It Turns Out, Fast And Easy Loans Are Not So Easy
The Fulton Sun reports from Missouri. “There is no doubt that the mortgage crisis has made its way to Missouri, and the effects are slowly trickling down to the state and county level. Mikki Starmer, a real estate agent, said she thought the reason for an increase in foreclosures was due to lenders giving loans to home-owners that do not have the ability to properly manage their debt.”
“‘They are too quick to loan,’ she said. ‘They call them fast and easy loans, and it turns out they are not so easy. In this area it has more to do with bad loans and people getting in over their head.’”
“Rick Gohring, president of the Callaway County Market for The Callaway Bank, said most of the banks that are responsible for foreclosures in the area are national or statewide lenders.”
“‘I would have to say that when you see a trustee that is handling a foreclosure, they are not the trustees that work with local banks - these are mortgage companies,’ he said. ‘This happens because of the way they were organized when they did the loans, they made deals that may not have been in the best interest of the consumers.’”
“Data from Callaway combined with other counties shows a sharp decrease in sales. ‘In looking at what all of Callaway and Cole did, we are down 35 percent from a year ago,’ Starmer said. ‘In Callaway and Audrain we are down 45 percent - we did 55 percent of what we did last year at this time.’”
“Gohring said even though interest rates are low and that it is a buyers’ market, there has been a decrease in customers at The Callaway Bank looking for home loans. Gohring attributed that fact to concerns that new home owners may have about the ailing economy and the future of the housing market.”
“‘There is a saying that the decision to by real estate is the most postponeable decision you can make,’ he said. ‘In terms of home sales, when you have uncertainty in the market… you can hold off on buying a house because you always have the option to continue to rent. Once you buy a house you are set in it no matter what happens.’”
The Post Dispatch from Missouri. “Jan Winters took a proactive approach with her lender, First National, for her 2-bedroom, 2½-bath town house in a new subdivision in O’Fallon, Mo. It was built for her two years ago while she was going through a divorce.”
“But shortly after the divorce, Winters quickly realized she was in trouble trying to make payments on her $199,000 mortgage. Her expenses exceeded income by $400 a month. By March 2007, she was constantly one mortgage payment behind, and that was before the interest rate rose on her adjustable mortgage.”
“‘I knew they didn’t want my house and I did. I tried selling the house but couldn’t,’ Winters said. ‘So I told the lender if they helped me through this, life’s going to turn around.’”
“In the end, she agreed to get a second job - in information technology - and seek credit counseling. First National let her skip three payments and added them to the end of her loan. So far, Winters has managed to make all of her payments on time.”
“Even borrowers like Winters who work out solutions to stave off foreclosure continue to teeter on the brink of financial ruin. Winters’ credit was hurt by the payments she missed, and that means she cannot refinance to a fixed-rate mortgage.”
“But First National recently agreed to keep the interest rate, which was due to reset this year, fixed for three more years. Still, more than half of her monthly income is going toward repaying debts, including the mortgage, credit cards and car loan. She recently lost her second job, and is now sewing clothing and upholstery out of her house.”
From WSBT South Bend in Indiana. “The relief bill…would give some home buyers a tax credit up to $7,500. Experts say it may encourage people to reconsider buying a home, especially with prices dropping on foreclosed homes.”
“The Nortons are searching for their dream home. One South Bend home caught their eye, but the price may still be a little high. ‘We only have $3,000 for the down or closing,’ explained Geri Norton, a first time home buyer. And they don’t qualify for low income help. ‘We fall between the cracks,’ said Norton.”
“The relief for first time homeowners could turn the Norton’s dream into a reality. ‘Yea that would be wonderful,’ said Norton. ‘We don’t want the house to own us.’”
The Journal Star from Illinois. “Belief that the U.S. housing market will not recover for an extended period of time played a large part in Standex International Corp.’s decision to close its Bartonville plant, the company said in a news release.”
In its first statement since informing nearly 60 employees of the Acme Standex Co. of the decision, the Salem, N.H.-based company issued a one-paragraph release.”
“‘The company made the decision to close the facility after careful consideration and in light of the continued severe recession in the new housing construction market…It was necessary considering that the housing market is not forecast to recover for an extended period of time,’ said the statement.”
From ABC 4. “Home prices have fallen as much as 50% in some cities around the country recently. That’s bad news if you’re selling, but great news if you’re buying. One prime example is a home in Cleveland, Ohio: a 3-bedroom, 2-bath multi-level house that had an estimated value of $112,692. Today, it’s yours for just under $37,000.”
“‘One thing that is really unprecedented is the speed at which the prices have fallen in these markets,’ said Paul Bishop, Ph.D. of the National Association of Realtors.”
“While hard-hit states like California, Nevada and Florida come to mind, some of the best deals for home buyers today can be found in Detroit, Michigan, where a whopping 1,754 homes are currently on the market, all for under $10,000.”
“‘Five years ago, this house would’ve gone for 69-89 thousand,’ said Carl Williams of Saturn Group Realty in Detroit. ‘Right now, this is one of Detroit’s great values, and it’s going for $7500 — a real steal.’”
“That home is located in a middle-class neighborhood, and experts say that when the market goes back up, the value will, too.”
“‘While it is painful for sellers, it is a good opportunity for buyers who are in the market to get a good deal on a house,’ Bishop said.”
The Pioneer Press from Minnesota. “U.S. home prices took their steepest dive yet in May by one key measure, though the erosion in the Twin Cities market appeared to moderate slightly. The Standard & Poor’s/Case-Shiller 20-city index dropped 15.8 percent in May compared with a year ago and the 10-city index dropped 16.9 percent - both record annual declines since the two gauges started in 2000 and 1987, respectively.”
“The Twin Cities index posted a glint of possible hope, plunging 14.8 percent from a year ago - a steep drop but not a record.”
