Ed Tse

Dear Tom: California Cities Provide Santa-Mozilo Loans to Upset Mozilo & Geroge Bush

Question: where did you find the 8 page pdf?? I would like a copy of it.. and what cities are you aware of that have this program? Thomas Hargreaves (Teamwork Financial Services)

What a coincidence! God wants you know what one of the cities I am talking about. So go to the city's website and you can see its first time buyer's program. It is identical with the 8 page pdf form, but I don't blame you if you could not see the whole or the best part of "Santa-Mozila" loan at the city website: http://www.comptoncity.org/cra/redevAgency1a.html). Just please don't ask me why the website used a brief word "silent" and didn't clearly spell out the goodies: the 2nd lien can be forgiven, no interest, and no monthly payments.

For the same token, don't assume your city don't have the same good free stuff by just clicking and looking at its website. Remember there is a saying, "Don't judge a book by its cover." Dig it out by yourself.

FIRST TIME HOMEBUYERS PROGRAM

The Community Redevelopment Agency (Agency) of the City of Compton has designed the First Time HomebuyersProgram (Program) to relieve the prevailing housing affordability crisis in the community. The Program consists of a SecondMortgage, which is in the form of a Silent Second Deed of Trust. An eligible household may receive second mortgage assistance up to $100,000.00. The amount awarded, however, will be based on the need for each household on a case-by-case basis.

WHAT IS SECOND MORTGAGE ASSISTANCE?

Second Mortgage Assistance is a mortgage subsidy provided by the Agency to a first time homebuyerin the form of a deferred Second Deed of Trust loan. The Agency's subsidy shall be used to reduce the price of the home to enable the homebuyer to qualify for the purchase of a home at an affordable level. The maximum loan awarded by the Agency is $100,000, which may be used towards down payment and closing costs.

The funds may be used for a larger down payment to satisfy the difference between the amount for which the buyer qualifies and the actual amount of the property. For example, if the property sells for $310,000 and the family qualifies for only $210,000, $90,000 of the $100,000 subsidy may be used to reduce the mortgage, and up to $10,000 may be used towards closing costs.

After securing the loan with a Second Deed of Trust, a lien will be placed against the property that is being purchased with the Agency's assistance. The Agency will serve as the Program Administrator, and participating mortgage lenders will be responsible for processing and underwriting the homebuyer(s) applications for a first mortgage.

Please also check the following article and see the house in Compton, CA. Find out how you can take advantage of it out of the housing downturn. Don't just sit on the fence complaining, "I can't do anything," while the opportunity boat is here.

****** ****** ******

...

When we get to the featured home of the day, you are going to see a home that has dropped 71 percent in one year! Stunning example of what was produced by this housing mania...

So with that, let us now take a look at today's Real Home of Genius. Today we salute you Compton with our Real Home of Genius Award.

The Dash to the Bottom

This home is 500 square feet and was built at the end of the Great Depression in 1939. It has one spacious bedroom and 1 large bathroom. As we are told in the ad that there is room to "add" which you may need to do if you need more space than 500 square feet. Again, is it really that difficult to move the garbage bin before taking a picture? So what is the sales history on this place? Let us take a look:

Sale History

07/21/2008: $235,060 *

09/27/2007: $340,000

I really have to sit in amazement at that sales price that occurred last year in September. Which institution wrote that mortgage? ... Some have been under the impression that after the credit crunch in August, that all of a sudden bad financial housing moves had ceased to plague the market. In fact, the above is simply an example that horrible lending is still occurring... Yet that September 2007 purchase price of $340,000 is a real deal.

So what is this home now selling for? How about $97,900. That is right folks, this home "depreciated" 71% in 11 months. This simply drives the point home at how horrific the mortgage industry really has become. Keep in mind the $340,000 loan was made 11 months ago! This isn't a loan that was made in 2005 or 2006 at the peak of insanity but after the credit crisis hit. The good news is that the current price may actually make sense for someone since the payment would work out to something like:

PITI: $720/per month 30-year fixed at 6.5% (see note 2)

Note:I am not in the mood to write today. My response to Dr. HB's article is very limited to just to the funny sentence "Again, is it really that difficult to move the garbage bin before taking a picture? " Then, I added the following:

Note 2: To me, the article is somehow not perfect if Dr. Housing Bubble didn't mention the Compton's Santa-Mozila loan (Real Homes of Genius: Foreclosing to the Bottom. Today we Salute Compton with a Stunning 71 Percent One Year Decline.) (Clearly, under the city Santa-Mozila loan, the new monthly payment shall be $285 or less. Very affordable, am I right?)

