Taking Discounts As A Way To Liquidate Property
The Palm Beach Post from Florida. “Homeowner Chentella Harper-Graham fell behind on her mortgage payments after a one-two punch to her pocketbook. Her husband lost his job as a clerk at a law firm, and she became caretaker for her ailing mother. The West Palm Beach woman was among the flood of Palm Beach County borrowers facing foreclosure, but she was able to escape her mortgage default relatively unscathed, thanks to a successful short sale. ‘We had to take care of our mortgage and ourselves, and we couldn’t do both,’ Harper-Graham says.”
“In 2005, Harper-Graham paid $131,900 for a 960-square-foot condo in West Palm Beach. In 2006, she refinanced for $153,000 and used the extra cash to buy flooring and cabinets. By late 2007, when lender US Bank filed a default notice, the unit’s value had plunged. Harper-Graham sold in March for $90,000 - including the uninstalled flooring and cabinets. US Bank agreed to a $60,000 bath.”
“For Harper-Graham, the fallout from a short sale was far less devastating than a foreclosure would have been. ‘My credit didn’t get hit too hard,’ Harper-Graham says.”
From Wink News. in Florida. “Thousands of people living in Cape Coral won’t have to pay between $10,000 and $15,000 as part of the city’s billion dollar utility expansion project. City council voted to postpone hooking up homes located in the southwest six and seven areas. They may be off the hook for now but might have to pay more later on.”
“David Plume’s neighborhood has really been hit hard by Florida’s housing troubles. ‘There was about five families on this street and now we are down to three,’ says Plummer.”
“His street is almost becoming the norm in the Cape. ‘You just need to take a ride around the city and count how many vacant homes you are seeing and houses falling into repair problems,’ says Councilman Tim Day.”
“One burden City Council members won’t be putting on the residents who are here, $10,000-$15,000 bill to hook into city sewer and water lines. ‘You can’t put something else on people who can’t pay their mortgage or insurance,’ says Day.”
The Orlando Sentinel in Florida. “The median sale price of a home in the core Orlando area was still 14.4 percent below the May 2007 median of $250,000. The number of houses and condos available through the local MLS was down 421 for the month and 1.76 percent lower than in May 2007. The 19.6 months of inventory was the lowest by that yardstick since August 2007.”
“Orlando resident Bill Butler has had no luck trying to sell his two rental houses, one in Orlando and one in Longwood, despite dropping the prices a number of times. So he’s considering auctioning them off to the highest bidders. ‘It’s about as slow as you can get,’ said Butler, who has been buying and selling rental property in Central Florida since 1994.”
“He recently dropped the price on his three-bedroom concrete-block home near Clear Lake in Orlando from $169,000 to $151,500 and now is slashing it to $145,000. He upgraded the electrical and air-conditioning systems, added tile and carpet, and now is ‘hoping to at least break even. It’s move-in ready,’ he said.”
‘His rental house in Longwood has had an asking price of $245,000 for some time now, but Butler said he’s now leaning toward auctioning it off ‘with bids starting at $189,000.’ ‘You just have to be proactive,’ he said.”
“Paul Auslander, a veteran financial planner in Orlando, said he travels throughout Florida a lot and thinks Central Florida’s housing market is in better shape than other big metro markets farther south.”
“‘The Miami market is down, Fort Lauderdale way down, and Palm Beach, where I used to live, is absolutely dead. I’m keeping my fingers crossed for us here. The Realtors I know are not happy, but I think we can pull out of this a lot faster than other [ Florida] locations, especially [coastal] locations where people feel vulnerable to hurricanes,’ he said.”
The Daily Business Review from Florida. “In South Florida’s tumultuous real estate market, even subsidized housing projects aren’t immune to foreclosures. Yet, Roberto Godoy may be one of the luckiest rookie developers in Miami. City officials are considering using millions of taxpayers’ dollars to rescue him from a construction loan that is in default.”
“SunTrust Bank last month cut a deal with city officials, letting them buy the troubled $2.99 million mortgage for $3 million. The city wasn’t the loan guarantor but agreed in principle to the deal to save the affordable housing project.”
“The project was to honor his late father, who had bought the land in the early 1990s to build affordable housing. ‘All he did before dying in 1995 was talk about building condos for the less fortunate,’ Godoy said this week. ‘It was his dream … and my nightmare.’”
