S&P Reports Three Years to Clear Shadow Inventory

Standard and Poor's, Amherst Securities, The Royal Bank of Scotland, and First American CoreLogic all agree shadow inventory is a major problem for the US housing market.

Today, we also have a Grade D HELOC abuser hoping to sell while they still have equity.

25 BIRDSONG Irvine, CA 92604 kitchen

Irvine Home Address … 25 BIRDSONG Irvine, CA 92604

Resale Home Price …… $649,900


I wish that I could fly

Into the sky

So very high

Just like a dragonfly

I'd fly above the trees

Over the seas in all degrees

To anywhere I please

Oh I want to get away

I want to fly away

Yeah yeah yeah

Lenny Kravitz — Fly Away

This song resonates with the freedom HELOC abusers feel when the free money flows. Go anywhere. Do anything. Fly away. Enjoy life's bounty. It reflects an abundance in life built on illusion; a neverending story rudely interrupted by reality. We see broken dreams and The Unceremonious Fall from Entitlement.

I wrote Shadow Inventory Orange County and Shadow Inventory Revisited to help define the terms and bring greater awareness to this major obstacle to a market recovery. HousingWire.com brings us reports from Standard and Poor's, Amherst Securities, The Royal Bank of Scotland, and First American CoreLogic delivering the same message: Shadow inventory is coming, and it must work through the system.

Shadow Inventory of Homes to Take Nearly 3 Years to Clear: S&P

A report from Jon Prior at HousingWire.com:

The “shadow inventory” of bank-repossessed properties, as well as distressed mortgages facing foreclosure, will take nearly three years to clear at the current sales rate, according to a report from the credit rating agency Standard & Poor’s (S&P). The analysts add that during this period many servicers will likely shift their emphasis from mortgage modification to loan liquidation.

The “shadow inventory” of homes includes all delinquent loans and real-estate owned (REO) property that has not reached the market. REO property are foreclosed homes taken back by the bank for liquidation. As for the total amount of homes in the shadow inventory, Amherst Securities places the total at 7m. The Royal Bank of Scotland found 2.7m, and First American CoreLogic counted 1.7m.

S&P estimates the inventory to equal a 33-month supply of homes. Analysts added the estimate is actually conservative, as they did not assume homes not showing signs of distress would default and push the overhang of supply even further.

Furthermore, court delays, political pressure and servicing backlogs constricted the flow of foreclosures hitting the market to a trickle. These delinquent borrowers who have not received a foreclosure fuel the “rapidly” growing shadow inventory of properties, according to the report.

“Overall, it is our opinion that recent positive housing reports should not be construed as a sign that the distress in the residential housing market is abating, but rather should be attributed to the temporarily limited supply of homes on the market,” according to the report.

Our current pricing is only sustained by lack of inventory and very low sales volumes. Any increase in inventory and resulting sales volumes will force prices lower, so homeowners and lenders live in fear of what will happen next. I speculate the loose cartel arrangement will crumble, and prices will slowly grind lower until this debt overhang is cleared. I am not alone in that conviction.

25 BIRDSONG Irvine, CA 92604 kitchen

Irvine Home Address … 25 BIRDSONG Irvine, CA 92604

Resale Home Price … $649,900

Income Requirement ……. $135,335

Down Payment Needed … $129,980

20% Down Conventional

Home Purchase Price … $300,000

Home Purchase Date …. 3/24/1992

Net Gain (Loss) ………. $310,906

Percent Change ………. 116.6%

Annual Appreciation … 4.4%

Mortgage Interest Rate ………. 5.05%

Monthly Mortgage Payment … $2,807

Monthly Cash Outlays …..….… $4,010

Monthly Cost of Ownership … $3,250

Property Details for 25 BIRDSONG Irvine, CA 92604

Beds 4

Baths 3 baths

Home Size 2,178 sq ft

($298 / sq ft)

Lot Size 4,472 sq ft

Year Built 1976

Days on Market 4

Listing Updated 2/17/2010

MLS Number P721972

Property Type Single Family, Residential

Community Woodbridge

Tract Pt

According to the listing agent, this listing may be a pre-foreclosure or short sale.

