Monthly Archives: October 2008

Mount Carmel Auction — THIS WEEKEND!

Put it on your calendar .. Oct. 25th, starting at 4:30pm. It’s “Under the Big Top”, the annual Mt. Carmel Auction.

You can view the online auction site here, get tickets for the event, or even download the Auction catalog.

Here’s just a small samplings of some of the great items up for auction:

  • A weekend in the Wine Country
  • Behind-the-scenes tours at Electronic Arts
  • 1 week in Florence, Italy
  • A private screening at Dreamworks
  • Wine, restaurants, golf, skiing, massages….And SO much more!


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Global Banks Need CHEAP Money Now?


Props again to Adam O. No, this ain’t no shill, just some good info to have.

So, Ben Bernanke and the Fed brought financial aid to the streets last week, lowering the Federal Funds Rate and Discount Rate by 0.50%. In an unprecedented emergency move, central banks across the globe joined in lowering interest rates. Huzzah!

This move follows Washington’s passing of the $700B Rescue Plan. From “Wall St. to Main St.”, a common concern has been heard Washinton:

“We need money… no, let me rephrase that…we need cheap money.”

Rates Could Rise From Here
Home loan rates have benefited from the weakness in the financial markets. Fixed rate mortgages remain very attractive. However, the Fed lowers short term interest rates to shore up financial markets. This could cause home loan rates to rise in the coming weeks and months if confidence returns to the stock markets.

ARM Holders Take Notice!
Anyone that has an Adjustable Rate Mortgage (ARM), take note. The London Interbank Offered Rate (LIBOR) has soared from uncertainty in financial companies…And 6 million home loans in the US are tied to LIBOR which determines the interest rate at the time of adjustment.

So, bottom line, if you know someone with an ARM, let ’em know that potential trouble may be lying ahead, and the time to act is pronto.

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My Email From Senator DiFi

Oh, ok, so it wasn’t PERSONALLY to me — more of an automated email sent to constituents expressing concern over the government’s bailout’s a pretty interesting read, actually.

Whether you like her or not, the facts she lays out on the gravity of all the financial failures is pretty astounding…read on:

Dear Mr. Gory:

Thank you for your letter expressing support for recent legislation to stabilize our Nation’s financial markets.

This is a difficult situation for which there are no perfect solutions, and I would like to share my thoughts and concerns with you. Please find attached two statements that I have given on the Senate floor detailing my reasons for supporting the Emergency Economic Stabilization Act of 2008 (Public Law 110-343), which the President signed into law on October 3, 2008.

Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my

Washington, D.C. office at (202) 224-3841.

Best regards.

Statement of U.S. Senator Dianne Feinstein

In Support of the Economic Rescue Package

October 1, 2008

“Mr. President, I rise today to support the bipartisan economic rescue legislation.

It has been said that Senators have six-year terms for a reason. And that reason is to be able to take tough votes because it’s right for the nation, and take tough votes when at times they may be adverse to the beliefs of your constituency.

This today is indeed a tough vote.

I want to thank the Banking Committee, particularly its chairman, Chris Dodd, and members on both sides of the aisle for their work on this.

So let me quickly begin.

This bill is not the bill that was put forward by Secretary Paulson on September 20th. His bill was essentially a non-starter – startling in its unbridled allocation of power to one man: the Secretary of Treasury whom we know now, and to a Secretary of Treasury after January whom we do not know.

It placed this man above the law, above administrative oversight and above Congressional action and essentially gave him $700 billion to do with what he thought best.

This bill didn’t fly with virtually anyone who looked at it, particularly constituents, who have called in the tens of thousands all across this land.

My office has received over 91,000 calls and emails with over 86,000 opposed. The bill before us is not Paulson’s three-page proposal. Rather, it is a bipartisan effort that adds oversight, accountability, assistance to homeowners, executive compensation limits and other measures to protect taxpayers.

But there still is a lot of misinformation on this bill.

This is not a $700 billion gift for Wall Street.

Rather, the federal government will buy equity in certain assets – both good and bad – to pump liquidity into the marketplace and unfreeze credit which is increasingly freezing and unavailable.

Over time, these assets will be sold and the federal government will be the first paid back on the investment.

The belief is that by doing this the federal government will clear much of the bad debt on the books of certain strategic financial institutions, restoring stability, adding liquidity and unfreezing credit.

Recently, we have seen major U.S. institutions fail:
Bear Stearns
Fannie Mae and Freddie Mac
Lehman Brothers
Merrill Lynch

And, two retail banks – not investment banks: Washington Mutual, and Wachovia

If we do nothing, more institutions will fail.

