The California Association of Realtors reported today that the supply of existing houses for sale in Orange County fell for at least a fourth consecutive month in June. The “unsold inventory index” shows that it would theoretically take 7.9 months to sell all the houses on the market at June’s sales rate.
The O.C. home supply remains at the lowest level in just over two years because of a reduction in the number of homes for sale and an uptick in sales.
The association reported that house sales were up 18.1% in June compared to the same month a year ago. It was the third month in a row that Orange County house sales had increased from the year before.
The median price of a single-family house, or the price at the midpoint of all sales, also rose slightly from May, up, 4% to $560,900. But that price still was 22.5% lower than the median sales price of a house in June 2007, when a standard house here fetched nearly $724,000.
O.C.’s stats mirror those for the state as a whole. Realtors reported that house sales in California increased 17.5% in June, but that the median price fell 37.7%, dropping to $368,250 statewide. A separate study by DataQuick Information Systems showed that median prices fell in 374 out of 385 California cities and communities in June, the Realtor association said.
Here’s a look at June prices and sales in O.C. and around the region:
| Area | Median Price | Price vs. ‘07 | Sales vs. ‘07 |
|---|---|---|---|
| O.C. | $560,900 | -22.5% | 18.1% |
| L.A. | $396,560 | -32.3% | 1.7% |
| Palm Springs | $277,970 | -29.4% | 19.0% |
| Inland Empire | $261,980 | -32.5% | 75.4% |
| San Diego | NA | NA | -20.1% |
| Ventura | $480,430 | -30.6% | -15.7% |
Read more:
—The median price of a single-family house, or the price at the midpoint of all sales, also rose slightly from May, up, 4% to $560,900. But that price still was 22.5% lower than the median sales price of a house in June 2007, when a standard house here fetched nearly $724,000.—
This is so misleading. A standard house for $724,000? Jon, let’s get off the median lovefest. It is misleading at best. The overall median for he entire county is a measure of what exactly? The midpoint of all sales? How about you post an avg. sales price and avg. square foot per zip code. Now that would be some relevant information.
too much resistance from the realtors to actually use a logical price basis like price per sq ft
Price per square foot would only work by city or neighborhood too. It is just as susceptible to be skewed by location.
And, can we finally put to rest the lie that inventory increased 10% on June 16th? That was utter fabrication. Total inventory continues its steady descent towards normalcy.
This indicates we may be getting to the end of the “great OC housing crash”. Can we begin writing history? Let me start.
“In the great OC housing crash that went from 2006 - 2008, CdM prices near the beach fell a stunning 5%. This wiped out about 5 minutes of equity during the boom years. There were some hoping this stunning decline in equity would lead to a depression, but they were wrong and landed up being lifetime renters in Riverside.”
That’s all great but remember this YOY…in which we now entering the abysmal stats of last year…so by comparison everything will be just rosy but what are the sales and volume versus historical averages? Now that the affordability products have but been wiped out, what are people using for loans? This is particularly important as with have seen what is going to happen to some of the banks and GSEs. More pain to come for sure.
Jimmy2 said:
“In the great OC housing crash that went from 2006 - 2008, CdM prices near the beach fell a stunning 5%. This wiped out about 5 minutes of equity during the boom years. There were some hoping this stunning decline in equity would lead to a depression, but they were wrong and landed up being lifetime renters in Riverside.”
Don’t forget this other part of this story: In the latter half of 2008, real income for every potential OC house buyer unexpectedly grew by 50%, and the world finally adopted America’s virtual economy (by ignoring the billions of bad debts).
File this under the Fiction section.
I agree provider, but at least one zip code for comparison at ppsf is far superior than the midpoint of sales.
Jimmy2:
Realtors like you have been calling the bottom even before it meaningfully started. Just reread NAR’s spokeman at the time, David Lerach’s comments two years ago.
If you think this is the bottom, keep dreaming.
