Banks Are Willing To Take 50 Cents On The Dollar
The Post & Courier reports from South Carolina. “Shandon Fowler is prepared to rent while itching to get into a house of his own. The New Jersey resident plans to move soon to Charleston with his wife. But even though the couple can afford to buy a house now, they plan to rent as they learn the layout of the Lowcountry and watch for the local real estate market’s next move. ‘Our hope is that the prices come down and we can get more for our money,’ he said.”
“For more than 18 months, the market has shown signs of weakness. And basic economics suggests that after a significant drop-off in sales, prices quickly would follow, especially in a market where more than 10,000 sellers are courting an increasingly limited pool of buyers.”
“‘It’s certainly a buyer’s market, but there is absolutely no urgency on them to buy a house,’ said Tom Guidera, a Mount Pleasant-based broker. ‘They see a soft market. They see sellers reducing their prices daily. They are not worried about interest rates, and they have time on their side. So why not wait? ‘”
“On the outskirts of Mount Pleasant, homes are selling at about the median price (of) $404,577. There, sellers of existing residences are competing with heavy incentives offered by builders in big developments such as Park West, agents believe.”
“Industry experts and local real estate agents agree: For the Charleston market to get back on an upswing, the number of homes for sale has to return to a more normal level.”
“Though sales began slowing in February 2006, buyers continued to list their homes, creating a massive buildup in available properties.”
“Locally, that number has climbed to more than 10,000 homes, giving the region an 11.6-month supply of inventory based on the number of sales made last year through the Charleston Trident Association of Realtors’ MLS.”
“‘A lot of buyers have got a house to sell, so they aren’t taking advantage of the reduced prices,’ said broker Ralph Wetherell.”
“That’s the case for Caroline Fernandez of Asheville, N.C. Her husband recently took a job at the Medical University of South Carolina, but the two won’t be able to afford another mortgage until their North Carolina home sells.”
“‘We’d like to buy in Charleston, but we can’t do much now,’ she said.”
The St Petersburg Times from Florida. “The Qandil family began a financial nosedive shortly after buying their $249,000 home last year. Today, they are one of about 5,000 families in the Tampa Bay area facing foreclosure. In September, Florida’s foreclosure rate was the nation’s second highest.”
“The Qandils haven’t made a house payment since April. They are $11,000 behind on a $189,000 mortgage. Deutsche Bank, their mortgage lender, is weeks, or maybe days, from taking their home.”
“Last November…after selling a 900-square-foot Pinellas Park home for $205,000, they discovered a 1,400-square-foot home in Seminole. The Qandils agreed to buy the home when they heard the price had dropped to $249,000.”
“Nader preferred to rent, but his wife, Evangeline, who had bought two previous homes, felt renting ‘was just throwing your money away.’”
“‘I should have listened to my husband,’ she says now. ‘I wanted a house, house, house.’”
The News Press from Florida. “If you owe $300,000 on a house that’s only worth $200,000, you may still be able to sell it — banks are increasingly willing to make up the difference.”
“But first you’ll have to go into foreclosure or at least fall behind on payments, and you’ll have to convince a banker you’re broke and not just trying to pull a fast one by selling to your mother so she can sell it back to you later.”
“As real estate prices have tumbled in Lee County, short sales have skyrocketed — accounting for almost one in five houses on the market right now from the occasional sale just a couple of years ago.”
“At the low end of the price range, short sales loom much larger: 32.5 percent of homes listed for sale at $150,000-200,000 in the MLS of the Realtor Association of Greater Fort Myers and the Beach.”
“In September, 1,220 foreclosures were filed in the county: more than five times as many as the 237 recorded a year earlier.”
“Josie Burdier bought her Cape Coral house in 2006 with a mortgage of $186,600 but wasn’t able to afford payments or sell the house for what she owed. ‘I tried to pay it off, paying the mortgage with my savings,’ she said, ‘but I’m five months in default.’”
“HSBC Bank filed a foreclosure action against her Oct. 4, but she still hopes to get a short sale approved by HSBC. ‘Basically, they’re waiting as well as me’ to see if a short sale is possible, Burdier said.”
“As foreclosures continue to mount, banks are more willing to deal, said Jonas Elliott of Loss Mitigation Services of Southwest Florida, which also negotiates short sales. ‘Lately it’s gotten a lot easier, especially a deal that makes sense,’ he said. ‘Banks are willing to take 50 cents on the dollar whereas before, they’d say 80, 90 percent.’”
The Herald Tribune from Florida. “For most developers, this is a time to hibernate, or at least scale back. Consider the forthcoming Marquee on the Bay, a water-view luxury condominium project at 1301 Main St. in Sarasota. The grand plans there have been adjusted to slash starting prices from $3.5 million to $1.6 million.”
