Comments on: Study finds more millionaires in Bay Area http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/ SF Bay Area Real Estate, Home Price and Mortgage Insanity Blog - Burbed.com Wed, 17 Mar 2010 23:05:37 -0700 http://wordpress.org/?v=2.9.2 hourly 1 By: nomadic http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48702 nomadic Sat, 18 Jul 2009 00:43:40 +0000 http://www.burbed.com/?p=3771#comment-48702 <i>Hm, doesn’t that defeat the point of non-recourse?</i> It just depends whether they've owned long enough to refi or take out a HELOC. I'm sure there are plenty of fools that the banks could chase after. Hm, doesn’t that defeat the point of non-recourse?

It just depends whether they’ve owned long enough to refi or take out a HELOC. I’m sure there are plenty of fools that the banks could chase after.

]]> By: Marty McFly http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48699 Marty McFly Fri, 17 Jul 2009 23:47:46 +0000 http://www.burbed.com/?p=3771#comment-48699 If all real estate debt was non-recourse, that would be a sweet ATM. Why wouldn't one just take the maximum amount of cash out and walk-away? If all real estate debt was non-recourse, that would be a sweet ATM. Why wouldn’t one just take the maximum amount of cash out and walk-away?

]]> By: R http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48698 R Fri, 17 Jul 2009 23:43:10 +0000 http://www.burbed.com/?p=3771#comment-48698 "Hm, doesn’t that defeat the point of non-recourse?" No, CA's non-recourse rule is just designed to protect buyers in the purchase of their primary residence. It is not intended to allow investors, speculators, or idiots that choose to use their home as an ATM to skate on their loan obligations when they decide repaying their debt is no longer convenient or conducive to their lifestyle. “Hm, doesn’t that defeat the point of non-recourse?”

No, CA’s non-recourse rule is just designed to protect buyers in the purchase of their primary residence. It is not intended to allow investors, speculators, or idiots that choose to use their home as an ATM to skate on their loan obligations when they decide repaying their debt is no longer convenient or conducive to their lifestyle.

]]> By: CB http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48697 CB Fri, 17 Jul 2009 23:00:57 +0000 http://www.burbed.com/?p=3771#comment-48697 I'd find more satisfaction from seeing the bank's executives and shareholders wiped out, but that sure as hell ain't going to happen. How about for every foreclosure a lender drops within a 2 mile radius of your underwater home, 10% of that recourse debt is forgiven when you walk. I’d find more satisfaction from seeing the bank’s executives and shareholders wiped out, but that sure as hell ain’t going to happen.

How about for every foreclosure a lender drops within a 2 mile radius of your underwater home, 10% of that recourse debt is forgiven when you walk.

]]> By: burbed http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48696 burbed Fri, 17 Jul 2009 23:00:26 +0000 http://www.burbed.com/?p=3771#comment-48696 <i>Take for example a lot of the six figure code monkeys in Silicon Valley that used similar I/O and option-ARM loan instruments during the run up. If these folks start walking away from some of their obligations, they will likely still be commanding premium sized paychecks that the banks can go after.</i> Hm, doesn't that defeat the point of non-recourse? Take for example a lot of the six figure code monkeys in Silicon Valley that used similar I/O and option-ARM loan instruments during the run up. If these folks start walking away from some of their obligations, they will likely still be commanding premium sized paychecks that the banks can go after.

Hm, doesn’t that defeat the point of non-recourse?

]]> By: Pralay http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48694 Pralay Fri, 17 Jul 2009 21:53:17 +0000 http://www.burbed.com/?p=3771#comment-48694 Although it explains why so many flat screens are selling in craiglist, but RealEstater never had a flat screen because he is priced out for real estate investment after procrastinating for <a href="http://www.burbed.com/2008/03/14/spring-bounce-is-here-5-monthly-appreciation-is-back/#comment-14336" rel="nofollow">more than a year</a>. He has a property</a> what he calls investment <a href="http://www.burbed.com/2009/03/18/375sqft-with-3-bedrooms-in-san-francisco/#comment-41496" rel="nofollow">"equivalent of 3 median priced properties"</a>, but unfortunately all the renters (his trophy wife and children) don't pay him rent <i>equivalent to flat screen</i>. :( Although it explains why so many flat screens are selling in craiglist, but RealEstater never had a flat screen because he is priced out for real estate investment after procrastinating for more than a year. He has a property what he calls investment “equivalent of 3 median priced properties”, but unfortunately all the renters (his trophy wife and children) don’t pay him rent equivalent to flat screen. :(

