Profile picture for arnie84

massive foreclosures poised to strike in CA

CLICK ON ME  <--------- Great artical I found from the L.A. times
  • July 05 2009 - US
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Answers (100)



Just how big the foreclosure wave will be is unclear. But loan defaults are up sharply. And with many government and banks' self-imposed foreclosure moratoriums expiring, the biggest lenders indicate that they are likely to move more aggressively to clear up a backlog of troubled mortgages.

Chase is proceeding to deal with an additional 80,000 borrowers in default whose foreclosure process had been voluntarily halted by the lender starting late last year.

Well, we KNOW it's big by the natl chart I added. Furthermore, Calif tends to run 1 year ahead of the nation on this chart. So yes, massive foreclosures are heading our way in Calif SOON.

On realtytrac.com it shows that only about 1 out of 10 foreclosed homes are even listed on the market, so the banks do need to get more agressive with selling them. The backlog of 'voluntarily halted' pre-forclosures shows that, like the Great Depression, at some point the banks need to be happy someone is living in the homes, maintaining the homes, and not letting the homes go to transients, being stripped for copper, frozen plumbing, leaky rooves, etc.

If the banks move more agressively to foreclose or sell the foreclosed homes, the housing market will collapse. IMO
  • July 05 2009
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Profile picture for space_acer
"the housing market will collapse"

more like the housing market will correct back to long term norms.
Sorry, to intrude to your comments, but i dislike the term crash and collpase to something that had no business inflating to begin with.  

Regardless what many peoples views are on Former Treasury Paulson,
He did state it correctly many times over. Here a few of his comments.

"I have long said that the housing correction poses the biggest risk to our economy. It is a drag on our economic growth, and at the heart of the turmoil and stress for our financial markets and financial institutions. Our economy and our markets will not recover until the bulk of this housing correction is behind us.""Of course, there is no national housing market, but instead a compilation of regional markets. The housing correction, and the run up to the correction, unfolded differently in different regions."

  • July 05 2009
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Profile picture for Chelsy_
very good article, it matches the analyst

The Housing Collapse of 2010 Will Be Worse Than 2008

  • July 05 2009
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Link

Great one Lrry! Very true to what we've been saying here for years now. I also clicked on the link to your link. The Peter Shiff link (above) is from 2006, and is great, too. There's nothing like watching 'old news' and how all those idiots predicted wrong! roflmao!! They laughed at Peter... who's laughing now?
  • July 05 2009
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Yes, prices in California will correct more.  Prices here have corrected significantly.
  • July 05 2009
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Profile picture for arnie84
That 60 minnutes link tells how things really are great info!!
  • July 06 2009
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Profile picture for edtilton
Too much Fox """News""" here. So what's the point?
Are you saying everyone should stay out of the market?
Other than what Rush told you is there any evidence to back up your assertions?
  • July 06 2009
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Profile picture for arnie84
"whats the point"

housing market is way to unstable to assume now is the time to buy. If you can't wait go ahead, but we have bigger problems then housing at the moment. The stock market, and bank stocks are taking a beating, unemployment still on the rise, recission still shows no signs of recovery, etc... we been over this time & time again.
  • July 06 2009
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Profile picture for sunnyview
Wow, great links on this thread. Thanks for posting them!
  • July 06 2009
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Profile picture for edtilton
It depends on your situation, any information you get from the press it automatically wrong because of the "Pig in the snake".
If I have cash that I am not going to need for 5-10 years, Real estate beaats heck out of the artificially low interest rates the banks offer and Wall street is a suckers game. Pay cash and put a tenent in there and I'm earning 10%.

