Comments on: HOUSING: MORE TROUBLE AHEAD

By: Rebob

Rebob — Fri, 09 Oct 2009 17:46:42 +0000

Is the LTV in your chart representative of the value at the time a mortgage was secured, and if not, what is the “valuation” date? I’m a veteran practicing residential real estate agent and I concur with your premise that most homeowners are now illiquid and in limbo until housing values reinflate to cover debt, selling costs and the down payment margin to purchase a replacement property… if course that suggests a replacement property meets a need that the existing home doesn’t. What a mess.

By: larry

larry — Mon, 28 Sep 2009 21:34:57 +0000

I live in a market,that in the last 12 months has seen the 3rd most expensive hurricain in U.S. history; 4 months ago we were hit by a tornado; the largest employer in the area laid off 11,ooo. people in a town with a population of (per storm 60,000) and now 48,000. Couple these with the results of the insanity of our federal spending and covert tax increases; we have a business enviroment where the only people making money are paid with tax dollars or sell drugs.But, Galveston, Texas is not reflective of the state of Texas. I question the results of the loan to value numbers you have for the state of Texas. Have you confirmed these numbers with other sources.

By: CHUCK ADKINS

CHUCK ADKINS — Fri, 25 Sep 2009 21:59:01 +0000

I’M RETIRED AND PROBABLY IN BETTER FINANCIAL SHAPE THAN SOME WHO ARE YOUNGER; BUT I’VE BEEN CONVINCED FOR A LONG TIME THAT WE HAVE TOO MUCH GOVERNMENT INTERFERENCE IN OUR LIVES; BOTH LOCAL AND FEDERAL, WITH TAXATION EATING UP MORE THAN THEY NEED TO PROVIDE WHAT IS NECESSARY TO THE PUBLIC, BE IT REAL ESTATE TAX OR INCOME TAX. AND REALTORS MAKING 7% IN ILLINOIS, WHERE I’M FROM IS LUDICROUS. BETWEEN THEM AND LOCAL,OR STATE GOVERNMENTS, THERE HAS BEEN AN INCENTIVE TO KEEP THE R.E. MARKET HIGHER THAN NEEDED FOR OBVIOUS REASONS, SINCE BOTH BENEFIT. THIS HAS BEEN THE REAL PROBLEM.BUT THE LENDING INSTITUTIONS ARE NOT EXEMPT FROM ANY BLAME EITHER. THEY HAVE DEVISED A MULTITUDE OF CHARGES TO BE TACKED ON TO THE MORTGAGE PAYMENTS FROM THE GIT-GO. HOWEVER, THERE MAY BE A SILVER LININING NOW THAT PRICES ARE A LITTLE LOWER,BECAUSE WE WILL SURELY HAVE AN INFLATIONARY SPIRAL IN REAL ESTATE VALUES IN THE NOT TOO DISTANT FUTURE; THE FEDERAL RESERVE, AND OUR OWN FEDERAL GOVERNMENT’S ACTIONS,SINCE THE NEW ADMINISTRATION HAS TAKEN OVER WILL GUARANTY A NEW HIKE IN INFLATION. SO OWNING A HOME IS STILL A GOOD BET,IF YOU CAN HANG ON,OR AFFORD TO BUY. THERE ARE WAYS TO GET AROUND THEM IF YOU TRY.

By: Rob

Rob — Fri, 25 Sep 2009 17:41:24 +0000

There are many homeowners with negative equity who can still easily afford to pay their mortgage, but now with the bank bailouts the mentality of at least some of these homeowners has changed. The attitude is screw the banks, screw Fannie MAE and all the institutions who got bailed out.

I know many people who have simply stopped paying their mortgage. They then plan a short sale and live in the house mortage and rent free and save the money that they would have been paying on mortgage payments. I know several people who have now been living free for about one year now without being foreclosed upon. Note, they have been paying their property taxes. The banks are so back logged (at least in California), that they can probably live another year for free before any hint of eviction.

The more common scenario is that the homeowner finds a new house and qualifies for a mortgage using another SS number. This works if a couple has only one person on the mortgage, say the husband. So the wife gets the new mortgage on her income and assets and as soon as she closes on the house, they stop paying on the their old house, send the keys to the bank and move. The husband has trashed his credit, but they they have a similar house for half the price.

If I had bought a house at the peak and my house was worth less than half what I paid, I would probably walk away from the mortgage myself considering my disgust with the way the banks have been bailed out.

By: Nathan

Nathan — Fri, 25 Sep 2009 17:09:57 +0000

Does this really have to be a death spiral? As the larger home prices continue to drop won’t that incent someone who is currently on the fence about upgrading their home to pull the trigger? The stock market does not hit zero (I hope), it drops until people start to say “Wow, there are some really good buys out here”. That being said, I have only lived in states not circled in red in the table above during this financial mess, so I cannot possibly understand the amount of home price deflating that these states need. So, me saying a bottom has to form due to new buyers and decreased new build supply is probably of little conciliation when that bottom is still a ways down.

By: Fabian

Fabian — Fri, 25 Sep 2009 15:55:28 +0000

I’ve never heard anybody paying 6% of realtor fee. You can easily bring it down or the frankania exposes. Anyway, this market still has way to go; down. Here in LA it’s still way too expensive.

By: frankania

frankania — Fri, 25 Sep 2009 15:12:09 +0000

Forget the 6% realtor fee. Who needs a realtor? Look for your own house in classifieds, craigslist, posters, etc. Then sell your house the same way. A title company can transact the sale for a small fee.

By: gregg

gregg — Fri, 25 Sep 2009 10:43:26 +0000

As an unemployed and underwater condo owner, a lot of what Mark says hits home. For me the 6% Realtor fees are a big problem. Without those, I’d sell and write a check to cover what remains on my mortgage. With those, I start to think about mailing in the keys. If the government is hell bent on giving away money, instead of giving the first time home buyers $8k, maybe they should give the money to dorks like me to help me sell without having to do a short sale, or worse, foreclosure. That what seem to be a better way to target those in need. The 20% down payment for a new home doesn’t effect me, because my next stop will be a 500 sf studio apartment somewhere.