Monday, November 24, 2008

Re-Default rate running around 50%

Yes, you read that right. Indications are that 50% of those that get a loan modification are STILL defaulting. Check out the report from Diane Olick. The reasons are many. The booming unemployment rate is surely catching a few people. But more probably realized that they are signing up to be renters for 30 years with many of these new deals. And they are paying high rents as compared to actually renting a comparable home. I'm sure a few people were just using the rework process to buy more time in the home. Think about it, if you haven't been paying a mortgage for 9 months and then get a work out, you can then default again and get another 9 to 12 months of free rent. Sucha deal!

Also in the report, distressed sales (foreclosures and shorts) are now running 45% nationwide (although in the IE they are 70%).

7 comments:

ButterMonkey said...

Yeah, I agree with her that we're at 2004 prices right now. We've got a couple of years to go, so I'll wait.

Allison said...

It's funny, most people I talk to (just your general IE residents) think the price drops have stopped. I visited with two friends tonight who both said we are at the bottom.

Why do they think so? Because they just bought houses and I guess that makes them feel better.

golfer_X said...

De nile is not just a river in Egypt!

ButterMonkey said...

Allison,

I have noticed a bit of a stall in the price decreases lately. I think its more likely the lack of new repo homes coming on the market because of the new law rather than us hitting bottom. I'm hoping for some movement after Christmas when sellers stop dreaming that Santa is going to bring them a buyer.

vipertom1970 said...

I hope Amber Hill, The Pinnacle in Corona will drop between 500k to 600k next year.

Sellin @ Da Drop said...

''The Pinnacle in Corona'''

Hold on they built a development called ' The Pinnacle' out here? In the IE??. LMAO!!!! Oh man talk about irrational exuberance...

Sellin @ Da Drop said...

delusional exuberance?