[SDEngineer]

While I’m sure a homeowner could in fact manage to trash their house without leaving any real evidence as to who did it, I can think of any number of ways that MOST homeowners who trash their houses could be caught.

Did they snag everything even remotely portable to sell on Craigslist/E-bay? Trace that sale/auction posting back. Something tells me that sink came from somewhere.

Do they have neighbors? Neighbors can be excellent witnesses – especially since I suspect that anyone who WOULD trash a home they no longer own may not exactly be the best neighbor – it suggests they have anger issues.

In any case, the banks aren’t pursuing them – most likely because their legal departments are already swamped doing all the actual foreclosure work. It’s simply time and money they’d rather spend on other issues at this point.

[SDEngineer]

The historical relation in San Diego normally quoted between rent and purchase cost is generally somewhere between 150 and 200x rent, with the higher desireability places going for closer to the top. Since 12x annual is pretty close to 150, I think you may be using a “rule of thumb” that is designed more for areas that aren’t “premium” (e.g. Mira Mesa, La Mesa, etc).

Be that as it may, housing prices to rent ratios in San Diego are still significantly out of whack. At the peak of the bubble, I would guess they were up at about 300x rent as a general rule. They’re falling now, but as has been noted all over the blog, they’re falling first from the outlying and inland areas, and the correction is slowly making its way to the coast. It’ll be quite awhile yet before we get back to normal historical ratios. I suspect the Pt. Loma area though will not likely dip too much below 200x rent – it’s very central, and very popular, though not quite as chic an address as La Jolla or Del Mar.

[SDEngineer]

The historical relation in San Diego normally quoted between rent and purchase cost is generally somewhere between 150 and 200x rent, with the higher desireability places going for closer to the top. Since 12x annual is pretty close to 150, I think you may be using a “rule of thumb” that is designed more for areas that aren’t “premium” (e.g. Mira Mesa, La Mesa, etc).

Be that as it may, housing prices to rent ratios in San Diego are still significantly out of whack. At the peak of the bubble, I would guess they were up at about 300x rent as a general rule. They’re falling now, but as has been noted all over the blog, they’re falling first from the outlying and inland areas, and the correction is slowly making its way to the coast. It’ll be quite awhile yet before we get back to normal historical ratios. I suspect the Pt. Loma area though will not likely dip too much below 200x rent – it’s very central, and very popular, though not quite as chic an address as La Jolla or Del Mar.

[SDEngineer]

The historical relation in San Diego normally quoted between rent and purchase cost is generally somewhere between 150 and 200x rent, with the higher desireability places going for closer to the top. Since 12x annual is pretty close to 150, I think you may be using a “rule of thumb” that is designed more for areas that aren’t “premium” (e.g. Mira Mesa, La Mesa, etc).

Be that as it may, housing prices to rent ratios in San Diego are still significantly out of whack. At the peak of the bubble, I would guess they were up at about 300x rent as a general rule. They’re falling now, but as has been noted all over the blog, they’re falling first from the outlying and inland areas, and the correction is slowly making its way to the coast. It’ll be quite awhile yet before we get back to normal historical ratios. I suspect the Pt. Loma area though will not likely dip too much below 200x rent – it’s very central, and very popular, though not quite as chic an address as La Jolla or Del Mar.

[SDEngineer]

The historical relation in San Diego normally quoted between rent and purchase cost is generally somewhere between 150 and 200x rent, with the higher desireability places going for closer to the top. Since 12x annual is pretty close to 150, I think you may be using a “rule of thumb” that is designed more for areas that aren’t “premium” (e.g. Mira Mesa, La Mesa, etc).

Be that as it may, housing prices to rent ratios in San Diego are still significantly out of whack. At the peak of the bubble, I would guess they were up at about 300x rent as a general rule. They’re falling now, but as has been noted all over the blog, they’re falling first from the outlying and inland areas, and the correction is slowly making its way to the coast. It’ll be quite awhile yet before we get back to normal historical ratios. I suspect the Pt. Loma area though will not likely dip too much below 200x rent – it’s very central, and very popular, though not quite as chic an address as La Jolla or Del Mar.

[SDEngineer]

The historical relation in San Diego normally quoted between rent and purchase cost is generally somewhere between 150 and 200x rent, with the higher desireability places going for closer to the top. Since 12x annual is pretty close to 150, I think you may be using a “rule of thumb” that is designed more for areas that aren’t “premium” (e.g. Mira Mesa, La Mesa, etc).

Be that as it may, housing prices to rent ratios in San Diego are still significantly out of whack. At the peak of the bubble, I would guess they were up at about 300x rent as a general rule. They’re falling now, but as has been noted all over the blog, they’re falling first from the outlying and inland areas, and the correction is slowly making its way to the coast. It’ll be quite awhile yet before we get back to normal historical ratios. I suspect the Pt. Loma area though will not likely dip too much below 200x rent – it’s very central, and very popular, though not quite as chic an address as La Jolla or Del Mar.

[SDEngineer]

JP: re the recourse/non-recourse state thing.

