Foreclosures are expected to increase as banks begin to process the backlog of both visible (NOD, REO, MLS) and shadow inventory.
Irvine Home Address … 6 DELAMESA Irvine, CA 92620
Resale Home Price …… $530,000
Livin' simple and trying to get by
But honey, prices have shot through the sky
So I fixed up the basement with
What I was a-workin' with
Stocked it full of jelly jars
And heavy equipment
We're in the basement…
10-20-30 million dollars
Ready to be spent
B-52s — Legal Tender
Ben Bernanke is intent on printing out way out of our economic slump if necessary. As Bernanke continues printing money and giving it to banks at zero percent interest, our banks are beginning to return to health. Some banks are healthy enough to begin taking the necessary write downs on their residential real estate loans.
U.S. Foreclosure Filings May Jump 20% in 2011 as Crisis Peaks
By Dan Levy and Prashant Gopal – Jan 13, 2011 8:04 AM PT
The number of U.S. homes receiving a foreclosure filing will climb about 20 percent in 2011, reaching a peak for the housing crisis, as unemployment remains high and banks resume seizures after a slowdown, RealtyTrac Inc. said.
“We will peak in foreclosures and probably bottom out in pricing, and that’s what we need to do in order to begin the recovery,” Rick Sharga, RealtyTrac’s senior vice president, said in an interview at Bloomberg headquarters in New York. “But it’s probably not going to feel good in the process.”
The Promissory Note and Mortgage are complicated series of promises lenders and borrowers make to each other in the loan transaction. Regardless of how borrowers perform, they are going to become emotionally attached to their properties.
If borrowers do not perform to the specifications of the repayment agreement, they generally sell, but they can simply squat and wait until foreclosure. More and more loan owners are choosing to do that.
A record 2.87 million properties got notices of default, auction or repossession in 2010, a 2 percent gain from a year earlier, the Irvine, California-based data seller said today in a report. The number climbed even after a plunge in filings in the last part of the year — including a 26 percent drop in December — as lenders came under scrutiny for their practices.
Foreclosures have weighed down U.S. housing prices as the nation’s unemployment rate is stuck at more than 9 percent. Home values may rise 0.6 percent for the year, the first annual jump since 2006, according to Fannie Mae, the largest U.S. mortgage buyer. They have fallen as much as 33 percent since peaking in 2006, based on the S&P/Case-Shiller Index of 20 cities.
Banks seized more than 1 million homes in 2010, according to RealtyTrac. That was up 14 percent from a year earlier and the most since the company began reports in 2005.
About 3 million homes have been repossessed since the housing boom ended in 2006, Sharga said. That number could balloon to about 6 million by 2013, when the housing market may “absorb the bulk of distressed properties,” he said.
With sales well off historic norms and near 10% unemployment, who is going to step forward and buy all the distressed inventory over the next 3 years? This is going to linger on for a very long time. 
Foreclosure Pipeline
“What makes this almost inevitable is the fact there are 5 million seriously delinquent loans not yet in foreclosure,” Sharga said. “They’ve got to eventually get in the pipeline unless the homeowners cure the defaults.”
I think many believe the invisible hand of the market is somehow going to make all these problems go away. These delinquent borrowers are either going to be given free houses as squatters, or they will be foreclosed on. Cure rates are very low because the debts are so large, and the employment and wage picture is so weak. Low cure rates will persist.
The foreclosure crisis is the biggest threat to U.S. economic growth, according to Mark Zandi, chief economist for Moody’s Analytics Inc. in West Chester, Pennsylvania. Lender delays in processing defaults may prolong a decline in home prices, he said in an interview this week.
As many as 250,000 foreclosure filings that would have occurred at the end of 2010 were delayed by the ongoing probe into lender practices, according to RealtyTrac. Those proceedings will be pushed into this year, resulting in an “ugly” first quarter, Sharga said.