Only thing keeping me in Arizona, rather than California is the Real estate Taxes
  • July 06 2009
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Profile picture for edtilton
It depends on YOUR situation, certainly not what some "expert" predicts. 09% of them are on someones payroll. They predict something and the herd of lemmings turns and heads for  a different cliff. Wall Street is a suckers game, unless you work there, for a decade the FED has been pushing these artificially low interest rates that help only speculators and the Banks. If I can pay cash and put a reliable tenent in a property for 5-10 years I'm ahead of the game.
  • July 06 2009
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Paying cash is definitely the best way to go. Credit, given so freely has caused a bubble, everywhere, and for everything. Because people were using it constantly, prices rose. In fact, I haven't seen a commercial lately that tells the price of things... just the payments! Rediculous.
  • July 06 2009
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Profile picture for edtilton
As I see it, somewhere down the road, when the financial markets stabilize, the government will realize they owe trillions. At that point they will start printing tons of money until the debt is only 15% of the money supply. In other words INFLATION to the tune of 300%. At that point a house worth $200K today will be worth $600K while the mortgage is still $200K. Just like the Carter years. I made a lot of money on Carter and when I see it coming I'll double down and buy all the Real Estate I can
  • July 06 2009
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Profile picture for blank screen EXILED
Why "real estate"?  The large business have made it clear they want to transition to more "virtual" and to "outsource" and "telicommute" thus requiring less "office space", less "industrial space" and less "bricks and morter".

And the government has made it clear that they tend to decrease the population rather than having is stay stable or grow.

And the EPA has indicated they intend to transfer most of the environmental impact costs to the landowners.

So, can real estate keep up with inflation?  Aren't there better hedges against inflation, such as "energy sources"?

Are we using 1950's models for economic stability and economic growth?  Or perphaps 2001 models?

You had better opportunities for quadruppling you net worth in 5 years during the Bush years than anyone ever had in the Carter years.
  • July 06 2009
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Profile picture for blank screen EXILED
tend --> *intend*

is stay --> *it* stay
  • July 06 2009
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Profile picture for edtilton
Wow, what you just said is a bunch of crap and theory. The last time we actually had high inflation, I had just bought a house for $37,000 financing $25,000 after a few years of hyperinflation my house was worth $120,000 and I still only owed $25,000, My investment of $12,000 became $100,000.
During the Bush years the FED kept interest rates artificially low, which is great for the banks but sucks for the citizens
  • July 06 2009
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Profile picture for blank screen EXILED
If you bought in my neighborhood in 2002 for $125k, you would have been able to sell in 2006 for $800k, and you would only have to put $4k down and only would have had 5% interest on the adjustable rate loan.
  • July 06 2009
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In California from 2002 to 2006 real estate market inflate rate is 20% annually (in fact 2006 inflate rate is 10%).
If you bought the house at beginning of 2002 for $125k, then the value of the house at end of 2006 is $311k.
Pasadenan inflated home's price too much, that go beyond anyone can imagination.
  • July 06 2009
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Profile picture for blank screen EXILED
your "inflation rate" is an "average"; I've given a specific example of a real opportunity that I was seriously considering purchasing.  The market had been kept "artifically low", so not only did it see the expected inflation, it also saw a "correction" for the 2002 artifical pricing.

So you ask why I didn't buy at the time?  Well, minimal income at the time was one reason, but the primary reason was substantial other obligations that minimized my available time.

Of course I knew that the property would at least double in less than 10 years; but I had no idea that it would be worth more than 6 times its sale price in less than 5 years.
  • July 06 2009
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It's all a numbers game. The problem is that the numbers are for the banks, because they pay Congress more than the people do.
  • July 08 2009
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bump
  • July 14 2009
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Profile picture for dacolan
There was an interesting article related to the now infamous Credit Suisse reset chart:

