Banking on appreciation with little skin in the game ($33,000 on a $963,000 purchase); counting on income from the upper unit of the Hayes Valley duplex to subsidize low carrying costs thanks to “rock-bottom” interest rates; and little in terms of reserves.
That’s the story in a nutshell.
With F.H.A. Help, Easy Loans in Expensive Areas [New York Times]
US (But Not DA) Prime And FHA Mortgage Defaults Climbing [SocketSite]

Recent Articles

Comments from “Plugged-In” Readers

  1. Posted by anonn

    [Removed by Editor]
    But to let you know, if you had personal experience with FHA loans you’d know that the vetting is not on the borrower, but the property. And it’s three times as stringent as it was before.
    [Removed by Editor]

  2. Posted by diemos

    [Removed by Editor]
    “But to let you know, if you had personal experience with FHA loans you’d know that the vetting is not on the borrower, but the property.”
    Yes! That’s what’s wrong with them. The borrowers are the ones who have to pay back the money. Not that anyone but me and other “internet crazies” care about that anymore.

  3. Posted by Zig

    moneyshot with Diemos’ article, story of three buddies putting 33K down on a million dollar place
    ““Everyone should have the chance to do this,” Mr. Kurland said.
    Everyone may get a chance.
    A few weeks ago, Congress extended the higher lending limits for another year. Representative Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that he planned to introduce legislation next year raising the maximum F.H.A. loan by $100,000, to $839,750.
    His bill would make the new limits permanent.”

  4. Posted by dub dub

    ^^^^ No, this is the money shot:
    http://www.nytimes.com/imagepages/2009/11/20/business/20limits_CA0.html
    They are all “in the technology field”, aged 24,27,31 and the RE is in Hayes Valley.
    “Then we read about the F.H.A. I had never heard of it before, and couldn’t quite believe it.”
    Smart guys!

  5. Posted by anonn

    your latest argument is odd. The FHA has become the dumping ground for all the worst lending practices. It’s not 3x more stringent. Have you been reading the news?
    FHA’s loan profile is deteriorating rapidly and it appears they will soon need a bailout. Their review of their FHA-approved lenders showed serious problems with egregious underwriting standards

    I’m sorry, but when it comes to vetting a property’s worth, it is much more stringent. You can think what you like in the abstract. I’m telling you the way it has been playing out in the real world.

  6. Posted by anonn

    [Removed by Editor]
    Again, and I pointed the same thing out to LD yesterday, your link had a national delinquency rate slapped onto a local anecdote. You guys all think they’re handing out these loans like candy. They’re not. The property will re-sell for 900K if they go delinquent. They’ve made sure of it.
    But that’s a big if.
    Here’s a fun toy: http://www.homepath.com/
    See how many FHA owned properties SF has? One.
    [Editor’s Note: Keep in mind that in 2007 there were zero FHA backed purchases in San Francisco (4,400 in all of California) versus 270 (and 107,000 in California) so far in 2009.]

  7. Posted by ex SF-er

    I’m sorry, but when it comes to vetting a property’s worth, it is much more stringent. You can think what you like in the abstract. I’m telling you the way it has been playing out in the real world.
    a question for you:
    what has shown to be a bigger cause of problems for RE and foreclosures?
    1) the property was not originally valued correctly
    or
    2) the borrower was not able to pay the mortgage.
    I think the answer is obvious.
    what has FHA become? A lender that allows you to buy with only 3.5% down AND that 3.5% can come from the First Time Homebuyer Credit and also from some gifts. In other words, you can get into a home using a FHA loan with VERY low downpayments and even no downpayment, even on a high cost house. (which was never before possible)
    I’m assuming you read the NYTimes piece today that’s all over the blogosphere where 3 guys bought a million dollar property with $33k down total using an FHA loan?
    now go back to my first question.
    it doesn’t matter if they’ve really ratcheted up their stringency on original property valuation if they are loosening their stringency on borrower qualifications (which they are)
    If FHA is soooooo good (as you claim, which is complete hogwash by the way) then why are they seeing astronomical losses? why are they having big problems with their approved lenders from a fraud standpoint? (remember, FHA doesn’t give out the loan, they just guarantee it). why are they at critical levels of capital ratios?
    why are over 14% of their loans delinquent. (yes, that’s one in 7!)
    c’mon anonn… leave this ridiculous argument. The federal government purposefully set up FHA to accept all the crap that nobody else wants to or can take. No private lenders would touch these deals with a 10000 mile pole. Fannie and Freddie can’t/won’t even do these deals.
    what is most hilarious is that you think that FHA is doing such a good job, but HUDs own inspector general does not!!!! however, he has been unable to get in the way of the Dodd/Frank bank gravy train.

