Drop The Price Or Bulldoze Them Down
A report from Marketplace. “Stacey Vanek-Smith: The median home price is down about 17 percent from last year. The reason? Foreclosures, of course. Buyers are bargain hunting. And owners of more expensive houses aren’t selling unless they have to. But there’s another problem says economist Lawrence Yun with the National Association of Realtors. He says appraisals are coming in low. Yun: ‘The buyer and the seller agree to a price. Yet when an appraisal is coming in, it’s coming in much lower than the agreed price.’”
“Columbia University housing economist Chris Mayer says appraisals are coming in low because home values are still falling. Mayer: ‘I think that’s a bit like blaming the messenger for the bad news. Prices are falling in housing and down payments are unfortunately going to be high, and it’s going to be very hard to complete transactions. So I think yelling at appraisers is misplaced blame.’”
“If the appraiser values the home at less than what the buyer agreed to pay, the buyer, not the mortgage lender, has to make up the difference. Colorado realtor Marianne Snygg says this is causing deals to fall through. Snygg: ‘I heard about one just last week. The buyer will need to come out of pocket for the difference and a lot of times the buyer can’t.’”
The Denver Post in Colorado. “Cherry Creek Mortgage Co. is among the lenders picking up the pieces in a shattered mortgage industry. A focus on long-term customer relationships, an adherence to more conservative underwriting standards and honoring commitments to its banks when loans did go bad are among the reasons Cherry Creek has survived.”
“‘To grow a firm to such size, and so rapidly, yet untainted by the grotesque ethical behavior recently so common in the mortgage world — that’s a corporate citizenship lesson to all businesses,’ Boulder mortgage lender Lou Barnes said.”
“When Frank Lorenti walks his kids down the street to the park, they share a highway with semi trucks. When Liz Campbell fills a bath at her home, the water runs brown. In exchange for embracing the plan that would quadruple the town’s number of homes, Bobby Ginn promised Minturn a $180 million package. Voters approved the council’s deal with Ginn by an overwhelming 87 percent…Ginn’s plan for Battle Mountain includes 1,700 luxury homes in a private golf and ski community.”
“Without seeing any tangible progress on Ginn’s promises to Min turn, residents can only remember the round of drinks the developer bought at the local saloon after the annexation vote. ‘It’s like Manhattan. The Indians got beads and we got a free beer,’ said Lorenti.’”
The Park Record in Utah. “There’s a lot of grumbling going on about the most recent proposal from David Holland Resort Lodging to pay back condominium owners owed nightly rental income since February. David Zatz, owner of the company, sent a letter to condominium owners Friday morning announcing a partnership with Phoenix Realty who will take equity ownership in the company. As part of the new arrangement, Zatz is requesting owners agree to sign a three-year contract.”
“But while owners willing to speak on the record are hard to find, they do want it said that they don’t like being told the conditions upon which they’ll receive money owed them. Jim Jenkins, an owner in All Seasons who has only done rentals for one year, wants the company to acknowledge that.”
“‘It doesn’t matter to me that he’s promised if I sign up with him for a new contract he will pay me for the old one. He still owes me the money whether I sign up with a new contract or not,’ he said Monday. ‘I think generally speaking, people in the rental program feel the same way. That’s our money and he owes it whether or not we sign.’”
CNN on Arizona. “Financially strapped prospective buyers like Locascio have discovered hope in the Neighborhood Stabilization Program, a year-old federal program designed to help stabilize communities decimated by foreclosures and abandonment. However, not one home in Phoenix has been purchased using the NSP funds despite hundreds of applications.”
“Experts want to caution those who think the Neighborhood Stabilization Program will solve Phoenix’s devastated real estate market. John Smith, president of a nonprofit that helps people find affordable housing, says that won’t happen. ‘We have to identify those goals, those strategies and those resources that are going to make a difference,’ he says. ‘This is not, in and of itself, going to do that.’”
“He compares the program to a Band-Aid, cautioning, ‘It is only one tool … we’re going to have to find some other solutions to stabilize these communities.’ Communities are visibly ailing all across the area, with some of the hardest-hit neighborhoods nearly abandoned by foreclosures. Homes are boarded up and weeds cover the ‘For Sale’ and ‘For Rent’ signs in thousands of yards.”
