U.S. Mortgage Foreclosure Filings Rise 90% in May

Discussion in 'Politics, Religion, Social Issues' started by zimv20, Jun 13, 2007.

  1. zimv20 macrumors 601

    zimv20

    Joined:
    Jul 18, 2002
    Location:
    toronto
    #1
    bloomberg

    no great surprise here. all that's left to see is how bad the housing industry will get, and how much it'll affect the rest of the economy.
     
  2. solvs macrumors 603

    solvs

    Joined:
    Jun 25, 2002
    Location:
    LaLaLand, CA
    #2
    Living in the area of CA I do, I can see it. Housing costs skyrocketed, lenders were ripping people off, and now the bubble is bursting. Soon the market will be in the toilet.

    Could barely find an apartment last year, now there's For Rent signs everywhere.
     
  3. hulugu macrumors 68000

    hulugu

    Joined:
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    Location:
    the faraway towns
    #3
    Tucson went through a similar bubble, housing prices outpaced the average wage, which created a stagnation in housing prices and now all those who bought into balloon payments hoping their values would rise high enough to cover this gap are now totally screwed. Of course, real estate appraisers were expecting this to happen since 2003-2004.

    Expect the economy to slow as people run out of credit to burn, especially on consumer goods like technology and autos, and be wary of banks who will certaintly want to find profits from other sectors.
     
  4. Queso macrumors G4

    Joined:
    Mar 4, 2006
    #4
    Our own housing market in the UK is staring into a similar abyss. The Bank of England are also expected to continue raising interest rates until inflation goes back below 2%. I hope it's not as bad as the early 90s, but the signs aren't good.
     
  5. paddy macrumors 6502a

    paddy

    Joined:
    Jun 25, 2005
    Location:
    TN
    #5
    Same for Ireland, our house prices are ridiculous, far greater than those in America. Up 200%+ since '97 and still climbing. When that bubble bursts we're screwed.
     
  6. FFTT macrumors 68030

    FFTT

    Joined:
    Apr 17, 2004
    Location:
    A Stoned Throw From Ground Zero
    #6
    We have a bunch of people in the Washington D.C. area who were granted
    no doc loans who really were not capable of handling those payments.

    Now with interest rates on the rise, more will fail to meet their obligation.

    What bugs me is that predatory lending is still heavily advertized with
    " The Lowest Monthy Payment" ads baiting even more people to buy what
    they can't possibly afford.
     
  7. PlaceofDis macrumors Core

    Joined:
    Jan 6, 2004
    #7
    things are seemingly starting to burst in Chicago too. not surprising. but the effects on the rest of the economy could be bad.
     
  8. Sdashiki macrumors 68040

    Sdashiki

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    Aug 11, 2005
    Location:
    Behind the lens
    #8
    Florida.

    'Nuf said.

    Housing market is grossly over-inflated.

    When someone buys a house for $90,000 and 5 years later EVERYONE wants to live there, the house is now $250,000. BUt with it comes increased taxes, which the people who could afford $90k, cant afford. So, they sell or foreclose.

    All over Florida housing prices are way higher than they should be. And in some places, its justified cuz people still pay for it. Mostly out of staters with no idea about land in Florida....

    I see the bubble bursting very soon, there are so many places still for sale, for exorbitant prices, that by the end of the year they will realize, I can either pay another year of taxes, or sell for less. Gee let me think...


    All I have to say is, HURRY THE HELL UP, im sick of renting but I cant afford your 3/1 for $190k just cuz you think its worth that much, honestly, sir, its not and thats why its still for sale almost a year later! (that was all in my head)
     
  9. Swarmlord macrumors 6502a

    Swarmlord

    Joined:
    Sep 18, 2006
    #9
    These no doc loans just for the sake of granting people credit that haven't earned it has got to stop. I remember when you had to work hard to prove you could make payments and have plenty left over to spare. Now your pet could probably get a loan.
     
  10. Queso macrumors G4

    Joined:
    Mar 4, 2006
    #10
    It's a globalisation thing believe it or not. All the money the Asians are saving has to be invested somewhere. US and European banks are getting it at next to nothing rates from their Asian counterparts, so they can afford to literally throw it at people. Even with masses of defaults they still make a profit.
     
  11. Swarmlord macrumors 6502a

    Swarmlord

    Joined:
    Sep 18, 2006
    #11
    Sounds likely. This whole "get into real estate and make millions" has always irritated me. I can't even listen when those get rich on real estate commercials come on. Nothing wrong with a little inflation index based growth in an industry, but not one that's considered a necessity. Wonder if people would think it was as fair for a group of investors to do the same thing for say our food source.
     
  12. Sdashiki macrumors 68040

    Sdashiki

    Joined:
    Aug 11, 2005
    Location:
    Behind the lens
    #12
    I think the real money making in real estate isnt the Donald Trump tried and true of buy low sell high. Thats far to risky these days.

    But its not too risky to "flip" a house. But I dont mean like those shows where its some guy whos business it is to flip houses, he never swings a hammer once. They just throw money around and yell at contractors.

    Im all for buying a fixer-upper, whether its my main residence or not, fixing it up with my own hands (and some pro help where need be) and selling it for more than I paid for it.

    There is truth to spending $10,000 in home repairs/improvements, and getting $20,000+ more for the house when it sells.
     
