Is Real Estate back in decline? (Tampa, Sarasota: renters, mortgages, bad credit)

[housingcrashsurvivor]

Originally Posted by DUNNDFRNT

Ypu understand that most people who defaulted on their loans did not commit a crime they were not involved in fraud, if you accept a loan which you cant afford its not a crime, its not smart, but the lender sets the guidelines, the lender comes up with product no doc loan, interest only ARM, whatever instrument they come up with to guess what get more customers, so the nature of a secure loan is that you charge interest based on the quality of the collateral, if the collaterals value plummeted that is not the consumer's fault, the person who signed the loan agreed to pay back the loan if not they lose the collateral and ruin their credit, thats the deal no jail time involved no tar and feathering, The systemic failure identified in the aftermath was that the people who produce the loan packages pay the rating agencies who rate the packages for other investors, the rating agencies knowingly rated toxic assets for other investors to package resell and so on, a feeding frenzy. How come companies can write off their losses, default on loans, its all part of business but if an individual considers a strategic default on a mortgage he is a POS,

As I understand collateralized loans, while the collateral is used by the lender to make the loan more secure, thus enticing the lending, I would imagine that depending on voluntarily signed paperwork, a person would still be responsible for money borrowed depreciation not withstanding. If you borrow $30k for a car and "if" it depreciates, you still owe $30k. We don't have payments reduced according to depreciation of what we bought, just like our payments on the set amount we borrowed wouldn't go up if the item appreciated while we owned it.

If the bank lends $200k on a house worth $300k on the next sale, what percentage of profit does the bank get? So then if you get $200k on a house now worth $100k, why doesn't the bank get the full loaned amount back? So collateral doesn't make the lender your business partner of your house. You own your house even if someone lent you the money. Now if the original agreement included part of profits to go to the lender on a sale then I could understand them taking a hit on any losses. Otherwise, the collateral simply functions as some security, not as repayment regardless of worth and unless in a non-recourse state such as Florida which has good protections particularly for homesteaded properties, then the defaulting party isn't a PoS but he might find himself in the situation of being SOoL.

As to writing off losses, a home is not a business which often benefits society by providing jobs. A home can double as an investment (I consider mine a bond portion of my portfolio and I fully intend to reverse mortgage later in life), also it can provide some income if a property has a mother-in-law wing or an accessory dwelling unit or a room to rent but primarily it is shelter, not a business.

And there are homesteaded benefits such as that as long as mortgage is being paid or if home is paid off, then as long as taxes are also paid a home can not be taken in a law suit which is not a protection provided a business. So it really is a different animal making that direct comparison incorrect.

Meanwhile back to current values on the direction of the market.....

Here's the latest Zillow price to rent ratios still below their long term averages for both the country and for Tampa Bay.

Florida low point since 2010 was 8.13 in Jan 2012 climbing steadily to 9.32 in Oct 2013 (latest figure)
Country Average (by excel) since 2010 low of 10.62 in Dec 2012 climbing steadily to 11.55 in Oct 2013

Metro Tampa Bay low 7.69 in Jan 2012 climbing to 9.14 in Oct 2013
Country (these avg numbers direct Zillow ) low 9.94 Feb 2012 to 10.79 in Oct 2013

So still trailing by about 15% below the national average and all that still stuck below the long term averages.

Hernando low 7.14 April 2012 to 8.21 in Oct 2013
Hillsborough low 7.72 in Jan 2012 to 9.4 in Oct 2013
Manatee low 7.32 in Mar 2012 to 9.44 in Oct 2013
Pasco low 7.03 Aug 2012 to 8.21 in Oct 2013
Pinellas low 7.91 in Jan 2012 to 9.46 in Oct 2013
Sarasota low 7.4 Oct 2011 to 7.94 Oct 2013
All counties in Country (excel average) low 9.92 in Sept 2012 to 10.74 in Oct 2013

[gulfer]

Originally Posted by ComSense

THe banks came after us for an obscene amoumt. Wasnt gonna happen.

Do you mean they came after you for what you borrowed? Was it you that mortgaged the obscene amount?

[bentlebee]

Originally Posted by gulfer

Do you mean they came after you for what you borrowed? Was it you that mortgaged the obscene amount?

Gulfer..remember nobody knew what they signed for and nobody did anything wrong

[StreetSmarts]

Originally Posted by gulfer

Do you mean they came after you for what you borrowed? Was it you that mortgaged the obscene amount?

No, they didnt come after me for what I borrowed. No, I didn't mortgage an obscene amount. I actually good (at th etime) a decent deal. But the neighborhood deterriorated (sp?), values plummeted and I got a job offer (in NC) which offered us a much better quality of life.

There's no way that a small'ish, 3 BR 2 Ba home on nearly zero lot lines should have been going for $300k in FL for cryin out loud. But oh well. I dont live in that area anymore and very glad.

[StreetSmarts]

Originally Posted by bentlebee

Gulfer..remember nobody knew what they signed for and nobody did anything wrong

I knew what I signed up for. I could afford the house. I'm a native and was born in FL, I didn't move to FL to flip a house and get rich like everyone else. I bought it to live in. But to think I'm gonna stick around all the foolishness and transients that my neighborhood became so I wouldn't hurt the banks feelings... PFT... not gonna happen.

[Pragmaticus]

Originally Posted by ComSense

THe banks came after us for an obscene amoumt. Wasnt gonna happen.

Originally Posted by ComSense

I knew what I signed up for. I could afford the house. I'm a native and was born in FL, I didn't move to FL to flip a house and get rich like everyone else. I bought it to live in. But to think I'm gonna stick around all the foolishness and transients that my neighborhood became so I wouldn't hurt the banks feelings... PFT... not gonna happen.

Well, banks will always come after those who could afford but decide not to pay.

[StreetSmarts]

Well I was employed when I bought, but then I became unemployed. They still didn't cut us a break. It was cool, the neighborhood changed drastically and I wanted out.

[gulfer]

Originally Posted by ComSense

Well I was employed when I bought, but then I became unemployed. They still didn't cut us a break. It was cool, the neighborhood changed drastically and I wanted out.

Understand ComSense. I was fortunate not to get caught up in the housing bust. Interestingly, a Realtor was the one that told me to wait for a while and see how things played out. I personally feel that man saved me a couple hundred thousand dollars.

Your scenario are the folks that I feel for. Pricing pressure forced people to pay higher prices and when the recession hit, good folks that lost their jobs had no other option but do to what they did. Those are the folks that I wish would have been given the mortgage relief.

I know mortgage lenders are taking that into account these days. It seems to be about 18 months from handing in the keys and taking a loss to where buyers with good employment are getting loans again.

The comments regarding people living in their homes mortgage free for 1 to 2+ years when they have the ability to pay are real. Those I personally feel should be required to pay. But you will find people that believe that is okay in every walk of life.

[StreetSmarts]

I know someone who is still in their house... 5 yrs later. I didn't do that. Once I was advised by my re attorney to stop paying, I moved in like 3 months once I lined up another job in NC. I could've stayed mortgage free for a few yrs, but we didn't go that route.

But like I said, the neighborhood was changing, I didn't want to be in that environment. The thing about FL is that neighborhoods change quickly. Next time I will be very, very cautious before buying again. And I'll probably never buy new construction again, unless it's right where I live which hasn't changed in the last 30 yrs.

Thanks for the reply, gulfer.

[StreetSmarts]

To give you, gulfer, an idea of what we were looking at... in 2006, the retail price of our house was $330k. I bought it for less (I worked for the builder). A cpl yrs ago it was going for about $135k.