Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Friday, December 19, 2008
Subscribe to:
Post Comments (Atom)
Northern Virginia Real Estate Statistics
REAL ESTATE SEARCH
County Assessment Websites
Buy/Sell Without an Agent
Local Real Estate Agents
Housing Economics Blogs
Local Interest
Housing Bubble Links
Eastern Regional Blogs
Western Regional Blogs
- Bakersfield Bubble
- Bay Area Real Estate Blog
- BubbleInfo (N. San Diego)
- Burbed (San Francisco)
- Dr. Housing Bubble (SoCal)
- Patrick.net (San Francisco)
- Portland Housing Blog
- Professor Piggington's Econo-Almanac
- Rancid Truth (Orange County)
- Sacramento Land(ing)
- Seattle Bubble
- SoCal Real Estate Bubble Blog
- Socket Site (San Francisco)
Real Estate Blogs
REAL ESTATE AUCTIONS
27 comments:
One in seven borrowers is under water and the problem is expected to get worse:
http://www.usatoday.com/money/economy/housing/2008-12-18-under-water-late-mortgage_N.htm
What exactly is the situation of someone that's underwater? If they sell their house for $80k less than they paid do they then owe the bank $80k immediately?
That's quite a sticky problem. Very few people can cover that kind of loss. Everyone in that article is planning to wait it out until they're back above water (which could take a LONG time). It'll lock up a lot of houses that would otherwise go on the market and the only solution I see is for either the banks or the government to eat those $80k losses. Individuals are rarely going to do it.
lets accept this - this country has access of housing and same time immigration is at all time negative for country built by immigrants.
either live underwater for long time or accept legal immigrants from countries such as India - who have both buying power, interest and positive energy to contribute to economy.
Jeff B, I've wondered the same thing myself. I would imagine that you could pay off the debt according to the terms of your mortgage... it'd just be like paying a mortgage for a house you're so longer living in.
Jeff B,
That's why it's called a short sale. You can convince them to give you a new loan for the difference between the sale (after fees) and the remainder of the mortgage note, un-collaterallized, and therefore at a worse rate, you can pay it in full on the spot, or you need to get a short-sale approved, in which case you are absolved of the debt and the bank takes the loss. If at all possible they will get it out of you, though, and a short with forgiven debt looks much like a bankruptcy on your credit report. A friend of a friend thought she was getting a short sale, but in fact was given a new consumer loan for the difference at closing (my 4th hand understanding of what happened).
Cara,
That makes sense, I guess I was too used to thinking of short sales as always involving the bank eating the difference. The amount of loss involved is large enough that I automatically assume people won't take it on themselves. Which I guess is the case most of the time.
"either live underwater for long time or accept legal immigrants from countries such as India - who have both buying power, interest and positive energy to contribute to economy."
LOL! As if we didn't have enough Indians around here already...
My underwater neighbors are Indians (H1-Bs, not US citizens).
What is really troubling is the refusal of banks to allow people who are underwater to refinance because they are underwater or maybe at sea level (excuse me) but don't have enough equity.
Instead of letting these folks refinance and move them into a position to ride out a multi-year problem, the banks are increasing the risk of their collapse. What's that balance sheet look like?
So what if some of the refinancing is technically unsecured? Anyone here have a credit card or two, or three. Please add up your unsecured limit for me.
The decision has been made: Everyone who is underwater and stuck with a tough mortgage deserves exactly what's coming to them. Let them bleed out. I mean, really, they deserve it. We want them to suffer and let the market find its natural bottom. Meanwhile, let's give buyers a big fat tax credit. They deserve it being moral hazard, original sin, free and all. Saintly.
The people who believe the moral hazard rule applies have won their point. It will apply; the underwater homeowners are truly in the deep sea.
But I have respect for a struggling homeowner, even those who made a really bad and dumb decision. The homeowners I respect are those that made one bad decision: they made a mistake when they bought their house. But how many of the people running Wall Street can say they only made one bad decision?
Compare a bad homebuying decision against the people who made decisions, day after day, that have put us in the position we are now in.
I have no respect for the thousands of reckless, greedy, or blind employees working on Wall Street, or at the SEC and the Fed who allowed all to happened. No respect. None. Zero. Zip.
But what the heck. The hammer of moral hazard justice is falling. I mean, Madoff is under house arrest in his $7 million condo. That must be tough. House arrest. Can't imagine.