“Real estate consultant Saul Cimbler said it makes sense for the city to try to save its investment as a second mortgage holder. ‘It is not unusual for a second position to buy a first mortgage to protect’ its interest, he said.”
“Godoy can’t wait for the project to be over. ‘It took too long … too many headaches,’ he said. ‘I would never do anything like this again. It is time to retire.’”
From Access North Georgia. “The water is not the only thing dropping on Lake Lanier. According to the president of the Lake Lanier Association, home prices are also falling about as fast as the lake they border. ‘More houses than usual are on the market,’ Lake Lanier Association President Jackie Joseph said. ‘They are not moving very rapidly.’”
“The blame goes, in part, to the struggling housing market. Many across the country are having a hard time selling regular homes. Expensive lake front property is suffering the same fate. But that means now’s the time to jump in if you are looking for a great deal. ‘Really big discounts are being offered,’ Joseph said. ‘Some people who are lake residents are taking those discounts as a way to liquidate their property.’”
The Index Journal from South Carolina. “The housing market is a mess. That much is clear, but what it means for renters is significantly more gray. ‘We’re renting more units, but rent hasn’t gone down or up,’ said Russell Lawrence, broker in charge at Greenwood Rental Agency.”
“Greenwood Rental Agency manages about 2,300 residential units and about 97 percent of those are currently occupied. Lawrence said this is slightly above the firm’s usual occupancy rate of 95 percent to 96 percent. But, he said, the agency and property owners are having to work with tenants more than ever on rent arrangements.”
“‘Ordinarily, your rent is due on the first of the month. . . . In some cases we are having to split it into two payments, but we’re still getting it,’ he said.”
“Ted Long, rental property manager at Harrison Real Estate in Greenwood, said he has run specials in a couple of his buildings, but said overall occupancy rates have increased for his company. ‘It’s helped our business because people are not able to get a loan for a house,’ he said.”
“Wilson Bruce, of Town & Country Property Management Inc., said said there have been some problems in the Anderson area. Occupancy rates and inquiries started to slow down there about Feb. 1, Bruce said. To cope, Town & Country has offered incentives and lowered rents, but still most of its properties have 15 percent vacancy rates where the usual is 5 percent to 10 percent.”
“Bruce thinks this is because of a combination of factors, mostly the economy and jobs. More people are putting off the obligation of a place of their own and are staying home, moving home, or moving in with friends, because they are uncertain about their financial future.”
“Bruce, who is also the president of the Greenwood Property Managers Association, is wary of the future. ‘I have begun to see some competitors lowering their rents, and that scares me,’ Bruce said. He also has noticed ‘traffic,’ measured in phone calls and walk-in inquiries about properties, has decreased recently.”
“Bill Clark, of Upstate Carolina Real Estate Investors Association Inc., said he has not noticed rent rates decreasing, but he can see how it might be a possibility in the future. ‘We’ve got a lower rent base than most already,’ Clark said of South Carolina’s rental market. ‘The rental base is great if you keep the rent below $850. You get over that and you’ve got a problem.’”
“Clark said he has noticed more properties on the rental market as a result of foreclosures, but he said South Carolina renters are not drawn to the kind of large properties that are being foreclosed on because they can’t afford them. Plus, he said, the number of people coming back to the rental market after losing their homes makes up for the new properties that are coming on the market.”
“Heritage Co. VP Van Walters said his company has experienced some downward pressure on rent prices, but he chalked the change up more to normal fluctuation than any trend. ‘We haven’t had an extreme influx of new construction in Greenwood,’ Walters said of why he thinks rent rates in this area have been stable. In other areas, rent rates were pushed higher by fancy new buildings and when the housing bubble burst, those rates came back down, he said.”
“Thousands of people living in Cape Coral won’t have to pay between $10,000 and $15,000 as part of the city’s billion dollar utility expansion project.”
Sounds like good news for Jeff from SDCIA.
Assuming he hasn’t offed himself by now and moved on to the Great Real Estate Boom in the Sky™.
US Bank agreed to a $60,000 bath.”
“For Harper-Graham, the fallout from a short sale was far less devastating than a foreclosure would have been. ‘My credit didn’t get hit too hard,’ Harper-Graham says.”
What a true American hero, very happy about stepping out on $60,000 worth of debt, and uses her real name no-doubt (who would make up ‘Harper-Graham’?)
