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Latest REOs
- $199,900 :: 3125 Watermarke Pl, Irvine CA, 92612
- $349,900 :: 10 Greenleaf 16, Irvine CA, 92604
- $439,900 :: 61 Olivehurst, Irvine CA, 92602
- $889,900 :: 14 Upland, Irvine CA, 92602
- $429,900 :: 56 Great Lawn, Irvine CA, 92620
- $465,000 :: 212 Garden Gate Ln, Irvine CA, 92620
- $329,000 :: 1006 Terra Bella, Irvine CA, 92602
- $579,900 :: 8 Star Thistle, Irvine CA, 92604
- $398,900 :: 191 Lockford, Irvine CA, 92602
- $750,000 :: 69 Lakeview 6, Irvine CA, 92604
So what happens in CA when a home is bought with an 80/20, the value goes down by 50%, the owner walks, the first mortgage holder forecloses and the second holder gets nothing? The second mortgage is purchase money so it is non-recourse but they have not had their “one action”. Can a deficiency judgement be sought or are they still held to the non-recourse rules of purchase money loans?
On a related note - is there some statute of limitations on how long these lenders can go after the debt? I’m sure it varies state-by-state, but after some period of time I would imagine the debt becomes “forgiven”.
“...I’m sure it varies state-by-state, but after some period of time I would imagine the debt becomes “forgiven”. “
Not likely…. See article below…
Firms profit off Florida homeowner defaults
.BY KIMBERLY MILLER
” ....In Florida, a claim must be filed within five years, but the lender has up to 20 years to collect.
So even if a borrower has no money today, he or she may rebound within the collection time frame.
``People are broke right now, but they won’t be broke forever,’’ Greene said. “
http://www.miamiherald.com/2010/06/15/1681212/firms-profit-off-florida-homeowner.html#ixzz0r2vmlPea
Have a nice day.
Twenty years?!?? Even the IRS only gets seven. That’s just brutal…
If the banks, or rather, the bankers are running the country, then it would make sense that they would have better terms for themselves compared to merely the IRS. And don’t forget “compensation” taxed at capital gains rates instead of income tax rates.
I am so glad that I didn’t take a ride on the CA housing market train.
“I am so glad that I didn’t take a ride on the CA housing market train. “
Same here! I remember being totally laughed at
back in 2006 by many coworkers, and friends for
not buying a house back then…
Now, no one is laughing, except for me.
Now, no one is laughing, except for me
And all the squatters who are gaming the system and living rent free at society’s expense now while renters continue to pay on time each month or be evicted within a month or two.
“And all the squatters who are gaming the system and living rent free at society’s expense now while renters continue to pay on time each month or be evicted within a month or two. “
That maybe be true, but I’ll never have to worry
any aggressive lenders comming after me for years, and years for the amounts OWED.
Brutal? No that’s the plan, screw Uncle Sam? Seven years or less. Screw Big Brother aka the real leaders, corporate amerikkka? Twenty years & counting. My scary words - “Hi, I’m from the finance* industry & I’m here to help”...
* = “fill in the blank”
After the hundreds of posts whining, bitching, and crying…..who is laughing?
Surely it’s the ones getting free rent and not us suckers for paying our bills. If the public was smart, they would revolt against the banksters and throw off the chains of debt slavery and actually use the U.S. Treasury….but the majoirty of the sheeple like things this way so suck it up people…..some get away scot free, you don’t. Your system, keep voting republican or democrat, it’s working SO WELL!!!
I’m not glad. I’m pissed off that I missed the train.
I immediately recognized a Ponzi scheme in the making back in 2002 when I started to look into real estate, and heard stories of co-workers selling their homes (in 2002/3) for double what they paid just five years earlier. I thought that was madness, until I saw those homes double again from 02-07!!!!
I was always taught to be responsible; don’t buy what you can’t afford. My mistake was treating a house like any other regular consumption purchase, and not looking at it as an investment.
It is four years in CA. This article over states the pitfalls.
If you are in trouble talk to a lawyer, stop paying and change your cell number. Either that or pay hundreds of thousands of dollars for your underwater house which you could spend elsewhere.
The quicker people stop paying the quicker the collapse and the market clearing happens. Moral hazard be damned - that happened already. Now its just about how we get back to normal.
A non-recourse second cannot seek a deficiency judgment after a foreclosure. The only available “action” for a non-recourse loan is foreclosure, so if the first has already foreclosed, the second has no options.
I don’t know what the statute of limitations is on such a debt, but there are probably a series of extensions that debt holders have available to stretch out the timetable. At some point, the extensions are exhausted and the debt dies statutorily. Perhaps one of our attorneys can provide the details from California law.
