EL CAMINO REAL

Allowing delinquent mortgage squatting causes more strategic default than does low prices

Oct 052012

Ever since the housing bust began, banks have been caught between a rock and a hard place. On one side, if they foreclose and liquidate their inventory, prices plummet which prompts underwater borrowers to strategically default. The downward spiral of strategic default is in clear evidence in Nevada. On the other side, if banks don’t foreclose, borrowers know they can quit paying and live payment-free indefinitely. This method has the advantage for banks of providing an illusion of collateral value backing their loans, but recent data shows banks build an even larger shadow inventory that must eventually be liquidated. Those liquidations will most likely cause still-elevated house prices to drop. New Jersey Housing Suffers as Defaults Exceed Nevada: Mortgages By [Read More...]

Residential loan delinquency rates more than FIVE times historic norms at major banks

Sep 102012

Shadow inventory is primarily a problem for major commercial banks. The GSEs have been processing their foreclosures, and although delinquencies at the FHA are increasing, these are fresh delinquencies, not long-term shadow inventory. The too-big-to-fail commercial banks have been endlessly can-kicking to delay what I believe are inevitable write downs. For as long as records on delinquencies were kept, rarely did the rate exceed 2%. Currently, it is over 10%! To make matters worse, the delinquency rate for commercial banks is not declining as fast as delinquencies overall. Over the last two years, the rate dropped from from a peak of 11.2% to the current 10.2%. If lenders continue at that pace, it will take another 16 years for delinquency [Read More...]

The GSEs admit withholding inventory to prop up house prices

Aug 262012

As strange as it sounds, most REO shouldn’t be listed for sale. REOs being processed for sale — the REO pipeline — is all banks are supposed to have. Once they finish processing, they are supposed to put them for sale and liquidate. It’s not unusual for a high percentage of REOs to be held by the banks. What is more telling about their policies is how long it takes them to sell a property, and how they classify the properties they hold. If all their properties are undergoing preparations for sale, and if sales are happening quickly, there is no problem. However, if it takes them a very long time to process, and if many properties are being held [Read More...]

Foreclosure counseling wastes taxpayer money and should be eliminated

Aug 172012

Most federal assistance programs are a waste of money. They set up an entrenched bureaucracy that drains taxpayer resources and provide little economic return. There are exceptional government programs that deliver great benefit at little cost to taxpayers, but the foreclosure counseling services are not one of those programs. Most of these borrowers are hopelessly underwater or overextended. The counseling might have done some good before they got into this mess, but at this point, telling them what they should have done differently isn’t going to help. Programs like this are created as political cover to deflect criticism that the government is not doing enough. There is little or no hope these programs will have positive outcomes for anyone involved. [Read More...]

People with second mortgages and HELOC are facing tough times

Jul 312012

HELOC abusers and lenders face day of recast reckoning Home equity lines of credit (HELOCs) were the favored tools of Ponzis during the housing bubble. These were used like a credit card with an ever-expanding credit balance that didn’t need to be paid back because the house was paying for it. Most borrowers viewed this as truly free money, and they behaved accordingly. This influx of spending drove the economy during the first half of the 00s, and the elimination of this stimulus and the subsequent need to repay this debt is what’s causing our economic doldrums today. HELOCs are similar to other revolving lines of credit with a few key differences. HELOCs are secured by real estate whereas a [Read More...]

El Camino Real bottoming nearly 20% below rental parity

Jul 202012

Irvine: El Camino Real Overview Median home price is $408,000. Based on a rental parity value of $539,000, this market is under valued. Monthly payment affordability has been improving over the last 11 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased from $289/SF to $291/SF. Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. Median rental rates increased $17 last month from $2,182 to $2,200. Rents have been rising for 11 month(s). Price momentum suggests rising rents over the next three months. Market rating = 7 Proprietary Irvine Housing News home purchase analysis 1 SKIPPER Irvine, CA 92604 $470,000 …….. Asking Price $610,000 ………. Purchase Price 9/30/2005 [Read More...]

El Camino Real struggles to find a bottom

Jun 202012

Irvine: El Camino Real Overview Median home price is $436,000. Based on a rental parity value of $526,000, this market is under valued. Monthly payment affordability has been improving over the last 10 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased from $287/SF to $289/SF. Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. Median rental rates declined $8 last month from $2,190 to $2,182. Rents have been rising for 10 month(s). Price momentum suggests rising rents over the next three months. Market rating = 7 Proprietary Irvine Housing News home purchase analysis 4842 LORI ANN Ln Irvine, CA 92604 $699,900 …….. Asking Price $540,000 ………. Purchase [Read More...]

El Camino Real prices still falling

Jun 142012

Irvine: El Camino Real Overview Median home price is $436,000. Based on a rental parity value of $526,000, this market is under valued. Monthly payment affordability has been improving over the last 10 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased from $287/SF to $289/SF. Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. Median rental rates declined $8 last month from $2,190 to $2,182. Rents have been rising for 10 month(s). Price momentum suggests rising rents over the next three months. Market rating = 7 Proprietary Irvine Housing News home purchase analysis 24 SNAPDRAGON #14 Irvine, CA 92604 $354,900 …….. Asking Price $464,000 ………. Purchase Price [Read More...]

El Camino Real prices falling and rents rising

May 312012

Irvine: El Camino Real Overview Median home price is $406,000. Based on a rental parity value of $516,000, this market is under valued. Monthly payment affordability has been improving over the last 8 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis declined from $303/SF from $291/SF. Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. Median rental rates increased $50 last month from $2,116 to $2,166. Rents have been rising for 9 month(s). Price momentum suggests rising rents over the next three months. Market rating = 7 Proprietary Irvine Housing News home purchase analysis 6 SANTA FE Irvine, CA 92604 $429,000 …….. Asking Price $595,000 ………. Purchase Price [Read More...]

El Camino Real prices are firming

May 032012

Irvine: El Camino Real Overview Median home price is $390,000. Based on a rental parity value of $501,000, this market is under valued. Monthly payment affordability has been improving over the last 7 month(s). Momentum suggests improving affordability. Resale prices on a $/SF basis increased to $284/SF from $303/SF. Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. Median rental rates declined $98 last month from $2,215 to $2,116. Rents have been rising for 8 month(s). Price momentum suggests rising rents over the next three months. Market rating = 7 Proprietary Irvine Housing News home purchase analysis 14631 DEER PARK St Irvine, CA 92604 $600,000 …….. Asking Price $290,000 ………. [Read More...]

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