After 6 months 50% of modified loans are once again in default..... Wow, who here is surprised?
More than half of loans modified in the first quarter of 2008 fell delinquent within six months, according to recent data from a top bank regulator. Redefault figures reached 58 percent after eight months, according to U.S. Comptroller John Dugan.
The trend has left officials investigating: Are the modified mortgages badly written? Or have cash-strapped, unemployed homeowners accumulated too much increased credit card debt to afford even reduced payments?
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I feel sorry for you "officials so X will give you a hint! The mortgage amounts are STILL too high relative to incomes. You can modify all you want, but when the principal amount is 5x the persons income they will likely default. There is just no margin for any unexpected cost when you are working with those ratios. Don't mod a loan unless the person can really afford it using the old tried and proven 28/36 ratios.
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More good news from the Press Enterprise...
It was only a few years ago that economists were talking about how the housing bubble was costing Inland Southern California its advantage as the affordable place for buyers. The area was at close to full employment, but home prices were going up too fast. It meant that even though there were abundant jobs in San Bernardino and Riverside counties, the typical worker could not afford the typical mortgage. Now more than 186,000 Inland workers are unemployed, many more are underemployed, and almost everyone is nervous about the state of the economy. It means that, despite a huge decline in home prices, there won't be enough buyers in 2009, Chapman University economists said in their annual forecast. The Inland Empire stands to lose 14,000 jobs in 2009, a drop of 1.1 percent, Chapman's economists predict, but the decline will ease by the fourth quarter. The two-county area lost about 38,000 jobs in 2008, according to a recent state report, and federal statistics indicate the job loss could have actually been much steeper. (no duh!) Unemployment, currently at a 13-year high of 10.1 percent, could go more than a full point higher. Most job sectors, except for health care and education, will see diminished payrolls. The job losses will likely hinder any housing recovery. By the end of the year we should see better housing numbers, or at least numbers that are less bad, Adibi said in an interview. In early 2005, when the median home price in Inland Southern California was about $340,000, only one in five people made enough to qualify for a typical 30-year fixed mortgage with 20 percent down. (what about 2006 and 2007 when only 1 in 10 could afford it?) The median single-family home price has dropped to about $209,000 in Riverside County, and $180,000 in San Bernardino County, according to a recent report by DataQuick Information Systems.
Adibi, who presented his forecast Wednesday in Riverside in front of an audience of mostly builders and developers, said there won't be enough demand for housing to bring the bulldozers back to the Inland area. He is forecasting a decline in Inland construction jobs for the third straight year. (wow, that's a stretch...not)
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Meanwhile back at the ranch, foreclosures are ready to soar as Fannie and Freddie's foreclosure freeze expires.
A moratorium that Fannie Mae and Freddie Mac put on foreclosure sales and evictions by their servicers in late November is scheduled to expire next week. Freddie had 5,000 to 6,000 loans headed for foreclosure before the freeze, though some might receive streamlined modifications. Fannie said it had contacted more than 10,000 borrowers and renters before the freeze about the possibility of a property heading for foreclosure.
"There probably will be two more waves of foreclosures coming," said Mark Carrington, the director of analytical sales and support at the unit of First American Corp. of Santa Ana, Calif.
"When the foreclosure moratoriums end, we'll see one wave of foreclosures," he said, and "2009 is going to be the start of the ramp-up of the option ARM loans facing foreclosure."
"Virtually everywhere we've seen moratoriums, there is a run-up in foreclosure activity, then a huge drop-off, and a spike back up when the moratorium is over," said Rick Sharga, a senior vice president at RealtyTrac Inc. in Irvine, Calif.
As of June 30, Fannie and Freddie owned or guaranteed 373,000 delinquent loans. Freddie had 151,515 "seriously delinquent" mortgages — meaning they were 90 days or more past due — as of Sept. 30.
"Right now, between moratoriums that were enacted last year and the pure volume of foreclosures, time lines could be double the standard of a year ago," said John Anderson, an executive vice president at Clayton Services Inc. in Shelton, Conn., which owns Quantum, a servicer of delinquent loans.
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So. let me get this straight. Unemployment is high and getting worse by the day. Values are falling. Defaults are rising. Re-defaults are running 50%+. Holy smokes, there's never been a better time to buy! (sarcasm off)
24 comments:
we're gonna lose a lot more than 14,000 jobs this year. The public sector layoffs will get very ugly.
