We have at least three years worth of distressed inventory in Orange County, and that assumes we don't add more to it. Despite the rise in the median price, the housing market is not healthy.
Irvine Home Address … 103 AMBIANCE Irvine, CA 92603
Resale Home Price …… $1,375,000
So you though you'd like to change the world
Decided to stage a jumble sale
For the poor, for the poor
It's a waste of time if you know what they mean
Try shaking a box in front of the Queen
'Cause her purse is fat and bursting at the seams
It's a waste of time if you know what they mean
Too many hands in too many pockets
Housemartins — Flag Day
Headlines about 8.4% mortgage delinquency rates don't convey the enormity of the disaster. Headlines about rising prices mask the reason for rising prices: withheld inventory. A large number of Orange County homes are going to be sold over the next several years as we liquidate the properties of squatters everywhere.
So how many loan owners in Orange County are failing to make their payments?
Number of OC Homes Delinquent on Mortgage Payments
Total Owned Housing Units
OC Homes With Mortgage
OC Homes Currently Delinquent on Mortgage Payments
(Links to source material provided above.)
According to ForeclosureRadar.com, there are 14,214 properties in Orange County with either a Notice of Default or a Notice of Trustee Sale. The ratio of visible to shadow inventory is comparable to national norms.
Published: June 7, 2010 3:46 p.m.
According to CoreLogic’s latest late-mortgage report, 8.40% of Orange County home-loan borrowers as of April are 90 days-plus late with their house payments. That’s +2.60 percentage points vs. a year ago. Also …
* Compare that change in delinquency rate to the national movement in a year of +2.87 percentage points vs. a year earlier or +3.15 percentage points in California.
* 2.37% of Orange County homes were in the foreclosure process; +0.15 percentage points vs. a year earlier.
* 0.35% of Orange County homes were repossessed by banks as REO (real estate owned); -0.10 percentage points vs. a year earlier.
* Orange County 90-day delinquency rate is -3.20 percentage points vs. the state’s slow-pay rate and -0.50 percentage points vs. national pace
* At right is a table showing how Orange County mortgage troubles compare to state and national payment woes.
If it is "different" in Orange County, if we are wealthier and more financially sophisticated than the rest of the nation, then why is our delinquency rate almost the same as the national average?
And if our delinquency rates are nearly the same as national averages, why are the foreclosure rates and REO rates much lower? Are lenders afraid to foreclose here because they know what it will do to prices?
Is anyone else amazed that lenders are choosing squatting over foreclosure?
At least Orange County isn't the worst, right?
(Reuters) – One in every seven U.S. households with a mortgage ended the first quarter behind on payments or in foreclosure, although a peak in unemployment could mean repayment stress is easing, the Mortgage Bankers Association said on Wednesday.
While the rate of new foreclosure actions has slowed, the stockpile of loans that are seriously delinquent or in foreclosure means a long path to recovery for the U.S. housing market.
"It's like shutting off the oil leak, but you still have a lot of oil in the Gulf to deal with," Jay Brinkmann, the MBA's chief economist, said in an interview.
The analogy breaks down because the pipeline has not been shut off. Delinquencies are still rising, and the pipeline is flowing at full strength.
Loans that are 90 days or more past due or in foreclosure represent a historically high 68 percent of all problem mortgages. High unemployment is overwhelming efforts by lenders to alter loan terms to borrowers.
Looming foreclosures and short-sales "suggest we will have more house price declines where we'll see a bottoming of the price decline very late this year into early next year," said Mark Zandi, chief economist with Moody's Analytics in West Chester, Pennsylvania.
Prices have toppled about 30 percent peak to trough on average but have stabilized in recent months.
"But the good news is that early-stage delinquencies and foreclosures are falling, so we should see a definitive rise in home prices by the spring 2011 selling season," said Zandi.
Give me a break. If we bulldozed about 30,000 homes of delinquent borrowers, perhaps prices may start rising by 2011. Zandi is market cheerleading.
The combination of loans in foreclosure and those that are at least one payment past due declined to 14.01 percent on a non-seasonally adjusted basis from a record 15.02 percent in the fourth quarter, according to the MBA's National Delinquency Survey.
New claims for unemployment insurance in the first quarter were higher than expected, the MBA said, which stymied improvement in the 30-day delinquency rate. The rate has stabilized, Brinkmann said, though "a bad situation that is not getting worse is still bad."
…"Overall, we see a continuation of the pattern of declines in short-term delinquency rates, at least on a non-seasonally adjusted basis, the continued historically high share of delinquencies that are 90 days or more past due, and a leveling off in the pace of foreclosures," Brinkmann said in a statement.
In other words, the amend-pretend-extend dance will continue until we see a reason to stop it.
