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no_such_reality
ParticipantBuying foreclosures is chic right now. It’s what the smart money is doing, haven’t you guys seen the infomercials?
I want to go, just to see the process and get a feel for what the “investors” are bidding. Then again, maybe I’ll just wait for OC county to start having decent auctions and show up there.
Then again, maybe I’ll just cold call and introduce myself to the people at Countrywide that handle the REOs for the cities I like. Their backlog grows steadily and even though they don’t have many in the areas I want, they have plenty across the State and I’m confident they’re all starting to feel the volume.
no_such_reality
ParticipantHeck I’ve seen 30% on a $10,000,000 land purchase where the developer needed the money for entitlements.
I think everybody’s point here is that the real purchase price of the above was $7,000,000. The 2nd point is those cash backs should all be disclosed and aren’t.
Hence what is really happening in many cases, the above is being listed as a $10,000,000 sale with no information on cash back and the lenders often are kept blind too.
April 18, 2007 at 11:02 AM in reply to: Strawberry Picker Buys $720,000 House on $15,000/yr Income #50483no_such_reality
Participantnot just 1 person earning $15k.
See how the media likes to distort the truth 🙂
No, the four buyers thought that’s what they were doing. I won’t get into whether two families with a combined income of $80,000 a year can afford a $720,000 home, that’s a different discussion.
One buyer, making $15,000, is the only one listed on the loan. The agent & mortgage broker played New Century’s inept underwriting and should be investigated for potential fraud of their clients.
New Century’s fault – funding a $720,000 loan with a $15,000 income. We’ve seen them do worse, so no surprise there.
Agent’s fault – pretty obvious if she was contributing to float the difference between wanted payment and needed payment until the magic refiance didn’t occur. Not to mention the questionable purchase price.
Broker/Agent fault – putting forward a single borrower loan when a four borrower loan was done. Wonder if other docs were doctored?
Two couples fault – not bringing someone to actually tell them what they were signing.
Anybody want to take a shot at how a bail-out will work for them?
For them to afford the home, you first have to forgive $200,000 of the purchase price and then refi them into an interest only loan at the current 30 year treasury rate to get them to a payment that will be 41.3% of their combined incomes.
This is why the bailout will fail to save the market, there is no saving these kinds of deals.
no_such_reality
ParticipantLOL, that’s the REALTYTIMES singing don’t worry, be happy. The government going fix everybody’s loans so nobody has to sell for less than they paid.
no_such_reality
ParticipantIt really doesn’t require much thinking – it only requires listening to what mortgage professionals are saying
Umm, isn’t that the same guys that started this mess?
but we are talking about minimizing the carnage by way of loan reworks
Yeah, rework. Read- refinance. They’ll put you in a new secure advantage loan if you have some equity left and run the clock another two years.
In the end, the math is still the same, they’re sitting with a $600,000 loan and holders want a real rate of return. If they have to take 1/2 the return, they’ll take half the return, right now, in full. They aren’t going take half the return for the next 30 years.
In the end, the people can’t afford LIBOR, let alone any margin. That’s a fundamental problem they won’t be able to address without a forebearance of the loan amount. Increase risk requires increased return, it’s a market fundamental.
They aren’t going to recast the Casey Serin’s, Casey and the clowns like him probably own half the trouble real estate around.
no_such_reality
ParticipantI do not see how the transaction would have made it through underwriting.
You ask this question when the television news shows document New Century loans with blank income statements and no assets?
Okay well why wouldn’t the buyer simply buy the home for 500k at 100% financing? Why would the buyer incur a higher property tax assessment, why would the seller possibily incur a higher cap gains tax (if it was an investment property)?
Fraud prereq. You have a home that won’t sell at $500,000. Probably won’t sell until $470,000 or less with a qualified buyer.
Fraud 101. The buyer wants house and boy would a new $30,000 toy, like a new truck be nice. With his cruddy credit, when’s he ever going to a loan for a new truck?
Fraud 102. The seller has a home he can’t unload for the last 180 days, there are other similar houses around that can’t get sold and they want the same or even less, along comes buyerman who will give me the whole amount…
Fraud 103. With a $500,000 capital gains tax freebie for living in it, as long as seller man doesn’t trip that, he and his wife are fat dumb and happy. As for the buyer, $30,000 now for $300/yr later. Psst, I doubt he even thinks about the tax bill anyway.
