[(former)FormerSanDiegan]

Haven’t we had this conversation before?
Yes. Many times.

But ….
I once had a conversation with my wife about where I wanted to live, how many kids I wanted, etc. If we hadn’t revisited that conversation occasionally she might be pissed that we don’t have 7 kids and live in Tennessee.

There are …
1. New sets of eyes (and accompanying sets of new opinions) reading these pages every couple months
2. New sets of data
3. New sets of bearish articles in the media
4. New comments by crazy Jim Cramer
… to consider.

[(former)FormerSanDiegan]

IMO, in the next 18 months we will see the steepest part of the price decline in this real estate cycle in San Diego. The peak was nearly 2 years ago. Inventory and foreclosures are building. it’s a given in the mainstream media that real estate sucks.
If you wait until 2009 you likely will have limited your down-side significantly. Not saying that that’s when the bottom occurs, but it’ll be close enough for long-term holders to avoid significant losses.

[(former)FormerSanDiegan]

IMO, in the next 18 months we will see the steepest part of the price decline in this real estate cycle in San Diego. The peak was nearly 2 years ago. Inventory and foreclosures are building. it’s a given in the mainstream media that real estate sucks.
If you wait until 2009 you likely will have limited your down-side significantly. Not saying that that’s when the bottom occurs, but it’ll be close enough for long-term holders to avoid significant losses.

[(former)FormerSanDiegan]

Perry – I think your point regarding the government sugarcoating is spot on. Piling on is not in their best interests.

However, I think you have the facts wrong wrt Bush Sr and the early 90’s recession. In that case he was claiming that we were already coming out of recession.

According to NBER that recession lasted through the quarter ending in March 1991, although they did not make this official until December 22, 1992 because there were several weak quarters of low growth following this recession (The jobless recovery that evolved into goldilocks and eventually became the late 90’s boom).

http://www.nber.org/March91.html

http://www.nber.org/cycles.html

So, actually Bush Sr was right, but by the time it was figured out it was too late (for him).

[(former)FormerSanDiegan]

Perry – I think your point regarding the government sugarcoating is spot on. Piling on is not in their best interests.

However, I think you have the facts wrong wrt Bush Sr and the early 90’s recession. In that case he was claiming that we were already coming out of recession.

According to NBER that recession lasted through the quarter ending in March 1991, although they did not make this official until December 22, 1992 because there were several weak quarters of low growth following this recession (The jobless recovery that evolved into goldilocks and eventually became the late 90’s boom).

http://www.nber.org/March91.html

http://www.nber.org/cycles.html

So, actually Bush Sr was right, but by the time it was figured out it was too late (for him).

[(former)FormerSanDiegan]

the stock market has done what, 20% in the past 4 months? is it on track to do 40% on the year? is that normal?

Stocks indexes are up 8-12% Year-to-date.
I wouldn’t call that on pace for 40% on the year.

[(former)FormerSanDiegan]

the stock market has done what, 20% in the past 4 months? is it on track to do 40% on the year? is that normal?

Stocks indexes are up 8-12% Year-to-date.
I wouldn’t call that on pace for 40% on the year.

[(former)FormerSanDiegan]

This isn’t a Heaven’s Gate type “family club” is it ?

[(former)FormerSanDiegan]

This isn’t a Heaven’s Gate type “family club” is it ?

[(former)FormerSanDiegan]

Good point n_s_r regarding the 2nd TD holder’s responsibilities.

It should also be noted that even for recourse loans (the 2nd TD in this case) it still requires the holder to sue your brother and obtain a judgment.

[(former)FormerSanDiegan]

Good point n_s_r regarding the 2nd TD holder’s responsibilities.

It should also be noted that even for recourse loans (the 2nd TD in this case) it still requires the holder to sue your brother and obtain a judgment.

[(former)FormerSanDiegan]

Quitcat – You are right that foreclosure is a process and many things can be done prior to a sale. Now, since the 2nd TD holder currently owns the property and it presumably went to auction, in which case the 2nd TD holder purchased it, you still might be able to buy the property or make some other deal with the 2nd note holders, which could include making the 1st TD holder whole again. However, you are in a tougher position than prior to the sale.

I would consider trying to construct an offer (if the property is worth it) with the 2nd TD holder. If the property is worth less than 110% of the amount owed, I would let it go.

[(former)FormerSanDiegan]

Quitcat – You are right that foreclosure is a process and many things can be done prior to a sale. Now, since the 2nd TD holder currently owns the property and it presumably went to auction, in which case the 2nd TD holder purchased it, you still might be able to buy the property or make some other deal with the 2nd note holders, which could include making the 1st TD holder whole again. However, you are in a tougher position than prior to the sale.

I would consider trying to construct an offer (if the property is worth it) with the 2nd TD holder. If the property is worth less than 110% of the amount owed, I would let it go.

[(former)FormerSanDiegan]

Back to the facts –

Quietcat. I am afraid that most of the good advice requires action prior to the second lien holder taking possession of the property. Options included selling the property either traditionally or via short sale (if there was no equity).

If there is any equity in the house after the banks liquidate it (and accounting for costs of selling), then I believe that your brother is entitled to receive it.
However, it is likely to be zero or much smaller than he would have received if he had sold it prior to losing possession.

The previous comments about recourse loans are important. If the 1st is the original purchase loan, the “bank” cannot come after other assets if they are not made whole. If the 2nd was taken out after purchase, then the holder of the 2nd can legally come after your brother for the difference that they lose. If they make more from the sale than covers the 2 loans plus carrying costs (unlikely) then he gets the remainder.

Remember, that these costs include 10 months worth of back payments and penalties, plus interest, and any unpaid property taxes if the escrow account was depleted. These amounts can easily add up to 30-50K or more.

[(former)FormerSanDiegan]

Back to the facts –

Quietcat. I am afraid that most of the good advice requires action prior to the second lien holder taking possession of the property. Options included selling the property either traditionally or via short sale (if there was no equity).

If there is any equity in the house after the banks liquidate it (and accounting for costs of selling), then I believe that your brother is entitled to receive it.
However, it is likely to be zero or much smaller than he would have received if he had sold it prior to losing possession.

The previous comments about recourse loans are important. If the 1st is the original purchase loan, the “bank” cannot come after other assets if they are not made whole. If the 2nd was taken out after purchase, then the holder of the 2nd can legally come after your brother for the difference that they lose. If they make more from the sale than covers the 2 loans plus carrying costs (unlikely) then he gets the remainder.

Remember, that these costs include 10 months worth of back payments and penalties, plus interest, and any unpaid property taxes if the escrow account was depleted. These amounts can easily add up to 30-50K or more.

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