Home Foreclosures

[VJW]

HOME FORECLOSURES REALLY BAD, TO GET WORSE


According to Realty Trac Inc., there were 323,102 homes in some stage of foreclosure in the 1st QTR of 2006, which is UP 72% ! from just a year ago. However, more black clouds are looming:

Household Borrowing and the Mortgage Resets

The WSJ reports that "More than $2 trillion of U.S. mortgage debt, or about a quarter of all mortgage loans outstanding, comes up for interest-rate resets in 2006 and 2007, estimates Moody's Economy.com, a research firm in West Chester, Pa."

Let's repeat that number: Over the next 20 months, more than two trillion dollars worth of adjustable rate mortgages will reset at higher interest rates.

WSJ: "Millions of Americans who stretched themselves financially to buy homes face a painful adjustment -- some could even lose their houses -- as monthly payments on adjustable-rate mortgages are reset higher

LINK

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[NoWayNovember]

Re: Home Foreclosures

That scares me. I am so glad we have a fixed rate mortgage.

[FrugalDiva]

Re: Home Foreclosures

Me too! We just refinanced our 1st mortgage and HELOC into one so it will be a fixed rate, the interest rates on the HELOC were killing us.

[SuzeOFan]

Re: Home Foreclosures

It's all those ARM mortgages that people took out that's to blame!
Greedy banks and government ....finding more ways to part people and their hard earned money!

The people who took out all these ARM mortgages really couldn't afford to own a house to begin with, but then to have it taken away by forclosure...!

Sad, very sad. It would have been better had these people not gotten these bad mortgages to begin with.

[SuzeOFan]

Re: Home Foreclosures

and another thing to think about...many people took equity out of their homes to pay off credit cards and so forth during the low interest rate feeding frenzy. the thought is a good one, clean up the debt but the reality is you've taken debt that was unsecured and put your freakin' house on the line to pay it off!

Have you seen their commercials? The really encourage that sort of desperate means to an end. The ones by those 'loan consolidation' people? They have this poor soul on there saying I'm finally free of ccard debt by using the equity in my house thanks to so-n-so."

But don't you think there ought to be more laws protecting people from these circling sharks? Credit cards are the worst. Don't even get me started on how slimey they are! Their like the kid who likes to change the rules in the middle of the game.

It seems we are less and less protected today than ever before in a lot of ways - starting with the most vulnerable...

[34saving]

Re: Home Foreclosures

Another aspect of all of this . . . all of the no money down, interest only loans mean that most people being foreclosed upon have just about zero equity. Foreclosure is expensive, so the foreclosing party (bank) or whoever insures them (PMI insurers?) is going to take a loss on a huge number of these foreclosures.

[jmjj215]

Re: Home Foreclosures

It's a lose-lose situation. Except I guess for some investor that's been waiting for these types of opportunities to snatch up houses cheap. Of course cheap today was expensive three years ago...

By the way, in German, the word for poor is arm.

[CJsoccerchic]

Re: Home Foreclosures

Not a worry rexdart! Everybody is always looking for a deal - if anyone could get a house for less then market price, even if it is a foreclosure, I think anyone with the means would do it. I would!

[SuzeOFan]

Re: Home Foreclosures

I can't fault anyone for taking advantage of opportunity when it comes.
As long as it's on the level.

The foreclosed party has already suffered the consequences and are long gone. The people buying foreclosures are not to blame.

Now here's a crazy thought....!

If only those 'ARM' people had bought foreclosures to begin with...
then maybe they'd be still watching TV in their own living rooms...!

[34saving]

Re: Home Foreclosures

Most foreclosures aren't bargains (at least where I live). At best they've been vacant for months and that's never good for a house. Most of them have been trashed. I've never fouund one where cost + fix up cost = less than fixed up market value.

[boefixepa]

Re: Home Foreclosures

Okay, I would hate to loose my home, but....um...you can't pick up one end of the stick without picking up the other also. Time and time again I see people wanting to pass the buck on the consequences of their choices. You made the choice...deal with the consequences. Don't blame someone else for your actions! They belong to you, if you don't like them....CHANGE! If you say you didn't know...well wasn't it your responsibility to FIND OUT! and EDUCATED yourself on what you were doing! It's so easy to learn or at least find someone who knows and will be willing to explain it to you. If you are willing and able to take the risk there is nothing wrong with many of the loans you are taking about. Do people who shouldn't have then have them of corse, but it's the same thing with ever facet of life. You need a license to catch a fish, but anyone can have a kid!! Tell me which requires more responsibility! If the banks and such don't want to deal with the hassel then then need to stop making loans. They can and are able to make higher requirements. They are making money somewhere or they would not do it.

I just can't feel overly sorry for those who want me...who is working hard and doing more than her part...to pay the consequence for their actions. Been there, done that, NOT doing it again!!

[SuzeOFan]

Re: Home Foreclosures

Too true boefixepa.

In the end we can't blame anyone else really for our own poor choices. We've all been there unfortunately. And if we've been misled, more often than not, it's because we were too willing to be misled. It's (fallen) human nature I guess.

Got to read that annoying fine print....!

It's like the saying goes... the devil's in the fine print!

[jmjj215]

Re: Home Foreclosures

34saving,
Don't you think most bargain purchases come from being first in line of a desparate/incentivized seller? A friend of mine buys, repairs, and sells homes for a living (did 52 last year, and that was a slow year) - he rarely gets things at foreclosures for the same reason you mentioned above.

[34saving]

Re: Home Foreclosures

Jesse - There are definitely better bargains to be found in the pre-foreclosure or just plain old "don't want to own this house anymore" stage. I think he/she who does business in short sales is probably going to make a lot of money in upcoming years too.

[VJW]

Re: Home Foreclosures

UPDATE:

The backlog of unsold new homes hit 565,000 in April (more than a six month supply).

Top five mortgage defaults by metro areas:

* Indianapolis – 1 of every 69 homes is in foreclosure (leads the nation)

* Atlanta – 1 of every 70 homes is in foreclosure (close second)

* Dallas – 1 of every 99 homes is in foreclosure

* Memphis – 1 of every 101 homes is in foreclosure

* Denver – 1 of every 105 homes is in foreclosure

Yikes.

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