“‘All the huge national builders had to start slashing prices. Then our top-end stuff was competing with their mid-range stuff — that’s what started putting a hurt on us,’ said Brad Gaubatz, VP of community development for DeMorgan Communites, which formed in 2003 to provide workforce housing, has delayed two forthcoming “affordable” communities.”
“Centex Homes has six communities open in the Sarasota/Manatee area…but doesn’t foresee any forthcoming projects until 2008 or 2009, according to David Lepow, director of sales and marketing. It felt the first pinch last summer.”
“‘It was drastic. It was perceptible within a 30-day period,’ said Lepow. ‘For many, many months, many quarters, extending beyond even two years, there were more than 10 people there waiting to buy those home sites (in the first hours they were available). Then, within minutes or hours, those home sites had sold. In July (2006), we had maybe half the sites sold. That was the beginning of the end.’”
“For those speculators who got burned in real estate, the ‘American Dream’ turned into a matter of ‘commoditization,’ developers said.”
“‘What happened over the past 10 years was wrong — it was wrong and it was bad,’ said Lepow. ‘When I was in school, you learned about commodities — not to buy your primary residence and become rich. Not on your primary residence. Let the Donald Trumps of the world invest in real estate, (not) the people who borrowed against their retirement and got themselves into debt with these crazy loan programs.’”
The Palm Beach Post. “Even after the South Florida housing market peaked in 2005, Johnson Cuffy knew how to score big profits in real estate. First, the Broward County real estate investor found a Fort Lauderdale house for sale for $245,000. Then, inflated appraisal in hand, he convinced the lender that the home was worth $340,000.”
“Cuffy landed a loan for $340,000, paid the seller $245,000 and pocketed the $95,000 difference, state investigators say. Profits secured, Cuffy let the home go into foreclosure. He was arrested in July after the seller alerted officials to the scheme.”
“An isolated case? Not by a long shot. ‘My phone has been ringing daily with people wanting to report suspicious real estate sales,’ said Detective Ted Padich of the Florida Department of Financial Services in West Palm Beach. ‘This is going on in every neighborhood in Palm Beach County.’”
The News Journal from Florida. “East Volusia’s waterfront land commanded record-breaking prices during the condominium development rush of 2005 and 2006.”
“Now, however, with new condo construction slowing, values have leveled off and, in a few cases, have started to fall, according to the latest tax assessments issued by the Volusia County property appraiser’s office. The downward trend is expected to accelerate in 2008, county officials say.”
“‘We’ll probably have some massive decreases next year,’ predicted Morgan B. Gilreath Jr., the county’s property appraiser. ‘It’s going to be a tremendous challenge to determine values.’”
“Gilreath said up-to-date values are getting tougher to calculate because there have been so few land sales this year.”
The Miami Herald from Florida. “The deteriorating housing market took its toll on BankAtlantic Bancorp in the third quarter. The Fort Lauderdale-based banking company said Friday it lost nearly $30 million while experiencing a seven-fold increase in its problem loans in three months.”
“The ratio of nonperforming loans to total loans rose from 0.47 percent at the end of the second quarter to 3.53 percent at the end of the third quarter. The bank also increased its reserves for bad loans from $42.5 million at the end of the third quarter of 2006 to $92.4 million in the quarter that just ended.”
“‘The impact of the decline in the Florida residential real estate market has been significant,’ BankAtlantic Bancorp Chairman and CEO Alan Levan said in a statement.”
“Trump Tower Palm Beach was supposed to be the toast of the town when it comes to luxury condos. Now it looks like Trump Tower could be toast.”
“Real estate mogul Donald Trump confirmed he is close to shelving the 23-story condominium in West Palm Beach. ‘We won’t go forward unless we see a robust market,’ Trump said in an interview.”
“What happened to the Midas touch of Trump? It ran smack into the worst real estate market in more than a decade, that’s what.”
“Only nine months ago, Trump pooh-poohed concerns Palm Beach County’s flailing home sales would affect this ultra-luxe venture.”
“Looks like the hype didn’t help, however. Not even The Donald could surmount the relentless downward slide in real estate. ‘The market in West Palm Beach is not exactly great-looking,’ Trump said.”
“It’s not great-looking in Fort Lauderdale, either. Earlier this month, Trump suspended a condo hotel known as Trump Las Olas Beach Resort, citing a weak condo market.”
“In June, Related exec Barbara Salk said less than half the project’s 150 units had sold (Prices range from $900,000 to $2.4 million for the over-amenitized condo.) Developers were shooting for at least 60 percent, or about 90 units, before starting construction.”
“Trump wouldn’t admit saggy sales are the culprit, of course. ‘We’ve done very well with presales. We’ve had substantial sales,’ he said. But he refused to provide details: ‘There’s no reason to be specific.’”
“For those speculators who got burned in real estate, the ‘American Dream’ turned into a matter of ‘commoditization,’ developers said.”