U.S. national unemployment, which hovers just below 10 percent, is forcing more homeowners to default in states other than those most hurt in the initial foreclosure tidal wave spawned by high-risk loans. Joblessness and wage cuts kept boosting defaults on prime, fixed-rate loans, or relatively safe mortgages made to borrowers with high credit quality.
… "Some might take comfort from the apparent topping out in the number of foreclosures started, but the inventory of foreclosures continues to rise — in other words, this headwind will linger," said Tom Porcelli, senior economist at RBC Capital Markets in New York.
Thanks for telling us how to take comfort from this terrible data.
Get it through your thick skulls people…
There is no cause for alarm from these problems, I have it from a reliable source that everything here will be all right. Orange County is different:
You're kidding yourself if you think prices are going to drop even more. We have already hit the bottom. I don't understand why "potential homebuyers" are under the assumption that there is going to be some sort of "correction." Get it through your thick skulls people…..right now is seriously the time to buy. I am not saying this as a Realtor but as a person with common sense.
Don't get me wrong, many areas of the US will continue to face declining RE markets, but not Orange County.
I am not saying this as a Realtor but as a person with common sense? Is he demeaning realtors or people with common sense? I can't tell. Would it have been better for him to say it as a Realtor? Would that have made his statement more believable?
JP Morgan Chase gets crushed
Today's imploding Ponzi stripped his equity as it appeared just like many others at the time.
- This property was purchased on 6/10/2004 for $1,205,500. The owner used a $964,350 first mortgage and a $241,150 down payment.
- On 9/17/2004 he opened a HELOC for $100,000.
- On 6/12/2006 he obtained a $500,000 HELOC.
- On 7/6/2007 he refinanced the first mortgage for $1,350,000 and got a $50,500 HELOC.
- On 9/25/2007 JP Morgan Chase extended him a HELOC for $270,000.
- Total property debt is $1,620,000
- Total mortgage equity withdrawal is $655,650.
- Total squatting time was less than a year.
Recording Date: 02/23/2010
Document Type: Notice of Sale
Recording Date: 08/12/2009
Document Type: Notice of Default
Luther Burbank Savings bought this property at foreclosure on 3/29/2010 for $1,457,000 which was the full amount of the deed plus missed payments and expenses. Notice these miscellaneous charges added up to $107,000. The value and cost of squatting is very high on these jumbo loan properties.
Irvine Home Address … 103 AMBIANCE Irvine, CA 92603
Resale Home Price … $1,375,000
Home Purchase Price … $1,205,500
Home Purchase Date …. 6/10/2004
Net Gain (Loss) ………. $87,000
Percent Change ………. 14.1%
Annual Appreciation … 2.1%
Cost of Ownership
$1,375,000 ………. Asking Price
$275,000 ………. 20% Down Conventional
4.84% …………… Mortgage Interest Rate
$1,100,000 ………. 30-Year Mortgage
$279,544 ………. Income Requirement
$5,798 ………. Monthly Mortgage Payment
$1192 ………. Property Tax
$225 ………. Special Taxes and Levies (Mello Roos)
$115 ………. Homeowners Insurance
$235 ………. Homeowners Association Fees
$7,564 ………. Monthly Cash Outlays
-$1463 ………. Tax Savings (% of Interest and Property Tax)
-$1361 ………. Equity Hidden in Payment
$510 ………. Lost Income to Down Payment (net of taxes)
$172 ………. Maintenance and Replacement Reserves
$5,422 ………. Monthly Cost of Ownership
Cash Acquisition Demands
$13,750 ………. Furnishing and Move In @1%
$13,750 ………. Closing Costs @1%
$11,000 ………… Interest Points @1% of Loan
$275,000 ………. Down Payment
$313,500 ………. Total Cash Costs
$83,100 ………… Emergency Cash Reserves
$396,600 ………. Total Savings Needed
Baths: 3 full 2 part baths
Home size: 3,500 sq ft
($393 / sq ft)
Lot Size: 6,674 sq ft
Year Built: 2005
Days on Market: 36
Listing Updated: 40312
MLS Number: P734152
Property Type: Single Family, Residential
Community: Quail Hill
According to the listing agent, this listing is a bank owned (foreclosed) property.
This property is in backup or contingent offer status.
OPEN HOUSE SAT MAY 8 FROM 1 TO 4…Absolutely gorgeous highly upgraded home situated in prime location at the end of a cul de sac iin the wonderful community of Quail Hill. Spectacular back yard with spa, fireplace and outdoor fireplace. The casita which could be another bedroom and bath was turned into a fabulous wine room. Beautiful kitchen with granite, amazing master suite, this home has it all. Simply fabulous from the curb to the outdoor grounds and everything inbetween. Not your typical bank owned property.
Not your typical bank owned property? LOL. Yes, only because banks are not foreclosing on properties like these and kicking out the squatters.
These pictures are pretty. The wet concrete is wet enough to create some good reflections.