  8. Posted by dub dub

    A serious question: assuming this is well-priced (I have no idea), how did three dudes from Boston get this property (with or without a downpayment).
    There must be locals swarming the two-unit market looking for presumed deals like this. How did these guys get it?
    That of course wasn’t the focus of the times piece, but it sure is an interesting angle. Does anybody know more?

  9. Posted by 3 words

    reckless
    buyer
    comeback

  10. Posted by anonn

    No agenda behind that presentation. No sirree bob. The sardonic lead, a new frontier in journalism? (And if I may, you, like, totally missed a prized opportunity to insert an Alfred E. Neuman gif.)
    I tried to find the property in question in the MLS and couldn’t. But again, 900 to 1M for a two unit in Hayes Valley = scary? Why? And now you’re saying somebody is paying decent rent in the other unit too? Did you know 51-53 Scott sold for 2.2M in this neighborhood two weeks ago? Please. Do not act as if FHA is not vetting these property valuations. None of you talking about this are familiar with the process. This is not hand in glove easy peasy appraisal.

  11. Posted by rr

    Because FHA loans are typically fixed rate, the interest rates on them are substantially lower than the typical rates for a fractionalized TIC. Plus, the down payment requirements drops from 20% to 5%. I wouldn’t be surprised to see a lot of TIC refinancing into these loans.
    Our building is still over the FHA conforming limit, but if it weren’t, it would be tempting to look into.

  12. Posted by anonn

    Two units. Hayes Valley. Under 1M. Rental income. Reckless?

  13. Posted by badlydrawnbear

    If you think this is an outlier I suggest you peruse Calculated Risk
    More on FHA Loans
    “In January, Mike Rowland was so broke that he had to raid his retirement savings to move [to San Francisco] from Boston.
    A week ago, he and a couple of buddies bought a two-unit apartment building for nearly a million dollars. They had only a little cash to bring to the table but, with the federal government insuring the transaction, a large down payment was not necessary.”
    A Few House Price Forecasts
    From housing consultant Ivy Zelman commenting on the MBA Delinquency report in the NY Times U.S. Mortgage Delinquencies Reach a Record High
    “I’ve been pretty bearish on this big ugly pig stuck in the python and this cements my view that home prices are going back down.”
    From Bloomberg: Housing Recovery in U.S. Set Back to 2010 as Market Wanes
    “I don’t think the housing crisis is over,” Mark Zandi, chief economist with Moody’s Economy.com, said in a telephone interview. “I think we’re going to see another leg down.”
    From Goldman Sachs chief economist Jan Hatzius in a note to clients: A Renewed Sag in the Housing Market (no link)
    “Our current working assumption is a 5%-10% drop in home prices through the middle of 2010. … house prices and credit quality … to weigh on the US financial system, the availability of bank credit, and ultimately the pace of the economic recovery.”
    National Survey: Data on Home Buying Financing
    October Trends in Existing Home Sales, a presentation from Campbell/Inside Mortgage Finance Monthly Survey on Real Estate Market Conditions.
    Thomas Popik, Campbell Surveys Research Director, highlighted several key trends from the survey in October:
    # Investor Purchases of REO Are Declining
    # First-Time Homebuyers Largely Support the Market
    # First-Time Homebuyers Dependent on FHA Financing
    # If FHA Guidelines Get Tougher, Look for Large Impact
    # Short Sale Inventory and Transactions Are Booming
    # First-Time Homebuyer Traffic Is Starting to Ease

  14. Posted by badlydrawnbear

    whoops, forgot the best quote from the NY Times piece …
    “Mr. Bedar, Mr. Rowland and the third partner in their property, Jordan Kurland, are all in the technology field, but their dreams of wealth do not feature stock options.
    “We’re banking on real estate,” said Mr. Kurland, 24. “Everyone expects prices to keep going up.””

  15. Posted by anonn

    If you’re going to edit the excess snideness out of the lead then feel free to delete my post. Thanks.

