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bobthebuilder
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Posted: Thu Feb 28th, 2008 03:49 pm |
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Stupid question, but how much does it actually cost to build a new 1,400 square foot home? Can the housing prices realistically stay below that amount for long? It would seem to me that it would cost a bit more than $89,000 to build a new house outright.
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anne.reed
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Posted: Thu Feb 28th, 2008 02:40 pm |
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http://www.fool.com/investing/dividends-income/2008/02/26/how-big-will-the-bank-bailout-get.aspx
How Big Will the Bank Bailout Get?
By Christopher Barker February 26, 2008
Judging by Monday's gains in shares of most big banks, investors must have missed a certain New York Times article over the weekend.
The piece cited a confidential Bank of America (NYSE: BAC) bailout proposal the bank presented to members of Congress. In its plea for help from the federal government, the Times reported, the document "warns that up to $739 billion in mortgages are at 'moderate to high risk' of defaulting over the next five years and that millions of families could lose their homes."
$739 billion? With a "b"? Numbers this huge demand a moment to pause for reflection. Total losses to date from this crisis throughout the global finance sector amount to $200 billion. Apparently, Bank of America not only foresees that total rising by 370%, but also warns that the trouble may drag on for half a decade. The sum is nearly five times the $150 billion total of the fiscal stimulus package that Congress approved earlier this month, representing nearly 5% of U.S. GDP.
What does this mean for Bank of America?
If Bank of America has adopted forecasts that quantify the potential cumulative industrywide losses from the mortgage crisis, has the bank conveyed its projected portion of those losses to shareholders within the company's recent earnings report?
Bank of America's 2007 annual report revealed $8.18 billion in remaining exposure to mortgage-related CDOs after writedowns, which sounded like a lot until this news. Although B of A did report an eyebrow-raising $104 billion in "special purpose entities liquidity exposure," it's clear that the market didn't think the company would actually lose that much. With Bank of America now becoming the largest mortgage lender, the company's share of a $739 billion loss would be substantial indeed.
How does it affect the Countrywide merger?
This revelation raises questions about Bank of America's acquisition of Countrywide Financial (NYSE: CFC), announced last month. After initially reading the move as CEO Ken Lewis' giant gamble that the U.S. slowdown would be less severe and shorter than many anticipated, I now wonder whether it was an entirely different sort of bet.
The Federal Reserve and the Bush Administration have drawn their lines in the sand with respect to the U.S. markets, indicating that they will consider any measures to stave off massive equity losses. Within this context, they can ill afford to let any of the enormous banks go under.
Was the Countrywide merger a strategic gamble that the resulting size of the company would exert even greater pressure on those in power to guarantee the company's survival? What did Ken Lewis know, and when did he know it? These are all questions that shareholders will undoubtedly be asking as these losses unfold.
With the merger priced at an 80% discount to Countrywide's 52-week highs above $40, though, it is entirely plausible that Bank of America perceived long-term value at $8 per share. At least one Countrywide stakeholder agrees.
Will Bank of America be the only victim?
Hardly. Major mortgage-lending competitors Wells Fargo (NYSE: WFC), JPMorgan Chase (NYSE: JPM), Washington Mutual (NYSE: WM), and Citigroup (NYSE: C) will presumably face their share of losses as well. Across the pond, too, European banks with significant exposures to mortgage-backed securities, such as UBS (NYSE: UBS) and Deutsche Bank, are sure to join the fray. The results for European markets and the euro itself could be similarly painful.
What's the bottom line for investors and consumers?
If the losses spur the type of bailout for which Bank of America is lobbying, consumers will foot the bill through tax increases and/or inflation. If the government leaves the markets alone, a reversal from recent actions, we'll face plummeting equity markets and a continued credit crunch, matched with severe home devaluation and overall stagflation.
In either case, investors can expect further spillover from mortgage defaults into losses on credit card debt, auto and student loans, commercial real estate, etc. Somehow, I suspect that even this $739 billion number will not be the banks' final answer.
For me, the light at the end of the tunnel was extinguished this weekend. For anyone who owns a major mortgage lender, this is your last call to run, not walk, to the nearest exit.
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pipeman
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Posted: Thu Feb 28th, 2008 02:38 pm |
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StanTheMan wrote: Isn't Johnson Ranch in the Queen Creek area? I just purchased a foreclosure home...1400 sq.ft. for $89k. It's a great little home! Things are tough all over. I think that wherever you have a dominance of starter homes you will have a problem with foreclosures, especially in a market like this. But, many can benefit from this market!
