RayD

Delinquent Mortgages Are Soaring; Foreclosures Aren't

Your statement seems to ignore the potential cash flow banks will receive from foreclosures.


On Jul 09 09:24 AM Lies and Damned Lies wrote:

> Interesting observation but I would suggest that the actual backlog
> is
> [Properties that are delinquent]-[Properties sold in a short-sale
> situation]=[Foreclosure backlog]
>
> Foreclosure, without a doubt, is an expensive and lengthy process.
> By allowing a delinquent owner squat on the property banks are allowed
> to time-shift the loss into the future (spreading the pain instead
> of sinking the ship).
>
> Benefits for the bank:
> *Home "owner" maintains the property. Saving the banks money.
> *Avoidance of expensive legal fees.
> *Able to time-shift losses into the future.
> *Hires an agent and lists the property are a short-sale. Short-sales,
> in general, sell for more than a foreclosure.
>
> Benefits for the owner:
> *Lots of extra cash each month.
> *Credit is not impacted as much.
>
> Benefits for the potential buyer:
> *A discount in comparison to normal sales.
> *Property tends to be in much better shape than a foreclosure.<br/>
>
> So what exactly is the incentive for a bank to seize a property?
> They would lose more money regardless of what happens.
> They'd have to pay for the maintenance of the property, the court
> fees, be forced to recognize losses NOW and still will have no income
> from the property.

The Looming McMansion Attack

The market forces can be delayed, but they will not be denied. Despite the administration's expansion of the loan rescue program
these extraordinarily large, and expensive, homes will inevitably drop in value sir - just like your existing home, but proportionally perhaps a little more.

On Jul 02 03:52 PM 3 degrees of seperation wrote:

> I have my eye on a just such a house in a prime area of Florida.
> Problem is that asking prices have not come down at all yet, in fact
> the sellers are still asking a premium over what they paid in 2007.
> I am ready with a cash offer when prices get discounted by 35% off
> of the peak, but don't know if we will ever get there in this area
> of Florida. It is frustrating to continually hear how much prices
> have come down, yet it is not happening where I want to buy. I should
> note that nothing is selling at the current asking prices, but that
> doesn't appear to be influencing sellers to do an discounting. Many
> of the homes in this development are unfurnished and never lived
> in, so I know speculators bought a good number of these homes.

Wall Street Continues to Misunderstand Housing

You've got to be kidding me!

Despite Mr. Waite's assertions, there is no denying there is tons of unsold houses, excess inventory, that the market must work through. Plus the household income to home price equation must return to some semblance of normalcy.