Nonprime Mortgage Maps

Link is to an interesting little tool brought to you by the insurance company; I mean a bank; no, I mean an investment bank; no, I mean the Fed.

http://www.newyorkfed.org/mortgagemaps/

Thanx! Great interactive stuff--the best $700 Billion can buy.

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So in the 32459 zip code only half the mortgages are current, 62% have had a late payment in the past 12 months, and 35% or ARMs are scheduled to reset in the next 12 months? Am I reading that right?

So in the 32459 zip code only half the mortgages are current, 62% have had a late payment in the past 12 months, and 35% or ARMs are scheduled to reset in the next 12 months? Am I reading that right?

It looks like that data is not specific to 32459. I think that is for all of Florida. I can't get those numbers to change for Mirimar or Freeport.

So in the 32459 zip code only half the mortgages are current, 62% have had a late payment in the past 12 months, and 35% or ARMs are scheduled to reset in the next 12 months? Am I reading that right?

From what I can tell, the information for individual counties and zip codes is not available. Those statistics are for the state of Florida, and they apply to subprime loans only. So I guess it means there is some more shaking out to do.

From what I can tell, the information for individual counties and zip codes is not available. Those statistics are for the state of Florida, and they apply to subprime loans only. So I guess it means there is some more shaking out to do.

There was a button choice for Alt-A as well to the right of the subprime button.

Did anyone try an other zip code in Florida and see if the stats were different?

It does note that the subprime loans are on 36.9 out of every 1000 housing units, and Alt-As are 19 of every 1000 housing units.

So we're talking about 5% of housing units in the state for purposes here.

It does note that the subprime loans are on 36.9 out of every 1000 housing units, and Alt-As are 19 of every 1000 housing units.

So we're talking about 5% of housing units in the state for purposes here.

Yes it looks very scary until you understand that this is only for Subprime and Alt-A loans and then look at the actual numbers being considered. Over 94% of the loans in Florida are NOT Subprime or Alt-A mortgages. Of the less than 6% that are, most are current with their payments (over 70% Alt-A, 50% Subprime). So the troubled mortgages really amount about 2% of the total mortgages held in Florida. Florida, California, and New York look to be by far the worst hit areas.

Now I'm not saying it's not bad and won't get worse from here. The option ARM mess is still to come. I'm just saying the data so far shows a that most people (98%) CAN pay their mortgages and the whole country is not collapsing.

Yes it looks very scary until you understand that this is only for Subprime and Alt-A loans and then look at the actual numbers being considered. Over 94% of the loans in Florida are NOT Subprime or Alt-A mortgages. Of the less than 6% that are, most are current with their payments (over 70% Alt-A, 50% Subprime). So the troubled mortgages really amount about 2% of the total mortgages held in Florida. Florida, California, and New York look to be by far the worst hit areas.

Now I'm not saying it's not bad and won't get worse from here. The option ARM mess is still to come. I'm just saying the data so far shows a that most people (98%) CAN pay their mortgages and the whole country is not collapsing.

So the next reset that comes in November, Merry Christmas, is going to be the ones that were zero interest resetting?

So the next reset that comes in November, Merry Christmas, is going to be the ones that were zero interest resetting?

Done with the majority of the Subprime resets. But the Alt-A and Option resets are just getting started. Looks like 2010-2011 will be the worst time for those mortgages. But since there is no data yet, who knows if the default rates for Option ARMs will be as bad as Subprime. Alt-A default rates have not been nearly as bad as Subprime so far.

Mortgage Reset Chart
http://calculatedrisk.blogspot.com/2007/10/imf-mortgage-reset-chart.html

Businessweek article about Option ARMs
http://www.businessweek.com/magazine/content/06_37/b4000001.htm

I would venture that a majority of loans in Walton County, especially along 30-A are probably ALT-A's rather than subprimes. Wouldn't stand to reason that folks buying at 2005 prices down here had to have better credit - hence land in a higher rating? Also, we may actually be at or near a peak in the Option ARM resets right now -

Loan renewals are going to force foreclosures over the immediate term. 3 year loans with a balloon are not being renewed on properties that are over mortgaged without substantial equity infusions. I know that many lot owners are being forced by their lenders to bring 200,000 to 500,000 in cash to their loan renewal. The lender would rather foreclose than renew the loans.