Nice Kob.
Manassas is perfect example of city where hostility towards immigrants led to crash of home prices. If you drive away hard working Mexicans what you will get is nothing but ghost cities like Manassas.
Removing hatred towards immigrants in only solution of housing - else keep watching your home prices to crash forever!
In last 8 years USA was doing nothing but eating on its own housing. Guess what housing is around the block eating everyone now! And even talking on bottoming of housing market is foolish - this is nothing but abyss.
Dear Tester please more clear,
you said "Manassas is perfect example of city where hostility towards immigrants led to crash of home prices." Do you think prices only chrashed in Manassas? Beacause prices crashed everywhere. Did you mean "illegal immigrants" because if the city of Maanassas was hostile to an immigrant would be against the law.
You said, "If you drive away hard working Mexicans what you will get is nothing but ghost cities like Manassas." I thought you were talking about immigrants now you switch to people of the Republic of Mexico. I know now you are biased.
You said, "Removing hatred towards immigrants in only solution of housing - else keep watching your home prices to crash forever!". I see that you are biased tward Mexicans, I will assume you mean legal immigrants from Mexico. Does your statement mean that other immigrants need to stop hating Mexican immigrants. Do the Indians hate the Mexicans? Because this thread mentioned higher Indian immigration? Do you hate Indians? You have a problem.
john, don't feed the troll.
yeah don't feed the troll suffer under the water ha! only country in world where houses are selling for trash! wow
tester lives in a fantasy land. Don't feed the troll.
John, two latinos are walking down the street, one legal, one illegal. How do you tell the difference? Answer: you can't. That's why any policy which pretends to target illegal immigration actually targets all immigrants. Now every latin looking person is in a constant state of fear that they will need to provide their "papers" to authorities at any time. They will also face discrimination at the DMV, schools, libraries, wherever. As far as whether any of that has to do with the housing price collapse is debatable. Certainly, the 2 hardest hit areas in the DC metro are Prince William county and the Town of Herndon, both of which have anti immigrant government in place. Which one caused the other is unknowable as far as I can tell.
Shamrock,
I think your argument regarding illegal immigration policy is flawed. For example, if two people walk out of a store and one of them stole a pack of gum, how can you tell which one did it? Just because you can't tell by looking at them doesn't mean you shouldn't enforce the law once you identify the shoplifter. I could argue that people who appear to be poor are targeted by store security; therefore, they shouldn't have an anti-shoplifting policy.
I tend to believe the number of subprime mortgages in Herndon and Manassas has more to do with price declines than anti-illegal immigration policy. Many of the hardest hit areas in the U.S. (such as parts of California) have pro-immigration governments.
Here's the outstanding article in today's NY Times, which sets forth the current administration's disastrous policies vis-a-vis home ownership and laissez-faire approach towards lending standards:
http://tinyurl.com/7vxhc
Note the White House analyst used price/rent data to foresee the problem. He was dismissed. Sound familiar? I'd also keep this article bookmarked to respond to any idiots who parrot the pernicious lie that the Community Reinvestment Act was the primary cause of the housing crisis.
Terminator-X: you have a bad tinyurl
Try the link to the actual article:
http://www.nytimes.com/2008/12/21/business/21admin.html?_r=1&hp
Novahog - just fyi the hardest hit citites in CA are also cities with maximum latino population - Stockton / Vallejo / San Bernandino. If you don't want to accept truth. Even if immigration was not the only reason to contribute to downfall it really fuelled it to much higher levels. If legal immigrants are threatened always in a country they would ultimately move back taking along with them their contribution to gdp / taxes / social security and also cashing their homes or not invest in homes at all.
Interesting article, Term, thanks.
P. 4 is a bit confusing - how did Falcon get fired, then later get Bush's backing? An editor could have helped clarify that page.
I just want to be clear about one thing.
There is a difference between immigration, and illegal immigration.
I resent it when people try to say anyone who is in favor of having immigration laws, and enforcing them, is somehow "anti-immigrant" or "anti-Mexican."
One of the most fundamental sovereign rights a nation possesses is control over its own borders.
You simply do not have the right to go anywhere you want at any time and just move in.
As someone living overseas, legally, I respect that. I respect the fact that I am here as a guest in another nation and that I am not a citizen here.
This is not a hard concept to master.
