Cubic Zirconia_IHB
New member
LOL! I am the one 
Do you know people who are likely to lose their homes?
- Thread starter IrvineRenter_IHB
- Start date
NEW -> Contingent Buyer Assistance Program
California Association of Realtors 2009 Forecast
http://www.car.org/economics/housingmarketforecast/
Your examples are the type that piss me off. I can see if you lose your job. I can even sort of see if you took an adjustable rate and you didn't expect the new payment to be so high. But people who walk away just because they are upside down are a different story. They signed a contract, they gave their word they would pay so much a month, they can afford to pay so much a month, they just don't feel like honoring their word.
Also, the banks aren't doing anybody any favors for taking so long to foreclose on people. Word has gotten out that banks now take a year (or more) to kick somebody out after they have stopped paying. A year's worth of free rent is yet another incentive for upside down folks to stop paying-so even more people are doing so.
I hadn't really stopped to consider that, but it is true. I may use that idea in a post...
Correct. Some preliminary numbers - 600K loan that you walk from - $4000 a month. HOA - $150 a month. Property Taxes - $1000 a month. Insurance - $150 a month.
So you don't pay any of this for one year. You just kick back and enjoy the view. You've just saved $63,600! Pop that into a savings account and you're already to buy the next place in a couple of years.
Luckily, the evil and morally bankrupt folks that do this will spend every dime of the 64K on updated cars, Disney Cruises for the family, flatscreens and dinners out. Then they'll spend another 15K on their credit cards. Once they are on the street, completely out of money and STILL owe 30K on their credit cards they will declare bankruptcy and move to Iowa.
No offense to Iowa.
There is this property on Somerville. I believe that person staying there has stopped paying mortgage for almost an year when I went to see the place. She didn't let us in when we stopped by to see the place. Our realtor had an appointment and all, but she just said my kid is sick and shut the door.
I didn't understand why an underwater homeowner wouldn't want to sell their home and cooperate with the buyer/ realtor then.. My realtor had to explain to me that she was living free.. Now I know why short sale open houses are only for 3-4 hours on a Sunday, open late, close early.
I have always had a hard time with this question. Sort of a chicken or the egg question but I guess it could be broken down if someone really had the time and energy to do some research into people's reasons for walking away. In my nanny's case, she bought for 575K, current value is 240K, it just seems like a no-brainer. They can continue to pay by having 4 people working full time in the house and all of their money going to the mortgage as it has since they bought. The reset is coming and that will end it anyway. Will the house ever be worth 575K in their lifetimes? There is also that other sticky point as to their reasons for buying the house in the first place. They were suckered in by some of the biggest low life scums on the planet, people who they trusted because they spoke their language and catered to the Hispanic population. Of course, they were supposed to refinance and be able to pay off their debt within one year with all of the wonderful equity they were supposed to have. Crazy.
Graph noticed a house around the corner from me go back to the bank a week or so ago. 5-6 cars still in the driveway or parked on the street. Everyone still living there. I drive by every day to go to the gym so I'm keeping track of how long they stay before the bank actually makes them vacate.
Guy in my neighborhood probably sold the house to them. Spoke Spanish, drove the Escalade with the massive rims and wife drove the Lexus. Bought three places of their own. Had a subprime mortgage company that catered to Hispanics. Fell into foreclosure on two of their houses. Their last house (the one in our neighborhood) is 15K back in property taxes and they haven't paid HOA in a year. Liens from their auto company on this last house. Declaration of Homestead on this house. Quitclaim from the wife to the husband on this house. Their subprime mortgage company has State Liens like you wouldn't believe.
And they must have 100 customers just like yours. I don't know how they sleep at night. They still drive the nice cars and swim at the HOA pool. They just don't pay any of the bills.
Tick tock, Clarice. Tick tock.
Anonymous_IHB
New member
OCCOBRA said:
California Association of Realtors 2009 Forecast
http://www.car.org/economics/housingmarketforecast/
freedomCM_IHB
New member
I wonder what is really going to happen to sales volume this year? Will they really be able to generate 550k sales?
Are there going to be enough low-end FCs to support that level of sales?
Will enough long-time equity owners sell into this market?