“Persistent declines have returned Twin Cities prices to their 2003 levels, according to the index, wiping out years of gains for homeowners.”
“Have housing prices hit bottom? Jeff and Anne Deeb would like to know. They’ve had their Blaine town home on the market for nearly nine months and cut the price more than a dozen times, to $170,000.”
“Eager to move closer to their jobs in Minnetonka and Eden Prairie since they pay $700 a month to fuel long commutes, the Deebs are mulling another markdown - and possibly taking a loss on the home to get a sale done.”
“‘It’s frustrating,’ said Jeff Deeb. ‘We’re trying to figure out if it’s worth dropping now. Do you do it now and get rid of it and move on? Or do you try to wait it out? Maybe we’ve hit rock bottom. I don’t know.’”
“Christopher Galler, senior VP of the Minnesota Association of Realtors, describes the Twin Cities as being ‘in the midst of a muddy turnaround.’”
“It’s not clear when the tide of foreclosures and short sales that have flooded the overloaded market will subside. In the first half of this year, lenders have repossessed 9,176 homes in the seven-county Twin Cities area, according to a Pioneer Press survey of sheriff’s foreclosure auctions, compared with about 13,000 for all of 2007.”
“Warren Hanson, head of the Greater Minnesota Housing Fund, predicts metro foreclosures will climb more than 50 percent over last year, or reach nearly 20,000 by year’s end.”
“Such ‘lender-mediated sales’ make up about 20 percent of metro home sales, or more than 6,000 listings, pressuring down prices overall, according to a Minneapolis Area Association of Realtors study.”
“Finally, there’s still a lot of new construction that needs to be burned off. About 8,600 homes are under construction or finished and vacant around the Twin Cities, most of which aren’t counted in the total for-sale inventory the Realtor groups report.”
“The Deebs…two-bedroom town home in Blaine is 7 years old, with windows on both sides and a back patio that opens onto a small woods. But there’s an oversupply of brand-new empty town homes nearby in Blaine, said Ryan Karasek, the Deebs’ agent with Edina Realty’s Champlin Park office.”
“So the Deebs are stuck. They’ve held off hunting for a home closer to Minnetonka or Eden Prairie lest they fall in love with something before they can sell the town home, Jeff Deeb said.”
“‘When we first priced it, we thought we were right in the ballpark,’ Deeb said. ‘We don’t want to give it away.’”
From KFYR TV in North Dakota. “The housing bubble has not burst in western North Dakota like it has in many other areas, but there are more homes on the market in the Bismarck area waiting to be sold now than in the last four or five years.”
“Doug Scheetz`s northwest Bismarck home is for sale. His real estate agent says it has everything a buyer could want. The house has been on sale for two months. ‘We`ve had a lot of interest. A lot of people though the house, and then also online,’ says Doug.”
‘But so far, there hasn`t been a buyer who was willing to commit. Doug`s real estate agent says that`s because many interested buyers are scared to buy because of what might happen instead of what`s actually happening.”
“Century 21 real estate agent Sonja Tkach says, ‘What we`re seeing is that we have a lot of impact that`s coming from our national media. It`s a good market in Bismarck. And what people need to understand is we`ve been very insulated, and we`re not as affected by what we`re seeing nationally as what someone might think.’”
“Inventory levels are different for homes at different prices. Some have enough homes to last for a year and a half. Prospective buyers can be a little more picky. And once they do choose a home, they have extra wiggle room to haggle. Buyers might want to also consider the fact that it`s a good time to find a reasonable mortgage.”
“Tkach says, ‘If you`re looking at a $200,000 house in today`s market, interest rates are 6.25%. Logically, we`ll see that interest rates will probably go up. If they go up to 7.25%, that`s about a $200 difference in home payments.’”
“So buyers who wait could miss out on saving money on both the purchase price and the mortgage.”
“His real estate agent says it has everything a buyer could want. The house has been on sale for two months. ‘We`ve had a lot of interest.”
When selling my first place there was hardly any interest shown at all. Only two buyers even came to see it. Except that those two buyers came during the first 24 hours and one promptly paid asking.
“A lot of interest” my azz!
BTW - as this is a Midwest thread - Hizzonor’s son sez Chicago’s facing the worst budget problems he’s ever seen - blames “huge” nationwide slowdown.
I went to a party last night (my 40th birthday) and when the topic drifted to how everyone had made a killing in real estate, and how the recovery should occur by next spring thanks to the bailouts etc., I let loose on my thoughts about bailouts, Fannie and Freddie, and the direction of the economy. I still can’t believe how many Kool-Aid drinkers there are out there. Out of a dozen educated adults, not one agreed with me that the housing bubble was anything more than a “California and maybe a couple of other places” problem.
I know, I experience the same thing all the time. This thing has a loooong way to go till people finally get the message.
in late 05 I thought the nominal recovery would be 09
how wrong I was
Yeesh, you’re like me. I wouldn’t let my birthday stop me from opening The Troublemaker and saying similar things. And I’m a lot older than 40.
And yet I bet most of those “geniuses” when asked if they could actually afford to buy their own home today would laugh and say, “Oh, of course not!”
Yep, because nobody being able to afford to buy = prices need to keep going up! Argh!
New York talking the same talk
Now it gets interesting. Daley isn’t one to cry wolf, although some posturing with the unions is probably part of it.
How did Patterson’s speech go over in NY?
I have a feeling that aside from those who actually lived here during 70s have no clue as to what he is alluding to…..
Now it gets interesting. Daley isn’t one to cry wolf …
I know, let’s raise the county sales tax. Oops, did that. We have the highest sales tax in the country, far as I know (10.25%).
Already taxing the poor smokers out the wazoo. Already taxing the poor boozers out that wazoo. Already taxing the (f%cked) property owners out the wazoo. Already trying to make additional revenue from parking and traffic violations.
