Did you just read CR and see the article on there are few preventable foreclosures. They talked about postponing the inevitable trough modification, which in the long run will lose the bank more money not less. I would lump increasing max loan to pick a pay with that analysis.

I read you were excited about NoCoCivil who found a pick a pay that starting to amortize in a short period. If this happened most of the time why would you want any extension of total balance owed (ie move to 125%) wouldn’t it just create few properties for sale ad infinitum. If his example was most of the loans there would be no problem at all.

The last point is that banks don’t print money. Banks borrow money and pay staff. Right now with Option ARMs banks continually need to borrow money to pay lenders and employers cause pick a pay does not cover their (the banks) borrowing expense. So yes there is no foreclosure loss with the extension, but the bank can still run out of money and go out of business like WaMu or Wachovia.

Here’s one in Brentwood for ~60% off:
http://www.redfin.com/CA/Brentwood/2037-Sage-Sparrow-St-94513/home/2108375

Leading indicator or exception? We’ll find out soon enough.

If our LL is in this situation, how many others are in the same? This December (suspect when the bank will finally get around to completing the foreclosure) and early next spring may be a very bleak time for the 700k plus market unless you are a qualified buyer….

Do you pay mello roos tax? If so, do you know the assesment district name?

Thanks for the information.

My aunt and uncle are in this same situation. They bought in an upper-end tract near Naples, FL.

There are many areas that have been harder-hit than even the subprime areas of San Diego. My aunt and uncle had the unfortunate timing of “retiring” right at the peak of the boom and buying a house in what is now called “Ground Zero” of the housing bust.

We visited them a couple years ago and had fun counting the banks. I commented that 50% of these tiny banks (there were 3-4 in every strip mall) would be out of business in 5 years. This caused my uncle to grimace. As the former CEO of a small bank, he knew all too well what kind of margins most of these banks were operating on.

My aunt and uncle were devastated by the financial crisis. Probably got hit worse than anyone I know (I don’t know any Madoff victims, however.) They are still living in the house, but you can see the strain in their faces and voices.

-Erica

P.S. I will testify to Brentwood. I worked in Pittsburg and had a boss who lived there. Prices have dropped some 70-80%, and everyone who once lived there is gone. Who can afford the A/C bill on a 4500′ house in the middle of a desert that requires a 150mi round-trip commute to most jobs?