mortgage delinquencies
 

Federal Housing Administration reports it is seeing mortgage delinquencies slowing. WSJ buried this on p. 5

Only a couple of months ago it was assumed that the FHA and its portfolio would be the next big bailout.

At some point, the rate of delinquencies has to slow down because not every mortgage is subprime or created for people who should never have gotten a mortgage in the first place. It will get worse if unemployment doesn't turn around, and quicky.

I cleaned up my back woods and got rid of all the dead wood. Now there is no more dead wood!

Hey, on the upside, the fires are almost all out!

http://images.brisbanetimes.com.au/2...hima-420x0.jpg

Couldn't have put it in a better analogy.

moreover, the banks have become more stringent - not less

maybe you guys should form your own gloom club

Hey guys, don't worry about the "housing bubble" that popped, helped ease us into this dismal economic state and recession... The banks are more stringent! We're saved! They'll never lend to unqualified buyers ever again!

I just made the first payment on my latest FHA loan last week. The process wasn't too difficult, but then we were overqualified. The thing that really chapped my ass about it was they did another employment verification the day after close of escrow but before they released funds. And they couldn't get a hold of my wife's HR folks. We were literally minutes away from the deadline to have the funds released and deed recorded before it dragged into the next week when I got my wife to get her boss to call the lender. Nevermind the lender's office was almost within view of my wife's car in her company parking lot and she sent emails from her work email. I could have had any stranger make that call and vouch for her and they would have bought it. PITA!

Care to comment on the role that the CRA had in this?

Wow. You mean they are finally running out of low-lifes and dead-beats? Who-da thunk?

The FHA has been given many hundreds of millions of dollars to give to poor people who can't afford to pay back a mortgage. THIS YEAR!
Nothing has changed. "Our" government is still loaning money to po' people who can't pay it back. They have not learned their lesson.
What could possibly go wrong?

This is my biggest complaint about the current economic mess - we're not learning a damn thing from it.

This SHOULD BE a huge learning experience for us all, but we're still making the same damn mistakes we were making before the pop. Spending/living way beyond our means, borrowing way too much, not enforcing accountability, allowing social engineering policy to trump fiscal conservatism, etc.

We've learned nothing. Isn't the clinical definition of stupidity doing the same thing over and over and expecting different results?

That is the clinical definition of insanity. But yea, it is stupid too

If we learn from our mistakes, the glory days of the US will end. I'm not saying we'll start living in caves, but we'll miss the days of overconsumption, gluttony, and waste.

webb is the PPOT equivalent of Benny Bernanke's "The problems in subprime have been contained."

By my experience, the tightening of credit to only the most creditworthy will dampen the market further. I'm not suggesting credit be loosened. Also, the leveling of the mortgage delinquency rate is a partly/mostly due to the fact the delinquencies are being moved through foreclosure. It can't be counted as delinquent when it is no longer in possession of the borrower. No doubt the incompetents at FHA will say, "Look! Delinquency rate down," whilst obstructing the ocean of foreclosed inventory.

Totally agree with this. I put my house on the market, hoping to take advange of the down market and upgrade to a larger house. I go through the pre-qual process and qualify for about $150k more than I should really be able to afford.
It pisses me off that these lending institutions are still making poor loan approvals and still offering people more than they can afford.

Not only that, but they're taking forever on processing short sales and foreclosed properties. They're trying to squeeze every last dime out of the defunct (or soon to be) loans. Sounds logical, until you factor in that the several grand a month they're eating on the original loan, taxes, etc. They drag out the sale 6+ months in hopes of saving $5k - $10k on the sale price.

The "bait and switch marketing" they're employing is also frustrating. Houses are constantly being listed for prices the banks have no intention of selling the house for. I know of one house that was listed for $300k. Friend offered $270k for it. Bank countered at $325k. WTF :confused: I'd also like to know where all of my tax bail-out dollars went and how that's helping the banks help me. Maybe it's just me, but I'm not seeing it.

Didn't we have a thread a few days ago in which the Dems thought 5% down payment was too high for some folks (minoritories and poorer people)? They don't learn.

1 & 2. borrowing is down for all types - savings rates are UP

- so are saying they have not changed enuff, or what??

3. examples?

4. "social engineering" has always been engaged in -- e.g. the US Govt. gave enormous grants to RR's -- to get the transcontinental RR built - it worked. was it worth it??

another e.g - the entire robber baron era was built on a govt'l substructure

then there's the space program...

so, you need to be more specific about your objections

Randy, I must congratulate you on this excellent thread. Full of cogent posts, with germaine anecdotes and well supported arguments, with a few exceptions. Posts 1 and 16 in particular.

maybe you're reading it upside down

I don't know if this means anything, but there are more houses for sale in the high rent district here than I've ever seen.

either that or dyslexic

I wonder about that too, I went to a foreclosure auction yesterday, still a lot of homes on the chopping block. I knew of a house that was going, I wanted it to use as storage(large lot, ect) & have a friend looking for a place to rent (divorced after 30 years, has nothing to show for it)

So after researching, I found out that the owner owed $139K ($126K+ fees) needs some wood replaced, roof is questionable, and hearing about FC homes selling for $100, and true, they do, back to the bank...
So I took some cash, figured what I would be willing to spend & value based other homes in the area for sale & such, went & signed up.
The 1st few properties didn't have any bidders other than the bank, so, $100 by the bank bought them, but if there were bidders, the banks had a minimum and you had to go $100 over that to get the property, and they weren't any real deals either. I bid on the one I was interested in, but turns out that the bank wanted $119K, I was willing to go 1/2 that, based on the fact that it backs right up to rail road tracks & I know the work it needs and there are already 4 other homes for sale in the same subdivision (and it is a small one too).