I’m sure he’ll think of something, though.
(Gawd, I felt like I was channeling taxmeupthebootaaaay there for a second.)
Chicago’s tourist taxes have got to maxed out as well. Taxes on rental cars, restaurant meals, hotel rooms, and event tickets are pretty steep already.
There isn’t too much wiggle room here. He’ll probably go for the one-time taxes like xfer fees, city stickers, dog licenses, etc. - look for them to soar.
Other than that - now is not the time to add to the mounting reasons for tourists to stay at home or for local diners to eat at home.
“Other than that - now is not the time to add to the mounting reasons for tourists to stay at home or for local diners to eat at home.”
TES-TI-FY, Brothah John! Everyone around here is attempting to raise prices on any and everything, and it cracks me up, because when non-essential goods and services adopt that “me-too” attitude, I say, eff ‘em. Cut ‘em dead and don’t buy.
This is deflationary thinking at its very best.
Wait till the masses come to that conclusion. For now, the vodka is still flowing.
Make sure it’s not that cheap Russian shit that’s popular in the U.K. I’ve only been hungover once from drinking vodka. I was out of it for 3 days. Mighta’ well been in Moscow.
Strange how people are not told the truth that the boom housing prices where based on a mania and a ponzi-scheme ,combined with faulty and fraudulent lending to fund it .
The value will not come back in the short term because the value was fake to begin with . The demand was fake ,the loans were fake ,the motives were wrong for borrowers purchasing real estate ,etc etc.
Who ever came up with this crazy idea that you could count on real estate going up ? This concept is just nuts . Sometimes real estate just remains flat for years ,(I have been through cycles like that ). Real estate is based on true demand (flippers excluded )combined with peoples ability to afford to qualify for loans ,and of course it’s based on jobs and little details like thats. Sure the actual price to produce a house comes into play, but if people can’t afford that price ,
than nobody will buy what the builder constructs .
I just can’t believe that such stupid assertions by the cheerleaders could be popular and accepted without
challenge .
May I offer you some fois gras, mon cher?
Or how about a Chicago trucker’s union card?
Or perhaps a syringe of Steiger family DNA?
Everything the buyer wants, except a reasonable price, I’ll bet.
I also love this part: “Tkach says, ‘If you`re looking at a $200,000 house in today`s market, interest rates are 6.25%. Logically, we`ll see that interest rates will probably go up. If they go up to 7.25%, that`s about a $200 difference in home payments.’”
Yeah, because as rates rise, prices rise… because housing only goes up! Hahahaha! Good thing we don’t have to pay for the house so prices can keep on going up and… oh, wait… what? Now I DO need to be able to pay for the house to buy it?! Oh, nevermind!
So how old are the Nortons?
My parents lived downstairs from my grandparents for more than a decade saving up a downpayment. Three kids were in one bedroom. They were 33 when they bought their first home. They had been married 11 years, and they still had to borrow some money from my grandparents to make the downpayment.
My wife and I deferred parenting six years to save, and finally bought three years later. We had been married eight years, and were 33 and 31 when we bought our first home, just before the arrival of our second child. With two incomes AND THE SAME LIFESTYLE AS OUR PARENTS AT A SIMILAR AGE we had been able to save a substantial downpayment.
WT,
My wife and I were in our late 20’s but had “amassed” the considerable sum of $12,000 in an annuity. It wasn’t quite 20% but since we were going VA, they let it slide. It only took us 8 years to come up with it.
“…her 2-bedroom, 2½-bath town house …on her $199,000 mortgage. Her expenses exceeded income by $400 a month.
…In the end, she agreed to get a second job - in information technology - and seek credit counseling. First National let her skip three payments and added them to the end of her loan.”
Wow, 2 jobs for a crappy town house. On the bright side, the 2 jobs should keep her sufficiently busy so that it’ll be much more difficult for her to find time to make any more stupid financial descisions.
And a bit further down…
“Still, more than half of her monthly income is going toward repaying debts, including the mortgage, credit cards and car loan.”
So much wasted opportunity - for a town house in MO.
To be fair though John “I” can’t on one hand dish out a sound drubbing for the gal in Cali that walked away from her home with casual ease and at the same time belittle another for taking some painful measures to keep hers?
Don’t get me wrong, I see your point as it’s a choice she should have more carefully considered before taking the plunge.
It’s not really a drubbing, DinOR, it’s actually a tragedy. Here with this gal we see yet more of the carnage caused by the housing fetish. This woman probably wonders why she can’t get ahead, why she can’t keep more of her paycheck.
Is she even aware of the causes behind her predicament? Where does she think a solution for lies? Within herself… or with the m.t. promises of agents, pols, and the boyz?
“it’s actually a tragedy”
No argument there. Again most of us here don’t have anything against home ownership at large ( many here are/were/will ) but when it comes at all cost?
An unfunded 401k/IRA, zero savings, no travel or entertainment. Is a “wall painting fetish” worth all that?
DinOr…I had the same feeling about this gal who was trying to make her payments and was denied a refinance . In fact I thought it made sense in this instance to re-work this loan into a more manageable loan . Any borrower who will take on a second job to try to keep their house is trying hard to honor their bills . The loan she has is probably a gouge loan also .
Well ,I guess this lady will qualify for the housing bill program
but the original lenders should have to keep the note ,just as all lenders should eat their mistakes ,or pay the price of re-working them .
“…and experts say that when the market goes back up, the value will, too.”
It’s this kind of reasoning and subsequent approach. A bunch of houses having variable intrinsic values over time, all of a sudden now constitutes some “market” that drives their value.
They’re restless and must have their market.
“Persistent declines have returned Twin Cities prices to 2003 levels”
And a big hi-ho hardy HELLO to ‘03 from us here at HBB y’all!