GREAT LOCATION INSIDE YALE LOOP ON CUL-DE SAC! A Must See Home in Highly Desired Woodbridge! This Home Features:4 Bedrooms and 3 Bathrooms ~Spacious Living Room with Cozy Fireplace and Cathedral Ceilings ~Formal Dining Room Opens to Family Room ~Large Kitchen with Center Island, Garden Window, Tile Flooring, Breakfast Nook and Plenty of Cabinets for Extra Storage ~Luxurious Master Suite, Mirrored Closet Doors ~Neutral Carpet and Paint Throughout ~Lots of Windows, Skylights and French Doors Add Natural Sunlight ~Plenty of Closet Space and Storage ~2-Car Attached Garage ~Nicely Landscaped Backyard ~ Enjoy Woodbridge Amenities with Parks, Lakes/Lagoons, Parks, Pools, & Walking Trails ~Award Winning Schools and Conveniently Located Shopping, Entertainment and Freeways.

Redfin listing for 25 BIRDSONG Irvine, CA 92604

Title Case? ~Tildes?

Is there a stylistic use of tildes in English? Could I use it ~ or misuse it ~ like a dash? Does it look better ~~ or need ~~ a double tilde? Or does it just lõõk stupid no matter how it's used?

"In MediaWiki, three consecutive tildes (~~~) create a "signature" (which can be customised by the user), five consecutive tildes (~~~~~) result in the time in UTC, and four consecutive tildes (~~~~) result in the signature followed by the time in UTC.

Another recent use of the tilde is to indicate either a "melodic" pronunciation, or a commonly recognized vocal inflection by enclosing a word or entire phrase between a pair of tilde (similar to the use of quotation marks) which indicates that such word or phrase is to be either sung as a tune, ~Happy birthday to you…~, pronounced as a jeer or taunt, ~Nyah, nyah!~, or with a common change in pitch, ~What-EVER!~.

In many online or internet communities, the tilde is used to show a sarcastic or sometimes playful connotation for the word or words to follow it."

It will be interesting to see if I can find an appropriate stylistic use of a tilde….

Relax ~~~


What grade would you give?

Today's featured property was purchased on 3/24/1992 for $300,000. The owners original financing is unknown, but by 2/7/2000, the owner had a $286,000 first mortgage. Let's use that as a starting point even though it may be off.

  • On 12/20/2001 the owners opened a HELOC for $30,000.
  • On 4/10/2003 they refinanced the first mortgage for $322,700.
  • On 12/2/2003 they opened a HELOC for $100,000.
  • On 8/29/2005 they increased the HELOC to $200,000.
  • On 6/12/2008 they refinanced the first for $417,000, and they obtained a second for $180,000.
  • Total property debt is $597,000.

  • Total mortgage equity withdrawal is $311,000.

IMO, this earns a grade D because these people were periodically and systematically withdrawing the equity from their property at a rate much higher than overspending ordinary lifestyle would indicate; they more than doubled their mortgage. To me, this symbolizes an active anticipation of appreciation and the intent to use as spending money just like income. By my definition, that earns a D.

Foreclosure Record

Recording Date: 01/27/2010

Document Type: Notice of Default

It is also possible that this owner is unemployed, and that they really are willing to repay all the mortgage equity withdrawal, but they can't. Perhaps the lender will dance with them a while longer, or perhaps not.

I like the photo above. The undistorted panorama provides the "feeling" of this room. I would like to see more like these.

54 thoughts on “S&P Reports Three Years to Clear Shadow Inventory

  1. AZDavidPhx

    This seller should not be bashed for paying off (-297K) in the first 18 years of house debtorship. They were simply managing their finances the same way that our government manages theirs.

