Apr292016
The secret benefit of FHA financing everyone should know
FHA insured mortgages are assumable, meaning a borrower can transfer the debt to a different borrower rather than paying off the old debt, a useful feature in a rising mortgage rate environment.
Over the last 35 years, mortgage interest rates have fallen steadily, so very few buyers active in the housing market today have ever experienced a rising mortgage interest-rate environment. When rates steadily fall, people typically refinance and terminate their old mortgage in favor of a new one with better terms. Most people expect rates to rise from our record lows, and when rates rise, people typically don’t refinance because they want to keep their low mortgage interest-rate mortgage.
In a rising mortgage rate environment, people need to use new tools to properly manage their mortgage debt. One dormant mortgage tool that people will rediscover as mortgage rates rise is the assumable mortgage.
Assumption of Mortgage
Assumption of mortgage is the purchase of mortgaged property whereby the buyer accepts liability for the debt that continues to exist.
To be more precise, the borrower is assuming both the rights and obligations of the promissory note and the Deed of Trust. Borrowers seeking release from their payment obligations usually sell for cash and terminate the loan; nonetheless, a qualified new buyer may assume the previous borrower’s liability and simply take over making payments on the loan. Assumable loans have been around as long as lending, but over the last 35 years, nobody needed to use it.
Lenders despise mortgage assumptions (and they should)
Both buyers and sellers benefit from assumption, but lenders suffer — which is why assumption is generally limited to government programs and adjustable-rate mortgages. Lenders do not want their fixed-rate loans assumed.
Lenders borrow short to lend long; in other words, when they underwrite you a 30-year loan, they obtain the money they loan you with short-term borrowing, mostly from savings accounts, maybe even your own. In the industry this problem is known as an asset-liability mismatch. If lenders have a portfolio of low-interest loans outstanding in a high interest rate borrowing environment, they experience a negative spread, and eventually go bankrupt. In fact, much blame for the Savings and Loan fiasco traces back to a negative spread condition and asset-liability mismatch during the early 80s.
In rising interest-rate environments lender spreads are squeezed but not eliminated as older, low-interest loans are replaced with newer, high-interest loans. If all loans were assumable, lenders would be handicapped in their ability to rematch their assets and liabilities. To avoid asset-liability mismatch, lenders put due-on-sale clauses in their promissory notes specifically to prevent low-interest loans from surviving to term with a series of debt-assuming owners.
Fortunately for buyers, the federal government cares not about making a profit or cost of financing, and they hold loans to term; as a result, assumable loans are underwritten to standards compliant with FHA or other government programs and insured by same.
Why would a buyer assume a loan?
Any rational buyer would want to assume a loan with lower payments and fewer than 30 years remaining to pay. The only downside for a buyer is that they will never refinance into a lower interest loan simply because they already have one. I have written many times about the virtue of buying when interest rates are high and refinancing into a lower interest rate to accelerating amortization. Buyers obtain this same benefit through assumption, and sellers can extract value from the transaction.
Seeing this potential outcome in advance will help you position yourself to take full advantage. Most fixed-rate private loans — including those issued by GSEs — are not assumable, and borrowers who utilize financing today with due-on-sale clauses will have no opportunity to extract value from their financing.
Sell faster or sell for more
If interest rates rise, assumable fixed-rate financing has value even if the financing has not been in place long. For instance, if a buyer must become a seller two or three years into their mortgage — and if they have equity and can sell — they will have a significant advantage over sellers with similar properties who do not have assumable loans. A few years from now, the lower mortgage payment will be an attractive feature prompting buyers to select one property over a neighboring one. If you faced two competing properties but one offered an assumable loan that reduces your payments 5%-10%, all things being equal, wouldn’t you chose the one with the lower payment? I would.
As interest rates go up and time passes (which reduces remaining amortization), an assuming owner enjoys monthly savings and a shorter amortization schedule. At first, this is merely a sales point, but eventually, the benefits accruing an assuming owner morphs into a source of real monetary value a seller can obtain.
How to use owner financing to obtain equity from assumable loans
There are three primary ways owners obtain direct and measurable financial value from their assumable loan:
- Buyer increases down payment and pays more total dollars
- Seller offers and buyer accepts a seller-financed second mortgage and the seller either keeps the cashflow or discounts the loan in the secondary market and obtains a one-time cash infusion.
- Seller offers and both buyer and lender accept a wrap-around mortgage.
