Showing posts with label mortgage. Show all posts
Showing posts with label mortgage. Show all posts
Thursday, August 16, 2007
Tuesday, August 7, 2007
Tuesday, July 24, 2007
Good Grief
I just read this article in Yahoo! (via Drudge) about how Countrywide (my mortgage loaner) just posted a huge loss this quarter, due to so many borrowers with GOOD CREDIT (aka Prime loans, as opposed to Subprime loans) defaulting or paying late on their loans. The article notes that rather than the sudden interest rate reset rise causing the problems, it's the fact that no one can sell their houses for anything close to what they paid. So now, it's not just the subprime shady loans going bad, IT'S EVERYONE!!
Notable quotes from the article:
-"I do think it's important to observe what happens going forward," Countrywide Chief Executive Angelo R. Mozilo said. "We are experiencing home price depreciation almost like never before, with the exception of the Great Depression." (emphasis mine)
-"The company has set aside $292.9 million in preparation for borrowers missing payments on loans, with some $181 million of that amount for prime home equity loan losses. The reserve is more than four times the size of the reserve established in the second quarter of last year." Good to see they've provided me with a cushion!!
-"Mozilo said the number of unsold homes must fall before the market can begin to recover. He doesn't expect the market will turn around until 2009 at the earliest."
-"Barring a decline in mortgage interest rates, the company said it expects its loan production volume to decline."
The last one is the important one. While Bernanke is off fightin' inflation, the economy is starting to go to shit due to the housing collapse. Fightin' inflation is an admirable battle, but not at the expense of EVERY HOMEOWNER IN AMERICA. The bad thing is, for every asshole investor like me who just has to keep renting out to alcoholic lunatics, there are 5,000,000 poor, struggling families who are going to have to foreclose on their house.
And, speaking of inflation, I don't see Burnin' Bernanke doing anything about my $4.00/gallon gas!
He's such a dream-stealer.
Friday, January 12, 2007
But first, a recap, part deux (or, how I gained a new appreciation of my college landlord)
So, I started 2006 feeling pretty good about my decision to enter into the real estate market. I received an incredible tax refund in February, and that was just with one place for five months! Gotta love those fully deductible interest-only mortgage payments. To be honest, I still feel like it was a good investment decision, despite a bit of bad luck. Having said that, however, the bad luck was pretty bad...
March 2006: After another housing search, and following some intense negotiating with the seller, I close on my second investment property. I end up getting the house for less than the seller was asking, and was still able to get the seller to pay all closing costs. How did this happen (especially after my experience in the earlier bidding war)?? Two words - cooling market. After our initial bid was rejected by the seller, she held an open house. A day after the open house, she accepted my offer. This, of course, did not set off any warning lights, and I celebrated my good luck. I spent most of March looking for tenants and upgrading the appliances in the kitchen.
April 2006: I finally get all three rooms rented out in the new property. Two of the tenants are pretty much model tenants, who fit the ideal characteristics - mid/late 20's, clean, non-smokers, steady jobs. Then there was Hillary (note: not her real name).
Hillary marked the beginning of what was a difficult real estate/landlording year. In my hurry to fill the third and final room in the property, I pretty much let in the first person who agreed to the place. Hillary was in her mid/late 40's, a smoker, without a steady job, and, oh yea....a psychotic raging alcoholic. One story perfectly sums up the nightmare that was Hillary (for me and my other tenants): The guy who was living in the second bedroom (we'll call him George) had come back to the house with his girlfriend, and they were downstairs in the living room watching TV. Suddenly, upstairs, they hear Hillary screaming and stomping around. Somewhat distressed by this (at this point, they were on to Hillary's personality), George and his girlfriend retreated to his bedroom (which was actually closer to Hillary's room, so I'm not sure it was much of a retreat). At this point they start hearing Hillary screaming again - "The power of Jesus Christ compels you, the power of Jesus Christ compels you!!" As the two huddled, confused, in George's room, Hillary stomped down the stairs, and began screaming outside his door. Then, George's door opened.
"Oh, hello George, how are you doing?" Hillary calmly and politely asked, AS IF NOTHING HAD HAPPENED.
Needless to say, Hillary's stint in my place lasted about a month, after which a slew of other tenants have come and gone from that room. I think that room might be cursed, as a matter of fact. But, the lesson here is, BE SELECTIVE with tenants. Credit check at least. If she shows up smelling of booze, DON'T RENT HER THE ROOM.
God, I'm such an idiot sometimes.
