Can buyers in default 365 days or longer be saved?

[Coronita]

[quote=walterwhite]If the rate is low enough and the payments better than rent why not stay? 4 percent is kind of high. The govt should subsidize a .1 perc interest rate on every single mortgage in the country immediately.[/quote]

Be careful what you ask for. I’m pretty sure that thought has crossed someone’s mind in our government.

[NotCranky]

[quote=sdrealtor]I agree it cannot fix the entire problem. Its just an attempt to get people to open their eyes to possibilities and the power of what is being done. Here are a couple counters:

If the payment is low enough it can be comparable to rent so why not stay?

When prices were in freefall some people strategically defaulted because they thought they were going even lower. Now that things have stabilized there is more to be hopeful about.

Some people had temporary and possibly continuing loss of income. Living mortgage free for 2 years cvan heal wounds and allow people to build reserves back up. I have seen it many times on short sales I have completed.

The declines vary everywhere. If I’m not mistaken you are up in Temecula where declines are typically 50%+. Where I am, declines are under 20% in most cases so a buyer that put 20% down can be in a zero equity situation (i.e. cant cover selling costs without coming to the table) but isnt far underwater.

These are just a few and there are plenty more. What got me here was challenging the assumption that anyone who hasnt paid is DOA after a couple months. Looking at the actual numbers, I found that a buyer could be saved after 2 full years under some circumstances. I like to challenege the status quo and I did. The results surprised me too.[/quote]
Great, we can help a few poor people in North County start off with a clean slate.

[Anonymous]

I don’t think anybody here is disagreeing with your analysis – just pointing out that it probably doesn’t apply very often.

BTW, I don’t think typical declines in Temecula are anywhere near 50%+

I know of a couple of homes purchased at the very peak (early/mid 2006) that have declined just under 50%, but these are worst-case examples. I would say “typical” declines from purchase price are no more than 30%.

[sdrealtor]

[quote=Jacarandoso][quote=sdrealtor]I agree it cannot fix the entire problem. Its just an attempt to get people to open their eyes to possibilities and the power of what is being done. Here are a couple counters:

If the payment is low enough it can be comparable to rent so why not stay?

When prices were in freefall some people strategically defaulted because they thought they were going even lower. Now that things have stabilized there is more to be hopeful about.

Some people had temporary and possibly continuing loss of income. Living mortgage free for 2 years cvan heal wounds and allow people to build reserves back up. I have seen it many times on short sales I have completed.

The declines vary everywhere. If I’m not mistaken you are up in Temecula where declines are typically 50%+. Where I am, declines are under 20% in most cases so a buyer that put 20% down can be in a zero equity situation (i.e. cant cover selling costs without coming to the table) but isnt far underwater.

These are just a few and there are plenty more. What got me here was challenging the assumption that anyone who hasnt paid is DOA after a couple months. Looking at the actual numbers, I found that a buyer could be saved after 2 full years under some circumstances. I like to challenege the status quo and I did. The results surprised me too.[/quote]
Great, we can help a few poor people in North County start off with a clean slate.[/quote]

With some luck on your part, one of them might open a McDonald’s in Jamul

[SK in CV]

[quote=briansd1]I heard that’s the kind of rework they’ve been quietly doing in commercial real estate. That’s why we haven’t been the dramatic drops (relatively speaking) we saw back during the S&L crisis.[/quote]

Exactly right. Commercial lender asset managers know what they’re doing. (That’s not to imply that residential asset managers don’t. However, they don’t.) As do commercial real estate investors. Both sides do evaluations without emotions and come to an agreement. Foreclosure happens, but it’s almost invariably by agreement.

[sdrealtor]

[quote=pri_dk]I don’t think anybody here is disagreeing with your analysis – just pointing out that it probably doesn’t apply very often.

BTW, I don’t think typical declines in Temecula are anywhere near 50%+

I know of a couple of homes purchased at the very peak (early/mid 2006) that have declined just under 50%, but these are worst-case examples. I would say “typical” declines from purchase price are no more than 30%.[/quote]

I’ve sold several homes in Temecula that tell me you are wrong. Got one in Harveston right now that is going to sell around 50% off peak.