Hey, maybe if enough banks have to deal with short sales they’ll be a little more cautious about granting those loans in the first place.
I think she did a good thing. She didn’t walk away, she managed to put together a sale, and got herself out of a hole. Her credit took a ding, which makes sense because she didn’t pay back “all of the loan.” The bank took a bath, as they should have done for not having been more careful in the first place. (If she was paying PMI then I see no reason for the banks to bitch at all–isn’t that what PMI is FOR?!!)
“SunTrust Bank last month cut a deal with city officials, letting them buy the troubled $2.99 million mortgage for $3 million. The city wasn’t the loan guarantor but agreed in principle to the deal to save the affordable housing project.”
$3 million for a $2.99 million loan in default…what a deal! Your tax dollars at work folks!
Not my tax dollars. Notice they have to pay back the Feds too. Pay up Andy!
Ben, I’ve been a lot of places in this country of ours and I’ve yet to see corruption that rivals that in FL except possibly in NY and DC. I have to assume someone has their hand in the cookie jar on this one.
I’ve oft been told that the only (2) things you need to run a scam in FL are a phone… and an air conditioner!
I was ripped off on 3 different moves in NJ. Three different companies, 3 different ways of finding them, 3 different ways of ripping me off. All scams in some form or fashion. I’ll never go back to NJ! What a dump.
Fool me once - shame on you.
Fool me twice - shame on me.
Fool me three times - ???
NO!
Fool me once- shame on you
Fool me twice- not…not…not…not gonna fool me again.
“I’ve oft been told that the only (2) things you need to run a scam in FL are a phone… and an air conditioner!”
In January you don’t even need the air conditioner.
You haven’t spent much time in NJ have you?
Home of the Penny Stock Boiler Room!
I guess I just lump NY and NJ together…I had experience working with builders in NJ…we won’t go there.
I laughed myself silly when I read that. Yeah, I’m sure SunTrust “let” them buy the mortgage for full price. What a bunch of fools. None of those bureaucrat’s buddies, advisors and consultants ever heard of discounted mortgages???
Blano - such skepticism - heck, “trust” is part of the corporate name!
“Bruce thinks this is because of a combination of factors, mostly the economy and jobs. More people are putting off the obligation of a place of their own and are staying home, moving home, or moving in with friends, because they are uncertain about their financial future.”
A slowdown in household formation has long been predict on this blog, but is this the first instance mentioned prominently in the MSM?
“A slowdown in household formation has long been predict on this blog, but is this the first instance mentioned prominently in the MSM?”
Rents declining in Orange County (CA):
http://tinyurl.com/6gzlrs
“Axiometrics Inc. says rents at Orange County’s biggest apartment complexes are on a pace to drop 3.1% this year, the first drop since the four quarters following the 9/11 terrorist attacks in 2001 when they fell 2.7%.”
“Rising vacancies also will put added pressure on big apartment complex rents, Denton says. Axiometrics expects the vacancy rate to be 5.9% in the second quarter, rising to over 6% by the end of the year.”
“He sees several contributing factors including the number of new apartments coming on the market and tenants doubling up with roommates or downsizing to less expensive rentals.”
On an interview on 1070 AM in Los Angeles yesterday evening, doubling up or moving in with relatives was given as the most likely reason for the rising vacancies and declining rents. There was no evidence that those in foreclosure were driving down vacancies.
This shows that rents are down everywhere.
In Palm Beach County you would have been hard pressed to find a 1 bedroom apartment for less than $900 per month, even in the less than desirable areas.
Today $895 gets you 2 BR 2 BA wherever you want to live (that’s not coastal or in Boca).
That single bedroom apartment will run you $595 to $695.
Incredibly that’s about what we paid for a 2bd/1ba apt. on Palm Avenue in Imperial Beach, CA circa 1988. Brand new complex right off the trolley tracks. I think it was $550 a month.
Yes, I’m mortified of escalating rents.
D - I’m a bit bleary, but I don’t understand. Rents here in Florida are dropping. Not as fast as wishing prices, but fast enough.
This just HAS to happen in Silicon Valley. My youngest son rented a one bedroom in San Jose for $1050 a month. Moved out 2 months ago and they have now raised that rent to $1295!!
Its an old building, the place is a dump and they are totally taking advantage of low income renters. (Plus they bilk their tenants when they move out for their deposit, knowing that low income renters will not go to small claims court).