Sales numbers are up against very low comparisons of last year. If sales had kept going down, they would have become zero and even turned negative. That is not realistic.
None of this means prices are going to recover anytime soon or even stabilize. Prices lag sales volume be very significant time frame. This is the pattern in evey cycle.
Just look at this downturn. YOY sales started slowing in Oct of 05 but median price peaked in June of 07. Good 18 to 19 months of lag. If sales are recovering, one or two months don’t make a trend, price recovery is far away.
In addition, fundamentals like employement, affordability, credit availability are still far adverse for any meaningful recovery.
Finally, wash you face with soap water and get out of your delusion that CDM represents OC.
I dunno Jimmy……
Don’t quit your day job and spend too much time trying to write:)
In your fictional history story be sure to include the part about the realtor in CdM who had clients property listed for more than buyers would pay. This resulted in numerous sellers suffering while they carried property for nearly a year while listening to the constant assurances of RealtorJimmy that prices never dropped in Cdm.
When reality finally hit and the fine folks of CdM realized the rest of the county inventory had dropped while Cdm inventory rose and sales had stalled, when the good folks came out from under the ether they waited for low tide, took RealtorJimmy down to the waters edge, burried him in the sand with only his oversized empty head showing…………
Ok, Jimmy, it was only a dream, the good folks of Cdm pulled your listings, dropped their prices and got on with their lives.
In the future, RealtorJimmy can be seen wandering Coast Highway, picking empties from the trash bins, cursing the poor folks that live on the wrong side of the highway, ingesting noxious gas fumes and wondering what is wrong with everyone who didn’t see what he saw and wouldn’t pay what he felt entitled to and why the banker was so mean when he got tired of his stories.
By the way, RealtorJimmy still hoards those empties. He isn’t about to turn them in for mere pennies. He is certain that inflation is right around the corner and those empties will bring substantial change — when the people finally see what they are really worth.
Jimmy,
Don’t write your CdM history yet.
Here’s the start of “The rest of the story”…….
Community —– Zip — Median– Change Sales Change
Corona del Mar 92625 $1,515,000 -10.9% 13 -48.0%
That is better than April 08 when the median in 92625 was $1.466M, and do not even look at Oct 07 when the median was $1.295M.
Someone was saying something about the value of median price - now who was that?
Who’s talking median here?
I noticed the 13 sales — 13 sales aren’t enough to establish a median, a mean, an average or anything else of significance ……whether you consider square foot or price.
It isn’t a large enough sample to do anything other than cause concern to those hopping for good news from an area like CdM.
Keep in mind, there are 194 listed CdM properties, 108 of which show price reductions since they were currently listed.
13 sales?
So, where in any of this is the good news?
I can tell you how upset all the owners in CdM are. You see, they got these homes for 20% of their current value 10 or more years ago. They should have been smart and rented over the last ten years. Instead, they were dumb and got stuck with a home worth 5 times what they paid for it. You are right. the news is all bad.
I closely watch the RE in my area; about 4 blocks in every direction. Homes nearby range from 350k condos to 20M trophy spreads. Two houses which were for sale near me this spring ‘sold’ about the time that Thoughtful was claiming the big spike in activity (both roughly 1M). I was quite perplexed, thinking that it couldn’t be true (seeing through the bearish-colored glasses that I have). Both houses were over-priced (in terms of ppsf). They are ‘nice’ houses, but there are nicer houses for less $ in nearby, slightly nicer neighborhoods that are not moving. I was skeptical, so I continued to watch them closely. Turns out, both houses are back on the market! BOTH! One apparently ‘fell out of escrow’. The other may have been either an attempted flip or a phony ‘sale’ back to the lender.
The take away is … there is a lot of nonsense going on. Some realtors apparently view this as a public relations challenge … and their organizations have well-orchestrated campaigns of misinformation. If you’re shopping this market, you need to accept that whenever you hear these lamers suggesting that ‘activity is picking up’, or ‘prices are stabilizing’ that it is utter fiction; insist on proof from objective sources. Rational interpretation of available trustworthy data strongly points to housing prices in OC continuing to fall much, much further.