Fraud 104. Every is on the take. Seller makes $30,000 more than he would and doesn’t have to wait, buyer man gets $30,000 for his new toy, and Agent man gets the sale that wouldn’t occur and gets $32,000 commission to carry back to his brokerage, maybe more if the co-op was fattened to keep them happy.
no_such_reality
ParticipantMuch as many feel that the housing downturn is just getting started, I say with equal confidence that the loss mitigation machine is just getting warmed up.
So what?
Think it through. They’ll be able to offer you a couple extra months to get on your feet after a job loss, other than that, nobody is going along for the ride.
It’s simple, the bulk of the loans out there are not going to default because of a job loss, medical illness, but for one very simple reason, they can’t afford the payment at market rate for their loan amount.
It’s even worse, they can’t afford to make the interest payment on the loan if they got the government T-bill rate.
What they can afford is something that charges about $300 for every $100,000 they’ve borrowed a month. They have a $450,000 magic loan that is letting them pay $1350 a month, the boogeyman is coming and wants his $3000 a month. This game is over. Nobody is letting the little Casey Frauderboys squat with their $700,000 if they aren’t getting their $4500 a month anymore.
Scummy deals are still being made though the lights coming on and the kitchen floor is covered in roaches that are about to get stomped.
no_such_reality
Participant.
no_such_reality
ParticipantWhy is the owner giving you a $100K freebie?
Fraud, end of discussion.
no_such_reality
ParticipantI’ll 2nd east side Costa Mesa or SouthCoast area.
Look around a bit, Irvine is clean but a bit sterile and traffic and parking rival high density down town areas in many of Irvine’s tracts.
Another major thing to consider is exactly where you will be working. The morning and afternoon commute can really suck through Irvine and up/down the 5/405.
no_such_reality
ParticipantSpeeding is breaking the law. At any point, an officer can apprehend you for breaking the law by speeding.
When excessively speeding, the punishments become rise in equal porportion.
When speeding is done intentially for other illegal purposes, such as street racing, the penalties become more stringent.
When something else happens during the speeding, such a car crash during a street race, even more stringent penalties such as trying the drivers for homocide.
So you see, Casey may be right, he’s like the deluded street racer with their modified subarus racing down the street past a school, one car wrapped around a telephone pole and couple kids dead in the crosswalk.
no_such_reality
ParticipantSuch a tragic tale. Immigrant Farmer making $15,000 get’s $720,000 loan and can’t afford it
I know, you’re all shocked.
There’s no bailing this out. There’s throwing the executive mmanagement team of New Century and others like them in jail, real jail. As well as the realtors and brokers that participated in theses schemes. That’s the only bailout that will fix this mess.
no_such_reality
ParticipantWHY IN THE WORLD tax payers would bail stupidity
Because the Pols are playing the vote gathering card.
Voter turn out is apathetic at best, Seniors (home owners), and established middle aged citizens (home owners) vote the most.
The pols knowing that most voters are home owners either dependent of the equity for retirement or on the housing ATM are playing the “I’m protecting your home from the actions of greedy unscrupulous evil big corporations (lenders)”
Given that the majority of American pay very little tax after child credits and home interest deductions, most say why not. You can see from the IRS 2004 taxes paid table that 85% of the population have an AGI under $100,000, with an AGI between $75,000-$100,000; their average tax bill was $8500.
2/3rds have incomes under $75000, those between $50K and $75K AGI have a tax bill under $5400.
Under $40,000 AGI, that’s 60% of the population filing, less than $2500.
An AGI under $30,000, that’s half of the population filing, tax bills run under $1824.
That’s the root of the problem, too many carry too little of the burden of providing for the government programs.
no_such_reality
ParticipantPeople often price rents by that the “need” to get. Once a home sits on the market for a while, then it’ll be priced at market rate.
If they have substantial equity. For many of the rentals with current exorbinant “need to” rents, they won’t come to market, the owners can’t handle that much negative cashflow a month.
The OP is thinking ahead well. If the owner is currently extended, their room to negotiate with a good tenant is very limited.
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