The attraction of a short sale over foreclosure is the chance to negotiate not only how the loan is extinguished with regards to deficiencies, but also how the transaction is reported to credit agencies.
http://www.cotohousingblog.com/?p=10556
Tanta had much to say about the lenders suing for deficiency judgement. It was her opinion that very few lenders will actually sue when the borrower’s lender points out the negligence or fraud associated with the loan.
Sorry, I meant when the borrower’s “lawyer”, not lender. DUH!
I believe debt collections is 4 years if no payments are made. every time payment is made, it starts the clock again as well.
http://www.fair-debt-collection.com/SOL-by-State.html#5
IR- Don’t forget that in California forgiven mortgage debt is still considered income for tax purposes. Close friends of mine walked on their $420K townhouse when they failed to sell it for $220- and it was sold short for $200.
That difference of $220K is income as far as California is concerned.
http://www.dsnews.com/articles/california-waives-state-taxes-on-forgiven-mortgage-debt-2010-04-13 oops nevermind.
Wasn’t there something passed forgiving that tax debt in CA?
“Es” is right.
That income has been forgiven in California, as in the article that “es” linked to.
Final, definitive reading on that——in this link, as straight from the California Franchise Tax Board Website:
http://www.ftb.ca.gov/aboutFTB/newsroom/Mortgage_Debt_Relief_Law.shtml
OT: More borrowers exit Obama mortgage help plan
My comment: no $hite…let’s see how many of those are actually Irvine homedebtors.
The headline should read:
House Debtors With Liar’s Loans Give Up (Blame Obama)
Of course they are dropping out. Amazing how having to prove your income is such a hardship for some people. I love these stories that call the program “troubled”. Anything that is not a principal reduction is going to be “troubling” to these bleeding hearts.
” Amazing how having to prove your income is such a hardship for some people.”
Now you can wonder why so many small businesses in Gulf States affected by Oil Spill are going to get a doughnut from BP as most of small business show little income or losses at best to tame IRS taxes, now they cannot claim loss of income they never documented, LOL
What goes around comes around
What happens if you file BK? Isn’t everyone wiped out?
I know there is a greater stigma in BK versus SS’s and Foreclosures, but what is stopping people from going “all in” when things are pretty much farked over to begin with? Why quit while the goings good?
My .02c
Soylent Green is People.
I’ve not a lawyer nor gone through the process. I think the debt is “restructured” based on the debts and all assets including some forms of retirement plans. So best to get advise from a good BK lawyer and CPA before acting. Know your rights and consequences of your actions. The debt can be wiped out or lowered by the judge, but BK is not the answer to all debt problems.
I know of one, who thought that the down payment loan was non-recouse, but due to refinancing only the downpayment portion, the lender called 6 months after the jingle mail and wanted $100,000. After some haggling, they reduced balance by 65+% and allowed payment over a few years.
She felt bad about paying the $35,000. She needed to realize that she got off easy. Could of been the first was also recourse and the second didn’t negotate down the loss. BTW: she was a CA REA.
I think if I received a letter like that one I would most likely collapse to the floor, but not before cracking my skull open on brand new granite kitchen counter tops. They would be wise to send a heart defibrillator in a box alongside each letter with a sign that says: “Open Me First”.
Then again I’m probably underestimating the high number of collection letters that Californians already receive on a daily basis from their credit card companies, including Nordstrom’s, Baby Gap, Target, etc. charge cards too.
I don’t think banks and thrifts own the patent on “extend and pretend”.
I can’t now find the link but I read a post somewhere last week that more people are now behind on their home loan payments than their credit cards - first time in history. It is worth keeping my Target credit line open so I can buy food so I’ll make the min payments.
Perhaps now is the time for me to start that Singing Clown Process server business that I have been thinking of for awhile now.
We have clowns drive to the debtor in one of their little tiny cars, ring the door bell, and do some song and dance to add some humor to the situation before handing them the letter For an extra 9.99, the clown will ask the debtor to smell a flower which promptly squirts them in the face with a jolt of Kool Aid.
Much cheaper than including defibrilators with each note.
We need to get our unemployed clowns working again, I say.
Most of them should be treated according to legal principles: no need for stocks, public humiliation through tarring and feathering, or use of their remains for fertilizer.
However, if there is any record that these individuals have leased or purchased a Mercedes or BMW during their period of debt acquisition, then they should be thrown in prison camps. The United States has several facilities used to intern the Japanese during WWII, at places such as Manzanar and Tule Lake which can be refurbished and used for a just purpose this time.
