Remember this RSF house that listed in December as a short sale for $799,000?
Even though it’s Hacienda Santa Fe (non-Covenant), the price sounded reasonable, and they did have offers. It was marked pending the first week of January.
But in March it came back on the market – at $1,020,000. The agent remarked,
“Lender has set price – no lower offers”, which just begs buyers to either make lower offers, or ignore it.
The seller cancelled a couple of weeks later, relisting with a different agent who kept the same price and remark, but added this: “House had foundation repair in 2001. Buyer to have inspection by Qualified Geotechnical Engineer.”
A couple of weeks ago they finally lowered the price to $895,000, but it’s still not pending, seven months after first hitting the market.
Think the lender is sorry they didn’t take the first deal?
yep the lender blew it as usual.Jim’s 101, don’t chase the market down!!!!!!!!!
FHA the new subprime?
From that article:
The financial results so far are not as dire as those created by the subprime frenzy of 2004-2007, but taxpayer losses are mounting on its $562 billion portfolio. According to Mortgage Bankers Association data, more than one in eight FHA loans is now delinquent — nearly triple the rate on conventional, nonsubprime loan portfolios. Another 7.5% of recent FHA loans are in “serious delinquency,” which means at least three months overdue.
The FHA is almost certainly going to need a taxpayer bailout in the months ahead. The only debate is how much it will cost. By law FHA must carry a 2% reserve (or a 50 to 1 leverage rate), and it is now 3% and falling. Some experts see bailout costs from $50 billion to $100 billion or more, depending on how long the recession lasts.
$100B? Drop in the bucket, in their eyes (Fed, etc.).
Chasing the market down is the new black.
You should post the lender information too, just to put a name to the idiocy. It’s probably not going to be a shock to anyone, but it might help someone win a betting pool for “guess a bank which will fail and/or need a (or another) bailout”.
As for the FHA, of course it’s the new subprime, by definition. Of course taxpayers are going to lose a lot of money on all the FHA defaults, either through foreclosures or debt forgiveness: everybody knows this (although it’s good to keep repeating it, so the politicians have less ability to pretend it’s not obvious).
Think the lender is sorry they didn’t take the first deal?
My guess? No. This home is just another entry on a big fat spreadsheet that is subject to stupid corporate procedures and politics. I bet the guy in charge of this listing (at the lender) is just chalking it up to the downturn in the real estate market.
Banks suck but they’re just doing what they do best… Exploiting impulsive idiots with the lure of cheap and easy money.
Our elected representitives are the ones failing us.
I have my 839 days on market update up on my blog for chasing the market down anecdote.
Anyway; “Buyer to have inspection by Qualified Geotechnical Engineer.” The only way they know to say that is if a Qualified Geotechnical Engineer has already produced a report.
Scrape, recompact, certify equals $200k and hopefully you can keep the building fees.
Anyway; “Buyer to have inspection by Qualified Geotechnical Engineer.” The only way they know to say that is if a Qualified Geotechnical Engineer has already produced a report. (Rob Dawg)
It may be just me, but if I read those eight words in the listing summary, I’d have NO interest…
I’d wager the only reason they don’t consolidate FHA, FNM & FRE into one big taxpayer-supported mortgage giant is because then it would be too obvious for everyone to see what a huge black hole all three represent.
p.s.: Nice area and lot, but that house is at the very least a monster refurb if not a TD. That means you’re essentially buying a lot, and it certainly isn’t worth that price.
Yeah maybe the lot is worth 400k. The foundation fix will be cheap if they just use some Mighty Putty to hold it together(that stuff is amazing). Maybe someone could dismantle a house in Detroit and move on to that lot.
RE: Oceanside Condo Auction, JH checked in with this report:
Just got back. Stayed for about 9 auctions. The room was filled. Most of the people were pre registered. Opening prices had multiple bidders on each unit. I mean maybe 10 bidders. Most units went out for 50% of original pricing.I m sure they sold every unit. The auctioneer was great. They served quality hour dervs. Not just plain cheese and crackers. Very professional auctineer.
