CA Shadow Inventory

[SD Realtor]

sdr – the loan mods I have seen were not recorded as well.

cardiff – Maybe eventually they do get recorded but it would not matter as they do NOT, nor WILL THEY EVER get used as comps.

tg – When FSD used the term zealots in his previous posting in this thread that officially put him in the pullitzer category.

[sdrealtor]

SD
Have you seen anything like this? Its basically a $250K principle reduction written down to current market value.

[sdrealtor]

SD
Have you seen anything like this? Its basically a $250K principle reduction written down to current market value.

[sdrealtor]

SD
Have you seen anything like this? Its basically a $250K principle reduction written down to current market value.

[sdrealtor]

SD
Have you seen anything like this? Its basically a $250K principle reduction written down to current market value.

[sdrealtor]

SD
Have you seen anything like this? Its basically a $250K principle reduction written down to current market value.

[analyst]

[quote=sdrealtor]Here’s a new story from the field about a shadow inventory house. I have never heard one like this but when I hear one I gotta beleive there are others. It’s a true story and some posters will write it off as a realtor fabrication but its not. I do not have the exact details but what i have is close enough. I was floored and still am. I was actually out partying last nite with a regular Pigg poster who can cooberate it.

I bumped into an old client who tried but failed to sell his house a couple years ago because he couldnt get what he wanted/needed. He had an extended period of unemployment and refi’d into a neg am Option ARM just under 600K about a year before he tried to sell. He neg am’d up to around 700K and it recast. He couldnt afford the payments so he stopped paying. He approached the bank for a loan mod and went back and forth for about a year. He owed almost 700K plus another $50K in missed payments. He was willing and ready to walk if the bank foreclosed. Out of nowhere he got contacted by the bank with an offer. New loan for about $490K and a sub 5% 30 yr fixed rate. Thats a principle reduction of about $200K plus forgiving a years worth of interest payments.

Oops there goes another shadow inventory house, oops there goes another…….[/quote]

Ask him to let you read the loan documents.

Until you read the documents, a principle reduction is speculation. Frequently, the borrower does not read and does not understand.

The typical situation would be that the new terms do not include a principle reduction. Usually some amount of principle is set to an interest rate of zero and a payment rate of zero, but is still due, hopefully to be collected in the future after values rise again.

The lender will now collect a substantial payment instead of zero. The gutted mark-to-market rules allow the lender to avoid writing down the asset value and capital value.

[analyst]

[quote=sdrealtor]Here’s a new story from the field about a shadow inventory house. I have never heard one like this but when I hear one I gotta beleive there are others. It’s a true story and some posters will write it off as a realtor fabrication but its not. I do not have the exact details but what i have is close enough. I was floored and still am. I was actually out partying last nite with a regular Pigg poster who can cooberate it.

I bumped into an old client who tried but failed to sell his house a couple years ago because he couldnt get what he wanted/needed. He had an extended period of unemployment and refi’d into a neg am Option ARM just under 600K about a year before he tried to sell. He neg am’d up to around 700K and it recast. He couldnt afford the payments so he stopped paying. He approached the bank for a loan mod and went back and forth for about a year. He owed almost 700K plus another $50K in missed payments. He was willing and ready to walk if the bank foreclosed. Out of nowhere he got contacted by the bank with an offer. New loan for about $490K and a sub 5% 30 yr fixed rate. Thats a principle reduction of about $200K plus forgiving a years worth of interest payments.

Oops there goes another shadow inventory house, oops there goes another…….[/quote]

Ask him to let you read the loan documents.

Until you read the documents, a principle reduction is speculation. Frequently, the borrower does not read and does not understand.

The typical situation would be that the new terms do not include a principle reduction. Usually some amount of principle is set to an interest rate of zero and a payment rate of zero, but is still due, hopefully to be collected in the future after values rise again.

The lender will now collect a substantial payment instead of zero. The gutted mark-to-market rules allow the lender to avoid writing down the asset value and capital value.

[analyst]

[quote=sdrealtor]Here’s a new story from the field about a shadow inventory house. I have never heard one like this but when I hear one I gotta beleive there are others. It’s a true story and some posters will write it off as a realtor fabrication but its not. I do not have the exact details but what i have is close enough. I was floored and still am. I was actually out partying last nite with a regular Pigg poster who can cooberate it.