Stan, Johnson Ranch and the rest of us out here have a Queen Creek mailing address "ONLY". We are not in Queen Creek or their city limits..........PERIOD. . We are actually in unincorporated Pinal County. We have been trying to get realors to stop telling people that this is Queen Creek, but to date that has not happened As seen by the posting below.Last edited on Thu Feb 28th, 2008 02:50 pm by pipeman
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anne.reed
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Posted: Thu Feb 28th, 2008 02:37 pm |
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StanTheMan wrote:
Isn't Johnson Ranch in the Queen Creek area? I just purchased a foreclosure home...1400 sq.ft. for $89k. It's a great little home! Things are tough all over. I think that wherever you have a dominance of starter homes you will have a problem with foreclosures, especially in a market like this. But, many can benefit from this market!
Yes, Stan, Johnson Ranch is in Queen Creek but not within the city limits. In fact, we are not even in the same county as Town of Queen Creek.
You are absolutely right, things are tough all over. However, I don't think the problem will be limited to the starter home market. I think this devaluation will continue through all price points within the market as it is a function of two factors:
1) Banks loaned money to speculators, first time buyers and everyone inbetween, without regard for their ability to repay the debt.
2) American consumers stopped living within their means, but began living on their inflationary profits from the housing boom.
I am pleased for your good fortune and welcome you to the community. But, $63.00 per square foot (89000/1400) is a pretty shocking price decline. Many residents have existing mortgages over $120.00 per square foot. What that means is to sell their homes they would need to pony up about $90,000 in the case of a 1400 square foot home. The fact that you purchased this home as a bank repo, creates further pressure on developers and builders to "fire sale" their inventories, lay-off workers, and do whatever they must to remain in business. Each of these factors fuel the downward pressure on real estate markets and the US economy, Meaning, the trend will probably get a lot worse before it gets better.
Regards,
Anne
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StanTheMan
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Posted: Thu Feb 28th, 2008 02:10 pm |
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| Isn't Johnson Ranch in the Queen Creek area? I just purchased a foreclosure home...1400 sq.ft. for $89k. It's a great little home! Things are tough all over. I think that wherever you have a dominance of starter homes you will have a problem with foreclosures, especially in a market like this. But, many can benefit from this market!
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anne.reed
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Posted: Thu Feb 28th, 2008 12:25 am |
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Dear Bambi:
Yes, I am sure that the foreclosures listed in 85242 are mostly in 85243. Probably someones' web search for Queen Creek, AZ turned up 85242. All in all, we are Queen Creek whether they acknowledge us or not. Our fate will be their concern as well as ours.
Regards,
Anne
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Bambi
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Posted: Tue Feb 26th, 2008 06:30 pm |
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anne.reed wrote: http://money.cnn.com/2007/06/19/real_estate/500_top_foreclosure_zip_codes/index.htm
In Arizona, Queen Creek has the most foreclosures with 271 by June 2007. This is pretty significant since we are such a small community when contrasted with the major metropolises which top the list. As these figures are updated I fear we will continue to climb the ladder of homeowner despair. Maricopa, Buckeye and other "hot" markets are not far behind.
Regards,
Anne
The danger of using zip codes for the foreclosure list in this case is that it includes Pinal County's Johnson Ranch area, so it's not really a true picture of Queen Creek or our area.
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starleen
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Posted: Tue Feb 26th, 2008 06:24 pm |
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I got this website from the AZ republic blog for the foreclosure article. I don't know if the stats are true but it's sure interesting:
http://phoenixflippers.blogspot.com/
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starleen
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Posted: Tue Feb 26th, 2008 06:09 pm |
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| I wonder how many of the foreclosures are on owner-occupied homes as opposed to invester owned properties.
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anne.reed
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Posted: Tue Feb 26th, 2008 06:06 pm |
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http://money.cnn.com/2007/06/19/real_estate/500_top_foreclosure_zip_codes/index.htm
In Arizona, Queen Creek has the most foreclosures with 271 by June 2007. This is pretty significant since we are such a small community when contrasted with the major metropolises which top the list. As these figures are updated I fear we will continue to climb the ladder of homeowner despair. Maricopa, Buckeye and other "hot" markets are not far behind.
Regards,
Anne
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Bambi
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Posted: Tue Feb 26th, 2008 12:56 pm |
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Well, the latest news is from this mornings new....Arizona ranks 4th in the Nation for foreclosures. Nevada is first.
Worse yet. In the month of May, many loans are due to "roll over" to those higher interest rates. They are expecting another wave of foreclosures from that.
How can we compete with the foreclosures sales? We're approaching a $100,000. spread now between what the guy paid for the home and what it's worth today.
Last edited on Tue Feb 26th, 2008 02:00 pm by Bambi
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Bambi
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Posted: Sun Feb 10th, 2008 12:48 pm |
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Wise beyond her years wrote: I surprised you are recommending a variable rate loan in this economic environment.
Predatory lending practices and irresponsible referrals from professionals are in large part culpable for the heart ache we see flooding across Johnson Ranch, Queen Creek and other prime targets for sub prime lending.
