Even Renters at Risk for Foreclosure Texas Cable News We already know the number of foreclosures nationally is skyrocketing. Now there's a new trend in North Texas, and it comes as a big surprise to renters.
El Paso County Foreclosure Rates Skyrocket KRDO.com El Paso County is already at nearly seventeen hundred homes for new starts in the foreclosure process. El Paso County is running about four to five hundred filings each month the past three months.
Canseco Is Out at Home New York Post Retired baseball slugger and confessed steroid user José Canseco revealed yesterday that he had lost his California mansion to foreclosure - one of the first celebrities to publicly admit becoming a statistic in the national housing crisis.
Love him or hate him, you can't deny that Ted Turner is a force and an American original
May 08, 2008
No need to be long winded. This is familiar territory for regular readers here.
An April 22 story in the L.A. Times declared, "California foreclosure ‘surge': Up 327% from '07 levels."
Technically, it was correct.
L.A. Land, the newspaper's blog that follows "the rapidly changing landscape of the Los Angeles real estate market and beyond," accurately reported "the actual loss of a home to foreclosure totaled 47,171 during the first quarter. ... Last quarter's total rose 48.9 percent from 31,676 in the previous quarter, and jumped 327.6 percent from 11,032 in first quarter 2007."
But what does that mean?
I did a little digging and discovered that there are roughly 10,381,206 households in California, according to the 2000 Census. In other words, the number of foreclosures, as a percentage of households, did indeed double - from 0.31% of all households a year ago to 0.45% today.
On the other side of the country, an April 29 New York Post headline declared: Metro Foreclose Rate Soars 34%.
"In Brooklyn, one in every 241 homeowners is now in the foreclosure process," the story said. "That is more than double the number of Brooklyn households in that situation a year ago."
If my 8th grade math is intact, one out of 241 translates to a 0.41% foreclosure rate, almost exactly the same figure as reported by the L.A. Times.
Interestingly, this context - that less than half a percent of the homes in the two largest markets in the country are in foreclosure - was not provided anywhere in the L.A. Times or the New York Post stories. Nor have I seen any such facts reported when it comes to the nationwide housing "crisis," in which 98% of all mortgages continue to be paid in full and on time.
Why do you think that is?
Share the Eye:
Tips for Avoiding Foreclosure HUD The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.
Foreclosure Law Provides Recourse LegalNewsline Legislation to fight mortgage foreclosure fraud "will provide valuable recourse for our citizens in potentially desperate situations," once it is signed into law by the governor, Florida Attorney General Bill McCollum said.
The Face of Foreclosure Twin Cities Planet We hear it on the news every day: The severity of mortgage foreclosures. We see the statistics. But those are just numbers. Behind the numbers are people.
This is my area of expertise. I'm in real estate. (residential, commercial and investment prope...
May. 08, 2008 1:25 AM
Do you think we're headed for a Recession?
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This is my area of expertise. I'm in real estate. (residential, commercial and investment properties) I use to be in construction and property management.
Of course, the numbers look bleak when stated as actual numbers of foreclosures but the percentages are not that bad. It's true that more foreclosures are on the way. A crisis may happen in the prime rate market as to second home buyers going to into foreclosure not just the sub-prime market.
I'm handling a number of foreclosed (bank owned) properties at this time. They list and sell below market values. They bring existing home sale prices down in certain areas because the existing home has to compete with the bank owned price. Bank Owned or Real Estate Owned properties are properties that the bank received after the trustee's sale didn't sell the property. The house is not in "foreclosure" it has been completely foreclosed on and returned to the bank.
The market locally is actually returning to a "normal" market after the recent "bubble" market. While there has been a significant decline in prices, and a continuing low interest rate, the problem is the tough new lending standards. It is harder to qualify for a mortgage. The lenders require full documentation of income, a higher credit score, a bigger down payment, and higher reserves (two or three months' mortgage payments in the bank.) Just like in the good old days!