The first concept — buyers increasing their down payment and paying more total dollars — should be familiar to anyone who has prepaid interest points when originating a loan. People frequently pay interest up-front in order to lower their interest rate and monthly payments over the life of the loan. When a buyer assumes a seller’s low interest-rate loan, they are doing the same thing, but instead of that money going to a lender (or mortgage broker) that money accrues to the seller. Do you see why lenders hate assumption?
The second and third concepts — issuing seller financing as either a second mortgage or wrap-around mortgage — are far less common and much more complicated, but the financial rewards are great, and any seller with an aging and assumable first mortgage should explore the options assumable financing creates.
Seller financed second mortgages
Imagine a loan issued today with a $4,000 monthly payment. Fast-forward to 2025, and the same loan balance financed at 9% yields a $6,000 a month payment. Obviously, a buyer would prefer the $4,000 payment to a $6,000 one, and the seller would like to extract the equity accumulated through paying down the loan balance plus a premium for the value of their financing.
If the seller allowed themselves to be taken out by a buyer using a conventional loan, they would obtain the $138,619 in financing equity obtained by paying down their mortgage debt, and at the closing, the sales price would show no change, and the seller would obtain a check for their financing equity minus fees. However, If the seller offers and the buyer agrees to a second mortgage with a $2,000 payment for a 15-year term at 9%, the seller would obtained an annuity worth $197,186 when the loan balance has only been paid down $138,619 for a value-added of $58,567 or about 8%.
(The annuity value of a $2,000 monthly payment over 15 years discounted at 9% is $197,186)
Why would a buyer agree to this? Well, if you were buying this property in 2025, you are still paying $6,000 a month, so you are no worse off on a monthly payment basis, and your total debt is the same, so you are no worse off on a total debt basis; however, and this is a big however, you will have one loan on a 15-year amortization schedule and another with 20 years remaining out of 30 — you have just accelerated your amortization and reduced your Time to Payoff. I would take such a deal, wouldn’t you?
Both buyer and seller benefit greatly from assumption; only lenders dislike it.
Wrap-around mortgages
Wikipedia’s description is well written, so I relay it in full here:
A wrap-around mortgage, more-commonly known as a “wrap”, is a form of secondary financing for the purchase of real property. The seller extends to the buyer a junior mortgage which wraps around and exists in addition to any superior mortgages already secured by the property. Under a wrap, a seller accepts a secured promissory note from the buyer for the amount due on the underlying mortgage plus an amount up to the remaining purchase money balance.
The new purchaser makes monthly payments to the seller, who is then responsible for making the payments to the underlying mortgagee(s). Should the new purchaser default on those payments, the seller then has the right of foreclosure to recapture the subject property.
Because wraps are a form of seller-financing, they have the effect of lowering the barriers to ownership of real property; they also can expedite the process of purchasing a home. An example:
- The seller, who has the original mortgage sells his home with the existing first mortgage in place and a second mortgage which he “carries back” from the buyer. The mortgage he takes from the buyer is for the amount of the first mortgage plus a negotiated amount less than or up to the sales price, minus any down payment and closing costs. The monthly payments are made by the buyer to the seller, who then continues to pay the first mortgage with the proceeds. When the buyer either sells or refinances the property, all mortgages are paid off in full, with the seller entitled to the difference in the payoff of the wrap and any underlying loan payoffs.
Typically, the seller also charges a spread. For example, a seller may have a mortgage at 6% and sell the property at a rate of 8% on a wraparound mortgage. He then would be making a 2% spread on the payments each month (roughly, anyway. The difference in principal amounts and amortization schedules will affect the actual spread made).
As title is actually transferred from seller to buyer, wraparound mortgage transactions will violate the due-on-sale clause of the underlying mortgage, if such a clause is present.
Note that pesky due-on-sale clause is back. Lenders do not like wraps any more than they like assumption and they dislike it for the same reasons, asset-liability mismatch.
Facts about loan assumptions
I wrote to Soylent Green Is People with help in writing this post, and he provided me the following list of facts about assumption:
- Assumptions do not require a down payment. If the seller has equity it’s paid to the seller. If the loan is break even to value to upside down, it’s simply taken over.
- Assumptions do not (for the most part) require appraisals. It depends on the investor. An FHA insured loan would not require an appraisal, a private investor ARM loan would.
- Credit qualifying is based on underwriting standards available at that time. Income, assets, credit, and debt to income ratios apply.