When I travel... I carry my papers. If needed, I will show them. That is the price you pay for living as a foreigner in another country, legally. (and it is not a big deal)
Since I have obsessively tracked the bubble bursting in Manassas, allow me to offer my humble assessment of the impact of the crackdown on illegal immigrants:
I did not live here when the huge influx of immigrants, legal and illegal, occurred. From what I have read, I understand they were following the construction jobs, and Manassas was the least expensive of the expensive options in this area. As the child of immigrants married to another child of immigrants, I understand the dynamic of family bringing family over, through proper channels and otherwise, and it is clear a great deal of that occurred, as well as many men coming alone in order to send money home.
In hindsight, by tracking the sale history of the endless foreclosures in PWC, it becomes crystal clear that many immigrants purchased houses with mortgages they could not afford at all (instantly foreclosed upon), and many others purchased houses with mortgages that became unaffordable.
By looking at the details of these sales, certain patterns emerge: when the sales were from builders, the sale price for the same base unit would often be far more expensive for Hispanic/Asian/African-American surnames than for Anglo surnames. Many investors bought from builders, only to turn around and sell to another member of their same ethnic group a couple months later for more than $100K more. Immigrants seemed most likely to buy houses for prices far above their current assessed values, for prices for which their homes NEVER assessed.
Simply put, many immigrants, legal or otherwise, were not sophisticated buyers. Some were taken advantage of by more savvy people who spoke the same language. Some did their best to understand, and guessed wrong. Some tried to play the system, committing fraud.
So they engaged in the same exact behaviors as other people during the bubble years. And many got burned.
The crucial difference, I think, is that many of these immigrants had little to keep them here, not much to cause them to fight to stay. If they were legal, maybe their wife and children were not. If they were not legal, they had a tenuous hold on the rapidly evaporating contruction jobs. It was easier and made more sense for them to walk away.
So Manassas led the way for eveyone else in the price slide. More subprime mortgages held by people who had fewer reasons to stick it out caused more foreclosures faster.
Stuck-up, arrogant know-it-alls can look down their noses and sneer at the supposed "intolerance"-housing crash connection, but I just laugh every time I see the Post point fingers at the illegal immigrant resolutions out here. They want their housekeepers and their groundskeepers and their babysitters, but they don't want them in their backyards, now do they?
Fact is, the influx of immigrants was accommodated quite well, and Manassas is still a majority-minority area, from what I see at the grocery store. But some transient elements who came here outside of legal channels truly had no regard for the community in which they resided, and they were causing problems far more severe than chickens in backyards. There is nothing wrong about enforcing our country's immigration laws.
What happens when you do? The hard-working, law-abiding immigrants stay and work towards the American dream. Just take my neighborhood as an example. During 2004-2005, several multi-family situations moved in, and some multi-single-men groups, too. One plowed up their front lawn and planted corn. One kept a couch in their front lawn and cut off chickens' heads regularly. Another built a stockade fence around the front yard to the back, and parked cars inside it on the lawn. Far more important, my friend around the corner was awakened before dawn one morning because FBI agents were breaking down the door of her neighbor in a drug bust. These incidents run the gamut from amusing to dead serious.
Every single one of those houses were foreclosed upon. Do you know who moved in? Immigrants. With children. Who work really hard and who lovingly tend their slice of the American dream, their house.
So no, it is not the crackdown on illegal immigrants that is causing the crash here. Rather, the natural consequences of the nationwide crash simply began to manifest here first, because many of the distressed homeowners here had an easier time walking away, and there were more people with risky mortgages and shaky finances to begin with.
"So no, it is not the crackdown on illegal immigrants that is causing the crash here. Rather, the natural consequences of the nationwide crash simply began to manifest here first, because many of the distressed homeowners here had an easier time walking away, and there were more people with risky mortgages and shaky finances to begin with."
I know many people who did very well until a few years ago but are struggling today. These are technical, executive types, well education, skilled, professionals.
From AOLs 10 most likely to fail.
Hovnanian shares are down by 70% over the last year. Recently, the shares have been as low as $1.70, putting the company's market cap at $171 million. The housing downturn may actually get worse as unemployment and foreclosures rise. JMP Securities recently commented that HOV is a "bankruptcy risk" due to debt and exposure in the hardest hit real-estate markets. A liquidation with Hovnanian would probably be an auction of land and unsold homes.
Post a Comment