The "problem" has been the ARM's that have reset for homeowners who couldn't afford the higher payments, the homeowners who have used their equity as an ATM machine, and the "flippers" who got in on the market at the end. (Tulipmania in 16th century Holland comes to mind as well as the Florida real estate "bubble" in the 1920's).
you can blame the current "crisis" on many things. Most importantly is the disconnect between the buyer and the ultimate holder of the mortgage. The mortgages have been diced, sliced and sold to so many investors that the person who ultimately gets your money may be an investor in Germany or Hong Kong or even yourself through an investment fund you bought into. These guys are seeing there investment shrink because the underlying derivative (the house) is decliningg in value. Many lose but someone will always gain because of the loss. think about it, you can buy a good home at a bargain price.
There are hundreds and thousands of real estate agents, loan agents, and construction workers who are out of work because of the "crisis". It's a supply and demand issue: not enough work for too many workers.
People still need to sell their home for all the usual reasons: death, job change, divorce, marriage, children born or leaving home; and people still need to buy for the same reasons. Smart investors still need to invest money. Foreign investors are finding good bargains because of the dollar to other currency values and the favorable interest rates.
the commercial side of the business, which I also have an interest in, is quite stable although a credit and liquidity crisis is possible.
It's true that 98% of all mortgages are paid on time and many of those mortgages are also sub-prime.
Locally, the employment market is quite stable (if you don't count the job losses in the real estate and mortgage and construction business. But these kinds of jobs are often cyclical. The problem this time is the cycle has been upward for 20 to 25 years.
I will not downplay the pain and suffering of some home owners and the many tenants they rented to who are now losing their "home" because of the loss by the owner. But I will say that "numbers never lie, but liars use numbers". It's like that old joke about the difference between a recession and a depression. A recession is when you lose your job, a depression is when I lose mine.
If any of our friends on this site are in trouble with their mortgages take action now. Don't wait. Call the bank, call a mortgage broker, do something. The bank does not want to own your house, they don't want to be a landlord, but when it's time for you to go, you will be gone. The bank will see to that. Then I'll sell your home and the ghosts of your memories to someone else.
more on the honor rollJ. Peterman and ExPat
Thank you for both the question about the context of the numbers and the excellent explanation of what they mean and the consequences. It's this manner of information presentation that leads to effective decision making and it would truly be a breath of fresh air if there was more like it. I also realize the difficulty of the decisions that have to be made by many, as well as the consequences and have great empathy toward them.
It's when folks take raw data and spin it to fit the message that they want to impart to the public with the intent of either supporting their's, or their affiliation's agenda, and/or casting doubt on someone else's position, is when it becomes even more emotionally charged, or worse, a self-fulfilling prophecy. It seems the glass is always described as either half-full or half-empty; it's never presented as being "it is what it is".
I certainly feel much better having gotten that off my chest.
Be well
John
John,
I agree. This type of information is wonderful. Too bad it doesn't sell. Doom and gloom sells, but serious analysis is a niche market at best. It's a pity, because some of us like to stay informed. That's why we stick with Peterman.
To answer Mr. Peterman's question about why the context of low percentages didn't show up in these major newspapers, Mr. Roush has hit it right on the head. You get people's attention by playing the doomsayer and the fearmonger and that sells papers.
If there's no catastrophic hurricane, explosion, war, plague, or other major disaster, most of us fold our paper ever so neatly and sigh "Nothing in the news today."
thecatalyst said...
This type of reporting happens all too often. Here's the drill:
-Something starts out as a problem.
-It is portrayed in the media as a CRISIS.
-Based on the overblown coverage, the public demands that politicians "do something" to fix the "crisis".
-Politicians then do something that ends up creating a bigger problem (usually down the road a bit) than the original problem that in time would have probably worked it's way through just fine on its own.
Sorry if I am beginning to sound cynical on such a beautiful Spring day!