  2. Mosquito

    Creative use of punctuation ( the tilde) today
    Two grammatical errors in five characters yesterday
    Conclusion: the brain conversion to realtorese has begun …

    If you can’t take the heat, stay out of the gourmet kitchen … 🙂

    1. IrvineRenter

      Is there a cure or antidote I can take before the disease becomes terminal? Even a little kool aid is harmful to one’s health….

      1. Frank

        “Is their a stylistic use of tildes in English?”

        I think it’s setting in. Maybe next time get creative: “Is they’re a stylistic use…”? Or maybe you meant “Is theirs a stylistic use of tildes in English?”

        Maybe next time, you should get more creative: “Is thar a stylistic use of tildes in pirate English?”

        (Sorry, but those who live in glass houses … 😉 )

  3. IrvineRenter

    In case anyone forgot how Shadow Inventory is measured:

    MBA: 14.05 Percent of Mortgage Loans in Foreclosure or Delinquent in Q4

    Notice the BS trying to minimize the epic nature of this disaster:

    “The delinquency rate for mortgage loans on one-to-four unit residential properties fell to a seasonally adjusted rate of 9.47 percent of all loans outstanding as of the end of the fourth quarter of 2009, down 17 basis points from the third quarter of 2009, and up 159 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 50 basis points from 9.94 percent in the third quarter of 2009 to 10.44 percent this quarter.

    The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the fourth quarter was 4.58 percent, an increase of 11 basis points from the third quarter of 2009 and 128 basis points from one year ago. The combined percentage of loans in foreclosure or at least one payment past due was 15.02 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey.

    The percentage of loans on which foreclosure actions were started during the third quarter was 1.20 percent, down 22 basis points from last quarter and up 12 basis points from one year ago. The percentages of loans 90 days or more past due and loans in foreclosure set new record highs. The percentage of loans 30 days past due is still below the record set in the second quarter of 1985.”

    1. Architect Dave

      IR, your analysis is spot on. To put human terms on the carnage, I have a friend whose parents own a home on Birdsong street right near your profile today. They have massive debts due to health problems, failed business ventures, etc. and they are living off Social Security to barely make their housing payments but cannot sell their home because they are almost assuredly underwater after spending their own HELOCs to the max. And now the neighbor is trying to get out? Uh oh!

  4. es

    couple points… first, does anyone know how recourse works for HELOCs? i.e., if someone defaults on a HELOC, can the bank pursue a default judgment? From what I recall from law school, the protection from a default judgment extends only to a first mortgage on a primary residence.

    second, I think we’re being a little harsh on these “heloc abusers” without knowing specifics. I think a quick registration check for boats, RVs, etc. is in order before we call them “abusers.” Remember that cancer treatment can cost $150K before you blink an eye. It’s practically $100K to send your kid to state college. My buddy rolled his ankle really bad and it was $16K. We have no idea if this $300K + draw was for exuberant spending or for necessity. Sitting in our little ivory tower and judging people seems a bit smug.

    Of course, there are comebacks to all of this- maybe the kid should go to junior college then the local state school… maybe you should have gotten a job with health insurance…

    Maybe I’m naive, but I just fail to believe that AAAAAAALL these people just dumped hundreds of thousands of HELOC dollars on Hawaiian vacations and Rolexes… but it is Orange County.

    1. Woodbury Renter

      you said it…you are naive. Emergency equity withdrawal for unanticipated and uncovered medical expenses is as rare as snowfall in this area. Unless by “medical expenses” you mean brand new Mercedes S Class.

      1. es

        I guess what I should have said was “I *don’t want* to believe people just withdrew $300K and spent it on garbage.” I live in San Jose, so I guess we don’t have as much of a “keeping up with the Joneses” mentality up here… whereas you guys have TV shows dedicated to keeping up with the real housewives.

        1. Woodbury Renter

          more Los Altos here than San Jose proper. Then again I long for my Modern Warfare gear when walking in San Jose at night.