I find the greed absolutely disgusting and can’t wait for the entire market to fail abysmally.
“This just HAS to happen in Silicon Valley.”
At the next techno bust it likely will. The problem is all of the high paying jobs (sure there are low paying jobs too). I had an offer from a company for $80,000 yearly to do the same thing I was being paid $45,000 yearly to do in Detroit. Luckily I didn’t take the move because I would have been without a job in a year.
My response to anyone these days who are even thinking of moving here and especially young people — DON’T.
Unless you are a high wage earner, there’s no quality of life here. You will end up sharing rentals for a LONG time.
Hmm. A good friend of mine just left Silicon Valley, and was fortunate to be able to telecommute from our area to his job there (I’m in the Norfolk, VA area).
He says that they have a VERY hard time finding anyone with good skills. Good people are difficult to find, because there are a number of companies always competing with salary and other benefits.
He did very well there. Went from making $35K in Norfolk to $80K + $20K signing bonus there some number of years ago, and then it went up from there.
His house was a 3 bedroom with a pool, and I think the rent was slightly over $2000/month.
The contacts he made working there, and the caliber of companies, and the skills he picked up eclipse anything you could find in many other areas.
“Moved out 2 months ago and they have now raised that rent to $1295!!”
Potential - the key question, IMO, is: Did they GET that $1,295, for the term specified? If not, it/was is just a “wishing rent,” no different than the “wishing price” that Robert Cote coined here a few years ago.
Or could it be the illegals leaving that accounts for more apartment vacancies?
“Ordinarily, your rent is due on the first of the month…In some cases we are having to split it into two payments, but we’re still getting it”
?
More realtwhore thinking. Special billing arrangements, re-working the terms of the lease and having to work twice as hard to collect the same rent unfortunately do not constitute “business as usual” in my book. If that were the case why don’t you just charge them by the day? The Damage Control going on out there is just astounding.
You could just stop at what you first said. Special billing arrangements do not take something from being unaffordable to affordable. The sooner the REwhores and banks figure this out, the better we all are. How on earth does collecting rent 2X a month help? Or giving me teaser rates for a few years (after which, I then lose the home)?
There’s one measure of affordable that has worked throughout modern history:
3X income = max loan amount
All the other crap/happy talk is just that.. Interest rates moving does make a SMALL difference, but nothing like the RE establishment would have you believe. The stupidity just runs SO deep in that business; I fear that the entire model is broken. Having hot, dumb (mostly) women conduct million dollar transactions when they CAN’T ADD is a very, very bad idea.
Mike, I think you are also a communist who hates freedom. Why buy something you can afford when you can borrow now and pay later…or maybe never?
The good news is fewer people are in denial about house prices in general. They are still in denial about the proper time to buy.
MIchael Fink,
Agreed, doing business on a “payday basis” sounds like something you’d expect to hear outside the main gate of a military base? But the bottom line was that these were all mom & pop shops *not Walmart, REIT’s and nationally chartered banks.
Like you, I too fear the “entire model is broken”. Especially when you consider that we’re keeping int. rates artificially low when everyone that’s of a mind to keep their house has already either re-fi’d to a fixed loan or is current on their payments!
Fer chrissakes, what makes these lenders think someone that’s 14 months behind on their $3,800 payment is going to suddenly turn the whole situation around? The fact that the lenders aren’t moving forward with foreclosure shows just how “broken” the model is!
I think maybe the low rates = false hope that keeps the FB making payments.
And of course, don’t forget the biggest FB that needs the rates to stay low.
Al,
Well I can see that “false hope” in 2007 but c’mon. Back when realtors were telling infestors they “can always re-fi to a fixed down the road” we just laughed!
The sober reality was that those with income, might not have the FICO, those with the FICO, might not have the equity and the few that weren’t completely under water wouldn’t have the income OR… the FICO to pull off one last miracle re-fi.
The Credit-Suisse Re-Set Chart (AFAIK) hasn’t been updated since it first came out. Those that could re-fi… HAVE! Again I think you’re right. In the early hours of the credit crunch the Fed/Treasury were literally responding to the crisis minute by minute. Any problem they can push out until next quarter/year is basically “solved” where they’re concerned?
If you’re behind one mortgage payment of $4000, then you have to come up with $8000K the next month. OR 12K after the third. This is tough to make up even if you make 200K per year. Stupid…..