How about FHA Secure or Mortgage Hope? These are new government sponsored programs for homeowners who got sucked in by the greed that motivated people to finance their lifestyle with inflation. Sadly, most are already upside down on their property (owe more than the property is worth) and these programs aren't designed to assist them.
As Morgan points out, some lenders are willing to streamline loans to reflect more favorable rates.
Just imagine how ugly it's gonna get when the underwriters as well as the lenders start dropping like flies.
Recommendation: If you are buried in an ARM or interest only note:
List your property with a Canadian broker (the value of their dollar is favorable for US investment)
Bring your payments current (beg, borrow...)
Get all your tax returns filed and current (requirement of Fannie Mae and Freddie Mac lenders)
Don't even waste your time or money (applications fees often apply) applying for a commercial loan (they aren't even available to well qualified individuals with 70% LTV ratio-Stick to FHA or VA products in this market
Don't expect the interest rates cuts by the Fed to improve rates for consumers (it's just a bank bail out)
Don't fall prey to that mortgage lender that offers a mortgage that's too good to be true, it probably is
I did not recommend any loans. I identified these loans as being available. You are proving to be a person who is on here to undermine my posts and to give false guidance.
I recommend to posters and readers alike to research what this poster has posted before you embark on her directions. Some of her comments have been taken from other articles. And I do not suggest you list your property with a Canadian Broker. I suggest you have your realtor contact a Canadian Broker, and hope for a referral.
Last edited on Sun Feb 10th, 2008 01:35 pm by Bambi
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Wise beyond her years
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Posted: Sat Feb 9th, 2008 08:27 pm |
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I surprised you are recommending a variable rate loan in this economic environment.
Predatory lending practices and irresponsible referrals from professionals are in large part culpable for the heart ache we see flooding across Johnson Ranch, Queen Creek and other prime targets for sub prime lending.
How about FHA Secure or Mortgage Hope? These are new government sponsored programs for homeowners who got sucked in by the greed that motivated people to finance their lifestyle with inflation. Sadly, most are already upside down on their property (owe more than the property is worth) and these programs aren't designed to assist them.
As Morgan points out, some lenders are willing to streamline loans to reflect more favorable rates.
Just imagine how ugly it's gonna get when the underwriters as well as the lenders start dropping like flies.
Recommendation: If you are buried in an ARM or interest only note:
List your property with a Canadian broker (the value of their dollar is favorable for US investment)
Bring your payments current (beg, borrow...)
Get all your tax returns filed and current (requirement of Fannie Mae and Freddie Mac lenders)
Don't even waste your time or money (applications fees often apply) applying for a commercial loan (they aren't even available to well qualified individuals with 70% LTV ratio-Stick to FHA or VA products in this market
Don't expect the interest rates cuts by the Fed to improve rates for consumers (it's just a bank bail out)
Don't fall prey to that mortgage lender that offers a mortgage that's too good to be true, it probably is
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Bambi
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Posted: Thu Feb 7th, 2008 06:01 pm |
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Exciting news. You can now get a 3/1 ARM or 5/1 ARM mortgage for 4.8% According to lenders, we are in a mini refi boom. So, hopefully, we should start to see purchases start to pick up.
Lower the rates again Federal Reserve....1/2 point will due just fine.
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Bambi
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Posted: Thu Jan 31st, 2008 05:26 pm |
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For a good comprehensive view of the real estate lending market, try this site.
http://www.bankrate.com
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Bambi
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Posted: Wed Jan 30th, 2008 12:37 am |
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Well, I just heard on the news that two million, that's 2,000,000 more loans are due to have their interest rates rise this year and next on those subprimes and others with that type of escalation clause. And that foreclosures rose 80% in 07 over 06. Some staggering figures, that i guess we think can be averted with a $600. tax credit?
No one can buy an attitude change, and that's what we need.....with the assistance of a leader who knows how to lead us into that mentality of spending frugally, without the fear of it being our last dollar...our last meal.....our last job....before doomsday? A war costing us $720 million dollars a day, benefiting those in the "War" business, Corporations benefiting from that 720 mil., encouraged by the military industrial group of powerbrokers, who will be eventually running this planet....if we allow it to happen.
Off with the old and on with the new.....attitude, and let's cause this change to occur.
I hope the Feds bring that rate down a point....one whole point....and FHA introduces that program right afterwards, it just might help us make that attitude adjustment.
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Bambi
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Posted: Sun Jan 20th, 2008 02:56 pm |
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Now you are witnessing Homebuilders merging, to offset their losses, or to keep themselves from going out of business completely. I have seen this happen in other recessions, and is the first step towards recovery for them....sharing the winnings is better than no winnings at all.
The Establishment urging us to spend our money carefully, and even getting ready to spur that urge by releasing money to us. Now what will we do with that money? Spend it or pay overdue bills with it? Save it out of fear of running out of money? Yes, that will happen too, making the gift of that money useless in it's objective.
