Monday, April 23, 2007


This is too good not to post. The truck at the drive thru is a police vehicle that was confiscated from a drunk driver. I wish more communities would advertise like this. Notice the TV in the back. On the box it says, "Smart. Very smart." The guy should have listed to his TV box before he slammed a few and hit the road.

In the Nick of Time!

We sold our house 5 months ago for $157,000. It was 3 years old with not too many upgrades. Just this weekend, these showed up on the market for $149,900. These homes are of equal quality, but larger than the one we sold and the neighborhood is better with curbs and gutters and sidewalks and other amenities such as little playgrounds. Schools are not nearly as good, but taxes are the same. It is closer to the tollway for people who commute to Chicago or Rockford, or north to Janesville or Madison.

I think it is an interesting sign of where the market is going. Now is a great time to be watching and waiting. I think 5 months ago these homes pictured would have been listed at $169,900 or possibly $179,900. Makes me glad we sold when we did!

Tuesday, April 10, 2007

Riverfront Living

Waterfront Property with the Rock River in northern Illinois right outside your back door. Notice the house is up on cement blocks, because it has flooded approximately every 5 years. I'm not sure how much the asking price is, I tried checking the realtor's website, but basically it is a teardown unless you are very ambitious with a lot of money. It is also uninsurable. I guess it would be a fun place to go in the summer on weekends.

This is the land version of the "Pelican Boat." Scroll down to see the picture of it.

Thursday, April 5, 2007

Howard's Advice on Smarter Homeownership

Howard presents you with his advice on homeownership. He considers himself an expert in this area, as he has lived on a boat, a mobile home, and three single family homes in three different climates (Mild/Santa Barbara, Hotter than Hell/Lake Havasu City, Arizona, and What the Hell Were You Thinking does Winter Ever End/Northern Illinois).

Howard does not recommend this. It is in poor taste, and NOT in a harbor.

Problems such as this can occur when one's boat is not in a harbor.

This is not a good bargain.

For desert living, Howard recommends having a lake nearby. You will need at least one way to cool off when it is 120 degrees in the shade and 110 at night. Howard would not kid you about this.

If you plan on making your home in the frigid northern climate of the midwest, be prepared for this.

But it can be fun.

Howard definitely recommends the boat life.

Especially this boat life.

Fast Food Homes

When I grew up in this town, this area was a farmer's cornfield. I am sure he cashed out, and I don't blame him. Now this subdivision has hundreds of homes, and is the size the whole town was when I was a kid.

Anyway, the developer is a total ripoff king. He took what was originally approved by the city for 100 total homes, and built it into almost 1000 homes with only one way in and one way out. It has grown a lot since this picture. In other parts of the country where things are regulated, this would never have been allowed to happen. I do not like the government telling you or me what to do, but sometimes it is a good thing. I believe in this case it would have been, because this developer is basically a "good 'ol boy" who has been allowed to do whatever he wants as long as city officials gets their wallets padded. Not to mention all the tax revenue these homes bring in, the average being $4000 per year. The developer has more money than all the people who live in this subdivision combined. He owns a bank. I am all for success, but this guy is a crook and very dishonest. He wouldn't even put matching shingles on brand new homes. I'm not kidding. I have pictures to post later.

I am sure there are many, many towns just like this one. We don't see any improvements in roads, parks, and general maintenance. Police force stays the same. The Fire Department is still volunteer. I am mind boggled as to where all the revenue goes.

When I lived in Santa Barbara, and Carpenteria, California, I would see results from tax revenue. Streets were well taken care of, parks and beaches were well-maintained. People who lived there seemed to care more and took pride in their city. I realize there is more money in that area, but why can't these smaller towns make good use of what they have. Midwest suburbia is turning into a fast food mentality, slap it together and sell it. People who cannot afford custom homes don't really have many more options for home ownership.
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Sunday, April 1, 2007

Belly Up

Howard...belly up.

This is interesting reading about mortgage companies that have gone under or are on the verge of doing so. I found it at this forum. It is going to be difficult for those with less than perfect credit to buy a house, unless there is a large downpayment.