Michael Fink
check out 90001 Gardens Glen Cr. zip 33418
see if you think it`s woth an offer of $150,000
Jeff - not trying to speak for Michael, but generally you get better results with such inquiries if you include an MLS number or a ling to the ad. Most posters here are not going to step aside and do a lot of searching to find the object of a question. Best bet: the MLS number.
And the industry used to call I/O, Option-ARMs, etc. “affordability products.” Ha! If you actually had that mortgage until the house was paid for, you would pay a lot more than a traditional “unaffordable?” mortgage.
My local representative, Anna Eshoo (one of the dumbest ***** I’ve ever encountred!) sponsored an number of bills to increase the amount of FHA mortgages, lower the down-payment requirement, and increase loan terms to 40 years! She called this bill her “affordable mortgage” plan.
(And when you write her, her computer sees the word “Mortgage” and spits out a form letter that most greedy specu-vestors want to hear. See this exchange from the Patrick.net guy http://patrick.net/wp/?p=597 )
“3X income = max loan amount”
Michael - I agree absolutely. I think that anyone who is in the least risk-averse should stop at 2.5X. The concept of paying every two weeks cannot relate to rational homeownership as described daily on this blog, but rather refers to the shotgun-shack curse of those who are too poor to own but have been conned into thinking otherwise.
Or by the hour, like certain “motels” do!
Well, the only thing I can think is that people live paycheck to paycheck. So, they don’t have the money at the first of the month entirely, but will between their different checks throughout the month.
Perhaps a lot of this whole mess could be avoided if RE commissions were treated like employee referrals at companies… The person who buys that home from you has to live in it for at least 6 months (or a year!) before you get your commission. I bet they’d screen their clientele better then.
Hailey,
You know, that is such an excellent point! In insurance sales, if the client cancels the life insurance policy within the first year or so the agent gets a “charge back” and owes a portion or ALL of the commission back!
There are similar scenarios in securities and certainly in annuity sales. I mean obviously if the client cashed out of the annuity within the first year or two, it wasn’t the right fit.
I don’t know “how” the NAR would contend with that but that’s not my problem now is it? The firm could go ahead and pay out the 6% or 3% or whatever but if the “boomerang” sale comes back on their doorstep they can decide whose going to eat it. Excellent point.
Or better yet if the owners willingly default on the mortgage within 2 years you have to pay back all your commission as a penalty and its not discharged in a bankruptcy
All I’m saying is that someone should take a look at it. If the gal’s husband becomes disabled and she has a mass lay-off and the home flooded… well then no, no one should be in any kind of trouble.
But there have been all too many cases recently where there realtors themselves “coached” the potential buyer on how to “appear” qualified. They, the MB and everyone else involved got their comm. fees etc. and then leave US holding the bag! Now that sh!t ain’t right.
Eh, I sorta understand this, depending on when all the bills fall due. I usually end up splitting my payment of monthly bills/stashing away taxes across the two paychecks I get a month. Otherwise having to suddenly have $3000 in hand is a bit much.
‘All he did before dying in 1995 was talk about building condos for the less fortunate,’
We have those already - they are called apartments…
No kidding, ownership is not a cure for society’s ills - despite what its boosters claim. It sounds warm and fuzzy but walkaways and stripped foreclosures are the reality.
I’m not against ownership for most…and if there are $30,000 condos, why not offer them to everyone who can come up with 20% down and then just vary the interst rate based on credit risk?
The problem is the $30,000 condo doesn’t exist but plenty of potential buyers for something like that do exist.
“The problem is the $30,000 condo doesn’t exist”…..yet.
Sure they do, they’re called McHummers!
“McHummers” LOL!
Yeah, we strip the engine and anything else that doesn’t contribute to water tight integrity out and sell for scrap. Then find a “park” with easy access to a porta-potty!
I would actually love to see scores of 50-75k condos. I know I bang on this a lot but the whole idea behind a condo was they were ’supposed’ to be affordable..?
“I would actually love to see scores of 50-75k condos…”
So soon this will be the case. Condos that were running $200K are running $120K today. I’ve seen ads for condos in the $80’s and $90’s…and that’s Palm Beach County! Be patient and that day will come.
Yeah, as long as they’re not mobile homes! the horror.