I met a man from SRP who is in their accounting dept. He says SRP is also hurting, as many people are just not paying their utility bills.....not just a few, but thousands, who have been effected, so thus continues the "trickle down" effect. Now, watch our utility bills rise, to offset their losses.
Today, if you can qualify, you can get an ARM 3/1, at only 5% interest. They're heading downward. Soon it will be 4%. And when FHA introduces that loan where you only have to come in with 1.5% down, at 4% interest, it will be like a candy store opening....or that's the effect it "should" have on us, if history repeats itself. Now just find the right house to go with it; purchase it; and the prices will start rising slowly again, and we'll be on the road to recovery.....barring a war or effects thereof. More jobs will be created as a result, thus more homes built to house those "jobbers", more business's opening up to serve them and on and on....trickle. And, if it get's too aggressive, then you'll see those interest rates heading back up as a way to regulate that growth. So, let's go easy this time around.
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SanTanEvents
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Posted: Fri Jan 18th, 2008 11:50 pm |
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Bambi wrote: The foreclosure market is hot. Lots of buyers for those. The small builders I used to sell vacant lots to, are now buying these foreclosures. They can make just as much money buying those and not lifting a finger, as they can building a spec. house....so the vacant land market is flat.
I say look to 2008/early Fall, before we start bouncing back. There are many people who have walked from their homes, and the lender has yet to discover it.
I absolutely agree with that.
I've been checking historical stats for the month of January. Mainly because we were in the recent bubble and boy, did it burst. Many of my friends and neighbors are upside down in their homes. Buying at the peak and are riddled with buyers remorse. They come to me, "did you see that spec home with granite countertops? It's only $156k. I owe $220k on my home right now. What can you do for me?" Oooh, I don't want to answer that.
Anyway, I came here to talk numbers. It's been interesting to see what the numbers show.
Here's the skinny for Jan. In our area:
(These stat's include Queen Creek Proper & The unicorporated parts of P.C using the QC Mailing Address)
Month Year # of Homes Sold Avg. Sale Price
Jan 2002 13 144,576
Jan 2003 41 170,110
Jan 2004 46 173,099
Jan 2005 122 224,058
Jan 2006 112 308,000
Jan 2007 109 265,835
Jan 2008 66/clsd 202/awc&pending 144,755
With a possible 268 sales for Jan 2008 (the month isn't even over yet), and the prices retro'd to 2002, it has created another buying boost. Does that mean prices will increase? Not in the immediate future. We still have a very, very large inventory, 396 homes were listed for sale so far this month & and it's only Jan. 18th. Many of the seller's being banks & lenders pricing well under market value. Until that "just listed" number drops well below the amount of homes being sold I don't see home values increasing anytime soon.
For those of us that bought at the peak, it hurts, we are broken & weary. If you can't compete with the market my ultimate advice is don't sell. Don't list, don't add to the problem. If you can tough it out, try. Become a landlord or what ever you need to do. With it being harder & harder to find financing rentals have been coming back. If you absolutely need to sell and are willing to AGGRESSIVELY compete & possibly take a loss, there ARE buyers are out there, but they are bargain hunting.
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Bambi
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Posted: Mon Jan 14th, 2008 09:22 pm |
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Here's the entire Valleys MLS Inventory.
Homes active and on the Market: 61,381
Homes unsold and on the Market: 58,212
Homes sold in last 30 days: 3,169
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Bambi
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Posted: Mon Jan 14th, 2008 08:43 pm |
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I just receieved the Maricopa County Foreclosure list for this week. Last time I reported it, there were 642 homes being foreclosed upon.
This week it's 1300.
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Bambi
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Posted: Fri Jan 11th, 2008 03:18 pm |
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It's a crazy market out there. Cyclical. And so are people's emotions and confidence level. Receiving more calls recently. Can't wait till FHA offers their new program with only 1.5% down.
Feds meeting this month again. Hopefully they will reduce the rates a 1/2 point to a point.
Bank of America bought out Countrywide for billions.
Here's a link to Az. Multiple Listing Service's Home Sales Per Month Chart, showing sales from 2001 to 2007.
http://www.armls.com/pdfs/SoldChartNov07.pdf
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Bambi
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Posted: Thu Jan 3rd, 2008 01:07 pm |
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Times are still "tuff" out there. But, upon receiving the homes in foreclosure from the Title Company, there are fewer....156 pages....4 to a page. Not sure what significance that has, as may be due to Holidays....hopefully not.
173,000 people moved into our valley last year. And I think they all came out to the San Tans.
Mad Money is still advising people not to buy real estate, but instead to invest in oil and healthcare. Then he states, 2009 will be the time for real estate to pick back up. Soothsayers, but this guy is usually right on.
Prices still going down with the Builders, who are the ones setting the "pace" out here. They have told us that they will stop lowering prices the beginning of the new year.....let's see if they are speaking the truth.....developers speaking the truth....that's a new one.
