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Pacita Dimacali's Blog

By Pacita Dimacali | Agent in Alameda, CA

My heart truly bleeds for people who...

My heart truly bleeds for people who

....truly believed and hoped they can achieve the American dream of home ownership

....reached out for the brass ring

....saved and saved and saved to put a decent down payment on a home

....loved living in a home they call their own

....paid their taxes.

....kept up with their monthly payments

....supported the local economy by buying goods and services relating to maintenance and enhancement of their home and lifestyle

....when the economy started going south, did what they could to stay afloat as long as they could keep their home.

And when the job market dealt them a powerful blow, they lost their jobs.  And in spite of their efforts to be responsible homeowners and still feed their families, they lost their homes.

How could I not grieve with them?

Not all people who are losing their homes are greedy flippers, unwise buyers, poor speculators. or gamers. Those who were responsible homeowners and members of the community deserve our sympathy, not our scorn.

Come on people...have a heart!


NEWS FLASH;

As I wrote this, there are 131 homes actively offered for sale in my island city of Alameda, CA. Of these, 22 are short sales, and 7 are bank-owned. All in all, 29 homes or 22% of total. And more are coming up.

Comments

By Emmanuel Scanlan,  Wed Mar 11 2009, 04:54
Hello Pacita,

I agree with you 100%. You can also add to that then when they lost their jobs they might have tried to refinance their homes which (for various reasons) could have significantly reduced their monthly cash outputs. However, because they have no job the banks won't even look at them! Had the bank refinanced and extended their loan out they may have been able to afford and save their home and families security on their savings, or a lower paying temporary/part time job. I have actually seen this sad case several times in my area.

It is unfortunate that Many of these same people do not fall into any category that the stimulus bills were made for. They have become the "Forgotten Citizen" and you can find some of them in the Depression Era camps that are springing up all over, including the one in Sacramento, CA that made the World News. As our government continues to bail out large corporations, who failed to exercise responsibility, the numbers of these "Forgotten Citizens" will continue to grow. The average citizen will continue to deplete their own resources to survive this mess and be able to assist less and less in any way.

The only hope they have, and others to follow, is if our government will wake up and realize the trillions of dollars they spent to prop up failing companies can instead be used to save the very citizens they are their to represent.

Emmanuel J. Scanlan
PS Inspection & Property Services LLC http://www.psinspection.com
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Knowledge is power, but sharing knowledge brings peace!!
By Dp2,  Wed Mar 11 2009, 05:58
Unfortunately, empathy alone--without material assistance--won't help much.

It's also unfortunate that the media and many others are targeting investors as the pariahs who are solely responsible for our current economic woes. Sure, some investors screwed up, but they weren't the only bad apples in the bunch. There's enough blame to go around, and the size of the cast is vast, but name-calling and finger-pointing isn't going to resolve anything.

Many of those displaced people will need to find temporary housing: stated another way, they'll need to stay with family, stay in a shelter, or rent. At least 2--if not all 3--of those options involve working with investors (especially for the latter 2 options).

When will everyone wake up and realize that government (federal, state, local, etc) doesn't have the resource to bail everyone out? At some point, our leaders will need to start making some seemingly Machiavellian choices. We all--including our leaders--need to do something that some of us don't want to do: prioritize. We need to do something first, and we need to do something else next. In the grand scheme of things, it really doesn't matter which projects get selected first--so long as they generate enough momentum to sustain themselves and to launch the others.

We collectively need to stop playing all of these chicken-and-egg games, and cook a meal.
By Steve,  Wed Mar 11 2009, 10:05
If people would stop romanticizing houses and recognize, as most of the world does, that a house is just a heap of wood, pipes and wires on a tiny plot of land -- and the overwhelming majority of foreclosed owners will simply move into another heap of wood, pipes and wires -- it's not so bad.

I empathize with people losing their homes but the flipside (that's rarely mentioned) is they're also losing a crushing, overinflated debt. The moment that household with a $60K income bought a $410K home the likely outcome was already sealed. If these foreclosed owners can focus on three years down the road rather than the immediate chaos they see before them, they would recognize there are quite a few benefits to be had and appreciate the (eventual) minimal effect of a tremendous fiscal error will have on their lives. Many should consider naming their firstborn "non-recourse" as homage to the gift they were given.
By Pacita Dimacali,  Wed Mar 11 2009, 10:41
Take a look at last week's story from Time Magazine "House of Cards: The Faces Behind the Foreclosures"
http://www.time.com/time/business/article/0,8599,1881854,00.html

For them, it's not a matter of rent versus buy. And they're not folks who bought during the crazed and frenzied seller's market of 2003-2005. These folks scrimped, saved, did all the right things. But medical situation and job loss are the primary reasons why they are losing their homes. Whether they're renters or owners, they will still need shelter from these stormy times.
By Stephanie,  Mon Apr 6 2009, 14:28
If they bought before 2003, put at least 5% down, then after 6+ years they should have enough equity to be above water and get out with some money left over.

Sadly, there have always been people who lost everything due to job loss or illness. I'm sure there have been many homes forclosed on in the past for the same reason. And while this is tragic and they do deserve your sympathy, what about sympathy for the great many others who cannot afford a home in the community they were born and raised in because the market has skyrocketed to the point of insanity? Many, many more are forced with the grim reality that the Bay Area housing market (not including the outskirts) is so overpriced that it takes two high income earners for a family to afford to live in a crappy little home built orignially for lower-income families?

A $550k house with a 10% down payment will cost roughly $3k a month in mortgage fees alone. Add to that about $10k a year in property taxes and it's $46k annually, without figuring in the cost of insurance and utilities. That's a lot of money to live in a 1250 sq foot, working class home. Especially given that the federal government will tax you like a rich person, even though you're lower-middle class out here. When my husband moved out here, he jumped at the chance to make 20% more than what he'd make in Missouri, but the housing costs are 5x as much.

Sorry to vent, I'm just frustrated. I've lived here my whole life, and I watched things spin out of control over the past 12 years. It's really sad looking for a first home in this market.
By Pacita Dimacali,  Mon Apr 6 2009, 22:21
Stephanie

Take another look....

Th properties are nearly down to the prices of the early 2000s. And the interest rates are even below 5%. FHA is offering programs with as little as 3.5% down. And various communities are offering home buyer assistance programs.

I've lived in Florida and Texas where our home prices are so much lower than what they are here. For example, for what we sold our 3000 sq ft 4 BR/3 BA, 3-car garage pool home in a golf course community, we were aghast when we found that all we could afford for the same amount was a 1 BR/1 BA 600 sq ft condo in San Francisco.

Since then, I've adjusted my expectations. And now, 6 years later, I am so happy I moved here. There's till so much to be thankful for living in the Bay area.

But home buying is not for everyone. Don't be cash-poor and property-rich.

Unfortunately, there are also those who used their homes as an ATM machine. I can't cry over people who did stupid things.

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