  16. Posted by sidelined

    Awww, flujiemuffin, something really seems to have gotten your goat lately.
    Even Robert Toll just said the same basic thing about FHA lending. Except he used the kinder words of “train wreck.”
    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRsDeHu7ywas

  17. Posted by mikeywoodz

    I saw that building back months ago, it didnt sell quick it was on the market awhile. 2 units for under 1m sounds good till you see the horrible 80s construction

  18. Posted by anonn

    All you FHA bashers are basically saying the market is going to crash much harder than it already has. Why else would a default/resale of a properly valued property pose much risk?
    So pardon me for being skeptical. I feel like I’ve heard that brand of doom and gloom somewhere before.

  19. Posted by Tall Guy

    I could care less about the FHA conversation. How about the deal in question here. Can anyone argue the case where their investment is NPV positive within a 10 year period? Be realistic w/taxes, upkeep, occupancy and required return on the $33k.
    In the money, at the money, or out of money?

  20. Posted by tjg

    train wreck waiting to happen

  21. Posted by polip

    silly debate, after all, no less than the Chair of our House of Representatives Financial Services Committee has told us that this is just sound federal government policy:
    Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that the defaults were, in essence, worth it.
    “I don’t think it’s a bad thing that the bad loans occurred,” he said. “It was an effort to keep prices from falling too fast. That’s a policy.”
    So, please, just forget about the underwriting standards you fools! It’s now a desirable policy for the FHA to insure bad loans.
    We elected these fools, so realy it is just our policy, and that is why we must all be the ultimate bagholders!

  22. Posted by SFwatcher

    “All you FHA bashers are basically saying the market is going to crash much harder than it already has”
    — Wait, anonn agrees that there was a crash…Thats news, wow…

  23. Posted by anonn

    Honestly, do any of you FHA bashers doubt that the market will crash further?
    Because that’s what you’re really saying. “Forget about underwriting standards” ????
    The valuations for these properties are occurring/ have occurred post correction! If you think it’s easy to get any old in-pocket appraiser to come up with any lofty valuation you wish, you’re wrong.
    So come right out and say the market will crash further. Don’t try to conceal the sentiment within a fake argument that this is the same thing all over again.
    If someone defaults on the loan, it sells for the same price. Maybe more. Maybe slightly less. There’s always at least a 3.5% buffer too.
    Jeez. These poor Hayes Valley guys. What did they ever do to you?

  24. Posted by anonn

    — Wait, anonn agrees that there was a crash…Thats news, wow…
    I think you think you’re deriding me but you’re actually exposing your limited understading. Why don’t you comprehend the timing of what has occurred? Maybe there’s a remedial r.e. blog you can read instead of this one?

  25. Posted by 3 words

    bashing
    time
    wasting

  26. Posted by anon

    To fluj’s question:
    Yes, SF housing market prices are going to fall more than 3.5% from here. Odds are 100%. More than 10%? Odds are 90% More than 20%? About 67% More than 30%? 50-50.
    That’s why FHA loans with only 3.5% down are asinine.

  27. Posted by anonn

    Yes, SF housing market prices are going to fall more than 3.5% from here. Odds are 100%. More than 10%? Odds are 90% More than 20%? About 67% More than 30%? 50-50.
    Riiiighhhhht. You’re probably making some good money this football season, oh wise and knowing swami-anon. How does the Niners-Packers spread look?

  28. Posted by matlaw

    These Hayes Valley guys, and people like them, who either think that real estate will forever increase in value and/or think that prices are now in-line with any reasonable metric (rental value or % of average income), are making it very difficult for those of us who have a different view of the market from buying at what, historically, are reasonable prices by artificially inflating prices through misguided optimism, poor analysis of market trends, and easy access to ridiculously easy and massive loans.
    I just hope there are a limited number of them.

  29. Posted by Legacy Dude

    fluj/anonn, instead of your usual ankle-biting style of commentary, why don’t you actually come up with a contrary prediction for a change? Something you can be held accountable for in the future…instead of just saturating this blog with your finger pointing and seemingly insatiable need for attention.
    Are you saying FHA is fine, and will not need a bailout? Are you saying prices will not fall any further in San Francisco? Are you saying that FHA lending is not materially affecting our market? Or that it’s sound policy? What exactly is your point? Please give us YOUR 12-month market outlook.
    You may be tired of the no-account know-nothings, but your “in-the-trenches” omniscient expert routine has become equally grating, especially given the condscension with which you deliver it. At least IMO.