Bad Andy,
I really invite that. At the height of the bubble I couldn’t b-e-l-i-v-e what people were asking for “luxury” condos!? 400k? 500k? A cool mil? You’re kidding right?
The model since inception was:
Sell primary ( and PAID IN FULL ) residence.
Purchase ‘nice’ condo ( IN CASH ) within driving distance of “the kids”.
Invest difference in muni’s/corp. bonds ( depending on tax bracket )
Use interest to supplement social security.
Live happily ever after.
WTF happened!? How did this simple model get so perverted?
“WTF happened!? How did this simple model get so perverted?”
Greed!
I agree with Andy on the pricing, especially for those unremarkable condo conversions that don’t go the “repartment” route.
From the size of the unit and its price, I suspect that Ms. Harper-Graham in West Palm bought a converted unit with visions of dolling it up for a flip. Whoops!
“WTF happened!? How did this simple model get so perverted?”
Greed!
And a sense of entitlement.
Condos at $30,000? Heck there’s already single-family homes in Miami selling for less than $25,000. For instance, check out this beauty:
http://tinyurl.com/5tkrq9
At that price, you could even afford the required Kevlar vest and helmet that you’d need while making a dash from your car to the front door.
I’ve said this before, but I will repeat it here.
The truth is that homeowners, based on traditional lending standards, were more responsible and more financially secure than non-homeowners. They worked hard, saved their money and got a “paid off” house to live in at the end of the mortgage life. This gives them financial security in old age. This was a great system until idiotic, bureaucratic morons decided that owning the home made them more responsible, rather than responsible people generally own homes.
The result of this backward thinking led to “securitization” of loans and cheap lending to get people into houses. The experiment has failed.
It is the same reasoning that “poverty creates crime”.
Bullcrap! Crime creates poverty. Giving people money to “get them out of poverty” does not make them responsible, law-abiding citizens, it is simply throwing away money that could be used for worthwhile purposes, rather than re-building ghettos after providing “free housing” to the so-called “disadvantaged”.
This whole “ownership society” is a farce, simply because owning something used to imply working and saving for it, not having it handed to you. If you don’t PAY anything for whatever you have, you seldom place any value on that possession. Houses included. I am simply astounded vast sums of money were poured into places no one really wanted to “buy”.
Can I vote for you for president?
Second!
What that further implies is that those among us that have done an inadequate job saving for retirement could “make up” for lost time by jumping onboard the RE Bonanza Bandwagon!
Getting “approved” for a ZERO down loan, doing a little gussying up and flipping the house for an outrageous profit doesn’t mean that you’re adult enough to do what we’ve all been TOLD to do a million fergin’ times.
My tinfoil hat theory is that the HB was designed to help woefully ill-prepared boomers make up lost ground from the tech wreck… but that’s a whole other topic.
Third!
BTW, I live in an area where there are more than a few of those “disadvantaged” types. From what I’ve seen, personal behavior seems to have a lot to do with whether one rises out of poverty or not. I’m talking about things like:
1. Staying in school and earning a high school diploma at the very least.
2. Not having children until you’re married and not getting married until you’re at least 20 years old.
3. Getting a job and holding it.
4. Devoting major amounts of free time to reading, rather than watching television.
From a rental perspective condos are exactly synonymous with apartments - the only difference is who owns them - individual owners (for condos) vs. company/group ownership (for apartments).
Well….the nice thing about condos is that you can futz around with the interior and nobody can say boo.
I have to say I continually appreciate/gloat about the wooden flooring in my condo (it had that nasty Berber carpet and I had it all ripped out and decent flooring put in.) Also appreciate immensely the very solid shelving I had installed AND the paint job I did. Life’s too short to live with mushroom beige.
Next project is to get decent lighting….
“The blame goes, in part, to the struggling housing market. Many across the country are having a hard time selling regular homes. Expensive lake front property is suffering the same fate. But that means now’s the time to jump in if you are looking for a great deal. ‘Really big discounts are being offered,’ Joseph said. ‘Some people who are lake residents are taking those discounts as a way to liquidate their property
Yeah right..JUMP IN now and take a real BATH. Everyone’s drowning…don’t mind those bodies…Enjoy
Never mind the 1,000,000 dead lemmings who jumped in ahead of you…. Now’s the perfect time for YOU to jump - maybe you can use all the dead bodies as personal floatation devices!
