Friday, April 23, 2010

Six feet deep

In paperwork, that is. This time it's for the mortgage lenders... I was barraged with application forms, requests for additional documentation, etc. today. *PLUS* had to do my regular work, that, like, I get paid for. How tedious...

-- Badtux the Paper-buried Penguin


  1. Mortgage? As in "buying" an iceberg? You must have confidence in your continued employment!

    That aside, it's probably a good time to be buying. Interest rates can only go up. And I don't know if Bay Area home prices are going to go down more. I kinda keep an eye on the old neighbourhood to see what's happening with sales there, and on the hill where we used to live, people are holding firm with the delusional prices they ask. If we could get our old house for the same price we paid for it in 2002, I'd even move back to the U.S. Especially because we could pay 50% in cash now without stretching. (Largely thanks to that metallic substance you scorn.)

    When I think back to when we bought in S.F., I can see we were at the leading edge of the bubble bogosity. At first, the mortgage agent played it hard. My wife had a good job with the University of California, and I was a hospital nurse, which is like guaranteed employment. But since we were moving from Florida, I was not CURRENTLY employed when we were signing up for a jumbo loan. So the guy acted as though he wouldn't put up the money.

    Then he decided he could. And we didn't have to do 20% down -- even though we could stump up the $140,000 that would necessitate, as I and Mrs. Bukko had both sold houses we owned previously. The lender let us do a 80-10-10 instead. Not like those 105% loans that came later in the bubble, but not conventional either.

    And we never understood why we kept getting notices in the mail that said "Your mortgage has been transferred to so-and-so" when we'd keep on sending payments to the same BofA address. Now I know that we had been securitized. We were not rubes when it came to finances, but until the current crisis sharpened our insight on how things work, we had no idea of the games behind the scenes.

    If you do buy, you'll be in the midst of all that, plus whatever new shit the financial maggots dream up. My guess is confiscatory property taxes by local governments who want to get money from people by holding their homes for ransom. Good luck with it!

  2. Bukko, I have faith in the value of my skills in my particular niche -- just the other day I was contacted by someone who had the exact job I'd move to if I wasn't doing what I'm currently doing. Architecting large computer products and bringing them from idea to delivery is *hard*, you won't believe what percentage of projects fail to deliver a product at the end, and it's what I've done time after time over the past fifteen years with no - *zero* - failed projects, even in cases where it *should* have failed due to poor management, lack of resources, or both. People are willing to pay for that sort of "get'r'done" .

    SF? Yeah, still delusional up there. Things are not quite so delusional in parts of the east valley though. PITI DTI of 28% (the old definition of "conservative") will actually get you through the doors of many properties now, and some of them aren't even in the ghetto :). My feeling is that there are still neighborhoods where things are going to fall further, but there are certain neighborhoods that have hit bottom, and I believe I've identified one of them.

    And if I'm wrong in my belief... well. I've spreadsheeted it and I still get an affordable place to live in the meantime. And if I'm wrong about my employment... well. Uhm. It's currently taking about a year before lenders even bother sending out a NOD (Notice of Default) right now. And there's a six-month backlog for Illegal Detainers in the courts. Reality is that people are getting away with squatting rent-free in their homes for almost two years after their last payment. Not what I would choose, mind you, but certainly beats being immediately evicted from an apartment and forced out onto the streets...

  3. Oh yeah, regarding taxes -- Prop 13 constrains pretty hard the property taxes that can be put onto a property. I expect "fees" for car licensing, sales taxes and income taxes to rise, not property taxes, because it's easier to go after those taxes. Even with "special assessments" to pay off bond issues, taxes are currently at around 1.2% on properties in the South Bay... and that's not likely to go up by much.

    - Badtux the Homebuying Penguin


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