Here Is What The Liberal Dems Have Done To The Housing Market, But They Stuck It To The Mortgage Companies


Foreclosures for sale: Big supply, low prices

cnnmoney

 
Les Christie, On Thursday May 26, 2011, 5:16 am EDT

There’s a three-year inventory of homes in foreclosure for sale, and that’s devastating home prices.

Las Vegas has so many foreclosures that 53% of all the homes sold in Nevada are in some stage of foreclosure, according to a report from RealtyTrac, the online marketer of foreclosed properties.

Foreclosures represent 45% of sales in California and Arizona, and 28% of all existing home sales during the first three months of 2011.

“This is very bad for the economy,” said Rick Sharga, a spokesman for RealtyTrac.

What’s more, the homes are selling at steep discounts, especially so-called REOs, bank-owned homes that have been taken in foreclosure procedures.

The average REO cost on average about 35% less than comparable properties, according to RealtyTrac.

But in some areas, the discounts were ever greater: In New York State, the discount for REOs was 53% during the first quarter. And it was nearly 50% in Illinois, Ohio, and Wisconsin.

Also weighing on market prices are “short sales,” homes where the selling price is less than what is owed by the borrowers. These sales sold at an average 9% discount.

Including both REOs and short sales, Ohio had the biggest discount of any state, at 41%.

There were 158,000 deals involving distressed properties nationwide during the first quarter, less than half the nearly 350,000 during the same period two years earlier.

With the slowed sales pace, it will take three years to burn through the inventory of 1.9 million distressed properties, according to Sharga.

“Even if you look at REOs alone, it will take 24 months to clear them and that’s without any new foreclosures at all coming into the system,” said Sharga.

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Posted on June 1, 2011, in Politics and tagged . Bookmark the permalink. 10 Comments.

  1. John, I have a story I’d like to share. I know that you have made several posts about this topic. So if this is not the best post to place this comment, let me know.
    ********
    My wife and I purchased a new home March 2010. We were ecstatic to realize that we were about to embark on one of the biggest decisions of our lives. We had been saving for years. This was a big moment.

    Like I said, we had been saving for years. We had made provisions to allow for that big of a commitment. We paid down all of our current debt, we payed off vehicles, got our credit reports in order, etc. We thought we were fairly prepared.

    So I go to my bank and ask to speak to a loan officer. I ask to become pre-approved so that I could ensure I was not wasting anyone’s time when looking for a house. The guy immediately heads to the back and is gone for several minutes. He returns with a pre-approval statement for $500,000. “Congratulations!” he said, “You are pre-approved for $500,000.”

    My head was whirring with this news. I remember seeing what a half-million dollar home looked like in my area. I was over-joyed. Then reality set in.

    Kathryn and I had budgeted for a home at around $150,000. This was crazy. Maybe we undercut ourselves. They are the experts after all.

    So we recalculated, recalculated, re-estimated, number-crunched, etc. for days. We were worn out wondering why such a huge discrepancy.

    We made a decision. We didn’t say anything to our bank. We told our realtor that we wanted a home around $120k, nor more than $150k. The house we ultimately bought was only $142k.

    We’re doing okay. But there are some tight months. You know? A lot of things can happen. And we’re so happy we didn’t stick ourselves with that half-million dollar house.

    But I ask you, how many families take a critical look at these figures? How many families simply say, “Well, I appreciate that, but our family will stick with this.” Considering the shit hole we’re in today, not many. But is it their faults? That’s the question.

    The people who ultimately buy the houses are mostly to blame. Yes. But the savvy “predators” coaxing people into these “schemes” are the scum of the earth. And organizations like Peanut (or whatever their name is), giving EVERY family a home, because every family should have a home, is asinine. It’s despicable. It’s completely irrational, unsustainable behavior.

    People need to work towards those successes. Prove to the banks that you can make long term investments in your life. Show them you’re in it for the long haul.

    It’s sad that we’d allow ourselves to get to the point we are in. That no one is proud to make their own way in this world anymore. I know men who are on “family assistance” and aren’t ashamed. I would feel like a failure if MY family needed assistance because I couldn’t take care of them.

  2. Hey Lynn
    Your points are all very well made and cogent. This is the problem with the libs who initiated all of this.
    You are a conservative and just don’t know it in spite of your atheism . You did all the right things
    Blessings on you and yours
    John

  3. Thank you, John. I’m so glad I did. I’d like to add that I have friends who bought a gorgeous home. They haven’t declared bankruptcy, they’re making it okay; but these are the same people who can’t go out to dinner with Kathryn and I on Friday night because that would be an extra expense they didn’t budget for. That’s not way to live. You know?