- Condo project HOA’s are not re-evaluated. If an FHA loan was made in an association that was acceptable at origination but has since deteriorated, it is of no issue to the assumption department. Since the borrower must credit qualify for the assumption, the current HOA dues might impact the buyers ability to qualify, but that’s the absolute depth of scrutiny these loan applicants will get.
- “All in” lender costs to assume is about $1,500 per transaction. It is not a scalable fee. There will be escrow, title, and other non lender costs, but minimal at best.
- The loan must be originated and in place for 12 months before an assumption can be completed.
- The seller or borrower must pay any escrow shortage/past due interest.
- These are our current guidelines, subject to change of course, and not applicable to every lender, but likely similar to what everyone else has as policy.
- We get “many” requests to assume, but are closing 1-2 per month. I’d say this is likely due to below market financing available today. Most vintage 2005- 2008 FHA loans were priced in the high 5’s. 2009 FHA loans do not have 12 month seasoning yet. Project forward into 2011-2012 – if we aren’t all wiped out from the planetary alignment/Mayan calendar event…. I’d guess there will be plenty of cheap rates available for buyers willing to purchase FHA financed homes through assumption of the original note.
The GSEs will underwrite ARMs with assumability, but since they are ARMs, the assuming buyer is not locked in to a low rate, so it becomes worthless and pointless. Assuming an ARM does not work like assuming a fixed loan. Don’t mistake one for the other. You want to take out an assumable fixed-rate loan.
When the FHA cut its insurance premiums in half in late 2014, the onerous costs became manageable. If you are borrowing in a price range financeable with an FHA loan, it may be worth considering. Ten years from now, that clause about assumability you probably didn’t pay much attention to could turn out to have considerable value.
[listing mls=”OC16086885″]
Unmasking the Men Behind Zero Hedge, Wall Street’s Renegade Blog
http://www.bloomberg.com/news/articles/2016-04-29/unmasking-the-men-behind-zero-hedge-wall-street-s-renegade-blog
The Zero Hedge guy(s) are exactly what we thought they were. Sad day for fanboys…
Colin Lokey, also known as “Tyler Durden,” is breaking the first rule of Fight Club: You do not talk about Fight Club. He’s also breaking the second rule of Fight Club. (See the first rule.)
After more than a year writing for the financial website Zero Hedge under the nom de doom of the cult classic’s anarchic hero, Lokey’s going public. In doing so, he’s answering a question that has bedeviled Wall Street since the site sprang up seven years ago: Just who is Tyler Durden, anyway?
The answer, it turns out, is three people. Following an acrimonious departure this month, in which two-thirds of the trio traded allegations of hypocrisy and mental instability, Lokey, 32, decided to unmask himself and his fellow Durdens.
Lokey said the other two men are Daniel Ivandjiiski, 37, the Bulgarian-born former analyst long reputed to be behind the site, and Tim Backshall, 45, a well-known credit derivatives strategist. (Bloomberg LP competes with Zero Hedge in providing financial news and information.)
In a telephone interview, Ivandjiiski confirmed that the men had been the only Tyler Durdens on the payroll since Lokey came aboard last year, but he criticized his former colleague’s decision to come forward.
He called Lokey’s parting gift a case of sour grapes. Backshall, meanwhile, declined to comment, referring questions to Ivandjiiski. A political science graduate with an MBA and a Southern twang, Lokey said he had a checkered past before joining Zero Hedge. Earlier this month, overwork landed him in a hospital because he felt a panic attack coming on, he said.
“Ultimately we wish Colin all the best, he’s clearly a troubled individual in many ways, and we are frankly disappointed that he’s decided to take his displeasure with the company in such a public manner,” Ivandjiiski said.
Sad day for fanboys??
How so?
Folks cite Zero Hedge blurbs like the info is completely accurate unquestionable gospel from prophets, free of any bias or alternative motive. The reality is, it’s just a perma-bear site with sensationalist headlines and content designed solely to make money for the owners.
It’s one of those sites that you have to take at face value. The news is highly sensationalized for sure, but I appreciate it for the research they provide and information they bring that typically isn’t found elsewhere. If you take it with a grain of salt and don’t believe everything you read…then it’s fine.
Agreed. The problem is, folks start worshiping it, without any critical thought. They start thinking Trump is a viable President, and never stop bashing fiat currency and the Fed.
If at this point in the game you are not bashing fiat currency and the Fed, you are the problem.
Then count me as part of “the problem.”
