Wanted to see what local/realtors thought of this and how it will affect Sowal.
I thought 2011 was supposed to be when we had big issues with commercial loans, but it seems like it's going to be another rough year for residential.
Over 1 million Americans seen losing homes in 2011 - Yahoo! News
NEW YORK ? The bleakest year in the foreclosure crisis has only just begun.
Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and industry experts say more people will miss payments because of job losses and also loans that exceed the value of the homes they are living in.
One in every 45 U.S. households received a foreclosure filing last year, a record 2.9 million of them. That's up 1.67 percent from 2009.
Foreclosures are expected to remain elevated throughout the year, pushing home prices down another 5 percent nationally before finally bottoming out.
The pain likely will be the most acute in states that have already suffered the worst. For the most part, it will be states that saw the biggest housing booms: Nevada, Arizona, Florida and California. They will be joined by states hit hardest by the economic downturn, including Michigan and Illinois.
More than half of the country's foreclosure activity came out of five states in 2010: California, Florida, Arizona, Illinois and Michigan. Together, these states recorded almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.
One in every 17 Arizona households got a foreclosure filing last year, while one in 18 received a notice in Florida.
Replies
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SoWal Insider
Nowhere did that article say that 90% of the mortgages were above water.
It said AT LEAST 10% of them were 25% under water.
So all of the many mortgages 1-24% under water were not part of that 10%.
Now back to the real issue - when the hell are these banks and accountants going to get a flipping clue!!!!
It isn't income until you get paid. It's a debt owed you. 2 very different things.
It's a standard accounting practice -
Accrual Accounting Definition
You assume you have the income until you're sure you don't, then you write the loss off. They'll be writing these investments down for years to spread things out.
Beach Fanatic
They are allowed to accrue interest on non-performing mortgages ? until the actual foreclosure takes place, which on average takes about 16 months.
All the phantom interest that is not actually collected is booked as income until the actual act of foreclosure. As a resullt, many bank financial statements actually look much better than they actually are. At foreclosure all the phantom income comes off gthe books of the banks.
So, is this another reason to delay the actual foreclosure?
Beach Lover
Question? What is an REO?
Beach Fanatic
Question? What is an REO?
Real Estate Owned (by the bank).
Beach Fanatic
Nowhere did that article say that 90% of the mortgages were above water.
It said AT LEAST 10% of them were 25% under water.
So all of the many mortgages 1-24% under water were not part of that 10%.
Now back to the real issue - when the hell are these banks and accountants going to get a flipping clue!!!!
It isn't income until you get paid. It's a debt owed you. 2 very different things.
I think you're reading it wrong. I believe what it says was "of the 6 Million homes" at risk for foreclosure, some 10% of THOSE at risk for foreclosure are 25% underwater on average. So really only 600K homes in this country are now still at risk of foreclosure, and even then the banks only take a 25% haircut, and only on the ones where they actually do end up taking back, and then where no deficiency judgment is sought against the noteholder.
So basically, no big deal, banks in a sloped yield curve environment, such as the one we have, have NO PROBLEM earning their way through whats left of this nightmare. The time to have been scared was 5 or 6 years ago. The Horse be outta da barn now.
SoWal Insider
I think you're reading it wrong. I believe what it says was "of the 6 Million homes" at risk for foreclosure, some 10% of THOSE at risk for foreclosure are 25% underwater on average. So really only 600K homes in this country are now still at risk of foreclosure, and even then the banks only take a 25% haircut, and only on the ones where they actually do end up taking back, and then where no deficiency judgment is sought against the noteholder.
So basically, no big deal, banks in a sloped yield curve environment, such as the one we have, have NO PROBLEM earning their way through whats left of this nightmare. The time to have been scared was 5 or 6 years ago. The Horse be outta da barn now.
Of 6 million at risk, 10% are 25% or higher underwater. You're not taking into account everything between 0% underwater -> 24.9% underwater, you're also ignoring the fact that 6 million homes are at risk, according to the article.
There's plenty of data out there on what we can expect in terms of forclosures this year. It's not a pretty picture.
SoWal Expert
In 2011, 30 year, fixed, interest rates are expected to increase up to about 6%. That is still very low, historically. On a one million dollar home with 20% down, that's a difference of about $6,000 per year. It really shouldn't be much of a factor for high-end homes.
However, when you start looking on the low end of homes, it will affect sales because those buyers are likely already pushing the boundaries of what they can afford. Those people may be more likely to take advantage of lower rates, buying now, rather than waiting until later and finding out they cannot buy.
However, when you start looking on the low end of homes, it will affect sales because those buyers are likely already pushing the boundaries of what they can afford. Those people may be more likely to take advantage of lower rates, buying now, rather than waiting until later and finding out they cannot buy.
SoWal Expert
I read an article this morning stating that banks are now more willing to go through with short sales as the lender stands to profit more from it, since they don't have foreclosure proceedings and since banks are being accused of being foreclosure mills with improper procedures.
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