Buyers Want To Pay More
The Union Tribune reports from California. “Median home prices may be down nearly 40 percent from their 2005 highs, but most residents still feel affordability needs attention. An online poll of 31,000 residents showed that 76 percent of participants said making housing more affordable is an important or very important priority for the region’s future. Only 9 percent said the issue is not important and 15 percent were neutral. However, Lori Holt Pfeiler, the San Diego Foundation’s associate VP and a former Escondido mayor, said housing concerns some groups more than others. For example, 80 percent of young people aged 18-34 rank affordability as important. But only 66 percent of people aged 55 and over agree.”
“‘Seniors didn’t really care,’ she said, ‘because they already have a house.’”
The Daily Breeze. “The Southern California economy is on the mend with positive annual job growth for the first time since 2007, but the lag in the housing and government sectors continues to slow recovery, local economists said. One positive factor is the rise in rental rates, causing consumers to return to consider owning a home instead of renting, said economics professor Lisa Grobar. ‘That will push us to a recovery, but it may still take another year because of a backlog of foreclosures that still haven’t come onto the market that have been held up in courts,’ Grobar said.”
The LA Times. “A nation still struggling to clear up one housing debacle has run smack into another – soaring rents. Rob Magnotta, a real estate agent, recently listed his two-bedroom Irvine, Calif., condominium for rent on Craigslist for $2,300. He had six applicants within 24 hours, including one who wrote a poignant letter about losing a home to foreclosure. ‘It was almost too easy,’ said Magnotta, who chose another renter.”
“Rising rents have converted some renters into buyers. Scott Matulis recently purchased a townhome in Oak Park, Calif., after enduring two consecutive years of rental increases. His mortgage, taxes and homeowner association fees now total $2,200, just $100 more than what he was paying his former landlord. ‘I finally just pulled the trigger and figured I’d be throwing money away on rent,’ Matulis said.”
“Even for those with better jobs, paying rent can be difficult. Virginia Villa of Brea, Calif., a single mother of four who works as a manager at Disneyland, has doubled up with her adult daughter, who contributes $400 to the monthly household budget. Still, Villa said, about half her take-home pay goes toward rent and utilities. ‘I have a decent job and I would love to buy a house, but I don’t think that’s possible to do,’ Villa said.”
The Record Searchlight. “Home sales in Shasta County are up roughly 35 percent this year — nearly 50 percent over two years ago. Sales in March fell one shy of a five-year high. Inventory is tight: the number of houses for sale is down to levels not seen in years. Yet prices continue to fall. March’s median sales price of $135,000 hit a 10-year low.”
“‘In some cases, banks won’t take offers over list price if they involve a loan because they fear the property will not appraise for what the buyer wishes to pay,’ emailed Brad Garbutt, of Real Living Real Estate Professionals in Redding. ‘So in a way, the market prices are being kept artificially low by lenders unwilling to accept the fact the buyers want to pay more.’”
The Mercury News. “Foreclosure activity dropped across the Bay Area in April, as lenders apparently turned to government programs aimed at keeping struggling homeowners in their homes, ForeclosureRadar reported. But while the decline in distressed sales was good news for underwater homeowners, it also kept the number of homes for sale frustratingly low during the onset of the peak home-buying season. With so few homes on the market, bidding wars have broken out in some communities.”
“New government programs may also be cutting into short sales — the sale of a home for less than is owed on it, said Joe Reichert of Keller Williams Realty in Danville. ‘Some short sellers are holding back,’ Reichert said. ‘They’re getting hope that there’s some help coming.’”
“But there are still plenty of distressed homeowners facing eviction. Ruth Woods, 83, is about to lose her Oakland home of 40 years because she was talked into a Wachovia ‘pick-a-pay’ loan in 2007 that has become impossible to pay. She took about $60,000 out in a refinancing, but says much of it went back to the lender in the form of mortgage payments and the remainder she spent on maintenance, taxes and insurance. ‘The money I got I was giving it right back to them,’ she said.’
From KTVU. “Attorney General Kamala Harris is pushing to change the way foreclosures are carried out in California and some San Francisco residents took up the issue Saturday in the streets of one neighborhood that has the highest numbers of foreclosures. ‘I lost my job in early 2010,’ said Monica Kenney. She said the bank worked out an agreement to keep her home. ‘The following day the left hand didn’t know what the right hand was doing and now I’m struggling to have them rescind this foreclosure,’ she said. ‘You know, I want my piece of the American dream.’”
