Irvine Housing Blog

I have to agree with the geographic component.  Foreclosures have not been slow, or missed the ‘safe havens’ in SEFL.  Prices have fallen on many of those very expensive properties.  It puzzles me that Irvine props would be so slow to get foreclose.  From what I’ve seen, many toxic loans were originated out of Irvine.  If the bank foreclosure operator, based in Irvine, sees a dq loan in Miami or Irvine, which would he be more likely to push through quick, and which will he drag his feet on?

CA has to adjust its property tax law.  You have to increase the tax value to the appraisal used for a cash-out heloc/refi, or at least a maximum 1.25X loan amount (don’t want to punish someone who takes a loan from 10% LTV to 20% LTV).

THE PROPERTY NEEDS RENOVATION.THE BUYER SHOULD INVESTIGATE THE PROPERTY WITH PROFESSIONAL INSPECTORS, AND SHOULD REQUEST ALL PROPERTY INFORMATION FROM THEIR AGENT.

I suspect the above is going to become a fairly common disclaimer in listings for properties with a long history of squatting.

I’d also add following the article posted above today that while I think most in California/FL/AZ are aware of housing problems in their markets the rising problems elsewhere aren’t on the radar. I’m in NJ and when I mentioned to people that NJ is 3rd in the country for delinquent mortgages (after FL/NV) the reaction is that I am making it up and am delusional.  I’m not even sure I can say we are in the denial stage - you have to be aware of an issue to deny it and I don’t think that is even the case.

Another implication of this squatting is that people are still living in the “jumbo loan neighborhoods” who should by now be looking to either buy or rent in lower-priced areas.

This in turn is discouraging genuine “move-up” relocation by adding an extra, artificial, amount to the natural location premium.

At some point this will probably revert to the mean, and in fact if financial factors were all that mattered (and I acknowledge this is NOT the case) you might see some folks attempting to capture the artificial premium.  Possibly by selling and renting in the premium area while buying and letting in the beaten-down area, intending to reverse the process later.

Alan Greenspan is opening his trap again:

Greenspan Says U.S. May Soon Reach Borrowing Limit

Perceptions of a large U.S. borrowing capacity are misleading,” and current long-term bond yields are masking America’s debt challenge, Greenspan wrote in an opinion piece posted on the Wall Street Journal’s website. “Long-term rate increases can emerge with unexpected suddenness,” such as the 4 percentage point surge over four months in 1979-80, he said.

Did you read that, Planet Reality? Think low rates are here to stay permanently for the next decade or two?

Then again, Alan Greenspan hasn’t exactly had the best track record lately when it comes to making economic predictions.

How exactly do these “analysts” come up with the number of months of inventory?  The article listed says that “Miami has the largest backlog with a 62-month supply. But unlike New York, Miami’s shadow inventory has fallen from its March 2008 peak of 129 months.” 

So somehow in the last 27 months (since March 2008), 67 months worth of inventory has cleared.  Either I don’t understand time or this “statistic”.

Two edge sword of the short seller.
In a non-recourse state as CA, the seller may be better using a FC with no other recourse than using a short sale.  The short sale contract may have clauses to reimburse the banks at a latter date for the shortness of the sale.  Best to read over the contract with a fine tooth comb and have a RE/contract lawyer also look it over.

As for the rate of FC on Dq’s by lenders.  Who would your forclose on first, your neighbor or some one 1000 miles away?  As a bankster, who would you rather foreclouse on, your co-worker with a 2 million HEW withdraw and 2 years Dq or Joe six pack with a 20% down who’s behind 6 months Dq?

IrvineRenter,
How’s your FL and the Great Depression blog coming along?

We visited this house.

It is empty. It needs total re-build = paint, all windows, all floors, all bathrooms and kitchen. Everything needs to be redone, including roof and garden. The sweemingpool is very small and the whole back yard is a mess. But there is no evidance to an intentional damage by the former occupants of the house. It is only old and neglected. Never been treated. One more thing - It doesn’t look like a 3000 sqf. Maybe they count the garage which is a very large 3 car garage. The neighborhood is nice, and the comperables are around 830-860. Given the house’s condition, one must count 80-100k for renovations.

We were told that there are offers for 750-785k, and thought it is much too high for the risk of this house. Unfortunately, as long as there are buyers out there that give that kind of money, the prices won’t come down. At least if that house will be sold for 785k, it will be a new lower comperable, still not low enough though.

As to the question if and when to buy - We pay 45K/year for rent (though we don’t pay taxes, HOA exc.), and we don’t get tax discount for our renting payment like we would for our mortgage payment. We also have very nice downpayment from our old house (overseas, and from many years of hard work and saving,(we are not so young any more) always paying the full credit statment at the same month. so it makes sense to buy, even if the house price will fall 35k/year. The thing is - no one knows how low it will fall, and as I said before, as long as there are people who pay, the prices won’t fall. We are still waiting.

IR, you wrote:

“The areas where prices have not crashed yet are the areas without many subprime loans and subprime foreclosures.”

Does Irvine fall into that category?

If not, why are many prices at peak levels and how is TIC able to raise prices each phase for their new homes?

If so, wouldn’t banks be foreclosing faster in Safe Haven areas since price retention is better?

“I am shocked by the squatting. I really am. It never occurred to me that lenders would simply give away homes to people. Do lenders really believe they can do this without dramatic long-term consequences on borrower behavior?”

Sadly, this is what’s currently happening. All that talk late last year about Option ARMs blowing up and a few months ago where BofA is going to increase foreclosure processes have not panned out. We’re still not seeing massive increase in short sales, NODs, NOTs, and regular sales by folks cashing out while the going is good.

I said a few months ago that patience is virtue. Well, that virtue is starting to dry out.

Sad….just sad….especially for folks who are **actually** paying rents.

There’s one other option.  Banks go under when there’s no one to save them.  Once the mortgages are in the hands of another private entity (not the government of course) there will be no reason to pretend and there will be action.  A change of attitude in Washington could come from anti bailout candidates.

Ethan McCord, seen carrying wounded children in the Wikileaks Apache attack video, writes an apology letter to the grieving family and to Iraq. He also wants the wars to end.

http://www.askbutwhy.com/2010/06/ethan-mccord-talks-about-wikileaks.html