Jim, it’s good to hear that you’ve been able to see a well run auction.
That was JH who went, I’m still 0-fer.
I’m between dance recitals currently, my oldest has her last ever at 6pm tonight.
FHA is sensitive to bubble bursts because of it’s 3% down minimum, so that collectively FHA loans of the 2005-2006 vintage are the most underwater of any class. Most sincere home buyers will keep paying even if they’re a little underwater, but if we’re taking 30%-40% underwater then even people who acted in good faith are going to question if it’s really worth overpaying $100K-$200K for their house. It’s worse than renting from the bank because the payments are that much higher than fair market rent.
Credit ratings last several years, but the yoke of debt is long term.
Mark “Mr. Mortgage” Hanson has his latest breakdown on his blog…
It looks like prime loans are the rapidly growing defaults.
What will the public be thinking/feeling in the next few months/years when banks that received taxpayer bailouts are recording profits each quarter, but housing prices are continuing to slide and unemployment is still out of control. Will they be screaming for another stimulus or will they be wanting some heads to roll?
Foreclosure inventories across Pay Option, Subprime and Alt-A continue to surge — up 88.3% y-o-y. This shows how lagging foreclosures actually are. The foreclosure resales for sale today are from 30-day loan defaults that first happened from 1 to 1.5 years ago — the heart of the Subprime Implosion. This highlights how much housing supply is in the foreclosure pipeline at any given time.
This number even shocked me — this equates to 1.3% of ALL mortgage loans in the country becoming delinquent in May alone. This is out of control. We track from Notice-of-Default, which is at 90-days typically. At 90-days most borrowers don’t cure. But as values come down, jobs continue to be lost and financing remains tight, more and more 30-day delinquencies are making all the way to foreclosure. Therefore, this 637k number is now very important and comes into play.
This is a perfect example of why I think almost all short sales are complete and utter bullshit. They aren’t actually for sale, at least not at the ficitional low ball prices they have on the listing.
Oh yeah, and I like the subtle realtor speak for “house is sliding off it’s fountain” thing with the geotechnic inspection. They probably didn’t know that when it was $799k-so now they do, they decide to raise the price by over $200k! Beyond stupid.
Off it’s fountain! LOL. I mean foundation, of course.
Mr. Mortgage shouldn’t be too worried about bank profits. CRE will surely finish the job that RRE started.
My understanding is that it’s mostly the smaller, regional banks that are hardest hit by CRE. They got into that market because they couldn’t compete with the ‘big boys’ in the consumer home loan market.
On a side note, CR has some info on loan mods based on an article in the NYT…
The California Department of Real Estate warns consumers that many dubious loan modification companies have organized themselves as law firms solely to allow them to collect upfront fees, even though the lawyers have little, if anything, to do with the services provided. The department cautions consumers against hiring such companies.
Thanks Ron, some of those same lawyer/loan mod companies also include realty services. They suck you in based on getting legal help, and the next thing you know you’re loan mod isn’t going through, and you need to short sell.
My understanding is that it’s mostly the smaller, regional banks that are hardest hit by CRE.
“Hardest hit” is correct. CRE will kill’em left and right. FFDIC on CR is talking about 1000+ total bank failures, and I agree.
The big boys (BOFA, etc.) are TBTF so it hardly matters to their survival, but ongoing RRE/CRE/CC issues will impair their profits for years to come.
It looks like banks will be doing more hoarding than lending…
Banks have failed to make adequate provision for the losses on loans and securities they face before the end of next year … U.S. banks may incur about $470 billion of losses and writedowns by the end of 2010, which may cause the banks to be unprofitable in the period …
“Large loan losses have yet to be recognized in the banking system,” Moody’s said. “We expect to see rising provisioning needs well into 2010.”