The San Gabriel Valley Tribune. “Rep. Linda T. Sanchez, D-Cerritos, released a statement this week regarding the decision by Fannie Mae and Freddie Mac to participate in the ‘Keep Your Home California,’ state-run program which helps homeowners at-risk of foreclosure. Currently, Fannie Mae and Freddie Mac own roughly 62 percent of outstanding mortgages in California.”
“‘It is a positive first step in helping more homeowners stay in their homes,’ Sanchez said. ‘Principal reduction is an important tool in foreclosure prevention because it means lower monthly mortgage payments for underwater homeowners.’”
“An idea that would force banks to register every city of San Diego home that’s in the foreclosure process is gaining traction. And according to one poll, it appears a number of San Diegans support the proposal, which aims to fight blight in neighborhoods and hold banks accountable for the maintenance of distressed homes. In 2011 alone, close to 19,000 default notices were filed in San Diego County.”
The Bakersfield Californian. “The median sale price of an existing single family home in the Bakersfield area rose to $145,000 in April, a 9.5 percent increase from March and up 14.3 percent from a year ago. That’s according to The Preliminary Crabtree Report, a monthly gauge of the local housing market produced by Gary Crabtree of Affiliated Appraisers.”
“Bakersfield ranked second among the top 10 metro areas nationwide with the largest annual drop in homes listed for sale in March, according to Realtor.com. ‘The current conditions are causing multiple offers on properties and the emergence of cash buyers and buyers who have cash to increase the down payment if the appraisal does not meet the sale price,’ Crabtree said.”
“Although banks still own a tremendous number of homes foreclosed upon during the economic downturn, they’ve been careful to release them to the market slowly to keep from depressing prices. Crabtree said he wonders why banks aren’t releasing more of their inventory, and warned that government manipulation of the housing market could potentially create another real estate bubble.”
‘I lost my job in early 2010,’ said Monica Kenney. She said the bank worked out an agreement to keep her home. ‘The following day the left hand didn’t know what the right hand was doing and now I’m struggling to have them rescind this foreclosure,’ she said. ‘You know, I want my piece of the American dream.’”
I’m fed up with this type of whining, pissing and moaning.
A dream without hard work and planning and effort is just another dead brain cell.
“One positive factor is the rise in rental rates, causing consumers to return to consider owning a home instead of renting, said economics professor Lisa Grobar.”
Less affordable rents during a recession and foreclosure crisis is a positive factor?
Were any further reasons provided, or should we just nod our heads in agreement with this expert?
“‘That will push us to a recovery, but it may still take another year because of a backlog of foreclosures that still haven’t come onto the market that have been held up in courts,’ Grobar said.”
How will bringing this ‘backlog of foreclosures’ onto the market possibly help matters? For one thing, won’t the people who finally go through foreclosure get thrown onto the rental market, leading to a rise in rental rates?
Oh yeah, I forgot that less affordable rental rates during a foreclosure crisis is a good thing.
One of the advantages of converting from renter to buyer while on this blog, is that I can think both like a renter, and like a buyer/owner. From the perspective of the owners (the majority of voters), the article is internally consistent.
High rents means that responsible renters with cash (like me) would rather buy those foreclosures at current prices, which keeps prices from cratering, which keeps current FB’s above water so they can sell and move for jobs if they have to, or at the very least feel safer in spending money at the mall. This may not be good from the renter perspective, but it is a positive factor for the economy, where the majority are buyers/owners.
Meanwhile, the FB’s that are evicted go into the rental market, raising rents, which causes another layer of responsible renters with cash to want to buy. This is turn supports the price floor we seem to have hit. It’s a lot like what happened during 2003-2006, with more and more layers of people buying, except that tighter credit is keeping prices the same instead of rising.
Instead of a bubble, it’s a bubble sort. Unqualified buyers go back to renting, while qualified renters go into buying. Kind of a neat circle.
“This is turn supports the price floor we seem to have hit.”
The floor would be a lot lower if not for the shadow inventory currently being withheld from the market.
I think that in addition to being a stupid b*tch, this is a troll as well.
Insidious isn’t it? And it’s not just here.
Ben, unless I am very much mistaken, this is oxide’s current nom de internet. A nod to those who think she is daft, to put it mildly, for buying a house.
Best regards to you from the poster formerly known as Elanor.
