Operation Push Back

Wheres the Bottom

2010-10-12T09:57:00.000-07:00

Back in action.....

The road to ruin.....

2008-12-07T09:15:00.000-08:00

http://www.oregonlive.com/business/index.ssf/2008/12/road_to_ruin_happy_valley_stre.html

Denial for a year....

2008-12-04T09:36:00.000-08:00

Builder guy, high end luxury. In denial for the last year. Homes dropping 1m from original price.
Now short sale guy. Still using agents from yesterday that cannot sell. Still going to do it his way.
Already looking at BK. 12 mos of counciling and the denial was so strong he hits the wall.Has not even made 2 payments late yet.

From: XXXXhomes@aol.com
Sent: Tuesday, December 02, 2008 12:32 PM
To: Elvis
Re: Operation Push Back
Trying hard not to fold. Need to get the CDM house sold. Talked to my old neighbor, today about the inevitable, Bankruptcy. Are you moving in next to your old pal?

Kimball Homes.......Gone

2008-12-04T09:34:00.000-08:00

http://www.builderonline.com/business/breaking-news-kimball-hill-homes-will-shut-down.aspx?cid=BLDR081208002

Introducing Waluga...

2008-11-19T13:17:00.000-08:00

and another one bites...another one bites...another one bites the dust

2008-11-19T11:27:00.000-08:00

Breaking News: Village Homes of Colorado Files Chapter 11

http://www.builderonline.com/debt/village-homes-of-colorado-files-chapter-11.aspx?cid=BLDR081107002

Introducing: Cash in on Salem

2008-11-14T14:28:00.001-08:00

The Royal Flush...

2008-11-13T18:49:00.000-08:00

Introducing: Wheres the Bottom?

2008-11-11T09:20:00.000-08:00

Portland-area prices down 7.6 percent

2008-10-28T09:15:00.000-07:00

The bottom is still to come.....
http://www.oregonlive.com/business/index.ssf/2008/10/portlandarea_prices_down_76_pe.html

Depressed

2008-10-17T11:21:00.000-07:00

From: Elvis
Sent: Thursday, October 16, 2008 4:05 PM
To: The Mom
Wait.
We owe plenty of lumber guys.
10k down and 3k a month.
How about NO.
What is your attorney thinking?
We owe millions, have zero.
Fuck those dudes.
NO means no.
Unless you are missing something, I say either your attorney is collecting from them or is on the take.
I have a free word for you to use.
No.

From: The Mom
Sent: Thursday, October 16, 2008 3:22 PM
To: ElvisSubject: Depressed
K so.
I’m really depressed today. I feel like there is a ton of bricks sitting on my chest.
So I go to arbitration to settle a stupid lumber bill dispute. A $20K bill has now turned into $40. After arbitration, I lose, but get Ray’s name removed from the case. They also had to remove their lis pendens. Big deal.
So rather than wrack up more attorneys fees, and now that I still have inventory, and probably won’t be filing chapter 13 in January as planned, my attorney wants to settle.
So, they want 10K down and monthly payments of 3K and a trust deed against my house, signed by me and Ray……..
My money maker is still broken.
Isn’t it true that if 90 days go by and the debt is not repaid they can foreclose? My attorney says that takes many more months to make happen. I don’t know who or what to believe…………………..
Was happy til today.

Another one bites the dust...

2008-10-16T14:02:00.000-07:00

Click on doc for larger image:

Bankruptcy

2008-10-16T09:11:00.000-07:00

From: ElvisTo: XXXXXX@aol.com
Sent: Wednesday, October 16, 2008 5:00 AM
Subject: Bankruptcy
Don’t avoid me.
When you are faced with becoming a dirtbag, I guess you need to sit down with dirtbags to learn. Sorry for being frank…..Fritz, but I get worried when you talk this way.
Let’s break down the problem. Let’s get the right surgeons on the case. Let’s apply the right tools. Nothing worse than getting a checkup, having the nurse (after sitting in the waiting room for hours…) tell you YOU HAVE FINANCIAL CANCER…
Then finding out the person they brought in to operate on you is the same guy that was working at the gas station last week. And his tools? Precision cutting, exacting devices? No, that shit head has a chain saw to operate. You are NOT stewed; you are just stuck in the same market as the rest of us. We ran out of money before the world did, but when we hit zero, and we are all stuck in the market, we are all faced with the same problems. Careful surgery with professionals is the remedy. You will have to go through surgery, then follow with Chemo, and that my friend will make you sick, your hair will fall out, and you will need time to heal. Be good to the family, especially now. Take time to play, talk, plan and become closer to friends and relatives. They have to like you even in tough times!! Go to http://www.operationpushback.com/ and READ all pages. They are humorous, some are for entertainment and parody. Some are very real experiences. All are factual. Go ahead and tell your story, get mad, sign in fritz, we don’t need your name, we need your story. Head high soldier, we are only at Half Time. Round 4 and 5 are coming. We are fighting Mike Tyson. That dude knocked people out in round one.
He hits hard.

From: XXXXXX@aol.com
Sent: Wednesday, October 15, 2008 5:06 PM
To: Elvis
Subject: Bankruptcy
Sorry for the late reply. I have not ever dreamed about bankruptcy, let alone looked it in the eye and know I am. I see where I went wrong but it seems to late to do anything about it. You seem to be able to look adversity in the eye on a daily bases and grow from it, I can not. It seems unfair that this can happen to anyone, let alone myself, but it is. Hopefully the up-coming months will not cause me to become stronger not weaker.Fritz

Bad Bank Behavior...

2008-10-09T14:25:00.000-07:00

Another story now.
X-Bank takes us into Receivership and hires the very realtor we deemed incompetent to sell.
The need to screw partners, subs, and their want to develop 12 acres of solid basalt rock in a suburb rather than wait longer and work with us took over.
Banks eat people.
Another story.
X-Bank, set to foreclose, did not even blink at taking the lots.
They took them knowing we owed 160k each, and we had an offer for 950k each.
Now they have them, they are going to work with the same Realtors, same buyer?
What the hell? And of course the buyer will come with a lesser offer, and they will take it.
They have no regard to what our deficiency will be as long as they call the shots.
Bad bank behavior.
I want to sue.
Banks are now starting to increase their urge to foreclose or deed in lieu on builders.
They are hiring subs and builders in a manner where they will be the seller and convey the property.
Who will be checking on their builders risk insurance?
Liability?Permitting?Contracts?CCB licensing?Bonding?
Who regulates the banks insatiable panic to use or misuse the remedies given in a poor manner?
If a bank does this they should be denied judgments and forced to build houses with the same laws and rules we are.
They cannot be the seller of multiple homes without being licensed and held to the same standards.

Halloween is going to suck this year...

2008-10-03T11:21:00.000-07:00

Fortune Cookie message for today:

2008-10-01T13:20:00.000-07:00

Old relations will die.
You will most likely disappoint lenders, investors, subs or someone along the way.
All opportunity comes from new relationships. You must let the old ones rest or go in order to meet new people that will ultimately lead to new ventures. Let it happen naturally but do not fight to please people that will never respect your efforts.

End of first ever poll question:

2008-10-01T12:43:00.000-07:00

We have decided to prematurely end the poll: Do you trust your banks?
The poll was set for 100 days and the goal was to get at least 100 votes tallied.
With 29 days left and a total of 56 votes it has become apparent that the majority of people out there today do NOT trust their banks.
Final Tally:
46 votes (No - We do not trust our banks)
6 votes (Yes - we do trust our banks)
We will now be starting a new poll.
Please feel free to email me about poll questions; or if you have any questions about the blog in general.
Thanks to everyone for participating.