“‘What happened over the past 10 years was wrong — it was wrong and it was bad,’ said Lepow. ‘When I was in school, you learned about commodities — not to buy your primary residence and become rich.”
I do not know if this number is still true, but 35 years ago only 1:10 made moneys trading commodities. The commodities is a zero sum opportunity. Gambling at its finest.
‘The commodities is a zero sum opportunity. Gambling at its finest.’
- Agreed. I traded futures for 2 years in 1994 -95. The only internet brokers were ‘Dial Up’ via AOL! WTF!
Even if you correctly determined market direction, the Floor Traders would ‘run the stops’ routinely and mow down the weak hands AKA ‘No Reserves.’
Hoz
What’d you trade, back in the day?
Grains, silver in the 79 run-up, Bonds in the early 80s, then switched to currencies. Still trade off floor. Mostly currencies. Haven’t touched PMs since the 80 break - just not enough interest on my part. I trade with liquidity. There is no market as liquid as the foreign currency markets.
1979 to Jan. 1980 was like a craps table you couldn’t seven out on, in regards to Silver…
Much of my thought processes about the housing bubble come, courtesy of the Hunt Brothers & Co.
Soybeans, Lean Hogs, Canadian Dollar, British Pound
“Last November…after selling a 900-square-foot Pinellas Park home for $205,000, they discovered a 1,400-square-foot home in Seminole. The Qandils agreed to buy the home when they heard the price had dropped to $249,000.”
Knife catching is a dangerous sport.
Reminds me of the tech bubble. Buy JDSU its off 50% what a discount.
I work in the area of Pinellas Park. This is, for the most part, a working class neighborhood. In 2000-2002, you could buy an average house here for 75k-110k, with an average SF of 1000-1100. Those were affordable houses for working people.
These folks are just more morons with big-time real-estate dreams. They saw what the fraud had wrought……higher prices, and thought they had discovered a new business model……buy now, so you can get a bigger check in a couple of years.
For those who can remember, Pinellas Park was one of the neighborhoods where an article was posted here last year about housing being bought through a Tampa Realtor for 75k-89k and re-sold and re-listed for 200k.
The owner got the 75k. Pure and simple fraud, but the neighborhoods all thought their houses were now gold-mines. The forclosures are starting.
But to add to the insanity, a lot of the area has mobile homes. Immediately next to them are brand new 2 -story 2500 SF houses with 3 car garages, built on in-fill lots. They are not selling, but have been sitting for about a year. Pure insanity. I am sure the trailer owners like it though, as the price of their property is up.
OMG! She buried the St. Joseph statue in the wrong place! It has to be in the backyard and upside down. Now her house will never sell.
I cannot understand the stupidity of some people. How could you not understand that you actually paid someone 39k and that the house price was really 210k. Also after realizing that how could you now think that the house was worth 294k. And then when they could have gotten out of the house they turned down an offer at 200k. Stupid people!
“Nader preferred to rent, but his wife, Evangeline, who had bought two previous homes, felt renting ‘was just throwing your money away.’”
So much for not throwing money away by catching a falling knife
I hope that phrase “Throwing away your money rent” is the First slogan to get BURIED alongside the St Joseph statue in the Realtors vocabulary!
Ironically, the only place I’ve heard that phrase lately, around here, is on this site.
We have a knife catcher at work. He bought a condo in New Jersey about 3 months ago. He tapped into his 401k plan, can no longer add to his 401k, has an expensive 2 hour commute but still defends his decision by saying, “at least I’m not throwing money away on rent”.
Wait ’til he realizes he just became another lifetime wage slave too. Wonder if he’ll defend his decision then.
He, like so many others, seems prepared to go down with the ship.
Amen!
I cant wait to see the Donald in a food line. When Donald is bankrupt we will be at the bottom in the housing market.
His dad has $3 or $4 billion. Donald Trump has one of the biggest safety nets behind him on the planet. He always has.
Yup - DT in a soup line will never happen. The Wall Street a$$holes always have a plan b, C & D lined up, not to mention their foolproof mutual aid society for greedbag elites (known as the Federal Reserve System).
“I should have listened to my husband”, she says now. “I wanted a house, house, house.”
I’ve learned in every successful financial relationship there needs to be someone in control who can say “No!”. This person will be considered by those that he ultimately saves as being an a$$hole. If this person in the relationship doesn’t exist or is so weak that his “No” is ignored then the relationship is doomed.
Reading that story is depressing. With the sale of their previous house, you’d think they’d be ok, but they paid 39k directly to the seller and the new house sale is listed at 210k. His income is cut in half, she starts a store with rent and utility bills, and they go out and buy expensive furniture and toys for Christmas. And they have two kids. It’s a story about adult children with a quarter million dollar mortgage, debts and no clue about the real world.
Giving people like this access to easy Al’s free money was like giving matches to children…disaster is just waiting.