No, it’s not oxide.
Uh, yeah it’s oxide.
Well, when did you start using words like that?
Ben, here’s the reference:
——————
Comment by oxide
2012-05-12 13:15:35
It is indeed fact. In fact, for $200 LESS than the cost of renting, I will pay it off in 22 years. I haven’t arranged it formally, but that’s how the monthly check looks.
Comment by Faster Pussycat, Sell Sell
2012-05-12 13:51:07
Wow, just wow.
Nobody here said it but I bet many here thought it.
You bet on 22 years for a measly $200? Seriously?!?
Plus, downpayment.
You’re the stupidest b1tch that a Realtor can buy!
—————-
http://thehousingbubbleblog.com/?p=7156#comments
OK, I apologize. I didn’t think it was you because the language wasn’t typical.
You go, oxide. Hanging around perma-bears can skew one’s judgment. I got out of the stock market in time to avoid the crash, but didn’t get back in.
If only I’d listened to eddie.
Yeah, and you could be an upside down landlord in Atlanta too.
Do you need someone to tell you to buy stocks?
http://finance.yahoo.com/
Why buy stocks today when the indices are falling? Buy later after the indices crater for 40% less.
Ben, FPSS went over the line in that comment. Way over, IMO. Would you consider warning him about using such language directed personally against a steadfast HBBer?
“Uh, yeah it’s oxide.”
(Blush)
“Comment by Faster Pussycat, Sell Sell”
He must have had the mother of all hangovers last Saturday, as he heaped contumely on anyone who dared question his unbounded wisdom (e.g., by suggesting that perhaps Jamie Dimon actually *did* know from the gitgo about the derivatives trade which produced the $2+bn JPM gambling loss).
Don’t sweat it. The best way to diffuse being called names is to wear the name proudly. Now, lots of groups, when they are insulted, go out and get T-shirts.
The data that I’m seeing seems to suggest that the “withholding of REO” is market by market, and perhaps concentrated with homes that are in some way in dispute.
I looked through the Fannie Mae quarterly reports, which report each quarter the number of “acquisitions” (ie. new foreclosures becoming REO), and the total remaining inventory. From that, you can determine how many REO each quarter left their REO pool. This data is provided with granularity for the bubble states–no granularity for other states.
Fannie REO inventory for the quarter ended 3/31/12:
CA Started with 14,147
“Acquired” 3,829
Disposed of 6,187
Ended with 11,789
AZ Started with 4,385
“Acquired” 2,286
Disposed of 2,836
Ended with 3,795
FL Started with 8,677
“Acquired” 5,610
Disposed of 3,886
Ended with 10,401
NV Started with 2,833
“Acquired” 1,003
Disposed of 1,719
Ended with 2,117
Are certain houses held off the market for one reason or another? Undoubtedly.
Is there some massive withholding of REO inventory, thus continuing to swell the number of REO on the books at Fannie? Doesn’t appear to be the case.
For Fannie, the “shadow inventory” seems to be the future foreclosures as opposed to REO. In FL, this is massive, at about 11% of their Florida loans. In NV, this is also massive at 7%. In CA/AZ, it is less the case at about 2.25% seriously delinquent and about 3.5% seriously delinquent.
Are other financial institutions dealing with REO and foreclosing on delinquent borrowers differently? I’m certain of it, but I’m sure what is happening is different depending on what institution/servicer and state laws you are talking about.
“In CA/AZ, it is less the case at about 2.25% seriously delinquent and about 3.5% seriously delinquent.”
2.25% + 3.5% = 5.75% OF WHAT?
Of all conventional loans guaranteed by Fannie Mae for homes in the state of California, 2.24% of them are seriously delinquent.
Of all conventional loans guaranteed by Fannie Mae for homes in the state of Arizona, 3.22% of them are seriously delinquent.
For Florida, the number is 11.35%
For Nevada, the number is 7.06%
For the entire pool of loans, the number is 3.67%. Arizona and California are better than average, Nevada and Florida are far worse.
And the link.
The location of this particular data is page 8.
http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2012/q12012_credit_summary.pdf
It is a bubble because people are once again bidding up housing over what it should cost based upon income levels for any given area. Something will have to give with higher rents, wages will have to increase or people and jobs will have to move out of the area. We are in a period where the dog is chasing his tail.
‘Unqualified buyers go back to renting’
Almost anyone with a job qualifies these days. There are even govt backed loans that are no doc and no appraisal.
