[zeropointzero]

I would definitely/do consider them — I would hate to pay an HOA for services I didn’t need/use, property taxes are significant where I live (Northern Virginia) — I managed to appeal mine down (from 585k to 515k). As far as Mello Roos go — such fees are assessed the builder and/or made up through property taxes around here. Everyone bitches about property taxes around here, but nobody does much about it.

The thing that worries me is the future pension/healthcare obligations of my town – and my understanding is that San Diego has some significant issues as far as this goes, too. I am not against making sure teachers and public safety personnel are well taken care of in retirement – but I do think that few people understand the obligations that municipalities will be under in the coming decades. In other words, just wait until retirement obligations REALLY start to come due for cities/towns/counties/states around the country.

On the other hand – at least you’re not in Florida – where you’re also getting hammered by crazy insurance increases. Are any parts of So Cal getting drilled by fire-related insurance increases?

Thanks for bringing this up – property taxes / HOAs / Mello Roos / insurance = “death by a thousand cuts”

[zeropointzero]

Agency issues aside, Lulu ….. are you concerned about buying a house in this market environment? Care to share some other details on the potential purchase? (feel free to keep some details out, so no one else gets your dream home).

Just curious. Good luck in any event.

[zeropointzero]

I don’t think there is any “agency” relationship that is established through the act of showing a home. If you didn’t sign any paper acknowledging him/her as your agent, I think you’re fine.

Of course – you should let the new agent know the situation, and don’t be suprised if you get a testy phone call from the other agent if he finds out.

Still – it’s a little unfair to the first agent if he unearthed the house for you. Also – is this new agent a friend/acquaintance of some kind? If so – that’s also a little unfair. But, I don’t think there’s anything keeping you from doing it from a contractual/legal standpoint.

[zeropointzero]

If it wasn’t for the LTV thing kicking in, it would be a great gamble for someone. Hell – save your housing money for 10 years and walk away to Belize or something like that.

And – wouldn’t it be a great situation if the dollar got drastically devalued at some point? (Of course – a fixed mortgage is really good under that situation, too, right?)

If you could just somehow get that deal in a low-property tax region to boot, you would really be set.

Please – some supply some more details on this.

[zeropointzero]

Well, thanks for illuminating this practice, SD. I see why a bank might do this in certain situations. I’ll certainly look forward to seeing if it becomes something that actually becomes something that we hear more about. I still think it’s odd that they can’t figure out a way to reduce payments or change the amortization schedule rather than write off principal. These bankers must think the road back for the RE market is going to be a long one.

The funny thing is that they’ll probably get some of the houses back in forclosure, anyways, even with the principal forgiveness

[zeropointzero]

Wouldn’t it just be simpler for the lender to let folks defer payments rather than give up principal? I mean, in terms of having to re-record the deed (or whatever is needed) and take an record an instant and signifigant loss on their books?

Maybe I’m not sophisticated in terms of understanding the banking/lending industry, but it just seems like this is the LAST thing a bank would want to do in terms of accounting priorities – and also, to a lesser degree – fairness and complexity issues.

[zeropointzero]

Sounds crazy to me. If they just do it for homeowners who are delinquint, wouldn’t that encourage other folks to stop payments as well to get this deal?

And – if they cut a portion off the principal, and the indivdidual then sells and gets out even – well, that’s a no-win proposition for them as well.

But – if the good people at Chase Mortgage are willing to cut $50k or so off my $260k loan balance if I hold my payments hostage for a little while – hey, I’m all for it and sign me up.

I can imagine banks lowering payments for a short while for some folks, extending amortization schedules – steps that meet people halfway but still largely preserve lender income – but I can’t see them cutting off large (or even small) parts of the obligations that they have already paid to the happy previous sellers. Kwazy!

[zeropointzero]

You don’t have a large mortgage on a potentially depreciating asset in a city in the desert that is highly sensitive to national econimic trends. You don’t a mortgage payment that may reset to an unaffordable rate at some point in the next couple years, or has a prepayment penalty, or is actually adding to your principal balance. You have time to hopefully get a good handle on what is happening in the market and strengthen your own financial situation. Sounds to me like you’re just fine.

Of course – none of that matters if wifey’s not on board! 🙂
Seriously though – sounds fine to me. And about the few bucks you lost on your last transaction – that sounds like a lot less expensive education than others are receiving from the current marlet. Cheers!

[zeropointzero]

In terms of my income tax, deductibility generally kicks me back about 2 months of payments (PITI of about 2,200 a month). In my experience – it helps, and it keeps my costs (with a 20% down, 30 yr. fixed) pretty much in line with what it would cost me to rent a similar place (in Old Town, Alexandria, Va.)

BUT – what I am not sure about is where deductibility starts to lose steam if the AMT Alternative Minimun Tax) comes into play — which it hasn’t yet for me — but, I have read that it can for folks with significant property tax and state income tax as deductibles. Anyone been caught in the AMT trap?

[zeropointzero]

The low barriers to entry to the RE industry surely has allowed some lesser lights to join — and the last five years has allowed some of these folks to even thrive, as long as they could find listings and motivated buyers. On the other hand — the industry does attact some folks with energy and hustle, at least.

Of related intest — is there any way to track growth in “owner is lic. RE agent” listings? Surely there is going to be some real shakout from RE agents who assumed mortgages that cannot withstand a significant downturn in income in the coming months and years.

[zeropointzero]

“$500,000 is the new $750,000”

[zeropointzero]

It’s not the “schadenfreude” for me …. I take no pleasure in people in possible bad financial straits, no matter what their story or motivation.

For me, it’s just that the changing of momentum in the real estate market is interesting to watch. Seeing how the confluence of group psycology, economic optimism, boosterism and “creative financing” drove prices up has been interesting as heck — and watching these same forces in reverse is also going to be awfully interesting as well.

As a homeowner myself, I hope it doesn’t get too bloody.

[zeropointzero]

I am not as familiar (forunately) with all the machinations of ARMs — is the 6 mo. prepayment pentaly:

a) a prepayment penalty that is in effect for six months after loan originates (in other words, you could pay off after 7 months)? If this the case – how much is the penalty?

or

b) is the penalty six months worth of interest? If this it the case, how long is prohibition on repaying?

Just curious. Good luck!

[zeropointzero]

I’ve been addicted since stumbling on the site (via reference LA Times online article, I think) two weeks or so back.

I find it fascinating from my spot here in Alexandria, Virginia (close-in suburb of Washington, DC) – lots of similarities in terms of market psychology, overuse of ARMs and exotics, and condo inventory increasing in DC and close in suburbs. I think there is less sheer flipper and speculation activity than some of the frothiest markets – but we’re still due for some rude awakenings around here soon.

I’m addicted because the changing market is just going to be such a slow motion train wreck – anyone who really takes a close look can see it coming – and it’s going to really be interesting to see how it shakes out and how it ripples through the economy and society. I don’t relish the pain it’s going to cause some folks – but damn, it’s going to be so big that you can’t help but watch!

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