Monday, March 29, 2010

How to fix this mess

Foreclosure IS the cure, not the problem!

I read this over at the Irvine Housing Blog,

A 600% increase in foreclosures

I attended a local Building Industry Association conference on Friday 26 March 2010. The west coast manager of real estate owned, Senior Vice President Ken Gaitan, stated that Bank of America, which currently forecloses on 7,500 homes a month nationally, will increase that number to 45,000 homes per month by December of 2010.

After his surprising statement, two questioners from the audience asked questions to verify the numbers.

Bank of America is projecting a 600% increase in its already large number of monthly foreclosures.

This isn't unsubstantiated rumor; this comes straight from one of the most powerful men in Bank of America's OREO department (yes, that really is what they call it). It appears they have too many properties already.


Tyrone said...

Hmmmmm... shouldn't make anyone too confident about that recent house purchase, should it?

Complete all the foreclosures, devalue the currency, allow gold to price freely, and let's get this finished so we can get back to a normal, functioning economy.

Neudi said...

Can't get the the Irvine Housing Blog link. Is that 45,000 per month Nationally?

Neudi said...

Had to read it again to see its national.

golfer_X said...

Yes, but that's just one lender! from 7500/mo to 45,000/mo by the end of the year. I'll beleive it when I see it!

Neudi said...

Thought the same thing, I'll believe it when I see it. If they actually made that statement, they must be angling for something.
I'm with other folks that think foreclosures are the cure. We need home prices in Cali to decline to affordable levels. Folks out buying homes right now at 4 or 5 times income, guess we will see a banked owned sign in those yards in a few years as well. How can they possible afford luxuries like food and gas unless there are 10 people living with them. I just don't get it.

I have no idea how anyone eats in OC unless they are all dropping 20 or more %.

golfer_X said...

Home prices in most of the IE are pretty affordable. The problem is there is no inventory. 2/3 of the inventory is is not sell-able. It's either priced delusionally or it's a short sale scam trying to string a lender along or it's just a wreck. All the buyers are trying to get the remaining 25% and a majority of those are all after the same few low priced properties. Now LA and OC prices are still bordering on ridiculous. I look at the 1200 s/f 1950s tract home I lived in in Torrance selling for $700k and I just laugh. That's a 4K/mo house payment (with 20% down) to live in an old crackerbox with one tiny bathroom. They are still miles from rental parity. You could rent the same house for $2k/mo.

Inventory is finally creeping up. Although with the tax credit ending I would expect a frenzy this month to sign a deal so it may drop back down.

Neudi said...

Agreed, there are parts that are affordable. Just been focused on Eastvale until recent.

Here, this blew my mind.