Attorney General Probe
Attorneys general in all 50 states are investigating whether banks and loan servicers used faulty documents and signatures on loan documents, a process that has come to be known as robo-signing. Companies including JPMorgan Chase & Co., Bank of America Corp. and Ally Financial Inc. halted some repossessions as they reviewed their procedures.
Foreclosure filings in December totaled 257,747, the lowest monthly tally since June 2008. The number fell 2 percent from November and 26 percent from a year earlier, the biggest annual decline in RealtyTrac records.
In Florida, among the states most affected by delays because the courts oversee foreclosures, filings plunged 54 percent from a year earlier to the lowest level since July 2007.
Total U.S. filings in the fourth quarter fell 8 percent from a year earlier to 799,064. The tally for the three-month period was the lowest since the fourth quarter of 2008.
Nevada had the highest U.S. foreclosure rate in 2010 for the fourth consecutive year, with more than 9 percent of the state’s households receiving a filing.
I will be busy.
Arizona was second at 5.7 percent and Florida third at 5.5 percent.
California’s rate was 4.1 percent, Utah’s was 3.4 percent and Georgia’s was 3.3 percent. Michigan, Idaho, Illinois and Colorado rounded out the top 10.
Five States
Five states accounted for 51 percent of the U.S. filing total, with almost 1.5 million. California led with 546,669, down almost 14 percent;
Less filings in California almost certainly means larger shadow inventory. Unemployment remains very high, and as the high prices attest, the debts here are enormous. California is not over the hump.
Florida was second at 485,286, down 6 percent; and Arizona was third at 155,878, down 4 percent.
Illinois ranked fourth at 151,304 and Michigan was fifth at 135,874, both down about 15 percent from 2009.
Georgia, Texas, Ohio, Nevada and New Jersey also ranked among the top 10, said RealtyTrac, which sells data from counties representing 90 percent of the U.S. population.
To contact the reporters on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net; Prashant Gopal in New York at pgopal2@bloomberg.net
To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net
Over 1 million Americans seen losing homes in 2011
After a record 1 million home foreclosures in 2010, this year is likely to be even worse
Janna Herron, AP Real Estate Writer, On Thursday January 13, 2011, 3:21 pm EST
NEW YORK (AP) — The bleakest year in the foreclosure crisis has only just begun.
Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and industry experts say more people will miss payments because of job losses and also loans that exceed the value of the homes they are living in.
“2011 is going to be the peak,” said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year.
I don't know. Two Thousand Eleven might be the peak of foreclosures, but some markets will take much longer to clear out, and some will process quicker. I suspect we may see a peak in foreclosures, but the for-sale inventory may not peak for a year or two after that as we process the backlog.
Banks will undoubtedly be selling into the upwelling of the new recovery. IMO, the recovery will be weak because people will continue to pay down debt, and no HELOC money will be made available because there has been no appreciation to create any free money. The lack of mortgage equity withdrawal will be a drag on the economy An unpleasant side effect of government meddling falsely propping up prices and delaying the bottom.
The blistering pace of foreclosures this year will top 2010, when a record 1 million homes were lost, RealtyTrac said Thursday.
One in every 45 U.S. households received a foreclosure filing last year, a record 2.9 million of them. That's up 1.67 percent from 2009.
On Thursday, Freddie Mac reported that fixed mortgage rates dipped this week for the second straight time, extending a sliver of hope for some home owners.
A sliver of false hope? Interesting that this news story actually states they are giving the hopeless something to cling on to. Denial must be the driver of investment related reporting.
The average rate on the 30-year mortgage dropped to 4.71 percent from 4.77 percent the previous week. The rate on the 15-year loan, a popular refinance choice, slipped to 4.08 percent from 4.13 percent.
But both are a half-point higher than the lows they reached in November. The 30-year loan rate hit a 40-year low of 4.17 percent and the 15-year mortgage rate fell to 3.57 percent, the lowest level on records starting in 1991.