I bumped into an old client who tried but failed to sell his house a couple years ago because he couldnt get what he wanted/needed. He had an extended period of unemployment and refi’d into a neg am Option ARM just under 600K about a year before he tried to sell. He neg am’d up to around 700K and it recast. He couldnt afford the payments so he stopped paying. He approached the bank for a loan mod and went back and forth for about a year. He owed almost 700K plus another $50K in missed payments. He was willing and ready to walk if the bank foreclosed. Out of nowhere he got contacted by the bank with an offer. New loan for about $490K and a sub 5% 30 yr fixed rate. Thats a principle reduction of about $200K plus forgiving a years worth of interest payments.

Oops there goes another shadow inventory house, oops there goes another…….[/quote]

Ask him to let you read the loan documents.

Until you read the documents, a principle reduction is speculation. Frequently, the borrower does not read and does not understand.

The typical situation would be that the new terms do not include a principle reduction. Usually some amount of principle is set to an interest rate of zero and a payment rate of zero, but is still due, hopefully to be collected in the future after values rise again.

The lender will now collect a substantial payment instead of zero. The gutted mark-to-market rules allow the lender to avoid writing down the asset value and capital value.

[analyst]

[quote=sdrealtor]Here’s a new story from the field about a shadow inventory house. I have never heard one like this but when I hear one I gotta beleive there are others. It’s a true story and some posters will write it off as a realtor fabrication but its not. I do not have the exact details but what i have is close enough. I was floored and still am. I was actually out partying last nite with a regular Pigg poster who can cooberate it.

I bumped into an old client who tried but failed to sell his house a couple years ago because he couldnt get what he wanted/needed. He had an extended period of unemployment and refi’d into a neg am Option ARM just under 600K about a year before he tried to sell. He neg am’d up to around 700K and it recast. He couldnt afford the payments so he stopped paying. He approached the bank for a loan mod and went back and forth for about a year. He owed almost 700K plus another $50K in missed payments. He was willing and ready to walk if the bank foreclosed. Out of nowhere he got contacted by the bank with an offer. New loan for about $490K and a sub 5% 30 yr fixed rate. Thats a principle reduction of about $200K plus forgiving a years worth of interest payments.

Oops there goes another shadow inventory house, oops there goes another…….[/quote]

Ask him to let you read the loan documents.

Until you read the documents, a principle reduction is speculation. Frequently, the borrower does not read and does not understand.

The typical situation would be that the new terms do not include a principle reduction. Usually some amount of principle is set to an interest rate of zero and a payment rate of zero, but is still due, hopefully to be collected in the future after values rise again.

The lender will now collect a substantial payment instead of zero. The gutted mark-to-market rules allow the lender to avoid writing down the asset value and capital value.

[analyst]

[quote=sdrealtor]Here’s a new story from the field about a shadow inventory house. I have never heard one like this but when I hear one I gotta beleive there are others. It’s a true story and some posters will write it off as a realtor fabrication but its not. I do not have the exact details but what i have is close enough. I was floored and still am. I was actually out partying last nite with a regular Pigg poster who can cooberate it.

I bumped into an old client who tried but failed to sell his house a couple years ago because he couldnt get what he wanted/needed. He had an extended period of unemployment and refi’d into a neg am Option ARM just under 600K about a year before he tried to sell. He neg am’d up to around 700K and it recast. He couldnt afford the payments so he stopped paying. He approached the bank for a loan mod and went back and forth for about a year. He owed almost 700K plus another $50K in missed payments. He was willing and ready to walk if the bank foreclosed. Out of nowhere he got contacted by the bank with an offer. New loan for about $490K and a sub 5% 30 yr fixed rate. Thats a principle reduction of about $200K plus forgiving a years worth of interest payments.

Oops there goes another shadow inventory house, oops there goes another…….[/quote]

Ask him to let you read the loan documents.

Until you read the documents, a principle reduction is speculation. Frequently, the borrower does not read and does not understand.

The typical situation would be that the new terms do not include a principle reduction. Usually some amount of principle is set to an interest rate of zero and a payment rate of zero, but is still due, hopefully to be collected in the future after values rise again.