To: South-Side John,
I agree that the glass is never half full or half empty, it is only what it is. I see the reality of what is and look for the opportunities it presents. There is profit in the upside and also in the downside.
The housing crisis is not a crisis at all. It's a normal cycle. Right now we have to sell off an oversupply of inventory. The prices drop accordingly. If you add the sub-prime issue and the tough lending standards, you have a "crisis". But it's a crisis for a small percentage of people . If you're one of them it's a crisis for you.
What makes the current situation unique is that there is a down-cycle in the stock market. After the the Dot.com problem the money flowed into housing. When there's a housing problem the money flows back to stocks. Where do you put your money today.
The worst thing is for the government to step in and try to save the free market system. Let the market correct itself.
To ExPat:
You are absolutely right that the market should be left alone to correct itself. But I disagree with the very idea that the government could "save the free market system". The only way the government could do that is by having the good taste to stay in Washington. As soon as the government "steps in" there is inherently no hope for the free market.
To: DreadPirateRoberts,
I agree. The markets are very efficient when left alone. There are too many "white knights" riding into town to "save" the day. They should stay home (in Washington) and save the government from itself. They are fools who deny there's a 1,000 lb gorilla in the living room. And then decide they should bargain with it. Never realizing that they themselves are the 1,000 lb gorilla.
And I hope I haven't insulted any gorillas with my metaphor.
Now I disagree that the government should never step in, but I think ExPat put it correctly: "If you're one of them it's a crisis for you." The government ought to offer as-needed assistance to those hardest hit, but certainly not even consider wholesale 'industry bailouts.' As much as this is a free market issue, if I were one for whom this is a crisis, I would feel that the government had an obligation to help.
Is this a good time to say.....Don't forget to vote in the next election!?!
To: Mr. Roush,
I agree, there are times when the government should step in....but it's their arrogance and incompetence that worries me. A good example is the aftermath of Katrina.
The money has gone down a drainpipe somewhere and we have no idea who's holding the bag at the end of the drain pipe. There were thousands of temporary homes in the form of trailers that sat for months in another state. They're still sitting there.
Here in L.A. there are hundreds and thousands of small lots that the city owns, many were property tax repossessions.......the city doesn't have an inventory and doesn't know where they are. If they did and they could give small business contractor an incentive to build we go a long way to easing the affordable and available housing problem for low income people.
Spinner said...
Heard another NPR interview today.. I tend to listen to a lot of NPR news.. And someone suggested that it was a myth that the free market tended to adjust itself to a balanced condition if left to its own devices. It was suggested that the government has to step in occasionally to help achieve this balance. But it over-did it with the bursting of the tech. bubble. By lowering interest rates so much , they created such a climate of "cheap" money that it started this real estate bust. An interesting perspective. I suppose some intervention is occasionally necessary, but the body politic has to do it with an understanding of the big picture, not just to get re-elected. I also must admit that I am a bit hard-hearted. I feel that a lot of these people got themselves into such an outlandish mortgage situation without educating themselves about the ramifications of the papers they were signing, that why should I foot the bill for their poor decisions? If you only make $40,000/year, why do you think you can keep up with payments on a $500,000 house? If I make a poor choice as to what stock to buy and it tanks (as several are now) nobody is going to come bail me out. We are definitely getting ourselves way in over our heads in debt and someplace, we have to start taking responsibility for our own actions. Now, mind you, I am not for kicking these people out into the street. I don't know what the answer is, but somehow, this should be a wake-up call to better educate the public, or at least make the lending industry be more "user friendly" and enlarge that fine print and make it clear to those that don't understand just what the ramifications are when they enter into a contract such as these creative approaches present.
I am sure I will get a bunch of wailing about this, but it's called "responsibility", folks.
