An Insider's Guide to North San Diego County's Coastal Real Estate
Jim Klinge, broker-associate
617 Saxony Place, Suite 101
Encinitas, CA 92024
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Jim Klinge
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701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011

Category Archive: ‘Walkaways’

88.6% Not Underwater in SD

clIn the San Diego-Carlsbad area, 11.4 percent, or 66,899, of all residential properties with a mortgage were in negative equity as of the third quarter 2013, according to CoreLogic.  It was a slight improvement from 2Q13, when 13.6% of all mortgaged properties were in negative equity.

San Diego-Carlsbad

More than 20% equity:  73.3%

0 – 20% equity:  15.3%

Negative Equity:  11.4%

Near Negative Equity (95%-100%): 2.4%

Near Positive Equity: (100%-105%): 2.0%

Mortgaged Properties: 585,000

Average Loan-to-Value ratio: 56.9%

Click on image:


Posted by on Dec 17, 2013 in Sellers Waiting For Comeback, Shadow Inventory, Strategic Defaults, Walkaways | 0 comments

Sharpie Punks


LOS ANGELES, Aug 16 (Reuters) – In the age of Facebook and Twitter, a new crime has hit America: “Sharpie parties,” gatherings of party revelers armed with “Sharpie” magic markers and lured by social media invitations to wreak havoc on foreclosed homes.

Five years into the U.S. foreclosure crisis, Sharpie parties are a new form of blight on the landscape of boarded-up homes, brown lawns and abandoned streets. They are also the latest iteration of collective home-trashing spurred by social media.

At least six Sharpie parties were reported in one California county in recent months, where invitations posted online drew scores to foreclosed homes.

The partygoers are handed Sharpie pens on arrival by their hosts and urged to graffiti the walls – a destructive binge that often prompts other acts of vandalism including smashing holes in walls and doors, flooding bathrooms and ripping up floors.

Read More

Posted by on Aug 16, 2012 in Fraud, Scams, Walkaways | 11 comments


From HW:

The negative equity problem for U.S. homeowners might be worse than previously thought, at least according to a new measure from Zillow.

The online real estate data provider, in its first negative equity report, said 15.7 million, or 31.4% of homeowners were underwater on their mortgages in the first quarter. That’s up from 31.1% three months earlier but down from 32.4% in the first quarter 2011. 

Homeowners owed $1.2 trillion more than the value of their homes in the first quarter, according to Zillow.

With roughly 10% of homeowners 90-days-plus delinquent on payments, negative equity “remains only a paper loss” for most, said Zillow Chief Economist Stan Humphries.

“As home values slowly increase and these homeowners continue to pay down their principal, they will surface again,” Humphries said in a news release.

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Posted by on May 24, 2012 in Mortgage News, Shadow Inventory, Walkaways | 5 comments

47% Would Strategic Default


An alarming number of homeowners see strategic default as a viable option should their home continue to depreciate. Almost half of the homeowners participating in an online poll from Housing Predictor say they will walk away from their mortgage obligation if falling home values persist.

Five years into the housing downturn, and Housing Predictor found that 47 percent of those surveyed would intentionally stop making their mortgage payments even if they could afford to in order to get out from under the sinking investment of home-sweet-home.

The number of mortgage borrowers open to strategic default has risen sharply since Housing Predictor last surveyed public opinion on the issue roughly a year-and-a-half ago. In October 2010, 36 percent of homeowners participating in the poll said they would throw in the towel should housing prices continue to drop.

Housing Predictor says the foreclosure crisis, falling home prices, and lingering doubts that the value of homes will increase over most homeowners’ lifetimes are contributing to the increase in mortgage holders who say they will walk away.

FICO estimates strategic defaults to be more than a $20 billion problem annually.

Posted by on Apr 6, 2012 in Shadow Inventory, Strategic Defaults, Walkaways | 17 comments

More on Walkaways


When David Martin and his wife bought their north Seattle condo five years ago, they figured they had plenty of time to downsize if they needed to before they retired.

Now, with the property worth roughly $60,000 less than the balance of their mortgage, Martin, 68, has been giving serious thought to just walking away, a process lenders call “strategic default.”

“Guilt and morality are one side, and objective financial analysis are on the other side,” Martin said. “They’re coming to two opposite conclusions. I wonder how many other people are struggling with the same question.”

For now, Martin is electing to stay in his home and continue paying the mortgage.

“We intend to continue as we are on the basis that we gain nothing from acting at this point,” he said in a note. “We think that the real estate market in Seattle will rise by 2013 enough to offer better alternatives. There is a small chance that the federal government will act to offer more rational choices. The real possibility is that the debt might be refinanced in 2013 at a level that might offer enough reduction in payments to allow us to hang on long enough to shore up our financial position.”

another excerpt:

“We’re finding that people are much more willing to walk away when the other party is unknown or what you might call a ‘bad bank,'” said Seiler. “Those are the ones that received a lot of bailout funds or were active in the subprime market, giving loans to people who couldn’t afford them and they knew that.”

The mortgage lending industry’s widespread reluctance to modify loan terms has also changed homeowner attitudes about walking away, according to Ruyle.

