Brian
Posts:2276
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| 06/17/2008 12:41 PM |
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There are many more people who stripped equity out of their houses than you think.
Remember, leverage (debt) is just borrowing from the future so you can afford a higher standard of living today. You have to pay it back!
It's gonna be very bad when long time homeowners lose their houses due to resetting loans and/or unemployment.
Look at this property purchased on 01/23/1986 for $75,000. Now bank owned.
4256_10th_Ave_San_Diego_CA_92103
Property at 4256 10th Ave, San Diego Ca 92103-2305. Details
Sold by First AmerLnstar 714/573-1965
Total Outstanding Dept ~ $577,513.00
Re-Instatement Amount: $15,587.00
Original Loan: $555,000.00, Loan FileNo#:0053264, TS File#:08-0238778 Trustee#:20089070800672
Thanks jp for the info. ;)
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jpinpb
Posts:1480
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| 06/17/2008 1:17 PM |
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| I've seen a lot of these. There's one in PB or LJ, I can't remember where, but I marked it. Had the place for 20 some years, got a NOD. There's a lot of cash-out happening. |
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lee
Posts:79
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| 06/17/2008 3:12 PM |
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| People that have done this really deserve to get foreclosed upon. That is some INSANE cash out refi right there. |
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lee
Posts:79
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| 06/17/2008 3:13 PM |
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| I guess the question is, what happens to these people? Does the bank just take a massive hit or will they 'go after them' in court? |
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dangerkitty
Posts:25
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| 06/17/2008 3:26 PM |
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| I bet the bank is too busy to litigate - especially in light of all the similar shenannigans. |
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rwsinmissionhills
Posts:313
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| 06/17/2008 9:11 PM |
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Too busy to litigate...hmmm... I am trying to wrap my mind around that. Banks could be out billions. Could anyone be too busy to want their pound of flesh?
I'd, too, would like to know what happens to people who sucked all the cash out of their houses and go broke.
Does anyone know how often these people get chased down? I can see that the banks must be busy, but aren't a lot of these mortgages sold off to investors? I wonder at what point all these angry investors will be demanding that someone go after the people who cashed out hundreds of thousands of dollars then just walked when their house was worth much less than the loans.
As far as I can tell, I don't have any investments that have been tied to mortgages, but maybe it's just because the bad news hasn't fully trickled out yet. If I did, and if my investment portfolio took a big hit, I'd be hopping mad and want to go after someone.
Here is another thing: I am willing to bet that a lot of people who sucked money out of their houses lied on their loan applications. Even small lies are considered fraud.
If fraud can be proved in a civil court, that is called an intentional tort. Judgments for intentional torts cannot be gotten rid of by bankruptcy or any other slick move. Whoever gets a judgment against someone for an intentional tort can keep going after that money, including garnishing up to 25% of someone's wages.
A process like this would cost a lot of money. I wonder if there are enterprising lawyers out there who'll go after people wholesale.
I can't figure this out nightmare out. I wonder if there is any precedent for this? |
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jpinpb
Posts:1480
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| 06/17/2008 9:34 PM |
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Here is an interesting one. Check it out 4240 PL
NOD FILED.
Reinstatement Amount: $29,997.00
Original Loan:$1,500,000.00
Sales History
Date Price Held Return Annual
04/11/1988 $300,000
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jpinpb
Posts:1480
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jpinpb
Posts:1480
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track24
Posts:4
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| 06/17/2008 10:02 PM |
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Posted By rwsinmissionhills on 06/17/2008 9:11 PM
Too busy to litigate...hmmm... I am trying to wrap my mind around that. Banks could be out billions. Could anyone be too busy to want their pound of flesh?
Isn't the "problem" (for banks) that the mortgage loans they provided are basically set up so that the home itself acts as the primary security instrument to back up the cash loaned out for that home?