Will there be more mid-priced houses selling at enough of a discount to create a market in the $350-$600k range?
Are there going to be enough low-end FCs to support that level of sales?
Will enough long-time equity owners sell into this market?
Will there be more mid-priced houses selling at enough of a discount to create a market in the $350-$600k range?
tmare_IHB
New member
Update on the nanny just today, she says three more months and they will stop paying. I just can't figure out if she knows it's going to happen in three months, why she's not doing it now. I've essentially been stifled by the fact that I was vehemently opposed to this purchase in 2005 and told her so on numerous occasions. When she said "If only we had known" in 2008, I just had to bite my lip and shut up. I could have strangled her at that point but she is far too important to our family and I truly do love her. At least I can't say that I didn't try.
usctrojanman29_IHB
New member
Some people have to learn the hard way. As much as I hate saying this, most people are sheep and don't use their brain when making such a big decision as purchasing a home.tmare said:
trrenter_IHB
New member
I have a few and they frustrate the hell out of me.
1.) Bought house in the IE, did go through a divorce but he can still afford the payments. Recently moved back into the home with no intention of paying the mortgage. His new fiancee and he are going to live rent free until the bank kicks them out and save all that money the were paying on rent. If/when the bank kicks him out he will move across the street and rent where it is half the cost. He freely admits he isn't paying because the house is upside down.
2.) Person "owned" three properties. One was out of state they bought when they were transfered. They new the transfer may not be permanent but since RE always goes up they may as well buy then sell at a profit when they leave. Well they couldn't sell the house at a profit, they were actually going to take a slight loss. Most of which were selling cost and some loss in equity. They decided it would be much easier just to mail the keys back. So they did because they shouldn't have to take a loss. If they knew they may have actually lost money they would have rented. I think something is up with the other property they own because they are trying to dump that now. What is nice is though for them is they have not lost a dime they still have their 2 new cars and their primary residence. Planning the next vacation now!!!
3.) Professional couple that put 20% down took out a 30 year fixed, can still make payments. However they are truly thinking of walking away because they are down 35% from where they bought.
4.) Family member bought way out in east nowhere at the peak. I know they are now under water but they did take some equity from their condo that was built up from bubble pricing. Basically said if they can now move closer to civilization they will stop making payments and wait for the bank to take back their exisiting home. The real good news is that the wifes credit was bad so they didn't have her on teh mortgage. Her credit is now really good. So the foreclosure will go on him and the new house will go under her!! At least that is the plan. They will save all of the mtg payment as a down payment. They are hoping it takes well over 12 months before they hit the street.
1.) Bought house in the IE, did go through a divorce but he can still afford the payments. Recently moved back into the home with no intention of paying the mortgage. His new fiancee and he are going to live rent free until the bank kicks them out and save all that money the were paying on rent. If/when the bank kicks him out he will move across the street and rent where it is half the cost. He freely admits he isn't paying because the house is upside down.
2.) Person "owned" three properties. One was out of state they bought when they were transfered. They new the transfer may not be permanent but since RE always goes up they may as well buy then sell at a profit when they leave. Well they couldn't sell the house at a profit, they were actually going to take a slight loss. Most of which were selling cost and some loss in equity. They decided it would be much easier just to mail the keys back. So they did because they shouldn't have to take a loss. If they knew they may have actually lost money they would have rented. I think something is up with the other property they own because they are trying to dump that now. What is nice is though for them is they have not lost a dime they still have their 2 new cars and their primary residence. Planning the next vacation now!!!
3.) Professional couple that put 20% down took out a 30 year fixed, can still make payments. However they are truly thinking of walking away because they are down 35% from where they bought.
4.) Family member bought way out in east nowhere at the peak. I know they are now under water but they did take some equity from their condo that was built up from bubble pricing. Basically said if they can now move closer to civilization they will stop making payments and wait for the bank to take back their exisiting home. The real good news is that the wifes credit was bad so they didn't have her on teh mortgage. Her credit is now really good. So the foreclosure will go on him and the new house will go under her!! At least that is the plan. They will save all of the mtg payment as a down payment. They are hoping it takes well over 12 months before they hit the street.
