Thanks to the ML Implode-O-Meter for this gem that I previously missed:
Urgent Policy Notification:
California Purchase Money Business
Effective Wednesday, October 31st 2007 Citi Home Equity will discontinue lending on all Purchase Money transactions for properties in California.
Impact to pipeline applications:
- California Purchase Money applications that have received Conditional Approval or Final Approval will be honored
- California Purchase Money applications that have not received any level of approval and are in process will be declined.
- Operations will actively work the list of impacted applications
All other policies will continue to apply.
Note: Until our website is updated, brokers will have the ability to submit applications for Purchase Money transactions in California. These applications will be declined.
This Policy only affects applications where the subject property state is California.
Pretty much speaks for itself. How many others will be shutting off funding for buying in California? Kinda makes sense when sales have already fallen so much there isn’t much business here anyway.
Thank you for posting.
Good news or bad one? It depends on which side of the table you sit on, right?
Anyway, it is a good piece of info for us to act on.
Am I banned? Why can’t I respond to all of the attacks from people 2 posts ago?
I do not ban people unless they personally attack people. Your comment posted. I just read the response and thought it was well formulated.
You need to click the “refresh” button on your browser to see the comment posted sometimes.
Chuck Ponzi
This is probably a precursor to the entire State of California being locked out of mortgages.
Donna
This is great news for people sitting on the sidelines with plans to buy sometime in 2009-2012. Anything that turns off the money spigot will drive down prices. In the long term, banks will start issuing again once prices drop to the equilibrium points of “fundamental values” (i.e. rational relation to average household incomes, comparable rentals values, ect.)
I’ve been reading your blog for the last year and a half…so I just want to say thanks for all the work you’ve put in.
Someone has to lose for others to gain.
So many suckers bought homes in the last few years..Too bad for them..really good for those that are prepared.
From my vantage point (Yorba Linda, CA), we are no where near a bottom in the housing prices, especially at the upper end! Case in point, a 3 year old McMansion in Yorba Linda with an asking price of $1.9 million will set the purchaser back around $13K per month with 20% down and a $1.5 million jumbo loan, if you can get one. The same property is also available for lease for $5,600/month. I believe the monthly outlay of homeownership needs to come back into line with monthly rental prices before we see a bottom. Patience!
I’m with eddiemichaels on this one…also a Yorba Linda resident and seeing houses sit so long with all but one reducing their price. It’s now turned into a squeeze to see who will finally bust before loosing their home. What makes one think that anyone could buy the home at or above the price they paid with the situation their in??? No more shady lending to get people in and with what loan originators that are left, MOST people (other than those that did sell earlier) will not be able to provide the required down payments let alone the higher payments being driven by higher property taxes due to the overstated sales price. Waiting for the all cash deal…..
Chuck Pyramid Scheme – Just wanted to let you know…I sit in a lot of economist forecast sessions and everything I have heard falls directly in line with what you have been saying for as long as I have been reading. “Home prices need to fall an additional 20% over the next 3 years, front end loaded,” before the economy can to return to normal. Banks have been funding people’s spending so rampantly since 2004 that people overspent. Now there is going to be a credit tightening like never before; credit cards are not going to raise limits, helocs are gone – people are going to have to earn money to pay for what they buy. And to sum up people are spending 20% more than they make, I would be willing to bet that number is higher in So Cal.
Thanks for your blog. Keep it up.