The 08 selling season is DONE. ‘Blood in the streets’ is the forecast for this fall, continuing into spring.
(PS. Active Buyer … not a buyer … clearly a RE special interest hack)
(PPS. Jimmy2 … dumber than Jimmy1 … thinks we all don’t know of the potential of RE to make you both wealthy and poor.)
“A straw man argument is an informal fallacy based on misrepresentation of an opponent’s position.[1] To “set up a straw man” or “set up a straw man argument” is to describe a position that superficially resembles an opponent’s actual view but is easier to refute, then attribute that position to the opponent (for example, deliberately overstating the opponent’s position).” (Wiki, Strawman)
J2 - I’ve seen no one here suggest that renting for the last 10 years would have been a good idea … no one.
You falsly suggest that everyone in Cdm has owned for 10 years … like I said … dumber than J1.
“Cherry picking is the act of pointing at individual cases or data that seem to confirm a particular position, while ignoring a significant portion of related cases or data that may contradict that position.
The term is based on the perceived process of harvesting fruit, such as cherries. The picker would be expected to only select the ripest and healthiest fruits. An observer who only sees the selected fruit may thus wrongly conclude that most, or even all, of the fruit is in such good condition.
Cherry picking can be found in many logical fallacies. For example, the “fallacy of anecdotal evidence” tends to overlook large amounts of data in favor of that known personally, while a false dichotomy picks only two options when more are available.” (Wiki - Cherry Picking)
Used in a sentence: “Active buyer is really good at Cherry Picking”
Yawn,
See no evil.
THAT IS BECAUSE IF YOU DO NOT HAVE TO SELL RIGHT NOW, THEN YOU ARE NOT GOING TO LIST RIGHT NOW.
always playing with numbers…per square foot is close to HALF OF WHERE IT WAS AT THE PEAK…yes, the selling homes are at close to 50% of the peak….houses doubled, now they split…
How far will it keep going? who the h3ll knows…not any of you blabbermouths.
Oh, inventory is down so prices will spike…durfey durf durf.
shut it!
corona del mar is worth every penny…get over it.
this ignores all that shadow inventroy–REOs/foreclosed properties that are not listed with brokers
If you look closely, carefully and intelligently, there are few great buys out there… If you just look at the big picture, you will never see a good deal, regardless the market is going down or up.
TROJAN949
A GOOD DEAL
MAYBE U SHOULD GO ON LETS MAKE A DEAL
THERES A FEW DOORS U CAN CHOOSE FROM BUT GOOD LUCK TRYING TO FIND THE RIGHT ONE OTHERWISE U UPSIDE DOWN
BUT GO AHEAD MAKE A DEAL IN YOUR SO CALLED BIG PICTURE….LOLL
CDM is nice. You get what you pay for! Too bad those bagging on CDM . They wish they could afford to buy there.
Um. How does this reflect the inventory sitting on banks’ shelves? Guess we’ll just stick our fingers in our ears and keep on humming.
Show us the Median Price of O.C. during the last 3 months: April, May, June, July 2008.
If you bought house in O.C. during the last 6 months and next 6 months, you are in deep troubles. The worst has yet to come.
Be careful with statistic from Realtors. Trust but validate.
RealtorDaveE said:
“BTW, in our latest predictions I’m projecting a 60% chance of the OC price bottom being winter ‘09-’10 or later, so to that extent I’m in your camp.”
What’s is your prediction of the median price within that 60% chance? Within the 40% chance?
“Some of the provisions of the bailout bill wil help with inventory reductions.
I don’t understand the usefulness of raising the loan limits when Freddy and Fannie are bleeding from bad loans on overpriced mortgages. Won’t that 10% off current market value immediately drive down prices by at least that amount? And how exactly does the lender get a loan “off its books”?