Geotpf_IHB
New member
trrenter said:
Your examples are the type that piss me off. I can see if you lose your job. I can even sort of see if you took an adjustable rate and you didn't expect the new payment to be so high. But people who walk away just because they are upside down are a different story. They signed a contract, they gave their word they would pay so much a month, they can afford to pay so much a month, they just don't feel like honoring their word.
Also, the banks aren't doing anybody any favors for taking so long to foreclose on people. Word has gotten out that banks now take a year (or more) to kick somebody out after they have stopped paying. A year's worth of free rent is yet another incentive for upside down folks to stop paying-so even more people are doing so.
IrvineRenter_IHB
New member
Geotpf said:
I hadn't really stopped to consider that, but it is true. I may use that idea in a post...
usctrojanman29_IHB
New member
That can begin to add up very quickly...just image how much you can save once you stop paying the mortgage, HOA, property taxes, and insurance for a year or more. Really, the only thing to worry about is the utilities. Now we know where we got that rebound in consumer spending...all thanks to the slow ass banks. hahaIrvineRenter said:
IrvineCitizen_IHB
New member
usctrojanman29 said:
Correct. Some preliminary numbers - 600K loan that you walk from - $4000 a month. HOA - $150 a month. Property Taxes - $1000 a month. Insurance - $150 a month.
So you don't pay any of this for one year. You just kick back and enjoy the view. You've just saved $63,600! Pop that into a savings account and you're already to buy the next place in a couple of years.
Luckily, the evil and morally bankrupt folks that do this will spend every dime of the 64K on updated cars, Disney Cruises for the family, flatscreens and dinners out. Then they'll spend another 15K on their credit cards. Once they are on the street, completely out of money and STILL owe 30K on their credit cards they will declare bankruptcy and move to Iowa.
No offense to Iowa.
Cubic Zirconia_IHB
New member
IrvineRenter said:
There is this property on Somerville. I believe that person staying there has stopped paying mortgage for almost an year when I went to see the place. She didn't let us in when we stopped by to see the place. Our realtor had an appointment and all, but she just said my kid is sick and shut the door.
I didn't understand why an underwater homeowner wouldn't want to sell their home and cooperate with the buyer/ realtor then.. My realtor had to explain to me that she was living free.. Now I know why short sale open houses are only for 3-4 hours on a Sunday, open late, close early.
Soylent Green Is People_IHB
New member
At least once a week I get calls from people who can afford their payment but as noted before they want to know what happens when they walk because they are upside down. Even those who lost "phantom" equity and are at a break even point ask about walk aways.
What is unclear is if this is a national moral shift (my thought) or a local issue. We can sometimes get a bit myopic what with so many foreclosure/short sales in CA, NV, AZ, MI, OH, and FL. Does the average foreclosure / SS in the other States start with people giving up simply because they are upside down and don't want to pay off a falling value asset, or are they walking away due to economic conditions?
What is unclear is if this is a national moral shift (my thought) or a local issue. We can sometimes get a bit myopic what with so many foreclosure/short sales in CA, NV, AZ, MI, OH, and FL. Does the average foreclosure / SS in the other States start with people giving up simply because they are upside down and don't want to pay off a falling value asset, or are they walking away due to economic conditions?
tmare_IHB
New member
Soylent Green Is People said:
I have always had a hard time with this question. Sort of a chicken or the egg question but I guess it could be broken down if someone really had the time and energy to do some research into people's reasons for walking away. In my nanny's case, she bought for 575K, current value is 240K, it just seems like a no-brainer. They can continue to pay by having 4 people working full time in the house and all of their money going to the mortgage as it has since they bought. The reset is coming and that will end it anyway. Will the house ever be worth 575K in their lifetimes? There is also that other sticky point as to their reasons for buying the house in the first place. They were suckered in by some of the biggest low life scums on the planet, people who they trusted because they spoke their language and catered to the Hispanic population. Of course, they were supposed to refinance and be able to pay off their debt within one year with all of the wonderful equity they were supposed to have. Crazy.
