Forclosure "Activity" Up

[BLAZER PROPHET]

No sign of this mess ending soon. We've been at it for nearly 5 years.

http://economywatch.msnbc.msn.com/_...s-in-troubling-sign-for-housing-recovery?lite

 

[Sedatedfork]

No sign of this mess ending soon. We've been at it for nearly 5 years.

http://economywatch.msnbc.msn.com/_...s-in-troubling-sign-for-housing-recovery?lite

My house in Portland is under water and I can't sell it at this point. I bought it in 2006. I rent it out and lose money on it every month while I rent a house in Seattle that costs more than my mortgage. I basically lose $1000 a month. At this point I am just hoping to keep my Portland house as an investment property. I wish there was some sort of mortgage swap that I could do though so I could own an under water home in Seattle and swap it for my under water home in Portland. I feel like I am basically paying for all the idiots who bought WAY too much home and then started defaulting and the banks that were happy to provide these subprime loans. It doesn't seem right. The only thing I can hope for is that the Portland market picks up before Seattle so that I can maybe sell my Portland home at a point where I can get a good buy in Seattle.

 

[BLAZER PROPHET]

My house in Portland is under water and I can't sell it at this point. I bought it in 2006. I rent it out and lose money on it every month while I rent a house in Seattle that costs more than my mortgage. I basically lose $1000 a month. At this point I am just hoping to keep my Portland house as an investment property. I wish there was some sort of mortgage swap that I could do though so I could own an under water home in Seattle and swap it for my under water home in Portland. I feel like I am basically paying for all the idiots who bought WAY too much home and then started defaulting and the banks that were happy to provide these subprime loans. It doesn't seem right. The only thing I can hope for is that the Portland market picks up before Seattle so that I can maybe sell my Portland home at a point where I can get a good buy in Seattle.

Yeah, kinda in the same boat here. I bought my house for $159K. Then, in 2007 the value rose to $200K. Now, 5 years later it's $90K. And with an 80/20 loan, I won't ever have a chance for relief.

 

[Sedatedfork]

Yeah, kinda in the same boat here. I bought my house for $159K. Then, in 2007 the value rose to $200K. Now, 5 years later it's $90K. And with an 80/20 loan, I won't ever have a chance for relief.

We bought ours for $203K in 2006 with a 97% loan. Now Zillow has it 6 years later at $130K. Fortunately I didn't buy a home beyond my means, but I have no hope of selling it. At least I can claim the losses some years. Although I couldn't in 2010 for some weird reason.

 

[BLAZER PROPHET]

We bought ours for $203K in 2006 with a 97% loan. Now Zillow has it 6 years later at $130K. Fortunately I didn't buy a home beyond my means, but I have no hope of selling it. At least I can claim the losses some years. Although I couldn't in 2010 for some weird reason.

Doesn't this suck?

Brought to us by liberal politics and a total lack of government oversight.

 

[Sedatedfork]

Doesn't this suck?

Brought to us by liberal politics and a total lack of government oversight.

Yes! Although I consider myself fairly liberal (my liberal friends think I am conservative) this issue is personal enough to me to tickle my conservative bone. It is the problem that affects me most personally, but I have no idea how to fix it. It is just an uber clusterfuck. If a candidate had some great idea of how to fix it I would vote for him or her in a heartbeat.

 

[BLAZER PROPHET]

Yes! Although I consider myself fairly liberal (my liberal friends think I am conservative) this issue is personal enough to me to tickle my conservative bone. It is the problem that affects me most personally, but I have no idea how to fix it. It is just an uber clusterfuck. If a candidate had some great idea of how to fix it I would vote for him or her in a heartbeat.

I can't conceive of a way government can "fix" this mess. To be fair, it was brought on by liberal policies, but real estate agent collusion, greedy homebuyers who lied on their apps, predatory lending practices and mortgage brokers who also promulgated the lies bought all this on. So a fix wouldn't be fair to those who played properly within the rules. Also, since prices were pushed artificially high, this is a proper adjustment for prices.

I think if I would offer help to people, it would be the following:

1) Forgiveness of loan balances for those who chose foreclosure or a short sale so long as they meet certain financial conditions.
2) If #1 is met, then they have no tax liability for short sales.
3) Identify those areas where real estate agents illegally drove prices higher or predatory lending practices were strong... and force those industries to shoulder some of the financial burden for allowing people duped by their negligence.
4) Relax bankruptcy rules for people grossly upside down in mortgages where it was the price of the house and not piling on personal debtto a housing loan.