Now Mikey…you know it’s been a great time to buy since 2007 when NAR started telling us this. What are you…a communist? Do you hate freedom?
BUY NOW?!?!?
Thre isn’t a DRY basement in the whole State of Wisconsin and it isn’t even the house MOLD sale season yet !
I believe that I will wait for the dry season…or build an large wooden ARK
BUY NOW OR BE PRICED OUT OF THE WATER LOGGED MARKET FOREVER!
‘My credit didn’t get hit too hard,’ Harper-Graham says.”
She is in for a big surprise when her bank updates her credit report with a short sale and then sends her a 1099 for $60K to which she will owe taxes on.
This same situation just happened to a person I know who was bragging about not getting hit on his credit. The friend was very wrong!
I thought that the mortage relief act that went into effect 1/1/07 stopped the 1099 from being issued. That may be for purchase money and not refi.
I believe that is only on a foreclosure that the debt is forgiven..that debt is also ONLY forgiven on your primary home..
“I thought that the mortage relief act that went into effect 1/1/07 stopped the 1099 from being issued.”
1099 still gets issued, and you have to make note of it on your tax form that you are excluding it from income and why. I’ll give the standard disclaimer here that I am not a tax professional or accountant and if you’re in this situation you need to consult with someone versed in taxes.
‘My credit didn’t get hit too hard,’ Harper-Graham says.
This may be true if her credit was already quite bad; otherwise I agree that she is in for a rude surprise.
I wonder what the ramifications are of say being $30,000 behind in your mortgage before eviction, and having a ZERO balance on all your credit cards?
I would love to hear from someone who has gone through a short sale then checked their credit.
I hear a short sale will take at least 150 points off your credit; that would certainly take at three to four years of perfect credit reporting to recoup.
And adding to that, how many people taking a short sale aren’t already late on other bills or maxed out on their credit cards?So they could be looking at five or more years to repair your credit (if ever). And how many of these people had credit score points to spare?
I think many short-sellers are going to be in for a rude awakening when they find out how bad it still is, even if it’s not a foreclosure.
“In 2005, Harper-Graham paid $131,900 for a 960-square-foot condo in West Palm Beach. In 2006, she refinanced for $153,000 and used the extra cash to buy flooring and cabinets. By late 2007, when lender US Bank filed a default notice, the unit’s value had plunged. Harper-Graham sold in March for $90,000 - including the uninstalled flooring and cabinets. US Bank agreed to a $60,000 bath.”
_________________________________________________
How many $60,000 baths can a bank sink into?
The water is not the only thing dropping on Lake Lanier. According to the president of the Lake Lanier Association, home prices are also falling about as fast as the lake they border. ‘More houses than usual are on the market,’ Lake Lanier Association President Jackie Joseph said. ‘They are not moving very rapidly.’”
Never understood the whole..buy a vacation home..for me renting is the only way..
We have 2 families rent a cabin/home..for a week at $1200 dollars..we split the cost and grocery bill..at the most cost us $800..
I don’t have to pay the electric, mow the lawn, worry about break ins, deal with property taxes, insurance, mortgage…
Why buy…it just isn’t worth it..bad enough I already have one home to take care of…unless it is something handed down in the family where there is no mortgage or family can split the cost of taking care of it…I wouldn’t do it..
Ann,
I just love it when this topic comes up. One of the things my wife and I considered ( and still just might ) is renting up here in OR and buying a place in/near Las Vegas? The LV market is having an ongoing and horrific correction. The sheer number of listings below 150k is mind boggling. These are SFH ( not condos )
Still and all it will be years before we spend more time there, than here. They seem to have found something of a “solid footing” but we suspect this is a “trap door”. All in though it’s much more inviting as similar price points in OR are for mobile homes.
That aside we definitely considered timeshares. I realize this is a topic that draws a lot of ire but when you can pick them up on Ebay for a penny and then pay around $400-500 a week for their stupid maint. fees it’s about as cheap as vacation living gets. Anyone that has other suggestions… I’m open!
This is another boomerism that will blow up in their face. Second homes were a good investment until now…
My aplogogies for generational sniping, but…
Not to worry. I fall within that age group, and I think a lot of what my fellows do is stupid.
OK, now I need anyone who knows about mortgages to help me out here. I’m going to say this is on topic because we’re talking about Florida here.