“‘It’s overwhelming when you look at the numbers,’ Smith said, noting that Phoenix still records roughly 8,000 new foreclosure notices every month.”
The East Valley Tribune in Arizona. “The National Foundation for Credit Counseling survey revealed that nearly half of all American adults no longer believe homeownership is a realistic way to build wealth. Dennis Hoffman, economics professor at Arizona State University, isn’t surprised that many people’s attitudes toward homeownership have soured.”
“‘It’s just kind of a psychological thing,’ he said. ‘When people loved housing back in 2005-2006, they way overloved it, and now they’re way overhating it. I think psychology will slowly improve as we go forward. It may take years to kind of regain the basic confidence that people have in housing.’”
“John Stih, CEO of the Southeast Valley Regional Association of Realtors, said the American dream of homeownership is still out there, but ‘their vision might be blurred a little bit because when they went through this last cycle, they wanted to reap all the benefits.’”
“‘There’s still going to be homeownership, but maybe it won’t (yield) as much equity as it did in the past because it will be slower and it will be controlled because I don’t think the government and the regulators are going to let things get out of hand again,’ Stih said. ‘When you had 50 percent to 100 percent appreciation, that just couldn’t sustain itself. But homeowners will still be there.’”
The Camp Verde Bugle in Arizona. “Beth Adams, president of the Verde Valley Association of Realtors…says foreclosures are an important factor in home sales now in the Verde Valley. ‘They are a large percentage of the sales that are happening now,’ she said. She says foreclosure sales are priced at market value and the lenders want them off their inventory.”
“‘The inventory is incredible,’ said Carol Anne Warren of Adobe Group Realty in Old Town Cottonwood. ‘We have so many houses for a buyer to choose from. The sellers are very, very negotiable. It’s totally a buyers’ market.’”
“‘Every realtor in the Verde Valley has a list of 100 buyers,’ Warren said. ‘But those people must sell a house somewhere else. Once that starts to move, then the dam will break.’”
“Warren said the federal stimulus package has down payment assistance included that doesn’t have to be paid back, and it includes an $8,000 legitimate tax credit. ‘It’s not just first-time homebuyers right now, it’s anybody,’ Warren said. ‘I took my youngest son by the ear and told him ‘you’re buying a house.’”
The Las Vegas Business Press. “Whether all the ’stop foreclosure’ ads will lose their appeal after residents get a chance to go to court mediation for as little as $200 remains to be seen, said local attorney Frank Sorrentino. The lawyer, best known for his bankruptcy practice, has seen business soar in the last year. Many clients attempt to save their homes by going into bankruptcy, he said.”
“However, his clients usually have multiple financial issues that go beyond losing their home to foreclosure, he said. ‘Many have lost their jobs. Some have decided to let the house go,’ the lawyer said. He noted that the prices of houses have dropped so dramatically that somebody hopelessly upside down in their current domicile may opt to let the bank take the house back and save money by buying a new one.”
“At a June 16 Nevada Supreme Court hearing to get public comment on proposed rules for the mediation, attorney Benjamin Childs told Chief Justice James Hardesty that all homeowners should be allowed to request mediation on their loans, not just those that are facing foreclosures.”
“Childs, who handles bankruptcies and foreclosure issues, talked about the impact on the neighbors not in foreclosure. ‘My neighbor is 60 days behind and in the mediation program, and now he is paying $500 less than me,’ he gave as a scenario. ‘I’ll get to participate if I stop making (mortgage) payments.’”
“Frustrated homebuyers at the still under construction Cosmopolitan Resort Casino on the Strip have filed three lawsuits against the project. They claim numerous breaches of contract, and now want their money back. More than $200 million in deposits hang in the balance for the troubled development. The lawsuits have since been consolidated into a single case with more than 400 plaintiffs. Las Vegas-based Marquis & Aurbach is leading the legal charge.”
“The $3.9 billion Cosmopolitan, at 3700 Las Vegas Blvd. South, had been scheduled to open in December. Developer Ian Bruce Eichner, however, defaulted on construction loans last January and lost the project. Deutsche Bank AG subsequently bought the twin 600-foot tower, 2,998 condo-hotel unit complex during a foreclosure sale last summer for $1 billion. Next, it hired The Related Cos. to oversee construction on its behalf.”