Real estate offices still closing down, besides our Remax 2000 offices and Century 21 Metro Alliance in Q.C. Notice they are all Franchises and Run by Corporations? And that they shut us down without warning, bouncing our checks (Remax only)? And now they want us to come back as they have "fixed" the problem? They are the Problem. I have decided to take on the image of your Home Town (what town?) Real Estate Company. I am hiring a Broker today for Bambis Team, that is not tied to any large Corporation or Franchise.....just a local guy, who has a degree in Political Science; teaches Real Estate Law for the State, and teaches seniors in high school, Real Estate Law and the business. I am delighted to have such a great professional overseeing me. The County may not like it though, as he is like me, and will not allow indiscretions committed by a political body on it's citizens.
Talking about County......David Kuhl, one of the Department Heads of Planning and Development, was employed at Pinal before Christmas, but is not employed there after Christmas.....took another job.....kudos to him. He was good at what he did, but I think, and I say think, that he just couldn't work under that type of regime. He was also the one working on my case. Sorry to see him go.
Last edited on Thu Jan 3rd, 2008 01:16 pm by Bambi
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Bambi
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Posted: Tue Dec 18th, 2007 10:21 pm |
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Here's some good news. One of the best programs available right now is FHA. After the first of the year, it is said that the loan limit will be raised to $417,000 from the current limit of $203,150. And, the down payment wil be lowered to 1.5% instead of 3%. FHA Loans are not credit based so lower FICO scores are acceptable.
Now, there is also the FHA Streamline loan. IF your parents have good credit and you have shown a good history of making timely payments on another home for about 2 years, but have some other credit issues, this is the program for you. Tell your parents that after 6 months on the loan, and as long as you have made timely payments during that 6 months, the parents can be taken off the loan and it's all yours...the kids.
See Morgan's husband. He's a lender.
Last edited on Tue Dec 18th, 2007 10:22 pm by Bambi
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Bambi
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Posted: Wed Dec 12th, 2007 05:23 pm |
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nilbog wrote: 2 cents wrote: Why in the name of Harold would you take out anyother kind of loan than a 30 year fixed?
I have a 30 year fixed, with a good interest rate. So on Monday I get something in the mail from Countrywide (not my lender) asking if I'd like to refinance to a 40 year fixed mortgage. It was helpful to point out that I'd have extra money in my pocket each month. And I thought, sure, I'd love to still be paying a mortgage when I'm in my mid 70s!!
That company deserves what it gets.
Lets dissect this 30 and 40 year mortgage.
The purchaser is taking out a $150,000. mortgage, at 6% interest rate, amortized over 40 years. That equates to a grand whopping $246,153.82 dollars in just interest alone paid out to Countrywide's investors, with a payment of $825. a month, P and I only. A 30 year is $173,757.28 in interest alone, with a payment of $899. a month. Sure they want your business and it's easier to qualify for.
Now lets take out a 15 year mortgage at 6%, based on the $150k. Interest paid is only $77,841.34 over the 15 years. Payment is $1265.79 a month, P and I. Higher payment equals higher qualifying standards applied. But, the payment here is applying more money towards the principal than the interest, so is a much better deal in the long run.....you save a $100,000. in cash.
Most Arms are amortized over 30 years, and are all due and payable in a shorter time (2,3 or 5 year time frames usually). Those payments usually only cover the interest, as the balloon will be for almost the original amount financed. They are primarily used to "buy time."
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nilbog
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Posted: Wed Dec 12th, 2007 04:53 pm |
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2 cents wrote: Why in the name of Harold would you take out anyother kind of loan than a 30 year fixed?
I have a 30 year fixed, with a good interest rate. So on Monday I get something in the mail from Countrywide (not my lender) asking if I'd like to refinance to a 40 year fixed mortgage. It was helpful to point out that I'd have extra money in my pocket each month. And I thought, sure, I'd love to still be paying a mortgage when I'm in my mid 70s!!
That company deserves what it gets.
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2 cents
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Posted: Wed Dec 12th, 2007 01:11 pm |
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Why in the name of Harold would you take out anyother kind of loan than a 30 year fixed? You're just asking for trouble. Most of us are non-professional when it comes to the smoke and mirror shell game.
Flippin' idiots!
2 cents
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Bambi
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Posted: Tue Dec 11th, 2007 12:56 pm |
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Well, let's see if I can remember what I heard this a.m.
First: We are number one in Foreclosures.....Arizona.
As a tenant. If you discover your landlord's home you live in, is being foreclosed upon, you should stay put; put the payment(s) in an account to accrue, because if the foreclosure sale does not go thru, and the landlord takes it back, you will still owe those back payments. If the sale does go thru, your lease becomes null and void and you best hit the road...quickly. But, now you have money saved, to do it again.