How to use 1% down payment to buy a $300K house

Who says Californians have budget problems? California Cities have no financial pressure at all. At least, they are in a better position than Mr. Mozilo, former CEO of Countrywide. They are even greater or more generous than Presidents Geroge Bush or Benanke to provide us a Santa-Mozilo Loan.

With this kind of city programs, you can afford to buy a home up to $300,000 or more, with your one percent down payment. You can get up to 99 percent loan for your purchase. It is so great, isn't it? Maybe, you will say, "What's the big deal! VA has zero down program" or "DOA has the same zero down program in remote country area." Gee, you are not so easy to be pleased!

Okay, I got it. Let's move on! you haven't seen the best part of it yet. Not like those two stingy Mr. B who want you to pay back their tax credit of $7,500 and like to bite a big slice of your "future profit" through their "profit sharing" project by the so-called "Congress Rescue Bill." Those Californian cities don't charge you interest or ask monthly payments. Compared to those two year no interest programs provided by furniture stores or 7 year no interest program from automakers, is it good enough to please you?

Wow, wait. Things even get much better! If you own (live in?) the house for 15 years, Guess what will happen? Your 2nd loan of $150,000 provided by the city will be forgiven. Yes, it will be "wiped out." (Note: don't be scared when you hear these two words. The situation is working for you, not like Indymac's stockholders being wiped out or the possible GSEs wipe out.) Literally, that means the city will give you $10,000 every year. At the end of 15 years, you don't owe nothing to the city. You own your property "free and clear," except the unpaid balance of the first loan of $150,000.

Am I kidding? No, I am not. "Read my lips" and verify the following attachments (Note: It contains 8 pages in pdf format that are very difficult for me to copy without a writer, I just post the most important part.) It is a decent business. There is no trick or fine print hidden like Alt-A loans, Option loans or any negative amortization loan.

So, hurry to get on board. Common, it is hot. But it is just new and hot out of oven. Don't look it as a hot potato. Find out if your city has this Santa-Mozilo program as an early bird, before time is changed or fund is dried or crunched as subprime loans did. (Note: don't be lazy by just clicking on your city website. You probably can't find it as I can't find it at the city website. Go out and talk to somebody. Please don't tell me we have the most transparent system in the world.)

Wow, what a surprise today I encountered! One thousand dollars for this California city house? Is this a joke? Is this a reckoning day? Am I kidding?

No, there is no typo. This house is absolutely not in Michigan or Ohio where a house sold for $1,000 is no surprise; it is indeed in a big city of California.

This house surprises me:

1**1 ******t Ave ***** CA 9****

2 beds, 2.0 baths, 894 sq ft

For Sale: $71,859

See listing websit

Zestimate: $132,000

30-day change: -$10,000

Value Range: $75,240 - $134,640

Last updated: 08/22/2008

Sale History
12/13/2007:	$184,417 *
11/08/2005:	$272,000
01/25/2005:	$140,000

From the above info, 10 years ago this house is valued at $70,000. Its Peak sold price was $272K in November 2005. 9 months ago, a bank took it back for $184K.

Recently the listing price was $71K (Note: the above listing in Zillow.com as of August 22) and reduced to $54K (see the bellow). It is reducing, reducing, and finally falling apart...

$54,000 1**1 ********* Ave ******** California, 9****	MLS #: 40*****5	Beds: 2 Baths: 2 Sq Ft: 894

Try harder and harder, please (Note: as an investor, I have ample time to wait). Now, everybody almost finished their hard works and tired (satisfied?). A realistic price tag is finally on the auction table. How much they would get for?

Down to ask for $1,000. After all the hard works done by the banker, asset manager, and agents in the past 9 month, do you expect all of them possibly get just a thousand dollar out of it? See, how good our traditional marketing channels can do the job?