  30. Posted by ex SF-er

    Please. Do not act as if FHA is not vetting these property valuation.
    Go back and read my post again. time and time again we have seen that the problem with RE downturn has not been initial property valuations, rather the borrower’s ability to pay the mortgage.
    we’ve already seen what happens by giving people million dollar mortgages with little to no downpayment. I don’t see why we need to repeat it.
    it would be one thing if this were an isolated case. but it isn’t. FHA is making up more and ore of the share of SF and other high COL area real estate, and that is NOT what it was intended for. And it does NOT have the experience or the understanding of those markets, nor the capitalization to continue doing this. One high cost home foreclosure costs FHA the same as 3 foreclosures on “typical” FHA products.
    remember; we don’t need a crash to see another major economic disruption from all of this. we can get it even if we simply get flat to stagnant prices. these sorts of deals only work if there is continual appreciation.
    For instance, let’s say that RE moves nowhere in 5 years. when these guys go to sell, they will have just over 3.5 equity. Realtor commmission is 6%. where are they going to get that extra 2.5% from? 2.5% is $25,000, which doesn’t sound like a lot until you remember that it took all three of them to scrape up $33k in the first place, AND you remember that they are RELYING on rent of the upstairs unit to make their payments
    I repeat: how exactly do you call near-zero down payments on million dollar properties to people who need to rent out part of the unit “stringent”?
    REGARDLESS of what the property is “worth”.
    let me guess: if it all falls apart they can just sell it for a profit? just like the 2006 buyers can do today?
    as an FYI to answer your question: I see persistent trouble in the SF RE market for at least 2 more years. I’ve consistently said this since 2007.
    I have no idea if we’ll see another “crash” or not. I doubt that things will go well in the next downturn of our W shaped recession though. (before you bark that I “missed” the latest upturn, I did not. I called for possible positive GDP numbers in Q3/Q4 way back in January when most were calling for armageddon).

  31. Posted by anonn

    You must be joking. I’ve made dozens of predictions that have been proven correct on this site for all to see. Remember “Real SF” ? Ha. That was created by haters like you because I made a call that was proven correct many times over.
    Today, with regard to this, I’ve actually said quite a lot. I said that FHA property valuations are stringent. I said that the program was created and implemented post market shift. I said there’s exactly one FHA defaulted property in this city. And in my opinion you’ll be unlikely to see many more. In 12 months time I doubt that values will shift much more either.
    What’s up with you, man? “Ankle biting” ? Kiss my ass. You’ve never enlightened anybody on this website to my recollection.

  32. Posted by anonn

    rather the borrower’s ability to pay the mortgage
    And if they default, someone else buys the property. Because it was valued correctly.
    Again, only one SF default has occurred.
    Again, in the case of these Hayes Valley guys, there’s rent revenue and it’s under 1M for a two unit in a desirable area. I don’t get where you’re coming from.

  33. Posted by anonn

    RE downturn has not been initial property valuations, rather the borrower’s ability to pay the mortgage
    No, the problem has been ability to pay the mortgage PLUS the property is no longer worth what it was purchased at.
    Sorry, that’s unassailable.

  34. Posted by whatFlujSaid

    “I’ve made dozens of predictions that have been proven correct on this site for all to see.”
    FWIW, most of the anonn/fluj predictions I’ve seen have been something like:
    “this [house in Bernal] will sell at asking”
    OR
    “this [house in Bernal] will sell at or near asking”
    I haven’t seen anything too much bolder than that, and don’t remember seeing predictions like the above outside of Bernal. Still waiting to see if those Bernal predictions are right, though — still pending.

  35. Posted by anonn

    Yeah well you’re not very credible, now are you name lad?
    Real SF. That’s all I really have to say to prove I’ve made a lot of correct calls.

  36. Posted by whatFlujSaid

    My impression is that “Real SF” was just the ever-changing part of SF that you believed was immune to price drops. It kept getting smaller and smaller and smaller until it essentially disappeared when all districts showed drops and price cuts. Your invocation of the term doesn’t prove anything other than your constantly evolving desire to say that prices didn’t drop here.

