Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 633 votes
Ok so I hear this story several times a week; "I bought it last year (or the year before, or refinanced during those times)...at that time my house appraised for XXX.... Now I cant make the payment, I just need out, PLEASE help me!!!
So I spend the half hour counseling these folks cause they're in a jam. God knows I'm non-profit cause they have no equity and I'm not even thinking about buying their house at that 105%. Doesn't meet my criteria.
But hey- you bought it, knowing damned well you couldn't pay for it...or...cashed it out...not to improve, but to go on vacation....Now you're stuck, and I cant even help....but I will be there when the bank resells it, cause at this point in time at least the bank knows they made a bad decision, and you may not have the equity to sell at a loss, but hey - the bank can. And they will.
Sorry for the morbid post all - just my thoughts on the market in my town at this time-
I have the same problem here in Las Vegas. I don’t even advertise looking for houses but I do some speaking engagements and I have been published so my name has gotten around a little. I get several calls a month from people who are upside down and think I can work magic. I let them know nicely that they are in a bad situation and I give them their options but somehow they expect to find a magic solution. Now they are waiting for the government to bail them out, good luck with that!
So, are there opportunities for short sales? Or, are these all "fix my loan and let me keep my house" owners? Is it even worth the effort, or is it just as profitable to wait until they're REO's?
Jon
Similar situation here. We had a big push of buyers coming up from Maryland to get away from the heavy appreciation down there. Now the '05 and '06 buyers that I have talked to who were at 90% to 95% of FMV in '06 are now at 105% of '07 FMV and sinking fast. They can't make the note, they can't refi because they used the 2nd that they took out last year to go on vacation or buy a boat or a benz or whatever. Anything other than to improve their house or their situation.
Example: A friend of mine lost his house to the bank. He paid $299K to build it in 2005. Bank listed for $319k in May '07. Sold for $279k about two weeks ago.
Most just want their loan to reset to 6.5% for 30 years. Like it's just magic. Break out a pen and write new numbers on the contract.
Rehab ... what do you, or anyone else think of the odds of some type of gov't bailout given that things are going to get worse before they get better?
Rehab ... what do you, or anyone else think of the odds of some type of gov't bailout given that things are going to get worse before they get better?
First off the situation is not as dire as the media portrays it to be, bad news sells so the media keeps feeding it. Because of all of the hype the government is being pressured to do something. The recent rate cut was motivated more by politics than by real need. The rate cut will have a psychological effect more than anything else but it will do little to solve any perceived mortgage crisis. The cut will cause banks to lower the prime rate which will lower payments on HELOCs, auto loans, variable rate credit cards and other consumption based financing but might have the opposite effect on mortgages. Mortgage rates are closely tied to the interest rate on 10-year bonds. The Fed’s rate cut could cause inflation to rise and the treasury markets will react with falling treasury bond prices which causes the interest rates to rise. As treasury interest rates rise so do mortgage rates which, in turn, makes it more difficult for borrowers to qualify for mortgages. If fewer potential buyers can qualify for mortgages then fewer homes will be sold and prices will fall further. As prices of homes fall more people are upside down and cannot refinance which will lead to even more foreclosures. The best thing for the government to do is to let the market take care of itself, any bailout will only delay an eventual recovery. But we do have an election coming and the politicians need to do something to keep the voters happy.
Minna right now there are so many people that have multiple liens on their homes that a short sale is hard to work. I ran into someone that wanted to list their home and go short and I walked from it. They owed about 130% of the estimated sale price of their home and had 4 liens that they would admit to. I don't need to deal with that to sell a house.
I don't believe that there will be a bailout. I believe that politics, more than reality is driving the media to report what sounds like a fiscal massacre.
I also think that once the election wraps up things will magically get better. Like everything else in this 30 second attention span society, the media foreclosure fad will swirl down the memory hole.
I am currently dealing with someone like this, they still owe about 98% of the mortgage that i know of and they need to get out without loosing much money.