Now, the banks are buying back these FC, instead of individuals, so they have a bunch of homes that they will be getting paid twice for (once by the Gov bail out, then the resale) so this isn't really helping new home owners or people looking to buy homes with cash to fix up & rent or sell. When going to a cash sale like this, I was looking at paying .60 or .70 cents on the dollar in this current market, but the banks aren't letting that happen, since our tax dollars are funding them to sit on properties..

We had a strange experience ourselves
 

I offered 675K for a house the bank countered at 625K WTF :eek:

I must have gotten really lucky. The house we just bought was listed as a short sale for $344k, which we offered. Bank countered at $350k, we said $346k and they agreed. Several months later they finally approved the short sale and we started moving forward with inspection and appraisal. House appraised for $332k. Bank agreed to $332k immediately and that's what we got it for. Sometimes they are rational.

Risking throwing away a sale over $6k is rational?

I'd have told them to shove their "counter" right up their keisters - take it or leave it.

Wrong, savings rates for May were down to 2.7% from 3.0%

(BAC) U.S. Savings Rate Trend Falling Again | Stock Blog Hub

Gee, the endless Wall Street bailouts? The lack of any meaningful reforms to Fannie/Freddie? The recent failure of Congress to implement a minimum 5% down payment requirement on federally-backed loans? The stalling of financial reform? How many examples do you want?

Gee, Obamacare? But what's another couple of trillion dollars between friends, especially when the deficit is now well over 12 trillion, right?

The transcontinental railroad employed people - Obamacare will not (in fact it seems likely to destroy jobs by forcing the closure of a number of hospitals and other healthcare facilities, several projects have already been canceled). The transcontinental railroad gave this country infrastructure on which it could built itself - Obamacare does not. The transcontinental railroad provided a return on investment. While it is speculation, I think it's fair to say Obamacare will not.

What about "immigration reform"? Cap-n-Tax? CRA (which I notice you avoided answering above)? There are a few "noble" social engineering efforts which either have or are bankrupting this country and tearing asunder its fabric of strength and resourcefulness.

Interesting (and accurate) perspective by Steve Wynn - cross posted from another thread (seemed relevant):

News Headlines

Note to self: do not let fellow Pelicanites negotiate RE for me.

The days of bidding over asking, asking, or slightly below asking are over, for the most part. Only the most unique real estate in great locations will command a premium. If you don't find the deal you like, wait. It will get better.

The banks will act like horse's asses if you let them. Don't play their game.

So counter their counter with $575K. :D

Do you think bank asset managers are in the least bit emotional or care whether you want the house or not? The bank probably didn't even know it was for sale when we made our offer. And since the sellers had long ago stopped making mortgage payments, I doubt the bank was in any mood to roll over for another $6k below what their BPO's said the place was worth. Once they got moving on the short sale approval process, rest assured, they were simultaneously getting things ready for foreclosure, just in case the deal didn't close. They were already looking at a six-figure loss on this house, so I'm surprised they even let it go. It was a paper loss until we bought it. Then it became a real loss for them.

"savings rates for May were down to 2.7% from 3.0%"

well, compared to what?? you need to look at long-term data & what I see on the Finc. news is that it is up, tho down a bit recently - when consumers open their wallets a bit that is good for the economy. When the wallet is too far open for too long, it is ultimately bad.

I also understand you are opposed to the health care plan. But the claims you are making are just wrong. Better health care for more people means more jobs in those fields, AND healthier people are less likely to wind up homeless, etc.
- Why not concentrate your attack on the real problems with the 2014 health care plan?

Randy I don't want to drag what started off as a discussion on mortgage delinquencies off into being a discussion on the merits (really the lack of merits) of healthcare reform or whatever else you want to discuss - start another thread. All I'll say about healthcare reform is that yes, it'd be nice to live in a world where everyone had free care - but such a vision is utopian. It can't happen. It's mythical just like unicorns and the Easter Bunny. Healthcare DOES cost money and it is not "free". Someone has to pay for it and you need look no further than Massachusetts than to see what universal healthcare will do to a previously solvent government (now in serious financial trouble and with very dubious prospects for solvency in 2012).

