Irvine Housing Blog

This was the first clue that there was a bubble in SoFL.  I saw people who made less money than my wife and I living in homes 4X or more expensive than ours in NC.  There (FL), you also had home prices skyrocketing but no real improvement to their job situation.  Now you have home values coming back down, and an even further deterioration of the job market (think a market based on home construction, real estate, and tourism).  A lot of the 50% DTI families used helocs to create disposable income, but that only made their debt situation worse.

Keeping everything else constant, a trend where buyers average 28% DTI move to 35% DTI roughly moves prices 25%.  Now 28% DTI to 49% DTI gives a 75% price increase.

Fannie & Freddie should only be underwriting conservative dti loans.  Since they are now completely govt institutions, they should be able to cross check 1040’s to verify taxable income.  There should be a govt website where a taxpayer should be able to verify values from their 1040 - have the IRS confirm them to a third party.  A bank that doesn’t care about DTI, doesn’t care about an enhanced income verification system.  House prices never go down, so they’ll just foreclose and make more money than from the payments.

High DTI’s hurt everyone because they will cause a conservative buyer to be priced out of the home they really want.  Maybe now that conservative buyer can pick that home up out of foreclosure, or distressed sale, and maybe that is how markets are really supposed to function.  I’d rather see price stability from prudent lending/borrowing.

Are realtors afraid of the word ‘barbecue’?

You see it in listing after listing, this BBQ business.

Why not also say PVT rather than private?

Or 4VR rather than forever?

Can I pay 7% and get an upgraded listing that is slang-free and written with proper capitalization?  Apparently, just being a 2M dollar house isn’t enough to cut it these days.  Who would have thought that an estate could be turned into a double wide trailor with the mere flick of a pen(keystroke).

Foreclosures fall, but banks bracing for next big wave

In November, for the fourth month in a row, the number of foreclosure filings in the United States declined—an 8 percent drop from October. But foreclosure experts aren’t celebrating. They’re bracing for the next wave of default notices, foreclosure auctions, and bank repossessions, which could hit early next year.

“We don’t believe the underlying conditions have actually improved,” says Rick Sharga, senior vice president with RealtyTrac, which released its report of foreclosure trends Thursday. Instead, state and federal efforts to help homeowners work out their problem mortgages are delaying foreclosures, he adds.

Even in a normal year, a third of these attempted workouts end up in default, he says. With high unemployment, tight credit, and depressed housing prices, this period will see much higher failures of workout plans, mortgage experts say.

For the moment, the number of foreclosures continues to fall. In November, the total fell to less than 307,000, the fourth monthly decline in a row after peaking at 360,000 in July. That’s the lowest monthly level since February and, on the surface, represents particularly good news for Nevada.

For the second month in a row, the number of Nevada properties receiving a foreclosure notice fell by a third. Las Vegas, which had topped the list of large cities with high foreclosure rates, fell to No. 5 in November.

The problem is that these drops are artificial, brought about because Nevada recently instituted a mandatory mediation program for problem loans, Mr. Sharga says. That’s a potential boon for some owners of distressed homes. It may help those on the margin restructure loans that might otherwise default. Such programs are also helping to keep the foreclosure problem from spiraling out of control and sending home prices plunging again.

The challenge is that many of these attempt work-out loans won’t work out, so foreclosure isn’t averted, it’s simply delayed. Of an estimated 7 million troubled home loans in this down cycle, 3.9 million will go through foreclosure, predicts William Campbell, a real estate adviser and head of RPC Group in Little Rock, Ark.

“We’re going to see a long drawn-out housing recovery that will gradually dispose of these distressed properties over the next three years,” says Sharga of RealtyTrac, an online marketplace for foreclosure properties based in Irvine, Calif. “Modifications will help, but they won’t solve the problem. It’s too big.”

The pending foreclosure numbers are all lies.  The was a guy on CNBC last night saying that we can all sit back and enjoy the smooth sailing from here to the recovery on the horizon.

Clearly this man is an expert and knows what he is talking about - why else would he be allowed to go on television and tell us what to believe?

I am perfectly content allowing this person to do my thinking for me.  It’s much more comfortable than thinking for myself and reading all these depressed negative Nancy’s trying to <B>Talk Down<B> the economy.

No sir - it can only get better.  Activity is up.  Lots of cars on the roads.  Lot’s of people at the restaurant I went to the other night.  Naturally, it follows that if Americans have access to cars, cheap gas, and 13.00$ chimichangas - easy credit and liar loans are right around the corner.  Get ready!  Bottom is in! 