The dip has led more borrowers to apply for a refinance, but would-be buyers remain hesitant, according to Wednesday's mortgage indexes from the Mortgage Bankers Association. It will take more than low mortgage rates to jumpstart a housing market plagued by high unemployment, falling prices, tighter credit standards.
The glut of foreclosures has compounded the problem and while the pace moderated in the final months of 2010, that isn't expected to last.
Foreclosures are expected to remain elevated throughout the year, pushing home prices down another 5 percent nationally before finally bottoming out.
The number of homes that received at least one foreclosure-related filing in December was the lowest monthly total in 30 months. Total notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.
Banks temporarily halted actions against borrowers severely behind on their payments after allegations of improper eviction surfaced in September.
Are you starting to suspect that banks will either invent or embrace any story that allows them to delay foreclosure?
However, most banks have since resumed foreclosures and the first quarter will likely bear that out, Sharga said.
The pain likely will be the most acute in states that have already suffered the worst. For the most part, it will be states that saw the biggest housing booms: Nevada, Arizona, Florida and California. They will be joined by states hit hardest by the economic downturn, including Michigan and Illinois.
And on Wednesday, Illinois lawmakers approved a 66 percent income-tax increase in a desperate bid to end the state's crippling budget crisis.
I hope Jerry Brown isn't getting any ideas….
More than half of the country's foreclosure activity came out of five states in 2010: California, Florida, Arizona, Illinois and Michigan. Together, these states recorded almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.
Nevada posted the highest foreclosure rate in 2010 for the fourth straight year, despite a 5 percent decline in activity from the year before. One in every 11 households received a foreclosure filing last year in the state. In December, foreclosure activity increased 18 percent from November with a 71 percent spike in bank repossessions.
Arizona and California also showed sharp December increases in the number of homes that banks reclaimed, at 52 percent and 47 percent, respectively. Arizona, along with Florida, finished the year at No. 2 and No. 3 for the highest foreclosure rates.
One in every 17 Arizona households got a foreclosure filing last year, while one in 18 received a notice in Florida.
California, Utah, Georgia, Michigan, Idaho, Illinois and Colorado rounded out the top ten states with the highest foreclosure rates.
RealtyTrac tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.
As more shadow inventory is brought into the light, prices will remain under pressure. It doesn't look like a vibrant economy is coming to save the market. Even if a rebound were robust, it wouldn't save many of the indebted anyway. Like those who got Option ARMs with 1% teaser rates..jpg)
Selecting Pay-Option default
The Option ARM, also known as the pay-option ARM, allowed a borrower to select a payment: (1) the fully amortized payment they could not afford, (2) the interest-only payment they probably could not afford, and (3) the teaser rate payment they could afford as long as the teaser rate was offered in perpetuity.
- The owner of today's featured property paid $433,000 on 12/10/2003. He used a $411,350 first mortgage and a $21,650 down payment.
- On 9/8/2005 he refinanced with a $508,000 Option ARM with a 1% teaser rate, and he obtained a $50,800 HELOC.
- On 5/17/2006 he enlarged the HELOC to $85,800.
- Total property debt is $593,800 plus negative amortization on a 1% teaser rate.
- Total mortgage equity withdrawal is $182,450.
He isn't in default, but he can't pay off the mortgage, so this is a short sale.
