Skip to comments.Sad Episode of 60 Minutes on Foreclosures
Posted on 12/28/2011 8:28:54 PM PST by Nachum
Bank foreclosures and abandonment are causing high home vacancy levels in neighborhoods across the country. Scott Pelley travels to Cleveland, a city thats fighting back against blight.
Chances are the home youre in isnt worth what it used to be. You may not have indulged in the real estate bubble with its liars loans and Wall Street greed, but you were stuck with the bill. Home values have dropped so far, so fast, that nearly 25 percent of mortgage holders today owe more than their house is worth.
And with unemployment so high, so long, many face foreclosure. If you thought your home value couldnt drop any more, have a look up and down the block. You might say, There goes the neighborhood. The new threat from the great recession is the sudden surge in the number of abandoned houses. Vacant homes have become so ruinous to some neighborhoods that one city, Cleveland, decided it had to find a solution.
(Excerpt) Read more at ewallstreeter.com ...
I bought my house where I want to live forever! Coming home is like going on vacation to me!
I’m not under water, but the crash destroyed all my fake equity...so what!
I live my dream and I’m surviving.
Yeah, but they sure cashed in that mortgage insurance.
thought your account was closed.
In many parts of Cleveland, that's been true for the last 50 years.
That’s the same situation most are in. My house would be lucky to sell if on the market. But it’s not. It’s sound, not under water, and I’m not using my equity as an ATM. Folks that bought over their head are the ones suffering. Sucks to be them or their lenders
One of my neighbors managed to sell his home and all its headaches for $1.5 million to the grandson of the original owners (an historic landmark and family heirloom) and has purchased a foreclosure a mile away that was previously valued at $1.3 million. He picked it up for $500k.
He’s had to put a lot of money into it to make it habitable — new drainage, new furnace, generator, etc. But it is gorgeous. I’m sure that it will be a good investment as long as he doesn’t go overboard on improvements.
The change of ownership is employing a lot of people — real estate, attorneys, workmen, movers, etc. Good for the economy. And I’m sure they will need new furniture once they get settled. I don’t see anything they already have fitting into the new house.
Really? I don’t remember that being mentioned in the article.
How bizarre, but the logic is sound; the foreclosed/abandoned homes have to come down. We have a lot of “For Sale” signs around, but not enough empty homes for the municipalities to start offering the properties to neighboring owners.
If they think things are bad in Cleveland, they must not remember the 70s.
It was so bad then that Dennis the Menace Kucinich was an improvement
It is, don’t go there.
IF: “ - - - Home values have dropped so far, so fast, that nearly 25 percent of mortgage holders today owe more than their house is worth.” ;
THEN: Have property taxes dropped accordingly?
Just go along with it.
Well, you keep trying to figure it out, bro. Without 20% down or principal paid down to such and a request to cancel same insurance, the mortgager is made whole from the delinquincy. And they own the property. These properties weren’t worth holding. What a shock, bro.
With not a despairing word of Obama, Barny Frank or Chris Dodd..
WHich, of course, is stupendously OUTRAGEOUS.. maybe treasonous.. at least seditious..
I’m not sure how I did it..
Bought my home 2 years ago for 17,000 cash (it’s a mobile home) and like cars, they are NEVER suppose to rise in value.
We’re thinking about upgrading both the park we live in and the home so we talked with a mobile home dealer.
They offered us 22,000 for it.
I’ve done some minor upgrades. Painted it, and replaced the flooring. But that is about it.
Problem is, it seems the value of the homes we want to buy has gone up as well.
(it’s probably just inflation, but let me live in my dream world ok?)
however, as we reach our retirement years, paid off mortgage or not, we still have property tax creep and it would be nice to know you could sell your home and move into a smaller place without losing a fortune...
you must live in some neighborhood..
I gave my son some money for a fixer upper in Miami in 2001. His wife used equity loan to pay off her student loan, but recently it turned out the house was worth less than they owed. They ended up doing a short sale and relocating. At least she doesn’t owe a lot of student loan money.
This is what I hate about these stories:
” And so Waple and his family were evicted from the house that he?d lived in for 23 years. “....did the real estate bubble really destroy 23 years worth of equity? Of course not. This guy used his house as an ATM. I feel bad for him; but he is in no way a ‘victim’ - I wonder how many vacations/boats/SUVs he got with his line of credit.
I also will never understand why being ‘underwater’ means you send the keys to the bank for some people. You’re upside-down - so what, turns out you didn’t hit the lottery. Consider it paying rent. If your income does not change, abandoning ship on an underwater loan is immoral and probably self destructive. Lots of people are ‘upside-down’ on car loans...yet they still make the payments.
Everything cycles (like prices go up and down) so a correction in RE was to be expected. What was not expected was for banks to bundle the same mortgages multiple times and sell them to investors then take the original mortgages and sell them to taxpayers via GSEs like Fakeyou and Fraudie, making taxpayers on the hook for the bundled investments.
Normally a RE bust would bring a recovery after getting rid of the excesses and bad loans, this time there is no end in sight as bad mortgage paper is more than 30 times higher, due to leverage used by banks, that has to be worked off during this recovery. Maybe by the year 2020.
The 60 minutes piece in just a misdirection play away from those most responsible.
You’re right; student loan debt is killing people today. They borrowed money in the “before-time”, and are expected to repay it at “new normal” wages - it isn’t going to happen, in many cases.
The real problem is not allowing the market to function naturally.
When the market is glutted, the values should come down in order to make the sales.
The problem is that the loan companies prefer to either hold the paper or not only take a complete loss, but pay somebody more cash to tear them down.
Meanwhile people who are looking to buy, can make offers, but in most cases their offers are beat by the homeowners attempting to refinance and the offer becomes their new market value.
What is nutty is tearing down the housing when now you have jobless and homeless people.
Usually when homes get bulldozed they are uninhabitable. The cost of bring them up to code doesn't make economic sense.
” - - - Just go along with it. “
Hmmmmmm - - - - . That goes against all that works for me. I’ve never been known to be someone who “goes along to get along.”
My question still stands unanswered. Anybody? Anybody?
Obviously, it isn’t.
I was being facetious.
I guess it wasn’t obvious enough.
There are a lot of real estate paper holders who want to tear down abandoned properties so the market values on the remaining properties are kept artificially high.
It’s a paper game. The real value is not directly attached to the real property.
That’s why they are only advertizing or selling about 1/10th of the properties with Notice of Default.
Your full of it. Nobody wants to tear down a functional piece of property unless they see a better opportunity. Investors are taking huge risks on marginal foreclosure properties. They aren't going to buy a piece of property to just tear it down...
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