      2. Swiller

        Believe it or not, there are people who used their HELOC to improve the property. That’s what it is there for…windows, flooring, a/c, electrical, etc etc.
        Es might be naive, but not EVERYONE screwed the system. In fact, the system is now screwing US.
        After seeing what I have in the last 25 years, and reading and talking to people on how they view things, you can bet that I will not take the high road on debt or even helping support the system, if/when the time comes, I’m going to walk from my house with a big ol’ smile.
        I use cash only now and don’t even have a credit card. I don’t care about credit scores and other trivial matters. If I walk into a house with 30% down, they don’t give a rats a$$ about my credit score.
        Credit scores and that game are for banksters to get rich.

        1. AZDavidPhx

          Believe it or not, there are people who used their HELOC to improve the property.

          This is a highly subjective statement. You may think you are improving your property because you install a granite waterfall shaped like Satan.

          Doesn’t mean that I, as your potential buyer, will agree with your taste and be willing to cover the money you spent in “improving” things. As far as I am concerned, that’s something you did for yourself. Whether the guy next door did the same or not, I could not care less. Your price will have to compete with his lesser “improved” property.

          1. Swiller

            I speak from personal experience. My HELOC went for new windows (double paned. Low-E),new sliding glass door, new plumbing, new electrical, ceiling fans (to not use A/C as much), a new AC/Furnace (one that won’t burn my house down but wasn’t covered by the builder for defects..long story) shelving I installed in the garage (permanent and can hold a LOT of weight, I could rent out the shelves as beds to immigrants from other countries EZ)….I could go on.
            All three properties I’ve owned in my life over the last 18 years, I’ve “fixed up” and have left the properties in much better shape than when I bought them.
            I don’t “think” I’ve upgraded my properties, I KNOW I’ve upgraded them. No HUMVEES, no granite counter-tops, no bullsh1t, but I got caught in the fraud simply due to bad timing, and MY personal choice to buy again when I KNEW people were smoking crack to pay that much…obviously, I was drinking the Kool-Aid too. I’m pissed, but I’m pissed at the SYSTEM and the BANKSTERS and our corrupt representatives. I will *not* attack the victims. Sure, there are some who pulled their games and walked with equity, but that is NOTHING compared to how much money was swindled by the banksters…not even close.

          2. Freetrader

            Swiller, why are you pissed at the system? Why on earth would you be angry at someone who was stupid enough to lend you money — and when you don’t repay the money you owe, you strip the property (which is probably illegal also, despite your presumption, but is certainly unethical)? You are angry with the bank — which loaned you money — not yourself — for foolishly borrowing more than you can afford. Your entitlement mentality is what is wrong with the system.

          3. Swiller

            MY entitlement mentality? I’ve worked full time jobs since I was 16. I’ve had the same job for 20 years, raised 2 kids, and have owned 3 homes. Always paid my damn taxes, have multiple retirement investments, and kept the system up and you call me out for what’s wrong with the system?
            It seems to be true, we DO NEED a revolution in this country. My bet is people like me, will win because we WORK and we make the system go, that and we aren’t afraid to get blood on our hands.
            “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. … God forbid we should ever be twenty years without such a rebellion; what country can preserve its liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance? Let them take arms.” — Thomas Jefferson to William Stephens Smith, 1787
            And stop with this unethical horsesh1t. Ethics and morality are something entirely separate than what is going on in Free Trade (banksters, you should just change your name to bankster) right now. I find you offensive and things would not go well between us if the chance encounter happens.

          4. Freetrader

            Swiller, you are an idiot.

            First of all, I am not a banker — not that that fact matters, since my background shouldn’t enter into this.