Trump is a viable president. And I despise Zero Hedge.
Meanwhile, the anti-Trump crowd incites more violence. After pepper spraying two young girls in Anaheim earlier this week, they decided to intimidate Trump’s supporters with mob violence in Costa Mesa last night, including threatening Trump’s life by spray painting “Trump 187” on a nearby wall. This is what happens when you allow people to break our laws coming into this country. It’s a different form of moral hazard.
It’s a very predictable response to his speech and behavior.
What is? Threatening a candidates life?
Yes. All of the anger directed at Trump is very predictable resulting from his speech and behavior. I’m not justifying it. I’m just saying, in no way should it be surprising.
Looks like Trump’s eliciting a similar response in Burlingame this afternoon.
Yep, just got back from lunch with about a dozen coworkers and we were watching that on the screen. Most of them are non-political and a bit apathetic as voters, yet the disgust for what we were watching was near unanimous.
I really think this violent protest movement is going to backfire in a big way and actually lead to more support for Trump. Mainstream America does not agree with these tactics. My coworkers felt like it was an affront to their right to vote for whom they choose.
There is no question ZH is biased against the big banks/financial industry, which would explain Bloombrgs disdain for the site, and underlying motive to take a big-swing at ZH whenever an opportunity presents itself.
Also, the problem with your “sensationalist headlines and content designed solely to make money for the owners” proclamation, is that it applies to ALL media outlets, NOT just ZH. They’re ALL in business to make money, sensationalism is big part of the business model, despite being bullish or bearish.
Thus, by making such a proclamation targeting ZH specifically, you have outed yourself as being biased against ZH.
Perhaps it’s a bad day for Bloombrg fanboys; or even certain others 😉
Respectfully,
el O
So, the journalisitc integrity of Bloomberg writers and editors is no different than the three guys at Zero Hedge? Is that your position?
The Age of Click-Bait
Click bait is everywhere. The guys at ZeroHedge are merely better at it than everyone else. Plus, they are funny, and they provide a perspective not found elsewhere in the sanitized financial media. As JW noted, as long as you question the source and read critically, there is often really good information there.
I think ZeroHedge lost something now that their anonymity is gone. When I wrote for the Irvine Housing Blog, the mystique of not knowing who I was made the site tantalizing. That went away once it was known who I was.
ZeroHedge will still be what it is, and it will still be popular.
No, learning your identity was no disincentive to read IHB / OCHN.
For me I always want to know who is writing something and the experience underpinning the POV. Mystique? –not IMO.
And since I have a 2012 FHA 30 year fixed, so this article was very interesting.
Thanks!
I don’t mind the headlines so much as the hyperbole-laden articles, that fail to present data in an unbiased way. It’s been shown time and time again that they will use compressed timelines or use chart manipulation tactics to hide the larger context that goes against whatever bearish narrative they are trying to paint for their readership.
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Home Sellers in U.S. Enjoy Highest Price Gains Since 2007
According to Irvine, Ca-based RealtyTrac’s March and Q1 2016 U.S. Home Sales Report, U.S. home sellers in March on average sold for $30,500 more than they purchases for, a 17 percent average gain in price — the highest average price gain for home sellers in any month since December 2007 at the onset of the Great Recession.
Among 125 metropolitan statistical areas with at least 300 sales in March, home sellers realized the biggest average gains compared to purchase price in San Francisco (72 percent average gain); San Jose, California (60 percent); Boulder, Colorado (53 percent); Prescott, Arizona (51 percent); and Los Angeles (48 percent).
“Home sellers in many markets are now seeing average price gains close to or above what home sellers experienced during the last housing boom,” said Daren Blomquist, senior vice president at RealtyTrac. “That should encourage more homeowners to take advantage of the prime seller’s market and list their homes for sale this year. Banks are already taking advantage of that market as evidenced by the uptick in the distressed sales share over the last two quarters.
“Given that bank-owned homes are selling at a median price that is 40 percent below the overall median sales price nationwide, the uptick in distressed sales combined with affordability constraints are contributing to faltering home price appreciation in some markets — most notably the bellwether markets of Washington, D.C. and San Francisco” Blomquist added.
Other markets with average seller gains more than twice the national average in March were Denver (42 percent); Portland (40 percent); Austin, Texas (40 percent); Seattle (38 percent); Baltimore (38 percent); Riverside-San Bernardino, California (37 percent); San Diego (36 percent); and Sacramento (35 percent).
