4 Million Homeowners 90 Days Delinquent - PeachParts Mercedes-Benz Forum

MTI · #1 02-17-2010, 05:16 PM

Prediction of Large Number of Foreclosures Looms for US Banks

It's unclear when those distressed properties would hit the market, but their large numbers are likely to push home prices back down this year, to a bottom in the fourth quarter, Chen said. And that would make things worse for the 25% of homeowners who already owe more on their mortgages than their houses are worth.

The biggest blows will be felt in California, Florida, Nevada and other states where home prices have dropped the most and the ranks of struggling homeowners have swelled.

Nevada had the highest delinquency rate, at 16 percent, followed by Florida, Arizona and California. The national average was 6.89 percent.

Skid Row Joe · #2 02-17-2010, 05:22 PM

Quote:

Originally Posted by MTI

It's unclear when those distressed properties would hit the market, but their large numbers are likely to push home prices back down this year, to a bottom in the fourth quarter, Chen said. And that would make things worse for the 25% of homeowners who already owe more on their mortgages than their houses are worth

That's what I've been thinking too. Many are moving a little soon on home purchases.

raymr · #3 02-17-2010, 05:26 PM

Darn, just when we thought those bonuses were safe!

pj67coll · #4 02-17-2010, 06:18 PM

My wife and I could find ourselves amongst that group soon enough. We've survived the layoffs this year but the state's economy is so screwed that I wouldn't be surprized if we wind up out of work next year. In which case we dump the house.

- Peter.

Hatterasguy · #5 02-17-2010, 06:30 PM

Can't pay the mortgage without a job, lack of jobs is the problem.

OTOH they need to keep that tax credit going, thats a great program that has motivated a lot of people to buy up this inventory.

Another problem is that people are still not saving money and buying houses through FHA financed at nearly 100%. I still think if you can't put at least 10% down you have no busines buying a house.

raymr · #6 02-17-2010, 08:53 PM

Quote:

Originally Posted by pj67coll

My wife and I could find ourselves amongst that group soon enough. We've survived the layoffs this year but the state's economy is so screwed that I wouldn't be surprized if we wind up out of work next year. In which case we dump the house.

- Peter.

Can you take in a tenant or 2 instead of dumping the house? You still have to live someplace.

#7 02-17-2010, 08:59 PM

I count myself very lucky that both me and my wife still have a job. I hopeeveryone is able to get past this and be okay.

#8 02-17-2010, 10:48 PM

Quote:

Originally Posted by pj67coll

My wife and I could find ourselves amongst that group soon enough. We've survived the layoffs this year but the state's economy is so screwed that I wouldn't be surprized if we wind up out of work next year. In which case we dump the house.

- Peter.

I doesn't sound like selling a house in Phoenix is that easy these days. I know some folks who are about $200k upsidedown on a house there. They would like to move for a better job, but can't sell without taking a big loss.

pj67coll · #9 02-17-2010, 11:39 PM

Quote:

Originally Posted by Hatterasguy

Another problem is that people are still not saving money and buying houses through FHA financed at nearly 100%. I still think if you can't put at least 10% down you have no busines buying a house.

Why stop at 10? Why not 20 or 30 or more?

- Peter.

pj67coll · #10 02-17-2010, 11:41 PM

Quote:

Originally Posted by raymr

Can you take in a tenant or 2 instead of dumping the house? You still have to live someplace.

For various reasons, unfortunately not. Yes, we still have to live someplace but if we were to wind up unemployed we'd likely leave Phoenix and wind up with relatives in other states looking for something else.

- Peter.

#11 02-17-2010, 11:49 PM

Quote:

Originally Posted by pj67coll

Why stop at 10? Why not 20 or 30 or more?

- Peter.

I agree 10% down on a property that might lose 30 or 40% of it's value is too risky for the lender. I certainly wouldn't buy something if I only had 10% down.

pj67coll · #12 02-17-2010, 11:52 PM

Quote:

Originally Posted by Craig

I doesn't sound like selling a house in Phoenix is that easy these days. I know some folks who are about $200k upsidedown on a house there. They would like to move for a better job, but can't sell without taking a big loss.

The Phoenix property market was the most stupidly overpriced in the entire country. The bubble here was the most severe. And the crash essentially the worst. In fact the only thing driving the greater Phoenix area economy (which is most of Arizona's growth) over the last decade was the biggest Ponzi scheme in state (and US) history. Namely the local manifestation of the property bubble.

We made the wrong decision as it turned out, buying a 200K house that was ludicrously valued at almost 300 the year before. Even I in my naturally pessimistic nature didn't for see just how badly it would all implode. Our house is essentially worthless. I don't mean that it's probably worth about half what we paid for it, I do mean that it is for all practical intents and purposes worthless. If we had to sell soon (say we lost our jobs) we would be lucky to get 30 or 40 for it. Which means we're stuck with 160 to 170K millstone around our necks which we would never be able to pay off.

I recently spoke to a property "flipper" who had just sold two properties in our area for about 60K each. That means he probably got them for 30 to 40 which is what I base the value of our place at right now.

We didn't do the damm arm loan thing. We did a straight 30 year fixed at 6 percent, then refied at 5 when we could. However there are so many arm loans still going to reset in the next year or so that we will see even greater swathes of foreclosures than recently.

In my opinion all sub-divisions that are still 50 percent or more vacant lots should simply be demolished and returned to farm fields. That's about the only chance we have of maybe, perhaps, sort of, stopping the hemorraging, if were lucky.

- Peter.

#13 02-17-2010, 11:59 PM

Yup, my friends bought a house for about $350k (down from about $400k) a couple of years ago; now the would be lucky to sell it for $150-200, which won't even cover their loan. They don't want to walk away, but they have better job opportunities elsewhere and are not willing to put their careers on hold for 5 years waiting for the housing market to recover. The whole situation there sounds like a mess.

Hatterasguy · #14 02-18-2010, 12:05 AM

Quote:

Originally Posted by pj67coll

Why stop at 10? Why not 20 or 30 or more?

- Peter.

Well I'm torn. On one hand I don't really give a damn as long as people keep buying my houses and I keep making money.

OTOH they really should be able to put something down. I'm starting to see the same crap again through FHA that got us into this mess. 5% or less down, and everyone wants the seller to pay closing costs. Now granted the people these days have far better credit and strong income. The underwriting is far better.

Hatterasguy · #15 02-18-2010, 12:12 AM

I feel bad for you guys in markets like that. I'm glad my market was spared a lot of that.

OTOH if I was in the land of nice $40k house I'd be picking them up left and right to rent them out or do lease options on them maybe if I was feeling ambitious.

I know a flipper in AZ who is making bank, he flipped 20 houses last year and wants to double that this year. He seems to price his houses right around $100k and makes 20%-30% on each one. Nice business. If you know what your doing its a good market, all the competition is bankrupt.