Well, when a lender waives prepayment penalties on “pick-a-pay” option-ARM, things must be pretty bad. And it wants out of the whole neg-am loan business. And here’s the proof:

Effectively immediately, Wachovia is waiving all prepayment fees associated with its Pick-A-Pay mortgage to allow customers complete flexibility in their home financing decisions. This includes all Pick-A-Pay mortgages on 1-4 unit residences.

Additionally, for all new loan originations, Wachovia is discontinuing offering products that include payment options resulting in negative amortization.

“I think they’ve come to the stark realization that the product was risky,” said Kevin Stein, associate director of the California Reinvestment Coalition. “They’re bleeding.”

Wachovia shares fell 3.9% to $15.58 during afternoon trading on Monday. The stock has lost 70% of its value in the past year.

 
I came across this story in the Washington Post, on a subject near and dear to my heart — the “freshened” listing.

Freshening up a listing by withdrawing it and relisting it several months later is a trick that has been used for a long time. It is particularly popular when properties have languished from one year into the next because the numbers assigned within a multiple listing service correlate to the year, and sometimes the date, the property is listed.

Primarily because new properties garner more attention, many agents/sellers pull their listing for a few months and then re-list it with a new entry date. But does that mean that’s all you need to do? Thankfully Illyce Glink does say that you may have to look more at your house when it’s not selling rather than freshening listings.

Instead, she says to stage your home — no news there, to rethink your price:

While you may believe your home is worth more (and at one time I’m sure you were right), you may have to cut your price to sell soon. If you don’t feel like competing on price, consider taking your property off the market until next year.

And finally, use the Internet to virally market your home. Either way, we both agree that “freshening” a listing isn’t the only thing holding your house back from being sold. Another look at the property and may come up with a few ideas of how to sell it faster (hint: drop the price.)

Hold onto your hats, I couldn’t believe this price either. The pictures, although showing holes in walls, don’t seem frightening but you probably would want a tour of this just to see what you’re getting into. Still, it’s in Hercules and only $99,900, so maybe it’s worth looking at? If anyone does see this, please let me know what you find! It’s 2,171 square feet, four-bedroom, three bath home with a three-car garage (it’s all about the garage for this house, isn’t it?) that was last sold a year ago for $468,948. Good luck!

A little town called Fairfax in Marin is also selling off what looks like cabins for just a hair and I mean hair below $500,000 — $499,000. Don’t know much about the area other than it’s woodsy and people who like to hike love that kind of stuff. The house doesn’t look bad, or maybe I’m immune to horror, but it’s 1,248 square feet and has a little yard. Don’t let the animals run loose because coyotes will probably eat them. Other than that, you can have a chi-chi address in Marin County

There are two “houses” in Half Moon Bay under $400,000 on St. Martin’s Beach Road. I was curious how something with an ocean view (and possibly access) could be so cheap, so I did some investigating and wondered if it was a place similar to Paradise Cove in Malibu. You know, the trailer park with million-dollar views of the Pacific. (Yes, you would be trailer-park trash, but hey.) It seems a bit more complex than that, though. Since 14 Martins Beach Road mentions the one-bed, one-bath is on leased land for $580/mo. with 13 years of a lease left, there may be much more to the story and explain the $209,000 price.

The other, 33 Martins Beach Road, seems a bit bigger, with two bedrooms, but also is on leased land. A I looked around, I found that that seemingly the whole parcel is up for sale, marketed as a  ”truly private” beach and 53-acre agricultural property. Apparently they charge $10 a car to go to the beach. Man, what a racket! Price is $48,500,000. So, I guess it’s not surprising that people want to leave since the new owner could do all sorts of things to them (like raise leasing prices!)

That concludes our post on the Cheapest Houses in the Bay Area! Come by again when we look at sea and lakeside homes to beat the summer heat.