            Secondly, in your defense of your unethical advice, you cite your good citizen credentials — good for you, by the way. You’ve paid your taxes, and done well. Yet then you go on with some tripe about “revolution” and “tyrants”. Do you even realize what you are saying? Unless you want a Cambodia-style meltdown to happen, you’d better hope you don’t get what you want. You still haven’t explained to me why you hate bankers so much — if you borrowed money to buy three homes, paid off your debts, it seems things worked out pretty well for you didn’t they. Without bankers, who is gonna give you the money to buy those three homes? The tooth fairy maybe?

            You remind me of that idiot in Texas, Stark (who was actually from California). Stark had everything going for him — a good education, money, he owned his own airplane for Christ’s sake — yet he was convinced he was a victim because — egads — he had to pay income taxes. So he pulls mini 9/11 and tries to kill his own family, and leaves a diatribe behind about the usual suspects and how he has been victimized.

            You haven’t been victimized, my friend. You have obviously benefited greatly from this society, so the source of your rage is a little obscure, but it obviously has a source in some deep-seated feeling of entitlement you obviously possess.

            “The tree of liberty/the blood of tyrants”. Yeah, right. If there were ever a bloody revolution in this country, you would lose more than anyone. You might want to remember that before counseling revolutionary violence against “Banksters.”

          5. david

            Yes, it’s lame to blame the mortgage banker, and then steal from the bank by stripping the home. No one forced the debtor to take money at near Treasury rates, which is a great deal subsidized by the U.S. taxpayer.

            However, it’s also lame to defend government policies by saying we have a wealthy country. “You haven’t been victimized, my friend. You have obviously benefited greatly ….” If you’re still prosperous after someone takes half of your income, great, you have still been massively robbed. You are still half a serf, though a prosperous serf.

          6. Freetrader

            I am not defending any particular government policy, but to offer violent revolution as an altnative is ridiculous. Regarding taxes, the government doesn’t take ‘half’ out income, especially if we own a home. But even assuming that is true, how do you propose to pay for the government? Are you an anarchist who believes that we would have a perfect society if there were no government at all? How are you ‘robbed’ if tax dollars to pay for roads, schools, police, and national defense? The biggest part of the government budget is the massive middle-class entitlements of medicare and social security. What policies do you espouse? If you want to advocate a policy of ending middle-class entitlements and eliminating the home mortgage interest deduction, I would agree, but advocating violent revolution is no answer — unless one wants to really advocate for the discredited alternatives of anarchy, communism, religious dictatorship, or facism — the alterantives to representative government.

          7. tonye

            “You may think you are improving your property because you install a granite waterfall shaped like Satan.”

            What’s wrong with that?

            Where else are you going to properly sacrifice the KFC leftovers?

    2. AZDavidPhx

      I’ve noticed that every time we see a huge equity withdrawal – someone always stops by to play Medical Bill Charades.

      All those fancy pants vehicles you see driving around town, the second houses, granite counters, etc are all easily explained by hard working successful people and all the huge HELOC extractions are most likely medical bill hardship. It’s understandable; people who live in areas like Irvine only have access to substandard medical insurance. Most work odd jobs that provide no health care benefits.

      Makes perfect sense.

      1. es

        dammit, you guys are right. It just seems SO CRAZY to me to spend money you don’t have in that fashion.

        BTW, I didn’t mean to offer medical bills as an excuse, but rather a potential explanation. I guess I was looking for a way to rationalize this.

        I guess Orange County really is a different planet.

        1. AZDavidPhx

          It just seems SO CRAZY to me to spend money you don’t have in that fashion.

          It’s not crazy at all. When you buy house, you are entitled to yearly appreciation dividends from that asset. House prices only go up (a realtor with a little ‘r’ said so).

          That yearly dividend is your reward for house debtorship – you are free to extract it and spend it as you wish.

          When you sell the house for its new value, you get to break even (maybe even make some more money) when the buyer pays you a handsome reward for your house.

          That’s just how real estate works. Always has and always will.

          Buy now or be priced out forever.

        2. MalibuRenter

          A lot of people thought they actually did have the money. You know, their house was worth 3x what they paid. Thus, they thought they had the money. They thought when they sold the house at some point they would still get more cash.

