I mentioned in the video that it needed $20,000 to $25,000 – that’s to get it in good enough condition to move in. The eventual owner could easily spend $50,000+ in improvements over the first year, and today’s buyers don’t want the hassle.
If you’re only willing to consider buying the houses in excellent condition, it really narrows down the selection – and inflicts bidding wars in virtually every case.
Here’s a classic ponzi scheme right in our own backyard.
This guy owned this house since 1988, and had been an active contractor in the community. When the market was hot, borrowing money to do remodels and flippers worked out fine for him.
But when the music stopped, he kept borrowing.
Eventually the cross-collateralized mortgage holder foreclosed in 2007, and took back two properties, the one in the video and another on La Veta. After the bankruptcy, the next lender in line, the $800,000 lady, got the third property. The remaining 10-20 individuals who lent money got burned for at least $2 million, and maybe more.
He preyed on people’s trust – he had friends in the community that recommend him to other friends. Because he seemed like a nice guy, more and more people kept lending him money unchecked, and eventually the scheme failed:
From the SD County Assessor – I am happy to provide comps:
The County Assessor’s Office wishes to notify property owners that tax relief is available if their property’s market value has fallen below its assessed value. Your property’s assessed value is shown in the upper right hand corner of your current tax bill. For all practical purposes, this only affects those property owners who purchased their property at the height of the current real estate market.
Under State law, a temporary reduction in assessed value can be made when the market value, as of January 1, 2010, falls below the assessed value.
Once reduced, the Assessor’s Office must then annually review the value of the property until the Proposition 13 value is fully restored (adjusted with the annual CPI, not to exceed 2%). Consequently, a new request for review is not required if your property currently has a temporary reduction under this provision.
Property owners who believe their property’s market value has fallen below its assessed value should file an Application for Review of Assessment with the Assessor’s Office as soon as possible but no later than May 14, 2010. They should provide their opinion of value and supporting documentation, such as comparable sales, current listings, or a recent appraisal indicating the value as of January 1, 2010. Ideally, comparable sales should have occured between 10/1/09 and 3/31/10.
With all the postponements of trustee sales, it seems that if any defaulting borrower could just fog a mirror, the servicer would give them a break.
Apparently, they’ll go farther than that – from a reader:
My sister passed in mid 2007 from cancer. She was widowed and lived in Oregon. She put down 10% in 2004 for a house with 80/10 mortgages from Greenpoint. Greenpoint failed in late 2007 and Capital One stepped in to take over. Our family decided, since the house was the only Oregon asset and the holding cost during probate would offset any equity, that rather than going through probate to sell it, the bank could have it.
Two years ago this week I was in Oregon with my wife clearing out and securing the house because the bank was in foreclosure mode. Now here we are, two years later and the bank still has not foreclosed, postponing month over month and even refiling after the foreclosure deadline passed and cancelled the original filing. I’m glad I turned off the water and drained the pipes in the house since it was freezing while we were there. I can only imagine what that house looks like after being vacant all this time…
Hopefully some bandos are living there – do they have bandos in Oregon?
Julie brought up the mark-to-market accounting requirement for banks.
I don’t think the banks worry much about marking to market. Of the 43 Countrywide/B of A listings I’ve sold, I can’t think of one of the foreclosed mortgages that was actually owned by them. CFC was selling their paper on Wall Street as private-label MBS, and those owners may have some requirement – but B of A is just the servicer on the majority of CFC paper.
Without the accounting requirements, the servicers might keep kicking down the road forever the 17,247 San Diego County properties in default.
Here is another example of can-kicking. The FDIC just agreed to sell two portfolios of loans with a combined unpaid balance of $3.05 billion to Lennar Corporation.
MIAMI,Feb. 10 /PRNewswire-FirstCall/ — Lennar Corporation,one ofthe nation’s largest homebuilders, today announced the closing of two structured transactions with the Federal Deposit Insurance Corporation (“FDIC”).
The transactions represent the purchase of two portfolios of loans with a combined unpaid balance of $3.05 billion. A subsidiary of Lennar, Rialto Capital Advisors, will conduct the day-to-day management and workout of the portfolios. Lennar acquired indirectly 40% managing member interests in the limited liability companies created to hold the loans for approximately $243 million (net of working capital and transaction costs), including up to $5 million to be contributed by the Rialto management team. The FDIC is retaining the remaining 60% equity interest and is providing $627 million of non-recourse financing at 0% interest for 7 years. The transactions include approximately 5,500 distressed residential and commercial real estate loans from 22 failed bank receiverships.
My point is that here are another 5,500 loans that should be foreclosed on, but instead they are being shuffled off for additional processing.
For those of us who are seeking more REO inventory, it appears that we may be in for a long wait.
Let’s lighten it up just a bit – for those who value living in a neighborhood where most services are within walking distance, here’s a link to a website that not only ranks the ‘walkability’ factor of a specific home address, but also lists the closest shops and restaurants, and their distance.
The big white house is owned by Sheila Potiker. Her late-husband, Hughes Potiker (who died last year at the age of 80), founded Entertainment Publications, the coupon-book publisher.
One of those older houses to the south, probably the one with the above-ground rail going down to the beach house, has an subterranean elevator too – I’ve seen it!
Here’s his second video too, from the ultimate real estate paparazzi:
The freeway traffic in this area (which has seen marked improvement over the last few months since the last project was completed) deters some people from thinking about living further north.
Could a new interchange help real estate values in Encinitas/Carlsbad?