    And, honestly, I’ve always considered myself in the middle, politically. I think that in order to be a good human being, you need a nice balance of liberal and conservative. Too extreme either direction is destructive. Look at conservatives like Glen Beck, Newt Gingrich, Sarah Palin. These are the last people I would want on my “gang” during a shootout. They’d save their own ass by cutting a deal with the other gang. Too much of the every man for himself mentality is inhumane.

    But on the flip side, you have goofballs like Fanny Mae and Freddie Mak, Howard Dean, John Kerry, Al Gore, etc. These guys wouldn’t be in my gang either. They’d tear down the wall that was covering us from gun fire. Then wonder why everyone got shot. “But I was tearing down barriers! Can’t you see that?”

    I’m comfortable sitting smack dab in the middle, using common sense and reason to sway my ideals in the direction best suited for my family. At times, I have liberal tenancies; and then express conservative motions when executing them. I like it actually.

  4. Yes I can see you as a centrist. It is the engineer in you I believe. Glen Beck is an entertainer but brings interesting info that no one else does. Although I have read that he is not above appropriating work that was not his and claiming that it was.

    I have read Sara Palins book and if you had as I recommended instead of listening to the lame stream media, you too I believe would see her in a much different light. She is much like you really.

    What I can tell you is to not trust anything that the mainstream media tells you because they have tossed out journalistic ethics years ago. I have had way too many dealings with them in the past. As a free lance writer I still have to deal with them.

    As trustworthy as Apple is, the media is just as UNTRUSTWORTHY. They are a very corrupt organization as a whole.
    John

  5. Hi Lyn,
    LOL…
    no, I am not laughing at you…
    I am just laughing at the “banking system” and
    financial advisers….
    🙂
    ohh good grief!…
    your story reminds me of me and my husband in the mid-80’s looking for a house…
    once they were done with figuring our money options, and the debt they could get us in…
    🙂
    I was saying:
    are you trying to insult yourself or us??!!!
    are you trying to get us into a last cent to a house we don’t need??!!!
    are you for real??!!!
    I will tell you something else…
    Our most beloved dog received a credit card application too!!!!
    well…
    of course we shredded that darn thing!!! we did not need Poppy to get us in a trouble over Beef Jerky at the “Pet Store”….!!!!!
    😉
    no, it is not a joke…
    it was a c/c application with his name and our last name…
    anyway…

    to your wondering question…
    NO …
    most Americans are glad to be “approved” for a higher limit…
    …as far as I know….
    people are just taking everything like it would come from Santa…
    …and educational statisctics are…
    like an illiterate tsunami coming out of our schools…
    young college students are associating Washington D.C. for “Washington De City”…

    I don’t even want to know what is going on in public schools….
    ahhh…THE UNION!!!!!
    silly me….what I am thinking!!??

  6. And to add to this story. I went to buy a HUD home in the beginning. From all of the incentives, I was actually going to be ahead by $117.34. The down payment was “taken care of.” The taxes were “taken care of.” And the bonuses from my bank took care of the mortgage fees, applications, etc. When it was all said and done, I would have come out richer by $117.34. What!

    Imagine this if you will: You go to apply for a home. You get approved for a half-million. When you’re done figuring the numbers and realize that you will actually come out ahead, what’s the incentive to NOT take that deal? If you default, you haven’t really lost anything. You didn’t have to make a 20% down payment, you didn’t have to pay 3%+/- taxes on your house, you didn’t even have application fees. As a matter of fact, you would be able to take all that money you saved and go buy a new car.

    What in the hell has happened in this country? I want to live in a really nice home like the next guy, but I’m a realist. If I can’t afford it, I don’t buy it. Simple. Period. Done. Finito. Vamanose.

  7. Hey Lynn
    Be careful, you are sounding more and more like a conservative. Nice to know that you are responsible for your finances, far too many people including Congress are not.

    Obama, Reid and Pelosi have quadrupled our deficit in just two short years and want to increase it more. It is like maxing out your credit card and then going and getting an increase in your borrowing limit. This is of course untenable in our private life and should be off limits in our government.
    John

  8. Yes. And I love all their programs. I would love to give everyone a million dollars. Guess what, congress, not gonna happen.

    These guys need to understand that all they’re doing is creating more and more “beggers.”

    JFK said it best, “Ask not what your country can do for you, but what you can do for your country.”

  9. Yes we again need to adopt and instill in our children the sense of personal responsibility. More people need to start their own businesses and be the captain of their own desitny rather than looking to government for yet another handout.
    John

  1. Pingback: Use Caution When Selling REO Properties, by Phil Querin, PMAR Legal Counsel, Querin Law, LLC Q-Law.com « Oregon Real Estate Round Table

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