Irvine Home Address … 6 DELAMESA Irvine, CA 92620 
Resale Home Price … $530,000
Home Purchase Price … $433,000
Home Purchase Date …. 12/10/03
Net Gain (Loss) ………. $65,200
Percent Change ………. 15.1%
Annual Appreciation … 2.8%
Cost of Ownership
————————————————-
$530,000 ………. Asking Price
$106,000 ………. 20% Down Conventional
4.79% …………… Mortgage Interest Rate
$424,000 ………. 30-Year Mortgage
$107,133 ………. Income Requirement
$2,222 ………. Monthly Mortgage Payment
$459 ………. Property Tax
$0 ………. Special Taxes and Levies (Mello Roos)
$88 ………. Homeowners Insurance
$81 ………. Homeowners Association Fees
============================================
$2,851 ………. Monthly Cash Outlays
-$377 ………. Tax Savings (% of Interest and Property Tax)
-$530 ………. Equity Hidden in Payment
$194 ………. Lost Income to Down Payment (net of taxes)
$66 ………. Maintenance and Replacement Reserves
============================================
$2,205 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$5,300 ………. Furnishing and Move In @1%
$5,300 ………. Closing Costs @1%
$4,240 ………… Interest Points @1% of Loan
$106,000 ………. Down Payment
============================================
$120,840 ………. Total Cash Costs
$33,700 ………… Emergency Cash Reserves
============================================
$154,540 ………. Total Savings Needed
Property Details for 6 DELAMESA Irvine, CA 92620
——————————————————————————.jpg)
Beds: 3
Baths: 2 baths
Home size: 1,325 sq ft
($400 / sq ft)
Lot Size: 4,365 sq ft
Year Built: 1977
Days on Market: 3
Listing Updated: 40554
MLS Number: P765471
Property Type: Single Family, Residential
Community: Northwood
Tract: Ps
——————————————————————————
Great opportunity to own a Charming house in Park Paseo. open airy and bright floor plan with laminated wood floors and High ceiling. Walking distance to Award Winning Santiago Hills Elementary School & Northwood High School. Large yard with patio. Association ammenties are pools, Tennis, Spa, clubhouse, Tot Lots, BBQ's. Walk to Shopping, parks & trails. Low Tax Rate, No Mello Roos, Association Dues $81/month. DON'T MISS THIS CHANCE!!!
ammenties?
“Foreclosures are expected to remain elevated throughout the year, pushing home prices down another 5 percent nationally before finally bottoming out.”
5% ?
bottoming out?
Is she kidding?
How is it possible that the REO pipeline could
be possibly cleared in 2011?
When REO’s rates are at historical levels,
then maybe we are at bottom.
“Denial must be the driver of investment related reporting.”
No kidding. Has anyone noticed how often even the most discouraging economy news is presented in a positive, optimistic light?
Where is the surge of foreclosed properties? One just hears about it but hardly sees them showing up in the for-sale inventory. All are just regular equity sales.
Where I live (southern Cal), the inventory is very very low. Sellers are very slow to lower prices cos they don’t have to. I don’t sense the impending imploding of REOs at all. It’s like I am living in a different world from the reported doom and glooms.
Banks are withholding inventory. The foreclosure filing, the first step in the process, is now starting to increase. After the filings come the foreclosures, and after the foreclosures come the REO. Banks can delay and withhold inventory at any step in the process. They will drag this process out as long as possible to ensure you pay the most possible for a property to make up for the losses on the stupid loans lenders made.
If they paid their mortgage, they would not have this problem.
I agree that faulty loan docs should be contested, as well as fraud by the banks.
However, living rent free and squatting is not the best way to go is questionable at best.
Where is the sympathy for all the savers?
Deadbeats deserve what they get!
You’re just wishing you had the guts to default.
If you’re underwater this is actually a smart thing to do. Banks do it all the time silly.
All business will default if they deem it advantageous. NAR itself defaulted on a purchased property. Millionaires go BK, and then they are right back on top.
Enough bullsh1t games. Whats good for the aristicrats, is damn well good enough for me, and if the RULE OF LAW has degraded into such a mess that only ordinary workers like you and I have to comply, while the “others” do not; aka, police who consistantly and blatantly break the law, politicians who commit fraud and are “censured” rather than thrown in jail, banksters who commit fraud, lose investments, and are COVERED by the U.S. government instead of being thrown in mother f’ing jail, we have a problem Houston!
That being said, I really could give two sh1ts about anyone’s judgment. The saddest part of the story is the majority of americans are still ignorant schmucks who look to victimize the victims, and suck taint to their mammon masters as long as their precious Wall St. investments produce for THEM.