The lender will now collect a substantial payment instead of zero. The gutted mark-to-market rules allow the lender to avoid writing down the asset value and capital value.

[analyst]

[quote=sdrealtor]
Oops there goes another shadow inventory house, oops there goes another…….[/quote]

I agree that the federal government strategy is preventing the shadow inventory from becoming real inventory, and will continue to do so as long as the federal government can continue the policy.

The only reason for trying to understand the size of the shadow inventory is to predict what might happen if the federal government cannot continue its current policy.

The policy has effects away from the housing market, affecting the value of the dollar and the willingness of people, domestic and foreign, to lend to the federal government, and to U. S. banks and quasi-banks.

There is no guarantee that the current policy can be continued indefinitely.

If the government returned to monetary discipline (soon), the assistance to the housing market would end precipitously, and values would return to levels determined by a normally functioning real estate market. This would be somewhere in the vicinity of 150% of 1998 values (for San Diego mid-market), perhaps overshooting low for a while (due to lots of foreclosures) before settling in.

If the government does not return to monetary discipline, the real estate market will avoid the decline, but others will be harmed to an equal or greater degree.

[analyst]

[quote=sdrealtor]
Oops there goes another shadow inventory house, oops there goes another…….[/quote]

I agree that the federal government strategy is preventing the shadow inventory from becoming real inventory, and will continue to do so as long as the federal government can continue the policy.

The only reason for trying to understand the size of the shadow inventory is to predict what might happen if the federal government cannot continue its current policy.

The policy has effects away from the housing market, affecting the value of the dollar and the willingness of people, domestic and foreign, to lend to the federal government, and to U. S. banks and quasi-banks.

There is no guarantee that the current policy can be continued indefinitely.

If the government returned to monetary discipline (soon), the assistance to the housing market would end precipitously, and values would return to levels determined by a normally functioning real estate market. This would be somewhere in the vicinity of 150% of 1998 values (for San Diego mid-market), perhaps overshooting low for a while (due to lots of foreclosures) before settling in.

If the government does not return to monetary discipline, the real estate market will avoid the decline, but others will be harmed to an equal or greater degree.

[analyst]

[quote=sdrealtor]
Oops there goes another shadow inventory house, oops there goes another…….[/quote]

I agree that the federal government strategy is preventing the shadow inventory from becoming real inventory, and will continue to do so as long as the federal government can continue the policy.

The only reason for trying to understand the size of the shadow inventory is to predict what might happen if the federal government cannot continue its current policy.

The policy has effects away from the housing market, affecting the value of the dollar and the willingness of people, domestic and foreign, to lend to the federal government, and to U. S. banks and quasi-banks.

There is no guarantee that the current policy can be continued indefinitely.

If the government returned to monetary discipline (soon), the assistance to the housing market would end precipitously, and values would return to levels determined by a normally functioning real estate market. This would be somewhere in the vicinity of 150% of 1998 values (for San Diego mid-market), perhaps overshooting low for a while (due to lots of foreclosures) before settling in.

If the government does not return to monetary discipline, the real estate market will avoid the decline, but others will be harmed to an equal or greater degree.

[analyst]

[quote=sdrealtor]
Oops there goes another shadow inventory house, oops there goes another…….[/quote]

I agree that the federal government strategy is preventing the shadow inventory from becoming real inventory, and will continue to do so as long as the federal government can continue the policy.

The only reason for trying to understand the size of the shadow inventory is to predict what might happen if the federal government cannot continue its current policy.

The policy has effects away from the housing market, affecting the value of the dollar and the willingness of people, domestic and foreign, to lend to the federal government, and to U. S. banks and quasi-banks.

There is no guarantee that the current policy can be continued indefinitely.

If the government returned to monetary discipline (soon), the assistance to the housing market would end precipitously, and values would return to levels determined by a normally functioning real estate market. This would be somewhere in the vicinity of 150% of 1998 values (for San Diego mid-market), perhaps overshooting low for a while (due to lots of foreclosures) before settling in.

If the government does not return to monetary discipline, the real estate market will avoid the decline, but others will be harmed to an equal or greater degree.

[Author]

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