Now they’ll become the taxpayers problem…thank you easy Al.
Uncomfortable story. (I Shiver) Bad….
f***ed family
f***ed bank
She’s heinous in every way you could describe.
Geez, at least she should be a hottie!
You let this lady drive you to the poor house, and yet she can’t run mile once in a while. $4,600 for a bedroom set!
Wow, dude, you must have your green card by now, cut your losses and dump this Gold plated Pig!
It seems a lot of women in particular really want to own a house. It’s about having a sense of permanence and belonging. The nesting instinct has been vital for the evolution of mankind, but girl, it’s time to curb that instinct!
And don’t discount the “shopping” aspect, that sadly is many womens reason for being, as we’ve conditioned them to be that way…
Shopping at the mall or shopping for a house/s is all the same, once they’ve been brainwashed by the advertisers and celebrities and assorted hooligans that make it so.
Yes, a lot of women were stupid, but I would be very reluctant to say they were any more the culprit than the average man. It seemed to me that the majority of power-tripping, get-rich-quick real estate “investors” were men. And here in NYC, a lot of single men, with no nagging wives or girlfriends, seem to have fallen into the “real estate always goes up” trap. That, or they need their status symbol at any price.
Anyway, I’m not saying women in general are by any means blameless. I’m just saying that it’s usually pointless to generalize.
One of my sisters is a great example…
She’s much smarter than I, but why does she have 3 houses now?
And she’s all about shopping.
Maybe I would put it this way: many many people are stupid (on my kinder days I would say ignorant). Men and women are stupid,ignorant, and/or greedy in their own idiosyncratic ways.
And that’s good. It makes things so much more interesting to watch. Ahhhh, the folly of man (in that inclusive sense).
Yesterday when I posted I was leaning towards the ‘ignorant’ description of my fellow man. I was feeling mellow and kindly, probably because I had planted 45 tulip bulbs and drunk a quantity of beer. I believe I even announced that not every single FB was totally to blame for their onrushing doom, and that ‘bald stupid optimistic monkeys should stick together’.
Today, I have changed my mind again, and I’m back to the ‘Everyone’s an idjit’ view.
So I agree with you, red pill. It’s all so sad, but it’s all so funny.
I have a lot of fur so I’m probably some kind of “hairy monkey”.
Its a tough situation out there. You don’t know what to do with all the wild cards. China and the cash reserves, government debt, the Fed.
They all make this big moves and we all get run the hell over.
Some of us made good guesses staying in the market and putting money overseas. Hell, the Fed could as easily have raised rates and increased reserve requirements. A little bit of regulatory enforcement and a few other moves… poof the people with money in China are in trouble.
If we have very substantial wage inflation from monitization of debt then the poeple with houses that hang on will make out.
Not saying that is a good solution but it is certainly possible.
“Nader preferred to rent, but his wife, Evangeline, who had bought two previous homes, felt renting ‘was just throwing your money away.’”
“‘I should have listened to my husband,’ she says now. ‘I wanted a house, house, house.’”
http://www.youtube.com/watch?v=Ubsd-tWYmZw
Madison Avenue and their own inherent lack of reasoning/logic skills have convinced far too many women that they’re entitled to have it all - right now! Too many husbands caved in against their better judgement to unrelenting harping/browbeating from these sucubus she-devils and now they’re paying the price. During the bubble years these wives could count on “allies” like the infamous Suzanne of Century 21 fame, who happily pandered to their sense of entitlement by telling them what they wanted to hear.
The husbands’ festering resentment at these illogical wives and their ceaseless demands is going to explode as they find themselves deeper and deeper in the hole. Just about the only good outcome will be that millions of Evangelines and her ilk - who acted on their galactic sense of entitlement, rather than reason and fiscal prudence - will FINALLY begin to realize that listening to their more innately cautious better halfs can save them a lot of grief.
If we ever assemble a “Housing Bubble Blow All-Star Team” you’d be my first draft choice.
A guy gets married, thinking that there`s something in it for him. There`s nothing in it for him, he just thinks there is.
Earl,
I’m married to a great girl, and wouldn’t have it any other way. True, marriage has its fair share of aggravation, but it’s nice having a “life partner” in the hetero sense of the word. You both have to act as checks & balances on the other at times, but do so in a respectful and fair manner. Thankfully, I married a girl who had enough faith in me that she was willing to hear me out and reluctantly (back in 2004) agreed to rent rather than buy when we sold our house and relocated. I’ve known several couples where the wife was the more level-headed half of the relationship, but usually it’s the other way around.
TxChick,
Thank you. The feeling is mutual.
I am very thankful to have my wife’s full support in this. Other than the people who blog here who I know only by screen name, it was a lonely journey.
And, by far, the majority of Realt-Whores were women! At least the ones I dealt with in FL and CA. Think ‘Carmella Soprano’.