Don't say it is a waste time! Look at a bright and broader view, it is a job-creating so that everyone can be busy and earn some money to put bread on the table. So it is a MacroEconomics. Who cares about national productivity, right?

I am very disappointed at some fellow agents who refuse to write a low ball offer, say 20% off, since they are trying to act as a principal, not an agent. However, if I make you an offer asking 90% off your listing price, I don't blame you if you kick my butt. How much do you think you "will" buy this house? You are not serious to expect a final price omitting the two "0" at the end of its previous sold price, aren't you?

But just for this case. If you're not, you are too kind to be greedy, for I know you may be wrong. Look at stock market, as of August 22, our two big GSE Fannie and Freddie lost their stock value more than 90-96 percent in a year. Don't you think it could happen in real estate? Why not?

Yesterday I watched PBS TV on Californian Education Review. It was said that California education, particularly the infrastructure, has been deteriorating to follow Michigan and Ohio. But it is still incredible for me to think the housing market will follow the shoe. Gee, I shouldn't watch the TV program.

I know this auction site very well and have been with it for more than 3 years. It is a serious auction with no tricks, not like others, such as R**** or other W**** that play buyers at their fingertips.

One thing I am 100 percent sure is this house will be sold a lot less than the price it held 10 years ago. It would not surprise me if it could be sold for less than $5K (Note: I have my reasons).

Let see the result in a few days.

Dear Hank,

Thank you for forwarding the promotional email to me. [Note: enclosed herewith at the bottom.] Its idea is very good, but they have not done it right. If they could have the idea I put in my "America Poor Folk's Egold" formula, they would be able to do it much better to the poor families and the nation as a whole.

The promoters pick up a foreclosure, fix it up and sell. They are doing the same thing as I once did in the past years, except they have manpower and money to advertise on internet. Per their website, they claimed that they have markets nationwide, it is very clear to me that they are focusing on the state of Indiana at this moment.

Are they giving you the value? Look at what area they are working on. Take their property at 1237 S. Ohio, Kokomo, IN as an example. Probably all their properties are in a depressed market. In this neighborhood, almost everybody is asking less than $30K for his properties. How could they put the 1237 Ohio a price tag of $57K and reduce it to $49K?

As I know, almost one thousand of Indiana properties are currently put up on auction block by Coldwell Banker alone, don't mention others. In the month of November 2007, there were about 50 properties scheduled to be auctioned off in the City. What do you think? At least I will have a doubt: people are leaving, not moving in. Is there anybody want to pay their claimed rent of $600 a month to live in?

Well, if we have fund or manpower, we can do a lot better. There are ample opportunity to buy better properties in USA. Even in California, the great chance is right coming up over there. A lot of properties are selling at least 50% off its peak. It is very common that California properties are currently asking 20 cents for a dollar, compared to its 2006 price. Absolutely not like those past 4 years, there is a boat of opportunity coming to the Port of California. You can make a lot of money at your doorstep.

Why do you want to go to Indiana or any place on where, as I know, you've never put your foot while the opportunity is knocking right on your door?

Everyday I run into dozens of bargains in real estate without walking out of my house. If you are not confined yourself to a specific area or a particular house, you can find a lot of bargains in California if you treat your purchase as an investment, not a home for you to retire at this moment. It is very hard for you not to see the opportunity at the fire sale.

There is no shortage of them in any county of America. Just tell me where you want to go, I can locate it for you very easily. Say, yesterday, there is a Florida property foreclosed for $133K. The banker put it on market for $75K, then reduced to $69K and now you can have it for $35K. It is surrounded by $180K properties. If we buy it and fix it up, can we ask for $120K and sell it for $100K? You bet,

Maybe you forgot our real estate lessons we learned out of our 20 year experience. We can make all the needed remodeling or renovation, but we can't change the community and its outside surroundings. Remember it is the number 1 rule in real estate: location, location, location.

ET

****** Ave, ******, FL 3**** 2BR, 2BA, 1083SF - Lot/Acres:10001 Leading Bidder: Bid Now Contact: Christina *****,

$32,500

For the above Florida property foreclose court lawsuite:

H-27-CA-2007-515 D******* Bank National Trust v ***** Wern ******Ave. *****l, Fl 3****. H-27-CA-2007-515. D******* Bank National Trust. v J*** Wern. $133029

******Ave, *******, FL 3***** , $75000 2 beds 2 baths (Note: this is the property foreclosed for $133029. I believe it was the initial asking price of $75K. Now you can get it for $35K. What a discount!)