Reset Chart from Credit Suisse has a Major Error

In short, Wells expects $56 million in Option ARMs to recast due to the loan balance reaching 125% of the value of the original loan and another $269 million to recast based on the terms of the loan. Given that we're talking about a portfolio of over $100 BILLION of these loans, this means ESSENTIALLY NO LOANS WILL RECAST due to the negative amortization limits or contractual terms before 2012.
  • July 14 2009
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Profile picture for arnie84
well I guess Arnold the worthless governator  is going to freeze foreclosures  for another 90 days. Most of the homes listed as bank owned/reo on realty trac & realquest in my area have been posted with in 2 weeks. However, Lately I see them taking months to post, and more & more are becoming bank owned just stitting there worse than befor.  I am not ready just yet, and the excitement of buying my first home has slowly gone away!
  • July 14 2009
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Profile picture for dacolan
arnie84,

Most major lenders were/are exempt. The latest 90 day moratorium in CA had very little impact on the timing of foreclosures hitting the market.

The latest trend appears to be banks intentionally delaying filing the final foreclosure notice. They send out NODs and NTSs in the hope that some of these defaults will self-cure (and the numbers have shown this to be a useful tactic for the banks' balance sheets) often with no intention of foreclosing. This keeps these assets off their books, and lets them off the hook for maintenance and property taxes as well.

Lately there has been story after story of defaulted homeowners that presumed their house had been repossessed after receiving a Notice of Trustee Sale, only to receive a bill for their over due property taxes some time after they had vacated the house they believed was no longer in their name.
  • July 14 2009
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Profile picture for blank screen EXILED
I missed the news about the foreclosure freeze.  So, what does issuing I.o.u's instead of paychecks, and refusing to let lending institutions liquidate their bad debts have to do with improving the economy?  How do either improve the State's financial balance or increase the number of jobs available?


  • July 14 2009
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Profile picture for space_acer
Latest news from San Jose Mercury News.

Foreclosures going up and up away.

http://www.mercurynews.com/realestatenews/ci_12834550


Foreclosures continued to climb in Silicon Valley last month, as banks again increased the pace at which they sold homes taken back from owners behind on their payments.There were 591 foreclosures in Santa Clara County in June, up 22 percent compared with May, ForeclosureRadar, a Discovery Bay company that tracks California foreclosure activity, reported today. Foreclosures were up 63 percent in May from April.

In a sign that the trend would continue, notices of default — the first step leading to foreclosure — rose by 11.5 percent. Foreclosure sales statewide jumped by 24.7 percent, the company said, marking the third consecutive month of increase following a moratorium pending announcement of President Obama's Making Home Affordable plan. The moratorium ended with announcement of the plan in March. A total of 22,201 foreclosures were auctioned off throughout California in June, representing a loan value of $9.57 billion





 





 



 
  • July 14 2009
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Profile picture for blank screen EXILED
In 2000, per the U.S. Census, there were 105.5 Million occupied housing units in the U.S.; 69.8 million of them being owner occupied.  Zillow indicates about 80 million ownership units in the U.S., which would be an increase of about 14%.  In California, there were 11.5 Million housing units; 6.5 million of them being owner occupied in 2000.  Perhaps we had 14% new units?  There was a tremendous amount of new construction, but I don't think it was 14%.  But if it was, that would mean about 7.4 million ownership units now.  So, if 22.2k foreclosed in a month, that would be 0.3% in a month, or 3.6% in a year.  Since the turnover rate is about 14% per year; 3.6% represents about 26% of the market.  The foreclosures should be closer to 7% of the market, or about 1% foreclosing in a year; so  the number of foreclosures are still about 4 times where they should be in a normal market environment.
  • July 15 2009
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I think the number of foreclosures/short sales for sale is a lot higher than 7%. More like a quiet 75%.
  • July 15 2009
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Profile picture for blank screen EXILED
Per the numbers given; 26% of the market in California are Foreclosures.  NOW, that doesn't say anything about inventory the banks are still holding on to, trying to figure out what they want to do with them.

"Normal" is 7%.  We haven't had "normal" in California for a long time.
  • July 15 2009
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Sadly, no we haven't. It's been too crazy for too long. It's hard to believe that we are so used to these high prices, we think 1/4M is good! lol
  • July 19 2009
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