      2. MalibuRenter

        There are people in areas like Irvine who claim that they used home equity to try to start a new business, or support a failing one. That often seems credible to me.

        I also knew a woman who got the house in a divorce around 1999. She didn’t want to work and just kept extracting more money.

        1. zubs

          The failed business they were supporting with their HELOC was realestate. The greedy wanted to be big balling property tycoons. They took out the money to use as downpayment on investment properties and when the shit didn’t appreciate no more, their business was failed.

    3. Perspective

      “…does anyone know how recourse works for HELOCs?…”

      If the HELOC was not used to acquire/purchase the property, and the HELOC creditor does not use their one action (in CA) to pursue non-judicial foreclosure (usually the first lien holder would be the party foreclosing), then the HELOC creditor can seek a deficiency judgment.

  5. AZDavidPhx

    I sure hope they aren’t doing that. Banks are going after these folks who “vandalize” their properties prior to foreclosure.

    I actually side with the banks on this one.

    You may be the “owner” on paper, but if a bank holds a lien on your property then then it has first rights to the sale of the appliances and fixtures that it came with. This is perfectly logical and common sense.

    1. Swiller

      Yes, do NOT just take your high quality appliances and everything else YOU paid for in the house. What you NEED to do is buy the cheapest a$$, chineze made garbage, and replace EVERYTHING in the house with that. THEN sell YOUR furnishings. Let’s stick with the law here folks, if you get creative you can SHAFT the banksters much harder than you think AND stay within the law.
      The air conditioner doesn’t NEED to be working, you can exchange with your neighbor and leave the old one that doesn’t work.
      My advice is…STRIP THAT HOME, but stay within the confines of the law. I LOVE when people stand up for their rights and stay within the law.
      Got ceiling fans or nice light fixtures. Get one of the old plastic single bulb screw-in types. Replace EVERY fixture.
      If I “default” on my property, you can bet everything that isn’t nailed down or attached permanently, will be removed and sold or even GIVEN away. I would rather bless someone else than leave it for the banksters.

      1. HomeBeggar

        That’s awesome. The principle here though shouldn’t be to swindle the bank though, if you abused them. But, they did the loan, right? Whatever, haha.

  6. IrvineRenter

    The spin machine is working overtime today:

    Fewer people falling behind on home loans

    ~begin spin~

    WASHINGTON – The number of borrowers falling behind on their mortgage payments dropped sharply at the end of last year, a sign the foreclosure crisis is beginning to ebb.

    The Mortgage Bankers Association said Friday that the percentage of borrowers who missed just one payment on their home loans fell to 3.6 percent in the October to December quarter, down from 3.8 percent in the third quarter. The decline was even more surprising because delinquencies usually rise at that time of year due to higher heating bills and holiday spending.

    The new trend in late payments is significant because it means the number of people going into foreclosure will continue to decline this year. And that is important for all homeowners in areas where cheaply priced foreclosures are bringing down neighboring values.

    In high-foreclosure cities like Las Vegas, Phoenix and Miami, for example, homes have lost roughly half their values from their peaks. But Friday’s report showed Nevada, Arizona and Florida had some of the biggest declines in new delinquencies.

    Jay Brinkmann, the trade group’s chief economist, said the report likely marks “the beginning of the end” of the wave of mortgage delinquencies and foreclosures that started more than three years ago.

    ~end spin~
    ~begin reality~

    Still, more than 15 percent of homeowners with a mortgage have missed at least one payment or are in foreclosure, a record for the 10th straight quarter.

    “The bad news is that we still have a big problem,” Brinkmann said. ~brief spinner~ “The good news is it looks like it may not get much bigger.” ~back to reality~

    There will be, however, more short-term pain. Nearly half of all delinquent borrowers were at least three months behind on their payments, up from a typical level of under 20 percent.

    1. Soylent Green Is People

      That iceberg doesn’t look very big does it Capt’n? Plus at it’s current melt rate I’m sure there won’t be a problem when we swing near it.

