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:

Now that Irvine property prices have fallen over 20% since sometime in 2006 (almost 32 months), why is it that people are not so enthusiastic in putting their best foot forward and attack the market and purchase their Irvine home for 20% less than what they would have paid in 2006? This question keeps lingering around me at least once a day for the past year and a half or so.

I am asking this question for I don’t have an intelligent answer to it. But what I perceive—correctly or incorrectly—is as follows:

a) The market slump has effected the Orange County economy in such an adverse manner that it has given rise to increase in product cost (food & groceries, entertainment, transportation, etc.) that people shy away from spending.

b) Coupled with higher gas prices, they travel less and spend less, which in turn, reducing County economy directly via sales tax.

c) Potential purchasers of Irvine properties still wait for prices to drop even further, hoping, in the meantime, that the rates would also drop.

d) Buyers have become excessively choosy—and rightly so. I’m not blaming them.

e) Many would-be-buyers have been made redundant at their jobs. Thanks but no thanks to the economy.

Some interesting topics may be found in The Orange County Register Real Estate Section. Here are some links from the Register:

•    Agent thinks Coto de Caza housing ‘down significantly’
•    Century 21 boss sees ‘tremendous’ opportunities
•    CEO Rodgers of Prudential California expects ‘09 turnaround
•    CPA details tax twists in housing bailout bill
•    First Team’s Merage thinks it’s 5 years to next peak
•    Foremost’s Cameron sees housing comeback in ‘10
•    Homesellers ‘not shy’ to fire agents, J.D.Power says
•    Housing’s revival to be ’slow and steady,’ PWAR’s Robertson says
•    Insider Q&A hears Fed will ’sit tight’ on rates
•   Insider Q&A hears O.C. housing ‘very precarious’
•    CEO Steve Rodgers of Prudential California expects ‘09 turnaround
•    Investor says homebuying slump boosts ‘affordable’ rentals
•    Luxury broker says affluent homebuyers eye Surf City
•    Meisenbach of Lee & Associates says building sellers unrealistic
•    O.C. rents to be ’stagnant’ for a year, investor says
•    Pepperdine prof thinks O.C. housing ‘very precarious’
•    RadarLogic CEO says inventory a ‘wild card’ for home market
•    Real estate attorney says O.C. office market nears bottom
•   USC professors says housing recovery likely in ‘10

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 – Can anyone answer this question? 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:

An REO is a foreclosure-gone-bad. This is how I see it. The acronym stands for Real Estate Owned, which really doesn’t convey the true meaning of the term. In fact an REO is a real property that is now owned by the bank, or the mortgage company or the financial institution after an unsuccessful foreclosure sale attempts. Perhaps it should be called BO property—Bank Owned? Or perhaps FGB—Foreclosure Gone Bad? That, however, is beside the point. Let us stick to REO. I was just thinking aloud.

Foreclosure:
When a property is foreclosed, the financial institution puts it up for auction. The starting bid for the property normally begins at the sum of the loan balance plus any liens plus major repair costs plus over-due fees plus any costs that may set back the bank, will be included in the minimum starting bid amount. There are times that the bank puts up the property for auction ‘as is’. Meaning possible repairs, possible legal claims on the property including legal fees, even living-in tenants will be left for the successful bidder to deal with. The bidder or the potential buyer doesn’t know any of these – Read a true situation.

Normally foreclosures in Irvine are quite attractive and sometimes mouth-watering, and I must say, in a number of cases, the properties are quite attractive for their asking prices. But the coin has two sides; bidding blindly may be hazardous to your pocketbook.

REO:
Now that the financial institution has failed to receive a bid during a foreclosure auction, the property reverts back to it [the financial institution]. That is, the bank owns it. In effect, the sale of the property now will resemble a normal sale, as though an owner is selling his/her property. The buyer has the opportunity to inspect the property, do a pest inspection, appraisal, ask the bank to make necessary repairs, make offer and counter-offer and normally go through the same traditional home buying routines, with ONE BIG DIFFERENCE! A seasoned Irvine real estate purchaser asks the million-dollar-question: Why has this property become an REO? Is there anything wrong with it? Why have the potential buyers shied away from it?