Yep, I understand a large portion of the state budget goes to pay salaries. So one of the only ways to cut costs, is to lay people off.
Education and health care take up a huge portion of the state budget. If California ever grows a backbone and starts enforcing the immigration laws the amount we spend on just those two things would make up the shortfall. But the liberal pukes that run this state will never do that.
Before anyone slams me as a anti-immigration Yankee let me just state that I am not. I, myself an an immigrant. I came to the US legally with my family in 74. My parents filled out the paperwork, paid their fees and waited a good long time. I have nothing against LEGAL immigration. But there are an estimated 20 million illegal immigrants in the US and many (most) do not pay taxes. But they sure have no problem showing up at the ER when they're sick. And because of them we now have to print everything in two languages. BTW, how much does that cost every year??
If Arnold wants to save $40 billion all he has to do is make California an English speaking state again. stop printing state crap in Spanish, stop teaching in Spanish, stop illegal immigration, and enforce the immigration laws by deporting those that are here illegally.
I don't buy the BS that they are taking jobs Americans don't want. 25 years ago most of my young friend were in construction. In high school most of my buddies worked at fast food places. Who has those jobs now? It's not young American kids or young American adults.
( I really should not comment after a couple of drinks)
You've got my vote, golfer!
Drinking has nothing to with it, you are correct X. I am a 3rd generation Californian. Maybe I'm not as Native as a pure blood Pechanga or Morongo, but my family has seen things change... for the worse; due to uncontrolled illegal immigration. I remember the topic coming up at family gatherings when I was a child, and I'm 51 now. The elders were worried then, that at some point the State and economy would collapse.
None of them were Rocket Scientists, just good people with common sense who could see that services were increasingly being delivered to people who had paid little or nothing into the system, and that many blue collar jobs were being taken and jobs that had once paid a living wage, were turning into jobs that you could no longer use to support a family or even yourself.
Proposition 187 was probably the last hope this State had for a legal remedy. That was met with marching in the streets and threats of violence from the illegals and their supporters. The weak liberal court threw out 187, and in so doing, condemned this State to the fate we are seeing unfold around us. The housing Kaboom just poured gas on the economic fire that was already out of control.
Before anyone hollars racist at me, understand my wife is a Latina but that I respect her and others like her who immigrated here legally. I do not consider myself cruel or heartless, just a realist who knows that every decision has a consequence, intended or not.
The consequence of not dealing with immigration correctly when it should have been dealt with put us in the situation we are now faced with, of not having funds to cover basic services. Hey, but other than that, y'all have a good day.
Hello Everyone,
Can any one dissect George Skelton's calculation in his article as seen here at LA Times here:
http://www.latimes.com/news/columnists/la-me-cap2-2009feb02,0,418500.column
Or google:
Illegal immigrants are a factor in California's budget math
His bottom line is that "the state spends well over $5 billion a year on illegal immigrants and their families".
"But their absence from the state wouldn't come close to saving enough tax dollars to balance a budget that has a $42-billion hole projected over the next 17 months."
5 billions is 5 billions and we need all the helps, big or small, we can get to stop the bleeding.
I'm not for rounding people up and busing them across. But, we got to start some where. Or can anyone else come up with even smarter solution?
Further more, beside the 5billons, it does appears that we are going to be wasting another 42 - 5 =37 billions on something else.
My next big question is where and how are we wasting that $37Big Ones?
Where did all the money go?
Bigger: The money went where the money always goes- to the rich and needless.
X: I agree with you about illegal immigration. My parents came to the United States legally in the 1960's. When my dad died at an early age, my mom was too proud (stupid?) to take any of the welfare dime, even though she qualified for it. She had some crazy notion that you should work for your money (what a novel idea in modern America!). And work she did- three jobs for over twenty years, but my two sisters and I all went to college and have advanced degrees. My mom did not literally work herself to death, but it sure made her old before her time. She died with a smile on her face- happy in the knowledge that her three children grew up to live the American dream.
By the way, my parents both learned to speak English and never needed anything translated into Spanish. My parents were not alone in that regard. Many parents from that time were very much the same.
Today I teach in a public elementary school in the barrio, and I wonder what happened to that work ethic. The parents of my students sure don't have it....