For those interested in taking part of State Attorney General Jerry Brown’s lawsuit against Countrywide’s alleging “deceptive” business practices, take heart! We have the information you need:

Consumers who believe they have been victimized by Countrywide Consumers should file a complaint by contacting the Attorney General’s Public Inquiry Unit in writing at Attorney General’s Office California Department of Justice Attn: Public Inquiry Unit P.O. Box 944255, Sacramento, California ZIP code is 94203 or through an online complaint form you can find here.

The case is People v. Countrywide, Los Angeles Superior Court case number LC081846.

If you saw my article this morning (and I sincerely hope you did!) you will see that Harvard’s Joint Center for Housing Studies’ view of the housing market – kind of depressing:

The center’s “State of the Nation’s Housing 2008″ compares housing markets to other recessions of the past few decades and McCue said that complete recovery can take five to 12 years, but the nation’s already 26 months into the housing crisis.

McCue said that if unemployment worsens, there may be “forced sales” that will bring down prices and compete with foreclosures.

Paul Leonard, California director of the Center for Responsible Lending, a policy and research organization in Oakland, said the economy is “shaping into a perfect storm” of tight mortgage credit, shrinking credit card limits, higher unemployment and prices for consumer staples.

What does this mean? It means my 72-year-old mom is starting a vegetable garden because she refuses to pay $3.99 a pound for tomatoes (they went down, right?)  Even I’m thinking about it. I draw the line at canning and pickling, though. Gaaack!

California Attorney General Jerry Brown filed a lawsuit today against Countrywide Financial charging that the company forced risky loans on unassuming customers. That means the state joins Illinois in suing the company. Read on:

[Brown] alleged that Countrywide also pushed pre-payment financial penalties that boosted profits and kept people from refinancing out of the loans.

The lawsuit singles out a variety of “teaser rate” loans that Countrywide and other lenders specialized in as housing prices rose. Those offered interest rates as low as 1 percent.

The state said many borrowers mistakenly assumed those were permanent rates because Countrywide often offered that impression. Borrowers then quickly found themselves making higher monthly payments than they expected or could afford.

He gets even more detailed on his own press release where he takes the company to task for “Hiding total monthly payment obligations by selling homeowners a second mortgage in the form of a home equity line of credit,” and “Making borrowers sign a large stack of documents without providing time to read the paperwork.” 

 Oh, it gets interesting every day in the State of California!

I should have noticed something was up when I saw them pulling down the Countrywide Loans signs in Benicia’s Southampton Plaza. I just saw them put up WaMu posters this weekend. That shouldn’t last long either!

Public transportation is back! According to various reports, the high gas prices are causing people to rethink their gas consumption — including thinking about moving closer to their jobs in urban centers. There’s even reports of people in border towns going to Mexico for gas, of course the stealing of gasoline and even Realtors dealing with the higher prices. But the Inland Empire in SoCal may be hardest hit, so says the WSJ:

Even though falling prices in California’s Inland Empire are making homes more affordable, rising gasoline prices are crushing hopes of a housing recovery in this area, east of Los Angeles.

Deutsche Bank analyst Nishu Sood estimates that gas expenditures in the Inland Empire have increased to $1,322 a month from $534 a month in 2003 among local residents who commute about 120 miles a day, round trip.

Mr. Sood says soaring gas prices are hurting home builders that generated much of their profits during the housing boom by building in the far-flung suburbs of California. But it’s also hurting builders in non-bubble markets in Texas and Atlanta with long commutes.

And from the buying $2.66 a gallon gas in Mexico story in the New York Times, where people dodge bullets from drug cartels for cheaper gas:

Mr. Terrazas, a 48-year-old maintenance worker, is among a flow of American “gas tourists” who, Mexican service stations near the border with El Paso estimate, account for a 50 percent surge in gasoline sales here over the last several months. (Similar increases are reported along the border all the way to Tijuana.) Even the Mexico Tourism Board is promoting the journey.

