Two thirds of current foreclosures not listed

Discussion in 'Real Estate' started by 30ashopper, Jan 24, 2009.

  1. Geo

    Geo Beach Fanatic

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    I hear this "possibility" of judgements/liens often...
    Folks in the know pls enlighten me.

    If someone went subprime (or alt a) with little no money down on a primary residence- someone with good intentions who had no intentions of flipping, yada, yada...

    All of a sudden, stuff happens (lost jobs, divorce, etc.) and they can't pay it anymore and the market value is only 60% of the purchase price...

    So with a scenario like the above, what happens if they call the bank, tell them they cannot afford it and leave the keys on the counter?

    Their credit is destroyed.
    What else?

    Are they really doing judgements/liens?

    Are the bailouts making banks more forgiving? Is the fact that the above scenario is so common these days making banks more forgiving?

    Interesting times...
     
  2. Matt J

    Matt J SWGB

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    I'm just wondering what will happen to home values when a bank finally forecloses, puts the house on the market for the price they feel it is worth, and the first home inspector pries open the front door to find mold, rot, mildew, etc.
     
  3. AAbsolute

    AAbsolute Banned

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    So much of what I'm reading in this string of Posts here reads against the United States Constitution. The U.S. has three branches of government and was set up that way on purpose. Every time action is taken inopposite to the Constitution there is an equal, lasting and opposite reaction. This system of government performs hypocritically when corners are shortcut.

    I wish someone would just rip the band-aid off quickly and be done with it...the foot dragging makes things so much worse. Why does it take 18 months to work through the foreclosure process?

    I understand your point and wish it would be over quickly, but the consequence of shortcutting will have affects that last through the next several business cycles.
     
  4. AAbsolute

    AAbsolute Banned

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    Banks are making a business decision. There are things that banks know that we aren't privy to. It seems to me that bank loan committees should be able to decide the bank's asking price of at least 5 of their properties each time they meet for committee. There is an unknown variable in their consideration that you and I don't understand yet.
     
  5. AAbsolute

    AAbsolute Banned

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    Mold requires moisture. Mold issues caused by inactive conditioning can be remedied. Mold caused by recurring moisture intrusion, that's another story.
     
  6. Bobby J

    Bobby J Beach Fanatic

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    Not sure what you mean here. I understand the foreclosure process. It takes time. Up to 24 months. But, making the short sale process smoother in a timely fashion would only making it better for everyone. This has nothing to do with a short cut. Common sense is not against the Constitution. I think the over load has bogged the system down. So identify the problem and fix it.
    The consequences will still be here (borrowers and bankers) but lets get on with the consequences.
     
  7. Here4Good

    Here4Good Beach Fanatic

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    It's dangerous to assume that banks know something you don't know - you, who are in the housing market up to your ears day in and day out, and have been for years. You have a MUCH better idea of the market and what will happen.

    The only variable we do not see is the mission they have to prop the numbers up just for this quarter, since their bonuses are awarded quarterly. I do not think that bankers, or many other corporate types, are looking at the long view (and by long view, I mean past the end of this quarter or year).

    Back in another lifetime, I started my career working for a retail bank. The chairman was the grandson of the founder, and the chairman of the mortgage company I worked for had been with the holding company for his entire career, 30+ years.

    They always had the long view, since they had no intention of ever quitting.

    Now, banks and other corporations are bought, sold, mergered and the execs don't expect to stay more than 24 months, if they are lucky. They know that the entire merry go round could stop tomorrow.

    Just as all of us are sitting on our wallets (even those of us who could afford to make major purchases), and not buying cars or computers because we are acting in our own best self-interest, so are they.

    There will be no reward for the executive who starts writing down principal, since the effect will not be seen for a year or more. There is no reward in following a policy which will cost more now, and (possibly) less later.
     
  8. Santiago

    Santiago Beach Fanatic

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    Bobby I'm with you but it's not always as easy as it looks to people on the outside. There may be a problem with a loan that you the realtor knows about, the seller knows about and the lender has a suspicion about but is not willing to deal with at the moment. The bank may not need to charge the loan down due to loan loss reserve requirements so he ignores the problem as long as he can. Maybe they know that things will get better if they can just hang on. They(the bank) are still making money and refortifying their loan loss reserves every month from the profits they are making. This enables them to carry forward another month much like the consumer that keeps paying interest. There are many cases where the banker knows that the loan has gone south but can't stand the charge off that month. You on the other side just thinks he's crazy because he didn't take that offer that you brought in. You are probably right. That still doesn't help him with his bigger problem which is keeping his reserve requirements at a level that he(the bank) doesn't get a cease and desist order slapped on.

    As much shuffling and restacking the deck as the owners are doing to try to make things work, the bank's are having to do the exact same thing. You are just not privy to all of that. And then the federal government comes along just in time and re-capitalizes the bank enabling them to charge things down that should have been done long ago. As long as their basic business model is still sound, they can re-group and begin to profit and grow again. All is well. All of this by the way, has and is really happening. There's lots of interesting stories out there.
     
  9. AAbsolute

    AAbsolute Banned

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    Here4Good and Santiago were much clearer than I can be. My point was trying to weigh liberal construction against strict construction of banking regulation.
     