The Drive to 100

2008-09-24T09:19:00.000-07:00

I would like to thank everyone for voting - all 50 of you.
Its a magic number, but the goal is 100. I know its not a dynamic question - it was more a way of being able to track and see if anyone is actually coming to the blog. I have considered extending the time limit, but will hold back for now. Please enjoy the site, read some posts, and make comments. Most importantly - Please vote. Help the drive to 100.

2008-09-22T09:37:00.000-07:00

From: Elvis [mailto:wheresthebottom@gmail.com]
Sent: Monday, September 22, 2008 10:07 AM
To: 'The Mom'
Subject:What am I doing now?
Ok lady, you are on the road to recovery.
When you owed as much as we did we filled out 50 of those packets or more.
The phones ring 18 hrs a day.
Next people will be killing a rain forest worth of trees to send junk mail on bankruptcy, tax, short, investor, realtor, nit wits.
Your phone will not stop for a while.
Let X handle the banks, there is nothing more you can tell them or do for them.
No more working for free. Use the homes to your advantage and as leverage.
Keep your head straight, and for Christ’s sake finish those packets.
No hiding, no tricks, and if someone suggests you fraud just to save a thing, fuck them, it just aint worth it.
You will be surprised by the time the real estate is gone, many of the collection efforts will have gone with them.
You are smart, you will have more things.
Don’t forget family, they are the backbone of your survival.
A soldier can only fight if they have something to fight for. Your family looks to you for leadership and needs you strong.
When the coast is clear, then and only then will the coast be clear.

From: The Mom [mailto:themom@verizon.net]
Sent: Monday, September 22, 2008 9:29 AM
To: 'Elvis'
Subject: What am I doing now?
Hello there.
Are you ever grateful for caller ID? Well I sure am! I have been barraged (sp) with now way tooooo many get out of debt voice recorded solicitations. People must think I’m a real nice person when the phone rings, I look at it, tell it to shut the hell up and stuff it back in my pocket. Oh, she only answers the important calls! Needless to say, I have a big phonebook!
Anyway, the bank. Pacific Continental is offering me deed in lieu if I take another note, which I won’t, so they are giving me 30 more days to sell the house and get the heck out.Bank of the West, hasn’t talked to me since July. Too bad for them.
I met with a pretty awesome attorney the other day, who not only is a specialist (in bankruptcy) but at least looked at my scenario and created a game plan for escape.
What am I doing now?!
I’m filling out these damn short sale packets and forwarding them to XXXX XXXXX!!
Then…………….
I get back in the saddle and work on my life, my career and my MONEYMAKER!!!
Mom

The volcano erupts.....

2008-09-21T14:29:00.000-07:00

Renaissance Homes faces bankruptcy
http://www.oregonlive.com/business/index.ssf/2008/09/highend_oregon_builder_renaiss.html
Oregon's housing market still hasn't found bottom
http://blog.oregonlive.com/frontporch/2008/09/oregons_housing_market_still_h.html

Bloggers speculate on developers' deaths in Bend
http://www.oregonlive.com/business/index.ssf/2008/09/death_and_speculation_in_bend.html
The Blogg
http://bendbubble2.blogspot.com/

A small bit of gratis

2008-09-12T10:55:00.000-07:00

Of course from a bank that terrorized us into DEEDS IN LEIU.

From: xxxxxxxx@xxxxbank.com
Sent: Wednesday, September 10, 2008 8:39 AM
To: Elvis [wheresthebottom@gmail.com]
FYI a package with copies of all the executed/recorded documents is going out to you today. Thanks for your efforts, hope you guys are hanging in there.

XXXX X. XXXXXX
Vice President
XXXXXXX Bank
XXXXXXXXXXXXX
(P) XXX-XXX-XXXX
(F) XXX-XXX-XXXX
(C) XXX-XXX-XXXX
XXXXXX@XXXbank.com

The Street.com

2008-09-09T11:18:00.001-07:00

This web site is pretty cool. Go to http://www.thestreet.com/, strongest and weakest banks. Hit portfolio and tools, then banks & thrifts screener.
This will allow for some light studies in case you get curious about your institutions.
Since 3rd quarter reports are not out yet on it, you can look up your favorite bunch and study their strength.
Ours are….
Golf/ Sterling looking poor on cash, but decent assets. Keeping them C- but Sterling a D. Fraud, or mis management, or better yet…greed? I hope that accusation puts them right on the regulator list after 2nd quarter. West Coast look OK on cash, BAD assets. Which affects rating to a D, way to go boys. They forced us out of 2 projects. Lets see how they fare now. Columbia Community actually looks ok (but they were lying in the 1st qtr BAD) with a B-, Weak on liquidity but ok assets. Well, since they took us into Receivership this month, I say that rating may deserve to drop a few. Heads are gonna roll.
Pinnacle Bank, who participated with Columbia on a lot of our stuff gets a big ole D- for their operation. Bad assets AND no cash. This one can only get worse. My guess is they were instrumental to the threats and Receivership driving us out of our projects. Good. Wafed looking the best at A+ in first qtr. They did the most to get their people through the tough times. 2nd qtr will bring that down a bit but they look solid and were not too bad to deal with, great assets, no cash.
Banner Bank gets a C+ with OK assets and Liquids, working with us and refinancing a project, the ONLY bank doing this.
Anchor Bank Fetches a C in the first qtr, hmm. Wait til they get a bucket full of what they are kicking our butts for. Can you say DOWNGRADE?
Homestreet did not choke our bad assets down until 3rd quarter so they get to enjoy a B- for a while longer. Right between the eyes. Yes, methinks that one gonna fall too. Ok on assets, low on cash. Liberty can suck it. They get a D for BAD ASSETS and Low on funds AND BAD management. They got greedy and they need a slap on the forehead hard enough to leave 3-4 finger marks, welts. And to think, they are still getting to hide 2nd and 3rd quarters….Keep an eye out as they post 2nd quarter soon.

WaMu gives the boot to chief executive Killinger

2008-09-08T09:13:00.000-07:00

http://www.oregonlive.com/news/index.ssf/2008/09/wamu_gives_the_boot_to_chief_e.html

Banks Survey:

2008-09-08T09:05:00.000-07:00

I am attempting to collect as much informal data as possible regarding Banks.
If this is applicable to you; please take the time to fill out accordingly.
Thank you -

Which bank is giving you grief?
What is the balance?
Are you in default? If so by payments or by loan call/renewal?
Had foreclosure?
Experienced receivership?
Sub liens?
Draws stopped?
Line pulled?
Loan closed and fees collected but loan interrupted and not funded entirely?

Other?

And then there is this:

2008-09-05T10:04:00.000-07:00

Washington County sends voters higher development tax
http://www.oregonlive.com/washingtoncounty/index.ssf/2008/09/washington_county_sends_voters.html

Here is an example of what is wrong. When jurisdictions should be thinking of ways to encourage development; instead this one chooses to punish the builder/developer.

Letting go

2008-09-04T08:37:00.000-07:00

From: B “The Mom” [mailto:XXXXXXX@verizon.net]
Sent: Wednesday, September 03, 2008 7:24 AM
To: Elvis [wheresthebottom@gmail.com]
Subject: Letting Go
Okay so.............
I am not paying any more on my lines of credit etc that i used for business. by stopping, i know it will impact my credit score, but what do i pay with monopoly money? anyway, as the clock ticks and these loans become more and more past due, then these banks will start calling for negotiations? mentally...letting go feels pretty good, but when the phone only rings with collectors, or otherwise, the fear of the unknown is what gets me..................
talk to you soon.
B.