“Related’s involvement is ironic, considering the developer failed to build two high-rise projects of its own in Las Vegas — Icon and Las Ramblas — due to financing problems and gross miscalculations about the marketplace.”
“‘It’s rumored that they are going to finish the building as a shell and not do any interior work,’ said Marquis & Aurbach President and Managing Partner Terry Coffing. ‘They may convert it into a straight hotel, but the balconies present a building code issue. They still need someone to operate the hotel. They’re in too deep not to do something.’”
“‘This money in deposit is an attractive thing for them to keep their hands on,’ Coffing said. “They are going to do whatever they can to keep that cash. They may look to settle for 70 cents on the dollar. That would give them $60 million for doing nothing. It has to be attractive in some perverse accounting sense.’”
“Homebuyers could…wind up with dramatically different looking units than originally purchased. Calls to the sales office were not returned. The Cosmopolitan project Web site is no longer online. And Deutsche Bank officials refused to comment on pending litigation.”
“‘They haven’t talked to anyone in a year and a half,’ said Neil Senturia, a San Diego-based Cosmopolitan homebuyer who paid $590,000, or $697 per square-foot, for a 610-square-foot unit in the first tower. ‘No one will respond. And there is no Web site. I think they have issues. People don’t like being lied to and stonewalled.’”
The Las Vegas Sun in Nevada. “Skeptics have been suggesting for decades that Las Vegas has built more hotel rooms than can be filled, and still with every economic downturn, the Strip bounces back with remarkable occupancy rates, stoking even more construction. It may be the closest that man has come to creating a perpetual motion machine.”
“But the machine is sputtering now, and will sputter more through 2010, according to two new reports out this week that fret about the number of hotel rooms being added to the market next year. CreditSights noted that lower room rates are helping to fill Las Vegas hotels, but sales of condominium units on and near the Strip have come to a near standstill with 2,200 vacant units on the market.”
“The CreditSights analysts called it ‘remarkable’ that Nevada gaming win dropped in April for the 16th consecutive month, considering the major additions to the market. With the opening of Las Vegas Sands’ Palazzo and Steve Wynn’s Encore, ‘the old rubric that ‘supply creates its own demand’ is clearly not relevant in today’s environment,’ CreditSights said.”
“Stacey Vanek-Smith: The median home price is down about 17 percent from last year. The reason? Foreclosures, of course.”
Of course it’s foreclosures. Never mind high unemployment, reversion to prudential loan underwriting, massive stock market and home equity wealth loss, inventory glut or household precaution about catching falling knives when job security is in question and homes are dropping at the fastest rate on record.
In her world, foreclosures are a cause and not a symptom. I wonder if she thinks roosters cause the sun to come up.
LMFAO, that’s a great one! I can’t wait to use that the next time I need to counteract faulty reasoning in a “discussion.”
I wonder if she thinks roosters cause the sun to come up.
HAHAHAHA! Lovely, bink!
…Although, come to think of it, when I was young and iggerant* I used to look at the old and gigantic poplar trees in the front yard when they’d be bending and swaying and dropping fluttering leaves, and I thought they were breathing out the wind from their branches.
*this’d be last week.
No, not really!…besides, those trees are in Utarr. I couldn’t possibly be watching them breathing out the wind. I can only imagine it.
Ha! We were driving from LA to Joshua Tree and stopped for something to eat. My kids said how windy it was there. I told them if they would turn off all those damn fans it wouldn’t be so windy.
(Lots of windmills on the way)
Oh, you! And now your good and innocent kids be thinking that for forever and ever…
And that’s a good thing. A little confusion and wonderment does a child a world of good, in my firm opinion.
“If the appraiser values the home at less than what the buyer agreed to pay, the buyer, not the mortgage lender, has to make up the difference.”
Hint to prospective buyers: If your appraisal does not go through, you likely are offering more than the home is worth, and chaining yourself to an unnecessarily high level of future mortgage payments.
Yep.
Looks like a few appraisers are actual trying to do their job.
‘Economist’ Lawrence “keep those prices high” Yun must be mortified.
Yum Yun assigns the blame as “faulty” appraisals. Hmmm, just maybe the selling price doesn’t reflect the market? Just looked at a home for sale in my sister’s ‘hood. Zillow says it was purchased for $490K in 1999, they now want $850K. Been on Zillow for 4 months. Don’t most potential buyers at least take a peek at Zillow, even if the values are off?
