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This was an EXCELLENT article yesterday here in The Dallas Morning News. I know that recently one of the regular posters on here had asked this question since the "doom and gloom" news stories came out and wanted to know EXACTLY how many homes are "mortgage free" and how many homes REALLY face foreclosure. This article relates that info.
Tiny numbers make foreclosure increases look huge | Dallas Morning News | News for Dallas, Texas | Scott Burns | Personal Finance | Business Columnist | Dallas Morning News (http://www.dallasnews.com/sharedcontent/dws/bus/columnists/sburns/stories/DN-burns_24bus.ART.State.Edition1.3998024.html - broken link)
I read the article... and I understand basically what it's trying to say. But even if the foreclosure crisis is a regional epidemic I don't understand how anyone can ignore it's ramifications across the entire country. Let's be honest... if there was even 1 more foreclosure to be had in your community this year would you want it to be on your street?
Most people I know that saw their house appreciate even 1.5x's the purchase price are now either upside down or headed that way. Houses I've looked at where people bought in 2003-2005 are now listing well above market price because they don't have enough equity to get out and cover even closing costs. Sure 2 hrs away in Binghampton , NY prices and sales grew 16% last year as 25 years of continous exodus (due to lack of jobs) made a reversal through opportunities of cheap housing.... but even with cheap housing there are still not many competitive paying jobs.
Let's take this a step further... from a personal buyers persepctive. I recently tried for financing on a home FHA 97% LTV. I was recently unable to get approval on a FHA mortgage because the home I'm considering resides in a 'declining market'. Yet the local Realtor Association touted last week in the newspaper that despite sales being at thier lowest since 1999, and although foreclosure filings were up only 11% the average sale price still managed to raise 1.6% in Jan, proof therefore prices were not in decline at all.
I read the article... and I understand basically what it's trying to say. But even if the foreclosure crisis is a regional epidemic I don't understand how anyone can ignore it's ramifications across the entire country. Let's be honest... if there was even 1 more foreclosure to be had in your community this year would you want it to be on your street?
Most people I know that saw their house appreciate even 1.5x's the purchase price are now either upside down or headed that way. Houses I've looked at where people bought in 2003-2005 are now listing well above market price because they don't have enough equity to get out and cover even closing costs. Sure 2 hrs away in Binghampton , NY prices and sales grew 16% last year as 25 years of continous exodus (due to lack of jobs) made a reversal through opportunities of cheap housing.... but even with cheap housing there are still not many competitive paying jobs.
Let's take this a step further... from a personal buyers persepctive. I recently tried for financing on a home FHA 97% LTV. I was recently unable to get approval on a FHA mortgage because the home I'm considering resides in a 'declining market'. Yet the local Realtor Association touted last week in the newspaper that despite sales being at thier lowest since 1999, and although foreclosure filings were up only 11% the average sale price still managed to raise 1.6% in Jan, proof therefore prices were not in decline at all.
Someone please tell that to Fannie Mae.
I totally understand what your saying. Right now across the country it is the LARGER MAJORITY of the homeowners that are NOT in default, have paid off homes, are not refi'ing, not selling, etc that ARE paying the price for the MINORITY that did screw up when buying a home. For example, we bought our home in 2002 for $500K and to go out and buy a similiar home would cost over $1M but OUR appreciation rate is not there and I could not sell my own house for that but it would still be more than what I paid for it (which is kinda good as I don't want to pay the property taxes on it, lol). So we are staying put and going to add-on (another garage w/ a room above it). We put down a HEFTY down payment then and did do one of the "interest only" loans BUT ours had a VERY LOW cap on it to start with (having the HUGE down payment also gave us instant equity and we don't plan on moving for a LONG time so it was the right thing for us). Every year we kept an eye on the interest rates so that we could refi for a fixed rate (something we both preferred but did not do when we bought). The fixed rates were HIGHER than our cap until two years ago and we did refi. Well they dropped again last month and we were like, SCHWEET! Get a lil money out to pay for the addition and at a REALLY LOW rate, go a 15 year mortgage and NOW WE ARE TALKING! Sadly, we did not have our personal papers in order to lock that in then. We do now and are ready for the second that the rate drops again to 4% to lock it in as our mortgage broker knows to do so. Because of the people out there that did do the no-doc loans and the ARM's that were NOT watching and did not refi WE are paying for it. They are REALLY PICKY on every single little thing and even we are having to jump thru hoops to get ours done because of the few bad apples even though we have a GREAT track record, qualify NO PROBLEM (the banks are crying they can't get our loan as we did shop around). Even today when I talked to our current mortgage company they were trying VERY HARD to find SOMETHING to do for us. So the good people do get shut out right now because of it.
The author of that article also had another one a few weeks back even telling about how states like Texas are going to REALLY suffer because of the states that need to be bailed out. Money that WOULD go to homebuyers here that CAN afford a house, that is not in a bubble can not get loans because the dollars will be used up in the other states like California to help bail them out. I personally don't think that is right at all. Why put a good real estate market into jeopardy in order to save one that is floundering? Just because we have had slow and steady appreciation rates and not ones that went thru the roof in the last few years we are fine. But that is all on the line since the money that is keeping our buyers going strong in an area where jobs ARE good and pay IS good, where home ownership IS attainable to the majority it will be jeopardized because of the minority.
This was an EXCELLENT article yesterday here in The Dallas Morning News. I know that recently one of the regular posters on here had asked this question since the "doom and gloom" news stories came out and wanted to know EXACTLY how many homes are "mortgage free" and how many homes REALLY face foreclosure. This article relates that info.
Tiny numbers make foreclosure increases look huge | Dallas Morning News | News for Dallas, Texas | Scott Burns | Personal Finance | Business Columnist | Dallas Morning News (http://www.dallasnews.com/sharedcontent/dws/bus/columnists/sburns/stories/DN-burns_24bus.ART.State.Edition1.3998024.html - broken link)
Thanks for sharing this info, it does help educated the masses!
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