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I guess CFC is more aggressive in lowering the selling price. Or they've stopped foreclosing. Or they're refi'ing everyone into agency.
All of the above.
Buy now or be priced out FOREVER! MWAHAHAHA
This is just a train wreck in slow motion. LOL
Banks Bleeding Value and Hiding Desperation / Financial Sense Editorials
FSO Editorials: "Banks: Bleeding Value And Hiding Desperation" by Ronald R. Cooke 03/24/2008
If the house mysteriously burns down, it no longer counts as inventory, correct? I'm just sayin...
Hey there might be something said for going to the extreme early... Go nuts on the lending, go nuts on the cutting back and pour it all back on again in 3 years...
(Do like the "All of the above." point...)
My parents are 5 days from closing escrow on a 2nd home in north las vegas. It needed "major repair work done due to previous occupants destroying the place as well as taking everything when they left, including the doors.
My parents are 5 days from closing escrow on a 2nd home in north las vegas.
Not exactly a great time to buy, especially in Vegas. Vegas, Bubble, Vegas!
CFC is NOT lowering their prices. They have stopped foreclosing and they no longer accurately report their numbers.
Once SEC Chairman Christopher Cox is imprisoned and we get a new Chairman, ANgelo Mozilo will be exposed. Anyone who believes him or his company is an idiot.
Oh - also to report, In Carlsbad (North County San Diego, where I am), there are good number of houses with 'for sale' signs going up recently. In this particular neighborhood the average asking is ~$800k - ( that were bought for $350k 6 years ago when they were brand new tracts). Not a single "Sold" sign though.
My neighbor across the street has had their house on the market for 6 months and still nothing.
CFC is NOT lowering their prices. They have stopped foreclosing and they no longer accurately report their numbers.
Sounds about right. As soon as I saw the plot, I figured they were throwing in the towel on accurate reporting.
they could just be lying ?
Operation Homewrecker
SACRAMENTO (Reuters) - U.S. officials said on Monday that they had charged 19 people with targeting desperate homeowners facing foreclosure and stealing at least $12.6 million through illegal mortgage and loan activities.
The ring allegedly operated out of Southern California led by 33-year-old La Habra resident Charles Head, 33, owner of Head Financial Services, who was arrested on Friday.
"Not exactly a great time to buy, especially in Vegas. Vegas, Bubble, Vegas!"
Haha. North Vegas is the #1 place for foreclosures in the country. You couldn't pay me to live anywhere in NLV. Daniel, unless they got that thing for 90% they got ripped.
Thanks for the article link, FFDIC. Interesting that my 35% suggestion from the previous thread is mentioned.
Tyrone
Not to sound critical, but the train wreck metaphor (at least to me,) is getting a bit hackneyed. Nor, do I believe, does it portray the situation as well as the following: picture a whirlpool and yourself, ourselves as floating chips.
At the periphery, events appear slow and orderly. As our chips swirl forward, around and down, we gain proximity to each other, and events gain velocity. Example: no sooner than the BSC/JPM not-a-bailout is announcement made, Wells Fargo joins the fray, (possibly creating a mob scene at the Fed window very soon.)
So now we have REO sales outpacing straight-up sales applying additional pressure on an already soft RE market, which in this observer's opinion is bringing us all closer to the center of the whirlpool.
And at the center is the void.
What's with the crap here on REOs, the housing bubble is popped and the market is going up.
Calculatedrisk is supposed to be a subsidiary of NAR and we should be partying about the recent sales, or did someone NOT get the memo?
Tanta?
ABout CFC:
I know people that have not paid their mortgage in 6 months or more yet have not been foreclosed on. The individuals are all in higher priced, 900K and up, homes.
itÂ’s all about not reporting losses
My guess is they're using Hope Now or somesuch nonsense as cover for no longer bothering to foreclose in order to save cash--hiring lawyers is an immediate expense, plus taxes, HOA (my condo assoc. is suing a bank at the moment for not paying dues on a unit they foreclosed), marketing, etc. They've got so much REO already it will take years to clear, so why take on more now? They can even seem like good guys for a while, letting troubled home owners try to stick it out a couple more months.