Meanwhile, at the other property....
I had decided, upon advice from my realtor (helpful guy, he says sarcastically), that I should try to sell the place to another investor. He brought a few people by, but none seemed interested, at least not at the price we were advertising it at. Why??
Possibly because of the dog and cat shit that littered the carpets. Or maybe because of the smell that came with dog and cat shit littering the carpets. Hmm...we may never unravel that mystery.
My relationship with the tenants in that place began deteriorating rather quickly after those fiascos, and I vowed to sell the place as soon as my girlfriend and I returned from a previously planned vacation in Greece (side note: If there is a more spectacular locale than the volcanic island of Santorini, I sure as hell haven't found it.)
I giddily typed up their 30 day notices, set them aside, and had an incredible time in Greece. Excellent food.
I came back home at the end of May 2006 feeling relaxed, confident, and anxious to sell the place. I knew I was going to have to spend a good deal of time, money, and effort rehabilitating the house after the zoo left, but I even looked forward to that. I handed the tenants their 30-day notices on June 1, and slept great that night. In fact, I felt better than I had in a while...until the freak storm hit...
TO BE CONCLUDED IN PART THREE (TROIX?)...
March 2006: After another housing search, and following some intense negotiating with the seller, I close on my second investment property. I end up getting the house for less than the seller was asking, and was still able to get the seller to pay all closing costs. How did this happen (especially after my experience in the earlier bidding war)?? Two words - cooling market. After our initial bid was rejected by the seller, she held an open house. A day after the open house, she accepted my offer. This, of course, did not set off any warning lights, and I celebrated my good luck. I spent most of March looking for tenants and upgrading the appliances in the kitchen.
April 2006: I finally get all three rooms rented out in the new property. Two of the tenants are pretty much model tenants, who fit the ideal characteristics - mid/late 20's, clean, non-smokers, steady jobs. Then there was Hillary (note: not her real name).
Hillary marked the beginning of what was a difficult real estate/landlording year. In my hurry to fill the third and final room in the property, I pretty much let in the first person who agreed to the place. Hillary was in her mid/late 40's, a smoker, without a steady job, and, oh yea....a psychotic raging alcoholic. One story perfectly sums up the nightmare that was Hillary (for me and my other tenants): The guy who was living in the second bedroom (we'll call him George) had come back to the house with his girlfriend, and they were downstairs in the living room watching TV. Suddenly, upstairs, they hear Hillary screaming and stomping around. Somewhat distressed by this (at this point, they were on to Hillary's personality), George and his girlfriend retreated to his bedroom (which was actually closer to Hillary's room, so I'm not sure it was much of a retreat). At this point they start hearing Hillary screaming again - "The power of Jesus Christ compels you, the power of Jesus Christ compels you!!" As the two huddled, confused, in George's room, Hillary stomped down the stairs, and began screaming outside his door. Then, George's door opened.
"Oh, hello George, how are you doing?" Hillary calmly and politely asked, AS IF NOTHING HAD HAPPENED.
Needless to say, Hillary's stint in my place lasted about a month, after which a slew of other tenants have come and gone from that room. I think that room might be cursed, as a matter of fact. But, the lesson here is, BE SELECTIVE with tenants. Credit check at least. If she shows up smelling of booze, DON'T RENT HER THE ROOM.
God, I'm such an idiot sometimes.
Meanwhile, at the other property....
I had decided, upon advice from my realtor (helpful guy, he says sarcastically), that I should try to sell the place to another investor. He brought a few people by, but none seemed interested, at least not at the price we were advertising it at. Why??
Possibly because of the dog and cat shit that littered the carpets. Or maybe because of the smell that came with dog and cat shit littering the carpets. Hmm...we may never unravel that mystery.
My relationship with the tenants in that place began deteriorating rather quickly after those fiascos, and I vowed to sell the place as soon as my girlfriend and I returned from a previously planned vacation in Greece (side note: If there is a more spectacular locale than the volcanic island of Santorini, I sure as hell haven't found it.)
I giddily typed up their 30 day notices, set them aside, and had an incredible time in Greece. Excellent food.
I came back home at the end of May 2006 feeling relaxed, confident, and anxious to sell the place. I knew I was going to have to spend a good deal of time, money, and effort rehabilitating the house after the zoo left, but I even looked forward to that. I handed the tenants their 30-day notices on June 1, and slept great that night. In fact, I felt better than I had in a while...until the freak storm hit...
TO BE CONCLUDED IN PART THREE (TROIX?)...
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