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evolusd
14 years ago

Amazing to me how we have
Amazing to me how we have record default figures, but at the same time everyone is complaining about the lack of inventory.

Makes me think there are a ton of homeowners living in homes and not paying the mortgage, knowing that the Bank is planning to wait it out until the government makes them whole with taxpayer money.

I’m steering clear of this market.

SD Realtor
14 years ago
Reply to  evolusd

I cannot argue with you about
I cannot argue with you about those living in homes for free right now. I personally know two families doing that. One has not paid a dime on thier mortgage since last May. The other since September.

peterb
14 years ago
Reply to  SD Realtor

This RE market is in massive
This RE market is in massive dislocation. People living in homes and not paying their mortgage, shadow inventory waiting in the wings and a tsunami of defaults gathering huge momentum. Anyone who’s not under pressure, is not putting their house on the market. So there’s the inventory issue. The govt’s intervention is amazing. But the market will not be denied. This thing is going to blow-up somewhere in late 2009 or early 2010. This is going to be an all-time show.

urbanrealtor
14 years ago
Reply to  peterb

Peterb:
So Dr. Doom,
Will

Peterb:
So Dr. Doom,
Will this meltdown happen before I finish designing my Dune-style stillsuit?

I am trying to time its construction with my new engine that runs entirely on despair.

To Rich and Adam:
I am seeing NODs and REOs becoming progressively more decoupled.
It seems that lots of NODs never get to NOT.

My one client who has not paid since Feb of last year was just convinced by the bank to move back into his place and pay about half of what his payment was 2 years ago.

Your thoughts gentlemen?

peterb
14 years ago
Reply to  urbanrealtor

Dr. Doom. You say it like
Dr. Doom. You say it like it’s a bad thing.
I dont deserve it. I’m no Marc Faber.
But I did stay at a Holiday Inn last week.

Deccoupled? Foreclosure is a process from NOD to NOT. Things can happen in this process to stop or delay it. But, if one is in NOD status, what are the remedies? Sale, Short sale, get current, mortgage modification? What if the mortgage is upside down? Short sale, probably. But those are very problematic and not always too good for the owner. So I think most have to get to NOT.

I wonder how the bank is classifying your clients house? Their asset. He’s probably in violation of the loan contract. Non-performing..partailly performing? Is he renting from them now? Did the bank just do the mod themselves? A mortgage is a contract. Contract law applies. Sounds like it’s part of the shadow inventory now.

Does anyone know if Mr Mortgage has a new website yet? I cant seem to locate it.

urbanrealtor
14 years ago
Reply to  peterb

Petey:
The note is

Petey:
The note is essentially an option that the lender has the right to exercise (or not) given certain conditions. My comment regards my widespread (though anecdotal) observation that NOTs don’t seem to be arising in the way predicted by past relationships of NOD to NOT. Ergo, the banks are failing to exercise the option as much as expected.
To me this indicates the lenders don’t want these collaterals (the real property) to become the assets. They would prefer to keep the notes as the asset (even if those assets perform at a reduced rate).

Also, this would not be shadow inventory since the bank has not repo’d it and does not appear interested in doing so. I would categorize the shadow inventory as that where repossession is essentially inevitable (though again, the example I gave begs the question of what, exactly, that means) or where they have repo’d it and are just sitting on it and not listing it. Seriously though I think most shadow inventory is really due to the banks being overloaded with inventory.

peterb
14 years ago
Reply to  urbanrealtor

Urby:
Then, the bank has

Urby:
Then, the bank has decided to have an “under performing” loan instead of the property. Sounds like mark-to-market avoidance. Which may be why people are staying in homes 12 or more months after they’ve gone NOD. But there’s that “over loaded” excuse as well.
But, this is a lot of guessing and no real information.

Still, does anyone know about Mr Mortgages new website???

sdrealtor
14 years ago
Reply to  peterb

These NOD’s are still very
These NOD’s are still very concentrated in a limited number of ZIP codes. Still relatively few of them in the nicer parts of the county.

tdelamater
14 years ago
Reply to  peterb

Let me google that for
Let me google that for you

http://lmgtfy.com/?q=Mr.+Mortgage

peterb
14 years ago
Reply to  tdelamater

Thanks tdelamater. I tried
Thanks tdelamater. I tried that. But he’s no longer there. He said he was going to put up a new site. But that was well over a month ago and still no site…….

jpinpb
14 years ago
Reply to  peterb

I went to the old site. If
I went to the old site. If you subscribe, you can get more info. I’ve been so busy, I haven’t checked his site and didn’t even know he moved. He had a lot of good info. If I hear anything from the subscription about new address, I’ll post. But if you subscribe, you’ll probably get the same info.