Now, you may say: what does this mean to me? I work hard, I pay my bills, I pay cash.

Here’s what it will mean to you: it will be harder for most Americans to get any credit. Therefore, jobs will be lost.

And we may well face a deep recession. California has 3.75 million small businesses with an average of 5.6 employees. That adds up to over 20 million jobs.

Some of these businesses are funded with cash, but most are funded with credit. When credit freezes, payrolls cannot be met. And when payrolls cannot be met, pink slips are sent out.

And this will happen to retailers, grocery stores, restaurants, electrical and plumbing contractors, apparel manufacturers, computer and electronics stores, and auto dealerships.

Sales at auto dealerships have fallen dramatically in the past year.

Ford sales are down 34 percent,
Chrysler sales are down 33 percent,
Toyota sales are down 29 percent, and
GM sales are down 16 percent.

The list will go on and on.

Importantly, there have now been several improvements to this bill. First, The FDIC insurance rate covering bank deposits has been increased from $100,000 to $250,000. Americans will know that their deposits are secure up to $250,000.

The legislation will provide tax relief to working families.

One example: the Alternative Minimum tax is a real problem. It was meant to apply only to 200 wealthy people, but it was never adjusted for inflation and it has crept down the income scale to the point where more than 25 million taxpayers today may well have to pay an Alternative Minimum Tax.

In California, 700,000 people paid this tax last year. But 4 million Californians will pay that tax this year unless we take action.

This bill takes that action. For one year it will prevent this tax increase.

The Congressional Budget Office has reviewed this bill and concluded that the net cost to taxpayers is “likely to be substantially less than $700 billion.”

Again, these investments are first in line to be paid back.

It must be remembered that there was a great deal of criticism when the U.S. government bailed out Mexico in 1996 with $20 billion. The fact is, the money was paid back ahead of time and $600 million in profit was made.

Let me give you the following points.

This bill mandates that the government provide loan modifications for the subprime mortgages it acquires. This will help keep families in homes rather than foreclosing and putting the house on a deteriorating housing market where property values drop and homes are looted.

The bill limits executive compensation. It provides strong oversight and accountability, including a financial stability oversight board, a five-member Congressional oversight panel, an Inspector General, and a constant presence at Treasury by the Government Accountability Office.

This is the only choice Congress can make.

One can rail against it and vote no on it, but that’s not going to solve the problem. We have one chance, and one chance only, to solve the problem, and it is this bill.

I wish I could write it differently. Others wish they could write it differently, but the fact is that we are faced with this. Again, there is no question this is a tough vote.

But there’s no question that this is a vote that I believe has to be made.”

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Nearly 1 in 6 Homeowners is Underwater: Are You?

An article today on purports that nearly 1 in 6 US homeowners owes more on their mortgage than their home is worth.  I imagine, like all real estate statements, it should be predicated with “Depending on where you live…”. In other words, your mileage may vary. I imagine that the ratio in Stockton is wildly different than someplace like Palo Alto.

So, completely unscientifically, here’s my own poll, to see what readers out there are feeling:

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New Gory Details Podcast — Special Meltdown Episode!


This month: Special Financial Meltdown Episode and 2-Year Anniversary Episode

On this, the two year anniversary of the Gory Details Podcast….the longest running real estate podcast here in San Mateo County, we are covering the oh-so-relevant topic of today’s economic situation and how it’s affecting the mortgage and real estate market

And joining us today as our special guest to the Gory Details is a highly respected mortgage broker from Guarantee Mortgage, Mr. Adam O’Donnell
Take a listen, because the Ocotober edition of “The Gory Details Podcast” is now available! 

 (1) iTunes users, get it right here
(2) Or get it at
(3) And, always available at

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New, Shiny Mt. Carmel Homes for Sale

Well, finally, a flurry of some bright and shiny new listings in Mt. Carmel (pictures and virtual tour links to follow):

179 Inner Circle – $1,060,000 – 3/1.5, 1890 sq. ft. on a HUGE 14,110 sf lot

2311 Brewster Ave – $1,349,000 – 5br/3ba, 2570 sq. ft. on a 6500 sf lot

102 Jeter St. – $1,399,000 – 3br/3.5ba, 2612 sq. ft. on a 8255 sf lot

520 Quartz St. – $829,000 – 2br/2ba, 1090 sq. ft. on a 4800 sf lot.

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