“They feel much better about doing it if they’ve tried to contact the lender and the lender won’t budge,” he said. “They feel justified about it because they’ve tried to do their best to work it out.”


JtR:  At the end of the article they are running a poll, with 18,335 responses so far to this question: 

Would you consider a ‘strategic default’ if your home was worth less than your mortgage?

60.7% of the respondents said Yes.

Posted by on Jan 9, 2012 in Strategic Defaults, Walkaways | 21 comments

Free-Rent Program Extends

From (seen at CR):

NEW YORK (CNNMoney) — Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they’re willing to put up a fight.

Among the tactics: Challenging the bank’s actions, waiting to file paperwork right up until the deadline, requesting the lender dig up original paperwork or, in some extreme cases, declaring bankruptcy.

Nationwide, the average time it takes to process a foreclosure — from the first missed payment to the final foreclosure auction — has climbed to 674 days from 253 days just four years ago, according to LPS Applied Analytics.

It takes much longer than that in Florida, where the process averages 1,027 days, nearly 3 years. In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.

Because California is a trustee-sale state, the delays are shorter – only 11 months on average:

Days to Foreclose/Sell - California

And while some borrowers are looking for ways to make good with lenders and get their homes back, many aren’t paying a dime. Nearly 40% of homeowners in default have not made a payment in at least two years, according to LPS.

Many of these homeowners are staying in their homes based on a technicality. There is rarely any dispute over whether or not they have stopped paying their mortgage, said David Dunn, a partner at law firm Hogan Lovells in New York, who represents banks and other financial institutions in foreclosure cases.

“In my experience, they never say, ‘I’m not delinquent’ or ‘I want to pay my bill but I’m confused over who to send it to,’ or ‘Oh my God, you mean I didn’t pay my mortgage?’ They’re not in technical default. They’re in default because they’re not paying,” he said.

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Posted by on Dec 28, 2011 in Bailout, Fraud, Loan Mods, Protest, Scams, Shadow Inventory, Walkaways | 3 comments

Case-Shiller San Diego Sept 2011

David Blitzer and his crooked bow tie make the usual psycho-babble comments on CNBC:

“Consumer attitudes have gotten a lot more negative about long-term commitments, and the No. 1 long-term commitment most people in this country made is buying a house,” David Blitzer, chairman of the S&P Index Committee, told CNBC.

Prices in August were also revised to show a decline of 0.3 percent after originally being reported as unchanged.  The index has leveled off in recent months and analysts are hoping the market is at least stabilizing.

“Over the last year home prices in most cities drifted lower,” Blitzer said in a statement.

“The plunging collapse of prices seen in 2007-2009 seems to be behind us. Any chance for a sustained recovery will probably need a stronger economy.”



This was probably the more pertinent comment from the same article:

The number of U.S. homeowners who are underwater on their mortgages decreased modestly in the third quarter, though levels remained high, data analysis company CoreLogic said Tuesday.

The number of properties with so-called negative equity — in which the amount owed on the mortgage exceeds the property’s value — was 10.7 million, or 22.1 percent of all residential properties with a mortgage.

That is a slight decrease from 10.9 million, or 22.5 percent, in the second quarter, CoreLogic said.

“Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness,” Mark Fleming, chief economist at CoreLogic, said in a statement.

As the housing market struggles to recover, the large number of underwater homeowners has prompted concerns of more foreclosures to come if borrowers become unable to keep up with their payments or decide to walk away.



Lately, San Diego’s ride has been smooth, not bumpy, with September’s SA off -0.5%:

The last few years close-up:

Posted by on Nov 29, 2011 in Graphs of Market Indicators, Market Conditions, Psycho-babble, Same-House Sales, Walkaways | 0 comments

Would You Walk Away?


A new survey by Pew Research says 36 percent of Americans believe walking away from their mortgage is perfectly acceptable. We want to know if you would ever simply leave your mortgage and your home behind.

Tell us what you think. Share your opinion:

Would you ever leave your mortgage and your home behind?

Yes: 54%

No: 46%

Total Votes: 2267

Posted by on Feb 12, 2011 in Market Conditions, Shadow Inventory, Walkaways | 30 comments

Walk-Away Point

From our friend Nick at the WSJ:

At what point do borrowers who owe more than their homes are worth decide to stop paying the mortgage?

A new study from economists at the Federal Reserve Board aims to answer that question. The research found that the median borrower who “strategically” defaults doesn’t walk away from the mortgage until the amount owed exceeds the value of the home by 62%. 

(the new study uses -62%, JtR math shows $800,000 x -62% = $496,000)

The study is bad news for the mortgage industry in that it backs up the idea that a growing share of borrowers are walking away from loans. Concerns are mounting among lenders and investors that some borrowers who owe far more than their homes are worth are now choosing not to pay mortgages that they can afford.

But the silver lining here is that it suggests a rather high threshold for borrowers to walk away.

“The fact that many borrowers continue paying a substantial premium over market rents to keep their homes challenges traditional models of hyper-informed borrowers” choosing to simply walk away, the authors write. The results suggest “that borrowers face high default and transaction costs” that make strategic defaults less widespread than they might otherwise be.

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Posted by on Jun 28, 2010 in Market Conditions, Walkaways | 24 comments