Massive Equity W/Drawl Default in….Mission Hills….

[4plexowner]

These stories will be more and more common as we continue in this correction

Here’s one in La Playa (nice area of Pt Loma) – purchased in 1994 for $300K and ‘owners’ currently owe more than $700K and are trying to short sale

http://www.realtor.com/search/listingdetail.aspx?zp=92106&mnp=34&mxp=35&typ=1&sid=6f7a44003bd54151a1ecf7484c90b444&lid=1098490201&lsn=3&srcnt=10#Detail

I believe there are lots of people who have been living far beyond their means via the equity in their houses for the past decade

From the outside they look financially successful but a combination of factors is now biting them in the ass:
> house prices have dropped so there is no more equity to be extracted
> house prices have dropped so there is no way to refi the property without putting cash into the deal
> lending standards have gotten tougher – no more ‘fog a mirror’ loans with 0 down
> HELOs have been frozen
> jumbo loan rates are at least a full percentage point higher than non-jumbo rates right now IF you can find a lender willing to do a jumbo refi in CA right now

This combination of factors means no more housing ATM for many supposedly ‘well-heeled’ San Diegans

It also means that they are stuck in their current loan (almost certainly an ARM) and will have to deal with whatever reset terms they agreed to

As their properties are put on the market in distress sales we will see who has been swimming naked

[JWM in SD]

“From the outside they look financially successful but a combination of factors is now biting them in the ass:
> house prices have dropped so there is no more equity to be extracted
> house prices have dropped so there is no way to refi the property without putting cash into the deal
> lending standards have gotten tougher – no more ‘fog a mirror’ loans with 0 down
> HELOs have been frozen

This combination of factors means no more housing ATM for many supposedly ‘well-heeled’ San Diegans”

couple that with a jobloss or two and you really get a viscious cycle going. I’m telling you guys, some people have no idea what is coming down the pipe and it is not pretty.

[JWM in SD]

“From the outside they look financially successful but a combination of factors is now biting them in the ass:
> house prices have dropped so there is no more equity to be extracted
> house prices have dropped so there is no way to refi the property without putting cash into the deal
> lending standards have gotten tougher – no more ‘fog a mirror’ loans with 0 down
> HELOs have been frozen

This combination of factors means no more housing ATM for many supposedly ‘well-heeled’ San Diegans”

couple that with a jobloss or two and you really get a viscious cycle going. I’m telling you guys, some people have no idea what is coming down the pipe and it is not pretty.

[JWM in SD]

“From the outside they look financially successful but a combination of factors is now biting them in the ass:
> house prices have dropped so there is no more equity to be extracted
> house prices have dropped so there is no way to refi the property without putting cash into the deal
> lending standards have gotten tougher – no more ‘fog a mirror’ loans with 0 down
> HELOs have been frozen

This combination of factors means no more housing ATM for many supposedly ‘well-heeled’ San Diegans”

couple that with a jobloss or two and you really get a viscious cycle going. I’m telling you guys, some people have no idea what is coming down the pipe and it is not pretty.

[JWM in SD]

“From the outside they look financially successful but a combination of factors is now biting them in the ass:
> house prices have dropped so there is no more equity to be extracted
> house prices have dropped so there is no way to refi the property without putting cash into the deal
> lending standards have gotten tougher – no more ‘fog a mirror’ loans with 0 down
> HELOs have been frozen

This combination of factors means no more housing ATM for many supposedly ‘well-heeled’ San Diegans”

couple that with a jobloss or two and you really get a viscious cycle going. I’m telling you guys, some people have no idea what is coming down the pipe and it is not pretty.

[JWM in SD]

“From the outside they look financially successful but a combination of factors is now biting them in the ass:
> house prices have dropped so there is no more equity to be extracted
> house prices have dropped so there is no way to refi the property without putting cash into the deal
> lending standards have gotten tougher – no more ‘fog a mirror’ loans with 0 down
> HELOs have been frozen

This combination of factors means no more housing ATM for many supposedly ‘well-heeled’ San Diegans”

couple that with a jobloss or two and you really get a viscious cycle going. I’m telling you guys, some people have no idea what is coming down the pipe and it is not pretty.

[Borat]

How much would the house rent out for?

Rents around there are all over the map depending on how long the owners have had the place. My guess for this is somewhere between $1800/mo and $2500/mo.

I had initially said $2500-4000 but now I see that it is only 1130sf! Not much bigger than a lot of apartments so it ain’t worth a lot…

[Borat]

How much would the house rent out for?

Rents around there are all over the map depending on how long the owners have had the place. My guess for this is somewhere between $1800/mo and $2500/mo.

I had initially said $2500-4000 but now I see that it is only 1130sf! Not much bigger than a lot of apartments so it ain’t worth a lot…

[Borat]

How much would the house rent out for?

Rents around there are all over the map depending on how long the owners have had the place. My guess for this is somewhere between $1800/mo and $2500/mo.

I had initially said $2500-4000 but now I see that it is only 1130sf! Not much bigger than a lot of apartments so it ain’t worth a lot…

[Borat]

How much would the house rent out for?

Rents around there are all over the map depending on how long the owners have had the place. My guess for this is somewhere between $1800/mo and $2500/mo.

I had initially said $2500-4000 but now I see that it is only 1130sf! Not much bigger than a lot of apartments so it ain’t worth a lot…

[Borat]

How much would the house rent out for?

Rents around there are all over the map depending on how long the owners have had the place. My guess for this is somewhere between $1800/mo and $2500/mo.

I had initially said $2500-4000 but now I see that it is only 1130sf! Not much bigger than a lot of apartments so it ain’t worth a lot…

[Bugs]

I reckon the market rent for this sucka would be $2,000 or less. It’s only 2 bedrooms.

If the prices eventually do return to trend as we anticipate, a 175 monthly gross rent multiplier would result in an indicated value of about $350,000, which when compared to the 1995 purchase price of $255,000 actually makes some sense.

Granted, if the price structure in this neighborhood ever do go that far that point is at least a couple years off yet. Still, it could happen.

[Bugs]

I reckon the market rent for this sucka would be $2,000 or less. It’s only 2 bedrooms.

If the prices eventually do return to trend as we anticipate, a 175 monthly gross rent multiplier would result in an indicated value of about $350,000, which when compared to the 1995 purchase price of $255,000 actually makes some sense.

Granted, if the price structure in this neighborhood ever do go that far that point is at least a couple years off yet. Still, it could happen.

[Bugs]

I reckon the market rent for this sucka would be $2,000 or less. It’s only 2 bedrooms.

If the prices eventually do return to trend as we anticipate, a 175 monthly gross rent multiplier would result in an indicated value of about $350,000, which when compared to the 1995 purchase price of $255,000 actually makes some sense.

Granted, if the price structure in this neighborhood ever do go that far that point is at least a couple years off yet. Still, it could happen.

[Bugs]

I reckon the market rent for this sucka would be $2,000 or less. It’s only 2 bedrooms.

If the prices eventually do return to trend as we anticipate, a 175 monthly gross rent multiplier would result in an indicated value of about $350,000, which when compared to the 1995 purchase price of $255,000 actually makes some sense.

Granted, if the price structure in this neighborhood ever do go that far that point is at least a couple years off yet. Still, it could happen.

[Author]

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