Personally, I hope the housing prices collapse, and America goes into a depression. We deserve it.
Well, can’t say I disagree with you on anything you said. The shame is that the general public has veered into the mentality that it is okay to not have to live up to one’s obligations because “someone” will bail you out. So yeah, we deserve it.
@gepetoh
“live up to one’s obligations because “someone” will bail you out”
Can you let me know were the CHECKBOX is that says ‘you’re obligated’ to pay this back?
BTW… you can stop looking now. There isn’t such a checkbox. It is a brainwashing technique that you acquiesce to… sadly most of these things go unchecked.
There is a great movie on youtube about this called ‘esoteric agenda’… search for it. It is quite empowering indeed. Better than any horror movie you have ever seen.
@ geo…thanks, yes it’s sad, but this is the state of America. No one should have been “baild out”, no one, no homeowners, no banksters.
Living up to “one’s expectations”….what does that mean? You live according to what you can AFFORD, and hopefully, not go into debt unless it’s for a gain over the long period.
Banksters have the collateral of the home, it’s not my fault they allowed Wall St. to turn the housing market into a casino game, however, it *is* my loss, and apparantly according to the Federal Gov, your loss as well.
The whole thing stinks and my opinion, as well as how I conduct my life, has changed. RULE OF LAW indeed….yes, but which laws?
Defaulting when you can pay doesn’t take guts, it takes loads of cowardice, though.
I am over 50% underwater on my Chicago home and defaulting is taking the easy way out.
Banks do it all the time. Hmmmmm. Let’s see, criminals kill all the time, but I am not going to kill anybody.
Defaulting when you can pay is reneging on a basic and powerful social contract. Even though (some) banks may do it, doesn’t mean we should as well.
SILLY!
I disagree with you. You don’t have any social contract – you have a contract with a bank that likely says they can take your home if you stop paying. Whether you choose to do so is up to you.
Everyone’s circumstances are different, but I don’t think that defaulting is “the easy way out.” Comparing a loan default to criminals killing is irrelevant; it’s not illegal to default on a loan.
I’m not really one to speak because I never put myself in such a situation, however you have to do what’s best for your life. If I was throwing good money after a depreciated asset, I would certainly take a step back and carefully evaluate my situation.
I have been slowly changing my opinion about strategic defaulters. While I still get infuriated with the people who are squatting in houses they are not paying for and gaming the system, I have no ill will toward folks who want to jingle mail their bank.
Just remember, all of that money that you “borrowed” from the bank was actually created out of thin air. The funds that you received to buy the house were not taken from anyone and given to you. The bank simply wrote some numbers into an account for you and now you get to slave away to make those payments plus interest on money that the bank never owned to begin with. Why is it moral for a bank to collect interest on monies that it did not have to earn? Why are banks allowed to counterfeit money and “lend” it to people?
The system is rigged so that the banks never lose. Fate struck, the banks lost, and the government went rushing in to make sure that their friends never lost a penny. How moral is that?
Bottom?
This elevator still has 10 more floors to go. Not going even close to clearing TODAY’S shadow inventory for 2-3 years. BTW, that ain’t including all those NEW defaults on the way.
There is a threshold of pain whereby the bleeding [underwater] home owner will finally just stop paying on debt gone bad. When these ‘paying’ home owners actually come to their senses there will be default foreclosure chaos. It will look like that National Geographic scene where the zebras are crossing the river.
I believe that would be wildebeests 🙂
The second wave is clearly here.
From Lansner’s blog:
Highlight’s of DataQuick’s December homebuying report for Orange County:
* Orange County home prices finished 2010 at an 11-month low — with the median selling price falling to $410,000, lowest since May 2009.
* That 19-month low is 5.7% below December 2009?s median price — ending a 15-month winning streak that dated to August 2009.
* The first time the monthly median selling price hit $140,000 was June 2003
* Orange County shoppers bought 2,739 homes — down 5.1% from a year ago and the sixth straight year-over-year drop.