I agree that most men and women are as stupid as beans. I don’t mean to single out women as mostly responsible for the bubble.
In my limited suburban experience (East and West coast), the equation works like this: the women want the fancy house, with all the trimmings and furniture +spa to match. Cost = $800,000. The men grumble and to make things equal in the relationship they buy that monster truck and enormous TV for football games (+ fancy ipod and other things). Cost = $50,000. No single party is to blame. But if they ran their retirement numbers first, they probably wouldn’t do it.
‘I agree that most men and women are as stupid as beans’.
Hahaha! Funny.
Do you mind if I borrow it to use for a pretty cross-stitch sampler for my wall?
go right ahead…
Thanks, AC. Maybe these men need to get some more intelligent women in their lives.
In my world the flipper-speculators are mostly men.
This puzzles me, Nader, a certified mechanic with Autoway Ford for four years, was earning $17.50 an hour, bringing home about $3,400 monthly. “ Unless he had a lot of overtime, I don’t understand how making $36,400 a year translates to monthly take home of $3400.
Actually, with people keeping their cars longer, he probably was making a lot of overtime.
At x1.5, even 20 hours a week adds up quick … I should know.
But the point is that again a couple was given a loan they couldn’t afford or the borrowers lied on the loan application . Based on a survey that was posted here a number of months ago ,the number of borrowers loan application incomes that didn’t match their tax returns was very high ,(don’t remember the actual %).The regulators knew about this 2 years ago .
The question becomes ,how is the government going to bail out the lenders without the public objecting to it ? You can already see that the PR is that the FB’s are victims and they understate how many loans need to be bailed out that are speculator vacant homes .
Also ,if the government wants to stick their nose in this housing meltdown, than why don’t they demand that builders stop producing homes and tell planning departments to deny permits based on oversupply .It’s clear that the builders were building to sell to speculators and unqualified buyers and the real long term user demand was a illusion .What a big waste ,but maybe borrowers can get housing really cheap with all this oversupply ,in the final analysis .
I don’t understand how making $36,400 a year translates to monthly take home of $3400.
It doesn’t, except in “no-doc” loan land.
“What happened to the Midas touch of Trump? It ran smack into the worst real estate market in more than a decade, that’s what.”
He’s still got the Midas touch, in reverse.
“‘Lately it’s gotten a lot easier, especially a deal that makes sense,’ he said. ‘Banks are willing to take 50 cents on the dollar whereas before, they’d say 80, 90 percent.’”
Say goodbye to wishing prices. Lenders are lowering the comps.
50 cents on the dollar is amazing. We’re beginning to see some steep declines in California, but I think Florida is still way out in front.
In all honesty, I’m not even sure I want to live in California much longer. After 10 years I’ve had about enough of it. My wife would like to live in Manhattan or parts of Northern New Jersey. It’s like trading one rat race for another, but at least it’s a change of scenery. We’re really glad we didn’t buy a few years back or we would find ourselves chained to Los Angeles with a house that’s difficult to sell for what we paid for it.
There are plenty of good places to live in California…
Not a one of them is close to suburbia, though.
If you can live and work in Manhattan, and not have to own a car, it’s a great way to live. I was fortunate to be able to do that for a few years. And there’s so many resources just a short walk or subway ride away, that you don’t feel confined even in a small apartment. You tend to be out and about more than you would be in suburbia.
Plus, you can get a decent bagel!
(One of the things on my to-do list when I retire is to get a “Defense of Bagel Act” on the ballots of FL and CA to outlaw some of these things that are called “bagels”.)
I agree with your Manhattan assessment. If I had to drive in this city, I would move out immediately. Well, time to hit the subway so I can take the train to Boston. Have a good Sunday, all.
I’ve heard this comment from die hard New Yorkers on more than one occasion;
“Los Angeles has nice weather…New York has everything else.”
There are some incredible things happening in the above article, and they deserve a second look:
“Banks are willing to take 50 cents on the Dollar”
Just the psychological title of the article is ominous. Once home owners, investors, realtors, anyone who’s involved with the real estate field sees the title, it’s going to make them swallow hard.
And cringe.
It’s an ominous development, and the message is clear: banks can’t sell their repossessed homes.
Also, 50 cents on the dollar this early in the meltdown means it will probably go down further.
““‘It’s certainly a buyer’s market, but there is absolutely no urgency on them to buy a house,’ said Tom Guidera, a Mount Pleasant-based broker. ‘They see a soft market. They see sellers reducing their prices daily. They are not worried about interest rates, and they have time on their side. So why not wait? ‘”
I guess to me it’s shocking that a broker would say this. Almost without exception, real estate brokers are highly invested in the hype and continuing the Ponzi Scheme, at least until they collect their commission check.
Real estate sales people do not fare well in a down market. I think most of them work on 100% commission basis, so they are under tremendous pressure to keep the game going.