The U.S. Homeownership Rate Falls Again, Nearing a 48-Year Low
The homeownership rate fell slightly in the first quarter of 2016, dashing hopes that it had finally hit a bottom.
In the first three months of this year, the rate was at 63.5%, not seasonally adjusted. That is down from 63.8% in the fourth quarter of 2015, according to estimates published on Thursday by the Commerce Department. That puts it back near its 48-year low of 63.4% in the second quarter of 2015.
At the end of last year, economists had said the homeownership rate appeared to have stabilized and might begin to tick upward after falling for years following the housing crisis. When adjusting for seasonality, the homeownership rate in the first quarter also fell slightly to 63.6% from 63.7% in the fourth quarter of last year.
Some economists caution against reading too much into such a statistically small change in quarterly estimates. The fact that the homeownership rate is essentially flat is still good news, they said.
“We’re not seeing significant decreases like we were two, three, five years ago,” said Ralph McLaughlin, chief economist at real-estate information company Trulia.
The continued declines in the homeownership rate in part reflect a growing number of renter households. Some 363,000 new renter households were formed in the first quarter compared with the same time last year, about twice as many as the 177,000 new owner households.
That can drive down the percentage of households that own, while being potentially good news in the long-term because those new renter households are likely to eventually turn into owners.
Still, it also appears that factors such as rising home prices, student loans, delays in marriage and childbearing and uncertainty about buying a home as an investment are weighing on younger households and motivating them to rent instead of buy.
Another potentially worrying sign for the housing market: This was the second consecutive quarter when the number of new households formed was anemic, with the data showing just over 540,000 new households formed in total in the first quarter. In the third quarter of 2015, the number of renter households alone increased by 1.3 million.
Affordable housing rule ‘socialism,’ says Costa Mesa councilman
Is it socialism to require developers to include affordable housing in new home projects?
That’s what one Costa Mesa councilman said when asked to consider a proposed “inclusionary zoning” law at the City Council’s meeting April 19.
“Excuse me if I’m not a socialist,” said Mayor Pro Tem Jim Righeimer, who opposed studying the possibility of such an ordinance. “What do you think this is? It’s socialized housing.”
Requiring such a trade-off is “theft,” Righeimer added. People who can’t afford rent or home prices in his city should “look at where you can afford” to live.
Rent averaged $1,928 a month for a large-complex apartment in Costa Mesa this past winter, and the median price for a Costa Mesa home was $675,000 in March, real estate market trackers reported.
More than 101,000 low-income Orange County households can’t find affordable rentals, according to the San Francisco-based nonprofit California Housing Partnership Corp.
A shortfall of 50,000 to 62,000 housing units could cripple Orange County employers’ ability to recruit and retain a capable workforce, the Orange County Business Council reported in its 2015 Workforce Housing Scorecard.
Costa Mesa leaders have been trying to increase affordable housing since they launched an effort to clean up Harbor Boulevard motels, which some see as havens for prostitution and drug use and others see as low-cost lodging for the poor.
One project, seeking to replace the Costa Mesa Motor Inn with a 224-unit luxury apartment complex, sparked a lawsuit.
Motel residents and the Irvine-based Kennedy Commission, an affordable housing advocate, said in a January lawsuit that state law requires the proposed apartments include housing for low- and very-low-income residents.
Some past and present Costa Mesa council members requested a review of whether the city should adopt inclusionary zoning to increase “workforce housing.”
“Teacher’s aides, people who work in the retail industry (and in) food preparation need housing,” former Councilwoman Wendy Leece told the council last week. “Driving out to Corona and Riverside, clogging up the freeways; I think it behooves us to study this issue more.”
Righeimer and Mayor Stephen Mensinger argued inclusionary zoning would make new development too costly. If you force developers to include lower-cost housing, Righeimer said, new projects “won’t get built.”
“What it is is stealing. It’s taking money from somebody that doesn’t belong to you,” he added. “Government comes in, passes laws to say, ‘You pay money because I have power over you. I’ve got votes up here, and you can’t build here unless you give money to somebody.’ That’s called theft.”
Concluding, Righeimer issued “a wake-up call” to his fellow residents: “If you cannot afford to live here, and your kids can’t have decent housing, you should look at where you can afford.
Righeimer is an elitist asshole.
It is socialized housing by definition.
