Nowadays it seems everyone is talking about history—sub-prime rates. They seem to be beating a dead horse and crying over spilled milk. I understand all these sentiments, but these are not going to provide a solution to our current predicament. The situation is grave and must be dealt with rationally instead of calling each other names. It is easy to judge and get away with it.

All these aside, however, early this morning—September 29th 2008—the papers reported that the 110-page bill goes to the House of Representatives for vote. Later on in the morning the House said NO to the massive bailout dollars.

When the $700b ‘solution’ was initially suggested my first impression was irritation, rage and annoyance. But in the past week or so, reading and talking about it, my feelings were somewhat reversed and I mellowed and simmered down. I came to the conclusion that this actually could lubricate the financial wheels and stimulate the economy. True, at the taxpayers’ expense, but has anyone a better suggestion without hurting our pocketbooks too much? The damage is done and there is no way back into history to put it right, but at least this will buy the bad mortgages held by many financial institutions and sold, hopefully, for a profit, at the same time allowing the institutions to start over healthier and wiser than before, and also, hopefully under the scrutinizing eyes of the feds. This is an exceptional situation that needs immediate attention and it should be on everyone’s priority list. I am not a Bush supporter, but I must admit, this bailout is a calculated risk and sounds logical.

Another alternative to this bailout may be: instead of taxpayers paying into it, what about Uncle Sam paying the taxpayers in the form of some reduced taxes? What I mean is to relieve us of some taxes, such as capital gain when we sell our homes; an incentive for the seller—I don’t know, just a thought—but at least for a while.

Some interesting comments may be found in the following links:

http://propertygrunt.blogspot.com/

http://donklephant.com/2008/09/29/house-republicans-start-to-get-religion-on-bailout/

http://wordpress.com/tag/bail-out/

http://www.blogged.com/about/wall-street-bailout/

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team
Robert & Tania Mack

Century21 Professionals
Irvine, Orange County, California.

http://www.irvinerealestatelink.com

Irvine Real Estate link, CA – House Says NO to bailout by a 228-205 vote is a post from:

I am sure most of us who are interested in the current US economic situation, particularly the housing situation and mortgage blunders, have heard the President’s address to the nation—September 24th 2008—which took about twelve minutes to explain to the nation as to what happened and what the feds should do to possibly correct it. The gist of his address, as I understood, was help us to help you.

That’s all fine. As I’ve responded to many blogs regarding the very subject of the economy, our current situation began brewing over a decade ago. Of course, he did not waste any time to stress the latter, because he was not the Commander in Chief then. Am I to understand that in the past eight years of his presidency nobody in his administration could foresee this problem coming? And now that it has occurred and everything is surfaced up they knew that potential problems existed a decade ago? He just told the nation why. Money was plentiful, people spent, spend and spent, credit approval standards were low, financial institutions made loans left and right, Freddie and Fannie got fatter and became gigantic dollar bombs waiting to go off. And, indeed, they did, along with many smaller institutions.

Here is the point: I am not quite confident if this $700b taxpayers’ money, when approved, to be a success in terms of stimulated economy. This may cost each tax-paying citizen $2,000 – $3,000 (figures are rough, maybe more). I know the situation is critical. What if it doesn’t help? Some folks can’t afford to part with this kind of money, it’s hard for them as it is, although the contributing taxpayer will be repaid.

The president’s address was simple and straightforward. He said that this is not normal economic circumstances. His reasoning was logical, but then again, name one politician that has sounded illogical when addressing the nation. I personally have mixed feelings about this massive bailout, but if it works, then I’m one happy camper. We’ve suffered enough in the past 30 months or so.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team
Robert & Tania Mack

Century21 Professionals
Irvine, Orange County, California.

http://www.irvinerealestatelink.com

Irvine Real Estate Link, CA – The president and the $700 billion bailout is a post from:

I do Irvine real estate in Orange County, CA. Although my concentration is predominantly focused on Irvine homes, however I (I should say, we, because my wife is also working with me) keep myself in touch as to what’s happening nationwide regarding the housing market and the general economy.

Today, September 20th 2008, I was looking at The Los Angeles Times, the real estate section and came across a real estate blog concerning bailouts by the government.

I am not against a bailout of an institution (being financial or otherwise) that if left to the claws of bankruptcy may have adverse socioeconomic effects to you and me. But it seems that nowadays such bailouts of mismanaged institutions, in particular the financial kind, are nothing short of finding Uncle Sam’s hand in our pockets in the form of temporary increase in taxes of some sort. And the irony would be that neither you nor I can do anything about it. What does it tell us? I leave the reader to draw his/her own conclusion.

The XYZ financial corporation is going bankrupt. So what? Why should the feds bail them out at my expense? If the XYZ mismanaged its spreadsheets for, perhaps personal gain, why should I pay for it? Would dear old Uncle Sam bail me out if I defaulted on my mortgage due to illness and being out of work? Or just simply being laid off? No way Pedro! Then why should I concern myself with Lehman, AIG and F&F? BECAUSE THEY ARE BIG—Thanks to the big shots working for Uncle Sam. You fatten them and they fatten you, and you and I get screwed. Get my drift?

The economic hardship that we are encountering today is not the result of what happened last year or the year before, but many years earlier. The financial problems that we are having today have been brewing a decade ago, even earlier. We did not notice them because at that time we were all happy and content and seemingly we did not see any problems—latent problems—and money was plenty, market was good (save after 9/11) and housing up-and-down cycles were short and mostly on the up side. America was busy buying property, spending and spending. We never complained.