Until it collapses, that is.
Then it’s time to take that sales experience somewhere else.
Cliss,
That caught my eye as well. HSBC and Deustche Bank are the two mentioned, but now short sales at 50 cents on the dollar means these two have more losses in their future.The blowback from these accumulating losses have to hit NYC in the form of layoffs, which will impact the housing market here. It’s just a question of time.
Real estate sales people do not fare well in a down market ??
Quite the contrary…Any “successful” broker welcomes this type of correction in that it shakes the tree real hard and eliminates much of the incompetence in the business…Good brokers do quite well in this type of market….
Here you go: 4 SFHs in Reston VA. Granted, these aren’t nice houses, but compare the list price vs. the last sales prices:
FX6470762
2216 Cocquina Dr
Reston, VA 20191
List: $280,500
Last Sale: $405,000
% of last: 69%
LS Date: 4/14/2006
Owner: Deutsche Bank
———–
FX6573593
2203 Cocquina Dr
Reston, VA 20191
List: $275,000
Last Sale: $381,880
% of last: 72%
LS Date: 1/31/2007 (to FNMA, prior sale 1999)
Owner: FNMA
———–
FX6432765
2201 Cocquina Dr
Reston, VA 20191
List: $279,900
Last Sale: $360,000
% of last: 77%
LS Date: 10/20/2004
Owner: HSBC
———–
FX6533673
2208 Cocquina Dr
Reston, VA 20191
List: $279,900
Last Sale: $453,500
% of last: 66%
LS Date: 3/14/2006
Owner: private individual
Aparently Cocquina Dr. is NOT the place to live if you want to keep your house.
50 cents on the dollar? That’s more like stock trading. If you want out, you take the bid. Doesn’t matter if it 110 cents, 80 cents, 50 cents or 10 cents. The bid is what you get right now.
“‘It’s certainly a buyer’s market, but there is absolutely no urgency on them to buy a house,’ said Tom Guidera, a Mount Pleasant-based broker.”
buy·er’s market also buy·ers’ market (bī’ərz)
n.
A market condition characterized by low prices and a supply of commodities exceeding demand.
In my area, there is inventory - but not low prices. I’m sick and tired of hearing about this so-called buyer’s market. If prices are still way out of whack with fundamentals, it’s not a buyer’s market. It’s just a saturated one.
There was a good article by Peter Schiff I saw yesterday - his take is that banks will soon realise that foreclosures are useless. Why repossess the house when there are no buyers to offload it to? His prediction is that lenders will start serious negotiations with the borrowers - better rate and reduced amount to match the current value of the property. That would be incredible, but actually could make sense and reduce the bank’s losses. Instead of holding a property for an extra 6 months + paying all the transaction fees, they could end up in the same position at the end albeit via a simpler path. The losses are going to happen, it’s just a question of from which direction.
The exact moment we bail ourselves out, is the moment the Dollar begins in plummet, as we’ll be telling the rest of the world that we are fiscally unworthy of consideration, as we’ve bent the rules in our favor.
I don’t know if a bailout is coming. Lots of talk, sure, no end of that, but this problem is just so huge. There isn’t enough money to fix it.
“I don’t know if a bailout is coming. Lots of talk, sure, no end of that, but this problem is just so huge. There isn’t enough money to fix it.”
I’ve heard that also, the Fed Gov’t can’t afford to fix this mess. I read in our local RE section this morning that 401K / IRA rules may be changed to allow penalty-free withdrawals for the purpose of catching up on a mortgage or re-financing. It still keeps the FB tied to their alligator, which I kinda like -);
Really? Depending oh what kinds of weird retirement changes that can happen, I might actually try to withdraw everything from my accounts. That would be awesome!!!
I think this would be a good solution, though I would add a clause that in the event that the house is sold, any equity received, up to the amount that was deducted from the original mortgage, be given to the bank. So, If I had bought a house for 350k and it was then put into a conventional loan for only 275K (new appraised amount), I would still owe the bank an additional 75K at the sale of the home if I received equity in excess of what was still on the mortgage note.
I’m not sure this is legal to do if the banks write this off as a loss, but there has to be some way to hold the mortgage note holders responsible for the difference.
Why would anyone sell it for more than $275K then?
Reply to YLG:
I agree everything that you said, and referenced to Peter Schiff is true….
But, as a bank examiner friend of mine ‘appraised’ me…
“”"”NOBODY KNOWS WHO OWNS THE MORTGAGES”"”
The tranches are diced up into so many pieces it’s difficult to get everybody together????
I saw this also. It’s either something like this or massive foreclosures. Simply modifying loan terms isn’t enough. There also have to be adjustments to the principal. Is this something that lenders will actually do, though?
It is something I don’t want to see.
It is saying that it was okay to “overpay” and buy a house you could not afford, but we are going to let you keep it anyway and subsidize your payments.