Mad Money Man believes as I do. If the Feds don't drop that interest rate at least a half a point, we will see a recession. A full point would even be better. Remember, soon after 911, they were down to 1 point to stimulate the economy, and it worked.
The State is suffering a budget loss in 08 of around $1 billion. It will escalate up to 1.5 billion in 09. That means job losses and more foreclosures. It creates a dommino effect.
So, here's a Presidential candidate who wants to rid ourselves of excesses.
http://www.abcnews.go.com/video/playerindex?id=3971133
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Bambi
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Posted: Wed Nov 21st, 2007 01:39 pm |
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Another day. Appears that Countrywide has finally decided to offer some relief to it's mortgagees....albeit a bit too late perhaps.
Waiting 8 months to do this is a corporate greed factor. They have been foreclosing willingly on these properties, then sell the forclosed property to another party, usually an investor, and then proceed to write a new loan for the investor, which is enough to cover the loss on the old one. The consumers loss is their gain.
And who gets the short end of the stick? the original consumer that was talked into taking out a 2 year ARM, with an incredible interest escalation, with the illusionary promise that his equity will escalate to cover the increase.....poor advice by loan officers in order to make a buck. False promises. Crystal balls. But all legal. The Feds better devise and install some better protectionary "devices" for the consumer in the equation, or it will just happen again and again.
Don't accept any ARM loan that is less than 5 years, and tell them you want no interest escalations before the baloon is due. Better yet, stick with the 30 year fixed, unless you are a very sophisticated buyer and are aware of the pitfalls of ARMS.
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Bambi
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Posted: Fri Nov 16th, 2007 03:59 pm |
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Boy oh Boy. I wish I could hear some good news for a change. Just a little wisp of a cool breeze that has fresh flower petals flowing thru it, building my confidence and courage as it begins to lift my spirits.
But no. This week alone, we have had three, that's 3, couples come into our office, seeking shelter again as they were "duped" into believing their landlords word. The landlords "word" of promise was that as his tenants and as long as they pay their rent, they can live in his/her home.
Not true. There are no guarantees. The 3 different landlords of these three families was not passing the payment onto the mortgage company. They were spending the rent money on personal items, and allowing the home, with the tenants occupying it, to go into foreclosure. The Lender sent their reps over to take possession of the homes.....unbeknownst to the tenants. They had to leave immediately.
So, lesson learned. When you go to sign a lease agreement, perhaps you should insist on writing the check to cover the Mortgage, to the Mortgage Co. every month, and the second check can be the overage, made out to the landlord.
Last edited on Fri Nov 16th, 2007 04:00 pm by Bambi
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Bambi
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Posted: Sun Oct 21st, 2007 05:47 pm |
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Ok now. Let's see some of the events happening in this industry.
Feds are due to decide on interest rates in a another week. Best buff their crystal ball, for a clear view.
Housing slowdown is going to play out for alot longer. People are still walking away from their homes, as the solutions provided by the lenders has come a day late and a dollar short. Where were these lenders when the people were first asking for help? They were in their cushioned seats, in their air conditioned offices, telling these people with a cockey attitude, that no help will arrive until they are three months in the arrears. That's too late. Then the lender changed their minds, and are now coming with offers...too late once again...no one there any longer to answer the phone or pick up the mail. A stingey attitude was the accomplice to this event.
Those homes are now vacant, awaiting the lender's representatives to take them over and take them to auction where those that have saved their money for this day, can buy them for 5 cents on the dollar.....investors. Then those same investors turn around and rent that house out to the same guy, who asked for that lender to lower the payment amount in the first place to the rate they gave the investor.
Last month, builders broke ground on the fewest number of homes in 14 years. The Confidence level among these builders is the lowest in 27 years............ that means fewer jobs; no job? can't purchase much of anything; now business are closing down as no customers; Realtors closing down as no customers.....the domino effect. What's going up? Taxes!
Drop those interest rates. Builders; get those prices back up again.
And don't look for me on the Our Queen Creek site. We are finished with that Site. Now, we just operate the Bambisteam.com site and will expand upon that.
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bobthebuilder
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Posted: Fri Oct 19th, 2007 09:09 pm |
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San Tan Heights has plenty of occupied houses as well. It's a decent place to live and of all the communities in the San Tan area, it has by far the best location. Don't knock it too quickly. Not to mention we can actually see the San Tan Mountains from our houses.
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winative
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Posted: Fri Oct 19th, 2007 07:59 pm |
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I agree, investors should have more strict guidelines to follow when purchasing homes. Now we have all these vacant rental homes in San Tan Heights and all the other communities too. I knew all these investors would create a falsely growing housing market out here.
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Bambi
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Posted: Sun Oct 14th, 2007 03:35 pm |
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winative wrote: I think the market will take longer than 2008 to bouce back. Prices just went up too fast. My home appreciated 75% in two years, now it's back down to a realistic value. Not to mention a lot of subprime lenders went under due to people defaulting on loans.