* 30,737 residences were sold in 2010, down 1% from the previous year.
*More to come throughout the day!
FYI … Per DataQuick, Single-Family Median Home Price for The OC:
2010 Monthly/Weekly
$490,000 = Jan
$490,000 = Feb
$515,000 = Mar
$505,000 = Apr
$515,000 = May
$515,000 = Jun
$517,500 = Jul
$530,000 = Aug
$525,000 = Sep
$500,000 = Oct
$500,000 = Nov
$470,000 = Dec -Today’s median Epic FAIL!
epic fail because?
Have you factored in seasonality? Have you factored in mix of housing selling since this is median price.
And even if you have, a Jan to Dec change of 4% is “EPIC FAIL”
lol. Not saying whether house prices will go up or go down. Just saying your data point to justify “EPIC FAIL” are clearly lacking.
When I refer to “epic fail”, I’m really talking about the Ponzi banking coming from the Fed, and the Ponzi accounting from the big banks. All this was an attempt to push back gravity in asset prices, most notably, the real estate market.
Ponzi banking from the Fed? What do these mean exactly? I know what the Fed is doing but how exactly is this a Ponzi scheme? They don’t need a greater fool theory to keep their mechanism going.
Also, if prices haven’t cratered to 1998 levels like everyone on this blog was predicting, then hasn’t the fact that prizes have gone down 4% in your “EPIC FAIL” point to an “EPIC SUCCESS” ….this EPIC FAIL is in light of seasonality (with dec always the worst month of the year) and without factoring for mix of homes determining the median.
It doesn’t have to go back up to pre-bust levels to be a EPIC FAIL. It just doesn’t need to down uncontrollably and thats seems like a “EPIC SUCCESS” in terms of THEIR STATED OBJECTIVE, whether or not you agree with their objective.
When the Federal Reserve Bank can swap a 5 year note with an accounting entry (as needed), and they can do this to the tune of a trillion (plus) dollars, that’s a ponzi scheme.
The only thing that has prevented a complete collapse in real estate has been this massive ponzi scheme at the Fed and the big banks. Many of us housing bears, believe that the ponzi scheme tricks are presently being overwhelmed by the sheer number of defaults and the lack of credibility of a phony economy.
from wiki:
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors.
You should use a different term.
—
The only thing that has prevented a complete collapse in real estate has been this massive ponzi scheme at the Fed and the big banks. Many of us housing bears, believe that the ponzi scheme tricks are presently being overwhelmed by the sheer number of defaults and the lack of credibility of a phony economy.
—
So prices are down 35% from your stats and the fed intervenes to slow down decline and you object because it proved “us bears” predictions wrong?
So you would have preferred the great depression again?
Why don’t “us bears” play out your scenario of a “complete collapse” in real estate and tell us what kind of world this looks like. Where are real estate prices? What is unemployment like? Is there political stability or do we set the ground work for WWIII?
Do enlighten us as to what this world looks like.
So you would have preferred the great depression again?
Great question. Let me answer it this way …
I would prefer the great depression II over a Japan style perpetual decline in asset prices at the cost of trillions of dollars thrown on the backs of our kids.
See, we did this … WE ARE THE ONE’S THAT SHOULD PAY FOR IT! NOT THE KIDS. Just think about this … we’ve spent trillions of dollars in an attempt to prevent a “depression”, and we’re still not out of the woods yet. Who’s to say, we’re not in a depression now? Ask an unemployed friend if we’re in a depression. WTF is a “depression”?
We are going to be the first generation in US history to pass on to the next, a lower standard of living. It’s simply not fair. We’re stealing!
lol. trillions thrown on the backs of our children from the bail out? Really?
Why don’t you show us how much debt was created by the fed exactly. The trillions of debt you speak of is being created by social security, medicare and common defense that go up every year when tax revenues are down due to a wtf is depression or recession.