These folks BOUGHT the loan and the loan terms.
They should be forced to pay. NO re-adjustments, and NO forgiveness.
Get a second job. Sell the house and keep paying your DEBT. You signed the papers, you agreed to PAY, so pay. PERIOD.
Why are the (middle-class) borrowers held to superstrict liability while the corporate lenders get off scot-free? If I lend 10,000 to some homeless guy does that entitle me to get the sheriff to take his dental fillings? If some idiot bank loaned 500,000 to a strawberry picker, IMO tough cookies, they just made a big charitable contribution. They had their opportunity to turn down the loan and ample warning.
Isn’t the bank eating the loss exactly what happens during a foreclosure? So the “middle class” borrowers CAN get off scot-free, exactly the opposite of your claim.
But hey, don’t let the truth ruin your great sob story.
Thank you Ben. This blog has been the most informative as well as the most entertaining. Being a new buyer it most likely has saved me thousands of dollars. I would also like to thank other contributors to this blog their comments are very educational. I have become an informed buyer who will not catch a falling knife.
Thanks a lot everybody.
SUGuy,
It’s always good to hear from the newbies. A gentle reminder: expressions of gratitude mean so much more when they’re accompanied by a modest and hopefully recurring check to Ben Jones. The expenses, in time and money, of making this incredible resource available to us are not inconsiderable, and while Ben has called it a “labor of love,” he has bills to pay, too.
I didn’t check out the bits bucket today, but did anyone see this, published yesterday? Wow, that’s some doom and gloom for the mortgage market.
http://news.yahoo.com/s/ap/20071027/ap_on_bi_ge/wall___main
“The Qandils haven’t made a house payment since April. They are $11,000 behind on a $189,000 mortgage. Deutsche Bank, their mortgage lender, is weeks, or maybe days, from taking their home.”
“Last November…after selling a 900-square-foot Pinellas Park home for $205,000, they discovered a 1,400-square-foot home in Seminole. The Qandils agreed to buy the home when they heard the price had dropped to $249,000.”
“Nader preferred to rent, but his wife, Evangeline, who had bought two previous homes, felt renting ‘was just throwing your money away.’”
“‘I should have listened to my husband,’ she says now. ‘I wanted a house, house, house.’
Bitter Homedebtors. Should have listened to me. LOL!
“…Cuffy landed a loan for $340,000, paid the seller $245,000 and pocketed the $95,000 difference, state investigators say….”
Cuff him and hall his ass to jail.
“This is going on in every neighborhood in Palm Beach County.’”
In California, the FBI & the IRS are making joint house calls on the fraudsters. You see, all proceeds from fraud are taxable as ordinary income. A couple of California houses can net the fraudsters a quick $400,000. The problem is, the fraudsters don’t pay the IRS (can you say “Al Capone?”) The tax bill is $120,000, plus interest, plus penalties, plus attorney’s fees! And interest on fraudulent proceeds is not deductible!
Want to see a suspected fraud deal in action? Go to http://www.metrolistmls.com and find the ML Number tab: Enter 70110106.
This house sold 3 months ago for about $900,000 and WAMU provided an $850,000 loan. Why would a loan officer at WAMU lend $850,000 on this house? I am not sure, but I can think of a few felonious reasons….
Anyway, the new buyer is now a seller and has now listed it with an agent for a short sale at $525,000. The utilities have been turned off for 6 months! WAMU probably has a first payment mortgage default on their hands. The sellers appear to be part of an Asian group working for Century 21 Landmark Realty in Sacramento. They appear to own multiple houses in the area and 2 months ago, they were all listed at $800,000 to 900,000 with “Sale Pending” notations on the MLS. This may have been done for the appraiser’s benefit. Now, the “sales” all mysteriously fell out of escrow and are listed at greatly reduced prices. Century 21 may be getting a visit shortly from the FBI, the IRS, & the DRE.
Check out the three “supporting listings”: 70090262, 70036139, & 70101862. Right before your very eyes, suspected mortgage fraud in action. The authorities already cuffed Cuffy, now it is time to pick up the rest of these felons. They drove the market so far out of whack it will take years and years and many miserably ruined lives before it recovers. The more examples the Feds make out of these monkeys, the better. It won’t stop the FB’s pain, but it will provide them some feelings of justice served.
There was a Nigerian ring that was doing this same thing with a group of townhouses in Frisco, Texas (N of Dallas). One of those shining examples of unlimited opportunity for foreigners in America:
http://www.dallasnews.com/sharedcontent/dws/classifieds/news/homecenter/condos/stories/class092406dnmetfrisco.15bce408.html
and what would mortgage fraud in Dallas be without a few Dallas Cowboys involved:
http://mortgagefraud.squarespace.com/journal/2005/7/11/new-questions-raised-about-former-dallas-cowboys-players-mortgage-business.html
It’s so easy to find these things. You’d hope that the IRS has (someone on the staff just looking at RE transactions to investigate fishy ones.