]]> By: BuyersAreIdiots http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48693 BuyersAreIdiots Fri, 17 Jul 2009 21:35:44 +0000 http://www.burbed.com/?p=3771#comment-48693 <i>Don’t you mean that would be a satisfying scenario?</i> Well, that too. :-) I got dibs on Real Excreter's flat screen when it goes up for public auction! Don’t you mean that would be a satisfying scenario?

Well, that too. :-)

I got dibs on Real Excreter’s flat screen when it goes up for public auction!

]]> By: CB http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48691 CB Fri, 17 Jul 2009 20:46:31 +0000 http://www.burbed.com/?p=3771#comment-48691 <i>So that will be an interesting scenario.</i> Don't you mean that would be a <i>satisfying</i> scenario? So that will be an interesting scenario.

Don’t you mean that would be a satisfying scenario?

]]> By: BuyersAreIdiots http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48690 BuyersAreIdiots Fri, 17 Jul 2009 19:32:50 +0000 http://www.burbed.com/?p=3771#comment-48690 R, My suspicion as to whether or not the banks go after recourse will vary from situation to situation. In the subprime realm, I doubt if they will decide to go after that pink elephant. However, in the Alt-A and prime categories, a lot of those folks will have meat that can be picked. Take for example a lot of the six figure code monkeys in Silicon Valley that used similar I/O and option-ARM loan instruments during the run up. If these folks start walking away from some of their obligations, they will likely still be commanding premium sized paychecks that the banks can go after. So that will be an interesting scenario. R,

My suspicion as to whether or not the banks go after recourse will vary from situation to situation.

In the subprime realm, I doubt if they will decide to go after that pink elephant. However, in the Alt-A and prime categories, a lot of those folks will have meat that can be picked.

Take for example a lot of the six figure code monkeys in Silicon Valley that used similar I/O and option-ARM loan instruments during the run up. If these folks start walking away from some of their obligations, they will likely still be commanding premium sized paychecks that the banks can go after. So that will be an interesting scenario.

]]> By: anon http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48689 anon Fri, 17 Jul 2009 19:15:09 +0000 http://www.burbed.com/?p=3771#comment-48689 "then you would have to count the illiquid assets (like home equity) they excluded, no?" Of course... “then you would have to count the illiquid assets (like home equity) they excluded, no?”

Of course…

]]> By: R http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48688 R Fri, 17 Jul 2009 19:00:53 +0000 http://www.burbed.com/?p=3771#comment-48688 Speaking of non-recourse debt, it'll be curious to see if any of these banks ever decide to come after people on their recourse debt. Only money used to purchase your residence is non-recourse. Refi money, HELOCs, former purchase money on a home that is now being rented out, etc. is all recourse but banks rarely come after the borrower, probably because they are too busy right now. Probably also because it would force the owner to declare bankruptcy. However, it'll be interesting if banks decide to in a year or two that they want to pursue borrowers on recourse debt. A lot of people who think they're free because their property was foreclosed are really not. The bank could decide it wants its money after all. I doubt it'll happen, but it could. Speaking of non-recourse debt, it’ll be curious to see if any of these banks ever decide to come after people on their recourse debt. Only money used to purchase your residence is non-recourse. Refi money, HELOCs, former purchase money on a home that is now being rented out, etc. is all recourse but banks rarely come after the borrower, probably because they are too busy right now. Probably also because it would force the owner to declare bankruptcy.

However, it’ll be interesting if banks decide to in a year or two that they want to pursue borrowers on recourse debt. A lot of people who think they’re free because their property was foreclosed are really not. The bank could decide it wants its money after all. I doubt it’ll happen, but it could.

]]> By: steve http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48687 steve Fri, 17 Jul 2009 18:56:50 +0000 http://www.burbed.com/?p=3771#comment-48687 <i>That is not relevant. What matters is assets minus liabilities.</i> then you would have to count the illiquid assets (like home equity) they excluded, no? a cool mil ready to invest seems just as good to me as any other arbitrary definition. That is not relevant. What matters is assets minus liabilities.

then you would have to count the illiquid assets (like home equity) they excluded, no? a cool mil ready to invest seems just as good to me as any other arbitrary definition.