The answer to this question maybe two-folds:
1- The property is a lemon (normally the case, or a potential money pit)
2- The property is grossly missed and overlooked (highly unlikely but possible).
The Irvine real estate purchaser of an REO, therefore, must do his/her homework thoroughly.

Because the lender is selling the property as an REO and provides the buyer with the opportunity of all inspections, an REO sale price is competitive and close to the current market value and the buyer’s offer should not deviate grossly from it. But remember to ask that million-dollar question, anyway.

Also, a slight point of leverage the buyer may have is the fact that the bank desperately wants to unload its REOs. They are like thorns on their sides. They may not show it but you, as a buyer, must know it, and also let them know that you know it. And, with a bit of good luck and a lot of homework, you might have the deal of the decade.

A brief statistics:
As of 09/03/2008 Orange County’s inventory on real estate foreclosures and auctions are close to 6,000 units (homes, condos, townhouses, etc.). And as of the same date, Irvine foreclosures and auctions tops 250 units (slightly over 4%).

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 – REO properties vs. foreclosure is a post from:

Your personal character plays an integral part in renting out your Irvine property to total strangers. You have no idea who the tenants are, therefore you take a risk. To minimize this risk, you have their credits, places of employment and monthly incomes checked, and perhaps interview them personally in order to build an impression, a feeling, if you will. To further minimize this risk, you ask for the first month’s rent as deposit, to be paid back in whole or in part depending on the final condition of the property as they vacate it. Tenants can be courteous and understanding; some may be a pain, and if you don’t have the personal character to deal with troublesome ones, then you shouldn’t consider renting out. When you rent out a property it becomes an investment property. You cannot always expect ideal conditions. You must be prepared for headaches, which come with the territory. Fortunately renting in Irvine, compared with other areas, seems to attract more desirables than otherwise.

The Mack Team does leasing as well as selling and buying properties for clients. I am happy to say that all the clients we have helped lease so far we have not yet heard a complaint. In fact in two occasions, we have received letters of complements in selecting the right tenants. I don’t want to sound over-confident because, given time, we are more likely to come face to face with an undesirable one. We have learned—and are still learning—from the past experiences of other agents who normally tend to concentrate on couples, or couples with children, or couples that are brothers and sisters or friends, rather than a single person. There is nothing wrong to lease your property to a single person, as far as we are concerned, but some of our colleagues in the profession believe singles carry more risks than couples. I am yet to digest this latter statement.

But no matter what, over time, renting is one of the best ways to increase your monthly cash flow. And also, over time, the advantages overweigh the disadvantages, but remember; you must have the character to deal with undesirable situations. If you don’t have the character and still want to be a landlord or a landlady, I’d suggest you hire an experienced property manager to handle problems, repairs and complaints. It may cost you a penny or two, though.

Advantages

- It pays, or mostly pays, your mortgage on the property. This is a huge advantage, and this alone may offset several disadvantages

- Tax breaks in the form of claiming depreciation, repair costs, maintenance, etc. (consult your accountant for details)

- In a long run, property appreciates annually, thereby increasing your equity as it sits and generates funds on both fronts.

Drawbacks

- Dealing with incessant tenant complaints

- Late payments
- Delinquent tenants

- Property damage

- Noisy tenants and complaints from the neighbors

- Without permission, boarding other ‘tenants’ and over-crowding the premises.