Latest news

2008-09-02T11:14:00.000-07:00

This blog is about telling a story. There are a lot of characters in this story. To name a few there are the vultures, The Ghosts of Christmas past present and future, The taxi driver, The garbage trucks, and there is B also known as "The Mom". B is a lady, a friend, and a real life mom who has lost everything. I try to help keep her sanity and give her good advice. Maybe if you follow her story you will learn something or at least be entertained.

From: B [mailto:xxxxxxxx@verizon.net] Sent: Wednesday, August 27, 2008 4:02 PM
To: 'Elvis' [wheresthebottom@gmail.com]
Subject: Latest News

I am now a fugitive!
I have a $50K judgement coming in. I’ve been advised by my counsel to stick my head in the sand as soon as possible!

Letting go of the toys...

2008-08-28T12:54:00.000-07:00

Lets say “part of letting go is letting go of the old lifestyle, this is a lesson we all need”.
Too often builder/gamblers get too many toys and during the good times we earned them.
Now we must simplify and survive.
Use your toys like logs on a fire, the winter will be long and cold, stoke the fire.

The Giant pool of Money

2008-08-28T10:18:00.000-07:00

In case any one missed this before:
http://www.thislife.org/Radio_Episode.aspx?sched=1242

The Art of War

2008-08-27T13:46:00.000-07:00

Email exchange between The Ghost of Christmas Past and myself. The Ghost is a real life mentor and friend. He is also a re-occuring character in the world of Push Back. His words are wisdom to live by.

From:The Ghost of Christmas Past [mailto:Ghost@XXXXX.net] Sent: Wednesday, March 19, 2008 9:18 PM

To: Elvis [wheresthebottom@gmail.com]

Subject: Napoleon
Elvis __ with respect to the XXXXXX's, __ Napoleon gave good advice:“Never get in the way of an enemy that is in the process of destroying themselves”The Ghost of Christmas Past

From: Elvis [mailto:wheresthebottom@gmail.com]

Sent: Thursday, March 20, 2008 4:52 AM

To: The Ghost of Christmas Past

RE: Napoleon

Yea, but my old friend Sun Tzu also told me some useful advice about war.
When your army is more advanced and stronger than your enemy, advance and destroy him on his land. When your army is evenly matched with your enemy, advance as he advances and meet him on mutual ground to fight. When your army is weaker and cannot match the enemy, draw him to your land and only fight if provoked. If provoked on your own land, use the familiar layout and element of surprise to your advantage, he is far away from his supplies, be light on the foot. I don’t remember the quotes exactly because I have read 4 different translations, but I get the jist. If the odds of defeating the enemy, stay in the hills and wear him down. Hide your food and weapons and travel light. Strike in small ambush attacks to chisel away at the mass. Break the big problem down to small manageable parts.

National Give a Builder a Hug Day!!!

2008-08-27T13:23:00.000-07:00

It appears fixing the local housing market is tougher than I thought (ha), we will need a bit of help now! I will keep asking just so you know. Since we don't have jobs any longer and don't build or borrow, we are now left with the time to help organize the undertaking. This method is not one person, but many brains from certain sectors poking and pushing buttons with educated guesses at what may occur. There are enough smart folk in this area to combine forces and create the market within a market I have spoken of before. We have met with many personally now, since we have the time, but we cannot get to as many meetings as needed. If you are too busy to apply yourself, congrats, excuse the intrusion. If you are too busy but are not getting anything done, shame on you, you cant spend all of your time dyin, spend some of it tryin. We seek to provide a stream for matchmaking, on a larger scale than is going on with individual situations already. There is no organization to it, people just reactions to situations, and a drone like acceptance to some of the financial punishment being handed out. That's just not acceptable, lets take the problems and introduce them to the solutions.

Recruiting problem situations: (product in)
Builders that got in over their heads (like us) that could use a bit of relief (today is national give a builder a hug day). Of course develop people that now have a stalled situation need a match making process Mortgage guys (had too many tools to buy!), some got over the skis as well. Any other professional that is carrying way too much baggage and would like to get out from under it
It is amazing, we are currently even helping a lawyer, quite a few Realtors, along with many of the mortgage folk. Any one with something that is choking them that is endangering their financial being, send em in, we will go to work on them. Construction banks that have builders and houses that are foiled, (like us) have them call, we are matchmaking to solutions Mortgage banks with loans and reo props will need to come in with some of their deals Laid off, but very smart support folk that have been eliminated from an old type of job, we will be needing some help Candidates, typically good closing assistants from title or the transaction coordinators in realty, you know the types Tech support, (I will explain that soon, but we need some help there). Marketing smarts will be needed, to help execute a flawless public calling to launch in 45 days or 10-1 Sales support, to sell and assist in the wake up call, again, these have to be killers, energetic and ready to work. That means public relations, speakers, possibly someone that can do power point style presentations as well as Realty agents that may be losing listings due to market woe, and ones that want to do some deals Bankruptcy attorneys, people suing each other because they don't like the market, need to stop and identify the problem My guess it is a piece of real estate and a deal gone bad. So the solution is sue and make it worse? Think solutions, that's free.
Recruiting solution situations: (product out)
Builders that still have credit will be tempted to overpay for land and lots. We need to first ask them if they have credit, and are good at their jobs, to assist in getting the ½ finished homes done and the builders and banks stuck in them need to stop growing weeds and getting vandalized while losing dollars suing each other and, we need your help. We identify daily stuff that needs you. Rather than start new homes, help other builders and banks get out of the ones that are stopped. How the hell can a realtor, builder or bank really think a home will sell in that condition? Buyers smell death, which creates fear, they move on. Producers in mortgage, all types needed for good quality buyers looking for good deals, we will need buyers coming to the rescue of these projects as well. The end game is that if there are not enough buyers that is one thing, but if there is no money for them to buy, they can hope for a home all they want, we need the mortgage guys coming to us with the buyers that are approved and ready to buy and we can show them good killer pricing. Realtors that have energy and want to make deals, needed for good product in and good product to sell need a place to match make and use the professionalism they use on their own, only in an inventory bashing manner. I seek to drive the inventory to 4 months by Years end, that is one month a month. That will take some doing, and it will need the smart minds pitching in and forcing a market correction. Do not be afraid of bad comps, with 4 mos of inventory a few bad comps will soon be forgotten as we get supply in line with demand.
Deal junkies that cant stop gambling and made it through with some credit, yes we will need them for buying as well, we do NOT need as much flipping for a buck, that is not a solution, it does not drop inventory. If a flip has to happen, lets assure it lines up with relief for a problem, saves lives, then is mature enough to wait to align with a retail solution. It is a bridge between problems if necessary. Plan A is to get the problem and solution met up before we need the clean up crews of investors that are hungry for deep bleeding deals. Good investors to back the deal junkies will be needed, but mature money, not spastic lines of credit flip dough but smart intentional money. Flow it to the people that want to assist the problems and not more vultures. That is death feeding on death and vultures eating dead vultures (yuk). Lets find the good funds to flow and get them used in a problem solving fashion. Investors that can hold for 3 years are best, we will also need places for the bruised credit people to cook and work with the mortgage pros until it is time for them to be repaired and back to owning. Those people need triage centers. Investors can provide triage housing, nurses and doctors can work on the patients. Send all you know of the above to us. We are pressing re-boot and intend to create a market within the market. Got a plan now.

We are not alone in our struggle...

2008-08-26T15:20:00.000-07:00

Home builders coalition for responsible bank behavior:
http://www.pathtodefault.com/

Quick hitters...