The problem with mandating “affordable” housing is that to offset that requires building high-end luxury units to offset the losses that the affordable units create. What’s wrong with that you ask? Well, it precludes the development of working- and middle-class level units for people to live in because these are not profitable enough to overcome the losses on affordable housing units. Basically, you are choosing to create more income inequality in the city by favoring the rich and the poor, and squeezing out the middle class. That is the end result of socialism and the price-control mentality that comes with it.
Priced Out: Big Cities Are Becoming Too Costly For Lower-Income Residents
Can’t afford housing in your expensive city? The solution for many is to move out.
America’s 10 most expensive metros have a lot going for them. They’re big. They have plenty of jobs. And for many residents, they’re desirable places to live.
But there’s a catch: the cost of housing has become so expensive that lower-income households are getting squeezed out.
Rents and home prices have soared in Chicago, Los Angeles, New York, Oakland, Orange County, Calif., San Francisco, San Jose and Washington, D.C. In these cities, rents paid by tenants on average have increased 13%. Home values have risen 12.5% from 2010 to 2014. In addition, the share of households in these cities making more than $100,000 per year has risen 3.6 percentage points during the same period.
However, many residents of these cities have been left behind. The share of households making $30,000 or less per year – which makes up 30% of all households in these cities – has fallen just 2.2 percentage points. As a result, these lower-income residents have opted to move to less expensive areas of the country. In some cases, even those able to afford these expensive cities are leaving too.
9 markets where cash buyers overpay for homes
Typically, paying for a home in cash allows you to get a big discount on the purchase price — but that’s not the case in some popular housing markets.
Cash buyers paid more per square foot for homes than mortgage customers in nine American cities during the first quarter of 2016, according to data released Thursday by real estate data firm RealtyTrac; that’s up from just five markets at the same time last year and two during the same period in 2014. (And in most cases, this trend was non-existent in 2006 and 2007 right before the housing bubble burst.)
“It is so competitive in these markets that cash buyers have to up the ante,” says Daren Blomquist, the vice president of RealtyTrac.
Blomquist says this is likely happening because cash buyers in these markets — who, in these cases tend to be attracted to more expensive properties, often starting in the $1 million range — are bidding against one another, driving the prices up. “It’s worrisome — to me it is a sign that these markets are getting caught up in the frenzy that may not be based on reality,” he says. “Things are getting frothy in some of these markets.”
Cash home buyers are forking over the highest premium for their properties in Honolulu, Seattle and San Francisco, paying 6.6%, 5.2% and 4.8% more per square foot than traditional buyers, respectively. To put that in context, cash buyers get a 23% discount nationwide.
City Premium paid by cash buyers
Honolulu area 6.6%
Seattle area 5.2%
San Francisco area 4.8%
Naples area 3.9%
San Diego area 2.5%
San Jose area 2.2%
Los Angeles area 2.2%
Cape Coral/Fort Myers 1.5%
Oxnard/Thousand Oaks/Ventura 0.2%
That said, that doesn’t mean cash buyers they are getting ripped off: It could also be that the properties they want are going after are (or will be) worth more per square foot down the road. And, it could be, that lenders are cautious with purchase prices for homeowners with a mortgage.
Still, Blomquist notes that this cash-buyer-premium may be a troubling sign for some of these markets, especially in light of other factors. In all nine markets, the share of investor-buyers is down, according to RealtyTrac data. Plus, Honolulu and San Francisco are now both less affordable for the people living there than their historical affordability averages.
California Real Estate Executive Gets Booted Off JetBlue Flight, Brags about His IQ
It’s a shameful tale indeed that unfolded at the Long Beach Airport, on a recent flight set to depart for Sacramento. A mysterious drunken man appeared to be looking for trouble, as he began boasting about his wealth an IQ, and arguing with other passengers. Little did these passengers know, this man was indeed actually who he said he was: a vice president at a California Real Estate company.
David Brackett, who is believed to be a vice president at California real estate and mortgage company Homeland Financial Network, was filmed disobeying crew and yelling obscenities with two other people recently on a flight from Long Beach to Sacramento.
The entire scene was caught on camera by passenger Sara Walter Bear, and her video was widely spread after appearing on the blog Rants of a Sassy Stew.
In the footage, Brackett identifies himself and then goes on a rude rant, prompting him to be shown the aircraft door. At various points in the video, the man threatens to sue his fellow passengers. ‘I did not sign any disclaimer for this to be released,’ he says at one point to the woman filming. ‘So I will be filing a lawsuit.’ One woman shouts back: ‘Go ahead Jay Z. Bye Felicia’.