I monitor NODs in about 10 ZIPs. sdr – I have seen a LOT of NODs in LJ and am beginning to see a more than usual amount in Carmel Valley. Point Loma and OB are fairing ok. PB has their share. It’s a mix and the NODs are not just limited to undesireable areas.

Now I agree that the NODs are taking an inordinately long time to go to NTS. I see many NODs attempt short sale and languish on the market for a verry long time while the banks try to squeeze whatever money they can out of the homeowner.

Banks are backlogged. Banks are waiting for bailout money. Banks don’t necessarily want to sell as it will show on their books as a loss. So many reasons. Delays forced upon them by government to allow homeowners more time, etc., etc.

As far as loan mods, I thought it’s only for conventional loans under a certain amount, which most places in SD are over, hence helping other states in the country but not really here.

jpinpb
14 years ago
Reply to  jpinpb

My understanding of loan
My understanding of loan mods:

“One part of Obama’s program offers refinancing to those who owe more than 80 percent of the value of their homes. And homeowners are ineligible if their first mortgage exceeds 105 percent of their home’s current market value.

In addition to seeking to clear the way for more mortgage refinances, the Obama plan asks the Treasury Department to work with lending institutions to modify mortgage payments so that certain borrowers pay no more than 31 percent of their incomes. Only owner-occupied homes qualify. No home mortgages larger than $729,750 will be eligible.

Interest rates, which now hover around 5 percent, could be temporarily cut to as little as 2 percent under the plan. ”

Basically delaying the inevitable some more. Doesn’t say how temporary. Rumors? 5 years?

“It seems minimal on the face of it,” said Mark Goldman, a real estate instructor at San Diego State University. “They really are not reducing loan balances. I don’t see how this will make a significant dent in the free fall. At this point, all help is welcome.”

sdrealtor
14 years ago
Reply to  jpinpb

FWIW, I know people that have
FWIW, I know people that have gotten loan mods 7 digit loan amounts.

rubberducky
14 years ago
Reply to  jpinpb

Robbing Peter to pay Paul.
I

Robbing Peter to pay Paul.

I got some advice the other day to seek a loan mod (I’m in day 100ish of waiting to hear back from the bank), but now that I think about it, I’ll be in the same hole in 3-5 years when it would come due.

When I consider how many people are being temporarily modified, I begin to wonder what housing will look like in 3-5 when their loan amounts climb back up and we end up in a smaller hole just like this one (it will be smaller, right?).

Anyone have any relatively solid data for the #/trend of loan mods? Wouldn’t that be interesting to know?

jpinpb
14 years ago
Reply to  rubberducky

3-5 years from now we should
3-5 years from now we should be in a stranglehold deathgrip of inflation.

rubberducky
14 years ago
Reply to  jpinpb

That was not the case with
That was not the case with the 1929 crash.

Prime did not go over 3% until the mid-50s.
http://research.stlouisfed.org/fred2/data/PRIME.txt

Which doesn’t mean it won’t happen this time.

Besides, Bernanke very likely wants inflation to effectively reduce the future cost of paying our outstanding debt.

(if a loaf of bread sells for one million dollars, then the fact that we own a paltry few trillion to China is negligible… right?)

jpinpb
14 years ago
Reply to  rubberducky

Great data! Thanks. Maybe
Great data! Thanks. Maybe there’s a glimmer of hope 🙂

peterb
14 years ago
Reply to  jpinpb

Yeah, I signed up for his
Yeah, I signed up for his info via email. Got nothing yet.
I’ve head many stories of 12 or more months without foreclosure for non performing. There’s a real conundrum out there.

Anonymous
Anonymous
14 years ago

We are starting to see a few
We are starting to see a few foreclosures in Coronado right now. I am amazed at some of the deals on the island right now!

Chris Van Tuyl
http://realestatesd.blogspot.com