Of course, even people whose intention is fraud can go to the MSM and say “boo hoo! I’m a single mom on SSDI!” and our legislators will declare their forgiven debt as “phantom income” and try to remove the tax liability from it.)
No, the IRS is too busy hassling me over the deductions for my Aeron office chair.
Are you claiming a medical deduction for a bad back, or home office? Why is this an issue?
Those Aerons are worth every penny. Call me sitting pretty
There are a few of these places around my area. Meaning about 6 block radius. Someone on our street sold the house to themselves for about $600,000 over what zillow said prices were last year. So the house they bought for $900,000 was then sold for $1.5million about 6 months later with the exact same family living there. I have seen a few other things like this when just flying over the area using Zillow.
I also saw my first foreclosure sign today while jogging. the house has been vacant for over a year. but there the sign was.
“If you owe $300,000 on a house that’s only worth $200,000, you may still be able to sell it — banks are increasingly willing to make up the difference.”
“But first you’ll have to go into foreclosure or at least fall behind on payments, and you’ll have to convince a banker you’re broke and not just trying to pull a fast one by selling to your mother so she can sell it back to you later.”
Is this really what we’ve become?
You have to prove you are financially incompetent, before they’ll throw you a bone…
‘You have to prove you are financially incompetent, before they’ll throw you a bone… ‘
But that should be surpassingly easy to do, for so very many people. So it’s okay. It’s a test they can pass.
You have to prove you are financially incompetent, before they’ll throw you a bone…
Why should they be thrown anything? They should pay.
Men have to pay child support. No one cries for them when the government takes 1/3 of their income. If they make less, they are still required to pay.
These people should be forced to WORK OFF the debt.
That is a financial lesson. There is no lesson when people are allowed to walk. It teaches them that they can get away with being irresponsible, and someone else should shoulder their burdens. No forgiveness, no bank-re-adjustments, just PAY UP or the debt remains until PAID.
I think I’m clear on this now.
Very.
The true cause of the housing bubble: WIVES! Simply outlaw wives and our economy would be much better off/
Sorry if it’s a repost.
Comment by Olympiagal
2007-10-28 09:08:51
Yesterday when I posted I was leaning towards the ‘ignorant’ description of my fellow man. I was feeling mellow and kindly, probably because I had planted 45 tulip bulbs and drunk a quantity of beer. I believe I even announced that not every single FB was totally to blame for their onrushing doom, and that ‘bald stupid optimistic monkeys should stick together’.
Today, I have changed my mind again, and I’m back to the ‘Everyone’s an idjit’ view.
So I agree with you, red pill. It’s all so sad, but it’s all so funny.
But even though the couple can afford to buy a house now, they plan to rent as they learn the layout of the Lowcountry and watch for the local real estate market’s next move.
Why is this even newsworthy? Isn’t it STANDARD advice to rent for at least a year or two after you move to a new city?
“Why is this even newsworthy? Isn’t it STANDARD advice to rent for at least a year or two after you move to a new city?”
As more and more Real-a-whores become property managers, we will see this advise touted all over the place.
“On the outskirts of Mount Pleasant, homes are selling at about the median price (of) $404,577. There, sellers of existing residences are competing with heavy incentives offered by builders in big developments such as Park West, agents believe.”
I proffer a new addition to the canon of conventional real estate wisdom: In any state or region in which the average teeth-to-resident ratio drops below about 25, consider renting instead of buying. Consider it even more strongly when the local price reaches California levels.
Johnson got Bobbitted…
“Even after the South Florida housing market peaked in 2005, Johnson Cuffy knew how to score big profits in real estate. First, the Broward County real estate investor found a Fort Lauderdale house for sale for $245,000. Then, inflated appraisal in hand, he convinced the lender that the home was worth $340,000.”
“Cuffy landed a loan for $340,000, paid the seller $245,000 and pocketed the $95,000 difference, state investigators say. Profits secured, Cuffy let the home go into foreclosure. He was arrested in July after the seller alerted officials to the scheme.”
The median price of a house in Mt. Pleasant is 404K? Why in the hell would anyone want to pay 404K for a house in MP? Unless things have changed drastically, I always thought of Mt. Unpleasant as one of those one-soplight towns I had to slow down in in my hurry to get back to college after spending the weekend at my parents’ house in Forest City (another one of those towns that looked better in my rearview mirror)!
It’s funny how any town with “Pleasant” in its name isn’t! Out in CA we have “Pleasanton”.
Why wait for 72 virgins in heaven when you can have a free, obese, coach-carrying Floridiot right now!!
Everyone come on down!!
(spoken with South Park cynicism and sarcasm)
Free water for your toilet bowl… POOL INCLUDED! Stop throwing your money away on rent and just plain throw it away!!!