Irvine Housing Blog

It’s off the market according to Redfin, which is too bad. I did so want to see what the inside looks like.

That “Trashout” video is sobering. One wonders what it was like the last day before the family left. Where did these modern day Okies go?

Not Irvine.

Minors working in the coal mine?  Child labor law violation!

I’ve commented about Option Arms before, and that chart is scary with the big Option Arm bump on the horizon.  I’d like to see more detailed analysis on these loans because of the various ways they can blow up.  How do they figure the “resets” will be clustered in 2010-2011?  How MANY loans are we talking about - because when they reset I believe the VAST MAJORITY of them WILL go into default (some people can’t even really afford the “minimum” payment).

1. Making the “minimum” payment (at a teaser rate effective to about 1-2%) adds the unpaid interest to the loan balance, BUT the balance can only go so high - usually 110%, 115% or 125% of the original balance.  Once that ceiling is reached, the loan automatically recasts to a fully amortizing principal and interest payment at the fully indexed rate (index + margin) of probably 6-8%... doubling or tripling the payment.

2. Others have written in the note a set time period after which period the optional “minimum” payment goes away (usually 5 years).

Either way, at some point, these people will be paying fully amortizing payments on loan balances up to 125% of the original loan - as values have dropped by up to 40%.

Someone needs to put together a complete analysis of these loans and what’s to come… the housing crisis won’t be over until these loan are gone.

I am trying to help a reporter with a story on the walkaway phenomenon. If anyone reading this would like to tell their story to a reporter for the Christian Science Monitor, please email or call:

Dan Wood

danbwood@aol.com

818-905-1985

This is the real thing. If you or someone you know could help and would be willing to tell their story, please contact this reporter.

Thank you.

5% of short sales are actually sold?  I think that figure is higher now.

For the San Fernando Valley and Ventura, http://effectivedemand.blogspot.com/ shows about 15% of actual sales as short sales.

Even though the listing is off market, the bottom of redfin posts 3 apprasials from online services. Theses apprasials ranged from $610k to $1.1 million with zillow at $850k.

So the appraisals are all over the map.  That means no one know what these properties are really worth.  When we get closer to bottom, the apprasials will start to come closer together.  Like comparing BCS polls at the start of the season vs late November

I had heard the bank will only collect on the PMI if the property goes to foreclosure. This may explain why they reject some short sales.

“If this property sells for its asking price, the lender stands to lose $442,000 after a 6% commission. IMO, that is a great deal of money.”

With the bad bank scheme, who will pay the money ?

My lender has asked me about a short sale, but I’d have to list it at a price that I could afford to keep it at. Plus, with only few short sales being approved, and my credit already trashed due to non-payment and other issues with my divorce, I don’t have a strong motivation to list.

I have been in contact with my lender, sending them boatloads of paperwork, not receiving responses or contradictory responses, but it’s extremely frustrating. Right now I just plan to stay until they kick me out, unless they give me another option.

The 4330 sq ft lot size on this property is so ridiculously small.  That’s one reason we won’t be looking in NW II or Woodbury regardless of price.

IrvineRenter -

Thanks for posting the link to foreclosure alley.  It really put this entire crisis, and what it is doing to California especially, in a whole new light.

IR, you have posted so many upper-middle and upper bracket properties whose owners are buried by HELOC abuse, that you have to wonder if HELOCSs and 2nd mortgages are perhaps the biggest debt sink we have.

No comprehensive numbers are available, but we have to wonder if this form of credit abuse was perhaps THE reason for so many middle, upper-middle, and high income home owners being deep underwater.

And if that’s so, we really are deeply buried for quite a few more years beyond your original projections.

On another subject, I’d respectfully like to correct you on just ONE little historic fact:

Marie Antoinette did NOT say “let them eat cake”. Never. These words were actually spoken, in less insensitive language, by another member of the royal family, but not that way. The words were placed in the queen’s mouth by her many enemies among the aristocracy.

Foreclosure is the best measure of a home’s wholesale value.  Unfortunately Barney Frank does know want us to know the true value of housing.  Let’s see who knows best.  The Market or Barney.  I’m going with the market.

You’ll notice that nobody at these hearings is asking the right questions, so of course they’re coming up with the wrong answers.

They’re asking: how do we get credit moving again. But they’re not asking, why should we get “get credit moving again” when that’s what caused the problem to begin with.

They’re asking: how do we prevent foreclosures and keep people in “their” homes. They’re not asking: why should we support values, and why should we keep people in homes who should never have bought these homes to begin with. They’re not asking, how do we keep the unemployed in their homes and how can we contain the damage instead of attaching it to the national debt, and putting the entire system at even greater risk.

Frank and other members of Congress impresse me as individuals who mean well, but who are utterly clueless on matters economic and financial, which is all the more reason our officials should never have been mucking about in them to begin with. This debacle was caused, not by “free enterprise” but by Crony Capitalism:the unholy partnership between well-meaning but financially and economically illiterate government leaders, and the top business leaders who own them. Every socialized housing and lending program, which are the true cause of this debacle, was promulgated for the benefit of the housing and lending industry, and has done nothing but distort the market and shift responsibility for failure to the taxpayers.