]]> By: anon http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48686 anon Fri, 17 Jul 2009 18:41:08 +0000 http://www.burbed.com/?p=3771#comment-48686 "No, I am saying if you have $1 million in ‘investable assets’, and you default on your house debt in a non-recourse state, you will still have your $1 million." That is not relevant. What matters is assets minus liabilities. “No, I am saying if you have $1 million in ‘investable assets’, and you default on your house debt in a non-recourse state, you will still have your $1 million.”

That is not relevant. What matters is assets minus liabilities.

]]> By: BuyersAreIdiots http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48685 BuyersAreIdiots Fri, 17 Jul 2009 18:33:19 +0000 http://www.burbed.com/?p=3771#comment-48685 More good news: http://www.latimes.com/business/la-fi-caljobs18-2009jul18,0,6076386.story California unemployment rate is now 11.6%. Clearly, we are well on our way to a recovery. Buy now before its too late! More good news:

http://www.latimes.com/business/la-fi-caljobs18-2009jul18,0,6076386.story

California unemployment rate is now 11.6%. Clearly, we are well on our way to a recovery. Buy now before its too late!

]]> By: aaa http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48684 aaa Fri, 17 Jul 2009 18:31:07 +0000 http://www.burbed.com/?p=3771#comment-48684 No, I am saying if you have $1 million in 'investable assets', and you default on your house debt in a non-recourse state, you will still have your $1 million. No, I am saying if you have $1 million in ‘investable assets’, and you default on your house debt in a non-recourse state, you will still have your $1 million.

]]> By: anon http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48683 anon Fri, 17 Jul 2009 18:14:50 +0000 http://www.burbed.com/?p=3771#comment-48683 You're saying that because it is a non-recourse loan, you do not calculate it on your balance sheet? Wrong. Try again. You’re saying that because it is a non-recourse loan, you do not calculate it on your balance sheet?

Wrong. Try again.

]]> By: aaa http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48682 aaa Fri, 17 Jul 2009 18:12:52 +0000 http://www.burbed.com/?p=3771#comment-48682 #5, home debt does not matter because many states are non-recourse, so your financial assets can't be harmed regardless of what you owe on your house. #5, home debt does not matter because many states are non-recourse, so your financial assets can’t be harmed regardless of what you owe on your house.

]]> By: anon http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48681 anon Fri, 17 Jul 2009 17:50:09 +0000 http://www.burbed.com/?p=3771#comment-48681 What a BS study: "The study defined millionaires as having $1 million worth of “investable assets,”" What the hell?? This is quite possibly the most meaningless study I have ever seen. Did they subtract what people actaully owe on their homes? Obviously not. Not only that, the bay area is still playing 'let's pretend' in terms of their property values... Fools. What a BS study: “The study defined millionaires as having $1 million worth of “investable assets,””

What the hell?? This is quite possibly the most meaningless study I have ever seen. Did they subtract what people actaully owe on their homes? Obviously not. Not only that, the bay area is still playing ‘let’s pretend’ in terms of their property values…

Fools.

]]> By: aaa http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48680 aaa Fri, 17 Jul 2009 17:47:31 +0000 http://www.burbed.com/?p=3771#comment-48680 The study did not include home equity...it apparently was cash, stocks/bonds, 401(k), etc. The study did not include home equity…it apparently was cash, stocks/bonds, 401(k), etc.

]]> By: cardinal2007 http://www.burbed.com/2009/07/17/study-finds-more-millionaires-in-bay-area/#comment-48679 cardinal2007 Fri, 17 Jul 2009 17:45:38 +0000 http://www.burbed.com/?p=3771#comment-48679 It sounds like the study is counting net worth, not just liquid assets, you would think the numbers would be very high then since you get to combine 401k, home equity and other things. Intersting how burbed removed the parts of the article were people where disagreing with the results saying that home equity and stock market losses should've made the numbers decrease. It sounds like the study is counting net worth, not just liquid assets, you would think the numbers would be very high then since you get to combine 401k, home equity and other things.

Intersting how burbed removed the parts of the article were people where disagreing with the results saying that home equity and stock market losses should’ve made the numbers decrease.

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