Sheriff's Sales for Kokomo, Indiana November 14, 2007

1. 1225 East Taylor, Kokomo, Indiana 2. 1037 Springwater Road, Kokomo, Indiana 3. 1807 North Delphos, Kokomo, Indiana 4. 5837 Council Ring Boulevard, Kokomo, Indiana 5. 5565 West 200 North, Kokomo, Indiana 6. 1237 South Ohio, Kokomo, Indiana 7. 1705 Cadillac Drive West, Kokomo, Indiana 8. 3075 West 450 North, Kokomo, Indiana 9. 2862 Beachwalk Lane, Kokomo, Indiana 10.1135 South Ohio, Kokomo, Indiana 11.318 West Jefferson, Kokomo, Indiana 12.1606 North Lindsay, Kokomo, Indiana 13.1020 West Taylor, Kokomo, Indiana 14.1236 East Taylor, Kokomo, Indiana 15.1512 Bradley Road, Kokomo, Indiana CANCELLED 16.941 East Center Road, Kokomo, Indiana CANCELLED 17.9235 West 00 North South, Kokomo, Indiana 18.401 East Vaile Avenue, Kokomo, Indiana CANCELLED 19.4240 South 800 East, Greentown, Indiana 20.1021 East Wheeler, Kokomo, Indiana CANCELLED 21.4209 South Dixon Road, Kokomo, Indiana CANCELLED 22.150 West Lions, Russiaville, Indiana 23.215 Wickersham Drive East, Kokomo, Indiana 24.3662 West 400 South, Kokomo, Indiana 25.2143 South 1000 East, Greentown, Indiana CANCELLED 26.917 West North, Kokomo, Indiana 27.523 Santa Fe Boulevard, Kokomo, Indiana CANCELLED

The recent speech made by the mayor of Kokomo is quoted here :http://www.cityofkokomo.org/egov/docs/1204037891891.htm

As you all know, our city is facing a potential financial shortfall that could have a real and lasting impact on the services we provide to you every day.

The worst of these problems are still looming, on a very-close horizon.

But even our 2008 budget creates significant challenges for our city.

Our city's General Fund - our main operating account - will require us to take almost $400,000 out of our already-low cash reserves.

After this happens, those cash reserves will have just $460,000 remaining.

This money is supposed to serve as a cushion against unforeseen events. Independent Credit Rating Agencies, such as Standard and Poor's, say that this cushion should be about 15 percent of your annual revenue to be considered "strong."

If you have 5 to 15 percent, that's considered "adequate."

By contrast, we will have just 1.2 percent.

**** Enclosure: the original email from Hank

-- On Thu, 8/21/08, Hank **** <@yahoo.com> wrote:

From: Hank <****@yahoo.com>
Subject: Fw: INVESTMENT HOMES FROM 30K.
To: "Ed" <@yahoo.com>
Date: Thursday, August 21, 2008, 11:41 PM

Hi ET, Look at this. It's not bad, isn't it? Hank --- On Wed, 8/20/08, Bill <bbartel@****.net> wrote: From: Bill***<bbartel@****.net> Subject: INVESTMENT HOMES FROM 30K. To: ***@yahoo.com Date: Wednesday, August 20, 2008, 7:08 AM You have received an e-mail because you are a real estate professional or associated with a real estate professional and have made your e-mail address publicly available through various sources available to the public for the purpose of receiving communication regarding the real estate industry. Please CLICK HERE TO CONTACT US by e-mail, or call ***-***-7700 anytime. We value your time - UNSUBSCRIBE via our form. Responding to this e-mail will NOT unsubscribe you. www.*****************.com Great cash flow investment properties in Indiana. Homes range from $35,000 to $40,000 full Purchase Price, this is not a down payment. Rents range from $550 to $650 per month. These properties are located in Kokomo, just north of Indianapolis, Indiana. We have property managers, contractors and lenders in place. These homes make great rentals and have new paint, carpet and wood floors. Please CLICK HERE TO CONTACT US by e-mail, or call ***-***-7777 or ***-***-7700 anytime. We have a lender who can provide financing with either 10% or 20% down payment with very low interest rates, even as an investment property. This is an opportunity to leverage the property and still have CASH FLOW. These homes are brought to you by Positive Cash Flow Homes. We specialize in finding great cash flow properties throughout the Country. www.***********.com Please CLICK HERE TO CONTACT US by e-mail, or call ***-***-7700 anytime. We value your time - UNSUBSCRIBE via our form.

