Posted on 10/12/2009 3:31:13 PM PDT by Kartographer
New data suggest that foreclosures are rising in more expensive housing markets.
About 30% of foreclosures in June involved homes in the top third of local housing values, up from 16% when the foreclosure crisis began three years ago, according to new data from real-estate Web site Zillow.com. The bottom one-third of housing markets, by home value, now account for 35% of foreclosures, down from 55% in 2006.
The report shows that foreclosures, after declining earlier this year, began to accelerate in the late spring and that more expensive homes have more recently accounted for a growing share of all foreclosures. "The slope of that curve in recent months is much sharper than it was recently," said Stan Humphries, chief economist for Zillow. Rising foreclosures among more-expensive homes could create added pressure for a housing market that has shown signs of stabilizing in recent months as sales of lower-priced homes pick up.
(Excerpt) Read more at online.wsj.com ...
Larry Summers places fingers in ears, “ la-la-la, green shoots, la-la-la, we are coming out of the recession la-la-la cant hear you, la-la-la, the stimulus worked la-la-la”
....a tract mansion development went up in our neighborhood in the late 90s....I knew things were going wrong when buyers hung bedsheets in the windows....they couldn’t afford curtains....that’s how deep they were in hock.
These people were stupid...They should of got government jobs!
Zillow is not always the best source for real estate information (especially comps), but I can see how things might start to even out a bit on the foreclosures. The homes that were foreclosed upon early in the trend are either still bank owned (and therefor not subject to being available to be foreclosed upon again) or they’ve been bought up by investors with solid financials who are willing to wait for the market to improve before selling. The economic pain is trickling up and more families in what used to be considered “safe” situations are slipping and stumbling and winding up in default.
Look for more deed-in-lieu activity over the next couple of years. That’s when borrowers and lenders come to an agreement that the borrwers will give up the home in exchange for forgiveness of the loan balance and without the destructive effect to their credit rating that a foreclosure would have.
Yeah, but won't the home owners get hit with a huge tax bill, since forgiveness of a loan would be considered income?
No, because Congress changed the tax laws on that for the next few years.
Good to know.
My buds and I visited every new golf course community in SE Virginia over the past decade. McMansions are everywhere. We kept wondering who was buying the things... there’s just not that much going on down here.
No, because the way it’s structured it essentially says that the house is worth exactly as much as the balance on the loan and the process is simply a swap of two items of equal value. I used to write those policies a couple years ago and it was always structured to eliminate any tax ramifications. Doesn’t work in every case but it fits in enough cases that it’s worth looking into and will probably happen with greater frequency over the next couple years.
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