Pickle Real Estate

Reading Between the Head-Lines

NO MORE MORTGAGE PAYMENTS SOON – Get Ready to Default!

The New Bailout- NO MORE MORTGAGE PAYMENTS!

The plan is to FULLY SUBSIDIZE millions of borrower’s mortgage payments for three years.  The program is predicated upon the housing market improving within the next 5-years.  This is a really bad assumption to make but also could shed some light on the Fed’s inflation expectations. This plan may help borrowers de-leverage temporarily but will not help the broader housing market.  It just kicks the default can down the road several years.

“In five years’ time, participants would, in all likelihood, be able to sell their homes or refinance their mortgages at amounts that would allow them to repay the loan.”

This program does nothing about the leading cause of loan default across higher paper grades, which is negative equity. Those severely underwater borrowers that would chose to participate in something like this are the very ones that you want to foreclosure upon in order to clear the market in the first place. The primary reason one would enter a program like this is if you planned on walking anyway. After three years when their mortgage payments kick in again or five when the big balloon is due, do you really think the these underwater home owners will feel better about their situation or more passionate about saving the home in which they have lived for free for years knowing they are another $100k in debt?  I think not.

Full Analysis Here

November 5, 2008 Posted by | Banking, Foreclosure, Lending, Stats | Leave a Comment

Second Mortgage Notes For less than 1 cent on the Dollar!!?

2008-11-03 — ml-implode.com

“A good friend who specializes in distressed real estate assets such as notes and REO just bought 27 second mortgages with a face value of $2,153,400 million for $2400 – that’s TWO THOUSAND FOUR HUNDRED DOLLARS.”

Full Article Here

November 5, 2008 Posted by | Banking, Foreclosure, Lending, Stats | Leave a Comment

Nearly One of Five Underwater on Mortgage

thetruthaboutmortgage.com

 

“Roughly 7.63 million properties, or 18 percent of all those with a mortgage, are currently upside down, meaning the balance of the mortgage is greater than the current property value.”
Another two million borrowers are close to being in a negative equity position, putting nearly a quarter of U.S. homeowners in a very bad position, further exacerbated by ongoing downward pressure on home prices.

While the problem can be seen nationwide, a handful of states are taking the brunt of it, including Arizona, California, Florida, Georgia, Michigan, Nevada, and Ohio.

These seven states account for 58 percent of all underwater borrowers, but just 36 percent of outstanding mortgages.

Full Article Here

 

November 5, 2008 Posted by | Banking, Investments, Lending | Leave a Comment

   

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