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Old 03-06-2009, 12:36 AM
 
3,283 posts, read 4,672,371 times
Reputation: 753

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Quote:
Originally Posted by MisterDuke View Post
And Christopher Cox came from OC too. He was a longtime OC congressman before Bush tapped him to spearhead deregulation at the SEC. He made sure they looked the other way.

all the nonsense about unfettered free markets and deregulation! in 'FREE MARKETS' the interest rates and money supply are not created by a central bank. they are controlled by the market. without the central bank, none of this wouldv'e happened!

what would've happened when people started buying real estate in a frenzy, banks reserves would've been depleted, interest rates would rise and that would stop the boom dead in it's tracks.

instead, the banks were continually being provided liquidity at low, low interest rates. having said all that, we all enjoyed the benefits of the boom but now it's payback time!

if you can't do the time, ..........
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Old 03-06-2009, 07:57 AM
 
8,240 posts, read 15,255,229 times
Reputation: 3679
Quote:
Originally Posted by ocexpo View Post
If you look at places like Fresno, Bakersfield, etc. where a heavily latino population started buying new houses in these subdivisions, those markets have fared much worse than ours. I mean, in Modesto, for example, the average house price in one subdivision in 2005 (when it was new) was $821,000, the avg income was $75k, and 85% of the buyers were latino. Today, the most expensive home in that Modesto subdivision is listed for $405,000.

I am an architect for a low income housing corp. In 2005, we saw all these people who were going from subsidised housing to buying $600K detached homes. It was a disaster waiting to happen. I knew none of these people would actually make it, most of them lived on welfare and were gardeners/maids/low-skill government employees, etc.
Yeah, I guess those are the same people who are having their vacation home foreclosed on too?
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Old 03-06-2009, 03:10 PM
 
Location: Orange County, California
1,017 posts, read 2,707,675 times
Reputation: 470
Quote:
Originally Posted by ocexpo View Post
If you look at places like Fresno, Bakersfield, etc. where a heavily latino population started buying new houses in these subdivisions, those markets have fared much worse than ours. I mean, in Modesto, for example, the average house price in one subdivision in 2005 (when it was new) was $821,000, the avg income was $75k, and 85% of the buyers were latino. Today, the most expensive home in that Modesto subdivision is listed for $405,000.

I am an architect for a low income housing corp. In 2005, we saw all these people who were going from subsidised housing to buying $600K detached homes. It was a disaster waiting to happen. I knew none of these people would actually make it, most of them lived on welfare and were gardeners/maids/low-skill government employees, etc.
None of "THESE PEOPLE" made it? Geesh, this post is quite negative and biased. Plenty of cash-poor highly skilled tech employees and banking execs bought more than they could afford too, and have lost their jobs/homes too. Don't know why you blame them, their situation is no different than all CA'ians. Like EscapeCalifornia so rightfully said, there's PLENTY of blame to go around.
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Old 03-06-2009, 04:01 PM
 
Location: South Bay
7,115 posts, read 19,069,916 times
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Quote:
Originally Posted by 58robbo View Post
all the nonsense about unfettered free markets and deregulation! in 'FREE MARKETS' the interest rates and money supply are not created by a central bank. they are controlled by the market. without the central bank, none of this wouldv'e happened!
if we didn't have a central bank there wouldn't be anyone to print trillions of dollars in a futile attempt to pull us out of this mess! long live the fed and trillions of dollars in foreign debt that may never be paid back. I feel sorry for the chinese and japanase, what are they going to do when we can't pay them back the hundreds of billions of dollars they have in US paper?
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Old 03-06-2009, 06:34 PM
 
1,687 posts, read 5,383,409 times
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Fresno and Bakersfield (along with other cities) had a very large number of mainly out-of-town speculators and out-of-town flippers buying up houses to try to make a quick buck.

For example, check out the chart at the bottom of this WSJ article. Through Sept 2005 the markets with the largest number of purchases by investors were:
Redding 22% of purchases were for investment
Visalia/Tulare 21%
Fresno 20.8%
Boise 20.5%
Medford 20.4%
Bakersfield 20%
Merced 19.38%
Chico 18.5%
Ft Walton Beach 18.5%
Myrtle Beach 18.1%
Sarasota 18%
Investors Retreat From Housing Market - WSJ.com
The list goes on but nearly every city listed by the WSJ in the chart is today on the list of struggling real estate markets.

Once investors and flippers started dumping, it accelerated the problems.
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Old 03-06-2009, 08:43 PM
 
Location: San Antonio, TX
334 posts, read 798,321 times
Reputation: 258
Adjustable rate mortgages and subprime lenders have been around for a long time, and they played a huge role in this fiasco, but they did not "create" it. No, what caused the meltdown was the nifty securitization of these loans on Wall Street.

High risk loans are no problem, as long as they are identified as high risk and priced accordingly. High rates are charged for them, which discourages most borrowers and adequately compensates investors who know what they're getting into. This meltdown was caused by the creation of pools of these bad loans into AAA bonds and other "safe" investment vehicles. That is how this mess managed to strike so many pension funds and otherwise conservative banks.

So, it wasn't the wolf in OC that caused the meltdown, but the guys in New York who dressed it up as Grandma and put it in Little Red Riding Hood's bed.
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Old 03-06-2009, 09:31 PM
 
Location: OC, CA
3,309 posts, read 5,132,203 times
Reputation: 645
Quote:
Originally Posted by cabolissa View Post
None of "THESE PEOPLE" made it? Geesh, this post is quite negative and biased. Plenty of cash-poor highly skilled tech employees and banking execs bought more than they could afford too, and have lost their jobs/homes too. Don't know why you blame them, their situation is no different than all CA'ians. Like EscapeCalifornia so rightfully said, there's PLENTY of blame to go around.
Well, I can only comment on the people I personally saw in my own industry.

And yes, "these people." Someone who rents a low income house in one of our subdivisions has to make under $50K in most cases. All of a sudden in 2005, they bought houses. I bet you that not one of them kept their homes in the end.

Call it bias, call it whatever you what. But I personally saw some of the poorest people buy homes in the top 5% price range of homes in the nation.
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Old 03-07-2009, 02:00 AM
 
3,283 posts, read 4,672,371 times
Reputation: 753
Quote:
Originally Posted by BRinSM View Post
if we didn't have a central bank there wouldn't be anyone to print trillions of dollars in a futile attempt to pull us out of this mess! long live the fed and trillions of dollars in foreign debt that may never be paid back. I feel sorry for the chinese and japanase, what are they going to do when we can't pay them back the hundreds of billions of dollars they have in US paper?

it is good for us because we benefitted from this printing, but it is morally repugnant. it's like going to a restaurant, eating, treating the waiters poorly, staying way beyond closing time, leaving a huge mess and then sneaking out through the bathroom window(inflation)
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Old 03-07-2009, 08:26 PM
 
Location: Greenville, WI
8 posts, read 13,539 times
Reputation: 13
Default 2nd mortgages

Notice how most of the states with the highest rates of refi and 2nds are red states?
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Old 03-08-2009, 08:01 AM
 
Location: Irvine, CA to Keller, TX
4,831 posts, read 6,194,868 times
Reputation: 844
Quote:
Originally Posted by cabolissa View Post
I think the CA homeowners who experienced record property value inflation who then pulled out every penny is a big part of it. Also, the people who shouldn't have qualified for a home, but did. But none of this would have happened if the LENDERS didn't lend the money in the first place!!!!!! Don't forget, mortgage companies and brokers were making a mint doing it.

Who's to say that Texans/Coloradans/Minnesotans wouldn't have done the same thing if their home values rose to the same degree? People are greedy, period. The people in CA just had the opportunity unlike most of the other states.

The problem is at looking at your home as an investment, an asset. It's simply a place to live. Investment property is that which generates income. If you borrow against your home, you're going to lose it once you hit a rough patch. God knows most of us don't have a year's worth of expenses saved in the bank. It's playing with fire.
I think the CA homeowners who experienced record property value inflation who then pulled out every penny is a big part of it.

So you blame the smart people for the problems of the greedy, dumb people. I watched my house value go from $126,000.00 to $800,000.00 and when it hit the high it was adiós for TX, bought a beautiful home, put money in the bank and rested. BTW, I stayed in my home in Irvine, CA for 26 years. My house was my home until it was time to cash out. Now I have 4 years of expenses in the bank and a home paid for. Thank you CA.
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