Good news. We're at the tail end of a wave of subprime resets.
Bad news. Round Two of approximately $230 billion in resets that will hit home within the next year. Alt-A mortgages and Option ARMs.
The most opportunistic forecast I have seen is a 20 percent reduction in foreclosures for 2009 considered a “good year”. :yikes:
Add 750,000 in the active REO database. 17 percent of the inventory of existing homes for sale reported by the NAR in June. So we know that number is too low, let's add 8% to get to One in Four.
At current levels, there are more foreclosed homes than new homes sold in this country. 😱
25 percent of all sales will be foreclosed home sales, selling at a deeper discount to the market at an average of 33 percent discount to today's prices compared to 20 percent the previous year.
Builders can only compete with REOs by building custom from scratch rather Regardless, builders can't afford to compete against foreclosures at 40 percent to 50 percent off.
Pushing REOs through the FDIC-Asset Manager-Realtor pinhole is hardly any answer at all.
To Shoot The Messenger, aim at the stockings. :angry:
Replies
140
Banned
The way I understood it Mike Adkinson bought it from St. Joe for 400,000,000 and the RTC forced the ensuing mortgage into default under a theory of pending default.
If the loan was current and there was an interest reserve capable of carrying the note and the government run RTC was able to force it to public sale what do you think the new government run entity will do?
If the loan was current and there was an interest reserve capable of carrying the note and the government run RTC was able to force it to public sale what do you think the new government run entity will do?
Beach FanaticAuthor
The way I understood it Mike Adkinson bought it from St. Joe for 400,000,000 and the RTC forced the ensuing mortgage into default under a theory of pending default.Furthering this concept is the lack of sufficient equity (protection), do not know if that is the appropriate leagle eagle schmeal but the idea is that a second mortgagor can require the foreclosure on a home/house real estate asset under CH 11 asset protection if he can determine that there is not sufficient equity to cover debts plus usual selling expenses. Are they any 2nd mortgages that aren't in this shape? :idontno:
If the loan was current and there was an interest reserve capable of carrying the note and the government run RTC was able to force it to public sale what do you think the new government run entity will do?
Beach Fanatic
Furthering this concept is the lack of sufficient equity (protection), do not know if that is the appropriate leagle eagle schmeal but the idea is that a second mortgagor can require the foreclosure on a home/house real estate asset under CH 11 asset protection if he can determine that there is not sufficient equity to cover debts plus usual selling expenses. Are they any 2nd mortgages that aren't in this shape? :idontno:
No.
Banned
I don't know of any banks that would force a foreclosure on a mortgage that is being paid current. . . . . . . .wait. . . . . . .I take that back, I think I might know someone who is paying his note properly in Watersound West Beach who had a Lis Pendens filed against him just today by his lender.
Beach FanaticAuthor
I don't know of any banks that would force a foreclosure on a mortgage that is being paid current. . . . . . . .wait. . . . . . .I take that back, I think I might know someone who is paying his note properly in Watersound West Beach who had a Lis Pendens filed against him just today by his lender.Out of bankruptcy, perhaps not. In bankruptcy is a different matter. If the 2nd lienholder fears a depreciating asset, payments or not, he may be inclined to stop the bleeding to protect his asset. Remember, most mortgage payments do not return to principal.
Banned
Out of bankruptcy, perhaps not. In bankruptcy is a different matter. If the 2nd lienholder fears a depreciating asset, payments or not, he may be inclined to stop the bleeding to protect his asset. Remember, most mortgage payments do not return to principal.
Do you think a 2nd tier lienholder can push a party into an involuntary bankruptcy petition?
Beach FanaticAuthor
Do you think a 2nd tier lienholder can push a party into an involuntary bankruptcy petition?I believe they can. The only case I have seen where this happened, the Bankruptcy Court Judge/Central District, tossed the request out because the 2nd mortgage had not been perfected. (late filing I think). Note that the judge did not choose to take the simpler course which would have been to disallow the petition. I am led to believe the IBP was spot on.
With such a large set of , overvalued real estate, now upside-downed, 1-2 new home mortgage purchases, bankruptcy lawyers, adversarial and defending, should be having several field years, er days, er years. :confused:
SoWal Insider
I'm not going to try and predict where we'll be this time next year, there are too many factors involved including the alt-a's, a new president, congressional involvement, and the possibility of investors moving into real-estate to escape the stock market. But I can say with pretty good confidence that Lis Pendens filings and modifications for all of Walton have peaked for 08.
The important thing to note though if you're in the market - foreclosures take anywhere from 6-12 months on average to complete from the first filing. So while legal activity has peaked, most of these homes won't be landing in the market till next spring. Which leads me to believe prices still have a signifigant downside to them going forward. If you're buying today, you're probably paying too much.
The important thing to note though if you're in the market - foreclosures take anywhere from 6-12 months on average to complete from the first filing. So while legal activity has peaked, most of these homes won't be landing in the market till next spring. Which leads me to believe prices still have a signifigant downside to them going forward. If you're buying today, you're probably paying too much.
Edited
Banned
I believe they can. The only case I have seen where this happened, the Bankruptcy Court Judge/Central District, tossed the request out because the 2nd mortgage had not been perfected. (late filing I think). Note that the judge did not choose to take the simpler course which would have been to disallow the petition. I am led to believe the IBP was spot on.