2008-08-26T15:16:00.000-07:00

Banker Backlash: A California Builder Sues After His Lender Pulls the Plug

http://www.builderonline.com/economic-conditions/banker-backlash.aspx

California's Discount Foreclosure Sales Point to Housing Bottom

C:\Documents and Settings\Cory\Local Settings\Temporary Internet Files\OLK2\article.mht

We didnt start the fire......

2008-08-26T14:15:00.000-07:00

From: XXXX XXXXXXSubject: Bank exceses

To: wheresthebottom@gmail.com

Date: Thursday, August 21, 2008, 6:17 PM

"It is time for answers", notes HOME BUILDERS ASSOCIATION Spokesman__________. "The Housing Boom was fueled to excess by Wall Street and Banks. The Banks were wining and dining Home Builders, virtually throwing money at them in an effort to profit from thirst for homes and continuing rise in home prices. Now the "oomph" is out of that boom, and those same Bankers are howling like Wolves at the door of every builder in the metro area. The Banks overspent, used the Builders to fuel their fires, and now are turning on those Builders, burining the Builders now that the bubble is burst and the public isn't feeding at the trough any more! The Home Builders Association isn't going to lie back and watch its members be destroyed by greedy, myopic Banks and Bankers. The Banks blame the Brokers, blame the Builders for the excesses, but they forget who wrote the checks that fueled the fires. Banks forget who offered the credit and collected the fees that built those houses. We, the H.B.A., are not going to forget. We are taking names, responding to those Banks that couldn't give enought credit, and now can't be bothered to assist those Builders whose lives and livlihoods the Banks have jeopardized!

We don't play golf anymore...

2008-08-25T13:47:00.000-07:00

It bothers me now, the amount of people that call me, ask why talk about the pain to others. They are curious enough to hear me rant and they are intelligent enough to make good decisions on their own. For sure, the things I say are not for everyone and should not be taken as legal advice, but I say things that lawyers can't say. I get calls now daily from people you know and don't know, people I did not know and I find a few things are almost always true: The denial is wide spread. Everyone is scared in their own way, has their own timeline for destruction and EVERYONE says they are not like us. Yeah, I get that. I heard that from some of those who have perished by now. No one is like us, but everyone is burning cash one way or the other. Either you are out of cash, and burning the banks money, or you have cash and are still burning yours. This, I don't care how much we are not alike, is truth. I heard from a pretty smart, grey haired guy the other day, he is going to get a credit line at his bank, take the last bit of equity he has in a piece of collateral and use the 400k he gets to pay to keep his interest current. LET me get this straight....IF a bank will give you a credit line on your last asset of 400k, it must have money to lend under different guidelines than I am used to. This is a person who builds, has not sold a home in a while, has bought their own inventory as a defense method to gambling and not selling. Use the last bit of good credit and loans you can get to buy your own real estate at more than it is worth. Newsflash: I can buy down the street from you cheaper than you can build. His plan, although sound in his mind, is disturbing. He owes more than his home is worth, and that is in the low 1.something millions. ZERO equity, has drained to nothing in the bank, does not sell any homes now, and has many finished and unfinished lots in a pipeline of what was a
good business and plan in the good days. He wants to borrow so his bank will continue to like him. He is a fool.

There are 2 types of builders that have inventory right now that was built between 07 and now. If it is standing and not sold, it is on ground that was overpriced, which was good for the

developer. It was appraised at a time the appraisers thought it was worth more than it is. The banks, LIKE IT OR NOT, hired that appraiser, collected their fees, cashed them and the interest they used to pad their balance sheets and grow their stocks and companies during better times. The subs worked on these homes and got paid at top dollar and either are paid now and don't care or are not paid and wanting 100 pennies of what they are due, plus their collection efforts. The suppliers are the same, all of these people got paid on the way up with the vision that made sense, WHEN FINANCIAL TIMES MADE SENSE. We are dealing with a FINANCIAL MELTDOWN OF APOLOCALYPTIC PROPORTION for some of the companies and how they/we were set up for 08 and 09. Back to the new construction. If the home is not sold now, there is a realtor that is expecting to get paid, who does not have the money to market any longer, and hey, what is the message he would pay to market anyway? Nice home, quality finishes? Uh, nope it looks like now it is, nice home, priced just at what the bank is owed PLUS MY COMMISSION....Hows that working for ya? So, let me get this straight, pricing on the home must be tailored so that everyone gets paid 100% for their efforts to construct it but the builder? The very necessity that it took to create the vehicle to get paid? You gotta be shitting me. I created GIVE BACK as a message to get people in the mindset that they do not get 100% back or the homes will travel the eventual path. Those of us that ran out of money first will show you the way. Checkthe paper, it has been graced with a few to start. IF YOU DO NOT DO SOMETHING WITH YOUR REAL ESTATE NOW SOMEONE WILL TAKE IT FROM YOU AND DO IT FOR YOU. Liquidate the damn houses. They are not worth dying over. Your banks are sick and do not have enough cash to loan right now. If they did have enough cash, at audit time the truth will come out for them. They don't have enough cash to stay afloat much longer EITHER. They are lying to you, and they are lying to the share holders about how sick they are. They are spending hundreds of dollars an hour to send hundreds of reminders to builders right now that they want some money or else.....OR ELSE WHAT. Are you kidding me? They will take the houses, then re-hire another realtor that does not have the money to market them? And magically the home will sell. BRILLIANT. We should have thought of that before?

Think about this, the money lent during the good times on homes that are not sold today is your biggest concern. Your homes, our homes that are not sold were not required to have cash down, so we borrowed at 80% of the value of the good times. Now those homes have ridden the market down, to what we owe plus...yup, you got it a big ole paycheck from that person that is powerless to assist you much further. The homes are over leveraged and you can admit it now, or sometime after that home is taken from you. If it is overleveraged, and you are too busy pointing at us or others and whispering you are not like us, and you have an agent that is not selling, then you are meant to perish. YOU ARE LIKE US BECAUSE YOU BORROWED LIKE US AND PAID FOR LAND LIKE US AND HIRED SUBS LIKE US AND ARE STUCK IN THE SAME FRIGGING MARKET WE ARE STUCK IN...Just exactly what about us is not the same? If we can fast forward now past the micro picture of one at a time, and just assume for arguments sake I am right, we are alike, we are sick together and we have the cancer. The financial cancer of overleveraged assets. We are in the same market. That we must fix. What makes some of us different is that some of us are out of resources and do not, cannot pay our banks their life support any longer. This is ground zero. Cant lose much more. Even if we could borrow, we refuse to throw good money after bad. Save the relations for later. WE will need them. What makes some of you different is you may still have resource. My guess is that the more successful you were before the APOCOLYPSE you have more dough in the bank, and the more dough you have, you are burning it faster than ever as sales have slowed. Your absorption is the direct result of the current market we all share in common. Not like us? Nope, you are losing your cash, we have lost ours. Beauty is, I can do math. Once you run out of your cash, because you are not like us and you still have it, you will see just how much you are like us. Once you get to ground zero you will call. Once you get there I will remind you that you should have called sooner. And once you get there you will finally wake up and realize that we all share in the same big problem...