  37. Posted by anonn

    Yeah? That’s your dismissive pithy little post-synopsis? Well let me school you on what it really was. Real SF was the whole city minus district 10, most of 3, and SOMA/South Beach condos, which had a supply surplus IMO. It never wavered from that. Other than later on I conceded that the bigger houses in areas 4 took larger hits than I anticipated.

  38. Posted by Legacy Dude

    “You’ve never enlightened anybody on this website to my recollection.”
    Nope, never claimed to. But I also don’t treat it like my own personal online diary, posting 1/3 of the comments on half the threads, usually only to berate and dismiss all opinions that differ from my own. For the amount of time you spend here, anonn, you should pay the editor rent instead of complaining about his bias.
    The only posters here who were ever truly enlightening to read, IMO, were ex SF-er, LMRiM, Robert, diemos, and a few others whose names I don’t recall now. The departure of these literati, combined with the nationalization of the mortgage market, has significantly reduced the quality of content/comments here.
    I don’t mean that as a criticism of SocketSite or anyone posting, just saying there isn’t really much to discuss anymore, and there probably won’t be until the FHA/FDIC need bailouts, a debt/currency crisis hits, or there’s a regime change in Washington. Until then, toodles.

  39. Posted by anonn

    1/3 of the comments on half the threads, usually only to berate and dismiss all opinions that differ from my own
    Neither do I. I don’t post in 1/8 of the threads on here. Your taste in posters says a lot about you. No wonder you don’t like what I have to say. The feeling is mutual but I’m sure you’ve picked up some knowledge from me, while I’ve never gleaned anything except sub-par derision from you. So you’re welcome. Others are much better at pitching the scorn you’ve underhand lobbed at my Louisville Slugger.

  40. Posted by ex SF-er

    anonn:
    I think I see where you and I disagree most.
    If I understand you, you believe that FHA guaranteed loans will do ok because the property was correctly assessed at the time of purchase, and you don’t feel that there will be much more downside in RE.
    Thus, if people get in trouble (due to not being able to meet their monthly nut), they can simply sell the place to get out from under the mortgage.
    there are 2 problems with this
    1) the current buyers need appreciation in order to sell with a lot of these FHA products, because they have such low down payments (near zero) and they are not paying much principal every year. Thus, to sell they need to come up with realtor/transaction fees, which can be 5-7% or so of purchase price. the fact that they “need” an FHA loan in the first place predisposes them to not being able to afford those selling transaction costs. Thus: it’s a problem
    2) FHA is being used to increase the buyer pool. without FHA we would not have such loose lending. In addition, we have artificially low mortgage rates due to Fed zero interest rate policy, Fed purchases of mortgage backed securities, and other govt intervention. Thus, we have unprecedented govt support. At some point that will need to be unwound. thus, these current buyers (and taxpayers) are taking a huge risk that when it comes time for the buyers to sell that there will be as much demand. (the govt interventions shifts the demand curve to the right… loss of those will shift the demand curve to the left).
    I’ve yet to see how the US Govt will get out of the housing market without major disruption. sure, we keep hearing about how the economy will boom and that will solve all problems. It’s a possibility, but far from a certainty.
    the FHA program is already in shambles. it can only end in tears. This has been obvious for over 2 years now.
    again, you know it’s bad when the inspector general for HUD (who oversees FHA) openly admits that FHA is in major doo doo.
    by the way: it doesn’t mean much that not one FHA property has gone into foreclosure, since there were virtually no FHA properties in SF at all as recent as a year ago. FHA is a new beast to the SF market.

  41. Posted by tipster

    ^With all of the moratoria, “trial modifications”, etc, the foreclosure process takes about a year now. That means the “one” in foreclosure could be one out of the first seven FHA loans written!
    That proves this is going to be a catastrophe!!

  42. Posted by NoSirreebob

    wow, fluj is really on a roll today. Seems nothing can faze the all-seeing fluj, not haters, not FHA evaporated funds, not logic, not his goat being gotten astray, no sirree bob. his eloquent words continue to shine and grace us with his wisdom. I wonder if the charm carries over to personal dealings with clients.