[NotCranky]

[quote=sdrealtor][quote=Jacarandoso][quote=sdrealtor]I agree it cannot fix the entire problem. Its just an attempt to get people to open their eyes to possibilities and the power of what is being done. Here are a couple counters:

If the payment is low enough it can be comparable to rent so why not stay?

When prices were in freefall some people strategically defaulted because they thought they were going even lower. Now that things have stabilized there is more to be hopeful about.

Some people had temporary and possibly continuing loss of income. Living mortgage free for 2 years cvan heal wounds and allow people to build reserves back up. I have seen it many times on short sales I have completed.

The declines vary everywhere. If I’m not mistaken you are up in Temecula where declines are typically 50%+. Where I am, declines are under 20% in most cases so a buyer that put 20% down can be in a zero equity situation (i.e. cant cover selling costs without coming to the table) but isnt far underwater.

These are just a few and there are plenty more. What got me here was challenging the assumption that anyone who hasnt paid is DOA after a couple months. Looking at the actual numbers, I found that a buyer could be saved after 2 full years under some circumstances. I like to challenege the status quo and I did. The results surprised me too.[/quote]
Great, we can help a few poor people in North County start off with a clean slate.[/quote]

With some luck on your part, one of them might open a McDonald’s in Jamul[/quote]

Well, at least your argument is improving.

[Anonymous]

[quote=sdrealtor]I’ve sold several homes in Temecula that tell me you are wrong. Got one in Harveston right now that is going to sell around 50% off peak.[/quote]

Go to zillow and pull up the chart for 92591 or 92592. Peak was early 2006, today’s values have fallen no more than 50%

The curve is pretty steep. Lots of homes were purchased before 2006 at much lower prices.

So unless the “typical” foreclosure was purchased at the very peak, the 50% number is way too high (and you definitely can’t put the plus at the end.)

(Don’t like zillow? If you’ve got a better source for aggregate data, provide it. But don’t bother trying to claim anybody is “wrong” using just your hand-picked personal anecdotes for evidence.)

[sdrealtor]

Pri
I said they were 50%+ off peak value. That does not necessarily mean a house sold at the peak. Its nothing to argue about, it really isnt. It is what it is. Let’s call it 50% +/- a few.

[Anonymous]

So I see you also read Negotiating Tricks for Dummies. I love that book!

And you even use it internet discussions! Brilliant!

Here, lemme try…

We agree that the correct number is 30% (+/- a few.)

No any more arguing at this point would be silly, right?

[scaredyclassic]

The house we were renting in early 06 sold at the peak. The landlord terminated our lease to sell a crappy 3 br 20 y o tract home with a tiny yard and rats for just under 450k. I remember wondering what type of moron would buy it and shaking my head as we packed. They’re selling for right around 50 perc off maybe a bit lower on a crappy one like ours was. Man that place was not worth 450 or 350 or even 250. It was a pit.

That said I have fond memories of it. We loved each other so much there. I was stronger then used to carry my wife up the stairs on my shoulders all the time to amuse the children. Would probably keel over now.

I think the tent was 1600. I was glad to leave.

[sdrealtor]

Fine let’s call it 30%+ if that makes you happy. It really doesnt matter to me

[Anonymous]

Cool, we have consensus that I was correct and you were mistaken.

Have a great holiday weekend!

[sdrealtor]

I always do

[(former)FormerSanDiegan]

[img_assist|nid=15320|title=Temecula Zillow|desc=|link=node|align=left|width=399|height=300]

I follwed the advice further up on the thread.

The results indicate that prices in Temecula in aggregate are currently about 44% off peak. (At the trough they were about 49.8% off peak).

The particular house shown in the chart (orange line) is a foreclosure and is more than 50% off peak.

With these facts in hand, you may now continue your little spat.

[Author]

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