Do the rest of us a favor, get off your high horse and push. Did I say that? PUSH BACK. Don't run yourself out of resources giving a local bank money to operate. Do you know that we have one bank that spends over 500$ per hour kicking our financial ass? ONE GUY. The result? UNFORTOLD. What I want to know is what the hell do the shareholders think? The bank is
not giving them up to date information so they are hoping their community bank is still healthy. Wrong, they cant afford to hire that guy so they are borrowing now to kick our ass. That's funny. We switched a long time ago to a FEE BASED lending environment. Some banks were formed with the sole intent to do construction or FULL arms of lending were extended to construction loans. They got paid. Now there is no money to loan, no fees to collect, and as soon as those of you that are NOT LIKE US run out of money, they will not have interest any longer. Let me ask, what is a builder that cannot borrow or sell? Broken. What is a bank that cannot lend for fees and is not getting income from loans that are not performing? Broken. And what happens to the real estate if someone does not figure out another way to deal with it? Class......? It gets taken from you and sold anyway. To who??? Class???? A bottom feeder. Yup, in November I mentioned them, they are the eventual cleanup process either way. Now or after the banks get more broke. Embrace them, for they are real and they are out there. Some better than others. Know which vulture to pair up with. They don't mind waiting til you are dead. And let me tell you something, I talk to enough people now, just like the Bruce Willis movie, I SEE DEAD PEOPLE. They are walking, but financially dead. The vultures are very patient. Eat the dead meat off your bones. WE did the repulsive act of letting them eat off our bones while still alive. IN hopes to get the cancer off the body and in hopes of surviving. Weather we survive or not, a survivors club is being formed. Those that make it through, will have lost their hair and taken the poison in the fight for financial life. They will be given PUSH BACK survival bracelets, which will be made at the end of the year and distributed. Once a survivor, you would be asked to help just one, more if you can, but just one sick person. WE all do that, and we can get to healing.

Remember, this is a cycle. How many cycles you see will often depend on your degree of gray hairs. Many means you may see one more, none yet, a few. One thing for certain, we are gamblers. We created lives we were comfortable with, we don't conform to day jobs, we are a bit off and work best seeing our own efforts flourish. AND WE LIKE NICE THINGS. I cant tell you how many of the people are not like us that I talk to still have the old lifestyle. I see liens connected to names, lawsuits, inventory reports, and the level of sickness is evident. Then I get the call...."not like you", ran out of cash. But still has that muscle car in the garage, the boat, the dual SUV, typically the Escalade or slammed out Denali, you know the one with the low profile wheels and tires...The nice house, second house at the beach or somewhere, trips, nice ones too. And the real one, this one kills me. GOLF anyone? Are you kidding me? Your name all over telling us that it hurts and you have the money to golf? Are you kidding me? And not just cheap stick, spendy golf. The kind you used to let your banker pay for, you know the one who sold you loans? Where is he now? Most of ours got whacked. Or the title guy that is now gone. Or the supply guy who sold lots of overpriced shit and wooed you to play. And the time it takes to golf? Wait til you become like us. We don't golf anymore.

Intro: Wheres the Bottom?

2008-08-25T12:50:00.000-07:00

Triage is a 3 phase series of financial manipulation of the local economy. I am not an economist. Just have an idea.

Phase one:
Phase one is simple, finish the half finished homes that are stuck on the market. Price everything new that is built inventory all at once. Sure, this may screw the comps for a bit. But for how long? Supply here is different than elsewhere. Take it to 4 months. Vultures with money, meet builder that is sick. Builder that is sick....Vulture. Vulture, show him money, Builder, take what you can get. Gives new meaning to BIRD in the hand. Vulture with money, meet sick bank.
Bank, embrace Vulture with money. Bank, take the cash you are offered, you need it more than real estate. Vulture, flash the cash. BIRD in hand again. Builder still healthy and willing to gamble, meet Vulture with cash and half finished house. Vulture, use your cash to hire builder still wanting to gamble. Builder still wanting to gamble, get your subs still wanting to work.
Subs, sharpen your pencil, this is healing 101 and giving back is your survival. Suppliers, meet new business sphere, forget the golf. If you have enough money to take everyone golfing, you are charging too much money, sharpen pencil. Builder and sub and supplier, Vulture is now gambling and taking risks, you best keep pencils sharp. Spend your time managing your jobs for a change and you can survive. Vulture, meet Realtor, Realtor, wake up, your fees are too high.
Realtor, Vulture knows price sells houses right now, your skills for filling orders are needed, at a good rate. Buyer, meet Vulture, Builder, Subs, Supplier, and Realtor. They have priced a home at the proper price, according to the current market conditions. It took all of them to do it. An industry orchestrated movement to drive inventory to 4 mos. Do not offer them less, the home is properly motivated and priced I told you. There is a small amount of time and inventory that you can choose from, don't blink. If we all work to drive inventory to 4 mos, I said 4 mos, we self induce equilibrium. With equilibrium we gain control of supply, which will increase demand on what is left. At 4 mos we can match the amount of credit being let out slowly. Title people, meet Vultures and buyers. Do some business. Mortgage people, meet buyers and match us your best tools. Treat your customers to a price sensitive selling machine. Properly priced real estate industry professionals, motivated sellers and the public...meet www.wheresthebottom.com.
The only place that will be marketed as truly motivated properties for truly motivated buyers.
Soft open 9-1-08 for industry people to pollinate and use.
Public launch for marketing blitz, 9-15.

Phase two:
We will need the Vultures and their cash. The sick banks to take it. The sick builders and developers to eat shit and loose all that equity they have been holding out for. The builders that made it to buy the lots cheap. And the 4 banks that make it to start lending money based on an attainable takedown and absorption schedule. Yes, there will be fees, cash to close, and some different guidelines. The appraisers will be most confused during this phase. Comps will be all over the board. Create pricing that is cheap, blow out specials, and properly market.
www.wheresthebottom.com uses it to liquidate the backlog of finished lots.

Phase three:
Same vultures, developers, builders all needed. Approved, entitled, permitted or half started land. REMEMBER, ENTITLEMENTS EXPIRE. Check www.wheresthebottom.com under land when it launches, there will be good deals. HBA, Lawyers, Planners, City or Jurisdictions need to mandate some extensions. What a waste, tens of millions in wasted efforts will expire only to go away if we don't get it extended. Too many fees paid to get this land this far.
And jurisdictions, all fee based, have not been getting permit fees lately. They too are sick and will not be palatable to NOT charging. They have helped us overprice our homes.
They are hooked on the fees and have driven permitting through the roof. WE will also need politicians for this part of the game.

The Burning Building

2008-08-22T12:54:00.000-07:00

Here is the short and sweet version of our business as it was in February.
We called it the Burning Building.
You cant get all of your precious items out of a business that has been set afire.
Picture the burning building.
Me standing in front with my partner in business (and the wives are safe too!)
There are faint screams coming from inside. The kids…shit, the kids.
Also a dog, damn it the dog too? FIDO, sorry boy….
Family photos.
Favorite shoes.
And a few personal effects we cant live without.
I am running back in.
Gonna grab the kids.
Get the dog!!! Get Fido!!
Forget the things.
LIFE AND FAMILY, the rest does not matter.
The kids in this example, back then were projects.
Of 28 projects we chose 6.
Of the 6 to date, we will end up with none of them.
In the end, we risked our lives saving crap.

Sometimes reality bites...

2008-08-22T09:45:00.000-07:00

This Blog is a lot of things; informative, funny, sometimes raw and too the point.
Yes life is good; but reality is hard. People are losing their fortunes and their livelihoods.
Please take the time to read below; my last correspondence with the banker that used to buy me martinis and days at golf course.

“Bank man, I must ask you…..
If a man comes at you and your family in an alley with a knife and threatens to harm or possibly kill you, there are choices you must make as a man. You are in a fight or flight situation, a situation that has been around since the beginning of time, there is no talking your way out of it if the attacker is serious enough. Quick; what kind of man are you? You can Attempt to run, you may get caught. Or you can stay and fight. I am telling you, we will always choose to stay and fight. We stand and we fight. Like wise in the world of business; if your business is standing in the way of my business, threatening the life of my company I will not run, nor will I flinch in the danger and threats, I will fight. The builder that does not have much to lose cannot be taken from. What is this so necessary for?