      Kool-Aid. Use it for more than just delusionary thinking. Now with 25% more jumbled statistics.

      15% of mortgage holders behind on their loans. When you stand in line at your local Starbucks look around. At least 1 to 2 people in line shouldn’t be ordering that Tall Decaf Extra shot Mocha No Whip non fat Soy Latte Extra Hot with a double cup. They should be behind the bar working to get enough $$$ to pay their loan as agreed.

      These are scary times but covered with just enough veneer (Pergo?) to give us a nice sense of normalcy. Most societies would have devolved into a “pitchforks and torches” mentality. Time of course will tell.

      My .02c

      Soylent Green Is People.

      1. Swiller

        If or when the time comes from me to walk away from my house, if people show up with pitchforks and torches, I hope they are willing to lay their life down for what they believe…because I am. Always have been.
        It wouldn’t surprise me if things devolve that far. Thank God for the 2nd Amendment. There’s TWO things in that last sentence that should make every liberal hopping mad. God and 2nd Amendment.

    2. AZDavidPhx

      My favorite quote in that story was:

      The decline was even more surprising because delinquencies usually rise at that time of year due to higher heating bills and holiday spending.

      I love the moronic jumping to conclusions going on here.

      Yea, I had to buy the wife some jewelry so I went ahead and skipped paying the mortgage for the month. No big deal, I’ll just pay double plus some penalties next month; the lady needs bling and I need some new socks.

      They might as well have thrown in higher food costs from all the Hams, Turkeys, and barrels of Egg Nog being consumed.

    3. NOT

      Sounds to me like the money quote is “the percentage of borrowers who missed just one payment on their home loans fell”

      Note that it says “just”. So I assume that the total that have missed more than one has gone up. Is it possible to skip two payments at once?

    4. MalibuRenter

      “The Mortgage Bankers Association said Friday that the percentage of borrowers who missed just one payment on their home loans fell to 3.6 percent in the October to December quarter, down from 3.8 percent in the third quarter. The decline was even more surprising because delinquencies usually rise at that time of year due to higher heating bills and holiday spending.

      The new trend in late payments is significant because it means the number of people going into foreclosure will continue to decline this year. ”

      This is not necessarily the case. This could easily be explained by lenders taking longer to report delinquencies.

      1. AZDavidPhx

        This is not necessarily the case. This could easily be explained by lenders taking longer to report delinquencies.

        Just watch, in another couple of months the headline is going to read:

        “Delinquencies “unexpectedly” jump after initial hope!”

  7. Geotpf

    But I can come up with grey areas. Here’s one: Let’s say you buy a house and then years later you completely remodel the kitchen with new cabinets and appliances, removing the old ones. You use your own money to purchase and install such (not HELOC funds or similar). I think you could be legally justified to then remove said improvements prior to a foreclosure, since they weren’t there when the loan was issued and therefore weren’t paid for by the bank. Of course, that does mean the house ends up without a kitchen when the bank takes it back.

    Of course, this isn’t the case in most foreclosures. Also, in most foreclosures, the bank doesn’t bother trying to sue the homedebtor for damages, since the legal costs are high and chances of collecting low. In fact, usually the banks offer “cash for keys” after a foreclosure, acceptance of which requires the former homeowner to not trash the place.

  8. NOT

    So this house seems nice… Except it is VERY OLD, has NO YARD and someone wants $650k for it…

    Sir, you would you like an old box with no insulation to live in? It will only cost you a tad over half a million dollars? It comes with conveniently located freeways. Not interested? But I conveniently located the freeways for this house!

          1. Chris

            So what is the moral of the story from that image?

            Walk if you can’t get a $60k discount on the house that you bid on?

  9. Janice Clark

    Selling it while they still have equity is a good thing. Though I’m not sure about the payments posted and all those stuff. Anyway, goodluck with that! 😉

Comments are closed.