Bill Melater,
Sounds good to me.
This is just a whirlpool with chips in slow motion. LOL
eric in vegas: dirt cheap would be an accurate assessment - they intend to keep it for at least 5 to 10 years. My cousin and his wife (and coming soon first baby) are going to live there while saving for a 25% market value down-payment to buy the house from my parents. Nice way to help the extended family while betting that the world doesn't end and the housing market in vegas recovers in 10 years.
I'm suggesting that as distance halves, speed doubles. (Or something like that - it is a metaphor, after all.)
What's the normal life expectancy of one of these flakeboard and vinyl palaces?
I would prefer to call them a BORE (Bank Owned Real Estate).
I don't well understand people putting houses up for sale at a price 50% or more over the Zillow valuation. What is the point? Why? Does the agent not tell them the price is absurd? Why would an agent accept to list such a house? How long can this value delusion go on?
CFC is fishy- but they'll be part of the Dow soon, so not to worry.
Plus they still have a NYSE listing, so everything must be on the up-n-up
Bill,
We went through a mini building boom in the mid 90's and those glued chip board, soild plaster (monolithic cladding) houses are all screwed. They last 10 years then the maintenece costs skyrocket, is cheaper to knock it down and rebuild.
We call them 'leaky buildings', they all have toxic mould and have to be rebuilt. Thats the next scandal for the US! The chip board holds water then rots. Throw in your cracked foundation slab because they poured to quick or the weather was wrong...
If you have a nice dry climate, they will last, but if you live in the wet and humid parts, they are all probably showing signs of turning. Water is evil to houses if they are not robust enough..
if your interested a guy here has designed a thermal camera to look into the drywall to see moisture content...
Thanks to CR for flagging this. Do not dismiss the possibility that the rate of change of deterioration of the "waste product" (REO) of the marginal player (Country Wide) in the marginal state (California) may have peaked, particularly if you are interested in making money in trading the assets related to the cycle. It is striking to me that Housing equities bottomed late December, as did CFC in confirmation of the chart.
There will be a continued deterioration in the situation, just that the rate of that deterioration is slowing.
Think like an investor not like a housing doom zealot - paying attention to the first signs of a cyclical change three years was key to establishing shorts then.
andy in nz
My question was more or less rhetorical as I'm pretty sure one of these palaces would outlive a 30 year mortgage.
A couple of years ago I helped replace all the windows on one that was about 10 years old. All the sills were rotted away. What passes for construction these days is nothing less than criminal.
FWIW, Chateau Bidet, due to its erstwhile industrial nature, is 12" of brick. I'm almost ashamed to admit that with its 11' and 15' ceilings, restaurant stove, (salvaged) slate countertops, the 32xx sq/ft. including outbuildings and grounds, comes in at $32.67/sq-ft. And completely paid off.
What have we come to?
Paupers purchasing paper palazzi.
Oops
...would not outlive a 30 year mortgage.
Bill,
What have we become:
Pigs buying straw houses....
Sounds like a safe hide away, you got a big wine cellar?
Never touch the stuff, andy. Give me headaches. But Mrs. Melater is quite partial to tapping a box of Chateau Bidet Cabinet Champignon, vintage sellby 3/31/08 regularly. I prefer a good rum on occasion - Pyrat XO Reserve serves quite well.
Lapsing into a metaphorical mood, I'm inclined to view us, the hoi poloi, as aphidson the rosebush of life. We tap the bush for milk to sustain the ants, themlseves tolerated by the gardener who works for the owner. (Not a perfect analogy - I'm still working on it.)
Meanwhile, I'd rearrange the Grey Lady's motto to read... "All the news that gives me fits."
Thank You, CR for consistently shedding light in an altogether too dim world.
One has to pity the poor souls who have nothing better to read than the nonsense propounded with such vigor by traditional venues.
US STOCKS-Wall St soars on revised Bear offer, home sales Monday, 24 Mar 2008 06:03pm EDT
NEW YORK (Reuters) - U.S. stocks jumped on Monday after a raised buyout offer for Bear Stearns Cos Inc suggested that financial stocks may have reached bottom, especially in light of fresh data that fueled hopes for a turnaround in housing.