Would it make sense for us to spend our time investigating to find the liquidity ratio the banks are at? We could find the weak banks that do not have enough cash; we would start with the ones that we are now at war with. We could find out how much they have in new construction and their land portfolio, how much of it is and could be considered NON performing assets, and how much is being hidden from the shareholders and depositors in the spirit of protecting the assets of the banks. Loans it appears; have many ways of being in default. Of course our loans are not hidden, but I know the banks are hiding the facts in a way. Then we find out who the borrowers are, we call for a builder / creditor summit, and we find out if they are or would stand together to create a public mission to push back and create a new portfolio of non performing loans large enough to get the attention of everyone. Ahh, the story in the media. Builders unite and band together as an industry to push back with a unified statement. A line in the sand. Would it work? I dunno, but if our business is gone, we will have the time to spare…
The Banking Industry needs to allocate the resources necessary to help rather than add to the problem”

From Sea to Shining Sea and every where in between.....

2008-08-21T09:55:00.000-07:00

Southern California...
http://latimesblogs.latimes.com/laland/2008/06/in-escondido-bu.html
Oversees...
http://online.wsj.com/article/SB121925009806256941.html?mod=googlenews_wsj
The Midwest....
http://www.mlive.com/businessreview/annarbor/index.ssf/2008/08/nrc_realty_advisors_inc_to_hol.html

And the bottom is still yet to come...
http://www.marketwatch.com/news/story/am-best-special-report-more/story.aspx?guid=%7BC7330C64-9B30-475C-BFDC-8D2DC2BB07AB%7D&dist=hppr

A story about someone I know; the names have been removed to protect the innocent and badly bruised...

2008-08-20T14:52:00.000-07:00

Home starts at 2.8m.
Home listed for a very long time, call it a year, with Zero offers. The home is sweet, built well, should stand for years to come, it is new. Bank is owed 1.6m. Partners invest over 700k, there is 2.3m in costs total. First offer, from a real buyer, of course they want a killer deal comes in at 1.6m. First loss is to the partners, bank cares not, they get to lose 700k right off the top.
There is a second of 50k, and some other little clean up deals that come to another 50k.
One of the negotiator people working for the seller, dealing with the bank got the 100k of people aching to get some, to 35k. That with the commission would have made the bank eat 135k.
They decided to say no. They are ok with everyone else losing, but they will not accept less than 120% of their money. Buyer goes away. Bank calls 3 weeks later. "Where is the buyer? We were negotiating right? Isnt this the game?" No, the buyer made their offer, they are moving on to another home, you passed on a perfectly good buyer in the luxury market today.
"Call them back. We want to deal."
New offer comes in at 1.45m.
Bank accepts.

The true definition of "push back"...

2008-08-19T10:05:00.000-07:00

Builders Sue Banks That Pull Financing as Construction Projects Lie Unfinished:

Lenders are being sued by builders who say the banks have unfairly cut off their construction financing, stopped their projects midstream and forced their companies to the brink of bankruptcy. “Lender liability lawsuits are coming. It’s only just beginning,” says Michael Hackard, a lawyer in Sacramento, Calif., who focuses on real-estate law. “There are going to be builders who argue that the lender forced me into insolvency by not acting in good faith.” Developer John Thomas says he had nearly finished building a 222-unit condominium and hotel project in Stockton, Calif., when his lender, First Banks Inc.’s Missouri-based First Bank, wouldn’t release the final $6 million from his $40 million construction loan. As a result, Thomas’s lawyer says, liens have piled up against the project, the condo units haven’t been completed and the hotel has been taken over by a receiver. “If banks want to get out of residential lending, that’s fine; let’s sit down and figure it out. But that isn’t being done. The rug is literally being pulled from under us and games are being played,” says Mick Pattinson, chief executive of builder Barratt American and a member of a group of 30 California builders who have been meeting in recent weeks to discuss ways to push back against the banks. Pattinson says Bank of America Corp. froze his $100 million credit line for seven months, while ordering a new appraisal of his properties. During that time, Pattinson says, his company paid down its credit line by $30 million, but then stopped making payments in March when he realized the bank was never going to unfreeze the loan. Pattinson says that “after seven months, this country boy figured they weren’t going to allow us to use the credit line. I said, ‘No functioning line, no interest.’” (www.wsj.com) Wall Street Journal Online (7/23/08); Michael Corkery

We are all just fish food...

2008-08-19T08:18:00.000-07:00

Why do I wake up feeling good in the morning?
Is it because of my job? Probably not; I barely have one.
Is it my bank account? Not likely, last checked there is not a whole lot there.
Is it the weather? Cant be; I live in Oregon.
Ill tell you why....It's because I am alive and every day is a fresh start at success.
Lets see where today takes us.
When you have some down time...click around at the below links; you might learn something.

This is the way to not do things. This blog is about advocating the right way; but to do so you need to see examples of the wrong way. The house of cards...

http://www.registerguard.com/rg/Home/story.csp?cid=127244&sid=1&fid=1

The bottom is still to come.....

http://money.cnn.com/2008/08/19/news/economy/housing_starts/?postversion=2008081909

http://www.marketwatch.com/news/story/builders-still-gloomy-see-glimmer/story.aspx?guid=%7B45418AB5-729B-4DB1-94A5-0EB0B924E74C%7D&dist=msr_10

Another great blog to visit....

http://slcrealestate.blogspot.com/2007_09_01_archive.html

And then there is this...

2008-08-18T14:07:00.001-07:00

It is really amazing the types and ranges of stories that are leaking out of the cracks from all the angles. Some are sad, some make you think, and then there is this one, that makes you want to smile. Not because you are happy to see some one in pain; but because you cant help your self from finding humor even in the darkest of times.

The article:

http://blogs.wsj.com/developments/2008/08/14/foreclosure-hits-oregons-shire/

The website:

http://www.bendshire.com/

First cup of coffee

2008-08-18T08:56:00.000-07:00

Just a few days ago it was 105 degrees; this morning it thunders and hails.
The summer is winding down, gears have been shifted and a metamorphosis is taking place.
Soon WTB will be launched and the butterfly will be released from the cocoon. Until then please bide your time; while I do my best to keep you up to speed with a market that is as predictable as the weather in Oregon.

The question is asked: Wheres the bottom?
http://www.multifamilyexecutive.com/industry-news.asp?sectionID=565&articleID=756591

This guy in Arkansas may have found his bottom...
http://nwanews.com/nwat/News/68190/

A few quick hitters from Builder Magazine...
http://www.builderonline.com/articles/business/staying-afloat.aspx

http://www.builderonline.com/economic-conditions/builder-blocks-aug-15-2008.aspx

http://www.builderonline.com/sales-and-marketing/fbi-looks-at-builder-incentives.aspx?rssLink=FBI+Looks+at+Builder+Incentives

A couple of quick hitters....

