Irvine Housing Blog

“If the mortgage is covered by private mortgage insurance (PMI), the lender actually makes more money by foreclosing than by accepting the short sale. If they foreclose, the shortfall at the auction is covered by the PMI company. If they accept a short sale, PMI does not pay out”

Are you sure about your facts there? Through the novahousingblog commentators someone claimed that in the short sale they were buying, the loan had private mortgage insurance, and that while the bank accepted the short sale, the MI came back to the seller and requested they sign a promissory note for some substantial fraction (but not all) of the shortfall in order for the MI to approve the sale. The seller agreed to sign the note and the short went forward.

In your scenario, I’m pretty sure the MI would have a case to not pay the full amount of the claim if they can get access to those bids for higher amounts. Sure it will end up in court, or at least in the hands of lawyers threatening court, but still, it’s not clear the bank will get its insurance money.

If that is the case, that investors are profiting at the hands of MI’s, why don’t the MI’s bid on the properties at auction and keep the profit for themselves?

http://www.bankrate.com/finance/mortgages/foreclosure-mortgage-insurer-may-help.aspx

I wonder if the United Guaranty unit of AIG had enough reserves or if the general AIG bailout money has gone to them.

I don’t feel that bad for the MI’s.  They took loans that were bad.  They should have had access to as much underwriting info as the issuing bank, and they should have had the ability to either charge a higher premium, or refuse to insure.

There are few enough MI’s that they have a large volume of potential short-sale vs. foreclosures with each lender.  Litigating loans one-by-one seems to be a major bad road to go down.  MI’s as a whole should know who’s refusing short-sales and who’s not, and they should cut off those lenders from new MI issuance.

Golf buddy bought a condo within the last two months.  The condo was a shortsale and yet he bidded higher than the shortsale amount to win.  He was sure he was the highest bidder but he wasn’t.  The only way he won was the other guy backed out after getting laid off during the 3 month wait on shortsale answer. 

I didn’t see him for awhile so I had no idea he bought a condo.  I did hear him mention he was shopping around but I had no idea about this website then.  He moved out of renting a 1 bedroom @ $1400 a month to buying a condo and using his savings and paying $2400 a month with HOA dues included.  He is married but they are not rich and he was recently laid off due to economy although he did get another job.  I would have told him about this website if I had known he was shopping around sigh.

He was telling me how happy he was that he bought a place and I kept my mouth shut and just congratulated him.  I felt bad for him though.

Interesting premise.

I tried looking up some of the closing info from the MLS to verify…

-So far through this year, in Irvine, there have been 1168 closed sales reported.

-Of that set, 194 have been short sales. That is about 17% of total sales. Average DOM for this set is 129 days. Average OLP/SP for these over the course of the year has been 92.66%, or a discount of 7% of the original list price. Biggest drop was a purchase for 33% off on Apricot on 8/11.

-Of the 194 short sales, 46 have closed over their list price. Average DOM is 70 days. Average OLP/SP among that set has been 105.34% and the maximum overbid was 129% of list price (twice, most recently on Teak Bridge on 8/19).

It is apparent that the short sale game is not getting any clearer for anyone. Brokers have to spend a great deal of time educating buyers and sellers alike, and often the brokers themselves are confused. It’s hard enough to get a buyer and seller to agree on a price, but when you add in a lender (or several lenders) and more, the complexity escalates exponentially.

Thank you,
-IR2

While your facts may or may not be correct overall, MI loans are infinitesimal in Orange County, as the prior loan limit was $417k.

Over half a million for a nice condo doesn’t seem “very low” to me—but it does seem like asking prices are starting to drop closer to the realistic range.

ammenities=

*Pray the value doesn’t drop another 20% in the first two years you enjoy the “pride of ownership”**

In the same neighborhood, look at this WTF price;  $700+ /sq ft.  I am sure he will find a buyer because the school district is SO GOOD!!!

I wanted to see this property, but apparently you can only see it if you make an offer.  I decided to pass.

The problem with the heloc absuse is that it’s not just housing nor is it just wall street and the bankers. It’s everyone who has power to control money and who gets that money.

I stumbled upon this written by a doctor who is very angry over health care reform. I suggest everyone open their minds to what is the true problem in this country and that is Greed and corruption.

http://blogs.webmd.com/mad-about-medicine/2007/08/ceo-compensation-who-said-healthcare-is.html

Lack of regulation in all these areas have created this mess of fraud. I always say “Follow the Money”

My anger over all of this has not even budged, those that took money without intention of paying it back is as if they robbed their bank. Those that stole from patients with insurance and not paying their claims is the same—-stealing—the bankers the same—ect. ect.

Our country needs to wake up to all of this CRIME.

The listing says it’s a condo. A 4/4 condo? What’s up with that? Is there a shared wall somewhere? There doesn’t appear to be from the pics and map.

I smell some hidden info here.

-Darth

IR: “Do very low short sale prices still have shock value? If too many sellers go this route, the shock wears off, and expectation of lower future prices becomes the norm.”

I find this dynamic to be extremely ironic. The shadow inventory, the gov’t rescue, the long foreclosure process, all of it has been a desperate attempt to engineer this banker’s and politician’s dream of an orderly, steady, and gradual decline in the housing market. Quite ironically, however, the same greedy and desperate homeowners and RE industry workers that played the other half of the coin that got us here are foiling the banker/politician’s orderly slowdown.

-Darth

A bit off topic, but just a follow up to my recent comment about the Stockholm Syndrome:

A) I trust you know I was kidding, or perhaps “using hyperbole to make a point” is the better way to phrase it.  We’re all a little shell shocked by now given all the madness that has occurred in the past 3 to 5 years.  Kudos for seeing the humor/sigh of resignation/modicum of truth in my post.

B) Thanks for the kind reference to an ‘astute observer.’  I haven’t been called astute in ages

C) I was going on memory.  I was vaguely recalling that the SS was based on a bank robbery gone bad in Sweden in which the hostages were held for about a week.  After the robbers were captured the captives refused to testify against them in court and I think one of the female captives actually married one of the perps while he was in prison.  Evidently it is not that uncommon a reaction to extreme duress and perhaps can be seen just now in the very sad story of the girl in Antioch who was kidnapped when she was 11.  Apparently she never tried to escape. 

Anyway, thanks for your very measured, intelligent reply to a post I thought might have been a little harsh shortly after I pressed ‘send.’ I’m glad you didn’t see it that way.  I saw my shrink today and related the whole thing and he assured me you’re NOT suffering from SS. 

D jr

Hi…
I decided to pass. The problem with the heloc absuse is that it’s not just housing nor is it just wall street and the bankers. It’s everyone who has power to control money and who gets that money.

LEO – Loan Exit Option
Your Short Sale Solution

There is a new kind of short sale that has become available recently from HomeTelos for lenders and homeowners known as the LEO (Loan Exit Option) program.  The LEO program is your short sale solution that eliminates many of the problems associated with traditional short sales and cuts response and close time on offers from many months to just days.  Offers can be accepted immediately because HomeTelos works with the local agent, lender and homeowner to come to an agreement that is acceptable to all parties before the property enters the market.  This results in a pre-approved listing price and no more delays in obtaining decisions from the lender on offers.  Offers are submitted electronically and can be accepted immediately.

The LEO program is nearly identical to a traditional home sale in terms of efficiency. Even better, the transaction is handled completely by the experienced and knowledgeable staff at HomeTelos and the specially trained real estate agents we enlist. To learn more or to see if you qualify for our program, please visit our website at www.HomeTelos.com or contact us at Sales@HomeTelos.com or by telephone at 888.99.TELOS.