Rick, I never said anything about the bank managers being emotional - if anything I'd absolutely expect the opposite and in dealing with them I'd be exactly the same way... I think trying to squeeze a potential buyer for $6k on a $350k sale when they're undoubtedly sitting on thousands of unsold properties losing value daily, with few if any buyers is a very stupid move. Sorry but I don't play that "give me your best and final offer" or "here's a counter-offer" crap. I make one offer - one. If they don't like it, there are a hundred other houses out there - I could care less, buh-bye. I think that's absolutely the correct attitude to have in mind when buying ANY durable good - real estate, cars, boats, airplanes, whatever. If you fall in love with something and the sales guy or seller gets a whiff of it, you're dead. Therefore I don't allow myself to initiate any sort of conversation while I'm still "excited" about something - I walk away and if I'm still interested in a few days or weeks, I might inquire when it's become a rational rather than emotionally-driven decision.

Register my surprise.

I do agree with the notion that nothing was learned from this debacle.

By either side.

On the contrary, I think both sides have learned plenty from it. Politicians learned that they can buy even more votes by bailing out those they forced the banks to set up to fail. And banks learned that they won't have to suffer the consequences of lending to unqualified borrowers. This is like rewarding N. Korea's bad behavior and then expecting them to start behaving better.

You obviously have no clue (or perspective) regarding the process of pre-foreclosure (short-sale) real estate transactions.

Well, if you were a bank that didn't try to recoup as much of your loss as possible on every pre-foreclosure or REO, you would sink (more) rapidly. It's funny how a lot of folks think that they can (or should be able to) get bank owned or approved RE deals at substantially less than current market value. As mentioned previously, the only way that works is by bringing a LOT of money to the table and buying bulk REO portfolios. Here, a single SFR REO that is turn-key (and able to be financed) in a desirable area will sell at market value (which is typically over the asking price), and generally will have multiple offers.

Then you will be waiting a LONG time (or will end up settling). While Rick is reaping the benefits of home ownership, you will still be out there trying to "not get screwed". All the while, you would have been better off (financially & mentally) by paying a slight premium (if you had to) to get the place you really liked. Chances are that "premium" won't put it over fair market value anyway. If it did, it wouldn't appraise, and you'd be back to square 1 anyhow. It's not rocket surgery. If you think something is a good deal, chances are others will also. As long as that premium is at/under appraised value, who cares? The amount you've "saved" by low-balling will be eclipsed by the relative losses from rent/carrying costs/taxes/etc. over the several months/years it will take you to find something acceptable.
I agree with the first part. You obviously don't want to show your hand in any transaction, and keep emotions at bay as much as possible (especially as a buyer). However, if you are excited about a potential purchase, it fits all of your "check boxes" and it's that good/great of a deal, it will probably be gone if you wait "a few days or weeks".

Good things come to those who wait. Better things come to those who don't. :cool:

well put


I'll add the transaction costs in buying/selling a house are huge. Don't do it too often.

And in only a few states can renters deduct rent from their income taxes. Homeowners can & can do it for fed. taxes as well.

I disagree Eric. I don't have time for B.S. I make my offer and if it's good enough, fine. If not, fine. That's how I roll. Like Rick, the place we were going to buy in CA ended up appraising on an FHA for slightly below the accepted offer price so it would have been moot anyway but ultimately we pulled the plug on the transaction two days before closing and walked away due to a layoff. No skin off my butt. The place we're in now we will likely pick up on an agreed purchase-option with the owner, so there's no further negotiation required. I'm happy. If it doesn't work out for whatever reason between now and the end of next year, that's fine too. I'll reassess then and start the process over. No matter.

Renting is a very good place to be right now - and will be a very good place to be until concerns about the job market and the overall economy stabilize. Rates aren't going anywhere significant for a while and prices aren't going anywhere but down or flat in the near term. I see little if any pressure to act quickly and run the risk of being taken advantage of.

The keys I've found to getting a good deal is to be emotionally detached and as close to indifferent as possible - and to be completely unpredictable to salespeople and the manipulative little head games so many of them like to play - in other words, be completely dead honest from Square #1. It has always worked well for me - I've always ended up with good and fair prices, no guilt, etc. I have no plans to change a strategy that works by throwing all the stress back onto the seller knowing that there is no negotiation that will occur and no back-and-forth time-wasting B.S. If you don't want to do it that way, fine - but it works for me and like I said, I've no plans or reason for changing it as a result.

But I digress (this isn't a thread about negotiating tactics - it's about mortgage delinquencies. Can we please get back on subject here?

POP, you're in a very unique spot in planning to buy the place you're renting. Most people shopping for a home want to get out of the place they're renting. And most folks tend to like houses that tend to be popular with other folks too. So, unless you're really into rare houses that no one else wants or knows about, you're gonna be competing with others. And that can lead to bidding wars, counter offers and such. It's not like buying a car where you can always find another one around the corner. We looked for a year, probably at close to 100 houses and put in about 14 offers before things started going our way. Your chances of finding a house you want that no one else wants and then getting it for what you think it's worth are, well, slim.

Even during the bubble days we threw in a few offers on places in L.B. They would always either counter or say "there is a competing offer - submit your best and final offer". I always said "you have my offer, if you don't like it then reject it". I won't be dragged into a bidding war. Simple stupidity. There are WAY too many places out there for that kind of crap.