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DaCounselor
Participantsounds right, davelj. the bottom line is that the HOA is going to get paid. they certainly can chase the foreclosed homeowner for pre-foreclosure dues, but it sounds like the HOA more typically sits back and waits to ultimately get paid by the lender.
ParticipantBoth loans are non-recourse. Even if the 2nd is a HELOC and regardless of any provisions regarding recourse. CA code and case law say if it’s purchase money, it’s non-recourse.
There will be no tax owed due to the foreclosure.
ParticipantBoth loans are non-recourse. Even if the 2nd is a HELOC and regardless of any provisions regarding recourse. CA code and case law say if it’s purchase money, it’s non-recourse.
There will be no tax owed due to the foreclosure.
ParticipantInteresting niche issue, nsr.
If the HOA has filed a lien for unpaid dues (in excess of $1800 as you point out) it would indeed be cleared out by a superior lienholder (1st or 2nd mtg, for instance) foreclosing. The HOA could keep those in a superior position current and foreclose itself, but in today’s environment that probably wouldn’t make sense as I suppose most of the properties at issue may be under water.
If the HOA lien is wiped out, the HOA can still pursue payment from the former homeowner via legal action. Just because the HOA lien is wiped out doesn’t mean the obligation goes away.
Once the lender becomes the owner, they are obligated to pay HOA dues. If they do not, they property would once again be subject to an HOA lien ($1800 plus), HOA foreclosure and/or legal action against the lender for payment of dues.
Participant“Does this mean that the Fed cut today will have minimal impact in CA where there are a lot of ARM borrowers?”
__________________________________No. The Bank of England is likely to follow suit. The BoE also injected L4.4 billion into the British banking system last week, another L4.4 billion a few days ago and just announced a surprise L10 billion injection today. Not sign that all is well. And inflation appears in check over there, which helps clear the way for a cut.
BBA LIBOR is coming down.
Participant“if libor is a composite of the rates of central banks around the world, why would it parallel the ffr?”
_____________________________i believe LIBOR is set by the BBA and is not a composite rates from around the globe.
i have not looked at LIBOR beyond ’99, but since then the 6 month LIBOR has mirrored the FFR. and i believe there is evidence that the 3 month LIBOR movement slightly pre-dates that of the FFR.
ParticipantMore often than not LIBOR will run close to the FFR, so I expect the current spread will shrink if/when the Fed eases. I doubt the current spread will remain for the long term, in any event.
As for mortgage rates close 10%, that would require a margin of 4.5 on the 6 month LIBOR. I suppose there may be margins out there like this but i believe it’s far more common to see margins in the 2.0 range, which equates to an interest rate of about 7.4% today. Big difference.
Participant“hard day’s work? me? nope. never. see, there’s a difference between working hard and working smart–now if you’ll excuse me, I’ll need to get under my desk before Mr. Steinbrenner returns;)”
_______________________________just hope he doesn’t bring his grandkids to work or that someone doesn’t call in a bomb threat…
September 10, 2007 at 3:35 PM in reply to: Rumor – is CW reselling properties back to borrowers as short sales? #84083ParticipantI have not heard of this but it makes sense that it is at least being considered. If there is a 2nd mtg it would be wiped out by a foreclosure so no need for any approval from 2nd position (it’s not a true “short sale”). No 1099 if CW doesn’t issue one. Very interesting. I’m certain we’ll hear of additional creative strategies moving forward.
ParticipantSDR – I haven’t heard many details regarding servicer/investor interaction but I wouldn’t be surprised to learn that your info is correct. This situation is complicated by the fact that some MBS holders have insured against defaults, and the insurance payout on a default may be a better result for the investor than accepting reduced returns. So the investor may actually be better off with a default as opposed to a mod. In this circumstance, the investor can take the position that a mod goes against their best interests and threaten suit against the servicer if mods are undertaken. I haven’t heard of this happening but I haven’t been in that specific loop recently. I do, however, personally know two hedge funds that insured CDO tranches that they don’t even have on their books (via credit default swaps) and they are screaming bloody murder about potential mods that will wreck their insurance payout. They have a big problem with standing to sue so all they can do is make noise.
There are alot of angles on this mod stuff. It’s nowhere near being played out yet. But if the servicers don’t get moving soon they’re going to be a day late and a couple of trillion dollars short.
ParticipantThe servicer’s permissible modification actions are spelled out in the pooling & servicing agreements. The servicer generally gets to make the call on modifications so long as it will not run afoul of the interests of the investors. There is no necessity to track down the security holders for modification approvals.
ParticipantI don’t think Fed cuts will be a magic bullet by any stretch of the imagination. Rates are only one sliver of the big picture. However, if you take the position that increasing foreclosures are one factor in driving values down, than any action that impacts the number of foreclosures is going to be relevant. Working under the assumption that a huge % of current and impending foreclosures are due to loan re-casts, rate cuts that lower the re-cast loan index will obviously reduce the level of increased payments. The deeper and more frequent the cuts, the lower the re-cast payments, the less borrower distress, and fewer foreclosures.
Some cases will be essentially unsalvagable, others are not. In any event, a .25 easing is not likely to have sweeping impact. It’s going to have to go deeper, and it’s going to have to get there pretty soon. Even if it does, it’s only a sliver of the big picture.
ParticipantSo 79% of CA prime loans in default are “owner-occupied” and 85% of CA subprime loans in default are “owner-occupied”. At least according to the article.
I wonder what % of “owner-occupied” loans in default, prime and subprime, are loans that were obtained under the premise of being “owner-occupied” but were in fact never “owner-occupied”.
ParticipantI thought Bay Ho was north of Balboa and Bay Park was south of Balboa. That’s how we’ve always referred to it, anyway.
There are some great streets in both areas, but I personally prefer certain neighborhoods north of Balboa. -
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