Later on, the man who identifies himself as David Bracket said, ‘You’re right, I’m a loser, I own six houses…’ He also brags that he has an IQ score of 176 – and 20/20 vision.
http://www.dailymail.co.uk/news/article-3536614/Moment-annoying-California-millionaire-brags-owning-six-houses-having-IQ-176-thrown-flight.html#v-6720591911897812071
In the category of…if you have to have your IQ measured and brag about it…you probably aren’t that smart.
He would have really outed himself he he bragged about the size of his manhood.
Question from the audience to David Bracket:
If you make $4mm/year, “own” 6 houses and have an IQ of 176 why aren’t you flying private?
Carly Fiorina signs up to another doomed merger
Carly Fiorina is embarking on another doomed merger. U.S. presidential candidate Ted Cruz tapped the former Hewlett-Packard boss to be his running mate if he can somehow win the Republican nomination. The math, after a five-state sweep on Tuesday night by real-estate mogul Donald Trump, is about as compelling as the $25 billion takeover of Compaq that Fiorina championed some 14 years ago.
Like her disastrous corporate deal, the logic, timing and calculus of this political one are almost all wrong. Just as HP thought it would give IBM a run for its money back in 2002 by acquiring Compaq, Cruz and Fiorina reckon that together they might have a better shot at catching the front-runner. An upcoming primary ballot in California, where Fiorina lost a U.S. Senate election in 2010, represents a last-ditch hope to help Cruz, especially with women voters.
Just as the marriage of HP and Compaq was an ill-fated attempt to fight falling PC sales, this awkward campaign alliance is railing against nearly inevitable forces. The timing also gives off a similar whiff of desperation. It is too early to be choosing vice presidential candidates. The GOP convention isn’t even due to kick off in Cleveland for another three months.
Finally, the numbers simply don’t add up. After winning primary elections in Pennsylvania, Maryland, Delaware, Connecticut and Rhode Island, Trump ensured that Cruz cannot secure enough votes to earn a clean, early win to be the party’s representative. Rather, it would take a messy set of circumstances, in a so-called brokered convention where no candidate has enough delegate support on the first go-round, for the Cruz/Fiorina ticket to advance.
Fiorina may not single-handedly destroy as much value this time as she did in her last merger attempt. The failed outcome, however, is destined to be the same.
Haha… Clever headline.
Squeezed out: Millennials and low-income residents leaving O.C. at higher rates than expected
Who’s priced out of Orange County?
Apparently, more people than you might assume.
Real estate website Trulia crunched some numbers and found that millennials and households earning $30,000 or less a year have been moving away at higher rates than expected.
The study looked at residents getting squeezed out of America’s most expensive metro areas, including San Francisco, Los Angeles, New York, Chicago, Silver Spring, Md., Washington D.C., San Jose, Oakland and San Diego. It used data from the 2014 5-year U.S. Census American Community Survey in comparison to that of remaining households.
The analysis started with the assumption that if households in a metro area fall into certain earnings and other categories, those leaving would reflect about the same percentages. But they didn’t.
The study found:
• In Orange County, the share of households earning $30,000 or less was 13.1 percent. But among those leaving, the $30,000-and-under slice hit 24.3 percent. The numbers in Los Angeles County were 21.5 percent and 32.2 percent, respectively.
• Seen another way, the move-away compared to expectations rate among earning $30,000 or less in Orange County was a whopping 85.9 percent. It was 49.7 percent in L.A.
• Millennials – 18-34 year olds – in Orange County made up 20.6 percent of households, but 46 percent of those moving, representing a move-away-related-to expectations rate of 122.7 percent. In Los Angeles County, the respective slices were 24.4 percent and 48.8 percent, with a move-away-compared-to-expectations rate of 100.2 percent.
• In every metro in the study, households with $30,000 or less moved out at the highest rate relative to expectations – 50.8 percent overall.
• Those earning more than $150,000 a year moved out at the smallest rate relative to expectations, while those making $120,000-$150,000 represented the smallest group of everyone leaving.
• Residents taking in under $30,000 left San Francisco at the highest rates of all areas.
• Millennials represented the largest share of all age groups leaving pricey metros, at more than 51 percent. They also had the highest move-away-relative-to-expectations rate, at 105.6 percent.
The median price of an Orange County home – or the sale price at the midpoint of all transactions – was $625,000 in the year ending in March, Irvine-based CoreLogic reported last week. That’s within $20,000 of the all-time high local sales prices hit at the peak of the housing bubble in June 2007.