We should get Guy Lombardo and a ball dropping in your town square as we revisit each retro-active year. Now THERE’S something worth celebrating!
2000, anyone?
Yes, please.
“2000, anyone?”
By all means. What I found especially encouraging was that the BOB ( Bail Out Bill ) contained tax implications NAR is bound to hate. The way I understand it specuflakes will no longer be able to claim their multiple residences as “primary”. As you’d suspect ( with the IRS ) there is now a “test” and a formula for you to divide the number of days you’ve actually used the home ( yourself ) by the number of days you’ve owned it!
So basically in order to get any benefit it would have to be next door ( taking the thrill and romance RIGHT out of a 2nd home ) or you would have to bear the add’l commuting expense. Not likely at today’s prices. So for all it’s faults there ARE items contained within we should be cheering.
2nd homes are toast.
How about Dow 10,000! Now there is a level to celebrate.
WT,
My point was that this “burden” cuts the legs out from under the NAR being able to show homes in Bend, the OR Coast or any market within driving distance of your primary residence and giving you the “wink-wink, nod-nod” on cap. gains exemption(s).
How many people do we all know that own FIVE homes with the design of selling (1) every 2 years? If we could attribute the “run-up” in the DOW to that kind of preferential treatment, then yes, I’d be celebrating that as well.
This is one of THE most important victories we could have ever imagined. I for one intend to enjoy it.
When the Dow falls to 8,000, then it will be time to start buying a bit. Until then, I would not touch the Dow.
Keep the popcorn popping,
Red Baron
DinOR, I thought of you yesterday when my dingbat sister in law who has been living in OR since 1990 said “work is really dropping off” (her and husband both construction related). My wife mentioned the housing bust and she said “no it’s still on fire here”. Realizing what she said, she responded “oh, yeah, only the developments have foreclosures. Us people with acreage have nothing to worry about”.
Anyone with greater than 3/4 acre is in the taxman’s crosshairs.
exeter,
Too funny! It’s on fire here, the foreclosures are confined to dev’s, acreage will save the day..? We really are tap dancing here as plausible deniabilty reigns.
I too claimed “F-1″ for years but grew anxious about it. Very few here in the Wil. Valley can genuinely claim they are a farm. Not that horses *aren’t expensive, it’s just that after years of claiming losses I’m sure they will move you into claiming “hobby”. I have to disagree with your SIL though, it’s the ones on acreage that stand to lose the most. Wishing prices are still way up there but with everyone looking to downsize their debt-load and fuel prices forcing ever more closer in, those places sit. We’ve already confirmed that.
land goes up and down
the structure depreciates at neg 1-2% plus inflation……..
Yeah, that’s her (il)logic but she’s never be known as the family brain trust.
Taxme, you’ve never been more on the money. Stop heating a structure in the northeast for 3 years and watch what happens to your “investment”.
Today’s Detroit Free Press had an article stating house prices here have returned to January 2000 levels, according to Case-Shiller data. They are wrong. I could probably sell my house today for what I paid for it………in 1997.
motorcityjim,
Quick! Somebody bust out the Guy Lombardo albums! ( Or in your case Kid Rock )
The MC5 would be appropriate.
“So buyers who wait could miss out on saving money on both the purchase price and the mortgage.”
Any increase in mortgage interest rates will be more than offset by declining home prices in the next few years.
Median existing home prices in the US are 4.3 times the median household income. In other words, home prices are still way too high and will probably drop at least 25% more nationally and more in bubble states like CA, NV, AZ, and FL.
Keep the popcorn popping,
Red Baron
This guy, a Realtor for sure, doesn’t get the meaning of price adjustment:
“Tkach says, ‘If you`re looking at a $200,000 house in today`s market, interest rates are 6.25%. Logically, we`ll see that interest rates will probably go up. If they go up to 7.25%, that`s about a $200 difference in home payments.’”
They never understood that the only reason the prices got so high, was the payments got so low. What he should really be thinking is that for $200 per month in increased interest payments, the PRICE needs to adjust DOWN another $20,000.
Rate Price Down Monthly
7.5% 180,000 18,000 1,132
6.5% 200,000 20,000 1,138
Since Harry How Much A Month is not getting a raise, when
rate rises from 6.5% to 7.5%, home price has to drop from 200,000 to 180,000 so Harry can get a loan and keep his monthly payment the same.
A nice bonus for Harry is with lower price comes lower RE tax too.
“‘When we first priced it, we thought we were right in the ballpark,’ Deeb said. ‘We don’t want to give it away.’”
So instead they will continue to pay 700.00 a month on gas. Talk about not being able to see the forest through the trees.
BTW Ben are you sure the name Deeb is not Dweeb (slang: an unattractive, insignificant, or inept person)?
“Tkach says, ‘If you`re looking at a $200,000 house in today`s market, interest rates are 6.25%. Logically, we`ll see that interest rates will probably go up. If they go up to 7.25%, that`s about a $200 difference in home payments.’”
“So buyers who wait could miss out on saving money on both the purchase price and the mortgage.”
Here we go again: rising rates = rising payments. No doubt there are plenty who will believe it.
–Sigh–
Because real estate (and everything but salaries) only goes up!
Except when it doesn’t… but it will go up, becausing making housing less affordable with higher rates means the prices will need to go up even more!
instant equity is back
The equity must be repaid because the maximum amount on the new loans will be capped at 90 percent of the current market value, which automatically gives the previously troubled homeowner 10 percent equity in the home.
Am I the only one thinking that this gives lenders a vested interested in finding an appraiser who will “make the number”?? The higher the appraised value, the higher the mortgage value they can write (and fob off on FHA), and the lower their losses will be.
The lenders have an incentive to give the previously troubled homeowner 10% “phantom” equity!
What this really means is loans can be unloaded now, before they totally tank. 90% of something that’s going to be 50%, or less after REO, is an effing good deal for the bank.
