U.s. Foreclosures Increase 4 Percent In November

[Quicksilver]

Not good news for some folks. We always wondered how people could afford some of these homes. Guess the really couldn't.

http://72.14.253.104/search?q=cache:...ient=firefox-a

[Wagner]

Banks made initial money hand over fist in New Orleans following the Hurricane, which is why one of the highest sub-prime foreclosure rates is down there, along with a portion of the East coast.

[Quicksilver]

Yeah but California reports highest number of foreclosures for third straight month More than 19,000 California properties entered some stage of foreclosure during November, the most of any state for the third straight month and an increase of more than 19 percent from the previous month. The state’s foreclosure rate of one new foreclosure filing for every 635 households rose to 1.5 times the national average and jumped to seventh highest among the states after being 12th highest the previous month. California foreclosure activity has more than tripled from a year ago.

We knew it was coming because we had a feeling folks were doggin it trying to keep up with the Jones's. It's a tough road to hoe trying to keep up an image one cannot sustain.

[Wagner]

Cali is also the largest populated state, not to mention EXCEPTIONALLY over valued. My aunt had a place that was 780sqft, valued at 750,000.00. WTF? Too much sun people.

[Quicksilver]

In some respects your correct but there must be something that keeps people coming. So the value is placed on whatever the attraction is. I suppose whenever people decide that the lustre is gone maybe they will leave and the prices will come down. But until then go figure.

Originally Posted by WagnerX5

Cali is also the largest populated state, not to mention EXCEPTIONALLY over valued. My aunt had a place that was 780sqft, valued at 750,000.00. WTF? Too much sun people.

[GUINNESS]

I think Nicole and I need to do a little more negotiating on houses. With all this stuff going on, numerous houses for sale and a plethorah still being built... there's no reason this area should be selling for $120/sq ft, 95 - 100 easy.

[Eric5273]

This is because the economy is so good.

[the head]

Originally Posted by Eric5273

This is because the economy is so good.

It has nothing to do with economy being good or bad it has to do with balloon financing, variable rate mortages and interest only loans...people buy simply looking at the monthly payment not paying attention to what may happen in the future...the interest rate went up and people that were already maxed had no other alternative...I find it funny as hell

[x5GuyInLA]

Originally Posted by the head

It has nothing to do with economy being good or bad it has to do with balloon financing, variable rate mortages and interest only loans...people buy simply looking at the monthly payment not paying attention to what may happen in the future...the interest rate went up and people that were already maxed had no other alternative...I find it funny as hell

I think eric was referring to why prices are so high, but that's more of a supply and demand issue. I think the economy did play a role in what is happening in the housing market now, although it may not be directly correlated. Most of your ARMs follow the fed rate. Back a few years ago when the fed rate was at 1%, you could get a loan in the mid to high 3% and low 4%, with some options just slightly above the fed rate. It made more sense to get an ARM if you weren't planning on living in a home that long and wanted to keep your payments low. When the feds started raising their rate to control inflation, I think that's when your I/O and negative amoritization loans started becoming popular with the masses because it still kept payments low and your equity was building through appreciation as opposed to traditionally building equity through paying off your loan. That kept demand for homes high...any joe shmoe could get a loan...495 fico? no problem! Re-financing and HELOCs didn't help either. Well now that joe shmoe's rate is adjusting and appreciation hasn't gone up as much as they hoped, they can't afford the payments, they've maxed out their equity and they might have been laid off because their company had cut backs. You're right, buyers were short sighted, but it didn't help that lender guidelines were so lax and that many mortgage brokers doctored documents to get their loan through. What many buyers also didn't realize was that the minute they buy a home, they automatically lose about 7-8% off the top (1.5-2% for closing costs and 5-6% for broker commissions). So if they decide to sell, appreciation must go at least 8% for them to break even. And when a buyer doesn't have any equity in a home, they really have nothing to lose.

[Juanted]

Originally Posted by x5GuyInLA

Most of your ARMs follow the fed rate. Back a few years ago when the fed rate was at 1%, you could get a loan in the mid to high 3% and low 4%, with some options just slightly above the fed rate. It made more sense to get an ARM if you weren't planning on living in a home that long and wanted to keep your payments low. When the feds started raising their rate to control inflation, I think that's when your I/O and negative amoritization loans started becoming popular with the masses because it still kept payments low and your equity was building through appreciation as opposed to traditionally building equity through paying off your loan. That kept demand for homes high...any joe shmoe could get a loan...495 fico? no problem! Re-financing and HELOCs didn't help either. Well now that joe shmoe's rate is adjusting and appreciation hasn't gone up as much as they hoped, they can't afford the payments, they've maxed out their equity and they might have been laid off because their company had cut backs. You're right, buyers were short sighted, but it didn't help that lender guidelines were so lax and that many mortgage brokers doctored documents to get their loan through.

Well said, and right ON the money! (no pun intended)

Juan