 

[barfo]

Doesn't this suck?

Brought to us by liberal politics and a total lack of government oversight.

Those damn liberals, always arguing for less government oversight.

barfo

 

[BLAZER PROPHET]

Those damn liberals, always arguing for less government oversight.

barfo

Actually, I was referring to liberal policies and a lack of oversight brought on by conservatives. Thanks for bringing it to my attention.

 

[EL PRESIDENTE]

You haven't lost any money until you've sold your house. So if you stay in your house, nothing has changed.

 

[BLAZER PROPHET]

You haven't lost any money until you've sold your house. So if you stay in your house, nothing has changed.

Sort of a defeatist attitude, but I get it.

 

[Denny Crane]

Yes! Although I consider myself fairly liberal (my liberal friends think I am conservative) this issue is personal enough to me to tickle my conservative bone. It is the problem that affects me most personally, but I have no idea how to fix it. It is just an uber clusterfuck. If a candidate had some great idea of how to fix it I would vote for him or her in a heartbeat.

You're underwater $73K.

When the govt. bailed out the banks, they should have given YOU $73K and you give the money to the bank. The bank gets the money either way, but you'd be no longer underwater.

 

[chris_in_pdx]

You're underwater $73K.

When the govt. bailed out the banks, they should have given YOU $73K and you give the money to the bank. The bank gets the money either way, but you'd be no longer underwater.

I never thought of that. What a fantastic idea.

 

[EL PRESIDENTE]

You're underwater $73K.

When the govt. bailed out the banks, they should have given YOU $73K and you give the money to the bank. The bank gets the money either way, but you'd be no longer underwater.

Homeowner probably would have used the money to buy a car or television or something. Bank would not see it. typical mentality and extension of those who used their houses as ATMs

{Poasted via palm pilot}

 

[Denny Crane]

Homeowner probably would have used the money to buy a car or television or something. Bank would not see it. typical mentality and extension of those who used their houses as ATMs

{Poasted via palm pilot}

Well, the money would have to go to pay down the mortgage or you go to jail.

 

[RR7]

Well, the money would have to go to pay down the mortgage or you go to jail.

or, they give it straight to the bank, and forgive the mortgage part. That way it doesn't go into the homeowner's hands, but their payments drop. Would have been a great idea, and left people in homes.

 

[EL PRESIDENTE]

So people who invested wisely get punished and don't get a free $75k? Should we do this with people who lost money in the stock market too?

What about house flippers?

A house is an investment and should be subject to the risks of any other investment.

Loss in equity is transient. if the market rebounds then should the home owner be forced to pay it back?

{Poasted via palm pilot}

 

[Sedatedfork]

Well, the money would have to go to pay down the mortgage or you go to jail.

Sounds like Obamacare!! lol j/k

I like the idea but I think there are some problems with that. Obviously there are defaulted loans -- would the money go there or would it go to pay down my mortgage that I have faithfully paid since Day 1? Then, what happens with the homes that were in default -- does the bank still foreclose them and sell them? The foreclosure process is what eventually drove down home values (which I guess would be okay with me if the bank had paid my mortgage down so that my home was relatively still at water level).

I like the idea of an underwater swap though. Otherwise people are stuck in their underwater homes either deciding to try and short sale and take the credit hit, rent them out for a loss (like me), or stay in their home because they can not afford to move.

 

[MARIS61]

Doesn't this suck?

Brought to us by liberal politics and a total lack of government oversight.

First time I ever heard Bush called a liberal.

 

[MARIS61]

I can't conceive of a way government can "fix" this mess. To be fair, it was brought on by liberal policies, but real estate agent collusion, greedy homebuyers who lied on their apps, predatory lending practices and mortgage brokers who also promulgated the lies bought all this on. So a fix wouldn't be fair to those who played properly within the rules. Also, since prices were pushed artificially high, this is a proper adjustment for prices.

I think if I would offer help to people, it would be the following:

1) Forgiveness of loan balances for those who chose foreclosure or a short sale so long as they meet certain financial conditions.
2) If #1 is met, then they have no tax liability for short sales.
3) Identify those areas where real estate agents illegally drove prices higher or predatory lending practices were strong... and force those industries to shoulder some of the financial burden for allowing people duped by their negligence.
4) Relax bankruptcy rules for people grossly upside down in mortgages where it was the price of the house and not piling on personal debtto a housing loan.