This right here is the truth. I was shocked at the amount my credit union would pre approve me for. This of course led to me wondering about the soundness of the loans they’re making…time to hide my money in the mattress.
Young Deezy
Mine as well, yet credit unions like to brag about how conservative their underwriting is. BS. They are now banks in drag. Also, I’ve been noticing the tacking on of fees for all kinds of once free services. Drag Queens!
(Mine is a federally chartered one, and you can borrow 125% on homes and vehicles. Get your “rotten candy”)
I think the bigger issue with loans closing is appraisals. NPR recently noted that in “normal” times (whatever that means), approximately 75% of loan applications turned into mortgages. That rate right now is 55%, with a major issue turning out to be appraisals.
I just refinanced my house (purchased a year ago), and live in the mid-Peninsula…a pretty strong housing market today, being close to Facebook’s headquarters.
The appraiser said that regardless of what the comps say, he would only raise the value for the bank by 3-5%. He was true to form, and increased the value by 4% from what I paid for the bank.
The reason? The Bay Area is still considered a “flat to declining market” in his world, and that he didn’t want to have the bank raise an eyebrow if he gave a value too high relative to what I paid a year ago.
If mid-Peninsula is considered “flat to declining”, I wonder if there is any market that is considered “flat to increasing”, or “increasing”.
Nevertheless, it doesn’t matter…I put 25% down, and am not pulling any cash out, so flat (or even down a bit) would have been just peachy anyway…
Something will have to give
The thing that is “giving” is household formation. LL’s are increasing rents and daring tenants to pay it. Tenants find a way, usually by adding extra incomes to the household. Taking in a roommate, or a rental with 3-4 families, grandma moves in and contributes some of social security check, take in developmentally disables uncle, grandma does day care for the kids of a coworker, older kids work part time. Plus section 8 and other forms of assistance. Until we hit the tenements of the early 20th century, there is still some capacity for rent increases.
I was shocked to read the other day that rents are higher in podunky Larimer County than in Denver.
Unqualified buyers go back to renting,”
agree Plus it’s not so easy to buy in S. CA if the home is over 400K as far as I can tell ? Most homes in my area are over 400K. But I live in a bubble land not like most areas.
My friends in Phoenix tell me homes are really selling fast now, to who he can’t say. I look at zillow and see many many sold homes in my old nabe 85044. Low interest rates I expect are the big reason.
Instead of a bubble, it’s a bubble sort. Unqualified buyers go back to renting, while qualified renters go into buying. Kind of a neat circle.
LOL, this is a great metaphor.
Kind of a neat circle
Yeah, paying 50% of your salary for housing is really neat.
Not.
“Inventory is tight: the number of houses for sale is down to levels not seen in years. Yet prices continue to fall. March’s median sales price of $135,000 hit a 10-year low.”
The inventory squeeze wasn’t enough to keep Shasta County housing prices from tanking to 2002 levels.
‘So in a way, the market prices are being kept artificially low by lenders unwilling to accept the fact the buyers want to pay more.’
And in another way, clueless buyers are abysmally ignorant about how low market values have fallen. Otherwise, why would they be making offers which the lenders know are way over appraised value?
All they have to do is put up more down-payment. But most probably don’t have that. Which makes one wonder where prices would be if 0-3% down-payments weren’t available. Or 3% interest rates.
‘Crabtree said he wonders why banks aren’t releasing more of their inventory, and warned that government manipulation of the housing market could potentially create another real estate bubble’
Or 3% interest rates ??
Thats the key phrase right there….
Crabtree is not the brightest bulb in the pack. I knew him when I lived in Bako. He’s just another RE shill.
“She took about $60,000 out in a refinancing, but says much of it went back to the lender in the form of mortgage payments and the remainder she spent on maintenance, taxes and insurance. ‘The money I got I was giving it right back to them,’ she said.’”
Why throw away your own hard-earned money on PITI if you can pay it out of your loan proceeds?
What PI? I’m sure that was a paid-off house. She had to borrow against it for the taxes, insurance, and probably some 30-year-old fixtures that were falling apart. She’s 83. It’s possible she thought the $60K would be enough to pay T&I until she finally died, but maybe it wasn’t. I feel sorry for this woman; what other choice did she have?
For those who want to mock her for taking out refi cash, imagine if she hadn’t had a paid off house, and had to pay rent which surely would cost more than T&I.
