Man refuses to sell house he couldn’t afford, complains about foreclosure

 MISSION VIEJO, NEWS
Dec 072012
 
Man refuses to sell house he couldn't afford, complains about foreclosure

We’ve become so accustomed to foreclosures on underwater homes that we forget that’s not how it used to be. Foreclosures have always been part of the system, and prior to the housing bust, foreclosures happened to people who had equity in their properties. Foreclosures happen because people borrowed money and failed to repay it. The lender exercised their contractual right to call a public auction to recover their capital. They go to the auction and bid up the price to the outstanding value of their loan. If other bidders want to bid more, they are welcome to do so. When [Read More...]

The failure of loan mods will cause a new wave of foreclosures

 COTO DE CAZA, NEWS
Dec 052012
 
The failure of loan mods will cause a new wave of foreclosures

I am constantly amazed by the ignorance of the mainstream media when it comes to housing issues. They consistently cheer-lead, take the NAr’s statements at face value, and fail to question their rosy assumptions. This behavior provides people bad information and may cause someone to buy who might otherwise chose to rent if they knew the truth. There are many good reasons to buy today as values are well below historic norms, but people should be given accurate information in order to make an informed decision. That’s not what people get from the mainstream media these days. Today’s featured article [Read More...]

Kicking widows to the curb, the sad fallout of excessive senior debt

 ALISO VIEJO, NEWS
Dec 032012
 
Kicking widows to the curb, the sad fallout of excessive senior debt

My point of view on home ownership and debt is very different than most financial reporters, and apparently it’s different than most Americans. In my view traditional views of home ownership, like those extolled in Mike’s weekend piece Why our less educated parents and grandparents were more intelligent on homeownership, have been replaced by a twisted concept of money rentership as a proxy for home ownership. I described the slow deterioration of our concepts of home ownership in the post Money rentership: housing and the new American dream: One of the most common encumbrances on property is the mortgage lien, [Read More...]

Pent-up demand from boomerang buyers may not materialize

 LAKE FOREST, NEWS
Nov 142012
 
Pent-up demand from boomerang buyers may not materialize

A big part of the bullish sentiment toward real estate is the believe that former owners who lost their houses in foreclosure will return in droves to mop up the supply of shadow inventory and push prices higher. But what if they don’t come back? What if they were so burned by the experience that they choose a lifetime of renting instead? A recent study from the federal reserve suggests this may be the case. Almost 75% of those who lost their homes to foreclosure may never return, and if they don’t the so-called recovery may be much weaker than [Read More...]

Ravings of an entitled whiner struggling to keep a house she can’t afford

 ANAHEIM, NEWS
Oct 292012
 
Ravings of an entitled whiner struggling to keep a house she can't afford

The housing bust is littered with sob stories about people losing their family homes. As I noted Responsible Homeowners are NOT Losing Their Homes. To see the truth in this statement, one needs to have a clear definition of “responsible homeowner.” A “responsible homeowner” is a buyer who, if they utilized financing, did not stray from the conservative parameters set forth by lenders (prior to the bubble) and financial planners. This includes using a maximum 28% debt-to-income ratio on the mortgage, at least a 20% downpayment and fixed-rate conventionally amortizing financing. Few who fit this definition are going to lose their [Read More...]

Why the housing crash is far from over

 GARDEN GROVE, NEWS
Oct 052012
 
Why the housing crash is far from over

I am no longer bearish. I have been an outspoken housing bear for over five years now, but based on recent developments, I have far fewer worries about another catastrophic decline in house prices. The recent changes are as follows: Federal reserve’s open-ended commitment to unlimited stimulus for as long as it takes no matter the consequences. Lending cartel’s improved control of inventory liquidation. Removal of most barriers for refinancing underwater loans to aid kicking the can to spread out liquidations. These new developments when combined with some older existing policies has finally created the conditions for a manufactured bottom [Read More...]

Banks increase foreclosures 30%, notices plummet, REO pipeline stabilizes

 DANA POINT, NEWS
Sep 132012
 
Banks increase foreclosures 30%, notices plummet, REO pipeline stabilizes

Bank behavior determines home prices. They control the supply, and they control the money that drives demand. Whenever the banks change their policies, it shows up in the foreclosure statistics, and these changes determine the future of home prices. In August, three important developments happened in the foreclosure market: Banks greatly increased their REO acquisitions. Banks sharply curtailed new filings of notices of default. Banks stopped their internal liquidations of REO standing inventory. Each of these developments has implications for future home prices. The Foreclosure Report – August 2012 “We continue to see reports that there will be a wave [Read More...]

Fed study concludes delinquent mortgage squatters lower values, foreclosures improve values

 NEWS, SANTA ANA
Aug 212012
 
Fed study concludes delinquent mortgage squatters lower values, foreclosures improve values

There are many myths about housing markets perpetuated by banks and the financial press. Two of these myths include (1) keeping people in a house keeps up the values, and (2) foreclosures reduce neighborhood values. Many believe that allowing delinquent mortgage squatters to stay in place improves the condition of a property. Perhaps in rough neighborhoods prone to property crime, occupancy is better than abandonment, but in most neighborhoods, when delinquent mortgage squatters stay on, they property gets run down. Why would anyone spend any money to improve or even maintain a property in which they have no financial interest? [Read More...]