Loan renewals are going to force foreclosures over the immediate term. 3 year loans with a balloon are not being renewed on properties that are over mortgaged without substantial equity infusions. I know that many lot owners are being forced by their lenders to bring 200,000 to 500,000 in cash to their loan renewal. The lender would rather foreclose than renew the loans.

Is it because of how it would look on their books? If someone is making the payments and is trying and willing to continue, I do not see the logic in foreclosing unless the banks believe that values are still in a free fall and only going to get worse and not better.

Is it because of how it would look on their books? If someone is making the payments and is trying and willing to continue, I do not see the logic in foreclosing unless the banks believe that values are still in a free fall and only going to get worse and not better.

I'll throw out our personal experience. We have a five-year balloon lot loan that comes due at the end of the year. The mortgage company wants the balloon off the books, period. They are not willing to do anything to extend the terms. And we put 20 percent down on a reasonably priced, well-located lot five years ago. We are refinancing with this bank, but only because the two places we found that would do a refinance wanted to charge us 8 percent plus.

The worst part may be that our lot appraised at 30 percent below its late 2003 value. :shock: We may have to bring cash to our own refinance! But it also means that those other two banks probably would not be willing to work with us at all. Our only mistake in this is going into the purchase thinking that we would want to sell or build within five years. We don't care about whatever current value they come up with; we are end users & we want to hang onto the property. We are the types of people the banks should want to work with, but no dice. I just think there is room for things to still get uglier before it gets better -- not because of a lack of inherent value along 30-A, but because the lending climate is so horrendous and nobody knows what will happen next.

Is it because of how it would look on their books? If someone is making the payments and is trying and willing to continue, I do not see the logic in foreclosing unless the banks believe that values are still in a free fall and only going to get worse and not better.

I know at least one party who is facing the end of the lot loan and is up for renewal in Watersound West Beach. The lot was over 700,000 from JOE in 2005 and a comp. is now 275,000 from JOE today. The bank wants big cash or they're going to foreclose and try to collect the deficiency against the borrower. If the bank succeeds they will have improved their balance sheet with no loss. This is based on the theory that you can't short sell just because you are upside down. If a borrower has assetts the lender has a right to recover same. They don't always lose.

I'll throw out our personal experience. We have a five-year balloon lot loan that comes due at the end of the year. The mortgage company wants the balloon off the books, period. They are not willing to do anything to extend the terms. And we put 20 percent down on a reasonably priced, well-located lot five years ago. We are refinancing with this bank, but only because the two places we found that would do a refinance wanted to charge us 8 percent plus.

The worst part may be that our lot appraised at 30 percent below its late 2003 value. :shock: We may have to bring cash to our own refinance! But it also means that those other two banks probably would not be willing to work with us at all. Our only mistake in this is going into the purchase thinking that we would want to sell or build within five years. We don't care about whatever current value they come up with; we are end users & we want to hang onto the property. We are the types of people the banks should want to work with, but no dice. I just think there is room for things to still get uglier before it gets better -- not because of a lack of inherent value along 30-A, but because the lending climate is so horrendous and nobody knows what will happen next.

Are you willing to share where your lot is?

I know at least one party who is facing the end of the lot loan and is up for renewal in Watersound West Beach. The lot was over 700,000 from JOE in 2005 and a comp. is now 275,000 from JOE today. The bank wants big cash or they're going to foreclose and try to collect the deficiency against the borrower. If the bank succeeds they will have improved their balance sheet with no loss. This is based on the theory that you can't short sell just because you are upside down. If a borrower has assetts the lender has a right to recover same. They don't always lose.

How does taking a 60% loss on a loan constitute "no loss" for the bank? They won't collect the residual, these folks will be in bankruptcy in short order.

How does taking a 60% loss on a loan constitute "no loss" for the bank? They won't collect the residual, these folks will be in bankruptcy in short order.