‘what other choice did she have’
http://www.personalhomeloanmortgages.com/what_is_a_reverse_mortgage.asp
http://www.youtube.com/watch?v=kp-R1o753pM&feature=results_video&playnext=1&list=PL7948E42E5CC14713
“I feel sorry for this woman; what other choice did she have?”
You are making one big assumption–that the facts of the story are correct!
True, but is assuming what we want to believe any better?
Reverse mortgages were MADE for 83 year olds who can’t pay their current expenses.
Which is exactly the case for a friend of mine. Except that she was 86 and not of sound mind when she took out a reverse mortgage.
I guess it helped her pay down some of her debts, I don’t know. But I do know that her house went into foreclosure in 2009.
Elderly people on medications are some times not able to think straight as well.
And they are often trusting of banks and bank officials.
You should never go into foreclosure on a reverse mortgage. There are zero payments due until you die (or otherwise permanently leave the house, I believe - not sure how they determine that). The FIRE sector has done all sorts of crud with this insturment, but it is supposed to be you trade the house being part of your estate (you won’t need it then, tough luck to your heirs) for a lump sum or life annuity. Should be a good way for a cash poor senior with money tied up in a house to live out the rest of their time when they can manage the house with some additional income.
Your friend wasn’t in a real reverse mortgage.
You should never go into foreclosure on a reverse mortgage. There are zero payments due until you die (or otherwise permanently leave the house, I believe - not sure how they determine that).
My friend permanently left the house.
She fell and broke a leg on Christmas Eve 2007. After five weeks in a rehab center, her eldest son took her to live with him and his wife in northern AZ. AFAIK, that’s where she still is.
The family tried selling the house in 2008-09. It didn’t sell, so they let it go back to Wells Fargo, which had reverse mortgaged it for way more than it was ever worth in 2006.
“And they are often trusting of banks and bank officials.”
Isn’t this a primary symptom of senility?
Reverse mortgages were MADE for 83 year olds who can’t pay their current expenses.
It is unfortunate that more people are not financially literate. I know of more than one family who weren’t aware that their parent took out a reverse mortgage.
Had they known and understood what it meant (ie., no inheritance, etc.) they would have made different choices and figured out a way to help.
Of course, having a close-knit family that takes care of each other because they want to is always better than taking care of elderly family in hopes of future gain.
My folks kicked me out at 17. They can take care of themselves, or not.
Haha, that’s actually kinda funny.
But I was supposed to get an inheritance..wahhh!
It is unfortunate that more people are not financially literate. I know of more than one family who weren’t aware that their parent took out a reverse mortgage.
Hey, I wasn’t aware that my folks were still paying rent…
…for their telephones. As you recall, I made a royal stink to the media about that one.
Warning from Slim: Even if you live nearby, there are countless ways for your folks to get into trouble you don’t know about. Be vigilant. Protect them. They did the same for you when you were a kid.
I thought they were being terribly ripped off with fees? Are there legit low-cost reverse mortgage sellers out there?
I’m beginning to think that there aren’t.
And, speaking of things relating to seniors, I’ve been prospecting local assisted living facilities. It seems as if they fall into two categories:
1. Corporately owned, charge accordingly, but the actual care is provided by poorly paid help.
2. Mom and pop homes. Quality of care varies widely. And there have been cases of the moms and pops helping themselves to their residents’ life savings.
I now understand why my mother is such an assisted living refusenik.
I’ve seen a range of nursing homes/asssisted living - almost all in the context of entertaining the residents. In summer camp we had a class called show tunes for shut-ins. We perfomed at one place where it seemed that half our audience was tied to their wheel chairs with rope and were barely responsive. I saw some medium places with my New Jersey choir. They looked livable, but not great. And I have seen the high end with the group I sing in now.
You want to end up in one of the nice ones - and even they aren’t all that fantastic. Good luck if you can’t guarantee them their preferred rate for a long time. Medicaid only starts paying once you are destitute and the amounts aren’t that high
You want to end up in one of the nice ones - and even they aren’t all that fantastic.
Which is why my mother is such an assisted living refusenik. As much as my dad gets on her nerves (and mine), she’d rather be at home with him.
“She said the bank worked out an agreement to keep her home. ‘The following day the left hand didn’t know what the right hand was doing and now I’m struggling to have them rescind this foreclosure,’ she said. ‘You know, I want my piece of the American dream.’”