1 . Accredited Home. Panic selling; analysts are fearful about liquidity and have downgraded rating from "hold" to "sell"; $100 million drop in annual net income expected; missed earnings filing deadline with the SEC.
2 . Acoustic Home Loans. A harbinger of the broader meltdown, Acoustic Home Loans ceased accepting new loan submissions last year; buybacks were a major factor in collapse, according to BusinessWeek.
3 . Aegis Funding. Subprime unit has closed and a consolidated operation is reportedly handling prime, slimmed down subprime and expanded Alt-A offerings.
4 . Alliance Home Funding. Closed. Parent has folded mortgage brokerage into bank and "taken pre-tax charge of $680000 and an after-tax charge of $449000 to wind down the Alliance Home Funding operation," according to fourth-quarter earning statement.
5 . Ameriquest. Parent ACC Holdings had to beg Mass. Gov. Deval Patrick, former director, to help get them a life-sustaining line of credit from Citigroup to avoid shutting down. They've shut most of their offices, laid off 3,800 people, and have settled with 30 state attorney generals for $325 million over predatory lending practices.
6 . Ameritrust Mortgage Company. Shutdown, according to email to brokers: "Effective Monday, March 05, 2007 the subprime wholesale division of Ameritrust Mortgage Company is no longer in operation. Due to market conditions, our warehouse provider, Washington Mutual, ceased funding for subprime loans."
7 . Argent. Owned by ACC Holdings but may be acquired by Citigroup as part of a deal for working capital and a credit line for ACC if it falters.
8 . Axis Mortgage & Investments. Parent Biltmore Bank of Arizona closed this wholesale subsidiary in November 2006 due to "current lending environment and current conditions of the real estate market."
9 . Bay Capital/Clear Choice Financial. Press release on January 12, 2007: "Clear Choice has...announced that it is insolvent and in default on numerous obligations.. officially closed the mortgage lending offices of its wholly owned subsidiary, Bay Capital"
10 . Central Pacific Mortgage. Shuttered its door because it was apparently unable to make February's last payroll, mostly due to rising buyback costs.
11 . Coast Financial Holdings. Distressed because of developers unable to complete construction has put $110 million in loans in jeopardy for loans for 480+ homeowners.
12 . Coastal Capital. Shut down; owner & president indicted in Duke Cunningham scandal.
13 . Concorde Acceptance. Closed as of January 31st, 2007.
14 . Countrywide. Stock in a freefall after announcing that close to 20% of its subprime loans are in default. $600 million worth of stock sold by insiders. Reportedly in talks over a merger or alliance with Bank of America.
15 . DeepGreen Financial. Closed as of January 31, 2007 by parent Lightyear Financial, a private equity firm.
16 . DomesticBank. Stopped wholesale operations on 3-2-06, according to their website.
17 . Doral Financial Corp. Has agreed to pay a penalty to settle fraud charges with the U.S. Securities and Exchange Commission for a close to 1 billion overstatement in earnings. On March 2nd, 2007, said it will post losses for 2006 and warned on of a cash crunch if it is not able to refinance $625 million in debt.
18 . Eagle First Mortgage. AZ regulators shut them down citing illegal lending practices. Has until 3-14-07 to wind up operations.
19 . Encore Credit/ECC Capital. Was supposed to be sold to Bear Stearns for $26 million; ECC wound up paying Stearns $7 million to take it off their hands.
20 . EquiBanc. Closed by parent Wachovia after "intensive strategic review."
21 . Fieldstone. Closed 6 operation centers; had to restructure lines of credit; bought by C-Bass (MGIC & Radian Group) after losing more than 70 percent of it's value.
22 . First Franklin . Acquired by Merrill Lynch from National City
23 . Franklin Financial. Apparently has shutdown its wholesale operation as of 5pm 2-28-07; retail may be still alive
24 . Fremont General. FIL (Fremont Investment and Loan, its subprime subsidiary) has been ordered to cease-and-desist by the FDIC
25 . FundingAmerica. Closed as of January 19, 2007, little information available on their website.
26 . GMAC. Major layoffs in ResCap; looming writedowns for subprime loan portfolio; may take a large ($1 Billion) hit to cover bad loans made by ResCap.
27 . Harbourton Mortgage Investment Corp. Closed as of December 20, 2006, according to company press release "HMIC was forced to take these actions when it was unable to satisfactorily resolve mortgage repurchase claims."
28 . Home 123 Corp. A subsidiary of New Century; two dozen offices shuttered and 200 jobs cut as of January 17, 2007.
29 . Ivanhoe Mortgage. Unable to fund operations due to a shortage of cash, according to CEO John Cassel
30 . Lender's Direct Capital Corporation. Closed wholesale operations due to "lack of demand" effective 2-8-07.
31 . Mandalay Mortgage. Notified its brokers that it has exited the nonprime wholesale mortgage business. A message on its Web site said no new loans will be funded after Jan. 31, 2007.
32 . Merit Financial. Shut down because of "rising interest rates". State regulators investigating.
33 . Meritage Mortgage. Business shut down by parent NetBank. Staff acquired by LIME Financial.
34 . Millenium Bankshares. Winding down all mortgage lending activity by the end of 2006 to "avoid the risks normally associated with mortgage banking activities," according to press release.
35 . MLN (Mortgage Lenders Network). Has filed for Chapter 11, issued a cease and desist order Jan. 24 by Connecticut banking officials.
36 . NetBank Inc. Laid off the remaining portion of its staff in December after shutting down its subprime subsidiary Meritage.
37 . New Century. Stopped funding; in breach of debt covenants and trying desperatly to get waivers; restating '06 earnings downwards; 10 class-action shareholder lawsuits; may be in "death spiral", according to analysts.
38 . Novastar. Seriously impaired; likely no dividends in 2007, no taxable income through 2011; many shareholder lawsuits.
39 . Option One. Owner H&R Block has publicly announced it will be sold by end of March 2007.
40 . Origen Wholesale Lending. This modular home lender is transferring its wholesale operations to its correspondent partners.
41 . OwnIt. Ceased operations in December 5th 2006, Filed bankruptcy December 28th.
42 . Popular Financial Holdings. Parent shutting it down and completely exiting wholesale subprime to "focus on profitable businesses".
43 . Preferred Advantage. Closed completely when parent National City sold First Franklin.
44 . ResMAE. Filed Chapter 11 bankruptcy; assets purchased by Citadel Investment Group; being hounded by Merril Lynch for more than $300 million in bad loans.
45 . ResCap. Laying off about 1,000 people; may force former parent GM to take a $950 million hit due to "loan loss provisions", according to terms of its sale to Cerberus Capital, says Marketwatch.
47 . Sebring Capital Partners. Shut its doors as of December 5th, 2006 due to rising defaults, according to company employee quoted by the Denver Post.
48 . SecuredFunding. Ceased funding "based upon market conditions and limited product availability", according to website.
49 . Silver State Mortgage. Per their website, shut down nationwide wholesale operations as of February 14, 2007.
50 . Summit Mortgage. "Came to terms with a difficult business model in an unforgiving economy."
51. Trojan Lending. "Effective as of the opening of business on Monday March 5, 2007, Trojan Lending has ceased its wholesale mortgage operations and will no longer be underwriting or funding wholesale mortgages nationwide."

Howard is very concerned.