Posted on 08/22/2006 8:16:02 AM PDT by ex-Texan
• Q2 jumps by 67 percent year over year
• Buyers done in by ‘creative mortgages’
according to figures released Monday by Foreclosures.com, a Central Valley-based real estate investment advisory firm and publisher of foreclosure property information.
"Year over year at the end of the second quarter of 2006, foreclosure activity in California has increased more than 67 percent," says Alexis McGee, president of Fair Oaks-based ForeclosureS.com.
The once hot housing markets in Las Vegas and Phoenix are cooling off rapidly and defaults there are on the rise as well, she says.
"Both Las Vegas and Phoenix were impacted by speculators," says Ms. McGee, and more than 25 percent of new home sales in both markets were going to out of state investors who had no intention of ever occupying the homes they purchased.
Now those who came late to the party find themselves squeezed by rising interest rates and resulting negative cash flows, she says.
“The speculators are definitely on the run, and walking away from properties they cannot afford to hold and cannot sell at a profit," says Ms. McGee.
In Colorado, foreclosure activity has put Denver well up in the top 10 of metro areas with the highest foreclosure rates, according to Foreclosures.com’s figures.
“Almost 5,300 homes in Colorado have already been lost in foreclosure and, as of August 11, over 11,300 were in the pre-foreclosure process," says Ms. McGee. She cites recent reports by economists that showed that Colorado was lagging behind the rest of the nation in economic recovery from the 2001-2002 recession.
"A more severe situation, however, is in California," she says. "A primary reason is the overwhelming use of so-called creative mortgage products people were sold in order to buy ever more expensive homes."
More than $1 trillion of these exotic mortgages were due to reset in the next 18 months, she says, "and payment shock to such homeowners would be severe if not financially fatal."
One your price drop is way too drastic.
Two.. there are micro bubbles so it depends where you buy.
Three.. if you are going to live in it then it's a long term investment. Odd's are after 10 15 years it will be worth well more than it is at the moment.. even if the house loses money over the first 5 years.
Are you a day trader or a long? It's just like the stock market.. some people play by the hour.. some people play by the year or multiple years.
As the thought of all those lost opportunities weigh heavily on his mind, he sinks further and further into the abyss of keyword paranoia.
I got an interest rate only loan and I'm stoked about it. I'm in Oregon(nice land use laws here) my property will not be going down. I got a 5/1 arm because me and my wife planned on having children(we ended up with twins).. my wife was previous married as well. In the event we end up with 4 kids all under our roof we are going to need a bigger house. Also we planned on my wife quitting work to take care of the twins. That tiny bit of savings each month on the main mortgage can make a big different when you are squeezing everything out you can.
Besides I'm in line for a promotion soon and if I should choose to pay princple on my loans I can. I have a 15 year 2nd loan so I am putting money into the house.
Some people just use interest only poorly.. they don't have a plan and only see a price. Interest only does have it's uses and I still stick by my strategy.
Drinking his cheap hooch......alone.....in the dark.
If there were 3 last year and 5 this year it wouldn't attract any anxious newsletter readers to say foreclosures are up two this year. 11,000 in process in Colorado is also meaningless since some of those won't go all the way through the process--maybe 2/3 won't go to completion.
...enjoying alcohol inspired dreams of "scooping up foreclosures" and then retiring in style to the Italian Riviera.....(snif)
Where is my Red Bull?
Somebody get me a Doctor.
"I haven't run into that yet on this site, and I hope I don't."
There's plenty of it around here, and some of it on this thread.
Yes, I've noticed.
Interest only loans do have some advantages. They're great if you get extra income on a quarterly basis (such as bonuses) where you can then make a principal only payment. The catch is you must be disciplined to use the bonus for that purpose. Another benefit is that when you make a principal payment your next month interest only payment decreases.
Interest only payments are typically for 10 years and then convert to a traditional loan for the remaining 20 years.
Yeah, well, I think interest should be illegal. So should loans. So should houses I don't like. Crank up the gears of Big Brother.
So does the Dow--in the long run. The problem was elucidated by John Maynard Keynes: "The market can stay irrational a lot longer than you can stay solvent."
The Dow didn't reach its 1929 high until 1951. Twenty-two years is a long time!
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Three Cheers for Spending Money People Do Not Have !
Diversify, diversify, diversify.
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