  43. Posted by badlydrawnbear

    when did this become the ‘anonn’ blog?
    Why is everyone arguing with a poster who has made their agenda clear and is not only willing to ignore any obvious evidence that contradict their agenda but is really doing nothing but lashing out with personal attacks. I enjoy socketsite for OCCASIONAL snark but more for the great posts written very thoughtfully by some of the regulars here. This anonn vs. everyone stuff is dull dull dull
    If I wanted to read these kind of personal attacks back and forth I would just go to the craigslist housing forum.

  44. Posted by diemos

    Last week someone posted that anonn should just be ignored and my immediate reaction was, “No, no. Anonn needs to be savored like a fine wine or a well ripened cheese.”
    I have no doubt that he really believes that the chatter on these blogs matters and that if he can just shout down the nattering nabobs of negativity he can make 2005 come back again. Magical thinking at its best. Annon is always a useful reminder about the limitations of rational market analysis since the market is created by the actions of very non-rational humans.

  45. Posted by sparky-b

    I remain a happy anonn client, and if he can get me in on some FHA loans for my next buys all the better.

  46. Posted by nonanon

    ^ lol. isn’t sparky-b related to flujanonn?
    “FHA is being used to increase the buyer pool. without FHA we would not have such loose lending. In addition, we have artificially low mortgage rates due to Fed zero interest rate policy, Fed purchases of mortgage backed securities, and other govt intervention. Thus, we have unprecedented govt support. At some point that will need to be unwound. thus, these current buyers (and taxpayers) are taking a huge risk that when it comes time for the buyers to sell that there will be as much demand. (the govt interventions shifts the demand curve to the right… loss of those will shift the demand curve to the left).”
    bingo!

  47. Posted by sparky-b

    yep.

  48. Posted by anonn

    2005 again? Yeah. Um, nope.
    Open agenda? Only laughing in the fact of all the incorrect worthless lemmings and their calls for blood in the streets. I said a correction would come, but that it would be milder, and often that it hadn’t occurred yet. Now it’s like ’07,’08 peak, and … from the same chorus. LOL. I guess I need to be wrong on here in order to make friends. Yeah. Probably won’t do that.
    FHA –> Three kids buy a two unit in a neighborhood that supports much higher prices, and it collects income too. Sound the alarm!

  49. Posted by diemos

    “It’s over. Sorry. Scare tactics are dead. San Francisco never really took a price hit and it won’t, either.
    Posted by: fluj at June 23, 2008 9:57 AM”
    “I said a correction would come…
    Posted by: anonn at November 21, 2009 10:08 AM”
    Oh how history get’s rewritten. Aren’t archived websites great flujanonn?

  50. Posted by anonn

    Ha! How many times are you going to throw that one up, out of (its goading, goading, and more goading) context? Seriously? How many times? Now go find 200 examples me saying that a correction is likely but not to the extent YOU predicted.
    Let’s not forget that June 23 2008 is during a period when you and others were saying “wheee. look out below!” but now call “peak.” Please.

  51. Posted by anonn

    And the small hit SF did take three months later is nothing compared to what you and many others predicted, and shamefully acted as if had already occurred, anyway.

  52. Posted by diemos

    “Seriously? How many times?”
    Oh, I don’t know. I’ll try to keep it down to no more than once a month between now and Jan 1, 2012.

  53. Posted by anonn

    When you’re nowhere to be found to own up to how horribly wrong you were? It’s a date! Err. Wait a minute.

  54. Posted by diemos

    Such calumny.
    “during a period when you and others were saying “wheee. look out below!” but now call “peak.” Please.”
    Huh? When you’re at the peak is exactly when you should be looking out below. What’s the contradiction?

  55. Posted by EBGuy

    FHA –> Three kids buy a two unit in a neighborhood that supports much higher prices, and it collects income too. Sound the alarm!
    I’ve always wondered how you can screw up these two unit buildings as they allow you to bypass the condo lottery (but judging from the foreclosures I’ve come across, there are some that don’t make it). I’ll grant you, a protected tenant could throw a kink in the plans. Is there something else I’m missing? Evidently, these guys don’t seem to be going that route, though: The friends plan to live in the bottom unit and rent out the top. Looks like they closed on November 13.

  56. Posted by anonn

    Huh? When you’re at the peak is exactly when you should be looking out below. What’s the contradiction?
    Pass that haterade over to Tipster, hater. You don’t know a thing about these people’s plans, yet you called them names. Get a grip.