<a href="http://www.youtube.com/watch?v=JFUabzkAjBQ>Theme Music
OT: but if this was a commodity "crash" since the fed made everyone whole again then color me unimpressed.
Gold is back above $930 and looks like turning the privateer's long term chart back to "upswing" after just a single "downswing" entry .. so I'm wondering, if the water is now safe for equities why hasn't this supposed new flood of cowardly gold speculators sold up, and plunged into the main equity indexes? After all, this is officially the bottom right? the bottom for interest rates, the dollar, and equities. Why would you want to hold gold now at a price over $750 when the bottom in the competition has been so clearly indicated?
Like I said, CFC in California showed a smoothly rising accumulation of REO at about a hundred a week for the time I was watching it (about April '07 I think) and then after they passed 4000 they ground to a halt (December). About that time I started seeing hints they weren't evicting non-paying borrowers.
I think that 100 a week pace was what their back office could handle and then as the foreclosures mounted, it overwhelmed them. Looking at NOT's, sales, and CFC's exposure in California, can only lead to one conclusion,...the economy is doing better than expected and you need to buy now!
Or their numbers do not match reality. Take your pick.
Some people like to see the space in the middle as full of void. I like to see it totally empty.
House bidding strategy
I am bidding on a house. This house probably would have sold for $580K at the top of the market. Now he is down to $530K at least that's what he told me but still listed at $560K. I bid $475k but he said he would take $530K at min. House does need a little work. I figure the house will fall to about $450k at the absolute bottom or close to 25% off peak prices.
I was going to give another bid and my last one for $500K. Any suggestions on strategy. I have given the guy an article stating FRE ceo says house prices to continue to fall and up to 15% drop.
The brother of a good friend was very busy even 5 years ago doing basic but substantial repairs to condos and apts built in CA just a few years before that. As some of you have noted, the quality of construction in terms of materials, methods, and workmanship is abysmal: wallboard rotting, windows and doors needing to be replaced, flooring in horrible shape. If you're at all competent with tools and can show up on time sober, handymen are going to have a steady supply of work.
One can almost feel sorry for the folk in Carlsbad NV who, perhaps because of their innate goodness had been given a gift of half a million bucks. Had not God brought them to the land of milk and honey.
And now, have they then fallen from God's Grace? Perhaps soon they will become Flagellists parading down the Strip, wearing barbed wire and whipping themselves with nettles.
I am bidding on a house.
This is the wrong strategy. You are still letting the seller dictate the price. If prices drop further (depends on where you are), you could get screwed.
You need to figure out how much you could rent a comparable house for. Then take the monthly payment and at the maximum offer 140x this amount. You should never pay more than that.
Even at today's interest rates, it is cheaper to rent at 120x. 140x helps account for some of the intangibles like stability, etc. So if you cannot get this, you should continue renting.
In reply to Renterfornow on bidding strategy:
My suggestion would be to not make another bid but rather to tell the agent and/or owner that you continue to be interested in the house, that you are pre-qualified for the necessary financing, but that you will be looking at other properties. Say that you would be happy to hear from them weeks or months from now if they are interested in selling it for substantially less than they are willing to sell it for today. Do not fall in love with this or any other house. You can only buy one house. You need not settle for paying a "fair" price. Buy it from someone who will sell it to you at a price which is GOOD for you.
Just so I'm clear, REO sales are counted in the NAR figures released yesterday, right?
The only reason to buy a house now would be that it's your dream house that you plan on living in for the next 20-30 years and there is near zero chance you will be forced to relocate because of a job, etc., any tine in the next 7-10 years, and you can easily afford the payment and a large down payment.
The only reason to buy a house now would be that it's your dream house that you plan on living in for the next 20-30 years and there is near zero chance you will be forced to relocate because of a job, etc., any tine in the next 7-10 years, and you can easily afford the payment and a large down payment.
You know, you could have just said "there is no reason to buy a house now". That would have been shorter.
