Well done, sir.

Dick

I can remember looking at real estate ads in the LA basin a few years ago and seeing 20-25 year-old 2,400 feet, wood-framed houses going for $750,000. Unbelievable! Twenty years ago houses (Upland, etc.) going for $100/foot!

Till we meet again, I hope everyone stays healthly and happy. Enjoy your life.

I have a nursing background and am a mother and grandmother, so I do have the tendency to “fix” things. For the past 30 years, I have worked in Real Estate or mortgages though. I am one of those “damn mortgage brokers” but I do understand the mentality of homeowners, past, present and future.

My proposal of a government recall mandate is a valid one, one that can stop the flow of losses to the general public of homeowners and the banking industry. It puts a dollar number on the amount. The only parties involved are the homeowners and the banks. Not the “renters”.

It does not turn around the industry to be a boom again, nothing will except for incomes in general to double or for the “special” programs to return qualifying more “potential homeowners”. Neither in my opinion will happen it the next decade or two, but it does stabilize the housing market and stops the losses to the banks/investors.

I am not attacking the over inflated prices, which I agree were extremely over inflated. The prices were agreed to by both parties involved.

I am not attacking the special programs nor the liberal underwriting, the programs and underwriting were agreed to by both parties involved.

What I am attacking is the banks actions of releasing massive foreclosures sales into the market place with the knowledge that “these sales” would lower the values of the surrounding area affecting their existing customers financially.

Where is the consumer protection needed for the mortgage product? The mortgage itself became defective based on the business actions of the banks.

In the orginial proposal, I addressed and corrected the actual problems of our foreclosure epidemic from the homeowners point of view with the banks involved:

homeowners who weren’t underwater had the option of refinancing at 4%. (increases the homeowners spending power)

Homeowners who were underwater but current had the ability to refinace at the current appraised value at 5%. (increases the homeowners spending power and leaves them at 100% loan to value, the banks write down the dollar amount of reduction at 3x the loss)

Homeowners who were underwater and DELINQUENT had the ability to refinance if qualified within 31/41% ratios at the reduced appraised value at 6%. ( should increase the homeowners spending power and leaves them at 100% loan to value and again the bank writes down the reduction at 3x the loss for qualified borrowers)

Homes that were foreclosed on due to borrowers inability to qualify would be sold to the general public at the appraised value with a 4% interest rate. The banks would be able to write down the dollar loss at 2x the dollar amount.

If found, that the qualified potential borrower pool was insufficent to purchase said foreclosures, a subsidized auction would be done. This would be the only governmental money used for the proposal, to subsidized the potential homeowner with purchasing a property at the current appraised value.

What the proposal does not address is the credit default swaps that the government is trying to protect at taxpayers expense.

Until our government actually changes its focus to protect the public and not the banks bets, there will only be band aids offered.

No where in my proposal am I myself aided, nor is my daughter (for JoanJett sakes).

A bandaid is the TARP program, the modifications or even the bad bank proposed, they all just cover the problems up. The cut has become infected, it needs to be cut off and replaced which my proposal does.

“You are mistakenly taking me for “giveme, giveme” individual because the banks and realtors fooled the homeowner with:”

Hmmmm, I have not now nor have I ever said or thought that your were a “giveme” person. I pegged you as a “fixer” that is going to open the med kit, rub some ointment on the wound and whip out the right bandage and patch it all up.

I appreciate the point you and others make here about how the CA market is in the doldrums with much more pain to come. I live in the Bay Area, and it’s been fascinating to watch the transition from boom to bust.

Now there’s one point that some make about the Bay Area: the broad aggregated statistics like the ones you use here do not reflect the significantly different conditions in different segments of the market. Although the subprime mortgage problems and foreclosures are indeed a huge problem in lower-end markets, they may be much less severe in the higher-end ones. For example, there may be tons of foreclosures in East Palo Alto but very few in neighboring Palo Alto. Hunter’s Point in San Francisco might be a disaster, but Pacific Heights in the same city is a different matter.

To what extent do you think that the bleak prognosis you have for the CA market is true for the higher-end real estate markets (in the Bay Area, for example, that would be San Francisco, Marin, the higher-end towns on the Peninsula, etc.)?

The residential market for >$2 million houses does seem to be dead these days. Houses are staying on the market for months and price reductions have been rampant. Do you think that the wave of foreclosures and the tidal wave of inventory in the spring will occur in this segment of the market as well? Or is this more of a low-end phenomenon?

Thanks again for the great work!

Kevin: Anybody that has a lien on your house.

This actually is a concept I have been trying to elucidate with respect to Japan’s housing fallout. I’d like to know how the Japanese reconciled all of those multi-generational loans.

So, it’s not so much a case of one of your usual asinine obfuscations from the sidelines. But ridiculous to say the least, Kevin, considering the well chronicled fraud perpetrated by my humble lender, WaMu, that I should feel like I have some responsibility to them.

Oh, there I go again being childish.