When prices were rising on what seemed like a daily basis, banks *thought* they were in a no lose situation. Hence they freely provided many 5% down no doc loans or no money down loans (with a 2nd bank providing a loan to the buyer for the downpayment). Same thing with allowing owners to siphon out tons of additional cash from props that had appreciated X dollars according to the bank's appraisers. That is crazy azz financing but the banks thought hey, if the buyer walks, we still have the home to resell and that home will be worth more 3 months from now than it is today. But then something unexpected happened. Home values tanked.
Ooops.
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Eugene
Posts:268
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| 06/18/2008 2:01 AM |
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You can't be sure that there's any cash left. Maybe the borrower spent $100,000 remodelling the kitchen, paid off his student loan and credit cards, and went to Tahiti for a month.
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rkf619
Posts:38
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| 06/18/2008 8:36 AM |
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| From what I understand, unless the loan drawdowns on home equity loans are used for home improvements, the interest is NOT tax deductible - eg the interest associated with $50,000 spent on a new car or a vacation cannot be deducted. The IRS has announced that it is looking at the home equity loans more carefully because of the widespread abuse of the interest deduction allowance. Maybe this is the next, next shoe to drop. |
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Brian
Posts:2276
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| 06/18/2008 10:05 AM |
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Thanks for posting jp. Real life examples give us nice a view of reality.
2174 Guy is pretty telling of the lives of the "rich" specuvestors. They will fall like dominoes in the coming recession.
The argument that people who bought a long time ago have their houses paid-off is pretty much out the window. |
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jpinpb
Posts:1480
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| 06/18/2008 5:28 PM |
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They're going to keep coming in.
5062 Constitution
bought in 1983. Now NOD filed on 400k loan |
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jpinpb
Posts:1480
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| 06/18/2008 7:26 PM |
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I really like this place. I just don't think it's going to sell at this price in today's market. NOD was filed. I can't imagine the remodel cost that much, so cash had to have been spent elsewhere.
1145 Beryl Bought in '98 for 252k.
Reinstate $39,204.00
Original Loan : $1,200,000.00
Listed for sale 1,290,000.
So hopefully the bank will price it to sell. |
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Eugene
Posts:268
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| 06/18/2008 8:10 PM |
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" I can't imagine the remodel cost that much, so cash had to have been spent elsewhere."
Looks like the house was completely rebuilt from scratch. In '98 it was probably 1000-1200 sf at most. It's not cheap to build a custom 3500 sf house nowadays. Sure, not a million dollars, but expensive. Also keep in mind that he'd be sitting on 400k+ of equity if he just kept the original house.
It won't have much trouble selling at this price. It's almost La Jolla. The cheapest LJ house this size that's next to the freeway is 5491 Bahia Ln, asking 1.4m. |
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jpinpb
Posts:1480
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| 06/18/2008 8:39 PM |
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| Well, it was originally listed for sale in October 2007 and it has a NOD. So far, no spring shopper has gone for it. He is having trouble selling it. Doesn't look like they can reduce much considering sales price versus loan amount. |
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dangerkitty
Posts:25
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| 06/19/2008 9:11 AM |
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Posted By rwsinmissionhills on 06/17/2008 9:11 PM
Too busy to litigate...hmmm... I am trying to wrap my mind around that. Banks could be out billions. Could anyone be too busy to want their pound of flesh? div>
RWS, how would you litigate one in ten Americans? What about the appraisers and the agents? I believe they own some of this travesty as well. And the mortgage brokers? The banks and the buyers are not the only people who caused this mess.
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MJ
Posts:8
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| 06/19/2008 8:00 PM |
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A home on a corner lot just slipped in pre foreclosure in my hood.
I saw the owner 9 months ago with a Beamer, jet skis and they redid the entire property.
Driving by in my eco car, I figured they were rich...
Not, they vacated a few months back and now the home is for sale...
Not listed yet on SD Look up, even though a for sale sign is on the dying lawn.
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jpinpb
Posts:1480
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| 06/20/2008 6:48 PM |
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Here's another one:
4740 Mt. Royal
Bought 1987 for 145k.
Cash-out
Foreclosure 7-2
Total Outstanding Dept ~ $558,066.00
Re-Instatement Amount: $20,153.00
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