As far as the work ethic goes, I'm afraid it's worse amongst the citizens than the immigrants. The sense of entitlement the newer generations have is amazing. And it's a large factor in what got us into this financial mess. Too many young adults have grown up watching Beverly Hills 90210, The OC and crap like that, that they all seem to think they must live that way. Everyone should have a new Beemer, a big house and designer duds. Well, sorry folks that's how the real rich folks live. If you want that then you better become a doctor. Even then you will have to wait a few years as most young docs must pay off massive student loans.
Wow! you folks are making me feel almost young again!
I'm going to offer a brief counter-point.
I believe the state's budget problem's are more tied to the spending lobby than immigrants. Think about education. How many times have we heard that we rank near the bottom in per pupil spending?
The spending lobby (Teachers Unions) tell us that we need to keep throwing more dough at the problem. But is it really a shortage of dough, or a shortage of values?
On a per pupil basis, schools in good neighborhoods don't get much more dough than schools in crappy neighborhoods (often less), but their kids do way better in achievement. It's not a matter of spending; it's a matter of parents caring about their kid's education.
I believe this is a cultural issue that is going to require some honest dialogue to address.
There are lots of areas where this freakin state just throws money away. I agree, schools are one of them. We spend a lot on education and the results are horrid. I also agree the parents are the single biggest factor in a child's performance in school. But having kid in school, I can tell you that there are plenty of terrible teachers out there too. There seems to be no process for weeding out the bad teachers. Itz jist so hard to git a gud edumacation theze dayz.
moral decay in our society ?
I strongly feel between the unions and special interests they really have a strangle hold on the budget our governator tried but was shot down, have you guys any idea how much fire police teachers, correction get in benefits salary and pension ? city employees county? we need to take a hard look at those numbers because money is running out.
theres too much entitlement every body 'deserves' something!! b.s.
Hello Everyone,
In reading all the posts, it is clear to me that:
1. For Rich to Middle Class, to Poor, we are wasting money every where.
Illegals are part of the problem but did not contribute to all of our problems.
As to if we're wasting proportionally among everyone, that is still debatable.
2. Education starts at Home. No dis-respect, but if you watched "90210" in the 80s and still act all "90210" when you're a parent, who and what is stopping your kids from watching "90210" Redux and behave according?
If it holds that on a per pupil basis, good area school didn't get that much more money than bad area neighborhood school, then it is not about low performing schools.
IT SHOULD BE CALLED "LOW PERFORMING STUDENT, TEACHER AND PARENTS".
3. The Great American Dream to thrive in this Land of Opportunity of ours has turn into a Selfish, Self-Important, I deserve all I can get with minimum effort nightmare.
Is it fair for me to propose that going forward, self examination and being responsible to our own actions are the bitter pills we must swallow?
If not, no amount of TARP, Bail-Out, and/or regardless if it is President OBama, President Clint, or President McCain will get us out of this hole we had dug for our children.
And it's still going wrong! Last night I sat in my car and listened to a reporter say that someone had done a study and the results were that heart attacks are directly related to traffic noise.
Without any further inquiry as to the veracity of this study, they went on to suggest that the remedy was more zoning and municipal ordinances requiring new homes to be built so as to minimize traffic noise and also to retrofit existing home and revise existing neighborhoods.
Who's gonna pay for THAT? It's the same thinking and lack of thinking that has gotten us where we are.
I teach fourth grade in a public elementary school in a low-income area (pretty much the same kind of environment I grew up in). Yes, there are bad teachers out there (I work with a few of them). There are also bad and/or ineffective employees in any company/business. There are lousy doctors,lawyers, sales persons, architects, engineers, firefighters, policemen, dirt farmers, and tax-payer paid employees of the Department of Defense. To suggest that there is no mechanism to rid society of bad teachers is naive, misinformed, ignorant, and ludicrous. Please stop talking about things you have no knowledge about. Do your homework.
The appropriate hierarchy should be: student, parent, and THEN teacher. I teach children who come to school every day without being fed, with the same clothes they wore yesterday, with images in their heads of their dads/boyfriends beating their mothers/girlfriends (and themselves or their siblings), gang-related incidents, and all imaginable forms of physical and emotional abuse. When you are on a first-name basis with the local CPS correspondent there is something seriously wrong.
If you think you can do a better job instructing those children- GO FOR IT! Jump through all the hoops and acquire all the education I had to in order to become a teacher. And please, do it for a salary just above the poverty level (what fun!!!!).
Please do me just one favor. Before you endeavor to pass judgment on any educator, just spend ONE day as the teacher of record in a class with thirty-four nine year olds. I am their teacher, friend, confidant, counselor, parent, champion, and a whole host of other things I can't remember now.