  57. Posted by diemos

    “You don’t know a thing about these people’s plans”
    Plans? They have plans? Let’s see if we can extract their plans from their quotes in the article.
    “Me iz homeowner now! Me make X on hard to read lawyer paper! High-5 FHA guys! Where I stand with basket catch free money fall from sky?”

  58. Posted by AccordingToFlujanonn

    “There is one case to be made, and one case only, for price decline citywide. And that is for condos. But not all condos, plainly.”
    Posted by: fluj at June 23, 2008 12:40 PM

  59. Posted by ex SF-er

    FHA –> Three KIDS (with shoddy income stability) buy a two unit in a neighborhood that supports much higher prices (AT THIS TIME), and it collects income too. Sound the alarm!
    (emphasis mine)
    Again, you are looking at one half of the equation. I’m not sure why you persist in ignoring the other half.
    first half= property valuation.
    second half= borrower’s ability to pay.
    we have 3 very young people with unproven income track records (I believe one of them barely had enough money to get from Boston to SF in the first place) who had to scrape $33k together to buy this place. Now they will have a mortgage of $6k/mo or more. they will RELY on rental income from the above unit to make that $6k/mo.
    it takes all 3 of them to pay the nut. thus, if ONE of them runs into trouble it will stress ALL of their finance. If they have rental issues it will stress ALL of their finances.
    They are poor borrowing candidates for a Million Dollar place. Sure, if they would have pooled their money for a $300,000 place I’d think differently. But they didn’t.
    by the way: The NEIGHBORHOOD might support higher valuations, but THIS PROPERTY most certainly did not. (otherwise somebody else would have bought it for more).

  60. Posted by anonn

    You don’t know that their job situations are poor. You don’t know their assets. You certainly don’t even know anything about the property’s value, Ex-SFer, which I think sold for less than asking. You certainly don’t know what the property will or will not be valued at in several years. All of you guys are basing this off a slanted NYT article, cut up by a blogger with an agenda, and your own suppositions. It’s ludicrous.
    “There is one case to be made, and one case only, for price decline citywide. And that is for condos. But not all condos, plainly.”
    Posted by: fluj at June 23, 2008 12:40 PM

    Yeah, fluj pretty much nailed that one.

  61. Posted by anonn

    hahahahhaha. I am in no way the toughest BBS bull. No way. Ever hear of a character named “Marina Prime” a k a “Squaw Creek Resort” a k a “whatever the heck else he’s calling himself” ??
    That aint me. I’m about 14 levels of Ye Loyal Order of Bear down from the Grand Poobah.
    No. I’ve been saying we’re due for some sort of correction, off and on, since I started posting here. What bugs me is when people come on here and start saying that it has already happened.
    Posted by: fluj at December 20, 2007 6:30 PM

  62. Posted by MK

    Prices didn’t decline citywide in San Francisco? Really? Doesn’t sound like “one case only” fluj could even see it as a possibility, just for condos.

  63. Posted by anonn

    You’re obviously free to ignore any and all peak type SFR sales that get talked about almost daily on this website. Whether or not they contradict a notion of citywide collapse is also something you don’t need to consider. You’re of course free to not read the June 23rd thread in its context of chicken littles baiting with sky is falling calamity predictions. It’s all good.

  64. Posted by 3 words

    loved
    this
    thread

  65. Posted by diemos

    Fannie Mae to tighten lending standards
    Brian Faith, a Fannie Mae spokesman said, “A review of the files banks were sending to us revealed that an anomalously high number of the bank’s straw buyers were actually made out of straw. Henceforth we will stringently require a pulse from all buyers.”
    Fannie Mae reiterated its commitment to enabling homeownership and vowed not to discriminate against borrowers on the basis of income, assets, prior felony fraud convictions or the non-existence of collateral.
    “Access to cheap credit is a basic human right enshrined in The Fundamental Declaration of Human Rights. Fannie Mae is proud to play its role in ensuring fundamental human dignity by funneling losses from banks to taxpayers.”

  66. Posted by anonn

    So, the NY Times, FHA, three tech dudes property actually did sell for 14K over asking @ 963K. It was over 3000 feet, had two car parking, was in a desirable part of Hayes Valley, and it was bringing in 4000 a month.

Add a Comment

Your email address will not be published. Required fields are marked *