Any attempts by the Obama administration to avert this are just going to result in longer periods of time before the markets correct and a longer, more painful slide.
Posted on 07/04/2009 2:02:44 AM PDT by blueplum
Mortgage defaults have surged to record levels amid rising unemployment and falling home prices. Lenders are expected to move quickly to clear up backlogs as moratoriums on foreclosures expire.
Reporting from Washington -- Just as the nation's housing market has begun showing signs of stabilizing, another wave of foreclosures is poised to strike, possibly as early as this summer, inflicting new punishment on families, communities and the still-troubled national economy.
Amid rising unemployment and falling home prices, mortgage defaults have surged to record levels this year. Until recently, many banks have put off launching foreclosure action on the troubled properties, in part because they had signed up for the Obama administration's home-stability plan, which required them to consider the alternative of modifying loans to make it easier for borrowers to make payments.
Just how big the foreclosure wave will be is unclear. But loan defaults are up sharply. And with many government and banks' self-imposed foreclosure moratoriums expiring, the biggest lenders indicate that they are likely to move more aggressively to clear up a backlog of troubled mortgages.
-snip- California accounts for an outsized share of mortgage loan defaults. A stunning 135,431 homeowners in the state were hit with notices of default in the first quarter, an increase of 11% from the earlier peak in the second quarter of 2008, according to real estate information service MDA DataQuick. Foreclosure sales in the state have been moderating after averaging a high of 26,500 a month last summer.
(Excerpt) Read more at latimes.com ...
bump
The commercial real estate collapse is right around the corner as well...
The conventional wisdom out there says it is a good time to buy... NOT...
Ask any realtor and they say NOW...so the best advice is NOT....
Im in the miami area and the next fall will begin soon. Possibly if folks are in the market for a new home they may want to wait till Nov oor so.....and have lots of cash.
Depends. I’ve been watching the foreclosure market for months. Short sales are no bargain, at this point, IMHO. Most foreclosures aren’t either, however, there are properties out there that are bargains, even if the market drops another 50%. Some banks understand the situation and price the foreclosure at bargain basement prices from the git go. If you can find one of these and get your offer in quickly, before others try to bid it up, then you might get a good deal. Don’t engage in the bidding war though...there are too many properties available, no need to get caught in that trap.
The way to get a feel for your area is get access to an online tool that lists MLS, foreclosure, and short sales, and then just watch how the prices fluctuate, what they sell for, the area they’re in.
Another consideration, if you’re financing the sale, interest rates are on the rise, so drop in price versus rise in interest rates, may cancel each other out. Watch the price per sq ft...I think it’s the best indicator of a bargain, and anyone buying a foreclosure has to realize it’s an “as is” situation. Even if you find a problem, they’re not going to fix it, so it’s wise to take someone along when you view the property that is willing to crawl through an attic or under a house if you sense a problem. And if you want to get a bargain, have all your financing in place and proof of it. Get the bid into the bank quickly, and the general public may never even know the house has been on the market because the bank accepts it and no sign is ever placed in the yard.
Just my 2 cents.
I trust realtors as much as I trust lawyers, insurance people, bankers and dope fiends.
Mafia gangsters at least keep their word when they give it. They are up front about their interest rates and service fees being reliably high. If you come up with a creative financing plan, they will listen, cut you in on the deal if it looks good to them and even use you as a paid broker if you have talent(s).
We have a friend who’s a realtor and he’s helped us a lot. He has nothing to do with interest rates or even negotiating on the price, he just shows the property, facilitates the paperwork. We decide what we want to pay. It’s up to us to find financing (should we need it) and to make the offers. I didn’t know realtors were involved in financing...at least in our past, we’ve had none that were.
But Obama said the recovery is working.
Here north of Atlanta there are whole retail shopping centers, newly built, that are completely vacant. There are strip mall buildings near my home that have been vacant since completion 2 years ago. Other established shopping centers have vacant anchor stores, and no one seems to be interested in the properties. That has to be expensive.
Realtors are good sources of information about the best time to buy. In the same way, barbers are good people to ask about the best time to get your hair cut.
I always wondered how people could take on mortgages that were 5-7X what they made in a given year. The biggest mortgage I ever took was 3X my annual income and doing that made me very, very nervous.