“…a home in Cleveland, Ohio: a 3-bedroom, 2-bath multi-level house that had an estimated value of $112,692. Today, it’s yours for just under $37,000. In South Carolina, a brand new home, more than two thousand square feet sitting on an oversized lot, was previously valued at $125,000. It’s currently priced at $50,000. In Louisville, Kentucky, $28,000 can get you a 4-bedroom single-family home.”
“‘Five years ago, this house would’ve gone for 69-89 thousand,’ said Carl Williams of Saturn Group Realty in Detroit. ‘Right now, this is one of Detroit’s great values, and it’s going for $7500 — a real steal.’”
Are these foreclosures? Short sales? Or seriously the list price? The article doesn’t spell that out.
There is a community of no-association-fee townhomes that I would really like to move to, but they are listing between $250,000 - $280,000 right now. I can’t imagine getting near the kind of discounts as mentioned above.
I would guess those are ghetto specials, at those prices. That $7,500 house in Detroit is probably at best a bare shell.
I would guess that a house going for $28,000 in Louisville, KY for a 4 bedroom single family home would be found in the Portland area or somewhere on the west side of town. I have seen houses listed for as low as $10,000 in that part of town, but the neighborhood is bad and/or the house is bulldozer ready with all the copper being long gone.
If you buy there, you better have some Federation grade shields or at least some Kevlar siding on that house. If that house is not in that part of town, then I’d say that the house is toast and one would be buying the land.
Housing prices are down in Louisville, but the economy here is still fairly good. We have had some problems — a few factories closing and Ford cutting back (the Ford plant here makes trucks), but things are fairly good — for now.
I actually live here in Cleveland and $37,000 is overpriced except in a couple of neighborhoods. There are lots of home selling for $500-$2000 a pop. Just check out zillow or the real estate transactions here lately.
Investors are buying them up and doing owner financing for renters or flipping them on Ebay by selling them to stupid investors.
Uhhh….I see we have a ways to go until the sheeple learn that they aren’t all entitled to be homedebtors.
If you only have $3000.00 total in your life’s savings you are not “falling between the cracks”……In reality, this means “you don’t have enough money to buy a house”.
These are the types of people that need to take some classes in financial planning, save some more money, and RENT until you are liquid enough to afford a decent house.
$3000.00 ain’t sh!t. I’ll bet they have 3 X that amount in credit card debt that could/should be paid off. I’ll also bet that these people have two big SUV’s that they drive 50+ miles each way to work.
We have a long way to go before we hit rock bottom in this country.
“$3000.00 ain’t sh!t.”
You got that right, and this isn’t an inflation rant, because it’s been a long, long time since $3,000 was enough for a decent downpayment and emergency reserve for a SFH purchase. Depending on the particulars, $3,000 hasn’t been enough for a SFH in a decent location for many, many decades.
un-friggin-believable. The downpay on my first house 18 years ago was 4 times that and these people have the audacity to squeal?
What amazes me is that these people are squealing where potential employers can read all about it. I mean, come on. College students are being warned about not putting their drunken party photos on MySpace. Shouldn’t there be similar warnings for adults who talk to their local paper?
Correction: 14 years ago.
And if you would have come to table with only $3,000 fourteen years ago they would have gave you a pat on the head and a copy of “Apartment Finder” and sent you on your way.
In 2006, with $3,000, you would have been considered a “gazillionaire” at the closing table.
LOL! Yeah funny how that worked out. Not to out do anyone but I remember renting a house where you needed more “up front”. I still believe there needs to be a connection between buyers and their 401k’s.
No, not “tapping” them for DP’s and hardship cases but more a connection between “conditional approval” and mandating these people make payroll deductions to their company plans. If we can’t even connect those dots, what’s the point?
Hee hee, I sure was.
They looked at me like I was a millionare! Lucky I knew I was broke! 
I rented a 500 sft studio in Edgewater, Chicago in 2001. I had to come up with a 3 month rent as a security deposit, plus the first month rent – total of $2200. And this was the cheapest place that I found, granted it was very clean and safe.
$3,000 might not even pay to replace a broken heat pump the first winter they’re in the house. (We spent $6k, but that’s both heat and aircon.)
If I were giving advice to them, I’d tell them they need to have more than $3,000 left over **after** they have paid the closing costs and down payment! Otherwise, one big thing goes wrong with the house (or the job, or the car), and they are financial toast.
More like $3,000 with another (a fourth) zero at the end, NoVA. $3K barely covers scrubbing the guano out of a chicken coop these days.
That’s okay: they can just take the broken heat pump to the Fed’s Discount Window and Pawn Shop and exchange it for shiny, new dollars fresh off the printing press.
Wait - what do you mean we can’t do that?! That’s what the banks are doing! Oh, well…
“We have a long way to go before we hit rock bottom in this country.”
Not true. We’re there already. We just have a long way to go before people start admitting it, LMAO!
How much is your home worth? Well, it all depends where you live.
The real estate market is still shaking. New data suggests that home prices have hit a new record low. In every new study that comes out, homeowners from Miami, to Las Vegas, Phoenix and Los Angeles, have seen their home value go lower every time.
Is that disappointing? Of course it is.
Should we sell? Is not a good time.
Should we stick to it? Yes, if you can.
Have we hit bottom? Nobody knows.
Banks are facing their worst foreclosure crisis.
Don’t take me wrong, it’s good if you are in the market to buy a home for yourself or if you are an investor, but if you are not, and you own a home, most likely the value of your property is down at least 15 %.
Why do banks care if you are loosing your home? By having to sell repossessed homes, banks have to literally slash their prices down. It gets very costly for them, after all, they have to pay property taxes, maintenance costs, and whatever utilities that need to be paid, all of this expenses for a house that it’s just sitting there, vacant, and the bank is getting nothing in return.
