Definition of Stupidity

Unfortunately, this represents most of America.

One wonders if these folks were saying "bitter renters" on message boards when they put down the deposit.

one guy is a broker and has 2 kids and a wife. no excuse for blowing entire savngs on an apartment like that. I will say that that Maxwel Place project had preety significant delays. I'd advise this guy to lawyer up.

A broker! Of course... nobody called the RE market more incorrectly than the brokers!
(perfitz the obvious exception, of course)

If nothing else, the guy was a moron for not properly diversifying. Same reason a Wall Streeter doesn't put all his money in the stock market, or anyone at a company putting all their money into company stock.

That was dumb, even if you thought the market was going up.

it also says the guy borrowed against the equity in his existng home t use as part of the down paymen on the new place (which he lost). my god.

Do you really need to pile on somebody who lost their life savings and has children to support?

Actually yes. Its a cautionary tale. No one should be that stupid.

Malthus: My thoughts exactly.

What's the main difference between a family that bought their dream home in 1998 and one that bought their dream home in 2008? Ten years.

The last person in on a Ponzi scheme or a bubble isn't necessarily the dumbest, just the unluckiest.

You forgot the other key differences.

20% down vs. 5% down, traditional loans vs. liar loans, folks buying for live vs. "investment".

Those things are exactly what made it a ponzi scheme.

totallyanonymous: True, no one should be that stupid, but lots of people were. And if a few things had broken differently timing-wise, my family could have been among the collateral damage from this bust too.

That doesn't really describe most of the folks in that article.

10022: You're oversimplifying. We were underwriting NINAs, NegAms and 125 LTVs in SoCal in 1992. There is very little that is new under the sun.

I am losing money in this housing market too but the difference is that I could afford my house. The moral of this psyched up recession 2 years out i this: Do not give loans to deadbeats. Period.

Hey I just lost 5 grand in options expiration. Can I piss and moan that I didnt know the risks? Please. Anyone who did what these folks did knew or should have known. And agreeing to waive a financing contingency on a $1MM asset is equally idiotic.

If I knew about your losses on the options, I wouldn't anonymously call you an idiot or gloat over your losses either.

You should have becase I could have exercised them Friday at a loss and sold them today for a profit. But I dont go broke losing 5 K. If you would go broke losing a deposit without a financing contingency, thats pretty dumb, especially for a broker who purportedly undersands real estate financings.

come on. I feel bad for this guy but it doesnt detract from the stupidity.

"10022: You're oversimplifying. We were underwriting NINAs, NegAms and 125 LTVs in SoCal in 1992. There is very little that is new under the sun. "

Inferring that the makeup of mortages in the two periods is the same would not be accurate.

And, folks who couldn't afford what they were buying 10 years ago vs now are still people who SHOULD NOT HAVE BOUGHT.

"If I knew about your losses on the options, I wouldn't anonymously call you an idiot or gloat over your losses either. "

If it was your entire life savings, or your kid's education fund, I might... particularly if options owners had been saying "bitter non-options owners" for the last year.

totallyanonymous: I agree with you there. They paid their money, took their chances and lost their shirts. I sympathize with any family that loses their savings; but my sympathy hardens pretty fast when they start blaming somebody else for the loss, or asking "Hey, where's MY bailout?"

My point was simply that the main difference between late-bubble buyers and those who bought earlier was life circumstances, not market acumen.

West81--i agree. Its amazing that just insisting on a financing contingency would have saved hese folks their financia lives. If a seller will not agree to a financing contingency, simply do not buy. i recall the froth of the mid 2000s and am exremely grateful that my lowball "best and final" offers circa 2007 were snickered at.

Harsh Crowd.
You are on this site because you are interested in real estate and realize that purchases/sales of this magnitude require large amounts of research and homework. That what I'm doing here. Most of humanity does not present with the brain power, aptitude or, ability to attend to such detail. They work hard and want to own homes. I have heard this like a broken record,'I relied on the advice and concil of experts'. Not self proclaimed experts but, State Licenced experts who turned out to be self serving greedy bafoons. If you had a serious health issue would you not seek expert advice from a state licienced doctor? You might even take the advice on Medical care without a second thought. Why should the C trackers feel any different about the health care advice as opposed to financial or RE advice. Does everyone have to become an afficinado of everything? Why would a goober not depend on the originater of a loan to examine their ability to pay? This is how most Americans live their lives...taking direction from others. The SE crowd is not your typical American, we seem to be more intense, aggressive, unforgiving and critical.
That's why it feels like home to me!

"The SE crowd is not your typical American, we seem to be more intense, aggressive, unforgiving and critical."

