Obama to put his stooge in as FHFA head

[spdrun]

I was no fan of Bush, but for once I agreed with his nomination. I liked Ed DeMarco’s “foreclose on the losers, and let G-d and sonny Jeebus sort ’em out” attitude. Ah well, at least it will take a few months or more for change we can believe in to trickle down to Fannie and Freddie.

http://www.njherald.com/story/22127570/officials-obama-naming-ncs-watt-for-housing-post

[bearishgurl]

The NAR was the main lobby behind the ouster of DeMarco. With so many “would-be sellers” living “free” while waiting months for a (dicey) SS approval or to be foreclosed upon (with both possibly occurring simultaneously or in-tandem), they’re not listing because they are underwater …. hundreds of thousands of them grossly so. The NAR has made it plain over the last few years that they favor debt forgiveness (even in cases of “cash out” used for anything and everything but the mortgage and property improvements) over foreclosure. There has not been enough “churning” going on in the residential RE market and thousands of their members are starving while fighting over a dearth of potential listings. The NAR and its children’s (ex: CAR) position is that these poor-slob underwater owners should be able to list and also buy again ASAP.

The financial overextension of Joe6p (who did it to himself, btw) during the millenium boom is taking too long to sort itself out for the NAR’s taste …. of course, all due to gubment interference with the bogus HARP and HAMP programs, etc, its carrot-and-stick incentive offerings for the Big Banks to “play ball” and its continued manipulation of the financial markets in recent years.

This is JMHO, gleaned from my realty subscriptions along with what I’ve seen on the street, etc.

[no_such_reality]

Wasn’t that in the news the other week, the money from the Federal government is now allowed to be used for principal reduction. That’s why the big slow down in foreclosures. The banks just take the money straight from the gub’ment and rewrite the loan.

[spdrun]

“The NAR was the main lobby behind the ouster of DeMarco. With so many “would-be sellers” living “free” while waiting months for a (dicey) SS approval or to be foreclosed upon (with both possibly occurring simultaneously or in-tandem), they’re not listing because they are underwater …. hundreds of thousands of them grossly so.”

Even if a loan gets modified, they’d still be underwater. As far as I know, even after a mod, people can’t sell at the new loan amount — they need to basically do a short sale. This would just make more people sit tight, not less.

In other news, I was at the Morris County (NJ) sheriff’s auction this week. 25 homes went under the hammer with few bidders; a few months ago it was maybe four or five per week. *BANG* *BANG* Going once … SOLD! Should be some interesting grist for the mill as the REOs get offered through the fall and winter of 2013.

Good thing is that:
(a) the stooge may not be confirmed, and this will take a few months
(b) changing FNMA’s charter will take time as well
(c) hopefully I’ll have enough rental property not to give a fuck by the time the bums get a free pass.

[bearishgurl]

[quote=spdrun]”The NAR was the main lobby behind the ouster of DeMarco. With so many “would-be sellers” living “free” while waiting months for a (dicey) SS approval or to be foreclosed upon (with both possibly occurring simultaneously or in-tandem), they’re not listing because they are underwater …. hundreds of thousands of them grossly so.”

Even if a loan gets modified, they’d still be underwater. As far as I know, even after a mod, people can’t sell at the new loan amount — they need to basically do a short sale. This would just make more people sit tight, not less.

In other news, I was at the Morris County (NJ) sheriff’s auction this week. 25 homes went under the hammer with few bidders; a few months ago it was maybe four or five per week. *BANG* *BANG* Going once … SOLD! Should be some interesting grist for the mill as the REOs get offered through the fall and winter of 2013.

Good thing is that:
(a) the stooge may not be confirmed, and this will take a few months
(b) changing FNMA’s charter will take time as well
(c) hopefully I’ll have enough rental property not to give a fuck by the time the bums get a free pass.[/quote]

spdrun, perhaps it is because NJ is a judicial foreclosure state. The lenders there obviously had to go through a LOT in recent years just to get the right to take properties which they have long had the right to take were in not for the parade of bogus MERS robo-signing lawsuits and other assorted time-consuming legal challenges to foreclosure, which, in the end, were meritless.

Perhaps there are fewer bidders at a foreclosure auction there because the opening bids are higher (relative to actual market value) due to high cost of foreclosure? Also, perhaps the stock of housing in that area is quite old and/or in school districts that are not the best. I don’t know. It seems the average flipper who would send someone to a foreclosure auction to bid on properties would be targeting homes with a wide appeal which would sell fast for top dollar to a captive audience (read young Gen X and Gen Y with families).