  10. Bobby J

    Bobby J Beach Fanatic

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    I had a banker go over this with me recently but I am still puzzled why it takes 8 months to get an answer on an offer. I hear some states are looking into legislation that will not allow a short sale to be listed unless the bank states what they are willing to accept. That just makes sense. I really question the listing of a short sale if no one has been given the authority of a price. Seems almost fraudulent and is crushing the market for sellers. They become the comp but they have no basis.:bang: The sad part is I have pulled several off. The only reason is because I needed new shoes. :D
     
  11. Miss Critter

    Miss Critter Beach Fanatic

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    Milk. ;-)
     
  12. Bobby J

    Bobby J Beach Fanatic

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    So true.
     
  13. 30ashopper

    30ashopper SoWal Insider

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    Summing it up in two words - property rights. The laws are designed to protect homeowners from large corporations and government which have heavy weight legal strength. Everything needs to be processed, stamped, approved, signed off on, and judged before a bank can legally evict someone from their home and take ownership. (That's a good thing!) 3rd party filings by HOAs and the like tend to gum things up as well - banks need to re-file and amend and communicate to all parties involved. All of this has to pass through the county's administrative and legislative process linearly which adds to the time it takes for the entire process to complete.

    It's funny you know, sometimes we want government to expedite things and sometimes we find expediency to be flat out wrong. Government really can't do it one way here and another there, laws have to be followed explicitly no matter what.
     
    Last edited: Jan 27, 2009
  14. 30ashopper

    30ashopper SoWal Insider

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    Which brings to mind a funny story about the FDA. 30 years ago there was this big push to shorten the approval process for new bleeding edge drugs because people were dying waiting for their approval. 20 years ago the FDA shortened it's approval process and tried to expedite testing on bleeding edge drugs. 10 years ago the FDA lengthened it approval process because people were dying after taking bleeding edge drugs the FDA had expedited the approval of. Today people want the FDA to shorten it's approval process because people are dying waiting for bleeding edge drugs to get approved...

    I'll never work in government. :lol:
     
  15. Matt J

    Matt J SWGB

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    Am I the only one this comment doesn't scare the bajeezus out of? States take years to enact legislation and now they are discussing this. Me thinks the woods are deeper than we thought.
     
  16. Busta Hustle

    Busta Hustle Beach Fanatic

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  17. Santiago

    Santiago Beach Fanatic

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    I think in lots of cases its simply buying time. I guess it worked to some degree with the tarp funds becoming available.
     
  18. jerome

    jerome Beach Comber

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    yes sir


    I think you may be damn near correct on that. I am feelin it. Something else that I've read a few weeks ago - banks have "shadow" properties they aren't disclosing/advertising that are or may be in the future short sale or near foreclosure status. Banks are allowing or processing around 25-30% of the short sale/foreclosure properties currently on their books, the rest are shadowed. Couple this with putrid economic conditions with the perspective that the remaining 60-70% are not even on the market and YOU, my man, may get Watercolor minus some fungi. Imagine Watercolor at $250-300 sqft. Paradise lost and found. Just a thought. I remember realtors telling me that short sales in Watercolor would be a rarity at best. Not from what I am seeing. I've been through a short sale right before the worldwide collapse. They are a b-^@^%. Patience and don't get your heart set on anything. Value is really transitory and is at best, hard to define. Get a group of some brilliant economists together to overcome a problem and you know what you get- 20 different theories and a request for a few weeks to work on the details.
    Hang in there, you may have some competition from some wealthy out-of- staters, but when it comes down to it, they are only homes, right? People are realizing that. They are not assets until paid off. They don't pay you back. They are, (especially in today's climate), highly illiquid debt obligations whose values were toyed with childish greed and lack of potential consequences that in turn vacillated wildly. Now alot of people's lives are ruined over this gov-backed real estate pinball machine. Nobody in the golden days seemed to realize mortgages are obligations to borrow money; it is not money that you have. Value involves the agreement of two parties. Remember, nationwide appreciation of real estate has historically been slighty above our rate of inflation. This area is more of a guessin' poker faced quagmire as far as potential value and appreciation . You know what Warren Buffett said when marital obligations forced him to buy his first house. " I am going to name it Buffett's Folly." He paid in cash of course, but lamented over the amount of money invested in the home and its potential return versus the market. Bubbles happen all the time, but rarely twice within the same item of displacement. Good luck brother, let me know how things work out. I like this area. I am sad to see what happened to it. I hope for the best.
     
  19. AAbsolute

    AAbsolute Banned

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    I heard a caller to one of the CNBC shows Wednesday night describing her re-finance dilemma. She described that she bought a home with 30% down in '06 and had used a mortgage for the rest. She said she could not get a cash out re-fi at this time because the current appraised value was less than the mortgage balance. She went on to say that she couldn't understand why they could not get the cash out re-fi because she has 30% equity.
     
  20. Lynnie

    Lynnie SoWal Insider

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    And, many are violating RESPA - we understand why they are doing some of the things they are doing, but they are worsening the economy by doing so......


    :cool:
     

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