Why not just refer to ‘dual tracking’ by its rightful name:
Bank fraud.
(Cue in Polly to browbeat me for being the legal ignoramus I am…)
Dual Tracking: Luring Homeowners into Foreclosure
Posted on March 5, 2012 by Neil Garfield
‘Editor’s Comment:
I call it fraud. They prefer to call it “dual-tracking”. The fact is, that homeowners ignorant of the real intent of the banks and servicers went through the charade of seeking modifications and settlements. Yet they were set up every step of the way, in every way possible. From bogus lenders to robo-signed documents and now to have made official what we’ve known all along, that the pretender-lender banks had procedures in place to operate a dual-track system. In other words at the same time that homeowners were negotiating for modifications, the same banks had them on a track for foreclosure. No wonder a homeowner could never reach the same person twice, no wonder every new voice on the phone needed to have the information sent in again, no wonder the banks told homeowners that they could not help them until they were behind in their payments. Just like common oxymorons, the paradoxes such as deafening silence, living dead, or denying us our civil rights and calling it the patriot act, loan modifications and help for homeowners is really just an oxymoron. Makes sense now, doesn’t it.’
This lady wants a piece of the dream too, but she didn’t default on a loan, so I guess she’s out of luck:
‘Virginia Villa of Brea, Calif., a single mother of four who works as a manager at Disneyland, has doubled up with her adult daughter, who contributes $400 to the monthly household budget. Still, Villa said, about half her take-home pay goes toward rent and utilities. ‘I have a decent job and I would love to buy a house, but I don’t think that’s possible to do,’ Villa said.’
Somehow the MSM still hasn’t figured out that hapless renters are left out in the cold by these ’save our homes’ bailout programs.
Another group worth mentioning in this ‘fairness’ context are all the ‘deserving homeowners’ who were already foreclosed; for instance, what about my friends who lost their home in a BoA foreclosure action a couple of years back? I guess they won’t be seeing any of the BoA principle reduction bailout money, as these former homeowners have already been renting for quite a while.
“who works as a manager at Disneyland”
Which probably means she makes $15/hr, unless she’s a “manager” in the big yellow “Team Disney Anaheim” building visible from I-5. But if she works in the parks, she’s probably one of the “cast members” who either works in attractions, entertainment or food service.
Once upon a time Disney paid its “cats members” a living wage. I remember when I was in college my roommate landed a summer job busing tables at Disneyland. The pay was more than twice minimum wage. These days the pay would be minimum wage.
In the book Intern Nation, Ross Perlin describes the sorry lot of Disney interns, who are paid very little and work in conditions that could best be described as crummy. In recent years, Disney has filled many formerly living wage positions with interns.
And that’s the latest book recommendation from your HBB Librarian.
I worked for Six Flags back in the 80’s for less than minimum wage. And no time-and-a-half for over 40 hours/wk either.
“who works as a manager at Disneyland”
She got a piece of the dream.
If it was already fraud, they wouldn’t have had to forbid it in the agreement with state attorneys general.
Now, assuming the woman has a social security number or the bank has assigned her a unique identification number, there is zero excuse for it most of the time, but there are (admittedly very few times) when a work out gets approved and the movement on the foreclosure is in a place where a withdrawal isn’t possible. Not familiar with the details, but courts and governments have their own pace and it often involves it taking days if not weeks to stop something that is in motion. Plenty of time for a workout to happen after they are past the point of no return on the foreclosure. I think there should be a moment when the foreclosure process should do a last consult with the lender and say “are you sure” a few minutes before it actually happens (probably have that opportunity in judicial ones) but just because I think it should be there doesn’t mean it always is.
Before it can be fraud, there really has to be an issue with them not following the terms of the original contract. Assuming the paperwork is OK, I doubt they did. You may have a perfectly valid ability to foreclose as defined by the original note even if the person offers you a check for all their back payments, fees and penalties.
“If it was already fraud, they wouldn’t have had to forbid it in the agreement with state attorneys general.”
I meant the dictionary definition of fraud, not the legal definition:
If you aren’t using the legal definition, then make sure you don’t expect the law to do anything about it.
“In 2011 alone, close to 19,000 default notices were filed in San Diego County.”