The latest study by the S&P/Case-Shiller Home Price Index of 20 cities, revealed the news that for 22 consecutive months home prices dropped. Only from April to May, 2009 the decline was of 0.9 %
Hey Yanni, is Mirthala Salinas good in bed?
Yo, Yanni, your link is pointing to what is obviously a for-profit business. So, wuzzup with that dot-org domain name? Last I checked, those were for non-profits.
Whether it’s spam or not… sure looks like it, what with all that bad grammar and link to a website, trolling for business leads.
but trolling for what? There’s no “sell” that i can detect in this ad.
He points out that prices are falling fast and i guess that means we do not want to hard-money-borrow and buy until.. “Have we hit bottom? Nobody knows.” ??
Don’t sell.. don’t buy..
Don’t take me wrong..
don’t worry about that. Can’t take you wrong or right since the intended message is unknown.
By allowing these posts, maybe Ben is illustrating what kinda dimwit the average HBB troll is.
Here’s what I think our bud Yanni is trying to do…
1. NoVa, you’re right. He is indeed trying to troll for business leads.
2. He’s adding comments to posts on this site, which gets more than a fair amount of traffic. Since a link from a highly trafficked, reputable site like this one will help boost his own site’s Google page rank, he’s hoping that…
3. …his overall search engine positioning will rise. And a quick look at the site shows what search term he wants to rank well on: hard money. It’s repeated ad nauseum, which is a classic trick played by low-content sites that are trying to steal rankings from other sites.
And there ya have it, folks!
He’s hoping people click on his name/link. From there, you can go on to other sites to refer borrowers or lenders, or borrow money yourself. Basically, it’s ads for money lending.
It wouldn’t be so apparent except that those postings (here and other blogs) appear to be only modestly related to the topic at hand and not only formulaic but also somewhat poorly put together.
i already did a little clicking… the whole thing looks amateurish, like some kiddie working out of mom’s basement, but it’s not.
The web design site (Page design by RazDirectorydotcom) has the same street address as the hard money loan office (hardmoneyloansdotorg).
i guess i should map the street addy.. brb.
OK.. The building looks real enough.. right next to a Blockbuster store. Google map it and select Street View.
I tend to not think so much of a website where “Manhattan” is spelled wrong…
.org, as far as I know, does not necessarily mean nonprofit. At least I hope so, as my business’ website is a .org.
Casey Serin! Is that you?
“‘Five years ago, this house would’ve gone for 69-89 thousand,’ said Carl Williams of Saturn Group Realty in Detroit. ‘Right now, this is one of Detroit’s great values, and it’s going for $7500 — a real steal.’”
Wow–someone could buy this, rent it out for $75/mo (at a 100x rate), and be looking ok on the cash-flow; that would only be a 100x rents rate.
Assuming you could find someone to rent it to, of course. If you could find someone reliable, it might be worth renting it to them for FREE just as an incentive to look after the place and keep their good thing going.
A home.. in a middle class neighborhood. That’s not much info to go by. $7,500 .. hmm.. damn that’s cheap. What kinda things must be wrong with it? Bad transmission? Cracked block? .. burned valves? ..bent frame?
The same applies here in Cleveland. There are many houses selling for $500-$2000 a pop. Why rent at $500 a month when you can buy a house for $500? if someone bought a house for $500 the most they could lose is $500 + minimal property Taxes every year!!! Better than paying rent!! Sure you’re in a crappy neighborhood, and most of the houses are dumps, but many people are just walking away from their ultra hyperinflated $100,000 homes and moving next door for $500 (That’s .5 Cents on the Dollar!!, That’s right 1/2 of a penny on the dollar)
For those that can’t afford the $500 or don’t want to pay it, squatting is an attractive option!! No need to go to a homeless shelter, there are plenty of houses to move right into for free!!! If you get caught, that’s ok, you’ll just get kicked out and have to move to another vacant home!!
Sure you’re in a crappy neighborhood..
more like a wanna-be slum.. a ghetto in the making.. hit the brakes.. skid row up ahead..
No wanna be about Cleveland’s slum neighborhoods. What in God’s name dont people understand about this situation? These properties are going for next to zero because of the economy and the neighborhoods! Any display of wealth above the poverty line will make you a target for the rest of the population. As for future appreciation of any of these jewels, come look at the future: chindia goods shopping centers planted on former industrial property. The populations in this city, like others in the mid west, are almost totally dependent on recycled government taxation. Period. Graft driven, union strangled city and county agencies have driven the stake in the heart of this area. Many of us here have warned of this scenario for years, no, decades. There may well be great opportunity here for someone with cash and a long time horizon. A very long time horizon.
Here’s a surprise in the bailout bill that Bush just signed. The $7,500 tax credit for first-time homebuyers is just a loan! You’ll have to pay it back, interest-free, on your next 15 annual income tax bills.
http://finance.yahoo.com/loans/article/105473/The-Hidden-Tax-Traps-in-the-Housing-Rescue-Bill
That is SO cold!
I love this country.
You get to shear the sheeple all day long, and then afterwards, they even thank you for it.
“Thank you, sir. May I have another?”
hey.. we’re on a hunt for GFs here.. they have excellent hearing, so would you mind keeping it down a bit?
If it will entice the GFs to commit their money then I’m all for it. Better their money than mine.
the politicians would sooner sell their mommas into slavery than give away tax dollars.
And although this thing appears to be interest free on the surface, i suspect there are hidden costs or penalties or an added tax somewhere deep down in there to make up for it… next time i talk to my tax atty, i’ll find out.
A surprise? That was in the newspapers that I read. Oh wait, the astute journalists at CNN didn’t pick up on that in their 8-second promo of the bill (which they had to cut short to show the latest Hollywood news)?
