly on the coasts, was greatly inflated, that the prices had risen to the level in the summer of 2005 beyond which people's income could not support them, and the Fed would continue to raise interest rates in an effort to reduce inflation produced by rising oil costs. So, dude, you will continue to make these mistakes just like most foolish sociopaths because of who you are. And yes, I said sociopath. The dead giveaway is your shameless seeking of pity which is the hallmark of a sociopath along with the short-sightedness, blatant dishonesty, and thrill-seeking.

2. A house is a place to live in.

A lot of people these days no longer seem to believe that. Instead they have been seeing a house as just an investment and, in many cases, as a money management device. The end result of this recent run-up in housing has been that many people, particularly young locals, are unable to afford housing and will be that many ARM-holders will become financially insolvent. This phenomenon is consistent with the lack of sense of place, family, history, and community that is a leading characteristic of modern American sterile homogenous suburban sprawl with its attendant lifestyle of going into debt and wasting oil to buy cheap mass-produced stuff leading to the end result of making some corporate share-holders and executives very rich and garbage dumps bigger, a splendid display brought to you by the people who know the price of everything, but the value of nothing.


4 Rules of investing

A fool and his money are soon parted.

There is no fool like an old fool.

There is no keeping a fool from his foolishness.
(This one is also known as once a fool, always a fool.)

A fool is born every minute.

Thank you Casey, the flipped-fool, and others, for so brilliantly illustrating the first and third of these rules in action. And rest assured, that the mortgage lenders, by and large, just like the contractors, will abide by the dictum "Never give a sucker an even break."

[cube]

$this->bbcode_second_pass_quote('TommyJefferson', '.')..
I hope the banks lose their shirts. I hope the regulators get punished.
...

[TommyJefferson]

$this->bbcode_second_pass_quote('cube', '2')) Banks do NOT hold onto your home loans. The loans eventually find their way to the bond market where speculators can take the risk.

[Petroleo]

The guy closed his blog. His first smart decision in years

[GoIllini]

$this->bbcode_second_pass_quote('cube', '
')2) Banks do NOT hold onto your home loans. The loans eventually find their way to the bond market where speculators can take the risk.

I'm not a banker nor do I play one on TV.....but that's the long and short of it.

[Doly]

$this->bbcode_second_pass_quote('GoIllini', 'I')ronically, I'm guessing a lot of these defaults are going to be affecting hedge funds the most; we sold a lot to those guys, along with traditional buy-side firms like Prudential. So these defaults won't hurt the banks or investment banks, but they will hurt the rich.

[PhebaAndThePilgrim]

Hello from Pheba, from the farm:
The farm is paid for. The house was purchased 7 years ago with a 15 year fixed rate note. We have pinched pennies, done without, made do, etc.
We have worked very hard to always pay as much extra on the principle as we could.
When interest rates dropped, we refinanced and knocked 14 thousand off of the loan rate.
We now owe, 2,931.75 on the house, and will have it paid off by December, thus being totally free of debt.
Of course, we will then go back in debt by purchasing me a car that gets great gas mileage.
Whatever happened to living with means. What happened to the ideal that a home was the American Dream. Just one home, within a price and energy range that a person could truly afford.
This nation has gone insane.
We have accomplished our financial solvency on the salary of a carpenter. I do not work outside of the home. I do scrounge around, shop thrift shops, pinch pennies, sew, cook from scratch, etc.
Our lives have been financially geared around getting the house paid for.
I guess I learned this trait from my Mother. She paid off a 15 year mortgage in 3 years, on the salary of a factory worker, and a truck driver.
We don't live like hermits. I enjoy collecting my sewing machines. Our home is just beautiful. I have made all of the draperies myself, and recovered most of the furniture. We purchase DVD sets and enjoy watching old TV series.
We do not have cable tv, a cell phone, an Ipod, etc. and my computer is a cast-off from a business. The fact that it is Windows ME keeps me humble.
We did build the home ourself and saved a fortune on it.
My husband would scavenge trash bins on job sites and he spent 20 years dragging home materials that others threw away.
Our ceiling beams are solid douglas fir, 12 inch boards. extremely difficult to find. The boards were given to us, and were carefully sheltered until we could build the house.
We only took out the loan for what we knew we could truly afford to pay off.
We still do not have baseboard, closet doors, and no central air. (we may not get that anyway unless we can do ground source heat pump). I lived without floors until we could save cash for hardwood, which we installed ourself.
My belief is that this house flipping is a sign of a deep sickness in American society.
Pheba

[gnm]

Well said, congrats on getting out of debt!

$this->bbcode_second_pass_quote('Phebagirl', 'T')he fact that it is Windows ME keeps me humble.
Pheba

[MrBill]

Look at it this way. The guy was destined to lose his shirt. Even had he made money on his 7-8 houses, he would have turned around a just bought more with the profits, perhaps even increasing his leverage. Eventually, he would have gotten burned by getting bigger and bolder, and thinking that his profits were the result of good strategy instead of blind luck.

But he is no different, really, than many on these boards that think that all energy, base and precious metals, and commodity investments are cheap at any price and therefore oneway winning bets. As a matter of fact they are convinced of it.

[PhebaAndThePilgrim]

Hi: thanks for the info GNM. I really want a new computer. We just don't have the money right now. I would prefer a laptop the next time. I have read that laptops use fewer natural resources than a full size computer.
I know very little about computers. I just know I don't like ME.
A new/used tower would cost me about 300.00. But, the 300.00 is slated for other purposes at this time.
So, I just sweat it out every time I log on. lol.
I don't have much on my computer. I have a few charts I keep for my sewing machine hobby, but they are not valuable.
The mortgage comes first. Like I said, keeps me humble.
Have a pleasant weekend.
Pheba.