If they were like a lot of RE speculators, they may very well have done cash-out re-fi’s to cover carrying costs, pay for their standard of living, and provide seed money for further RE speculation. And, of course, these re-fi’s would have turned a non-recourse loan into a recourse loan. I suspect that they have enough recourse loans on the books to wipe them out.

[SDEngineer]

JP: re the recourse/non-recourse state thing.

If they were like a lot of RE speculators, they may very well have done cash-out re-fi’s to cover carrying costs, pay for their standard of living, and provide seed money for further RE speculation. And, of course, these re-fi’s would have turned a non-recourse loan into a recourse loan. I suspect that they have enough recourse loans on the books to wipe them out.

[SDEngineer]

JP: re the recourse/non-recourse state thing.

If they were like a lot of RE speculators, they may very well have done cash-out re-fi’s to cover carrying costs, pay for their standard of living, and provide seed money for further RE speculation. And, of course, these re-fi’s would have turned a non-recourse loan into a recourse loan. I suspect that they have enough recourse loans on the books to wipe them out.

[SDEngineer]

JP: re the recourse/non-recourse state thing.

If they were like a lot of RE speculators, they may very well have done cash-out re-fi’s to cover carrying costs, pay for their standard of living, and provide seed money for further RE speculation. And, of course, these re-fi’s would have turned a non-recourse loan into a recourse loan. I suspect that they have enough recourse loans on the books to wipe them out.

[SDEngineer]

JP: re the recourse/non-recourse state thing.

If they were like a lot of RE speculators, they may very well have done cash-out re-fi’s to cover carrying costs, pay for their standard of living, and provide seed money for further RE speculation. And, of course, these re-fi’s would have turned a non-recourse loan into a recourse loan. I suspect that they have enough recourse loans on the books to wipe them out.

[SDEngineer]

SDR:

No, because the funds are given back to the gift organization by the seller after the close. It’s legal because the program is operated by a 501(c)3 non-profit charitable organization, which is eligible to provide “gift” funds for the down payment under FHA guidelines (just like a family member could). The funding for the program is then provided after the close by the seller, so the program is reimbursed. They can’t get the funds from the seller before closing, or it would be considered a direct seller contribution to the down payment, expressly forbidden under FHA guidelines.

It’s definitely an unintended loophole, but one the FHA hasn’t been able to get legislated closed (and given current economic conditions, since it’s one of the few ways to get a 0 down, I don’t see politicians having the stomach to expressly close it in the near future). The FHA has, however, managed to exclude a LOT of these gift programs for violation of IRS rules regarding 501(c)3 charitable organizations (excessive fees, salaries, etc). The Nehemiah program, however, is still operational.

[SDEngineer]

SDR:

No, because the funds are given back to the gift organization by the seller after the close. It’s legal because the program is operated by a 501(c)3 non-profit charitable organization, which is eligible to provide “gift” funds for the down payment under FHA guidelines (just like a family member could). The funding for the program is then provided after the close by the seller, so the program is reimbursed. They can’t get the funds from the seller before closing, or it would be considered a direct seller contribution to the down payment, expressly forbidden under FHA guidelines.

It’s definitely an unintended loophole, but one the FHA hasn’t been able to get legislated closed (and given current economic conditions, since it’s one of the few ways to get a 0 down, I don’t see politicians having the stomach to expressly close it in the near future). The FHA has, however, managed to exclude a LOT of these gift programs for violation of IRS rules regarding 501(c)3 charitable organizations (excessive fees, salaries, etc). The Nehemiah program, however, is still operational.

[SDEngineer]

SDR:

No, because the funds are given back to the gift organization by the seller after the close. It’s legal because the program is operated by a 501(c)3 non-profit charitable organization, which is eligible to provide “gift” funds for the down payment under FHA guidelines (just like a family member could). The funding for the program is then provided after the close by the seller, so the program is reimbursed. They can’t get the funds from the seller before closing, or it would be considered a direct seller contribution to the down payment, expressly forbidden under FHA guidelines.

It’s definitely an unintended loophole, but one the FHA hasn’t been able to get legislated closed (and given current economic conditions, since it’s one of the few ways to get a 0 down, I don’t see politicians having the stomach to expressly close it in the near future). The FHA has, however, managed to exclude a LOT of these gift programs for violation of IRS rules regarding 501(c)3 charitable organizations (excessive fees, salaries, etc). The Nehemiah program, however, is still operational.

[SDEngineer]

SDR:

No, because the funds are given back to the gift organization by the seller after the close. It’s legal because the program is operated by a 501(c)3 non-profit charitable organization, which is eligible to provide “gift” funds for the down payment under FHA guidelines (just like a family member could). The funding for the program is then provided after the close by the seller, so the program is reimbursed. They can’t get the funds from the seller before closing, or it would be considered a direct seller contribution to the down payment, expressly forbidden under FHA guidelines.

It’s definitely an unintended loophole, but one the FHA hasn’t been able to get legislated closed (and given current economic conditions, since it’s one of the few ways to get a 0 down, I don’t see politicians having the stomach to expressly close it in the near future). The FHA has, however, managed to exclude a LOT of these gift programs for violation of IRS rules regarding 501(c)3 charitable organizations (excessive fees, salaries, etc). The Nehemiah program, however, is still operational.

[Author]

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