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 – Renting out your property – pros and cons is a post from:

For an investor in Irvine properties there is no such thing as bad times. Fluctuating times, yes, but not bad times. An established investor harvests his or her crop during sellers’ market period and sows the seeds during buyers’ market time. The only drawback may be the ability to forecast Irvine real estate market situation. Educated guesses based on history may be a good practice but not fool-proof, same with current trends. We don’t know when this trend may change direction and to what degree. Every five or six years the real estate market takes half an oscillating turn—for better or for worse. In most cases Irvine property owners are generally winners for obvious reasons. Exceptions may be: medical reasons, divorce, moving, disagreement between partners and in rare cases, natural disasters not covered or only partially covered by insurance.

I don’t encourage folks to commit themselves if, for any reason, they cannot meet the subsequent responsibilities of property ownership. It has its headaches: property management costs, incessant tenant complaints and repairs, association fees where applies, possible vandalism after the tenant vacates, Orange County property taxes, and the monster of them all: delinquent tenants. It takes a down-to-earth like character to deal with such ordeals. If you don’t have it, I’d suggest you keep your 9-5 position with your employer. On the other hand, if you have it you will eventually reap the results and smile all the way to the bank. Oops! Did I say bank? Yuk! I hate that word; I mean reinvest in bricks, mortar and iron and plenty of two by fours.
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 – When to buy property is a post from:

One of the perks of having an Irvine property is what goes in and around this relatively new, active and extremely clean city: The Great Park Connection is one.

City of Irvine and Orange County Great Park Corporation have invited residents of the city and Orange County, in general, to join for the Festival of Flight. The Festival of Flight celebrated the third anniversary of the Orange County Great Park and launched the Great Park Summer 2008 series of programs.

Marsha Burgess, Great Park Manager of Public Affairs, commented:

“We are delighted to invite residents from throughout Irvine and Orange County to attend this wonderful event.”

She goes on to say:

“The Festival of Flight marks the beginning of an exciting series of programs that will be enjoyed by Great Park visitors this summer and beyond.”

What is Festival of Flight? You might ask. Well, anything that has to do with flights, really. Airplanes, birds, balloons, etc. THE GREAT PARK BALLOON (Balloon launching), KITE CRAFTING AND KITE FLYING DEMONSTRATIONS (Learn how to make your own kite), BIRDS OF PREY (Birds of prey from OC and beyond), ORIGAMI DEMONSTRATION (Learn to make beautiful origami figures) and AIRCRAFT DEMONSTRATION (Vintage aircraft will honor the Great Park’s military heritage and delight visitors by conducting a flyover during the Festival of Flights).

Let’s see what’s in store for the summer of 2009 by contacting Orange County.
To pre-register for events go to www.GreatParkNeighborhoods.com

The interested reader may find the following related links useful:

http://articles.latimes.com/2007/jul/13/local/me-balloon13

http://epaper.ocregister.com/Repository/ml.asp?Ref=T3JhbmdlLzIwMDgvMDYvMDgjQXIwMDQwMA==&Mode=HTML&Locale=english-skin-ocr

http://campusapps.fullerton.edu/news/2007/140_military_history.html

http://www.ocgp.org/gpb/default.asp

http://www.orangecountygreatpark.org/

http://orangecounty.redfin.com/blog/2008/07/building_the_orange_county_great_park_bring_in_the_revenue.html

Directions to the Great Park

1. From southbound interstate 5

- Exit Jeffrey Road and right on Walnut Ave.

- Turn right on Jeffrey Road

- Turn right on Trabuco Road and continue straight past Sand Canyon Ave.

- Follow signs to Event Parking

2. From northbound interstate 5

- Exit Sand Canyon Ave. and turn right.

- Turn left on Marine Way

- Turn left after the stop sign

- Follow signs to Event Parking

3. From southbound interstate 405

- Exit Sandy Canyon Drive / Sand Canyon Ave. and turn left on Sand Canyon Ave.

- Turn right on Marine way

- Turn left after the stop sign

- Follow signs to Event Parking

Address:

Orange County Great Park Corporation

P.O. Box 19575
Irvine, Ca

92623-957

www.ocgp.org

* This article was taken from The Great Park Connection flyer

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 – *The Great Park Connection 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: