Building leaving San Antonio

[tekka-maki]

Originally Posted by rd2007

It's based in florida, so I wouldn't be surprised if they're hurting financially. Seems most of that state is and I can't really say I feel sorry for them and their greedy ways..

Standard Pacific is a big company. 3rd largest home builder in the states and lots of homes in Cali with a great reputation.

So when you say greedy, do you mean SP? I think they're a great company, as opposed to many more scrupulous builders with sketchy track records in S.A. (e.g. KB circa 1997-2002 etc.). Heck, the biggest home builder 'DR Horton' packed up and left Wolf Creek unfinished just recently.

I bought a brand new 4 bed plus office and game room/2500 sq feet/3 sides brick with a load of options from SP for 150... not too shabby. I just hope someone will be around to honor my 1 year/10 year warranties. Good thing I just put in a serv. req

Originally Posted by sapphire

I think every article I've seen where someone with an ARM was interviewed they threw the blame on the mortgage broker. .

Well, the bankers weren't exactly the innocent ones here; perpetuating predatory loans they absolutely knew couldn't repayed if the bubble didn't continue to increase. CASH IN-CASH OUT. Heck they have zero to gripe about because central banks were bailed out by the Fed Reserve injecting billions into the monetary system and we are the ones to suffer via inflation as a result of the banks' bad decision thanks to a very unwise model for lending in sub prime whereby they leveraged their loans via the bond market. That said, there's nothing inherently wrong with an ARM as it suits an investment purpose, even Interest Only, provided that if you don't sell the home, you are financially able to pay the increased payments. This is something many didn't fully anticipate.

See:
BBC NEWS | Business | The US sub-prime crisis in graphics

[rd2007]

Originally Posted by banker

As a banker I will be the first to admit that banks made mortgages that they shouldn't have - but the hard truth is that many people went shopping for houses based on the maximum payment they could handle...usually done with an ARM in place to give the lowest interest rate possible. Sadly - they didn't think far enough ahead to see what would happen when the rate repriced. Now they blame the bank for this type of stupidity. When rates are at historic lows there is only one direction they can go...that is up. Why people don't realize that is beyond me.

I was talking to my dad about this before Christmas because he's the president/CEO of a bank he started in Michigan and I agree with most of this.. However, he placed much more of the blame on the banks and their greed. He personally did not allow any of this with his bank and has not really felt the effect, except for filling out billions of reports to satisfy the needs of the knee jerk reaction to the whole situation.
I completely agree with your take on the consumers. It drives me crazy when I see a fool on TV whining about suddenly not being able to afford their $500K house because their secretary salary isn't enough.. Duh, why would anyone think that in the first place? Dumb on both sides as far as I'm concerned and I do not have any sympathy for either of them..

Originally Posted by the_dimwit

My wife and I refinanced our home in 2001 to pay off some credit card debt. We took out about 20k in equity to pay the cards off and buy some new furniture (badly needed as I was a bachelor before that point). As interest rates continued to drop, we refinanced again in 2003 in order to take advantage of the lower rates.

We chose a 5-year ARM due to an interest rate of 4%. I must say that my total mortgage amount was never high enough to cause a great deal of risk with an ARM (I bought the home in 1998--in Washington DC area just before housing boom).

I am closing on this house next week (we moved to SA in August 2007), so the ARM won't have a chance to expire/reset.

Would I still choose this option, considering what is going on now? Yes. The risk was not high, but the reward was. We dropped our rate from 6 to 4 percent, saving a decent amount of money per month. HOWEVER, I would NOT go that route if my mortgage was close or equal to what the current market sales were showing.

In other words, if my mortgage was 350k and home sales were around 400k, I would not refinance with an ARM to simply make a lower monthly note.

I agree with Banker--lending companies were allowing people to qualify for loans (whether initial purchase, refinance, or home equity) that should have never been allowed to sign on the dotted application line much less walk out with the cash. I watched people take up to 100% of their equity at the market's peak. Guess what has happened? They are freaking out at the prospect of watching their interest rates go through the roof at a time when they can't sell their house for less than their current mortgage.

Tough spot to be in...

--Dim

I'm sure you are the exception to the rule unfortunately. If everyone thought the way you did then I don't think this would be an issue. Thank you for being one of the few people that actually understood what they were getting into and made the most of it. We need a few million more of you...

Originally Posted by texdav

I have a friend who worked for KB and he said alot of the homes sold when he was there were ARM loans. He said there was little checking as to the truth of reported financial information in the approval.Said that alot of them were in the 300,000-400,000 purchase range;just buying more than they could afford.

That is just pathetic and they should be sued into non-existence.. I never liked them in the first place and this only fuels that fire. Thanks for posting that too, hopefully it helps someone else avoid a mistake

Originally Posted by sapphire

I think every article I've seen where someone with an ARM was interviewed they threw the blame on the mortgage broker. Why you don't pay attention and educate yourself on what is probably the largest purchase of your lifetime is beyond me. And then the lying to yourself about what you can afford is a whole other ball of wax. We "pre-qualified" for a whole lot more house than we ended up with. I just didn't want a scary mortgage bill in my mailbox every month.

