bubbleinfo.com

We already know that virtually all sellers of short sales are behind in their payments, and have lost interest in keeping their house.  Expect the same for home maintenance – most short sales end up needing work. Here’s an example:

Hat tip to MB who sent this from the nytimes.com:

LOS ANGELES — From Kirk Morgan’s perch, in a mansion at the top of Los Angeles, he can see it all: The snow-covered mountains from the vast windows in one of the seven bathrooms. The Hollywood sign, eye level from the kitchen. And, from the master bedroom, a sweep of Los Angeles stretching from downtown to the Pacific Ocean.

But what he likes best, Mr. Morgan said, are the fevered tales he overhears from the Runyon Canyon Park hikers who pause at the house set amid its own 22 acres that he has guarded for nine months, as they try to unravel the mysteries suggested by this foreboding hillside mansion. For all its aspirations at grandeur, the 16-year-old house at 2450 Solar Drive remains unfinished and vacant, pocked by boarded-up windows and gang graffiti, a jumble of hanging wires and holes cut in the living room ceiling. A Winnebago is parked in the gated front yard.

Many of the tales — like the murder that supposedly took place on the pool table in the billiard room — are urban legend, said Mr. Morgan, 53, the house guard, who was wearing camouflage shorts, a cap and no shirt as he opened the padlocked gate to allow a visitor inside.

“It just blows you away what you hear from these people,” he said. “Like it is owned by the Devil. I am a man of the Lord. There ain’t no Devil here. I salted this house and also had my Indian friends come over and burn sage.”

But many of the tales are accurate.

Gangs, among them the notorious Armenian Power, really did turn the place into a clubhouse, the police said. Gang tags are still visible on the walls. Teenagers commandeered the carpeted first floor for weekend raves.

Yes, over the years, 2450 Solar Drive has served as a blue-chip crack house, according to the police: its floors were scattered with remnants of crack cocaine, crystal methamphetamine and marijuana.

“And this is where the satanic stuff happened,” Mr. Morgan said as he led a visitor into a windowless room, pointing to a faded sketch on the wall. “You can see the image of a devil. And they had chicken feathers hanging on a wire.”

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This REO listing is on it’s third time around – the sales history:

1986: Foreclosed

1987: $429,000

1995: Foreclosed

1995: $450,000

2000: $820,000

2010: Foreclosed (loans were $1.3M)

2011: $899,000 list price

From the REChannel:

It didn’t make the headlines when it was first announced in November 2010 and it didn’t make the headlines this week.

But if President Barack Obama’s proposed 2012 Federal budget cuts involving the sale or disposition of 69,000 government-owned buildings located across the U.S. is passed by Congress, it would be the largest real estate deal of its kind in this country’s 236-year-old history, according to several almanacs and real estate industry sources which track such deals.

Instead of an outright sale, some of the properties could possibly be transferred to other agencies in need of space; or donated to colleges, parks and hospitals, according to Obama’s previous memos to federal agencies.

Peter R. Orszag, former director of the Office of Management and Budget, said in a June 2010 blog post the federal government has 14,000 excess buildings and structures and another 55,000 that are under-used or completely unused.

According to the GOP’s Oct. 6, 2010 White Paper, members of the Transportation and Infrastructure Committee claimed the sale of the buildings would save the government $250 billion in maintenance, insurance and other related costs over the next 10 years.

Committee Ranking Minority Member John Mica, R-Fla., noted in October the federal government, as the nation’s largest asset holder, manages 896,000 buildings and structures with a total area of 3.29 billion square feet and more than 41 million acres of land.

The GOP committee’s report was particularly critical of the General Services Administration.

It noted the government’s landlord owns “large numbers of vacant or underutilized federal buildings” and yet “struggles to dispose of its surplus property in a timely fashion and for reasonable rates of return despite its enhanced property disposal authorities.”

The report criticizes GSA’s real property management for its “apparent inability to maximize market opportunities to house federal employees at the lowest long-term cost to taxpayers.”

Beyond GSA, the report cites potential savings by selling off or reconfiguring assets controlled by the Transportation Department, Coast Guard, Federal Emergency Management Agency, Amtrak and the Army Corps of Engineers.

For example:

• The government would save $2 billion by selling 20 percent of “nonperforming” real estate assets.

• It would save $1 billion by “reducing or eliminating spending on unneeded courthouses and excessive courthouse space.”

• It would save up to $180 billion by “encouraging additional investment in infrastructure from the private sector by providing a better definition of public-private partnerships for undertaking highway, transit, port, rail, airport and other infrastructure projects.”

The Obama administration has agreed the federal government has surplus property.

Our simple guide to home pricing:

From foreclosureradar.com:

Reversing a four month declining trend, Notice of Default filings rose 6.9 percent month-over-month in California, while Notice of Trustee Sale filings dropped 13.8 percent from the prior month.

Foreclosure filings year-over-year show only mild change, with Notice of Default filings down 3.3 percent and Notice of Trustee Sale filings slipping just 1.4 percent from January 2010.

Foreclosure sales skyrocketed from December, with 51.5 percent more sales Back to Bank and 52.8 percent more properties purchased by Third Parties, typically investors. Cancellations were up as well, rising 12.4 percent this month as compared to last which was the first time in six months that cancelations increased month-over-month.

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In San Diego County, the number of trustee sales have picked up nicely, giving hope to buyers that there could be additional well-priced inventory in the coming months:

The number of local SFRs on the auction-list:

The current inventory is picked over and most potential buyers are just waiting for new meat – keep ‘em coming!

From bloomberg.com:

This was the year thousands of U.S. homeowners with option adjustable-rate mortgages were supposed to default as their payments spiked. Low interest rates and a surge of early delinquencies mean the numbers probably won’t be as bad as forecast, softening the blow to a housing market where prices have resumed falling.

Monthly payments on option ARMs reset after an initial low- rate period, usually five years, and researchers at CoreLogic Inc. in Santa Ana, California, estimated in 2009 that such recasts would peak at 54,000 a month in August of this year. In a 2006 cover story in BusinessWeek magazine titled “Nightmare Mortgages,” George McCarthy, a housing economist at the Ford Foundation in New York, compared the looming resets to a neutron bomb.

“It’s going to kill all the people but leave the houses standing,” he said at the time.

What he and other analysts didn’t anticipate was that so many option ARMs would go bad before resetting, and that interest rates would stay low enough to minimize the impact of the adjustments on borrowers who are making their payments. Still, a model developed by JPMorgan Chase & Co. analysts predicts that 70 percent of remaining option-ARM loans that were bundled into bonds will eventually default.

About $600 billion of the loans were made from 2005 through 2007, according to industry newsletter Inside Mortgage Finance. Of those packaged into bonds, some 20 percent have been liquidated at losses to investors, and almost half of the remaining ones are at least 30 days delinquent, in foreclosure or have been seized by lenders, according to data from JPMorgan.

“It’s not that option ARMs weren’t a bad way to finance homes, it’s just that the disaster already happened before the resets,” McCarthy said in a telephone interview last week.

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