That is because most people here are anonymous and can hide behind their keyboards like a bunch of cowards. If we were all in a room together, most people would not say 99% of the stuff they type here because they would not have anything to hide behind.

i am not anonymous. I am totally anonymous!

i still cannot get over being stupid enough to agree to sign a contract with no financing contingency if you don't have the cash on hand. for that matter, i also cannot get over being stupid enough to buy unbuilt real estate with no personal control over the finished product. kinda like going to a contractor for a $500 K renovation and giving him the entire sum up front. no one is stupid enough (I think) to do that so why buy unbuilt buildings with no rights? incrediable.

{{i agree. Its amazing that just insisting on a financing contingency would have saved hese folks their financia lives. If a seller will not agree to a financing contingency, simply do not buy.}}

As I mentioned in the previous thread on this subject we walked away from a deal last summer because the seller refused a mortgage contingency. I actually remember getting into a heated argument with the broker, who kept insisting that mortgage contingencies were highly irregular and simply weren't 'done', and that we would 'lose the apartment' if we didn't cave.

Well, we 'lost' it alright, and are are now laughing all the way to the bank, so to speak.

"That is because most people here are anonymous and can hide behind their keyboards like a bunch of cowards. If we were all in a room together, most people would not say 99% of the stuff they type here because they would not have anything to hide behind. "

Agreed.

We would not have had a year of "you stupid bitter renters" and now the "told you so, putz bubble buyer" responses now that the crash is officially in.

But, since we've had equal measures of both, its a little late to start complaining about that now...

The point is they are not anonymous. I know nobody forced them to be in the Times and some of them are more sympathetic than others, it just seems wrong to kick em when they're down. I'll stop my sermon now.

yes...precisely...no one forced them to be in the times...no one forces the family members of victims to appear on tv...no one is kicking them...we are not casting aspersions on their families, just their intelligence. lets stop coddling everyone who does something stupid. i am perfectly comfortable with feeling bad about their situation but also recognizing what caused it.

Yeah, I'm with cc.

That they chose to be in the times... I think they lost the right to not have their brains questioned.

I feel bad for them, but that feeling is mitigated by 1) he is in the profession and 2) they did not ask for a mortgage contingency when there was such a gap between signing and closing. I think it's one thing not to have a mortgage contingency (not that I would ever sign a contract without one, in any market) because you expect you will close relatively soon, but to buy new construction and have months or years before closing and not have the mortgage contingency, especially when you use all your savings and take out the equity of your home is absolutely irresponsible.

Absolutely.

Remember, this ass asked people to trust him for his RE advice. It was his fiduciary duty as a broker.

If he was a moron for his own purchases, think of how many other people he screwed!

I just don't understand Real Estate Brokers. I really don't. It's like these people are from a different planet or something. The fact that they get 6% of a a fairly large transaction for almost NO WORK and BAD or VERY BAD advice is beyond my meager abilities to comprehend. We sorely need a disruptive business model. Like the run discount brokers gave to the financial advisor firms years ago. Street Easy is a start in terms of information, but we need a catalyst. Thoughts???

Foxtons went out of business because they were frozen out of the MLS. Broker cabal. Most rank and file brokers are idiots. Makes the good ones look bad.

I don't think any other city in the US works the same way. No broker's fees in SF. Always seemed anticompetitive to me.

Absolutely... we have a cartel here.

Scummy politicians (same ones who have 5 RE apartments) allow them to get away with this because they hand 'em money in return.

Brokers are completely useless. I urge folks to lobby their assemblymen to clean up the etire industry. Its chock full of dead weight.

Charlie Rangel. Lets lobby his fat black ass.

It is funny, NYC, in theory the capital of capitalism, the champion of free markets... but our government is completely the opposite. We have protectionism in real estate, as noted above. We have protectionism in healthcase, where efficient challengers in healthcare are denied licenses because they will take away profits from hospitals (front page story in this month's crains). We have the UFT in education, which is as corrupt as it gets. 25% of our employed population work for unions that negotiate with the politicians they got elected (and then sets rules like how PERFORMANCE can't be used in determining whether you get tenure or not).

Sounds like a contradiction, but its actually the cause. Windfall profits from Wall Street and the super high biz taxes have paid for the corruption.

But when Wall Street falls back, things start crumbling pretty dramatically.

I'm actually scared what the next few years will bring. Not so much nationally, but with the fact that NYS is simply going to have to cut back 75% of its budget, and the majority of that is healthcare and education, where much of the corruption is already locked in.

> I urge folks to lobby their assemblymen to clean up the etire industry

I wish that worked.... but you're talking about asking these guys to bite the hand that feeds them.

The assembly is as corrupt as it gets. We're worse than Arkansas and all the places we make fun of.

I want Spitzer back. So he was bunnilinging hookers on our dime. He wasn't getting a bonus for it. He'd root out the brokers. I'm sure he and his dad hate them too.