Resale supply is coming, lenders increase foreclosures 10% in July in California

 CORONA DEL MAR, NEWS
Aug 152012
 
Resale supply is coming, lenders increase foreclosures 10% in July in California

The lack of supply on the MLS is becoming a serious problem. Buyers are getting burnt out and frustrated because they are unable to make a deal. Bidding is so aggressive — and so foolish — that 50% of deals fall out of escrow due to either a low appraisal or the borrower’s inability to obtain financing. The demand is still tepid by historical standards, but the supply is so constricted that lenders have considerable leeway to increase their foreclosure liquidations and still enjoy rising house prices. Perhaps as a response to current market conditions, lenders increased the number of [Read More...]

Conventional wisdom wrong, foreclosures don’t reduce neighborhood values

 NEWPORT BEACH, NEWS
Aug 132012
 
Conventional wisdom wrong, foreclosures don't reduce neighborhood values

Conventional wisdom is that foreclosures reduce neighborhood values. It turns out, that isn’t the case. It’s easy to see why people come to this erroneous conclusion. Properties that go through foreclosure often sell for less than recent comparable sales, particularly after the peak of the housing bubble when values were grossly inflated and ripe for a serious correction. However, it wasn’t the foreclosure that caused the discount, it was a motivated seller dealing with a property in poor condition that ultimately caused prices to fall. You wouldn’t know it by the huge inventories they currently manage, but lenders are not [Read More...]

Foreclosures dominance of housing market projected to end in 2015 or 2016

 NEWS, TUSTIN
Jul 192012
 
Foreclosures dominance of housing market projected to end in 2015 or 2016

At some point, the dodgy loans of the housing bubble will be recycled, delinquency rates will fall back to normal, the shadow inventory will be processed, and foreclosure rates will decline to the point they no longer dominate market sales and keep prices from rising. But when will that happen? Based on the most recent data from Lender Processing Services, I have extrapolated recent trends to attempt to answer that question. But first, we need to understand where we are in the process. In early 2012, lenders halted processing shadow inventory of long-term delinquent loans to attempt one more round [Read More...]

Foreclosure reviews are a gambit few former owners sign up for

 NEWPORT BEACH, NEWS
Jul 092012
 
Foreclosure reviews are a gambit few former owners sign up for

With millions of delinquent borrowers facing foreclosure, the death cries of so many desperate people was bound to have political ramifications. The unprecedented need to process tens of thousands of foreclosures spawned foreclosure mills like David Sterns law office and other who robo-signed documents. Such a process was bound to have a few errors. Although nobody who was making their payments faced foreclosure, the so-called robo-signer scandal prompted the major banks and services to negotiate a settlement agreement with the government to settle all claims and shield themselves from future litigation. Related to this same scandal, the federal reserve also [Read More...]

Detailed review of the new changes to California foreclosure law

 CYPRESS, NEWS
Jul 052012
 
Detailed review of the new changes to California foreclosure law

The California legislature passed the so-called Homeowners’ Bill of Rights, and Jerry Brown has indicated he will sign it into law. So how does this new law change the foreclosure process? Let’s take a closer look. Calif. Legislature OKs homeowners’ bill of rights Marisa Lagos and Wyatt Buchanan — Updated 11:33 p.m., Monday, July 2, 2012 What the legislation does: Delays: Bans banks from proceeding with a foreclosure when a homeowner is seeking a loan modification, a practice known as dual tracking. Dual tracking has always been part of the foreclosure process. Foreclosure is supposed to be a threat to [Read More...]

Foreclosure prevention laws extend the slump, experts agree

 MISSION VIEJO, NEWS
Jul 022012
 
Foreclosure prevention laws extend the slump, experts agree

Our real property system functioned well for centuries with very little change. Prior to the housing bubble, it was widely accepted that people borrowed money to buy houses and if they didn’t pay it back according to the terms of the promissory note, the mortgage agreement allowed the lender to call an auction to get their money back. Housing was an earned reward, not an entitlement. The basic dilemma is simple, most people don’t have the cash to buy a house, and it would take them most of their adult lives to save for one, so lenders designed loan programs [Read More...]

FHA foreclosures increase 73%, mostly from 2008 and 2009 bad loans

 NEWS, SAN CLEMENTE
Jun 042012
 
FHA foreclosures increase 73%, mostly from 2008 and 2009 bad loans

FHA has always been the lender of last resort. It was started in 1934 during the depths of the Great Depression to provide mortgage lending at a time when private money wouldn’t do it. Of course, by then the housing market had bottomed, so the FHA loans from the Great Depression didn’t cause huge losses, and since there was almost no other mortgage lending during that period, it was a welcome jump start to a beleaguered housing market. That isn’t the function the FHA played in the collapse of the Great Housing Bubble. FHA was loaning money when nobody else [Read More...]

California bank repossessions continue to plummet, squatters rejoice

 NEWS, SANTA ANA
May 232012
 
California bank repossessions continue to plummet, squatters rejoice

Like any business, banks adjust their business plans quarterly based on both internal and external forces. Internally, banks respond their need for additional capital to fund operations. Externally, they cope with a declining housing market, recent regulatory changes, and new conditions imposed by the bank settlement. When banks adjust their business plans, it may have sudden and dramatic effect on their policies. In the first quarter of 2012, the major banks which control most California REO dramatically reduced the number of properties they purchased at auction. The precipitous declines in REO were not due to improving borrower delinquency. Far too [Read More...]

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