“Another big help would be a gradual balancing of the budget, which would drop interest rates, via elimination of earmarks and a line item veto for the next president. You’d think one party would come up with something like that, but they’re all addicted to pork!”
If you want to eliminate pork, then the first to go is the bailout bill. Don’t forget, eliminating frivolous spending (i.e. Iraq) and reducing the trade deficit (out of politicians’ hands).
Price,
Good questions. I’ll try to clarify:
1. Median price at the bottom? Well, I don’t do medians because they’re pretty meaningless and very hard to predict since that also would be predicting which price ranges are most active. As long as the market is flooded with low-end REOs and short sales, medians should continue to decline, whether prices do or not. When high end sellers actually drop their prices enough to reinvigorate that foreclosure-starved market segment, those dropping prices will actually cause median prices to rise.
So let’s try “How much more will the average home drop in value under your two scenarios? Still a tough one, because of all the varialbes: Interest rates, unemployment, inflation, Congress, Iraq, oil. My “best guess” would be the additional decline from current pending prices for a typical O.C. home would most likely range from 0% to an additional 25%.
2. How does “raising the loan limits” help? Actually, the bill just makes the current, temporary increases permanent. It doesn’t immediately help with low end foreclosures as much as it helps stabilize the middle ranges by reducing the premium for “jumbo” loans. Over the long range, however, that will reduce foreclosures by imposing conforming loan qualifying and adjustment standards (i.e. relative sanity) on the majority of borrowers up to the new limit.
3. The reduction of the loan balance on loans “worked out” by the bill is to enable the borrowers to stay in their home. That 10% actually reverts to the government when they sell, so the motivation for the borrower would be to stay in their home, not to sell it. In theory, it would reduce foreclosures by about 300,000 homes, if lenders and borrowers cooperate. We’ll see.
4. The lender gets the loan off their books by having the reduced principal paid off because the borrower refinances with a new FHA insured loan. In exchange for dumping the bad loan, the lender takes a proverbial “haircut” on the principal down to 90% of current market value. That “haircut” will feel more like a scalping, but it probably won’t be as bad as the beheading of a foreclosure. Again, the devil’s in the details, but it’s a step in the right direction.
5. On eliminating pork: At this point the “bailout bill” is probably necessary to avoid another Great Depression. Doing nothing didn’t work out too well for Herbert Hoover, and the resulting ten years of Federal “bailouts” under FDR’s “New Deal” were a whole lot more expensive. What’s worse, if I’m remembering my U.S. history correctly (and history was my major at UCLA) the New Deal programs really weren’t that effective, and what finally got things moving again was World War II.
The “pork” I’m thinking of is wasteful spending to get Legislators re-elected, like Alaska’s famous “Bridge to Nowhere.” Passing a bill eliminating such Congressional “earmarks” and also giving the next president a line-item veto would be a very simple step in the right direction.
6. Reducing the trade deficit is not at all out of the politicians hands, because the biggest part of the deficit is oil, and we’re sitting on more untapped oil reserves than any country in the world. I say use the revenue from that oil over the short term to create the best clean, renewable energy industries in the world by opening up more areas for safe drilling but dramatically increasing leasing fees on federal lands. Then split the billions in increased federal revenue between federal deficit reduction and renewable energy innovations.
Strengthens the dollar, stimulates the economy, reduces the trade deficit, leads ultimately to a cleaner environment. In the case of Alaska’s Artic refuge, drilling would sacrifice less than .01% of ANWR to actual exploration in return for a $137 - $327 billion reduction in our trade balance (see Wikipedia, “Artic Refuge drilling controversy.”) Send the money to the Saudis, or use it for high paying jobs, deficit reduction, and energy innovations here. Seems like a no-brainer to me, but I am a Realtor. . . .
Dave: best post yet…good info and insight. Thank you sir.