I spoke with a lady who works for a mortgage company, and she said she knew an investor from California who owned six rental houses in Pinal County. He is letting the bank forclose on all of them. These forclosures whether they are purchased or not, can't be good for our housing values.
I guess the market will bounce back when the emotional level and confidence of the Amercian people is restored.....maybe 08/maybe not. Just speculating on 08 since it's a Presidential election year, and the Govt. usually pumps money into the economy during that time to "rev" people's engines. Just remains to be seen I guess.
There are many buyers/investors, out there that are purchasing these foreclosures, and many are down to a price that is for the balance of the loan, which is about what the market value is anyway. Also, the realestate community is offering classes on Short Sales to the salesman, as those type of sales are also dominating the market. So, in reality, the resale Market is good and people are buying from these happy sellers.....only the sellers are Lenders, not the resident, and the buyers are investors(mainly). So the original (California)"investor" of the six homes, is now walking and consequently, another investor is buying it. So, the 6 investor homes owned by one investor, are now 6 homes, owned by 6 investors......what's changed? ... the lender wants to unload these foreclosed/shortsale homes, so whoever shows up to take this albatross from around their necks, is welcome and will probably receive preferrential treatment. And if these homes cannot be rented, which if not rented, then the cycle will just start all over again.
Investors should be required to make a down payment of 30% min., to help insure they won't walk, as a $30k plus down payment is hard to walk from. The main reason the investor bought it was because he was offered prime borrowing terms, with little down, in a good market. When FHA loans were all assumable years ago, an investor would get that type of loan, milk the equity, then sell it to another person/investor, by allowing the buyer to assume it with no qualifying. That had to stop as it was a flagrant violation of the intent of the FHA loan....another learning curve.
Remember; those stats I posted here about sales vs. listings, is only based on the current Realtors MLS Inventory....not homes sold via lenders thru foreclosures/short sales, or other reasons.
Last edited on Sun Oct 14th, 2007 04:18 pm by Bambi
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winative
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Posted: Sun Oct 14th, 2007 08:22 am |
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I think the market will take longer than 2008 to bouce back. Prices just went up too fast. My home appreciated 75% in two years, now it's back down to a realistic value. Not to mention a lot of subprime lenders went under due to people defaulting on loans.
I spoke with a lady who works for a mortgage company, and she said she knew an investor from California who owned six rental houses in Pinal County. He is letting the bank forclose on all of them. These forclosures whether they are purchased or not, can't be good for our housing values.
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Bambi
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Posted: Thu Oct 11th, 2007 06:11 pm |
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In the last 30 days, there have been only 3,546 resale homes sold in the Valley.....out of 57,000. That's extremely low. We have a long way to go before absorbtion.
Regardless, try to renogotiate your ARM's, rather than walk. The lender can modify the loan, if he so desires.
The foreclosure market is hot. Lots of buyers for those. The small builders I used to sell vacant lots to, are now buying these foreclosures. They can make just as much money buying those and not lifting a finger, as they can building a spec. house....so the vacant land market is flat.
I say look to 2008/early Fall, before we start bouncing back. There are many people who have walked from their homes, and the lender has yet to discover it.
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Bambi
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Posted: Fri Sep 28th, 2007 06:48 pm |
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Well, todays mortgage update sent to me by Sterling Mortgage, states rates have returned to the 5% range again. Even Jumbos are looking real good (over $417k).
15 yr. fixed loan at 5.8%
3 yr. fixed ARM for 5.7%
They even still have Subprimes and extreme subprimes....don't understand that. Of course, they don't mention the interest rates on those guys....14%?
It's a start.
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americana
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Posted: Mon Sep 3rd, 2007 12:35 am |
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I DONT THINK ITS AS BAD AS IT SEEMS ,FORCLOSURES THAT IS.
PEOPLE ARE CHANGING THEIR MINDS ABOUT HOME OWNERSHIP,
TIRED OF HOA'S & THEY FEEL THEY'VE MADE A MISTAKE PURCHASING.
THEY DONT CARE IF FORCLOSURE TAKES EM... AT LEAST THEY ARE OUT.
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Bambi
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Posted: Fri Aug 31st, 2007 05:55 pm |
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Good info. and insight morgan.
Listen; I would like to start a real estate and mortgage info page on my ourqcsite., which would give out the latest information in the industry and how it impacts us. I would also like to have a forum so we as realtors, mortgage brokers and title companies, can share our information and answer questions of the community. We're all local and part of this community as resident business owners. If you're interested, p.m. me. I think this would be a service to the community. no hard selling...just information and discussion.
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morgan
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Posted: Fri Aug 31st, 2007 04:44 pm |
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Something has to be done - everyone is losing their homes. Who else can step in and help these people? Its sad that many people over bought - purchasing a home they could only afford with a low-rate arm.
