Author Archive: Irvine Renter

Your house is only worth what your buyer can pay for it. Your take-out buyer must be leveraged more aggressively than you are. One of my earliest posts in May of 2007 was about the impact future loan terms have on future home prices. If interest rates go on a sustained rise, financing home purchases will become more expensive. That is the math. Unfortunately, most people don't realize this has implications for how much they will be able to sell their house for later on. Most people assume whatever trend was in place in the past will continue indefinitely. Even long-term trends like generally rising home prices for several decades may be the result of underlying factors like falling mortgage…[READ MORE]

Nixon’s Western White House Is Listed for $75 Million San Clemente estate is owned by onetime volunteer gardener, Allergan founder Gavin Herbert By Candace Jackson, April 1, 2015 1:52 p.m. ET For Gavin Herbert, the retired founder and CEO of Allergan—the nearly $70 billion pharmaceuticals company—it was a lifelong love of gardening that led to his ownership of one of Southern California’s most storied and valuable coastal properties: President Richard Nixon’s so-called Western White House. Now, it will hit the market for $75 million. Mr. Herbert, 83, is selling the estate after 35 years of ownership and is looking for a buyer who will continue to care for the property. The 5.5-acre estate in San Clemente, Calif., has more than…[READ MORE]

Many underwater homeowners face recasting and resetting second mortgages and HELOCs. Their options limited, most will be stuck paying off these debts. One of the most obvious signs of the housing bubble was the willingness of buyers to purchase properties where rents only covered a small portion of the total cost of ownership. Speculators ignore the costs because they plan to make a fortune on appreciation; investors focus on carrying costs and consider appreciation a bonus. Speculators bought houses from 2004-2006; investors did not. One of the primary goals of the property analysis system on this site was to prevent a recurrence of the foolish behavior witnessed during the housing bubble. Everyone who buys a property should know the consequences…[READ MORE]

Millennials must pay off their debts and save for a down payment in a difficult job environment or they will never become homeowners. Historically, people who rent their primary residences break down into two categories: (1) those who value freedom, and (2) those who don't have the financial discipline to save for a down payment. Those who value their freedom to pursue job opportunities or other reasons should not anchor themselves to a piece of real estate. At some point their life circumstances may change, and they may wish to become homeowners, but until that change happens naturally, they will remain renters. During the housing bubble, lenders and politicians on the left believed they found a panacea with 100% financing…[READ MORE]

The benefits of using home equity lines of credit are large, and the costs are minimal. Get your free money today! If someone offered you free money, would you take it? If you didn't suspect a hidden agenda, I believe you would. Most people would accept financial help from family or friends because people who give gain tremendous emotional benefits from giving. It's incumbent on everyone to gracefully accept any gift offered to them because it pleases the givers. Ten years ago, lenders embarked on the biggest gift program of all time when they began making "loans" to people who had no ability or inclination to pay them back. The recipients of these gifts, affectionately known as Ponzis, accepted this…[READ MORE]

Tens of thousands of delinquent mortgage squatters may be awarded free housing if attorneys prevail with their statutory claims. "In law, unjust enrichment is where one person is unjustly or by chance enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing," according to Wikipedia. In terms of delinquent mortgage squatters, they are clearly being enriched at the expense of the lender who provided a loan in good faith on the assumption the loan would be repaid with interest. Our real estate finance system functions because lenders believe they will get their money back either through repayment or foreclosure if the borrower becomes delinquent. If lenders didn't have this assurance, they simply…[READ MORE]

Curbing the power of NIMBYs at local government is essential to providing more housing to alleviate shortages in California. California house prices are high relative to the rest of the nation for two reasons, one fundamental, and one not. First, California wages are higher than most of the rest of the nation, so people who live in California qualify for larger loans and use those loans to bid up prices -- the fundamental reason. Second, California has a chronic shortage of housing, which forces buyers to compete with each other for the available housing stock -- a reason that is not fundamental, but political. The market for housing in most of the United States is much more stable, and house…[READ MORE]

Wealthy real estate investors will move their money out of ultra-high-end properties when better investment opportunities become available. Rising mortgage rates hurt properties priced under $1.5 million directly because rising mortgage rates reduce the amount financed buyers can borrow and bid. What most people don't realize is that rising interest rates (not necessarily mortgage rates) hurts the ultra-high-end real estate market too. The market for properties priced over $1.5 million depend less and less on mortgage financing and more on the opportunities the wealthy have to park money and preserve asset value. The cash buyer of a $5 million property isn't affected by mortgage rates at all, but that buyer is greatly impacted by the desirability of competing asset classes…[READ MORE]

Sometimes people who feel they have something to say communicate far more by their actions than their words. Bernice Ross, CEO of, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books. She recently wrote about her experience obtaining a loan modification, and it contains many valuable lessons for anyone considering following her path. Riding the loan modification merry-go-round What it takes to climb out of a credit mess by Bernice Ross, Feb 16 When you or your clients find yourself in a financial mess due to circumstances beyond your control, you have a number of options. Do you walk away from your home when your mortgage exceeds its value? Do…[READ MORE]

Chinese house prices fell considerably in February. Is this the first leg down in what will become an epic financial catastrophe? The Chinese government and central bankers ran a Ponzi scheme to accelerate real estate development to help China catch up to the rest of the world. Unfortunately, since it was a Ponzi scheme, they couldn't figure out a way to unwind it without devastating their economy, so they kept putting more and more money into it, hoping desperately that it would work itself out. At some point long ago, China developed enough housing stock and commercial properties to meet the needs of its citizens, but since they depended so heavily on continued development to sustain their economy, they kept…[READ MORE]

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In Memoriam: Tony Bliss 1966-2012