A quick check on Redfin dot com shows only 7,790 homes currently on the market, right in the middle of the red hot spring sales season. Judging from how long it takes foreclosures to hit the market these days, and that foreclosures have been running high for several years in a row already, it sounds like there may be quite a large shadow inventory overhang for the San Diego housing market to work through over the years to come, especially compared with the very small current inventory of homes for sale.
“…7,790 homes currently on the market…”
For those unfamiliar with San Diego County population figures, there are roughly 3 million San Diego County residents packed into around 1 million households.
So 7,790 homes on the market comes out to about 7.8 homes per 1000 households. I fail to see how this can fail to go up over the coming years with retiring Baby Boomers looking to leave California for cheaper retirement living options, but perhaps I am missing it.
I fail to see how this can fail to go up over the coming years with retiring Baby Boomers looking to leave California for cheaper retirement living options, but perhaps I am missing it.”
I’m more worried about how broke this state is and how unwilling it is to fix it’s spending verus income problem.
This could be a major problem in 5-10 years
Perhaps the thought of paying property taxes based on the appraised value of your home will keep them there.
“I’m more worried about how broke this state is and how unwilling it is to fix it’s spending verus income problem.”
This, and the related consequence of a decline in the California standard of living, especially as regards government services such as affordable education, is why I expect net outflows over the next decade of people who are wealthy enough to escape and have options elsewhere.
“Although banks still own a tremendous number of homes foreclosed upon during the economic downturn, they’ve been careful to release them to the market slowly to keep from depressing prices. Crabtree said he wonders why banks aren’t releasing more of their inventory, and warned that government manipulation of the housing market could potentially create another real estate bubble.”
This is only possible when a small number of lenders control the market, possibly through collusion.
Price fixing is illegal under the Sherman Antitrust Act.
The only entities with enough inventory to manipulate the market are the GSEs and HUD. All govt controlled.
I guess if the government does it, that makes it legal.
Per Foreclosure Radar, the total REO in the State of California as of the end of March was ~86k. Per Fannie Mae’s quarterly report, ~12k was theirs. I don’t know how much other government entities have as REO in CA, but I would assume that Fannie is the bulk of it. It seems to me that if there is REO inventory manipulation it’s coming from the private side, not government.
Do you have any data on REO held by other government entities?
Price fixing is illegal under the Sherman Antitrust Act ??
Toothless tiger….Ever look at the CD rates all the banks offer ?? Is it more than coincidence that they are all about the same…
“Ever look at the CD rates all the banks offer ?? Is it more than coincidence that they are all about the same…”
View number one: Near-perfect competition between many individual banks offering near-identical products (F.D.I.C.-insured CDs) drives the rates to the same level.
View number two: The Fed’s monopoly control over interest rates ensures that level will remain abysmally low over the next few years.
Its been a very long time ago but I do remember a day when this was not the case…I specifically remember spreads of 1% or more typically with the smaller local banks…They were obviously trying to attract capital for what ever reason…Maybe to offset their anticipated loan portfolio…
It is only illegal if they plan with each other to do it. If they each decide independently to release their own inventory slowly, there is no collusion, no price fixing (see Ben’s comment) and no violation.
A hairdresser friend told me that she called on a rental as soon as it came out in the newspaper (rent $2200/mo) and the owner was taking applications. He had 25 already. It is in a gated area west of town. I told her of another three bedroom two bath in an area east of town (nice area) for $1700/mo. but she snubbed her nose at that. It’s still about putting on airs.
‘So in a way, the market prices are being kept artificially low by lenders unwilling to accept the fact the buyers want to pay more.’”
I’m sure buyers are willing to pay more. Much more. I’d be the highest bidder too if I was bidding with money provided by the government that I knew I could get out of paying.
“A nation still struggling to clear up one housing debacle has run smack into another – soaring rents.”
In coastal California, the New York area, the DC area, and perhaps one or two other places. Not nationally.
The subtext is that much of the U.S. has become a no future zone, where very few people who aren’t already there want to live. That’s the only way to explain what people are willing to pay to be in NYC.
Exactly, imagine living in a community where 80%+ of the population are lucky duckies. And there are tons of places like that in flyover country.
It sure does seem that any place that has some modicum of jobs has expensive rents, especially on nicer, newer apartments. There is a forest of “luxury apartments” on the east side of our little burg and from what I have seen they average $1300 a month. And this is in flyover country.
http://www.forrent.com/apartment-community-profile/1000061057.php
This country is dividing in two with rich areas with good jobs and poor areas with little in the way of good jobs.