Donald Trump in O.C.: Tensions mount as police in riot gear separate protesters, supporters
Police in riot gear worked to separate a growing crowd of Donald Trump protesters from supporters still trying to get into the packed Pacific Amphitheatre minutes before the Republican presidential candidate was scheduled to make his first primary campaign speech in California.
About three dozen anti-Trump demonstrators marched toward Trump supporters waiting in line at OC Fair & Event Center in Costa Mesa. Sheriff’s deputies acted quickly – as both sides shouted slurs and profanity – creating a barrier between the sides with officers on horseback.
Roughly a dozen backup deputies were called in to further separate the two sides as the anti-Trump contingent appeared to steadily walk forward and push back the horses. Those on the pro-Trump side were told to stand on the sidewalk.
“It was scary,” Chelsea Rogers, 25, a Costa Mesa cosmetologist who came to the rally with her 16-year-old brother and who supports Trump. “If it gets any crazier, I don’t know what the police will do.”
On the anti-Trump side, Katrina Mendoza, 22, an Orange Coast college student, quickly walked away from the crowds as her friends urged her not to go back to the protest.
“A lady tried to hit me,” Mendoza said. “She called me disgusting and told me to go back to my country. But I was born here.”
The atmosphere outside became increasingly tense as both sides continued shouting obscenities, with hundreds of protesters cordoned off in a portion of the parking lot.
Inside the amphitheater, the atmosphere more closely resembled a rock concert, with a huge American flag hanging behind the speaker’s podium and Elton John music blasting from loudspeakers.
The theater was about 85 percent full near the 7 p.m. scheduled start time, with more people still trying to get in as the crowd got ready for Trump to take the stage. As of 7:30, Trump still had not spoken.
“Mr. Trump is not going to do this by himself,”said Rancho Santa Margarita Mayor Tony Beall, warming up the crowd. “We are an Army. Together, we can do anything.”
He continued, “Is America worth fighting for?”
The crowd cheered.
“Is Donald Trump the one who’s going to squash Hillary Clinton in a landslide?”
The crowd cheered louder.
Donald Trump, the self-proclaimed “Uniter” in action.
The change he will undergo once he secures the nomination will shock people. The guy who spouted the nonsense to get the nomination is not the same guy who will run for president.
Democrats are smugly complacent right now in the certainty of a victory for Hillary. It won’t be as easy as they think.
He was talking about uniting Republicans, not the violent activists that support Bernie Sanders.
If that’s true, then he’s failing at both.
The 60% support that Trump has averaged over the last 6 primaries says otherwise. In a two man race that is called a landslide victory. In a three man race it’s nearly impossible to pull off.
Then you had John Boehner calling Cruz the ‘spawn of Satan’ or whatever. That is a clear signal to the establishment from one of their thought leaders, that it’s ok to support Trump.
A First: GOP Leaders Like Trump Speech
http://www.realclearpolitics.com/articles/2016/04/28/a_first_gop_leaders_like_trump_speech_130417.html
If Donald Trump has begun to refer to himself as the “presumptive” Republican nominee, the positive reaction Wednesday by some party leaders and strategists to his foreign policy address seemed to affirm that notion.
Although the candidate’s style was noticeably subdued, the speech in substance did not depart from what he has highlighted previously on the campaign trail, if often with less tact. But his points appeared to carry new weight for Republican leaders in the context of his likely nomination for the presidency.
“This was a serious foreign policy speech by Trump. It is worth reading and thinking about,” tweeted former House Speaker Newt Gingrich, who has not endorsed a candidate. “It will be ridiculed by Washington elites.”
“Trump is helping himself a lot with this speech,” Ari Fleischer, a former press secretary for President George W. Bush, echoed on Twitter. “It will resonate well with a lot of traditional peace through strength Republicans.”
Even Bob Corker, chairman of the Senate Foreign Relations Committee, said in a statement that Trump “delivered a very good foreign policy speech.”
The reactions seemed to mark a tipping point for Republican Party opinion of Trump. If the GOP in this election has endured the five stages of grief vis-a-vis Trump, beginning firmly with denial, many party activists and elected officials are now reaching the final phase — acceptance.
“It seems some Republicans after [Tuesday’s primaries] are willing to wave the white flag of surrender,” said Ryan Williams, a Republican strategist and former aide on Mitt Romney’s 2012 presidential campaign.