Sunday, May 17, 2009

One in six!

Delinquency rates in the Riverside-San Bernardino metro area hit a staggering 15.7 percent ---- meaning borrowers on roughly one out of every six mortgages were at least 90 days late on their payments, according to the report by First American CoreLogic, a Santa Ana research firm.

Oh yea, things are looking up........not!

And this about the $8k tax credit being used as a DP, Not so much! I found this at
Remember that promise that Shaun Donovan, HUD Secretary made at the Realtor mid-year meeting on Monday? The one about that the $8000 tax credit being made available for down payments? Well, the promise is broken.

This notice came from NAEBA headquarters this afternoon:

According to contacts with both FHA and HUD, Mortgagee Letter 2009-15, which stated that first-time homebuyers would be allowed to use the tax credit for their downpayment, has been rescinded. On a phone call with FHA, Kim Kahl was told, "The mortgagee letter has been rescinded for the time being.” NAEBA President John Sullivan was told something similar when contacting HUD. Neither FHA nor HUD gave further details.

I am not surprised. I think when HUD officials look at it, they see a buyer who needs that $8000 for a down payment as a buyer without enough reserve to be a homeowner.

This may be a good sign for Federal lending policy, IMHO.

Another interesting article I ran across involves those REDC auctions. Ever wonder how many of those houses actually sell. A reporter in Florida did, so he checked to see.

I thought I'd check up on REDC this week to see how many of those foreclosure homes actually closed. After studying the results, I feel duped. And you should, too.

Leave aside the fact that REDC admitted later that only 75 homes actually sold on Feb. 7. When I plowed through the first part of the "sold" list and compared addresses against property appraiser records, I didn't find a single home that closed as of Thursday. Not one.


ojedalive said...

Is 15.7 percent DQ a high for the San Bern & Riverside Metros?

Homer said...

Hey X, you spoke a bit in the past about housing price stabilization.

I keep on expecting the average asking price to drop, but they keep hovering around $220,000 for the past 5 months.

How is this possible?

Do you think this is merely a ledge, kinda like Wile E. Coyote running off the cliff. He goes outward then drops like a rock...

I took a look at the average household income for my Zip, and its at $84,000.

A typical house in my neighborhood therefore would historically be three times the annual average household income, making $240,000 home the norm. That's about wat they're at now.

I guess you still see $$$ drops, but I don't. The dust has kinda settled and I think absent a depression, we should be near (if not hovering at the bottom) at least in southwest Riverside Co, certainly NOT in Los Angeles or Orange Co.

Kane said...

Spent 7 hours at a REDC auction a while back looking at a REO fixer upper. Outside was nice ... inside ... not so much. A leaky roof, multiple plumbing leaks causing a rotted sub-floor, and scariest yet, the original and very worn carpeting from the 70's. I expected it to go for about $250k, as the area comped out to $350k. In the bidding frenzy, the winning bid was at $330k. A few weeks later, a C21 sign popped back up ... it didn't close ... only this time around, the asking was $330k, instead of the $300k it was before the auction.

WillyWanker said...

Those REDC auctions are complete scams. Don't bother going to them, they are a waste of time and energy. I was following a foreclosure that 'sold' at REDC and, of course, the house still was on the market as a foreclosure after 'selling' at REDC.

On another subject, does anyone know of any Palm Springs blogs that deal with the bubble and current collapse in the Coachella Valley part of Riverside County? I continue to search but seem to find nothing. I'd appreciate any leads.

Rt.66 said...

Thanks for the link.

It's about time someone in the MSM checked into this scam.

I have been following a one home that I bid on in December. Bank refused my very fair offer. Two months later it shows on MLS as pending. One month later it shows on RealtyTrac as going to REDC auction. Now RTrac shows it as sold...LOL.

Gov. seems to be positioning itself to take less risk, new appraisal rules and now not allowing the tax payer $8k gift to be used as a down.

What a bunch of confusion and outright dishonest manipulation. This is total panic folks, forget 3x earnings and all the other BS we've been fed. Overshoot will blow right through the trend line.

OSA said...

homer. what zip code has an average of 84K?

I'm Not POTUS said...

Does the REDC get to keep any of their fees on a failed auction?????

HMMMM, if they do they don't care what the fail rate is. Because in the long run they are going to collect on the same house in the future. Maybe 3 or 4 times.

They are the Ticketmasters of the auction universe. Can you say monopoly?

Homer... the hover is, I think, the threshold level of entry. At 220K, even a realtard can find someone with about $7k cash and fetch them an FHA loan on a 30yr fix that is running $1,111 a month.
FHA loves to make dreams come true.

A lot of people think that is doable.

A lot of novice investors think sticking $44k in a house on a 5/1 ARM will cash flow. $840 mortgage + other expenses leaves no wiggle room but cash out a $100k CD $88k down and you have about $300/month wiggle room on cash flow.

These two clowns will extend the plateau until continued job losses kill rents and ramp up delinquencies.

Nothing happens overnight.

IERealEstate said...

The reporter in Florida may be flawed in hi method. I don't doubt that the failure rate is high for those auctions. However, the method the reporter used to "research" is important. Depending on the County in Florida, I know it takes about 6 months to a year before records become available. I know this from personal experience. So unless he went to the public records office and asked to see the records directly, he may be looking at flawed information. He wouldn't be the first reporter to not do their homework right.

IERealEstate said...

As for price drops. Typically in a pull back like this, the sales volume begins to stabilize, but the prices continue to fall. The generally fall further than needed. It takes a longer for the $$$ to stabilize. I believe that you are not seeing the $$$ drop significantly because the foreclosure inventory is low compared to the last year. However, that will be changing again I suspect. As more homes are brought onto the market, the $$$ will fall again. However, the rate of decline will not be as dramatic.

Be careful when you look at averages and medians. They can skew the reality. However, they are some of the few tools you have to compare general market conditions from a statistics view.

golfer_X said...

My feelings echo that. I see the price continuing to drop for another few years but the big drops are behind us, well in the IE anyway. I still think prices in south OC and the better areas of LA are going down big time. They have decoupled from the IE and decoupling of real estate prices in interconnected markets never lasts very long. The whole "it's different here" theory only props up prices so far.