Where is DimeDropped these days? If I remember right, he is an appraiser down here in my neck of the woods.
In most cases I’ve seen the appraiser’s try to make the numbers work to get referrals and limit complaints. If the fear of indictment or feeling like a lying sack of ____ is keeping them from doing that, the buyer must be really over paying. I agree, however, that real esate agents only wanting to rely on appraisals if they are higher than the agreed sales price is very disingenuous, and view such statements from Realtors as very thinly disguised blackmail (i.e., we are targeting appraisers that give honest appraisals).
Yes, well, the NAR can take a flying leap because they are not the ones lending out the money. The lender makes the determination on what data it wants to use.
Hint to prospective buyers: If your appraisal does not go through, you likely are offering more than the home is worth, and chaining yourself to an unnecessarily high level of future mortgage payments.
Maybe yes, maybe no, but at least in theory that is ONE expert’s opinion.
I love how this is a ‘problem.’
It’s not even close to a problem. If the appraisal comes in at under the agreed sales price, just have the buyer put down a larger downpayment or the seller drop the price to compensate, or the agents can contribute a percentage or two of the comission to the deal, or all of the above.
‘Problem’ solved.
Or revise your bid downward….
That was implied in the ’seller dropping the price’ part.
Yes, but if the buyer is using an FHA loan putting down 3% it usually ends up back on the market. I’m seeing quite a bit of homes in the Scottsdale/Phoenix in the REO market under $400K (i.e. FHA range) coming back on the market specifically for this reason. It’s starting to get worse now that there are multiple offers coming in and the over bidding begins. If the REO is in decent shape in a desirable area within 72 hours there’s at lest 2-3 offers.
It’s funny the look on the REALTOR’s face when I’m walking through these properties signing “Time is on my side, yes it is”
“Hint to prospective buyers: If your appraisal does not go through, you likely are offering more than the home is worth, and chaining yourself to an unnecessarily high level of future mortgage payments.”
Occasionally, I will visit the realtor-infested city-data forums. A few months ago, a person was asking about her options after an appraisal came in around $90,000 less than the contract price. This was a house in an outer suburb of a bubble market, and was probably at 40% below late 2005 price levels. It was part of a large national builder’s unsold inventory.
She was upset about “losing this house,” but did have some modest understanding that this could a good outcome. REIC types and allied tradespeople posted suggestions regarding luxury house “uniqueness” and secondary appraisals. Only a couple of folks (including me) mentioned firing the realtor who helped her decide on an offer price. I suggested that she do that, thank the appraiser in writing, and do at least several months of research before future knifecatching attempts (said in a nice way).
Apparently, a secondary appraisal is underway and there may be a re-negotiated K based on that outcome. I am confident that “cash to make up the difference” is not an option. The person sent me a PM thanking me for my advice, but restating her certainty that she was still getting a good deal at the K price. Absent stringent appraisals and underwriting, most Americans will still jump into housing debt without hesitation.
Or, as az_lender pointed out, the seller could finance the difference. They are the ones drawing a line in the sand over the price, after all.
The seller can only finance it if they have cash or equity with which to do so. In many cases, they have neither; and the number who have neither is growing with time.
“So I think yelling at appraisers is misplaced blame.”
Hear hear! Just a short period of years ago, appraisers were catching blame for coming in too high, and now they are getting blamed for killing deals by coming in too low. I guess it is hard to find a Baby Bear appraiser who gets it just right?
I think the industry infighting is a positive thing.
Inside banks, I’m sure the lending officer doesn’t want to pay too much for a home and he’s looking for assessors to push down the price.
But at the same time he is sitting on some bad loans that he prays he can get rid of if it weren’t for these dang assessors pushing down the price!
Asparagus,
Bingo! What more could we ask for than to have the REIC standing in a circle with guns a’ blazing? ( Would have been nice had we addressed this issue about 10 years ago..? )
Those that claim the brow-beating of appraisers is at the core of this issue are getting to the bottom of things. This has been going on a LOT longer than MBS-securitization and CDS etc. All of that became a necessity as a result of appraisers being coerced.
“The buyer and the seller agree to a price. Yet when an appraisal is coming in, it’s coming in much lower than the agreed price.”
