bjforeclosures

Short Sales No Great Alternative To Foreclosures [Housing Tracker]

Some lenders are beginning to become more realistic when it comes to short sales. It is not uncommon in my area, which was supposed to be insulated from the bubble burst according to local RE professionals, to see official foreclosure notices that contain text similar to the following.

"ATTN: The Plaintiff may let the bid go for less than the judgment amount consistent with the adjusted FMV of the property at the time of sale. Plaintiff may also agrre to a short sale. Please address any inquiries to: xxxx@xxxxxxx. Please use our File No. and "3rd party" or "Short Sale" in your subject line. "

Inventory is rising and prices are falling and indications are that it is only going to get worse. The foreclosure process can be fairly long. By the time the lender even gets a judgment, they have missed out on 3 months worth of payments. By the time the auction actually happens it could be 6-9 months or more.

If you own a home with an upside down mortgage and are having a hard time with payments, contact your lender. You may be surprised how willing some will be to discuss options.

NYC Housing Market Showing Cracks - Barron's

It seems there were a bunch of people that didn't want to sell their homes but did want to benefit from the increased equity in their homes. HELOC's were used to purchase all sorts of things including vacation homes. I'm not sure about the Emerald Isle area, it might be that people are trying to cash in before prices go any lower.

NYC Housing Market Showing Cracks - Barron's

The rate of increase of home prices does seem to be worse than last time.

As you noted, it's going to be the lower end of the spectrum the feels the pain. The influx of new homeowners that were able to buy properties because lenders relaxed standards and allowed the national home price to income ratio to rise to levels never before seen. I don't have specific data for NYC but I have Bergen County NJ data.

Go to my website and click on the blog link and look for a posting entitled "Where should house prices really be and how did they get so high?"

There is also national data and charts there as well. So much for all the government bodies in charge of regulating banks so that things like this don't happen.

The Impending Mortgage Crisis: Part Three

woops, I guess I can't post a direct link. If you click on the link to "My Website" then on my site click the Blog link on the top right the Posting is titled "Where should house prices really be and how did they get so high?"

The Impending Mortgage Crisis: Part Three

You mentioned that some people believe that the current house price to income ratio can be this high because interest rates have dropped.

I recently did an analysis on housing prices and the house price to income ration and included some charts.

What they show is that the rise in home prices follows almost exactly the rise in house price to income ratio. There's also a chart going back to 1981, when the prime rate was over 18%. From 1981 through 1999 the house price to income ratio was pretty stable at around 3.0 even though there was a huge drop in the prime rate compared to what we've seen in recent years.