LOL
1. everything is always so hard to predict for realtors except…. now is probably a great time to buy, maybe not for everyone, but probably for you…..
2. there are still premiums on loans above $417K…. they better increase peoples income if they want to help anyone….
3. 50% equity sharing, 10% due on closing, 1.5% of principal every year…….. wow that 1.5% of principal tax is like a $100K loan on the average OC home….. the banks/congress are sneaky aren’t they !
4. it’s all optional for the lenders, if it’s cheaper/more lucrative to foreclose or if there is no way in hell FHA will take on the income/income stability of the home debtor at 90%……. the NOD will go out….
5. there were a myriad of bailouts/programs during the Great Depression………. and in Japan in the 90s………. they never work…… how can they? you can’t create something from nothing….. just more inefficient use of our dollars……
6. not much to say here, more of REDave boiling the ocean nonsense
Why so cynical mav?
………. mulli, i’m just realistic……. check out the fine print…. and check the history of the GD and Japan in the 90s…..
……… i don’t expect that we will have GD2……… unless our government tries really hard…… to pump money and create inefficiences….
mav, I would truly enjoy a cup of java with you one day. I think you would be surprised as to what my views are about RE and our economy. There has to be a little balance on this board, otherwise, it would be quite boring. Is today a good time to buy? Perhaps, for some…for the masses? Probably not…as indicated by the volume. But the volume is making strides which is good for our economy as a whole…when people buy homes, they have to spend in related areas. The two go hand in hand. So many local jobs are dependent upon our RE market being healthy…well, healthier than what it is today. Here is another point: buyers today know exactly what is going on. There are no surprises with respect to the market and expectations. They are getting it on all fronts…the media, the lenders, the agents, their friends, etc. Nobody is caught off guard and they are certainly not speculating for a quick return. So 2700 transactions or so indicate that many feel it is a good time for them to enter the market. If their objectives are long term, they will be fine.
if we are in a housing depression, why have existing home sales in the hard-hit West (think California, Arizona, and Nevada) increased four straight months (plus 12 percent)? And why are they up 17 percent from the low in October? More important, nationwide median existing home prices have increased four straight months, from $196,000 to $215,000. That’s a 10 percent gain.
And if the humongous Freddie, Fannie, and FHA ($300 billion) housing-bailout bills are so important, why did bank, thrift, and other financial stocks register their worst losses in eight years yesterday?
Big-government bailouts — the likes of which we haven’t seen since the 1930s — might just make matters worse, rather than better, since they interfere with the workings of free markets. In relation to the bailouts of Fannie and Freddie, we are talking about privatizing gains while socializing losses. Or as Paul Gigot of the Wall Street Journal put it, we’re using government power to generate private profits. This is always a bad idea.
Bill,
Herbert Hoover’s approach worked so well, why not try it again?
I went to my highschool reunion (15 years) couple weeks ago, and it really changes my respective.
Of course, housing is hot topic for all gathering, and no exception to this one. There were lot of “housing expert”, and I took quite a few hit when people realize that I just bought a house few months ago. Lot of folks quote media & professional advices on how housing have much further to fall. Even when I told people that the house I bought is a REO house, at 35% less than previous owner paid 3 years ago (980K). Nobody seem to care the fact that my mortgage payment (fixed rate) is $2900, while comparable houses in the tract rent for $3400-4000. All in all, those housing experts made me look like an idiot.
It didn’t make me feel bad though. First of all, I’m happy with my life, having a big & nice house for my family. Second, seem like most of the experts who criticized me still live in apartment & condo, so I don’t know if the wishful thinking was part of their harsh opinions. Career-wise, doesn’t look like they’re doing that well either. Some of my classmate are now lawyer & doctor, and they don’t have much opinions about my purchases, but those who’re in typical jobs were very critical & vocal about this whole housing thing.