I got this from Columbia TriStar Motion Picture Group/Sony Pictures today:

Hancock’s Helping Hand Mortgage payoff contest was inspired by some marketing/PR executive after watching the network news the film.  Hancock is a misunderstood superhero who is encouraged to improve his public image when he meets a good-hearted oh, yeah, definitely in PR public relations executive.

Columbia Pictures will pay off the mortgage debt of one deserving family  with a grand prize worth up to $360,000.  To enter and find the official contest rules, log on to www.Hancockmovie.com.  Entrants will write a 200-word essay explaining why they are deserving of the grand prize.  

OK, couldn’t Columbia Tri-Star afford a few $500,000 mortgages? I mean one $360,000 mortgage is nice but it’s a bit low for the Bay Area (or Hollywood, for that matter.)  More rules:

How is that mathematically possible? Can anyone tell me? Anyway, yet another shameless promotion by a movie studio? Yes. Helpful? No.

James Hagerty in the WSJ today writes, “No matter what Congress does, some cities will end up owning more crumbling houses as owners fail to pay taxes and do their maintenance. Taxpayers will foot the bill. The bigger question is: How can cities quickly get this property back into productive use? I have to say he’s onto something. Here’s more:

When Carl Greene became executive director of the housing authority in 1998, he toured some of the 8,000 or so single-family homes then owned by the agency. Some homes had become “crack” houses used by drug dealers. Others were what he calls “jack houses” — ones so rickety that their floors had to be held up by jacks.

Over the past decade, Mr. Greene’s agency has knocked down hundreds of jack houses, renovated others and built new homes for sale or rent to low-income people. But it has been a long slog, and the housing authority still owns around 1,000 vacant single-family homes.

The housing bill being considered by the Senate includes $4 billion to be used to purchase foreclosed homes for rehabilitation or redevelopment in an effort to “stabilize” neighborhoods. The House has passed a similar bill that would provide $15 billion of federal grants and loans.

Of course, the hue and cry will be, “That’s our taxpayer dollars!” but as Hagerty said above, your tax dollars are going to be spent — regardless. Why not use what already exists rather than building more homes? However, there has to be a balance of homeownership and renting, as Philadelphia also found out when it took over the single-family homes and created “projects.”

(In the 1970s) the Ludlow neighborhood ended up with far too many subsidized renters and not enough owners,says State Sen. Shirley Kitchen, who represents the area. Owners tend to take better care of property and push harder for civic improvements, such as better schools and policing. Marvin Louis, a community organizer in Ludlow, says the housing authority became “the main slumlords here.”

I think the whole idea should be getting away from the idea of slumlords and towards the idea of affordable housing. And in the Bay Area, that also means moderate income housing, not only low-income.

A few weeks ago, I talked about how Nehemiah Corp. was getting a lot of heat from the feds for getting people into homes with little if any down (by having the seller pay the down payment.) In today’s Wall Street Journal, it’s revisited again, but home builders are also being taken to task. Some, including Nehemiah Corp.’s CEO, feel all the blame on programs like his is “scapegoating.” Read on:

The FHA estimates that down payments provided by nonprofit groups account for 34% of all 200,000 loans backed by the FHA so far this year, up from 18% in all of 2003 and less than 2% in 2000. And the agency says that borrowers are two to three times as likely to default on their payments when they receive a down payment from a nonprofit.

In current versions of the FHA modernization bill, the Senate would eliminate the down-payment programs and a vote on the bill is expected this week; the House version keeps the program in place. Rep. Frank said in an interview that he believed a compromise could be reached with the Senate that would preserve the program but with tougher lending requirements. “No one is talking about leaving it untouched,” he says.

Personally, if I hear someone utter the words “They need skin in the game” I will kick them. I think that only applies to people walking away, and as I’ve said before, most people are dragged kicking and screaming from their homes. How you can afford it should be based on your salary/paycheck, not whether or not it’s morally beneficial to save $10,000.

As always, comments are always appreciated.