“The sucker and the seller agree to a price. Yet when an appraisal is coming in, the lender no longer wants to be a sucker too.”
“The sucker and the seller agree to a price. Yet when an appraisal is coming in, the lender no longer wants to be a sucker too.”
Oh, yes. And what really gets me is that, if they had the cash to make up the difference, those stupid suckers would go ahead and unquestioningly buy at the higher price in a heartbeat.
Bleh…I’m fed up with dumb people all around me. Sorry so ranty.
I dunno… I included in both of my attempted purchases (both turned down, thank goodness) that the property appraise for the purchase price, not that it appraise for enough to keep the bank happy.
Of course, one was a cash deal, and I lowballed so hard I would have been shocked if the appraisal had come in low.
An update from Condo land in East County, San Diego. The condo we sold in 2005 for $300,000 sold just last month for $130,000! Now if housing would just go down the same amount. Looking to buy in Porfessor Bear’s neck of the woods, Rancho Bernardo or Rancho Penasquitos.. *sigh* getting tired of waiting and a new neighbor just moved into the apartment above us… Patience Grasshopper!!
Stars End
Err,.. make the PROFESSOR BEAR…yeesh!
” Da sellers ‘r vewy, vewy negowtiable. You waskally wabbit, you.”
It’s always a good time to buy. Right?
Roidy
Anyone have a clue about how banks sell REO. Twice in the last few months I’ve telephoned the agent about a couple of places. But in both cases house sold right away but the agents seem to be total jerks. Like pulling teeth to get any info. Because the price was so low was I the 10,000th fool in their opinion who was calling cause he was going to get a great deal and the agents had had eough of being swamped with calls ? Even after I say I have sold my house could be a cash buyer, they don’t even offer to show me other stuff. This makes me suspicious the bank REO depts are selling stuff to their friends ? The agent today said the bank set the price, which was why she did not seem to know about comps. The other time the agent said he specialized in forclosures. Never heard from him. Maybe given most peoples’ finances he did believe there was actually a genuine cash buyer ? Any clues. P.S. Not near ready to pull trigger but have been tempted.
That’s fine, let them sell today’s REOs to friends or better yet hopefully they are snagging some for themselves. Overpaying could not happen to a worse subset of humanity.
It seems no matter what happens in the RE industry agents find a way to be slimy and suck.
Your time will come and better prices are surely on the way. Those thinking they are getting a screaming deal now are 2012s foreclosures.
Yes - the better deals are placed with ppl they know as favors. They really don’t want any competing bids. It’s a breach of ethical duties, but we are talking about real estate sales. The REOs that actually show up on the MLS are the leftovers that no insider wanted.
Tim,
Of that I have no doubt. Back when there were actually people bullish on RE posting here…, …, they’d shout that we were just b!tching b/c we were “priced out” and then rudely laugh in our faces!
But I’ve always felt BB’ing was about a HELL of a lot more than ‘that’. We’ve missed a golden opportunity to get these clowns on a leash and now we’re seeing them rape genuine buyers ( and lenders ) on the downside.
WHY wasn’t there a NAR directive barring Realtwhores (TM) from making bids on F/C’d properties!? Talk about a conflict.
‘I took my youngest son by the ear and told him ‘you’re buying a house.’
Does this constitute child abuse?
The agents eat their young.
Not if you give them the down payment. Then it’s just normal bad parenting.
Hahaha, again!
You’re on a roll today, binky.
More risk, debt, illiquidity and commitment (both in terms of location and upkeep) is what the fiscally irresponsible need. Why limit your problems to yourself when you can burden the entire Country?
…makes me suspicious the bank REO depts are
selling stuff to their friends ? …
They [the banks] are going to have to come up with
a whole lot of [soon to be former] friends. <;)
Actually, the best logical explanation I know of is that
the banks are very skittish about actually selling because
then the ‘marked to market’ price would have to
be booked [in most cases] at a loss.
Losses, in turn, would affect quarterly earnings.