In reply to Renterfornow on bidding strategy:
See if your property appraiser has sales data online. If so, get the data for this particular neighborhood and chart it out price/sqft on a time scale. Do a linear best fit of the data from the earliest date to 2002-2003. Then extrapolate to 2008 and beyond, like this Kenwood. Offer no more than what the linear best fit model projects and this amount only if you plan on being there for a long time.
You're in the driver's seat. Don't let what it may have sold for during the bubble be an influence.
I would call this BARF:
Banks Aquiring Real estate Foreclosures
CFC stood for :
Continuously Foreclosing in California
Now it stands for:
Collapsing Foreclosure Chart?
Do a linear best fit of the data from the earliest date to 2002-2003.
2002-2003 is way too late. That is prime bubble territory. 2001 at latest, before the market crash pushed everyone into real estate.
Regardless, rent is still the best measurement. That is a realistic assessment of what people are able to pay based on local income and the desirability of the location. It is the only true market value with have right now.
Plus, until price-to-rent multiples come down, home "owners" are just throwing their money away in interest, taxes, and insurance.
You people with your negative comments need to get a life. Put in some constructive commentary or shut up.
I have refused to buy a house for 5 years because of the phoney loans and stupid prices.
I did a 5% appreciation in my town on similar houses for 1995 prices.
The price for this house comes out to $443K.
RENT EQUIVALENTS. $2500 A Month rent at 140 times or $350K ---- 15 times annual rent comes out to $450K.
I do believe this house will bottom at the mid $400's imo. NY metro area by the way.
I am getting tired of waiting but home sellers I AM NOT GIVING IN. BAAAAAWAAHAHAHAHA.
Homeowners in the past have told me they "ain't going to give away their house"
I know what I say back "I ain't going to give away my money since I sacrificed and saved" No response just silence.
NY metro area by the way.
Whoa. In your case, I would wait until the job losses from the financial sector shake that town up a bit. That could conceivably cause rent to drop, and that changes everything.
We call them 'leaky buildings', they all have toxic mold and have to be rebuilt.
Funny you should mention that. As I write, the drilling has started on the condo complex next door. Five-month project, they say, due to mold.
CFC never accurately listed its REOs because, as Tanta has repeatedly intimated, their back room was never sufficiently competent to do anything accurately.
A house behind mine had a CFC notice posted on the door for six months. I tried repeatedly to find out what they were going to do with it. Then one day a buddy of one of CFC's local brokers showed up - he had gotten the house way below market at a time when prices were still going up. Made a bundle. I can't really complain because he did a nice job on the remodel so my block looks better.
I was going to give another bid and my last one for $500K. Any suggestions on strategy.
Offer $5000 less than your last bid.
Not to sound critical, but the train wreck metaphor (at least to me,) is getting a bit hackneyed. Nor, do I believe, does it portray the situation as well as the following: picture a whirlpool and yourself, ourselves as floating chips.
To me it's a wrecked train full of falling dominoes, caught in a whirlpool.
How many buyers are there, or will there be, compared to the number of REOs that are and will be available? Assuming many of these homes were once owned by subprime borrowers, and those loans have pretty much disappeared...
I believe Countrywide now prefers short sales to allowing properties to enter foreclosure. I looked at a short sale here in Los Angeles last week that had a countrywide mortgage. They seemed serious about getting off their hands quickly.
anecdotal, yes. but i'm seeing plenty more listings in my area on redfin w/ "...CHL pre-approval required..."
they're definitely liquidating to make that BoA deal go through.
or CFC is dumping pools of nonperforming on scratch and dent houses.
Tanta - It's obvious that people here don't understand how REO works and the responsibilities that all loan servicers have to loan investors. Hopefully you post some information on how it gets done. To everyone posting above, YOU'RE SPECULATING. Servicers like CFC don't decide what foreclosure properties sell for. Any decision on price, terms, whether the property sells via short sale or REO... All of those decisions are driven by the loan investor and/or the MI company.
By the way, a lender like CFC isn't going to "dump" properties into the market. They try to sell at current market value to satisfy the loan investor and not damage comparable values in the market place. If comparable values get damaged, then the death spiral for the community begins. Guess who the feds and state agencies blame? The lender that dumped all the REOs for cut rate prices.