Exactly! I work with one of those morons too. He came in all PO'd because a friend of his was losing their house because they got suckered into something and he completely blamed the broker. I do think those brokers should be put in jail, but I also think the people that fall for them need a good slap upside the head. He described the friends situation and I tried to get him to see that the friend had absolutely no business even thinking they could afford the house they bought. This is the same moron that doesn't have a problem with michael vick, so the whole conversation was worthless. He's hell bent on blaming the whole thing on the broker and even went so far as to make it a race issue. The fool just can't understand that stupid comes in every size, shape and color though...

Originally Posted by tekka-maki

Standard Pacific is a big company. 3rd largest home builder in the states and lots of homes in Cali with a great reputation.

So when you say greedy, do you mean SP? I think they're a great company, as opposed to many more scrupulous builders with sketchy track records in S.A. (e.g. KB circa 1997-2002 etc.). Heck, the biggest home builder 'DR Horton' packed up and left Wolf Creek unfinished just recently.

I bought a brand new 4 bed plus office and game room/2500 sq feet/3 sides brick with a load of options from SP for 150... not too shabby. I just hope someone will be around to honor my 1 year/10 year warranties. Good thing I just put in a serv. req



Well, the bankers weren't exactly the innocent ones here; perpetuating predatory loans they absolutely knew couldn't repayed if the bubble didn't continue to increase. CASH IN-CASH OUT. Heck they have zero to gripe about because central banks were bailed out by the Fed Reserve injecting billions into the monetary system and we are the ones to suffer via inflation as a result of the banks' bad decision thanks to a very unwise model for lending in sub prime whereby they leveraged their loans via the bond market. That said, there's nothing inherently wrong with an ARM as it suits an investment purpose, even Interest Only, provided that if you don't sell the home, you are financially able to pay the increased payments. This is something many didn't fully anticipate.

See:
BBC NEWS | Business | The US sub-prime crisis in graphics

I was talking about greedy banks/brokers/investors, which seems to be nearly the entire state of florida.. My dad agress with this one too and if his mom didn't live there he said he would never visit the state again. He even sold the condo he had down there. Somehow I thought that Standard Pacific was a florida company though. Now I know they're out of Irvine, CA.

[banker]

Originally Posted by texdav

I have a friend who worked for KB and he said alot of the homes sold when he was there were ARM loans. He said there was little checking as to the truth of reported financial information in the approval.Said that alot of them were in the 300,000-400,000 purchase range;just buying more than they could afford.

Unfortunately a large number of big builders (especially those that partner with banks) had/have in house mortgage lenders that work to "qualify" those buyers and work within the loose banking laws which allowed them to make mortgages to folks without verifying income. I'm not surprised that KB did this - but I would imagine that Pulte, Centex, DR Horton and the like all did that as well. Greed lured the banks and builders to do things that they shouldn't have done. But at the same time - the buyers can't blame them. The individuals must take responsibility for their actions. You know what you can and can not afford - it isn't the builder or the banks fault when you can't make your mortgage payment...

[the_dimwit]

Originally Posted by rd2007

I'm sure you are the exception to the rule unfortunately. If everyone thought the way you did then I don't think this would be an issue. Thank you for being one of the few people that actually understood what they were getting into and made the most of it. We need a few million more of you...

Yeah, if more people would do their homework before making such large financial decisions I think we'd all be better off. Unfortunately, that smiling face on the other side of the table was telling buyers that it would all be ok. You know, as in, "house prices will never go down...don't worry!"

Buyers didn't care, really. All they saw was the instant gratification (lower payments, fast cash, etc.). It was as if their PRIMARY homes became piggy banks with ATM card access. Complete a simple online application and you get as much money as you want.

Sounds sort of like the tech stock bubble of the late 1990's...and the current oil bubble of today. Speculate something to an unreasonably high price or value, and then watch as it collapses.

--Dim

[rd2007]

I hope the oil speculators lose big time because they are currently #1 on my most hated list. The system seriously needs to be fixed and they all need to lose everything, they definitely suck.
You're right on the mark with the need to do your homework too. All the people moving into Stone Oak now seriously need to do some research. I was amazed to see the stagnant/declining value of houses up there in yesterday's EN. I had always thought they were skyrocketing, but that is probably the worst area to buy in SA right now..

[The Man in SATX]

I would never buy in the Stoneoak area. Never had an interest to buy there. I am more happy with my 100k shack, and not the big houses. It is just me and my wife.. so I do not need some big 4000 sized house. My 1483 sized house is sufficient, besides I am not paying out of the wazzoo for it either! Once the Ft Sam Houston Expansion rolls in (my house is real close to Ft. Sam Houston)... I plan on renting that house and getting me something (another small shack with some acreage) out in the boondocks somewhere.

[Chavez05]

I don't think it will hurt the San Antonio market because we have so many builders.