Facing real estate severe downturn, there are so many analysis, outcries or arguments to government's "aids", "baiout", "take over", or "nationalization" leading to a devastating selloff of Freddie and Fannie's stocks yesterday. So much have been said, so much noisy sounds confused us.

Enough is enough. Nowadays, all those people in media have been trying to give us a picture of "no hope." Is it really a doomsday right at the corner? Wrong.

Is government's aid or bailout so terrible to investors or taxpayers? I have no simple answer to that. Or I may say there is no right or wrong answer to that. It will depend on which perspective you will take or what kinds of steps U. S. government will take. I hope those solutions provided by "stimulus program" or "rescue" bill are effective, not a corrupted, method to solve the problems we are facing. Even so far I don't see they are correct or effective, I keep myself optimistic and believe tomorrow will be better.

Why I say that? Everyone has his theory or speculation towards today or tomorrow. I believe it is very difficult to change people's minds or sentiment by a theory or argument, when I look around to see so many intelligent people speaking the results as the cause. I don't want to convince you guys by any theory. It would be of no use. What I am going to do?

I am old enough to go through so many things. So many modern people don't like to read History. Okay, I am not going to ask you read ancient Rome history. let's just look backward for 30 years. There is a fact of so-called "Lacocca Miracle": Lacocca became chairman in 1979 and helped the automaker stave off bankruptcy during a severe auto downturn, retiring in 1992.

It is so vivid in my minds as it happen yesterday. I don't ask you to read all the articles about this miracle. Make it very simple, just read an old article "Chrysler's Crisis Bailout" published by Times in 1979. Will you see or hear the same rhythm such as "bailout" saturated yesterday and today? Just as Mark Twin said, "History won't repeat itself, but will play the same rhythm." Do all the words used in the article sound very "modern" and familiar to those articles published today?

Hope everyone has his or her discovery or lesson on the similarities now and then. Certainly we have to replace the old day's "millions" dollars with "billions", "billions" with "trillions" because time has changed. 50 years ago, a person who left less than $3 million in his inheritance could be qualified himself as one of the richest. Now nobody will be listed as one of the richest by Forbes if he is just a "millionaire." He has to be a billionaire.

Here for your reference, I post the web link of Times as follows:

Monday, Aug. 20, 1979

Chrysler's Crisis Bailout

Questions about whether a quick federal fix is right-and will be enough The Carter Administration decided last week that now was the time to come to the aid of the nation's most beleaguered major company. After weeks of rising pressure for a federal fix for the multiplying problems of Chrysler Corp., Treasury Secretary G. William Miller produced-and Jimmy Carter approved -a Government bailout. It was designed to prevent the nation's No. 3 automaker (1978 sales: $13.6 billion) from sliding into a bankruptcy that could have put many thousands out of work and sent a shudder through U.S. financial markets.

Beamed Chrysler Chairman John Riccardo "We are extremely encouraged. This fits the bill."

In his first public act at the Treasury, Miller spelled out the ideological ground rules of federal aid and warned other troubled companies against expecting similar help. Such assistance, he said, "is neither desirable nor appropriate, being contrary to the principle of free enterprise." But Chrysler was an unusual exception, he added, in which the Administration "recognizes that there is a public interest in sustaining [its] jobs and maintaining a strong and competitive national automotive industry."

Despite Chrysler's immediate enthusiasm, the Treasury package falls far short of what the company sought. It does not give Chrysler the $1 billion cash aid that some analysts insist is the minimum it needs to keep going until late next year.

That is the earliest time Chrysler can expect to make money from the new generation of front-wheel-drive compact cars now being developed by President Lee lacocca, who will replace Riccardo as chief executive by this year's end.....