2008-08-15T07:54:00.000-07:00

The Fantastic 4 is our goal......we need to get inventory down to four months.
http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/1218770721271960.xml&coll=7

Others say homes -- even high-end homes -- are taking longer to sell.
In Happy Valley and Oregon City alone, said Deena Kraft, a broker for Windermere Cronin & Caplan Realty Group Inc., there are nearly 200 active listings for homes starting at $800,000.
http://www.oregonlive.com/business/oregonian/index.ssf?/base/metro_south_news/1218772503316780.xml&coll=7

Excellent example of giving back:

2008-08-14T21:01:00.000-07:00

In this case the jurisdiction makes an effort to encourage development....

http://www.oregonlive.com/business/index.ssf/2008/08/pdc_sees_condos_atop_downtown.html

'Extreme Makeover' house faces foreclosure

2008-08-14T12:33:00.001-07:00

http://www.breitbart.com/article.php?id=D927JS2O0&show_article=1

US foreclosure filings surge 55 percent

2008-08-14T09:37:00.000-07:00

http://finance.comcast.net/www/news.html?x=http://www.origin.comcast.akadns.net/data/news/2008/08/14/1034432.xml

Financial Apocalypse

2008-08-13T14:34:00.000-07:00

From: M [mailto: m@XXXXhomesXXXX.com]
Sent: Friday, August 01, 2008 1:25 PM
To:Me
Re: Push Back

when do you suggest that a builder push back? if he has unsold specs, but 6 mos. left on his loan and some interest reserve remaining, does he wait until the interest reserve runs out?...or does he make interest payments after the reserve is used up, until the loan matures, then "pushes back?"

This is an example of what not to do......

2008-08-13T13:58:00.000-07:00

-----Original Message-----
From: The Mom
Sent: Tuesday, August 12, 2008 7:24 AM
To: 'Me'
Subject: RE:
Well......................
I'm going to open a corporation in Nevada, file a "friendly" lien against myself, leverage it to the max, then when they come trying to collect, there won't be anything...................
Good friend of mine who's in the same boat, (who also is a friend/acquaintance of XXXX, oddly enuf) is also still working, and is on to some decent projects with a bank who still has money!
-----Original Message-----
From: Me
Sent: Tuesday, August 12, 2008 6:16 AM
To: The Mom
Subject: RE:
Plan?
-----Original Message-----
From: The Mom
Sent: Monday, August 11, 2008 2:11 PM
To: Me
Subject: RE:
nope
-----Original Message-----
From: Me
Sent: Monday, August 11, 2008 11:53 AM
To: The Mom
Subject: Re:
Welcome to the party did u sell a home?
------Original Message------
From: The Mom
To: Me
Subject:
Sent: Aug 11, 2008 11:06 AM
I go on a little vacation. The real estate market seemed to frenzy while I was away. More showings in 3-4 days than in the last 3-4 months!
Come home, unpack, wham! Get served! Foreclosure notice on my personal home!
S*@& !!
Sent from my Verizon Wireless BlackBerry

Breakdown on New Housing Bill

2008-08-08T13:00:00.000-07:00

1.Who is eligible to claim the $7,500 tax credit?First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
2.What is the definition of a first-time home buyer?The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.
3.What types of homes will qualify for the tax credit?Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses, and condominiums.
4.What is "modified adjusted gross income"?Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
5.If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.
6.Can you give me an example of how the partial tax credit is determined?Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750.Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625. Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
7.Does the credit amount differ based on tax filing status?No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing separately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.
8.Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.
9.I heard that the tax credit is refundable. What does that mean?The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).
10.What is the difference between a tax credit and a tax deduction?A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.
11.I am not a U.S. citizen. Can I claim the tax credit?Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
12.Does the credit have to be paid back to the government? If so, what are the payback provisions?Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
13.Why must the money be repaid?Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
14.Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.
15.If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
16.For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

Information has been edited for relevance from NAHB website.

Everyones gotta give a little......

2008-08-08T10:37:00.000-07:00

Has any one notcied the high cost of permits and every jurisdiction raising them? In this type of market they are not helping the situation. They should be lowering permits fees or at least keeping them the same to encourage builders and developers to get back to work. May have an ill effect on inventory.

Collateral Damage.....

2008-08-08T09:37:00.000-07:00

From: XXX XXXX [mailto:XXXXX@XXXXtitle.XXXXX.com]On Behalf Of XXXX XXXXX Sent: Thursday, August 07, 2008 5:27 PM To: ME : A Message from XXXX Formerly w/ XXXXXX Title & Escrow
Good afternoon,
As some of you are probably aware by now, XXXXX Title & Escrow has decided to cease operations in the Portland Metro area. This came as sudden and unfortunate news to us today. The escrow staff is staying on to complete all files, and will be done by August 29th. The sales and marketing team was officially given the boot today.
For those clients that I have met and worked with over the last couple years, I wanted to let you know that I have thoroughly enjoyed getting to know each of you and hope to keep in touch. Below is my contact info. If you know of any Web 2.0/Social Media Marketing opportunities in the marketplace, let me know. I would appreciate it greatly.
Take care,

XXXX
503-XXX-XXXX

Carolina Builder Closes Up Shop

2008-08-08T09:33:00.000-07:00

http://www.builderonline.com/business/carolina-builder-closes-up-shop.aspx

Comstock Halts Interest Payments

2008-08-08T09:31:00.000-07:00

http://www.builderonline.com/economic-conditions/comstock-halts-interest-payments.aspx

Another one bites the dust....

2008-08-08T09:01:00.000-07:00

http://www.builderonline.com/articles/business/taylor-morley-homes-of-st-louis-closes-doors.aspx

Builder puts lien on Waterfront Pearl developer

2008-08-05T12:45:00.000-07:00

http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/1217901319210980.xml&coll=7

Financial crisis hotline......

2008-07-18T14:32:00.000-07:00

This is an example of the trust people put in me now days.
All looking to me like a guru in a meltdown.
A financial crisis hotline.
Only who do I call?

you are so funny. and you appear so frickin smart. I pretend not to know about the stock market. Just that some days are good and others are bad! People don't understand what we are going through! Buyers now, are all credit hurt, they don't even qualify, let alone have a down payment!
My banks are terrible and impatient. I had 1 house in Gresham near persimmon golf course, gave it away at 499, originally 639, and it was a couple of days in default (loan expired), they held up draws on my other dingers for 2 weeks, while they had it re appraised, to make sure i wouldn't sell it for less than what was owed, and they came out to pick up a check for 12K to restock interest reserved for 3 months, and its not even in an interest bearing account, and my latest closes on feb 15! my birthday!
So my next turd in the bowl has interest payment due next month, like $5k. I can barely keep the heat on! just got the last months heat bills, they are $1000!. My debt is so mixed between XXX and pesonal, I am just so scared of frickin liens! XXX had liened me for $28K. when the bank finds out they'll shut me down again. and then they can start foreclosure in 90 days! I won't be selling anything for profit this year so how do i ever climb out of the debt??? It's huge!

Survival

2008-06-26T04:50:00.000-07:00

From: XXXX
Sent: Wednesday, June 25, 2008 4:13 PM
To: Elvis
Subject: Outstanding Balance
Elvis,

Thanks for the time on the phone.

As we discussed, XXXX Homes currently has an outstanding balance with XXXX of ~$3,600. XXXX would be willing to take $2,400 (discount of ~33%) provided we can get a check in hand by 6/30 (our fiscal year end). We are not pushing for this but want to create a win-win solution. If that does not work, we would request a payment plan of a small amount just to keep the account moving – maybe $100 a month… until you are able to sell off some of the homes with our products and improve your cash flow.

We want to be a partner with you in this challenging market – be part of the solution not part of the problem.

Also, I would be happy to participate in any group you put together focused at surviving this market!

Thanks,
XXXXX, XXX
Vice President

From: Elvis
Sent: Thursday, June 26, 2008 4:41 AM
To: XXXX
Subject: SURVIVAL

I see you are being as helpful as possible and appreciate every bit of that.
Sorry for the hassle, We are bailing water as fast as we can to stay afloat.
We are seeing a bit of light but it is going to take a lot of work to evade the same fate as some of our brother builders out there.
Some of the things we do to survive are not fun to talk about as it becomes more evident we are out of cash.
100$ per month is something we can handle if you can allow it to start 8-1.
We have some HUGE fires to stamp out between now and July.