People have brains, they can think by themselves, they can analyze situations by themselves without having a hot shot from the Hill to explain things to us via the standard media, besides, nobody would believe him, anyway.

In a nut shell, GLUTTONY IS ONE OF THE PREDOMINENT FACTORS IN ANY ORGANIZATION FAILURE.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.
The Mack Team
Robert & Tania Mack
Century21 Professionals
Irvine, Orange County, California.
http://www.irvinerealestatelink.com

Irvine Real Estate Link, CA – Bailouts by the federal government is a post from:

Financial giants, Fannie Mae and Freddie Mac, were mortgage icons as long as anyone can remember. Certainly they existed even before I was born. They grew and grew to a proportion so scary that for any reason if they toppled the effects on the overall economy would be almost irreparable for many years to come. No single entity with close ties to the government should be given the opportunity of such growth for the simple reason just stated above.

According to The Washington Post: Sunday, September 14, 2008, “…the federal government seized control of the two companies to protect the very mortgage market they were created to lubricate. The cost to taxpayers could run into the tens of billions of dollars.”

In not so distant past the F&F had many financial blunders that either went un-noticed or serious concerns fell on deaf ears. They made risky loans. Many borrowers defaulted on their loans. The Washington Post goes on to say: “…finally, as the credit crisis escalated, Congress passed a bill two months ago establishing a tough, new regulator for the companies. It was too late.”

Now, we’ll wait and see how the F&F is handled. My guess is when things settle and the market bounces back, hopefully soon, and everyone is happy and content, because the money flow is abundant and no one is concerned about the status of the economy, and the market is booming, while some executives behind giant financial institutions begin their finger-poking actions for personal gains, effecting the economy, then and only then will we wake up to a situation like what we are having today. And the never-ending cycle continues. Will it ever stop? I wonder!

Irvine real estate, like any other, was not immune from this bombshell that was brewing almost a decade ago, and now we are reaping its rotten fruit, today.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team
Robert & Tania Mack

Century21 Professionals

Irvine, Orange County, California.

http://www.irvinerealestatelink.com

Irvine Real Estate link, CA – Why did it happen to Freddie Mac & Fannie Mae? is a post from:

I don’t want to insult the intelligence of the reader, but there are folks who don’t know what foreclosures mean, and for the benefit of those few I would like to define this term in the layman’s language. When one borrows money from a financial institution to purchase a property and for some reason or other that individual is unable to pay it back, with interest, on agreed monthly intervals and amounts, the bank or the financial institution has no other alternatives but to take the property away from the owner. This action is called foreclosure. Irvine Foreclosures are not only dire for the owners but also for the lenders. Both parties lose. The only winner may be the third party who eventually buys the property at a bargain price.

Let’s face it; the banks are in it for a good chunk of profit. And also, without them [banks] most of us won’t be able to afford living in our own Irvine homes. A $500,000 loan balance at 6% over 30 years will cost you an additional $579,000 in interest only. That is, the bank will make an average of just over $1,600 a month on interest only over that period. In most cases they make good loans, but occasionally a bad one slips through their fingers, and they’ll have to deal with it, even at the cost of a few hundred thousand dollars. They don’t need the headaches and is not worth their efforts. They have plenty and a few hundred thousand will only make a small ripple in their financial bucket.

Ever since mid to late-2006 the rate of Irvine foreclosures has gradually increased to a new high. Lenders are overwhelmed with it. Not that they made bad loans but mostly due to hard economic times, unforeseen layoffs and unemployment are substantial contributing factors. The financial institutions cannot find enough time to process foreclosures in timely fashion. Most use their own escrow and title insurance companies. They make frequent errors (errors are inevitable and sometimes cannot be avoided) and if one is not careful one will pay for it—be it the lender or the borrower. In fact in couple of occasions I found gross errors to the disadvantage of my clients. They [escrows] are antsy and on the edge these days. The workload has taken its toll on them. We, The Mack Team, at Century21 Professionals in Irvine, make a diligent effort to go over our client’s final escrow closing statement, if asked, to ensure they are treated fairly and squarely.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team

Robert & Tania Mack

Century21 Professionals

Irvine, Orange County

http://www.irvinerealestatelink.com

Irvine Real Estate link, CA – Banks and foreclosures is a post from:

First and foremost reason to purchase a home, in my opinion, is simply to own it, owning a piece of America, and for those with small children, to grow in a home rather than in an apartment. To establish roots.

While this may be a sentimental reason many buy homes for investment purposes, others buy for second residence purposes. No matter what your reason, to own property in

Irvine is like to own gold. Many professionals refer to the old adage: location, location, location. In my opinion, although true, however, this may not be the case these days. Everything is relative. I mean you buy a run-down house in the worst location of a city and still make a profit after renovation and sale or rent out. Granted your profit margins will be minimal, but if it is done in volume and over an extended period of time your financial realization would be a considerable chunk. One strike of the forger’s hammer on the anvil generates a tremendous force than the thousand strikes of the tailor’s needles on the linen. In other words, the financial realization of properties bought and sold in attractive and much sought-out areas gives rise to huge profits and quickly. Both scenarios depend on many factors: Capital, lower interest rates, economy, opportunity, diligence and perseverance, your willingness to commit and take calculated risks.

Views, comments, responses and constructive criticism are welcome.

Make it a great day.

The Mack Team

Robert & Tania Mack

Century21 Professionals

Irvine, Orange County, California.

http://www.irvinerealestatelink.com

Irvine, CA Real Estate – Why buy a home – Part 2 is a post from: