[no_such_reality]

You’ll still get low-down loans from FHA on first buyer programs, but otherwise, I foresee a lack of greater than 10% 2nds.

A 15% 2nd will be available, however I suspect the banks will make it very unaffordable in terms of rate on the 2nd, and possibly higher rate on the first.

The banks are quickly realizing lack of skin in the game from the borrower is the leading indicator for default.

[no_such_reality]

You’ll still get low-down loans from FHA on first buyer programs, but otherwise, I foresee a lack of greater than 10% 2nds.

A 15% 2nd will be available, however I suspect the banks will make it very unaffordable in terms of rate on the 2nd, and possibly higher rate on the first.

The banks are quickly realizing lack of skin in the game from the borrower is the leading indicator for default.

[no_such_reality]

Deadzone, I don’t think you thought that through.

1. He’s had it rented since 2000. That means he doesn’t qualify for the capital gains exemption.

2. His current price structure is based on the prior market bottom. He will not see that price again.

3. Having had it rented for the six years, that depreciation he’s been claiming will come back as taxable capital gain.

4. His selling costs will be 5-6% minimum.

By selling, he’ll realize a 25%-30% drop due to the sales cost and tax hit on capital gains and a lowering of his basis cost. Add that to fact that since it’s a rental, it probably isn’t “prime” condition and that housing market is already 10% or so off peak and basically, if he sells now, takes the tax hit, he might be able to get back in for what he netted if the market collapses 40%-50%.

[no_such_reality]

Deadzone, I don’t think you thought that through.

1. He’s had it rented since 2000. That means he doesn’t qualify for the capital gains exemption.

2. His current price structure is based on the prior market bottom. He will not see that price again.

3. Having had it rented for the six years, that depreciation he’s been claiming will come back as taxable capital gain.

4. His selling costs will be 5-6% minimum.

By selling, he’ll realize a 25%-30% drop due to the sales cost and tax hit on capital gains and a lowering of his basis cost. Add that to fact that since it’s a rental, it probably isn’t “prime” condition and that housing market is already 10% or so off peak and basically, if he sells now, takes the tax hit, he might be able to get back in for what he netted if the market collapses 40%-50%.

[no_such_reality]

If you have good reliable tenents and the house is nearly cash flow positive and nets a positive after income taxes, why would you sell?

If you have along term lock on your interest rate, your job secure, keep the house and let the tenant pay the loan off for you.

More importantly, you bought in ’98, that’s still basically the bottom of last cycle.

[no_such_reality]

If you have good reliable tenents and the house is nearly cash flow positive and nets a positive after income taxes, why would you sell?

If you have along term lock on your interest rate, your job secure, keep the house and let the tenant pay the loan off for you.

More importantly, you bought in ’98, that’s still basically the bottom of last cycle.

[no_such_reality]

Bugs, given the number sitting empty out there and the amount foreclosures, I’m beginning to think Riverside et. al. will be lucky to hold 50%.

[no_such_reality]

Bugs, given the number sitting empty out there and the amount foreclosures, I’m beginning to think Riverside et. al. will be lucky to hold 50%.

[no_such_reality]

Bugs,

Any idea how the sales correspond to REO/NODs in those cities? You gave us what percentage was “must sell” inventory. I’m curious how that 94 sales in Vista for April compares to foreclosures in April in Vista?

Maybe I should rephrase that. I understand you gave us the percent of sales that were must sell. I’m wondering if we know how many foreclosures are in Vista and how many next foreclosures in Vista occurred in April. To get a read on ‘months of must sell inventory’ so to speak and to verify if the REOs are still stacking up faster than they are being cleared out. Make sense?

[no_such_reality]

Bugs,

Any idea how the sales correspond to REO/NODs in those cities? You gave us what percentage was “must sell” inventory. I’m curious how that 94 sales in Vista for April compares to foreclosures in April in Vista?

Maybe I should rephrase that. I understand you gave us the percent of sales that were must sell. I’m wondering if we know how many foreclosures are in Vista and how many next foreclosures in Vista occurred in April. To get a read on ‘months of must sell inventory’ so to speak and to verify if the REOs are still stacking up faster than they are being cleared out. Make sense?

[no_such_reality]

Temecula/Murrieta will have a real problem selling at any price until the foreclosure situation stabilizes. You’d have to be under a rock to step into that maelstrom where there’s a good chance multiple homes on the block will go foreclosure.

[no_such_reality]

Temecula/Murrieta will have a real problem selling at any price until the foreclosure situation stabilizes. You’d have to be under a rock to step into that maelstrom where there’s a good chance multiple homes on the block will go foreclosure.

[no_such_reality]

Well, Spanish is my third langauge. And while I’ve been in SoCal a while, I’m still limited to banos, cervesas, food and ?es en fuego sola? It’s bad Spanish, but they usually figure out what I mean.

Maybe I didn’t read intiendo right, I fudged, don’t know that word and couldn’t find a xlate on it.

What you say, makes sense on rereading with your clarification.

[no_such_reality]

Well, Spanish is my third langauge. And while I’ve been in SoCal a while, I’m still limited to banos, cervesas, food and ?es en fuego sola? It’s bad Spanish, but they usually figure out what I mean.

Maybe I didn’t read intiendo right, I fudged, don’t know that word and couldn’t find a xlate on it.

What you say, makes sense on rereading with your clarification.

[no_such_reality]

Of course, if those loans weren’t available, they’d all be crying about the unfair credit industry not loaning subprime the money.

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