Now just wait till the banks take into account the “tax-credit” repayment when they consider your loan application and see that for the next 15 years you will have $40/month less to spend on mortgage payments.
The whole thing stinks, though. Sure, it’s an interest-free loan, but to get it, you have to spend a veritable fortune on a house that you might not otherwise buy. Set the hook, and reel ‘em in. And we’ll have a whole new batch of poor sods trapped in their houses and being driven bankrupt.
“The whole thing stinks, though.”
Everyone’s been fooled by this bill. Truth is, it has NOTHING to do with housing. It’s basically an IRS information gathering bill disguised as a housing bill. LMAO! I think that’s the ONLY provision in it with any teeth. After all, gotta give the collection agency for the FED some new tools, they’re gonna need them.
750000 x 400000 = 300,000,000,000
bailout is suppose to help 400 hundred thousand homeowners.
Could someone help me. Are my numbers correct that comes out to 750 thousand dollars per distressed homeowner?
thanks.
Re: the Deebs
OMFG…! $700 a month for long commutes?!? Let’s see. Driving an SUV? Living more than 25 miles from work? Could be! I spend about $50-70 a MONTH on gas!
Stephanie
I don’t blame the buyers a bit. Let me walk up to you and say, Heres a million, no money down and have 90% chance of making a profit. If it turns against you, walk away. After all it is not as if you saved your income for the last 10 years to purchase.
Also I would bet a lot of these loans were to associates or kin. Yes, I know the house is worth 200K get loan for 1 million and then I will give you 100k. I will pay for your bankruptcy and besides, they stole this land from us anyway. F Americans.
“The Nortons are searching for their dream home. One South Bend home caught their eye, but the price may still be a little high. ‘We only have $3,000 for the down or closing,’ explained Geri Norton, a first time home buyer. And they don’t qualify for low income help. ‘We fall between the cracks,’ said Norton.”
Fall between the cracks? You’re a mile away from the nearest crack! If you only have $3000 to your name, you shouldn’t be making a multi-decade commitment! You won’t even be able to survive a car breakdown or emergency root canal, much less an unexpected roof repair or water heater replacement.
Can we get back to the days when you needed 20% down and then some (a few months mortgage in the bank at least) before you can think about buying a home?
“Can we get back to the days when you needed 20% down and then some (a few months mortgage in the bank at least) before you can think about buying a home?”
This will never happen without another 30+ percent shave in the price of homes at every level of the market. Saving up $60K for a downpayment would take decades for millions of households nationwide.
The choice is yours…do you personally want to take a serious bath on the value of your over-inflated home and then work an additional 10 years before retirment, or are you willing to accept
5-7 percent down?
Just askin’.
The choice is yours…do you personally want to take a serious bath on the value of your over-inflated home and then work an additional 10 years before retirment, or are you willing to accept
5-7 percent down?
Personally? I’d welcome it if the “value” of my 100% paid-up house in California and the swampland I have in Florida dropped 50%! These bubbles are unhealthy for America. I simply don’t care what my house is worth. It’s a place to live in.
I’m not willing to “accept” 5% down. If there was no such thing as a “GSE” lenders wouldn’t make loans without 20% downpayments.
Then you are the rare exception, reuven. Thanks for restoring some of my belief in people who have real wealth. There’s few like you around. Most wealthy people think they are entitled much in the same way leeches and locusts are.
Keep fightin’ the good fight.
Actually, wealthy people (at least self-made ones) don’t feel entitled. Wealthy wannabes do!
Or, conversely, if you are retired, are you willing to spend the last 10-25 years of your life rotting away in a decrepit, windowless,
3-to-a-bed retirement facility like they did ‘back in the days?
Or, how about forgoing MediCare, Social Security, MediGap, AARP, 10% off deals and all the other crap?
I thought not.
What you are experiencing is the death of The Demographic Gravy Train, which you may very well have ridden to the top through no fault of your own. That is, of course, if you were born from 1938 to 1954 or so. Don’t like it? Tough. Deal with it.
I don’t get you! How will going back to 20% downpayments make me spend the last 10-25 years of my life in a “decrepit windowless 3-to-a-bed retirement facility”? House prices need to be in line with incomes. Houses are NOT ATM machines. You don’t count any imagined value of your house in your “net worth” because you have to live somewhere. (Once a house is paid up, it may be proper to count the “imputed income” on the rent you’d otherwise be paying, once you take in account the cost of property tax and maintenance).
My paid-up house in 94087 cost me around $300K. I put 20% down on it 17 years ago, and had a 15 year mortgage. During the bubble, houses on my block were going for as high as $1.4 Million. I want the prices to be back in the 300s again, and I’m completely serious. I wouldn’t think for one second that I’ve “lost” anything. House prices aren’t even close to back-to-reality yet.
Here’s the gist without the apparent obfuscation (my apologies):
1. We’ve lots of seniors (or near-seniors) in this country who want to remain living high on the hog while demanding that those 10-40 years younger than they continue to prop up their lofty lifestyles.
2. Keeping #1 in mind, these same people haughtily orate that something is wrong and wrong-headed with those 10-40 years younger who can’t manage to save 20% down for a $300K+ house.
Well, guess what folks. Back when 20% down was the norm, few seniors (or near-seniors) could afford/were allowed to live high on the hog. Rather than live in retirement villages with shuffleboard courts, golf courses, bus trips to shopping malls, and on-staff medical personnel, yesterday’s seniors lived in bare-boned, waiting-to-die facilities. Or they lived with their kids, who fed them and wiped their parent’s behinds in their last days.
Their only hole-in-one was a six-foot-deep earthen pit.
So, where am I going with this? My point is that if we want 20% down (I ultimately want that, too, reuven), then something else has to give somewhere - in terms of someone’s/some group’s standard of living - to make that happen.
So, what will that something/someone else be?