To Spinner:
You'll get no wailing from me. Not this time. You have hit the nail squarely on the head. The only money the government has came from you and me. So if Peter makes a bad investment and the government "steps in", that means Paul is paying for it without his own consent. Those who are hardest hit (as Mr. Roush puts it) are paying the most dire consequences for their mistakes. But it's their consequences, not mine.
As for John Kerry's old saw about fair trade being more important than free trade, I have two words for you... Harrison Bergeron. Anyone who believes government imposed fairness should take priority over freedom should re-read Kurt Vonnegut's classic short story of such a scenario taken to its logical extreme.
There is another logical extreme we can take from history here. It's called The Great Depression. I've read a lot of data about how that catastrophe was not (as many people erroneously claim) a case of the free market run amok without government intereferance. My favorite article on the topic is entitled "Great Myths About the Great Depression". I offer you a link to it here: http://www.mackinac.org/archives/1998/sp1998-01.pdf
It makes its points more eloquently than I could have.
To: All of you in this forum (well so far at least): Kudos
Great discussion as usual. It's also refreshing that this group acknowledges what part we may have played in contributing to the problem at hand as well as identify our own action items to positively impact the issue. Kudos to La Donna for her vote comment.
In light of our previous discussion pertaining to our "Democratic Process", in particular the "Magical, Mystical, No-Value-Added Electoral College", I am still willing to take that leap of faith that my vote still counts for something (besides making me feel better about myself).
Oh, I have no problem with people paying for their own mistakes. Frankly, I take a wee bit of schadenfreude when I hear about someone getting into debt trouble, and in the same sentence talking about all the sweet things they're buying.
The issue with this is that frequently, if the hardest hit are left to fend for themselves, the rest of us suffer. Foreclosure brings a whole host of problems with it, and I'd much rather see it nipped in the bud than the rest of us suffer. The free market will correct itself, but it is a dynamic equilibrium. On the grand scale, sure it will be 'fixed,' but on the scale of the individual neighborhood quite a bit of urban renewal could halt in its tracks without gov't assistance.
I do hope that the banks learn their lesson, for while the general populace may be pretty irresponsible and entitled with their money, successful bankers are not. I hope that they'll stop making silly loans. S&L anyone?
To: LaDonna,
Thanks for reminding everyone who can to vote. We have a Primary on June 3rd in California. Two of the propositions (98 & 99) are about eminent domain. 98, if passed, will prevent local governments from taking private property and giving it to a developer for another private use. It also allows units under rent control to be free of control when re-rented. 99 offers limted protection to owner-occupied single family residences.
Now here is the trick if you vote "yes" on both and 99 gets more "yes" votes than 98, 99 becomes law and 98 does not. So you have to vote "no" on 99 and "yes" on 98 for anything to make sense. At first the two propostions don't look related, but they are.
How people vote is their business......but be educated to the impact of the propositions is essential.
To: Mr Roush,
I've heard that a billionaire investor named Wilbur Ross would like to revive the savings & loan industry. That would be a good start.
South-Side John, thank you for the kudos!
ExPat, You my friend; are well informed!
To: LaDonna,
You, my friend, are very kind! Thank you. You also have a keen insight into the topics.
ExPat
Spinner said...
To: La Donna and ExPat,
Watch it! This ain't e-Harmany.com!
To: Spinner,
Can't we all just get along? (Ha!Ha!)
Mr Spinner!
To: ExPat, I guess if we keep meeting like this, people are going to start talking!
To: LaDonna,
Let them talk! I plan to keep meeting like this........(Ha!Ha!)
To ExPat:
Forgive me for disrupting the merriment of the mutual admiration society over here but I want to take a moment to say thank you for bringing up the ever-fearful topic of eminent domain. I'm not a Californian so the individual articles at hand are technically none of my business (except in terms of the precedent they will set of course) but I sincerely hope to see article 98 pass. The abuse of eminent domain has long been a pet issue of mine (even above my dear old elephants) and I long to see that particular corruption stopped in its tracks.