With such a large set of , overvalued real estate, now upside-downed, 1-2 new home mortgage purchases, bankruptcy lawyers, adversarial and defending, should be having several field years, er days, er years. :confused:
I did some research since your post. It seems if a party has less than 12 creditors it only takes one to make the involuntary petition. If the party has more than 12 creditors a couple creditors would have to team up to bring the action. I'm betting we'll see an increase in this activity too.
Banned
I'm not going to try and predict where we'll be this time next year, there are too many factors involved including the alt-a's, a new president, congressional involvement, and the possibility of investors moving into real-estate to escape the stock market. But I can say with pretty good confidence that Lis Pendens filings and modifications for all of Walton have peaked for 08.
The important thing to note though if you're in the market - foreclosures take anywhere from 6-12 months on average to complete from the first filing. So while legal activity has peaked, most of these homes won't be landing in the market till next spring. Which leads me to believe prices still have a signifigant downside to them going forward. If you're buying today, you're probably paying too much.
What does "pre-foreclosure activity" represent?
SoWal Insider
What does "pre-foreclosure activity" represent?
Lis Pendens filings in Walton County.
Beach FanaticAuthor
I did some research since your post. It seems if a party has less than 12 creditors it only takes one to make the involuntary petition. If the party has more than 12 creditors a couple creditors would have to team up to bring the action. I'm betting we'll see an increase in this activity too.In the specific example of finding two preferred, secured mortgagees/creditors (I believe the creditors must be in the same class) - with the Fed bailing out, er, buying out old debt - we shall see what we shall see.
It is possible we are seeing a whole new grazing field. :idontno:
Banned
There were only 182 Lis Pendens filings or updates in the last 30 days in Walton County. 6 foreclosures per day, every day including Saturday and Sunday. Not bad.
Beach Lover
Any data on percentage of foreclosures on end user owned vs builder/speculative homes?
Banned
Any data on percentage of foreclosures on end user owned vs builder/speculative homes?
That's a great question. I can only speculate that nearly all lis pens are 2nd home/speculative ???85%???
I watch it every day.
SoWal Insider
Back at the end of September I guessed we had peaked. With final September numbers in and projecting forward the last week of October Lis Pen activity indicates that prediction may have been premature.
What's interesting is that most of the homes and lots represented over the last 6 months or so in this graph aren't on the market yet. The big unwind of this whole thing should be interesting to see. Next summer maybe?
What's interesting is that most of the homes and lots represented over the last 6 months or so in this graph aren't on the market yet. The big unwind of this whole thing should be interesting to see. Next summer maybe?
Edited
Banned
Foreclosures Finally Slowing???
I think foreclosures may be slowing. There were just 27 foreclosure actions filed in Walton County in the past week.
I think foreclosures may be slowing. There were just 27 foreclosure actions filed in Walton County in the past week.
SoWal Expert
This morning I realized that the foreclosure/legal notices section of the hometown paper has grown from a partial page to 5. We've still got a long way to go before it all gets cleaned out.
Beach Fanatic
This morning I realized that the foreclosure/legal notices section of the hometown paper has grown from a partial page to 5. We've still got a long way to go before it all gets cleaned out.
They seem to get gobbled up quick though. I have been working with a client and we have missed the foreclosure contract twice. We found another one and when we showed up the day after the home was listed 2 other parties were looking at the property. We put in an offer and hope to get this one! They price those foreclosures to sell and seem to be getting multiple offers on some of them.
Beach Fanatic
I have had 2 clients get outbid on different foreclosure properties this year.
Banned
It sounds like your buyers are looking for foreclosures. I've found that many buyers don't think they're getting a deal unless someone is losing something.
Remind me to borrow more than I need next time so I can sell for less than the mortgage so everyone's feeling like they won one.
Remind me to borrow more than I need next time so I can sell for less than the mortgage so everyone's feeling like they won one.
Beach Fanatic
They seem to get gobbled up quick though. I have been working with a client and we have missed the foreclosure contract twice. We found another one and when we showed up the day after the home was listed 2 other parties were looking at the property. We put in an offer and hope to get this one! They price those foreclosures to sell and seem to be getting multiple offers on some of them.
We got another letter from the bank telling us they had multiple offers!:bang:
They asked us to put our best foot forward . This is the 4th time in 2 weeks I have missed and offer. One time we came in $30,000 over the asking price! I think the foreclosure mess will get cleaned up pretty quick if the banks keep putting these low offers out!
Beach Fanatic
I know what you're saying Bobby. Seems like most of them are getting multiple offers. There are a couple that I can't believe are still on the market though. Banks are pricing very aggressively on the foreclosures. There are a lot of short sales in the pipeline right now. Should make for some great buys in 2009.
Beach Fanatic
We got another letter from the bank telling us they had multiple offers!:bang:
They asked us to put our best foot forward . This is the 4th time in 2 weeks I have missed and offer. One time we came in $30,000 over the asking price! I think the foreclosure mess will get cleaned up pretty quick if the banks keep putting these low offers out!
Ask the bank to show you the offers. They can black out the names etc. I find it hard to believe that any bank in this country right now are getting multiple offers on real estate.
Beach Fanatic
Ask the bank to show you the offers. They can black out the names etc. I find it hard to believe that any bank in this country right now are getting multiple offers on real estate.
I've been involved in 3 this year. They all closed shortly after.
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