Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Sunday, June 18, 2006

Flip-Begone!



Just saw this article in Realty Times, so you know it's gotta be true! It seems that now that the horse is out of the RE barn, it's time to pass some new Anti-Flipper Laws. ain't that always the way it goes?!
Often the end purchaser of the flipped property was not financially qualified, and used fraudulent income, employment and assets information to obtain the FHA loan. Then the buyer quickly defaulted, leaving FHA with insurance losses and a house that was worth nowhere near its appraisal valuation. The flipper, meanwhile, pocketed all the sales proceeds financed with the FHA mortgage.

Hey, why change the rules in the middle of the game? Oh, it's not the middle of the game? It's the end of the game? As a matter of fact the curtain's down, and the FBer has sung his/her last encore and left the building..(to the bank). Of course, now's the time to get serious with these fraudulent loans. Sure thing dude. Mos def.

And speaking of weird and strange financing in our little town. My ex-neighbor, as I've commented before, closed on his over-priced sh**box. So we were invited to join in a little celebration. Champagne and crow. I sort of felt like the murderer who watches the victims funeral from across the street, but then I remembered, we warned him and had nothing to do with this toxic paper. As a matter if fact we'd heard just two days before that there were "problems" with the lender. I'm sure there were. Anyone looking at the overall picture there would surely have some problems, but in the end insanity triumphed and the loan was granted.

There was much glee and toasting by the principals in this enterprise. I asked how soon he'd be moving in and was told that they couldn't move in yet, as it wasn't quite "livable". Only in Sonoma could one go into hock for almost 700k and not be "livable". The Flippers were also driving a brand new car, no wonder there were "problems" with the lender. The evening ended with our neighbor leaning over to my husband in a celebratory glow and moaning, "ooooooh, we're really in debt now!"
To bad those new laws seem to be too little and far too late.

9 Comments:

At 6/18/2006 01:55:00 PM , Anonymous Anonymous said...

to bad oh well. No sympathy. Dumb azzes..
Yes it is a little late for that law.. GJ FHA

 
At 6/18/2006 08:23:00 PM , Anonymous tom stone said...

not many fha loans in california these days,loan limits and actual (if poor) underwriting standards made them uncompetitive...i'll bet there were problems with the lender until a little creativity was applied.which just happens to be a federal crime,and a felony.....your neighbor would have been better off shacking up with a 16 year old,less expensive in $,smaller penalty and he'd enjoy the scr@wing he got a lot more even if he caught herpes.yoo-hoo mortgage fraud is a crime,and jails are really ugly places...no hoa fees though.

 
At 6/19/2006 10:06:00 AM , Blogger Marinite said...

Free meals too.

 
At 6/19/2006 12:12:00 PM , Blogger moonvalley said...

Well, they may not have far to move. What to make of this idea....Jails Converted To Condos?!
Jail site closer to becoming condos
County approves sale to developer
BY TIM NELSON
Pioneer Press
The vacant jail on St. Paul's riverfront and part of the office complex that West Publishing abandoned when it moved to
Eagan will become home to more than 300 new housing units, under a sale agreement approved Tuesday by Ramsey
County.
The Rottlund Co. has agreed to pay about $4 million for the jail and the so-called "F Building," the easternmost part of
the former West Publishing complex. Commissioners unanimously approved a sales agreement at their meeting.
The company plans to build 312 condominiums, ranging from $250,000 to more than $1 million each, according to Todd
Stutz, of David Bernard Builders, a division of Rottlund. The centerpiece of the development will be a 25-story condo
tower at the foot of St. Peter Street, substantially larger than a 10-story proposal the county approved last year.
Stutz said his company hopes to start construction in April 2007 and valued the project at $100 million.

 
At 6/19/2006 01:03:00 PM , Blogger Marinite said...

That's what Marinites what to do too. Marin is too special to put up with a prision within God's Country so San Quentin has to go. They are debating what to do to it if it does go. Converting it to housing/condos is one suggestion.

 
At 6/19/2006 01:16:00 PM , Anonymous reskeptic said...

MV, LOL! Apparently home ownership is the new American prison system, where your warden is the bank.

 
At 6/19/2006 01:24:00 PM , Blogger marin_explorer said...

"Marin is too special to put up with a prision"

Yes--a lot of land out there that I'm sure gets developers salivating--all in the name of "community concern". Of course, by the time that prison gets moved, Marin and the SF Bay will be have a far different housing market.

OT, but interesting--driving through the c.valley/gold country this weekend, we noticed a HUGE market change over last year: sale signs everywhere, and the locals surprisingly downbeat. "Soft Landing" is an impossibility out there, and I wouldn't be surprised if Sonoma/Napa sees a similar trend.

 
At 6/19/2006 03:02:00 PM , Blogger moonvalley said...

Hey Marinite, what about a dual use..like they're considering for The House of D.....could stand for both Detention, or Debtors..either way they're goin' nowhere.
" in the continuing saga of the Brooklyn House of Detention, the closed 760-bed jail on Atlantic Avenue between Smith Street and Boerum Place. Dumbo developer Jed Walentas, the Brooklyn Paper reports, is proposing knocking down the current Big House (renovated over the last decade to the tune of $50 million) and replacing it with two Big Houses, one a luxury building and the other for inmates. Meanwhile, the Department of Corrections is sorting through proposals for the prime property and looking into plans to reopen the House of D (as a jail), with retail at street level. Rather gives new meaning to "mixed use" development, doesn't it?

 
At 6/19/2006 04:19:00 PM , Blogger Marinite said...

moonvalley -

LOL! Yes! Turn San Quentin into a debtor's prision. That is poetic justice.

 

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