SoCal78_IHB
New member
Mine:
1) A couple in Chino Hills who paid $600k in the Fall of '06. She's a stay at home mom, and he's a mechanic. At the housewarming party, they were overjoyed. The husband said they bought as much house as they could possibly afford. This was on an ARM loan but I don't know any of the other details. I do know they suddenly appeared quite wealthy - buying new SUV's, taking trips, and fueling her hyper-consumerism / shopping addiction so we can all guess what's up there. The house is now worth approximately $380k. I check every now and then to see if it's hit the market yet.
2) The details here have to remain fuzzy because this person may be reading this blog and I don't really want to be identified. A man (engineer) and wife (don't know what she does) - they live in the western-most part of the IE. They bought the place in the early stages of the bubble with a 30 yr. fixed. Fair enough. Then the next year, they sipped the Kool-aid... 100,000 cups of kool-aid to be exact. They rolled it over into a refi with toxic loan. The drive from there to OC for work was not pleasing him so he rented his place out and got a luxury loft apartment in OC. The rent was not covering the mortgage because by this time it had reset & recast but he thought he could just keep it up and make up the difference on his own. Fine and well until his renters stopped paying him due to their unemployment. They booted them and moved back in. Apparently at this point they either decided not to pay or couldn't pay and listed the house as a short sale. It's currently in escrow but meanwhile they're still living there rent-free. He seems quite happy and says he has a 1.5-year recovery plan all worked out. I have not heard the details of his plan, but by recovery - it seems he thinks he will own a home again, this time in an upscale O.C. neighborhood, after this "plan" succeeds.
3) Out-of-state couple. Just your typical family who bought at the peak, overpaid, and got themselves into a pay-option ARM. The clock struck twelve and it was time to pay up the large sum every month. They were not malicious but truly ignorant of how finances work. Deferred interest until it caught up with them. No HELOCs here, just did not understand the fine print on the loan docs apparently. After they stopped making their house payment they got plastic surgery, took many trips, dinners out, new wardrobes for the family, and so forth. The house is currently listed as a short sale. They've had a few extremely low ball offers and no bank approval yet. Now they've moved out and are renting elsewhere.
I am very certain there are more that I know in these situations but this is all I have details on so far.
1) A couple in Chino Hills who paid $600k in the Fall of '06. She's a stay at home mom, and he's a mechanic. At the housewarming party, they were overjoyed. The husband said they bought as much house as they could possibly afford. This was on an ARM loan but I don't know any of the other details. I do know they suddenly appeared quite wealthy - buying new SUV's, taking trips, and fueling her hyper-consumerism / shopping addiction so we can all guess what's up there. The house is now worth approximately $380k. I check every now and then to see if it's hit the market yet.
2) The details here have to remain fuzzy because this person may be reading this blog and I don't really want to be identified. A man (engineer) and wife (don't know what she does) - they live in the western-most part of the IE. They bought the place in the early stages of the bubble with a 30 yr. fixed. Fair enough. Then the next year, they sipped the Kool-aid... 100,000 cups of kool-aid to be exact. They rolled it over into a refi with toxic loan. The drive from there to OC for work was not pleasing him so he rented his place out and got a luxury loft apartment in OC. The rent was not covering the mortgage because by this time it had reset & recast but he thought he could just keep it up and make up the difference on his own. Fine and well until his renters stopped paying him due to their unemployment. They booted them and moved back in. Apparently at this point they either decided not to pay or couldn't pay and listed the house as a short sale. It's currently in escrow but meanwhile they're still living there rent-free. He seems quite happy and says he has a 1.5-year recovery plan all worked out. I have not heard the details of his plan, but by recovery - it seems he thinks he will own a home again, this time in an upscale O.C. neighborhood, after this "plan" succeeds.
3) Out-of-state couple. Just your typical family who bought at the peak, overpaid, and got themselves into a pay-option ARM. The clock struck twelve and it was time to pay up the large sum every month. They were not malicious but truly ignorant of how finances work. Deferred interest until it caught up with them. No HELOCs here, just did not understand the fine print on the loan docs apparently. After they stopped making their house payment they got plastic surgery, took many trips, dinners out, new wardrobes for the family, and so forth. The house is currently listed as a short sale. They've had a few extremely low ball offers and no bank approval yet. Now they've moved out and are renting elsewhere.