How about we ask if we can pay off in the next 12 months you honor the 2400$ deal.
If we can pay it off in the next 6 months we do 2k total balance?
My guess is that we are going to find a home to stick that balance to that the banks don’t take all of the cash on.
This is hard right now as most of them are in FORCLOSURE!!!
We have reduced our debt from 50m to 20m in 7 mos. We have 4-6 more months to go to be free.I hate using the F word…

If this is acceptable, let’s make a soft note, we can’t sign personally but will honor the terms above.
We too want to survive this market.
We are taking on the responsibility and honor of assisting some of our fellow builders cut the cancer of their inventory off of their backs.
A rather surgical operation, no money comes from it, but the very thing that is killing us is the inventory.
Once that is gone, the interest stops, liens are satisfied even if they are negotiated down, they are healing.
Banks get some cash back for reserves, and the more they get back the more they will have to lend to the builders that get set free before it is too late.
Our system is a simple one. SURVIVE through letting go of the debt.
This will take the same attitude from subs, banks, and builders will have to let go of all of that profit that is not there today.

We have not poured a foundation since OCT.
We stopped living on draw money and started healing the flesh wounds.
That said, a builder that does not build and that sells homes at less than what he owes, and that has no cash reserves is fairly close to extinction.
We have nothing left to loose, we have no dignity left (crud) and we are fighting harder than 90% of the builders out there.
We solve our problems by being proactive.

Please, if there are any other builders you know that are struggling, we can help.
We know investors.
We know professional negotiators that get the prices the investors want.
We know the agents that get the deals closed.
We know the surgeons and vultures that will clean this mess up so we can get inventory under control and get people back to work.
We are creating a market within a market.

My cell is XXX-XXXX.
Talk to your builders.
Call me.
I will talk to anyone about pain and suffering…

Denial

2008-02-20T09:51:00.000-08:00

This is a response that I got from someone I intended to send my big email to. They are in default by 4 mos. They are holding out for the DUBAI pipeline. We have been hearing about the stupid Dubai Billions forever.
This person thinks they arranged a line of credit for them to buy distressed.
Really, so Dubai line of credit to buy one home at a time is at their fingertips? And they are waiting for the big pay day for arranging this transaction. Whomever allowed the fee structure must surely be close to closing and have access to 50k for them to make the house payment....

Bugger days.
I remember when I was supportive of throwing good money after bad...

DENIAL...

"I just received your email and I would like for you to call me back. I don't know if it was sent by error or by design, but I am certainly looking for someone to spot me some cash ASAP to re-instate my loan with XXXBank. I have several large closings coming up that are simply taking longer than I had planned to be able to adequately take care of myself and have no great enjoyment over the prospects of joining the blood on the street crowd, especially when I have well over a million in my pipeline that will close.
Can you please call me and tell me what you are offering because I am running out of time. For me, this is urgent business. Do call me. Are you saying you have emergency lenders who can give a temporary handout to someone like me, for perhaps even less than a month or on to six weeks? I have to get this handled and have been so busy with my own business than I have neglected my personal business. Now I need an exit strategy and I need it now. Tell me what you have in mind."

Fear does Motivate

2008-01-10T00:00:00.000-08:00

Email to me from a mom that I will simply call B.

With your banks, if you get a lien, do they hold your draw, too? Are your banks pushy or do they get it? Will they accept shorts? Mine won't. No way in hell!
So, here's my thought. On my one that I can't pay the interest, I damn sure shouldn't be hiring any labor because I won't be able to pay for it. So the house will sit unfinished? Wow, what a double edged sword! Just the day to day, is really wearing on me! I haven't had a happy day in a long time. I don't have a switch that I can turn on and off and be miserable at work, then come home and be happy. I'm trying so hard to be a good MOM! My son is a senior and having the year of his life, and then there's me, a bitch most of the time. Nice memories huh?
I'm just afraid mostly about the personal repercussions....................I'd sell my house and downsize, but then what. Give it away? Not a chance in hell. So here we sit. It's scarier than I like to live.

My response to B:

B - I am sharing your episode and my response with a few others, I hope you don’t mind. Besides the fact you are a MOM there are no clues to expose your identity. That said, I am sort of gathering a few from the industry and trying to get some traction in telling a story, real life, as it happens. That takes testimony and fear. Yeah, I am back on the fear thing. Fear does motivate and I promise if you are scared of loosing something you will fight harder than if you are pacified. With the stories and my candid approach in letting others in our spot know how it hurts rather than hide it, I am finding some pretty good reason to push back. If I can convince a group of industry leaders to unite, and rewrite history we can save a lot of people from the butter knife episodes.

Liens. Ugly little buggers in a normal environment no one wants to have happen, it shows something did not happen the way it was supposed to and someone got hurt. In these times, they happen, and right now, even though someone is hurting, it does not make them bad enough for you to jump. Take them serious, but do not jump, you are not worth as much dead. Some of my best advisors are now helping me create little sayings. “It is just a piece of paper…it can’t eat you…” That should help, it did for me.
Remember, the subs that lien, are just protecting a right to collect what is due. If you can’t pay today, and you fight every day to live, you will take care of them, that will define your character and the people will remember you were the one that paid them back, others quit. The builders, subs, realtors, mortgage, banks, and anyone in our industry that end up admitting this is all of our problem to fix will be the ones you work with in the future. You are forging new relations daily.

Draw, yes, the banks will flex on the whole no draws if there is a lien. They too are using their collection tactics at their disposal, they don’t want you to do anything but play in an environment that will ultimately destroy you, and they just want to be the ones that scared you into one more payment, one more lien paid off, before they do what the book says and kick your ass. It is written. One of my recent communications with Bank X said “no draw, no pay, expect a lien, no pay, no work, no work, no finish, no finish, no sell, no sell, no pay off, no one wins.” This actually got me a draw, after 60 days of holding that amount we had many liens piled up, and we paid every one of them with the draw, along with 2 months of interest, that takes the loan out of default and also allows funding of draws. This is a good solution for the bank, and the bank does not have to report a loss or default in that quarter. Remember, they are still trying to bluff the shareholders things are not bad, otherwise they have to sell off stock and they begin to weaken on the balance sheet, pretty soon they have to admit they are sick too. Far be it for the ones that wanted to take you golfing and give you money and buy you gin and tonics 6 months ago actually suggest a solution. They are not offering solutions. My guess is you will not get to borrow from them for some time even if you play by the rules and survive, they will NOT lend to you for at least another year. The only thing they are doing is pushing good people off the edge. I will find a way to make an example of one bank that is pushing too hard, by pushing back, going for a weak balance sheet bank, finding its biggest customers, banding together to rewrite history. Once we get the point across we mean business we are going to continue on this warpath through each bank until we put everyone on the same psychological playing field. Once there, you are the customer, they are the bank, you borrow and make homes, you need money to do it, they need you to sell money, they need deposits to do that and if the share holders are privy of an uprising of the slaves, they may listen. Put your butter knife away, today is not your day to die.

Another thing some good mentors are telling me is when you get done with a hard day of battle, your kids and family are the true believers. Be good to them, they will admire your valor as a soldier. Even if you are wounded and dying, they will be behind you. If you fall in battle, but live, they will help you rebuild a castle, they have to, they are blood. Try to preserve the best years of that boy’s life, be good to him and create a good memory. The possessions will come and go, the money can come and go. Family, your sphere of influence, what you can salvage from your character and your credit, protect with your life. People will not remember the ones that give up and fade away, they will tell stories about the ones that figured out how to fight hard enough to preserve themselves. Now be a good soldier and find me a few who have some guts to fight and get them to me so I can gain some momentum. The faster we organize the quicker history can be corrected.

It is ok to be scared.