  13. Turkish macrumors 6502

    Joined:
    Jan 12, 2007
    #13
    People have been using their homes as revolving ATMs for years.

    Refinance, take cash out, refinance, take cash out, refinance, take cash out...

    Now that home values have dropped, people are realizing that they have been living on borrowed money to finance their lifestyles, versus actually making (earning) enough money to live on.
     
  14. Swarmlord macrumors 6502a

    Swarmlord

    Joined:
    Sep 18, 2006
    #14
    It does seem like the whole notion of paying off your mortgage and having a little party to celebrate is obsolete. I think it would really help to get rid of the home mortgage deduction, but then the Fair Tax doesn't have deductions of any kind in the first place.
     
  15. Turkish macrumors 6502

    Joined:
    Jan 12, 2007
    #15
    It's sad, really. My better half is a branch manager for one of the biggest lenders in the country.

    They pay off these people's credit cards, and they are back within 2 years asking for more... Nowadays, there's no more equity to borrow against.

    Credit cards will be the bane of this society in coming years. People think they're getting along fine until they're in too deep.
     
  16. FFTT macrumors 68030

    FFTT

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    Location:
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    #16
    I think each family should be allowed one primary home as their major
    write off and one only major investment property free of capitol gains.
    A vacation home, rental property, a piece of land what ever you choose, but only one.

    In many cases a smart investment in real estate is the only way people
    can earn enough money fast enough to put their kids through college or save for retirement.

    Beyond that, the multi-investors would have to pay their fair share.
     
  17. Queso macrumors G4

    Joined:
    Mar 4, 2006
    #17
    People would get round that too easily FFTT. They could just form a company, invest their money into it, then buy lots of properties, paying themselves dividends on the development/rental profits.

    In a way that's a good thing. Why should only the extremely wealthy be able to own land and property?
     
  18. leekohler macrumors G5

    leekohler

    Joined:
    Dec 22, 2004
    Location:
    Chicago, Illinois
    #18
    All my friends have been telling me to buy a condo for the last two years, saying "It's a great time to buy! Do it now!" I'm glad I didn't listen. Prices have leveled off here, and there are foreclosures all over the place. Color me predatory, but I'm waiting to see just how low it goes. I'll buy then.
     
  19. FFTT macrumors 68030

    FFTT

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    #19
    The regulations would have to be very tight on what qualifies as a "family"
    investment property.

    Once you go to a commercial investment situation all the rules would
    have to treat those properties as multi-investor properties subject
    to a higher tax rate on capitol gains.
     
  20. FFTT macrumors 68030

    FFTT

    Joined:
    Apr 17, 2004
    Location:
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    #20
    Make sure you are pre-qualified with a good lender and try to set yourself up so you can jump when the getting's good.
    Your lender should know that you are targeting undervalued property and
    make sure they have a good idea of what the appraisals should be where you're looking. In other words you want to streamline the whole process.

    Nothing can help you get a great deal more than being able to tell the seller
    you can close fast. Like in two weeks.

    Honestly condo's are ok if you can afford all the condo fees easily, but otherwise it's always better to buy fee simple properties.

    Your best deal is still the fixer upper in a strong neighborhood or in buying
    from a reputable builder at pre-construction prices.
     
  21. gkarris macrumors 604

    gkarris

    Joined:
    Dec 31, 2004
    Location:
    "No escape from Reality..."
    #21
    Also happens because many of our jobs are going overseas, hence people are loosing their jobs (like I did).

    The few jobs here are also being given to people on work visas, hence the pay is much lower (I finally found a job for less than half my old pay - after looking for almost 3 years). So, you can't afford the house you have anymore.

    Now, the skyrocketing energy costs.

    Forclosure sometimes is not by choice...:(
     
  22. leekohler macrumors G5

    leekohler

    Joined:
    Dec 22, 2004
    Location:
    Chicago, Illinois
    #22
    I live in Chicago- I can't afford a house here. :) Condo it is for me. Plus, I wouldn't have the time to take care of a house. Thanks for the tips, though! I will keep those in mind for sure.
     
  23. IJ Reilly macrumors P6

    IJ Reilly

    Joined:
    Jul 16, 2002
    Location:
    Palookaville
    #23
    The sub-prime lenders are behind most of this. Too many risky loans can start the market tumbling when the economy turns down or the housing market flattens. We can only hope that the housing markets deflate only by about as much as the sub-prime lenders have contributed to its inflation. If not, a recession at the same time could add up to repeat of the early '90s.
     
  24. gkarris macrumors 604

    gkarris

    Joined:
    Dec 31, 2004
    Location:
    "No escape from Reality..."
    #24
    I do too (well, right outside of the city). But, make sure you understand all the numbers.

    My friend has a nice studio+ (a studio with a separate kitchen/dining area) and only pays $650/month with heat and water. He has to pay for parking up the street.

    He's looking for a condo. The ones where we live are $200,000+. Add the 2% taxes (yes, $4,000 a year for a condo). I computed that after he puts down 20% ($40,000), then, taxes, and some utilities (he now gets parking though), that's still about $2,000/month.

    Is "ownership" around here affordable??? He doesn't have the greatest paying job...
     
  25. leekohler macrumors G5

    leekohler

    Joined:
    Dec 22, 2004
    Location:
    Chicago, Illinois
    #25
    NO- ownership isn't affordable. That's why I'm waiting for prices to come down.
     

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