I am very certain there are more that I know in these situations but this is all I have details on so far.
caycifish_IHB
New member
IrvineRenter said:
Graph noticed a house around the corner from me go back to the bank a week or so ago. 5-6 cars still in the driveway or parked on the street. Everyone still living there. I drive by every day to go to the gym so I'm keeping track of how long they stay before the bank actually makes them vacate.
IrvineCitizen_IHB
New member
Guy in my neighborhood probably sold the house to them. Spoke Spanish, drove the Escalade with the massive rims and wife drove the Lexus. Bought three places of their own. Had a subprime mortgage company that catered to Hispanics. Fell into foreclosure on two of their houses. Their last house (the one in our neighborhood) is 15K back in property taxes and they haven't paid HOA in a year. Liens from their auto company on this last house. Declaration of Homestead on this house. Quitclaim from the wife to the husband on this house. Their subprime mortgage company has State Liens like you wouldn't believe.
And they must have 100 customers just like yours. I don't know how they sleep at night. They still drive the nice cars and swim at the HOA pool. They just don't pay any of the bills.
Tick tock, Clarice. Tick tock.
stepping_up_IHB
New member
Soylent Green Is People said:
IrvineRenter_IHB
New member
More from my email source:
Now that I have quick access to [public] home mortgage information, it is easy to pull the curtains back and confirm excess where I think I see it. I'll site two recent examples:
1) One of my favorite shows is the Dog Whisperer. This person goes to different subjects' homes and helps them with their dog issues. About 20-25% of the time, I can tell that the people Cesar Millan visits are way overleveraged with their mortgages. How can I tell? Call it a hunch; I've got a strong, innate aptitude for situational awareness (pilots call it "S.A."). The other night featured a couple from Castaic, California, and I had a funny feeling they were in way over their heads in real estate. Well, they say their name and location on the show, so I looked up their info and confirmed my suspicions: they bought a place for $460k and local comps are now selling for the low $300s. Check back in six months and those homes will be well under $300k. They've got a toxic mortgage, which is obviously the only way they could "afford" to buy that home. They had that fact written all over them during the show.
2) Last night I saw on the L.A. news that an Orange County woman was picked up for a murder she allegedly committed 10 years ago. A rather attractive blonde, with a super-racy Facebook photo, lots of jewelry, and an over-priced stucco box in Ladera Ranch. I knew right away where this was headed.....she was one of Fraudera Ranch's posers, and likely had a toxic mortgage. Sure enough, a contact confirmed she paid over $1.2 million for a home with essentially no money down. What a surprise. Ladera is getting hammered.
My short position in California real estate continues to strengthen thanks to examples like these....
Now that I have quick access to [public] home mortgage information, it is easy to pull the curtains back and confirm excess where I think I see it. I'll site two recent examples:
1) One of my favorite shows is the Dog Whisperer. This person goes to different subjects' homes and helps them with their dog issues. About 20-25% of the time, I can tell that the people Cesar Millan visits are way overleveraged with their mortgages. How can I tell? Call it a hunch; I've got a strong, innate aptitude for situational awareness (pilots call it "S.A."). The other night featured a couple from Castaic, California, and I had a funny feeling they were in way over their heads in real estate. Well, they say their name and location on the show, so I looked up their info and confirmed my suspicions: they bought a place for $460k and local comps are now selling for the low $300s. Check back in six months and those homes will be well under $300k. They've got a toxic mortgage, which is obviously the only way they could "afford" to buy that home. They had that fact written all over them during the show.
2) Last night I saw on the L.A. news that an Orange County woman was picked up for a murder she allegedly committed 10 years ago. A rather attractive blonde, with a super-racy Facebook photo, lots of jewelry, and an over-priced stucco box in Ladera Ranch. I knew right away where this was headed.....she was one of Fraudera Ranch's posers, and likely had a toxic mortgage. Sure enough, a contact confirmed she paid over $1.2 million for a home with essentially no money down. What a surprise. Ladera is getting hammered.
My short position in California real estate continues to strengthen thanks to examples like these....