creative_cpa
Posts:834
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| 02/02/2010 8:26 PM |
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From the New York Times:
In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040.
“People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?”
After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration’s loan modification plan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing.
New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying.
In a situation without precedent in the modern era, millions of Americans are in this bleak position. Whether, or how, to help them is one of the biggest questions the Obama administration confronts as it seeks a housing policy that would contribute to the economic recovery."
The rest of the article
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jpinpb
Posts:4534
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| 02/02/2010 10:11 PM |
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| Thanks for posting this. People are continuing to make the financial decision to walk. |
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wilson
Posts:1705
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| 02/02/2010 11:48 PM |
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If you read the article, you will see that good old Ben has not walked away - yet. Maybe he will and maybe he won't.
Now, let's turn the issue around. If this guy had not bought at the peak would he buy now? Of course!!!!!!!! I think that says a lot more of what opportunities are out there today. |
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sd_living
Posts:55
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| 02/02/2010 11:56 PM |
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I strongly believe that only one thing can fix Housing Market now.
INFLATION!!!! |
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jpinpb
Posts:4534
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| 02/03/2010 8:15 AM |
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| NODs chart |
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ownhomeinSD
Posts:1068
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ownhomeinSD
Posts:1068
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| 02/03/2010 8:42 AM |
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| I think many lenders think it is worth to do it comparing what they lost and start doing that. It may explain why we see rising in bankruptcy filings in foreclosure hard hit areas recently. My friend who evicted tentant in 2008 and got a money judgment through a lawyer at $250 cost but got $4000 moeny back. |
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ownhomeinSD
Posts:1068
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| 02/03/2010 8:50 AM |
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SD NODs from realtytrac:
Oct '09---------3139
Nov '09---------2661
Dec '09--------2104
Jan '10--------1755 |
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jpinpb
Posts:4534
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| 02/03/2010 9:24 AM |
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I think monsters are even scared of that chart.
Please let's keep in mind that banks as of late have declined to file NODs. There are people who have gone anywhere from 6 to 10 months w/out paying and still haven't received NODs. See. NODs have declined. All is well in the universe. Just ignore all those NODs. They will magically disappear.
Your article: "Some states, such as California, are "non-recourse" and don't allow deficiency judgments. But, even there, if the if the original loan was refinanced, some or all of it may be subject to claims."
There's always been a question on loans that were not purchase loans. If a bank forecloses, I don't think they can come after you. They can either foreclose or try to get a judgement against you. They can't do both. At least that is my understanding. |
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DT.SD
Posts:320
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| 02/03/2010 9:46 AM |
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"Please let's keep in mind that banks as of late have declined to file NODs."
JP, what would a bank's motivation be for this? How does this benefit for the bank? |
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jpinpb
Posts:4534
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| 02/03/2010 10:04 AM |
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| Banks just state they have a non performing asset. They don't take a loss. Come on. Follow along and pay attention to what's really happening out there. |
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DT.SD
Posts:320
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| 02/03/2010 10:54 AM |
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| he he, nice attitude. I don’t work in the banking industry so I don’t know this for sure, but I would think a bank is not required to realize a loss by simply filing an NOD (the first step in the legal process that secures their right to continue with the foreclosure process if they so chose). I guess this could explain why they do not foreclose on a property, but I am not sure that explains why a NOD would not be filed. Have you come across any good articles that discuss this? |
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BullBull
Posts:196
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| 02/03/2010 12:56 PM |
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Since this is SDlookup, why not look at NODs and Trustee Deeds in San Diego?:
NODs, January 2010: 1868, down 82 from December 2009, down 56% from the peak.
Trustee Deeds, January 2010: 1140, down 293 from December 2009, down 50% from the peak.
http://www.sddt.com/finance/economicindicators.cfm
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dchestney
Posts:1261
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| 02/03/2010 1:04 PM |
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| Other than idle curiosity (That's my main motive for reading/posting here!) and a desire to spew propaganda, the only real reason for all this talk about whether lenders are or are not holding back on NODs is if it sheds light on what they will actually do in the future--specifically when (and what kinds of) reclaimed properties will be put up for sale by lenders. So far, all I have seen (for months and months) is the claim that they surely will have to do something, sometime. Is that really informative? |
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BullBull
Posts:196
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| 02/03/2010 1:06 PM |
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Posted By sd_living on 02/02/2010 11:56 PM
I strongly believe that only one thing can fix Housing Market now.
INFLATION!!!!
Don Bernanke: "What's dat I hears? Someone know our secret plan? What'sa going on Tony?"
Bankster-1: "Dunno boss, someone must have talked"
Don Bernanke: "I wanna him in cement shoes right away, you see to that Vito!"
Bankster-2: "Whaddabout that sd_living guy?"
Don Bernanke: "Yeah, yoose right Vito, let him sleep with the fish too"
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creative_cpa
Posts:834
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| 02/03/2010 3:04 PM |
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Posted By DT.SD on 02/03/2010 10:54 AM
he he, nice attitude. I don’t work in the banking industry so I don’t know this for sure, but I would think a bank is not required to realize a loss by simply filing an NOD (the first step in the legal process that secures their right to continue with the foreclosure process if they so chose). I guess this could explain why they do not foreclose on a property, but I am not sure that explains why a NOD would not be filed. Have you come across any good articles that discuss this?
Accounting rules don't work that way. Banks (and all companies for that matter) have to report a loss when it is probable a loss has occured and the loss can be reasonably estimated. The administrative act of filing a NOD does not trigger the accounting for a bad loan. I can think of no reason why a bank would not file an NOD, since it protects their legal rights. However, there are probably many reasons why they would not move to a foreclosure as soon as possible: they may be negotiating a restructuring, the borrower may be in the process of a short sale, the borrower may be making some paymetns, the borrower may have filed bankruptcy (which creates an automatice stay of foreclosure), etc. |
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creative_cpa
Posts:834
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| 02/03/2010 3:09 PM |
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Posted By BullBull on 02/03/2010 12:56 PM
Since this is SDlookup, why not look at NODs and Trustee Deeds in San Diego?:
NODs, January 2010: 1868, down 82 from December 2009, down 56% from the peak.
Trustee Deeds, January 2010: 1140, down 293 from December 2009, down 50% from the peak.
http://www.sddt.com/finance/economicindicators.cfm
Please explain to us why looking at monthly changes in one statistic yields some relevant information that a person thinking about buying a house can use in the decision-making process. Does the monthly NOD total in January tell you what will happen in February?
Theoretically, when every house has been foreclosed upon and sits idle and rotting in the sun, the NOD rate will drop to zero, right? So, is that good news for the real estate market.
Everybody wants to post some numbers, but nobody can tell you what they mean. |
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dchestney
Posts:1261
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| 02/03/2010 3:17 PM |
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Posted By creative_cpa on 02/03/2010 3:04 PM
Accounting rules don't work that way. Banks (and all companies for that matter) have to report a loss when it is probable a loss has occured and the loss can be reasonably estimated. In fact, in reporting quarterly earnings (or losses), don't banks have to create loss reserves (deducted from earnings) for some estimated amount of losses from nonperforming assets? |
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BullBull
Posts:196
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| 02/03/2010 3:30 PM |
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Down 56% from the peak means that there is less than half the NODs than at the peak.
Down 50% from the peak means that there is half the Trustee Deeds than at the peak.
And the numbers are still falling.
Sorry to rain on your Tsunami. |
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JAP
Posts:119
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| 02/03/2010 3:55 PM |
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You never stop do you?
In 1-2 years you're going to look even dumber than you do now.
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