I agree. Our public education system is all screwed up. I teach my students to the best of my ability on each and every day (just like most teachers). But please don't try to speculate as to the problems in the system until you live within the system. I think I am better equipped in this regard than any of you. I could try to tell you what's wrong with the Department of Defense or dirt farming, but then again, I don't work for the Department of Defense and I don't dirt farm. So maybe I should just keep my mouth shut about that. I encourage all of you to walk a mile in my shoes. Then I won't mind so much if you want to talk crap about it.....
BTW: In my forty-six years of experience on this planet, the only job harder than being a teaching is being a parent. I should know. I do both....
BTW: In my forty-six years of experience on this planet, the only job harder than being a teacher is being a parent. I should know, I do both....
Hello Mr. Robert,
No Offense. Not trying to you disrespect you as a Teacher or Parent.
When I wrote:
"LOW PERFORMING STUDENT, TEACHER AND PARENTS"
The burden of responsibility does not necessary follow that order.
And Yes, I do see questionable action from (as your said) "lousy doctors,lawyers, sales persons, architects, engineers, firefighters, policemen, dirt farmers, and tax-payer paid employees of the Department of Defense".
They are to blame, too.
I'm to blame, too. I'm sure I did something right or wrong to contribute to this mess or get out of this mess.
We are all to blame collectively for who and how we form as a society, nation, and human race.
Thus, in the end of my posting, I had call upon an introspective look at who we are, what we do.
Beginning with me!
Obviously, you did an introspective and shared your actions and feelings with us.
It sounds like you go to bed at night knowing that you did everything you can in the best possible way.
I applaud you for doing all you can for those kids in need and we want more of you in our educational system.
I sincerely hoping all the "doctors,lawyers, sales persons, architects, engineers, firefighters, policemen, dirt farmers, and tax-payer paid employees of the Department of Defense" can do the same.
We are all in this together. And the process to a recovery starts with you, me, Golfer_X, The People that read and contribute to this great blog, and all The People in this nation of ours.
No disrespect to you. Again. I applaud you.
I apologize if I was out of line with any of my comments in previous posts.
I am very passionate about my profession, and it just seems as if everyone blames teachers for all the problems in public schools. We are easy targets....
Good Evening, Mr. Roberts,
You are not out of line. It is a matter of mis-understanding.
As matter of fact, I loved it when you called out the:
"lousy doctors,lawyers, sales persons, architects, engineers, firefighters, policemen, dirt farmers, and tax-payer paid employees of the Department of Defense".
Plus, you are right. Education is an easy target for blame games and quick political gains.
From City, County to State and Nation, each one of us live in this budget deficit mess. Each one of us share the duty to do the right things to rid ourselves out of this mess.
Each of us help to form a Family, City, County, State, Nation, Culture, Human Race.
Collectively, We are the problem.
We can let our leader(s) tell us what to do.
But I rather each one of us learn to do what's right.
Starting with me.
I agree with all of you - but bottom line - nothing is going to change until we make change happen. I listen to John & Ken on KFI 640(I hope everyone here knows who I am talking about) I LOVE these guys - everything that is being said here about the state of CA and our government in general, they touch upon but in a more profound way. They tell listeners on public radio to call into their government officials and make noise - let them know how you feel - bombared them with phone calls - emails and any other form of communication....we have become a society that complains but does nothing about what we feel is unjust or what is tearing this country apart - believe you me - those who think that illegal aliens should have equal rights as citizens are out there making a noise, picketing, going on TV - why can't we?
But I am a good "dirtfarmer"
And I'm a good engineer, working for a defense contractor....and my wifes a good medical professional....... honest we are ;-)
Hello Renee,
I totally dig John and Ken's energy on the Air.
But read this:
http://www.therealkfi.com
What is written on that web page may not be 100% true but I can understand Radio and TV are ran for profit. KFI on the Right and Air America on the Left are in business to make money.
No one gives the full story.
Everyone give their side of the story. It is up to you to research and discover what's behind a story.
Look at Golfer_X, he looks, listens, and reads to make decisions for himself and his family.
Golfer_X may drink a little but it ain't the Koolaid everyone is pouring.
Hi, DirtFarmer
As evident in you postings, I have to say that at least you're an intelligent Dirt Farmer with whole lot of good/business sense.
Bigger, I appreciate your comments. You are candid and sincere. Unfortunately, not too much of that out there these days....
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