Bill,
Seriously, I’d focus less on efforts to calm and stabilize troubled lending, housing, and stock markets and implementing obvious long-range fiscal restraints like a line-item Presidential veto and lifting the restraints on sane drilling so we can stop selling everything from the Chrysler to Budweiser to foreign interests.
I’m thinking we at least might have some common ground there.
If that doesn’t work, I’m an Angels and Ducks fan.
Would you say 80-90% of the people you know think it is not a good time to buy RE now? So what should you do?
2. OK, so it’s for it’s a long range plan (inflation-relation appreciation) and won’t stop the current slide.
3. As I asked before, won’t that 10% reduction put immediate pressure on current market prices?
4. So the government picks up the tab for still potentially bad loans. The burden has shifted from corporations to us. Who said that the rich paid too much taxes?
5. “On eliminating pork: At this point the ‘bailout bill’ is probably necessary to avoid another Great Depression. Doing nothing didn’t work out too well for Herbert Hoover, and the resulting ten years of Federal “bailouts” under FDR’s “New Deal” were a whole lot more expensive. What’s worse, if I’m remembering my U.S. history correctly (and history was my major at UCLA) the New Deal programs really weren’t that effective, and what finally got things moving again was World War II.”
If there was a Great Depression genie for the curent fiasco, it has already been let out of the bottle. The time for prevention is already past; we’re currently in management mode. As you aptly suggested, government programs won’t be effective. So I re-iterate, throw out the bailout plan. I am confident that the market will pick up when the U.S. economy naturally re-adjusts itself, by shifting away from RE and towards something more productive. Let the RE work itself out; more price reductions are needed until an equilibrium is reached.
“The ‘pork’ I’m thinking of is wasteful spending to get Legislators re-elected, like Alaska’s famous ‘Bridge to Nowhere.’ Passing a bill eliminating such Congressional “earmarks” and also giving the next president a line-item veto would be a very simple step in the right direction.”
This bill is still pork to me. In a real market system, big corporations, which are the biggest welfare queens, should be allowed to fail. Unless they want to prove to all privatization” junkies that private firms are no better or efficient than our big old government. Personally, I don’t see how a line item veto will do anything when the presidency itself is highly politicized and up for sale to the highest political donors.
6. “Reducing the trade deficit is not at all out of the politicians hands, because the biggest part of the deficit is oil,”
What is your source for that? According to my reference, capital and consumer goods comprise a huge chunk of the deficit. The government can only slap heavy tariffs on those.
“and we’re sitting on more untapped oil reserves than any country in the world. I say use the revenue from that oil over the short term to create the best clean, renewable energy industries in the world by opening up more areas for safe drilling but dramatically increasing leasing fees on federal lands. Then split the billions in increased federal revenue between federal deficit reduction and renewable energy innovations.”
Do you realize that this “short term” plan to tap into our oil reserves is actually a long term plan? That revenue won’t be realized for several years. Irrespective, renewable energy research should be conducted. This would help build new domestic industries, sidestep RE as our engine of economic growth, and produce new export commodities.
“Strengthens the dollar, stimulates the economy, reduces the trade deficit, leads ultimately to a cleaner environment.”
Taking on bad mortgage loans will add to our budget deficit and ultimately produce the opposite effect. As we go deeper into the red, we’ll have to borrow more money, devaluing our currency in the process.
Bill said:
“Big-government bailouts — the likes of which we haven’t seen since the 1930s — might just make matters worse, rather than better, since they interfere with the workings of free markets. In relation to the bailouts of Fannie and Freddie, we are talking about privatizing gains while socializing losses. Or as Paul Gigot of the Wall Street Journal put it, we’re using government power to generate private profits. This is always a bad idea.”
Good point. More government spending to prevent the inevitable is wasteful and counter productive. Our currency will continue to be debased as we have to borrow more than ever.
Those who continue to feel sorry for the rich ultimately forget about the social safety net they exclusively enjoy. If big business is going to get special treatment, they should be forced to contribute to a federal “bailout” insurance fund.