I think this explanation makes some sense, as the top
guns need a few more quarters to milk the bank for
their bonuses and the stockholders need some time
to bail out.
http://www.washingtonpost.com/wp-dyn/content/article/2009/06/23/AR2009062303500.html
Not Paying the Mortgage, Yet Stuck With the Keys
Foreclosure Backlog Imperils Recovery
By Renae Merle
Washington Post Staff Writer
Wednesday, June 24, 2009
A growing number of American homeowners are falling into financial limbo: They’re badly behind on payments, but their banks have not yet foreclosed.
The backlog of seriously delinquent mortgages, which so far affects about 1 million borrowers, is a shadow over hopes for a rebound in the nation’s housing markets. It masks the full extent of the foreclosure crisis and threatens to depress prices even further just as some parts of the country are hinting at recovery. For lenders, it could portend even more financial losses tied to the mortgage meltdown.
“It just means foreclosure rates are going to keep rising,” said Patrick Newport, an economist for IHS Global Insight.
And even though a delayed foreclosure can be a blessing for some troubled homeowners, for others, it simply prolongs the financial distress, leaving them on the hook for the condition of the property. Even if they move out, they cannot move on.
“I have even begged them for a foreclosure,” delinquent mortgage-holder Charlotte Jensen said. When she realized she couldn’t save her Glen Allen home last year, she filed for bankruptcy, packed up her family and moved out. Nearly a year later, Bank of America has yet to take back the home.
Simple answer: don’t move out. Have cash stockpiled and be ready to move quickly, if necessary.
Best answer: don’t buy an overpriced house.
I would have taken the advice learned from HBB to stockpile.
And pack much much later. Eww, moving is last on the list of fun things.
Stay in house.Don’t pay bank. Save money in mm or checking. The head guv will save you.Make them pay you jingle to move.
Yeah, why move out if the bank hasn’t foreclosed yet? They have to give you like 60 or 90 days notice, don’t they? Moving out makes no sense.
Yes, unless a job or something beckoned in another part of the country, why move out ? Just keep up the payments for the utilities and try to keep the lawn mowed and the pool free of scum. In our area, some of the banks are moving a little more quickly to take back the houses ( I think because of the moratorium our county had on foreclosures for several months ), but if my husband & I were unable or decided not to pay the mortgage on our house at some point in the future, that’s what I’d do, and we’d still mow the lawn and keep it nice, until the day we moved out. Stockpiling the cash and not moving out into an apartment until one is forced out would be the way to go, I’d think.
cottonwood, camp verde, what is going on in flagstaff?
Flag is a year or more behind the Verde Valley and Sedona. But the same things are playing out. Recently, actual foreclosure activity has spiked in Flag proper. The economy is taking a hit, etc, which is just what happens in each market as it rolls over.
Looks like Sedona prices are still in La La Land, is there any job base there to justify prices ?
Sedona seems to attract a lot of woo-woo New Age types. I think they believe that they can manifest money without a job. Or that the universe will send it to them. Or something like that.
A lot of the new move-ins to Torrey UT see it as the “next Sedona”. I say live and let live but it’s really hard not to just laugh at them for the most part.
it’s really hard not to just laugh at them for the most part.
Don’t restrain yourself, my dear! That’s why Jeebus made dumb people. So that the rest of us—all 408 of us, exhibited here on the HBB—can laugh!
HAHAHAHAHAHAHA!
Like that.
Correction, Oly. It’s BWAHAHAHHAHAHAHH!
“The National Foundation for Credit Counseling survey revealed that nearly half of all American adults no longer believe homeownership is a realistic way to build wealth. Dennis Hoffman, economics professor at Arizona State University, isn’t surprised that many people’s attitudes toward homeownership have soured. . . . It’s just kind of a psychological thing,’ he said. ‘When people loved housing back in 2005-2006, they way overloved it, and now they’re way overhating it. I think psychology will slowly improve as we go forward. It may take years to kind of regain the basic confidence that people have in housing.’”
To earn my economics degree I had to take classes on statistics, data analysis and advance econometrics. An economics professor talking about psychology without a discussion on fundamentals is appalling. If you don’t know where we should be, how can you have an intelligent discussion about confidence levels? What does “basic” confidence mean? Don’t you have to assume “basic” pricing and “basic” economic conditions as well for “basic” confidence to even apply? I don’t think the word “economist” has any meaning anymore given its abuse.
Here’s another economics degree holder who agrees with you. Especially your final sentence.
Housing will eventually get back to being that cruddy difficult experience where you pay for a long time and then leave a run down house to your kids when you kick it.