And thanks for pointing out that FNMA’s Charter will have to be changed to provide for mass cramdown. This will take an act of our (dysfunctional, at-odds-with-themselves) Congress :=D

The vast majority of those “bums” who have permanent modifications on their principal residence no doubt have mods which allow the stiffed lender to get back most or all of their “forgiven” debt upon sale unless the modified trustor hangs onto the property for a given length of time (5-10 yrs?) and pays them religiously and on time every month according to the modified terms. This keeps the poor slobs in their houses until such time as they get to keep some of the equity upon sale, whether they want to stay … or not.

I personally feel that the families who signed up for this foolishness did so ONLY because their credit was shot or nearly shot (they HAD to default in order to get their application for modification accepted) and they are now enjoying ultra-low house payments in an area they couldn’t otherwise afford to buy or rent in. They did it expressly to buy enough time to get their kid(s) through HS graduation (in their school attendance area of choice) and then they will address the degree that they are actually upside down (IF they still are at that time) and the degree that they will have to share equity upon sale with the lender(s) they stiffed in the past.

It’s just kicking the can down the road. Maybe 365 more bright sunny days will lift them out of their hole and maybe not. But they don’t care right now. They just want to continue living in an area they will never be able to afford to get into again until they don’t need to be there anymore.

It’s that simple.

Note: In CA, it is not mandatory for a “Modify Trust Deed” to be recorded if the same lender who held the TD to be modified (or their purchaser) is the same lender who modified the loan.

So, unfortunately, the public isn’t able to review the exact terms of 99% of mortgage modifications a trustor/borrower worked out with their lender(s).

[spdrun]

(1) Yep, NJ is judicial. Process takes 3-4 years on average vs 1-2 years in CA, which why it’s where CA was two years ago.
(2) Some of the houses/condos are in decent school districts, others are not. Upset (aka reserve) prices run the gamut from decent to crappy. 90% of the stuff went back to the bank to become REOs.
(3) Older isn’t necessarily considered bad on this coast.
(4) The irony of the thing is that I’m actually seeing BETTER deals on rental property in the “good” towns in NJ. Yeah, you’ll pay at least $300k for a duplex, but you can rent it at 8% cap to decent tenants, and no rent control in the wealthier towns either. I’m not even talking about foreclosures, just people who buy and sell organically at what they consider to be a fair price.

[bearishgurl]

[quote=spdrun](1) Yep, NJ is judicial. Process takes 3-4 years on average vs 1-2 years in CA, which why it’s where CA was two years ago.
(2) Some of the houses/condos are in decent school districts, others are not. Upset (aka reserve) prices run the gamut from decent to crappy. 90% of the stuff went back to the bank to become REOs.
(3) Older isn’t necessarily considered bad on this coast.
(4) The irony of the thing is that I’m actually seeing BETTER deals on rental property in the “good” towns in NJ. Yeah, you’ll pay at least $300k for a duplex, but you can rent it at 8% cap to decent tenants, and no rent control in the wealthier towns either. I’m not even talking about foreclosures, just people who buy and sell organically at what they consider to be a fair price.[/quote]

For an investor, it sounds like you have a better market to shop in on the east coast than we do out west, spdrun. Of course, that is assuming that there is a bottomless pit of potential tenants in NJ/NY who are both qualified to rent and have the desire to rent. In some areas of SD County, a LL or PM Co no doubt gets up to a dozen applications to choose from for ONE rental listing. In other areas of the county, it takes much longer to find a qualified tenant.

If the opening bid at auction is too high and the defaulted property reverts to the lender, it is actually better for a buyer looking for a principal residence (in most cases) to buy an REO, IMO. This is because Frannie lenders have been spending several thousands (in [indirect] taxpayer funds?) to ready a property for sale (which a buyer of a principal residence usually doesn’t have $$ set aside for after closing). After receiving their trustees deed, the REO lenders are then in a position to write off the delinquent excess (over market-value) which was present at the time of auction and then list the property in the range of what it would actually sell for on the open market.

For the buy-to-let investor, it is actually better to buy at the foreclosure auction, unless the opening bid is too high. But, if there is even 20% equity built in and the property is only a cosmetic fixer but otherwise in a solid rental area, it is probably worth it to bid it up to 80% of market value at auction, and, if the successful bidder, either execute a new rental agreement with the current occupants or serve them a 30-day notice to pay or quit after receiving their trustees deed, IMO.

[bearishgurl]

My comments below regarding reccos for buying investment properties are directed to the current SD County market, NOT the market of 2009-2011.

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