Haven't you ever filled out a financial statement when taking out a loan? The lender wants to know about the borrowers assetts so they can decide on approving the loan. If something happens where the bank is forced to foreclose they will seek to recover their loss by seizing those assetts. Many borrowers will even use their securities as collatteral. Certainly many borrowers will try to move their assetts around, but that can change the case from civil to criminal.

I believe that not all foreclosures end with a big loss to the lender. Many actions are a business decision by the lender where they believe they have a better opportunity to collect through the foreclosure process.

Are you willing to share where your lot is?

I don't want to get too specific, but it has a gulf view and is in an older neighborhood (1950s plat) w/ no buildout or HOAs though.

Haven't you ever filled out a financial statement when taking out a loan? The lender wants to know about the borrowers assetts so they can decide on approving the loan. If something happens where the bank is forced to foreclose they will seek to recover their loss by seizing those assetts. Many borrowers will even use their securities as collatteral. Certainly many borrowers will try to move their assetts around, but that can change the case from civil to criminal.

I believe that not all foreclosures end with a big loss to the lender. Many actions are a business decision by the lender where they believe they have a better opportunity to collect through the foreclosure process.

I wonder how much of those "assets" were in other real estate at the time. There's certainly no guarantee that assets held at time of loan app remain in the picture today, even cash assets.

I wonder how much of those "assets" were in other real estate at the time. There's certainly no guarantee that assets held at time of loan app remain in the picture today, even cash assets.

This is why I believe some lenders are forcing the foreclosure rather than renewing a loan without the borrower bringing hundreds of thousands of dollars cash to closing. If a person owns a couple properties it may be advantageous to a lender to force a liquidation if the borrower does not agree to bring cash. This way the lender can be first in line for deficiency.

I know at least one party who is facing the end of the lot loan and is up for renewal in Watersound West Beach. The lot was over 700,000 from JOE in 2005 and a comp. is now 275,000 from JOE today. The bank wants big cash or they're going to foreclose and try to collect the deficiency against the borrower. If the bank succeeds they will have improved their balance sheet with no loss. This is based on the theory that you can't short sell just because you are upside down. If a borrower has assetts the lender has a right to recover same. They don't always lose.

I have a Doctor friend who has a Wachovia lot loan that was up for renewal. They wanted around a 150K to renew, plus a hefty interest rate increase. They went back and forth. He just kept telling them that they either had to renew it or they could have the lot. He made the case that there is a limit to how much money his good credit was worth, and they could either keep getting the same payments, or go to war with him for the difference. They relented and rewrote the deal exactly the same as it had been. Certainly with a Doctor, you can figure that they would eventually get the shortfall out of him, but they opted to re write it. I guess its just the luck of which lender you are dealing with. One thing is for certain- these lenders do not want these lots.

I have a Doctor friend who has a Wachovia lot loan that was up for renewal. They wanted around a 150K to renew, plus a hefty interest rate increase. They went back and forth. He just kept telling them that they either had to renew it or they could have the lot. He made the case that there is a limit to how much money his good credit was worth, and they could either keep getting the same payments, or go to war with him for the difference. They relented and rewrote the deal exactly the same as it had been. Certainly with a Doctor, you can figure that they would eventually get the shortfall out of him, but they opted to re write it. I guess its just the luck of which lender you are dealing with. One thing is for certain- these lenders do not want these lots.

I am confused. Is the Doctor paying back what the bank loaned him for the lot?

Two questions:

Does anyone have knowledge of someone who actually was sued for deficiency around here, or are these just threats?

and
Is there a time limit for a deficiency judgement in Florida? I think Georgia has a 6 month time limit.

I am confused. Is the Doctor paying back what the bank loaned him for the lot?

Yes. He has been current, but the loan was only for 3 years. When he tried to renew it, they wanted 150K because the appraised value had fallen. Then in lieu of the 150K they "offered" to secure the extra 150K with a lien on his personal residence. He just kept saying no, then eventually they relented.

Bailout worries

What worries me is that with this bailout, why would these lenders work with anyone? Now that the Feds are going to be paying a premium for these toxic "assets", they will be under no pressure to deal, and that means for foreclosures or short sales. And all with our tax money. Makes me ill to think about it.