(1) Will it be an acceptance by the (mostly senior) well-heeled that the value of their over-priced villas will be cut in half or more, and, that, as a result, they may have to go back to work and toil away until they drop dead?
(2) Will it be the dissolution of welfare programs for seniors?
(3) Will it be the re-emergence of seniors living in squalor, rotting away slowly in an over-heated, stinky rathole retirement cells?
Reuven, I think we’re at least 20 years away from 20% down on real estate. And that’s our elected officials and fellow citizens do everything right. If all of us follow the most painful course imaginable.
Now, for where my ongoing irritation lies (and it does not apply to you, Reuven):
There seems to be a real lack of hands-on understanding among the seniors and near-seniors (and well-heeled 50-somethings) that those younger are already tapped out and already cannot support the lifestyles of those older than they.
That said, I believe that in general, there appears to be a real lack of first-hand experience/understanding among senior and near-seniors in the rapidly declining standard of living that their children and grandchildren are experiencing NOW with rapidly increasing speed.
Many seniors (and near-seniors) seem to think that they are experiencing a big decline in their standard of living as they fill up their gas tanks and go to the grocery store, but, in actuality, those increases are minor since so many of their other expenses are subsidized up the booty.
Conversely, wanna know what I paid for a recent kidney stone and one hour in the emergency room? $2,700 - after insurance. And seniors expect anyone in their 20s, 30s and 40s to save 20% down for a nothing special $300K domicile? On $50K average household income? Are they nuts? Apparently so.
In light of all that reality, to think that we’re going back to 20% down anytime soon is a pipe dream. If seniors (or near-seniors) wanna see that happen, then they need to be willing to absorb MAJOR blows to their wealth status NOW. And I’m not talking about this middling 20% loss in both housing value and stock prices. That’s chicken feed. I’m talking more like 75% losses in both, the immediate end of ALL of senior welfare subsidies, and a return to the workforce until they drop dead.
In short, they go back to living as their parents did. Live in a 1,200 square foot tract home, with one modest car and no plasma (electrical or medical). Afterall, that’s what life was like for seniors when 20% down was the standard for downpayments on houses.
If seniors (or near-seniors) can’t or won’t embrace that prospect, then they need to stop scolding those at the bottom of the world’s largest-ever Ponzi scheme (that they’ve profited from for decades like no generation ever has) for not being able to pull together 20% for a downpayment. Perhaps all these spendthrift, two-income youngster households are too busy paying for all their elder’s subsidies and extravagant lifestyles to amass wealth of their own? Perhaps demographics plays a role in the ability for specific generations to amass wealth?
If anyone reading this doesn’t understand the point or significance of the specific *extravagant lifestyles* comment, then he or she has some serious thinking to do. I’m not about to illuminate the point any further. Use your brain.
Whew — Again, Reuven, thanks for being one of the few exceptions. I hope I cleared things up. I’m beat.
Well, Reuven, I just spent two hours writing a response but it didn’t post. Shit.
What I will say is that we’re not on the same plane at all, and it’s likely a generational thing.
If it’s hard to see the correlation between the difficulty those 10-40 years younger than you have in amassing 20% down payments and the extravagant, highly subsidized lifestyles of today’s seniors (and near-seniors), then you are truly a product of the Demographic Sweet-Spot Generation (those born from 1938-1954). The Ponzi scheme and demographic your generation was born into and has enjoyed since birth is now rapidly disintegrating. What’s hitting home to you now on the practical, gut-level is what most others 10-40 years your junior long ago accepted and internalized. (Yeah, I realize those comments are probably insulting and condescending. So be it).
Your generation can’t forever be squeezing blood from a demographic turnip, reuven…and that’s what your generation continues to attempt to do come hell or high water. Sorry, the Demographic Gravy Train Is Over. Most people of your age seem to blissfully ignore the overwhelming importance of demographics has played in shaping our economy during the past 75 years.
Unlike for the 2-3 generations on either side of your own, yours has had the luxury of being able to effectively ignore the negative side of demographics. Those days are over for you now.
So, you want to see 20% down? If that’s the case, then your generation has to take a massive hit on the chin. I see it, you see it. We agree. The following scenarios are the most obvious:
1. Forego NOW 75 percent of both the value of your house and stocks.
2. Forego ALL of your subsidies NOW (MediCare, MediGap, Social Security, AARP, 10% freebies and everything else). You can live off nothing more than your accumulated wealth. Mail your Social Security checks back to the government.
3. Go back to work TODAY, and work until you drop dead and make your only hole-in-one a six-foot-deep earthen pit.
Now, to address your questions/my inability to be articulate.
20% down is wildly out of reach for most people in their 20s, 30s and 40s. Fine. Have you ever really wondered why it’s so difficult for so many younger, two-income households to save enough money to put 20% down on a $300K property? 25 years ago, a one-income household could accomplish the same in roughly the same amount of time for a $100K house.
Has it occurred to you that maybe those younger are spending lots of their money supporting your generation’s extravagant lifestyle? You know….those senior lifestyles of living in retirement communities where individual units can easily cost $300K? Where there are golf courses, shuffleboard courts, bus trips to malls and on-site medical personnel?
Seems to me that back in the days when a one-income household put 20% down, few seniors could afford such luxury living in their old age. Could it be that nowadays a good portion of that 20% down that youngsters are “too undisciplined” to save now is in some way reflected in those posh living conditions at retirement facilities?
Could it be that if all senior subsidies were suddenly ended that many of today’s seniors could no longer afford to live so lavishly?
Quite possibly. Perhaps they’d have to live in squalor instead.
Incidentally, how can so many of today’s seniors (or near seniors) can afford 2-3 houses in so many ideal locations? Their parents couldn’t do that, nor will their children be able to.
taxes are allmosts 300% higher as % of gdp than 1948
free-er healthcare and a World Tax of 865 billion will put us over 300%
word