1. Obama has already accomplished this, so be happy.
2. This is currently the main thing preventing short sales, the IRS will absolutely crush you by taxing the difference. After Dec 2012 they will also crush you for a foreclosure. The IRS is probably the biggest force preventing an overall economic recovery, and most certainly a real estate recovery.
3. Real Estate agents have no control at all over, nor much interest in, what price a home sells for. Nor do they have any control over who gets financed or the particulars of financing. You are thinking of mortgage brokers and lenders.
4. This was always the case until Bush rewrote the personal bankruptcy laws in his 2nd term, effectively eliminating the only hope millions of Americans had of survival.

 

[Denny Crane]

or, they give it straight to the bank, and forgive the mortgage part. That way it doesn't go into the homeowner's hands, but their payments drop. Would have been a great idea, and left people in homes.

Well, yeah.

 

[Denny Crane]

So people who invested wisely get punished and don't get a free $75k? Should we do this with people who lost money in the stock market too?

What about house flippers?

A house is an investment and should be subject to the risks of any other investment.

Loss in equity is transient. if the market rebounds then should the home owner be forced to pay it back?

{Poasted via palm pilot}

If there's a bailout, why not bailout wall street AND main street? A property is a property, a mortgage is a mortgage. The bank gets their money either way.

 

[Denny Crane]

Sounds like Obamacare!! lol j/k

I like the idea but I think there are some problems with that. Obviously there are defaulted loans -- would the money go there or would it go to pay down my mortgage that I have faithfully paid since Day 1? Then, what happens with the homes that were in default -- does the bank still foreclose them and sell them? The foreclosure process is what eventually drove down home values (which I guess would be okay with me if the bank had paid my mortgage down so that my home was relatively still at water level).

I like the idea of an underwater swap though. Otherwise people are stuck in their underwater homes either deciding to try and short sale and take the credit hit, rent them out for a loss (like me), or stay in their home because they can not afford to move.

Obviously the fine points/details are debatable. My preference would be to pay down the current mortgages first, since people have been doing nothing wrong, paying all along, and got screwed by the banks making the bad loans.

 

[EL PRESIDENTE]

If there's a bailout, why not bailout wall street AND main street? A property is a property, a mortgage is a mortgage. The bank gets their money either way.

Wasn't in favor of the bailouts in the first place, so you're talking to the wall here. Essentially, those that didn't buy houses over their head get fucked over in your scenario. Tax dollars used to pay down mortgages that in the future could recover their value, so essentially it was free income. Its extremely short sighted. No one's payments have ballooned to levels that were not unexpected. Look, payments are what they are. They are predictable and the payment schedule was agreed to. People should have budgeted that shit and not looked at the house as something that will only go up and won't go down.

Gee, maybe the government should pay for my car too. I lost value when I drove it off the fucking lot. HALP!

 

[EL PRESIDENTE]

I'd be down if it was this:

If you're underwater on your mortgage, you get $x amount of dollars and have to give it to the bank. If you are not or don't have a mortgage, you get the same amount of a money as a check tax free to spend as you want.

 

[BLAZER PROPHET]

3. Real Estate agents have no control at all over, nor much interest in, what price a home sells for. Nor do they have any control over who gets financed or the particulars of financing. You are thinking of mortgage brokers and lenders.

I knew this one would sting you. But, it's well proven true. In fact, here's a true story. Some years ago (mid 2000's) my wife & I were thinking of buying a place to rent on the coast in Newport as we were renting at the time. Then, we would retire there. Most of the houses we were looking at were in the mid 80's to low 90's. Then, on a Saturday, there was a local real estate broker get together/meeting. On the following Monday, all houses on the market rose immediately and simultaneously into the mid 100's. I want to say no less than 125, but I don't fully remember. I asked a local real estate guy and he said the decision was made to bring prices in line with Portland and also "force" a minimum buy in like other towns via the real estate brokers demands. We also had a friend who was looking to purchase a nice mobile home on land just north of Newport and the price was around 89. A few days later it was 125. I know you don't like having your job smeared as you want to think Realtors are as pure as newly fallen Tibetan snow, but those are the plain facts. Realtors share equally in the blame for the housing fraud mess.