Posted on 10/01/2007 12:51:04 PM PDT by 2banana
Most anybody in the mortgage business will tell you that August was a month that will live in infamy: The market was in turmoil, as doubts about the stability of subprime loans spread to other sectors of the mortgage world.
How bad was it? A survey of mortgage brokers suggests that one in three consumers who recently signed purchase contracts canceled in August -- up from just 4 percent three years ago, according to the research firm that conducted the survey for Inside Mortgage Finance, a trade journal.
The cancellation rate undoubtedly was fed by two scenarios playing out: Many buyers couldn't get mortgage approval because lending suddenly tightened; or, financially strained lenders yanked funding from their borrowers at the last minute.
But another factor was at work: Sellers -- not buyers -- were in trouble as their closing dates neared.
"Our office had four sales in one week that failed to close because the seller didn't have the cash," said the real estate agent, who declined to be identified because she feared office repercussions.
The sellers couldn't come up with the money?
...
(Excerpt) Read more at chicagotribune.com ...
Yes - the seller
Mortgage resets get alot worse in 2008. This game is in the 1st inning...
It’s not really a “new one.” I guess to folks who’ve never had a mortgage before, though, it might seem like it though.
Crazy times.
I work in a Bank. Yer right... it’s gonna get soooo Much worse.
bump
We had a house down the street go into foreclosure because the woman couldn’t sell it for the going market rate since it was less than what she owed. She had a number of offers that were close but the bank wouldn’t let her sell opting instead to wait until she stopped paying on the mortgage so they could take posession and sell it themselves.
Idiotic from the banks standpoint because instead of losing just a few thousand they will now lose upwards of $20,000 - $30,000 because it sat on the market so long.
I had to do this TWICE in 3 years, back in the 1980's. That's what it was like buying a house in Texas when the mid-80's oil bust was on.
It sure was hard buying that 3rd home, a couple of years later. You get a little gun shy...
Worse for these folks, great for Clemenza. Very helpful to those of us who haven’t bought a place yet.
Hate to say it, but first time buyers like my self cant wait for the market to tank.
Yeah... Wait, wait... save... and BUY next summer!!
= )
Indeed. Last month I was looking into selling a condo I no longer need. While exploring options with my RE agent we worked out that even if I write off the equity (about 10k) I would still probably have to bring 7k to the table for what we thought I could *maybe* sell it for. I guess I will be renting it out for a while. It's a bummer because I really just wanted to be rid of it - but not at that steep a cost.
When I bought my house 15 years ago, the seller had to write personal checks to cover the last $1,000 to each of the real estate agents at closing, because there was not enough money in the house.
My agent took the check and said she might as well tear it up, because there is no way it would clear. She was right. She never got her money.
But that was a really ugly case. The husband in an impending divorce stopped paying on five different car loans and a business loan, and all the liens came in the morning of the closing. Needless to say, his soon-to-be-ex wife was pretty PO’ed.
The bank finally put the house on the market a few weeks back. They’re asking $250,000, and so far I’m the only person who’s looked at it. I offered $225,000, which they turned down. I’ll wait a couple of months and offer it again. If the market keeps dropping here in Northern California, my next offer might be even lower.
Only a fool offers the asking price in a dropping market, and only a fool turns down a reasonable offer when the markets bottom is still unknown.
In the meantime, the front yard has become a desert, the pool is a dark green pit, and someone broke in and stole the fixtures. The house has no power and no HVAC, and winter is rapidly approaching. If nothing happens soon, humidity and temperature drops are going to irreparably damage the house and drop its value even lower.
And then I’ll get a REAL deal on the land!
Sounds similar to my situation. I have a townhouse that I would absolutely LOVE to get rid of. I bought it last year but have since discovered that if I stay in the area that I am in that I can look forward to working in call center hell for as long as I can imagine. I can get a better job that won’t drive me absolutely crazy if I just go to a bigger city but now I’m stuck here because of my townhouse which I can’t sell unless I am willing to take a HUGE loss. Problem is that I cannot afford to take that big of a loss. So now I’m left just trying to hold on to my sanity.
Yes. Very good for first-time home buyers.
Drive a hard bargain and get into the best house you can afford as soon as you can.
Here on Long Island the downturn in housing is being treated like the worst disaster since the great flood. I take a different view.
What future does a community or a region have if young families cannot afford to live there? Now young families can into their first home at a much more affordable price. Taxes and insurance are still horrendously high, but getting in at 10-20% below last year’s number means the difference between staying here or moving to another, more affordable region of the country.
Do you have a time line on when this will peak? Some Freeper had a chart that looked like Jan. of 08. Just curious.
We’re all doomed. Where’s my popcorn?
Same here in Central Jersey. We have one of the most expensive real estate markets on earth, the local libs have been whining about the lack of “affordable housing” yet even as prices have barely plateaued (few drops so far, and those that have occurred are only 3% at most), the same folks are running around saying “we’re doomed.”
When I moved to Pennsylvania, I was amused to learn that both the buyer and the seller have to pay the state 1% of the purchase price of the house. In some municipalities, it is even more. I’ve owned houses in four other states that didn’t have such a tax.
2% on every real estate transaction is one pot-full of money. For someone trying to sell a home, it can make the difference.
Vultures.
Consider offering a lease-option....C
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