Hello everyone. I found this website after I googled ‘real estate market predictions’ and sure glad I landed here.
I live in downtown HB and finally ready to buy a house after renting here for so many years. I just started to seriously look but there are so many people in my life telling me to wait. It seems that if I find what I want for the right price I should buy now instead of waiting for this unknown ‘bottom’ to hit and risk not finding something I want to live in for a very long time.
I will be visiting this site often and hopefully get the education on real estate that I so desperately need.
Thanks again for the great read…
Mar
Great dialog…I wake up every morning to CNBC and look for factual numbers that support a recurring theme for that days trading. One of the words that I have heard quite often is “FUNDAMENTALS” – Over the past several years it became apparent that we lost all of our Fundamentals, Can a household income of $80,000 dollars make a principal, interest, taxes, and insurance payment on a $400,000 dollar loan amount? Fundamentally we will see home prices continue to trend lower until these three things happen –
1. Prospective homeowners can put 20% Down (3% FHA) – We are back to when my parents and grandparents bought their homes, two options to finance homes
2. Homeowners will stay in their home for 10 years – It is a Home, which might become an investment later down the road.
3. $8,000 dollar of “Gross Income” – 40% Debt to Income Ratio (Backend, which includes All Credit Debt + House Payment) = $3,200 dollars Max for PITI + Credit Debt (Credit Cards, Car Payments, Student Loans, Child Support, and any other debt that shows on a credit report)
Loan Scenario -
• Purchase Price $500,000
• Loan Amount $400,000
• 30yr Fixed Rate at 6.5%
• Prop Tax Rate 1.25%
• Homeowners Ins $100 per mo
• Total House Payment (PITI) - $3,143.85 – Better hope there is no other debt, nor do they take on any other debt until income increases by 5 to 7 percent.
Over the next 12/18 months lending guidelines will continue to tighten, won’t be as drastic as the past year, it would not be a surprise to see the debt to income ratio move to 38% and not have much room for exceptions. It’s all about the fundamentals of solid financials that will stand the test, just like our parents and grandparents.
putting any credibility in CAR/NAR is a joke. they create their own information and keep many properties off the MLS so numbers look “better” today’s artice about Santa Ana shows what is a reality for the uneducated who think they can handle $40,000 per year on their $75,000 income on this new transaction. of course with 3 bedrooms, they can rent each one to a family to help with the payments. If home sales in Mojave went from 1 to 2 the NAR would report a 100% increase.
That Santa Ana deal was very interesting. The real damage was not due to the appraisal, if the comps were good it doesn’t matter that this was a foreclosure previously (I don’t know if they were really good comps or not….although I’m skeptical). The real damage was that Wells Fargo closed an 80% loan that was really a 100% loan. The value “could” have been $625,000, but the “real” sales price was $500,000 and the loan should be against the lower of the two. They were duped. Dave is right, they probably falsified assets too. And don’t believe the borrower’s claims of ignorance. There is a Sales Contract that he signed, at $625,000, somewhere in that file. I didn’t see any reason to believe they couldn’t afford the $500,000 (other than lack of down). Not sure where that leap came from.
Provider,
It was even more fraudulent than you show
Wells lent on what they thought was 80% of a 625,000 sale.
The actual sales price agreed upon by the buyer and seller was LESS than 462K - not 500K or the 625K they conned Wells Fargo into believing.
You overlooked the 30K seller kickback and the 3 months payments the seller made for make for the buyer.
The buyer was upset because the seller stiffed him on the widescreen TV:)
IF the buyer had gotten the promised 52-inch TV the sales price would have been even less.
Reading the whole story carefully the involvement of the Wells spokesperson seems obvious. She should have been outraged. I am. Crap like this by people like this helped put us where we are.
You’re right…add in the $30,000. Congrats to the OC Register, they just opened up a can of investigative whoopass on this crew that would make Mike Wallace proud. I’m sure we’ll be getting the play-by-play.