For people who purchased properties in California, a non-recourse state, and never refinanced, lenders cannot come after them seeking to recoup their losses on a foreclosure. For those who live in recourse states, or California loanowners who refinanced, the situation is quite different. Lenders still have the right to pursue these borrowers for the deficiency, unless they agreed to a short sale in California after July 15, 2011. Most borrowers walked away thinking the debt was extinguished. While it was detached from the property, borrowers are still legally liable for any shortfall on the lender’s books. Lenders haven’t done much [Read More...]

The current housing market price rally is largely being fueled by investors competing for restricted inventory. Both the banks that are restricting the inventory and the investors who are buying it are counting on selling these properties to owner-occupants who are willing to pay higher prices for a place to shelter their families. Conventional wisdom is that a resurgent economy and low mortgage rates will bring owner occupants back to the housing market with a willingness and ability to pay higher prices. But will it really work out that way? As proof that the current market rally is entirely fueled [Read More...]

HELOC abuse is one display in many of the properties I profile each day. I made my point about HELOC abuse years ago, and I originally wrote today’s post back in early 2010. No matter how many of these I profile, many readers, including myself, find these stories interesting. It’s one thing to know HELOC abuse happened, but it’s much more entertaining and educational to see every manifestation of the disease. The thinking behind this behavior is flawed, es evidenced by the legions of people who lost their homes this way. Recognizing the mistakes of others can be very helpful [Read More...]