I am going to go get ready by finding a nice pile of sand that I can shove my head into.

I wonder what the inside of this house looks like.
Why aren’t they showing any inside pictures?

Removing that ivy from the stucco with be a total nightmare.  It has probably destroyed the home’s structure and caused rot or mold.

What, no song today? How about “Welcome to the Jungle” as that’s what comes to mind when I see that backyard.

The new drumbeat and smokescreen going up is JOBS! JOBS! JOBS!

Like crackheads who just burned up their last rock - the masses are fired up demanding that politicians create jobs for them so they can go buy more stuff that they don’t need.

Nobody wants to talk about fewer jobs and less debt like the good old days when one income supported a family.  No, not these days - JOBS for everyone.  Stupid?  Incompetent?  Willing to push papers around until you have expended every last ounce of energy from the prime years of your life?  Well then, right this way into your new JOB where you will be treated like dirt and paid dick for all your hard efforts to cook the cheese burgers for your corporate masters.

I vote for less jobs, less debt, less taxes, less shopping, more free time to do nothing.

The DTI is really a debt service to income.  With that the Feds can hide alot.  Just make 70 year loans at 4.5% interest only $3919 per month on 1,000,000 loan/(million dollar house if nothing down). An income of only $130,000 needed for a DTI of 30%.  May be I should get a Nobel Peace Prize or Nobel Prize for Ecomonics? 

I view the $1,000,000 divided by 130,000 = debt to income of 7.6 which is too far traditional formula of 3 to 4 times income is the upper limit of house purchase price.

We can really stimulate the ecomony if the govt issues money—cash or tax rebate for home purchase, but that’s already being done.

Yes, 20% down and 50% DTI now is a standard mortgage product, but when I was working with loan officer at a model home office this weekend, even though I clearly stated that I will go 15 years with 30% down, the loan agent remaindered me a couple of times for a chance to qualify 10% or even 3% down payment program.

While government keeps pressuring banks for easy landing and with super low interest rates, is this the beginning of another subprime scheme? What if rate goes down to 3%.

Anyone know what is “DemoRuplictian”?

Ans:A person has Democrats appearance with the Publicans’ policies but actually is a extreme politician.

Shouldn’t this be under “WTF”?  $627 per square foot? Insane.

IR, I have not been posting here in a while but follow general economy. To say the least, I dont see any recovery. THere is some $4-$7 trillion in commercial RE debt due in 2010-2011 with no means to pay for it. Low foreclosures are the result of banks not letting the homeowner walkout by offering deals like fixed payment for 5-years to prevent writedowns, etc. One of the friends of mine got a $900/month 5-year plan on a $450K home in Palmdale when he tried to handover the keys to the bank.

Proof is in the pudding, unemployment is very high and going to get worse. we got seasonal hiring by Retailers and some Govt. workers (US Cencus Burew) that skewed the data last month.

Most AAA CDO’s and MBS are going to go sour.

market will bottom when bottom chasers/flippers are wiped out. At the end of the day, one has to have a job to pay for mortgage, I see very nasty 2010 and 2011 waiting for all of us.

Geotpf -

When you get done wanking yourself, there is a good lecture here that refutes your designer jeans theory.

I know I know - not as entertaining as Rush, but it is our responsibility to actually seek out opinion from people with educations every now and again.

http://www.youtube.com/watch?v=akVL7QY0S8A&

Please educate yourself so you can stop looking like a fool on here every day.

I live fairly close to this house and I’ve been to several houses in The Highlands.

Let me tell you something.  This house is downhill from the two tile roofed monstrosities just a house up the hill.  Also, I don’t think this house has a view.

The lot is big, bug a big chunk of it is hillside. 

Take a look at the map.  This house is at the wrong end of the cul de sac, no view, against the mountain with a big, useless lot and almost zip of a chance to add square footage since The Highlands are currently very opposed to 2nd story additions on account of the two Tiled Monstrosities.

I figure that a house on that street, with a view, will run at most $1.5MIL in this market.  Those homes have beautiful views, real nice lots and very good layouts.

But, this home, with all that ivy and those dark views makes me think that a bunch of Norway Rats must have eaten the common sense of the owner.

$2.3MIL?  No way.  These people are nuts.

As mentioned by IR above…

These truly WTF!!!!!!! prices are becoming less and less ridiculous because so many of these places are actually being purchased at or near the list.

WTF people!!!!!!!!  Get a clue!

Sorry just had to get that off my chest.

Who is responsible for paying the property taxes on REO. And are they usually paid on time by whoever is responsible?