Realtors are good sources of information about the best time to buy.
In the same way, auto dealers are good sources about the best time to sell your car at a tenth of what you paid for it and take on debt for a new one that is priced three hundred percent more than what it is worth.
More foreclosures = more excuses to nationalize the economy.
There are lots of places like that all across the country.
A lot of those retail outlets are full of products manufactured (or cultivated) in some other country. The math doesn't add up for the private industry and the only ones left to buy such products are fedreal, state and municipal government employees who produce nothing at all.
One interesting trend I'm seeing at home inspections in some Chicago suburban areas is that I'm doing inspections for young singles and couples who are buying foreclosed properties in were previously considered "marginal areas" of otherwise stable communities - values in these areas (at least in the eyes of these buyers) have undergone a huge over-correction: the properties were previously over-appraised because of their proximity to "desirable" areas, now the banks are in a state of shock, and are dumping these properties at perhaps a quarter to a third of their construction costs.
For example you might have a house that selling 60-80K, and needing $40,000 worth of work, but is only a short walk from a neighborhood of similar properties that were selling for $415K at the height and are still selling for $275-300K today.
This is really an interesting phenomena because these are areas that did "gentrify " even during the height of the boom, when middle-class two income families were pushing the price of similar nearby properties through the roof, but are now undergoing rapid transformation due to an influx of "lower middle-class" buyers.
There's are downside to this strategy: you need a hefty down payment and cash to make the immediate repairs, the current taxes are based on the previous market values, you have to be very careful about the physical condition of what you buy (and a lot of these buyers don't have much previous experience with property ownership), and of course you are betting that the neighborhood will continue to improve or at least remain livable.
But assuming you can avoid those pitfalls, some of these properties are just unbelievable, we and probably once-in-a-lifetime, values.
.....auto dealers are good sources ......
Ya look real good sitting in that car. It fits you.
What about that aguement, Sir Francis?
Even then if the realtor is paid a commission based on sales price then by by definition his interest conflicts yours. Assuming, of course, you want to pay as little as possible for a property.
I am certain I have saved tens of thousands of dollars by never being represented by my own agent. The seller's realtor has an interest in getting the home sold at a slightly lower price to someone who will get him his full 6 percent than getting a higher price from someone with a buyer's agent who will be forcing him to split a larger commision in half.
I've always brought my paperwork to a real estate attorney and I've brought an attorney or paralegal to every closing. I honestly can't understand why anybody would use a commission based real estate agent to purchase a property (unless they're out of state, or otherwise prohibited from looking for a home. Even then, though, paying that agent a commission based on sales price just defies logic).
I don’t pay him, the seller pays the real estate commission...and it will be paid, one way or another to either the listing agent, or if my agent helps me “view” properties by letting me into MLS listings, then he and the listing agent split the commission.
I can honestly say I’ve never had a real estate agent try to “suggest” any price we should or shouldn’t pay. They are required, by law, to present any offer you make to the owner (or bank in the case of foreclosed property.) It is the seller, or the bank, who pays their commission.
On the other hand, I do have to pay the real estate attorney, so that is money out of my pocket.
The exception, of course would be to buy a home that is listed “by owner”...and then all you need is the title company (and R.E. attorney) and the house should be priced lower because of the seller not having to pay a commission to a realtor.
Check THIS out for foreclosures in your area.
When I bought my house in 1998 I asked my realtor what it would take to get me into the house I wanted to bid on. She replied, “A full-price offer.” I did so and got the house, beating out a lower bid. I would have been very disappointed to have missed out on my house because of a couple grand in the price.
But I thought Obama was going to pay everyone’s mortgage?
Wonder how that woman at the Dem convention who was so thrilled that she would no longer have to worry about her house and gas is doing these days?
people not only took on mortgages they couldn’t afford (a migrant strawberry picker in a 750K house, for instance), but realtors and mortgage brokers were encouraging people to buy two, three, five homes and become ‘landlords’. These foolish people who got greedy didnt’ have the faintest clue of how to fill those newly purchased houses with paying renters that would keep paying rent, or how to use those rent payments to pay the mortgages due instead of partying it all away. We’re paying for their partying.
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