Middle class and middle nabes are going away
I can’t stand the new luxury buildings. The apartments are small. They concentrate all the good stuff in the common spaces which is great if you are one of those people who like to always be in public (and listen to other people’s noise), but you can do that in coffee shop too.
It’s all about appearances.
Trump’s buildings are like this.
I spoke today with a gentleman who was trying to rent an apartment at a large complex in Tracy, CA. They told him they might have a unit open up in a few months. Per REIS, that submarket (that includes Stockton), had a vacancy rate of 3.3% at last measure.
Throughout California, the apartment vacancy rate is 5%…rents moving up is not just on the coast (anymore).
The subtext is that much of the U.S. has become a no future zone ??
Excellent point WT….With the manufacturing base gone and flight to the center at best you can eek out is a sustenance life although, for some, thats all they require or desire….
With the manufacturing base gone and flight to the center at best you can eek out is a sustenance life although, for some, thats all they require or desire….
I think *almost* everybody who doesn’t have an upper middle class lifestyle would prefer it if they could continue to live where they wanted to. Many just aren’t willing to move away from family to an environment they consider undesirable.
Basically, there isn’t enough room for everyone from Ohio to move to Brooklyn. So now what? Can Cleveland be revived? Doesn’t seem to be happening on a large scale. But rents keep going up in closer-in areas of Metro NY, and prices have barely deflated.
They don’t necessarily want to be in Cleveland either. They want big city money without the big city hassles, and if forced to choose they stay right in their little hometown. Not that they could all make big city money even if they were in the big city…
Rust Belt chic: Declining Midwest cities make a comeback
Gritty Rust Belt cities, once left for dead, are on the rise — thanks to young people priced out of cooler locales
More than any other city in America, Cleveland is a joke, a whipping boy of Johnny Carson monologues and Hollywood’s official set for films about comic mediocrity.
But here’s what else is funny: According to a recent analysis, the population of downtown Cleveland is surging, doubling in the past 20 years.
What’s more, the majority of the growth occurred in the 22-to-34-year-old demo, those coveted “knowledge economy” workers for whom every city is competing. Pittsburgh, too, has unexpectedly reversed its out-migration of young people. The number of 18-to-24-year-olds was declining there until 2000, but has since climbed by 16 percent.
St. Louis attracted more young people than it lost in each of the past three years. And as a mountain of “Viva Detroit!” news stories have made clear, Motor City is now the official cool-kids destination, adding thousands of young artists, entrepreneurs and urban farmers even as its general population evaporates.
http://www.salon.com/2012/05/12/rust_belt_chic_declining_midwest_cities_make_a_comeback/singleton/
My father co-founded a manufacturing company that’s located in northeastern Ohio. Believe it or not, this company hasn’t had the least bit of trouble recruiting new hires to its rural location an hour’s drive away from Cleveland.
And, no, the people running the company don’t think that Cleveland’s a downer. They do quite a bit of business in the city.
As my good friend GDogg (Cleveland native) says, “Cleveland…. the mistake on the lake.”
Look I’ve seen stranger things happen. Whoodathunk NYC would have ever recovered from its’ 20 year decline from 1965-1982? Or that Buffalo would deteriorate into its’ current state.
Here’s what I do know. People who fool themselves into believing certain areas are the center of the universe are always made a fool of.
The LA Times. “A nation still struggling to clear up one housing debacle has run smack into another – soaring rents. Rob Magnotta, a real estate agent, recently listed his two-bedroom Irvine, Calif., condominium for rent on Craigslist for $2,300. He had six applicants within 24 hours, including one who wrote a poignant letter about losing a home to foreclosure. ‘It was almost too easy,’ said Magnotta, who chose another renter.”
Poignant letter writer, be careful. Why? Because you’re in a situation when you need to be selling yourself. Accentuate the positive, even when it’s difficult.
Case in point: I’ve gone on at great length about my not-so-wonderful parental health situation. Also, the major efforts that I’ve had to go to in order to find freelance work these days. You’re my friends, and that’s why I say that stuff.
But when it comes time to going for something big and good, it’s time to roll out the Positive Slim. The one who’s pitching a book project to literary agents. Another HBB-er planted this idea in my cranium, so I’m going for it. (Thanks, other HBB-er!)
Will keep you posted on how this pitching goes. So far, I’m up to 15 pitches. Just one reply and that was a no. I’ll keep on pitching…