You may have had a mortgage company who:
1. sold the short-term adj rate to the customer w/out advising what it would mean down the road if the customer did not have ample income or better credit scores - or they did tell the customer and ..
You may have had a customer who:
1. fully understood what they were getting themselves in to and decided to deal with refinancing out of the short term adj rate - later. unfortunately later came faster than expected and the customer didn't plan (improved credit scores and income) there is also a chance the customer was clueless and didn't full understand but signed the docs anyway.
From the article: If we're going to allow (lenders) to be refinanced out, what we're doing is saving them from their own greed. ... It might be good politics, but it's very bad policy."
Also i agree bambi in respect to the Arizona market - people will find it hard to find 3% equity in their home since many are upside down. So much for the FHA helping the homeowners in AZ.
I think the president bush said this is really an offer to help - not "bailout" call it what you want .. it is what it is.
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Bambi
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Posted: Fri Aug 31st, 2007 01:41 pm |
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The Govenment is not just bailing out the borrowers....they're bailing out the lenders.
And who has 3% equity in their home out here? Most are upside down.
But, if one "fits" the criteria, then yes, indeed, it will work and both the lender and the borrower are happy, and low qualifying standards and no money down will cinch the program's success. Too bad for all those people who have already walked.....we had 3 homes scheduled to be listed, and they decided to walk. Too bad it took this long to come up with a plan for the consumer.
More to come when Bush speaks. Have to see/hear the entire program to determine it's viability in our market.
Morgan: your in this business. What's your take on this bailout using FHA?
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morgan
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Posted: Fri Aug 31st, 2007 01:27 pm |
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| http://www.azcentral.com/news/articles/0831fha-loans0831.html#
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Bambi
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Posted: Thu Aug 23rd, 2007 01:50 pm |
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OZ wrote: Does anyone honestly think $100,000 homes in 2008 are good for the area???
We had a discussion about this before. These homes were not being occupied by large numbers of young starter couples but, many of them were loaded with a large number of people per home and it was noted by neighbors that this was where alot of the trouble was coming from in one community
OH, and if you don't speak English they have a spanish translation for the D R Horton homes!!!!!!!!
Sorry Oz. Yes, they do sometimes bring problems, but this is America and Horton builds affordable homes. The number of people in a home is usually governed by a municipality's laws. Tempe only allows so many per bedrooms. HOA's sometimes govern this too. One can make and enforce laws to govern certain types of behaviors, but discrimination is not one of them. We're not a municipality, so you will have to take it up with the County.
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OZ
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Posted: Thu Aug 23rd, 2007 03:24 am |
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Does anyone honestly think $100,000 homes in 2008 are good for the area???
We had a discussion about this before. These homes were not being occupied by large numbers of young starter couples but, many of them were loaded with a large number of people per home and it was noted by neighbors that this was where alot of the trouble was coming from in one community
OH, and if you don't speak English they have a spanish translation for the D R Horton homes!!!!!!!!Last edited on Thu Aug 23rd, 2007 04:45 am by OZ
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Bambi
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Posted: Thu Aug 23rd, 2007 01:25 am |
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Boy, I saw some great houses (models) today out here, and some are offering up to $45,000. in an incentive package....plus pay for your closing costs. You can deduct the incentive package from the price of the home. The homes are worth it....trust me. Not alot of whistles and bells, but that just raises the price anyway. Starting in the low $100's, deduct the incentive from the price, place your downpayment ($500.), and voila....you're below $100k for a mortgage amount.
How they doing it? Bulk sales. They have sold 35 in just two weeks. Can't believe it.
Now how does one compete with that?
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gk
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Posted: Wed Aug 22nd, 2007 06:52 pm |
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| Thanks to Terry.......the local data and info guru ...........here is the latest report from the realty board Attachment: ARMLS2Q07.pdf (Downloaded 10 times)
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morgan
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Posted: Wed Aug 22nd, 2007 06:35 pm |
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Bambi wrote: Remember that if you walk or are foreclosed upon, that it will be two years before you will be able to qualify at a decent interest rate, so try hard to maintain.
bambi is right - try hard to maintain.
the mortgage industry is reverting back to the way it used to be with requiring better credit scores, money down, proof of employment for qualifying. the days of not so good credit scores, 100% financing and "no docs" are becoming a day of the past.
if you have a short term adjustable rate loan i'd like to suggest you contact your lender to see if its to your advantage to switch over to a fixed rate loan. there are many variables that will determe this - credit score, the loan amount, the value of your home (you want comps on homes that have sold, not prices of homes currently 4-sale) length on the job - verifiable income. etc. there are still loan options out there - but - keep in mind the lenders are tightening their belts.
if you already have a fixed rate or long term adjustable, are happy in your home and not going anywhere - the news of the lenders closing down really doesn't affect you.
you can pm me if you have any mortgage questions or email me at | | |