Watching this slide down hill is pretty amazing.
As a note in this: I’ve lost almost all my enthusiasim for buying too. And I’ve been on the sidelines. Wondering about those who have been caught up in this mess. I remember after the last little bubble party in 92-93; talked with some of the people and they had some kind of faith conversions and wanted no part of housing again ever. There will be many more like that this time.
As so many told us, this time its different.
Its probably going to get very different.
The psychology is has changed. Soon the psychology on government guys running up debts will change too.
Prediction Market for the HBB Brain Trust:
-Dow and S&P 500 on 12-31-2009?
-Unemployment rate, 12-2009?
-Number of Investment Bankers/Hedge Fund-types indicted by 12-31-2009?
-There will be an attempted/successful “hit” on same, by some person/organization, by 12-31-2009? True/False
-Oil ($/BBl) on 12-31-2009?
-Using tech support from a US company, a repressive regime will track down and execute a “democracy protestor” (soon to be relabeled “terrorist”). True/False
FWIW: My wife called today about a foreclosure that she saw listed on Redfin. She asked the contact person if she could tour the house and was promptly rebuffed by “only if you are pre-qualified to purchase”. Like I’m in such a buying frenzy that I’m going to run out and get pre-qualified. If and when the right deal comes along I’ll jump through the hoops.
PS. Let’s see how if plan B works, called a Rotarian friend with RE connections for an end run.
“The CreditSights analysts called it ‘remarkable’ that Nevada gaming win dropped in April for the 16th consecutive month, considering the major additions to the market. With the opening of Las Vegas Sands’ Palazzo and Steve Wynn’s Encore, ‘the old rubric that ‘supply creates its own demand’ is clearly not relevant in today’s environment,’ CreditSights said.”
Umm, what has happened is that Vegas has run out of suckers to be fleeced…
“‘They haven’t talked to anyone in a year and a half,’ said Neil Senturia, a San Diego-based Cosmopolitan homebuyer who paid $590,000, or $697 per square-foot, for a 610-square-foot unit in the first tower.”
Ouch, it burns! Make it stop hurting, PLEASE!
I saw that $697 per square foot and thought the same thing…OUCH!! That has got to hurt!
If the floors were paved with gold and silver bricks, inlaid with diamond grout, maybe. Otherwise, No.
It might hurt even more than we think. I did a quick check of the figures and it looks like the actual price per square foot is $967! (590,000 / 610 ~ 967.2).
A little dyslexia to make the $/SF figure a little less horrifying?
Stacey Vanek-Smith
It’s so weird to see that written out, after having heard it said on the radio for x+ years.
In her world, foreclosures are a cause and not a symptom. I wonder if she thinks roosters cause the sun to come up.
Words are so important, bink, you’re so right.
Take “foreclosure crisis”. As if foreclosures just started happening for no reason other than, oh, I don’t know… the tides.
Or maybe a giant, invisible, alien spaceship landed and started hitting houses with a Foreclosure Ray and now these poor people are forced to move out and to uh…, rent.
But the “uh…, rent” part never gets expressed in ANY mainstream media reports - it’s just assumed that the invisible alien ray has made them all homeless, and that’s it.
The real and the reported are so out of whack.
“I don’t exercise because it makes my coffee spill”
Maxine
Simply put, many mediations will not result in a loan modification, for good reasons. Many mediations will result in a settlement where the homeowner and bank agree that the best course of action is for the homeowner to voluntarily transfer title and posession to the bank, in exchange for the bank forgiving the homeowner’s mortgage debt, forever and always. Restoring or preserving the homeowner’s credit could be part of the settlement discussions, as could the homeowner agreeing to pay a small portion of the loan back over time.
If a homeowner’s mortgage is worth significantly more than his house, the decision to abandon becomes a matter of simple math: If a homeowner has no hope of having an equity stake in the home for years to come — if ever — trading his mortgage payment for a much cheaper rent payment may be an economic no-brainer.
This is not high math. If a homeowner owes $100,000 more than his home’s value, it will take many, many years for the home to equal the mortgage balance, or it will never happen within the homeowner’s lifetime. It will take even longer if the homeowner modifies his loan to a lower monthly payment, and ironically, the case for a walk away becomes even stronger.