I’ve got a client who is purchasing his 2nd investment home. Credit is so/so and he’s putting only 5% down. How is he obtaining financing in this market? Haven’t the banks learned their lesson yet?
Does the bank have a NJ address?
Hope this is the right place to ask, but I am asking advice for an email friend of mine who is renting a house in Orlando, Florida. The landlord is also a realtor who bought the house as a foreclosure. Landlord/realtor has several other Florida properties he is renting and/or trying to sell.
She’s been renting the house for over 2 years and had just signed a renewal lease for the place. Each year the landlord/realtor had raised the rent, the latest rent being $1,275/month for 3 bedroom 2 bathroom house. Since I’ve been a lifelong renter in another state, I am not familiar at all with the Orlando, Florida area but that seems a bit high, especially since- learned from reading this blog - Orlando is the city with the highest percentage of vacancies.
A couple of days before the end of last month, friend came home to find pre-foreclosure papers being served on the property. She did some research and found the landlord/realtor owes approximately $177K on the place and has not paid the mortgage since January.
Friend has excellent job history along with a history of making all rental payments on time. The drawbacks are pets and a not-so-great credit rating due to past medical bills. The credit rating has been steadily improving. What goes without saying is the pets are a commitment.
Obviously the landlord/realtor told friend should continue to pay rent to him. The latest is the landlord/realtor stating he “fixing the foreclosure and that it will take a little time.” Friend wonders if she should trust landlord/realtor as he seemed “sincere.”
he wouldn’t have a foreclosure notice on the door if he was sincere or honest. He’s realtor, they’re a pack of liars. Tell her to stop paying rent and move.
My landlady was really “nice” - I paid her for the gas, I paid rent. She paid neither the mortgage nor the gas supplier. I found out about the gas when I ran out and they came and wouldn’t fill the propane tank unless I wrote them a check on the spot.
Tell her to stop paying rent, she’s going to have to leave either way and she’ll lose her deposit and last month’s anyway, so might as well wait it out w/o paying extra. In my state (Utah) the landlord can’t evict w/o 30 days notice, even for non-payment of rent. After that, when the bank gets it, the bank can evict, but from what I’m hearing they’re so far behind she might be able to stay a long time if she has a high tolerance for risk (being evicted). In the meantime, find another place, esp. if she has pets, as it may take longer.
Tell your friend he lives in AMERICA and has a right to his day in court …If he gets an eviction notice.
And DONT PAY CASH to the landlord, you will need proof of payment to a judge. Pay by Check and get a receipt…..NO CASH payments…
Renters have rights, and a lease is a valid document, plus even if the bank gets the house which could be many many months down the road.
All parties must be served even the tenants, so tell your friend OPEN ALL MAIL addressed to him It could be a summons to appear in court in the landlords case.
Remember only a Marshall or Sheriff can evict you AFTER YOU LOSE IN COURT.
Thanks for the advice.
I told her to put her rent money in an account, let the court know she is saving it until she knows to whom it should be paid - the landlord/realtor or the bank. About the ’sincere’ part, I’d be sincere if someone gave me $1,275/month in rent. He’s under no obligation to pay the mortage on her rental or or any of the other houses he ‘owns.’ Of course I can tell her that from a distance as I am not the one living there in danger of getting an eviction notice and/or having the utilities disconnected.
I figure even if the landlord/realtor starts eviction proceedings she can take the paperwork to prospective landlords and let them know why the eviction is being done.
I know how hard it is to find a pet friendly place. It’s surprising how many landlords won’t even allow a goldfish in a place. Though I have been to some rentals and understand why pets aren’t allowed as making an animal live in it would be considered cruelty to animals. I figure on telling the landlord I’m as committed to my animals as paying the rent on time.
Lost in Utah,
I’m enjoying reading about your adventures in squatting. Of course, I get to read about them from a distance, the same as with my friend. I read about your landlady taking all the applicances. I didn’t know she didn’t pay the gas bill.
My state is somewhat renter friendly. If you are renting a place and it goes into foreclosure, the bank has to honour the lease and the lease terms. However that carries it’s own set of problems as I cannot imagine a bank being too responsive to the heater not working at 2 a.m. Sunday morning.
Hey, serling, my squatter days are coming to an end, as I posted over in Bits. But not to worry, something else will come along, my life seems to gravitate to interesting things. Kind of like the river - flowing over sand bars, through snags, and under cliff overhangs.