If these sorts of collections pick up, it will put a severe strain on my monthly food budget: popcorn ain’t free, you know.
So I guess the banks really didn’t need a bailout.
If anyone were to mosey on over to the whitepages website and enter the first and last name of Ms. Somers, there is 1 match to a residence in Tucson, AZ. Zilow doesn’t list any historical sales info on the address though so it is hard to know if the matching name is just a coincidence or not. Maybe IrvineRenter’s source of information would have better information (if it was purchased in 06 or 07)
The original Manassas house might be found on on this web page (search for the last name).
According to Zillow, the house was purchased in ‘04 for 330K and sold in ‘08 for 227K ( nice haircut! ) after being initially listed for 375K
If this is the house then they must have taken out 50K or so as the article says the short sale was for 150K what they owed on the house. If the purchase price was 330 and ss price was 227K then we are talking a difference of 100K not 150K.
This is all assuming that this is the actual house though.
The numbers sound about right, but as you say, there is no way to be sure. If it is the same house, there was certainly a period where they were “in the money.”
I bet 1$ that the Manassas house is the correct house in question. The timeline of the sales and numbers are pretty much line up exactly with the info from the article.
Can you see the loan and downpayment on it? Perhaps a zero down, negative amortization ARM? That could also explain the jump in what was owed.
Nice, we need some type of accountability here and articles and laws like this should come from Federal level to shakeout the strategic defaulters who cashed out HELLOC and bought themselves luxury cars or run-away hideouts/homes in their spouse’s names. LOL, let see how far this one goes.
CA also has the one action rule. So that’s almost as good as non-recourse on the first. What I see in Irvine was shocking, but after looking into some NPB HEW, Irvine HEW’s are chump change. Might be the older Asian aversion and also older American aversion to debt in Irvine verse the beautiful people’s new thinking in NPB, NPC and CDM.
House price per sq. ft. highest in 2 years
http://lansner.ocregister.com/2010/06/21/house-prices-per-sq-ft-highest-in-nearly-2-years/69201/
Only AZDave is laughing at that
that’s a good one to rub in Irvine debtors face.
Even Bill Murray broke out of the ground hog day sequence by now.
IR,
Speaking of squatters, you might want to check out something that is happening up in the Pacific Northwest because this is what’s happening now as part of the fallout from the waves of foreclosures and securitization of mortgages(just take your blood pressure medication before you read it):
http://seattletimes.nwsource.com/html/dannywestneat/2012101648_danny13.html
http://seattletimes.nwsource.com/html/dannywestneat/2012126896_danny16.html
http://seattletimes.nwsource.com/html/dannywestneat/2012161968_danny20.html
Battles in California Over Mortgages
This explains the geographic factor of the bubble. Places where people thought of houses as investments - for resale or refi - were the places where prices soared, just because. It is still hard for me to understand why in some places people would pay 2-3X to be ‘owners’ (100% I/O or neg-am loan is not owning), while in other places prices can be below rental parity - even with rental parity at the peak.
The Irvine (or any other place) is special explains high prices for owners and renters, and does not explain price increases - unless a place is getting more and more special…
OK, I won’t try to explain Quail Hill, TRidge or those places out by Irvine’s Moreno Vally, BUT… most of Irvine is a pretty reasonably nice place.
You got to admit that.
Even much maligned UP has a very nice feel to it. Sort of like the Brady Bunch.
Does it justify 300 per square foot? I don’t think so, but when Dana Point went for 300, I think a place like UP (which I like more than Dana Point) did justify more.
It’s all a relative Ponzi scheme, and most of “older” Irvine was priced relatively cheap at the bubble peak.
Would I have bought at those prices? Hell no, we ran away from the TRidge models.
Speaking of dead cat bounces.
A realtor knocked at my door on sunday and handed me a list of recent sales in my TR neighborhood.
I was surprised at the prices. Well into the 400 per square foot range. Maybe I should sell this summer?
Problem is, it’s my home and the mortgage and taxes are low and very manageable. Since my daughter is still at UNI (see? I changed the spelling!!) I need to stay in the area and my mortgage is less than a rental.
Oh well…. just surprised the prices in TR are holding up so well. I guess that as TRidge dives from their stupid overpriced ranges they are helping TR hold up (we were lots cheaper than them at the peak…).
I haven’t seen any judicial foreclosures lately…seems like most lenders opt for non-judicial and go through their one-action that way.
Anyone know how to market a house post-judicial FC with a one-year right of redemption? That’s gotta be an awkward thing to go over during disclosures, even if it probably won’t happen. Is it even marketable?
Obviously, you might have submitted your application with a lender that only accepts customers with good credit.