So you think given the choice, the japanese would prefer the great depression and subsequent WWII and hardship over the last 10 years of their terrible economy where they are still are one of the richest nations in the world per capita huh?
Jeez, have some perspective.
Careful what you wish for.
Oh I do have perspective! We don’t even know what’s going to happen in real terms with our economy. Remember, we’re by no means out of the woods, however, we’ve spent trillions in an attempt to prop-up asset prices.
Remember what happened last May when the Dow dropped 1,000 points in a matter of minutes, only to come raging back within the hour. This is the kind of BS that happens when markets are being manipulated.
It’s NOT gonna work.
@lee
c
Please go to youtube and search for ‘debt as money’ then search for ‘the secret of oz’….
People are waking up to the mess… the time is NOW.
The median ASKING price:
Housing bubble pops
2006
Oct ~ $667,200
Nov ~ $660,750
Dec ~ $651,225
2007
Oct ~ $599,379
Nov ~ $588,475
Dec ~ $573,580
2008
Oct ~ $467,850
Nov ~ $455,774
Dec ~ $444,087
Ponzi scheme banking and accounting take hold
2009
Oct ~ $456,856
Nov ~ $449,760
Dec ~ $458,475
Ponzi scheme banking and accounting FAIL
2010
Oct ~ $447,000
Nov ~ $432,600
Dec ~ $423,722
Source ~ Housing Tracker
So lets see.
From 2006 to 2007, Dec to Dec, 12% drop. From 2007 to 2008, 23% drop again. “Ponzi” scheme implemented and price go UP from 2008, to 2009 and then in 2010, prices have come down 5% from the 2008 PRE Ponzi Scheme days.
double digit drop, double digit drop, then up then single digit drop.
yes, it looks like an EPIC, I mean EPIC, fail according to this….they stop rapid decline in asset prices or deflation as per their own objective. EPIC FAIL!
Obviously if you are statement is going to be that prices will continue to fall further and just as fast as it did in 2006 and 2007, then it will turn into an EPIC FAIL.
But NOTHING you have provided so far points to a failed policy against their stated objective.
not a statement of whether fed should have or shouldn’t have…nor a statement of FED causality or even FED correlation but your EPIC FAIL statements are EPIC UNSUPPORTED by your own data points.
I just don’t have the energy to argue.
Here’s what matters! From 2005 until late 2007, many people said there was no such thing as a housing bubble. Some insisting that it was impossible for prices to decline. They were proven wrong. When 2008 started, many housing bears thought it would get a lot worse (me being one), because we never anticipated that The Federal Reserve with the US govt would blatantly throw capitalism out the door, in an attempt to manipulate the economy.
The big question is, how/why did so many bears miss the govt/Fed ability to manipulate the economy on such a vast level? Answer ~ Because we’ve NEVER seen the govt/Fed take on these actions before. This has been unprecedented, and it’s mocked our once free markets, and jaded many American’s!
I remember commenting on this blog in 2007 that I would expect our government to do everything possible to arrest a serious decline in housing prices (because of the negative feedback loop the decline would create). Many shot-back that there was not much they could do; that they don’t “control” interest rates and that was really their only tool. I think we’re all shocked at the many tools they have and have used.
There’s still the tool of mass-refinancing through the agencies regardless of LTV with the prospect of adding underwater portions to the end of a loan (balloons).
We’ll see…
(IR-your cost accounting of “hidden equity” assumes that prices remain steady nominally. do you really think this is likely?)
only $3k/month to “own” this tiny 3/2 that hasn’t been updated since Nixon?
whadda bargain!
I see that 6 delamesa is off the market now. Any info on what happened? Did it get an all cash offer?
Foreclosure filings will only increase if the banks actually foreclose. There’s no doubt that the number of people defaulting on their mortgages increases though. But thanks to accounting regulations everything is possible.
You can read about Non-Foreclosure Crisis
http://www.wtffinance.com/2011/01/the-non-foreclosure-crisis-2/