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And that article has little to nothing to do with your previous post - which contained numerous inaccuracies about the housing meltdown.
And FYI ... if you think the "investors" in that article title and the "real estate investors" that you've referenced in your post are the same animal, you're even more mistaken than I thought you were.
In response to your post, I am just telling what I was told. All of your posts are race biased. That is my perception, and I said perception. My perception of your posts is that everything that is white is great, and minorities are just so bad. You think minorities don't deserve the same things out of life like their lily white, great, good white folk. I am so glad that I had the opportunity to leave the block; (i.e. the country). I forgot that I was a minority until I moved back to segregated Chicagoland. I think people should be able to live where they want to live without running when they see brown people. As far as schools, I think if you instill the values of education in children at home at the beginning; they will succeed anywhere.
I dont quite feel like a minority(in a literal sense) living in the southeast burbs as a Black man. Other than a few like Homewood and Flossmoor(which could be best described as a more suburban version of Beverly around here), Black people are in the majority. Even at Flossmoor and Homewood, the schools are half Black and some over 75%.
But I understand what you mean about being a minority in feeling like you're always reminded that you're Black or your race. The funny thing is it is not just white people, but also among us "minorities". Based on my experience when it comes to race base comments, I find many Hispanics( Mexicans in particular) to be some of the most politically incorrect people around, blurting out stuff without thinking the next person might've took offense.
Last edited by Chicagoland60426; 10-12-2010 at 02:17 PM..
And that article has little to nothing to do with your previous post - which contained numerous inaccuracies about the housing meltdown.
And FYI ... if you think the "investors" in that article title and the "real estate investors" that you've referenced in your post are the same animal, you're even more mistaken than I thought you were.
I don't doubt there are some investors who default - but to say "most" investors walk away is not true.
It's also untrue to say that average investors walked away when values slid - you're implying that most had their investments foreclosed on.
And it's also blatantly false to say that the housing meltdown was caused by investors.
(And it doesn't help your credibility when you the first article you link to provide your proof of defaulting investors, is actually talking about a different type of investor.)
I don't doubt there are some investors who default - but to say "most" investors walk away is not true.
It's also untrue to say that average investors walked away when values slid - you're implying that most had their investments foreclosed on.
And it's also blatantly false to say that the housing meltdown was caused by investors.
(And it doesn't help your credibility when you the first article you link to provide your proof of defaulting investors, is actually talking about a different type of investor.)
Chuckity, I read the article. I know what it was about. The title had nothing to do with the information contained in the article about strategic defaults. No, they didn't mention investors by name, but my post wasn't just about investors. And I posted two other articles that did specifically relate to investors. Yes, most investors who owe a mortgage that they are underwater on do eventually walk away. You can look at whole areas where investors accounted for most of the foreclosures in the area. Look in englewood, area code 60621 and try to tell me otherwise. If you bother to look up many of the 2 and 3 flat foreclosures currently on the market in englewood, most of them were owned by investors who got away with taking out ridiculous amounts of money on there properties, like 350k for an englewood 2 flat. Then they walked away when the market went south, and continued to rent the properties out until the foreclosure was complete. There are more of these types of foreclosures on the market in areas like that then just poor folks loosing there homes. And many of those poor folks who did lose there homes wouldn't have lost there homes or had any mortgage debt at all, if the mortgage market wouldn't have been so heavily manipulated in certain areas by investors.
Last edited by allen2323; 10-12-2010 at 03:07 PM..
I work in the finance industry, particularly the commercial banking arena. I don't read articles to know what is going on. I talk to the head of the RE group and those who report to him to see what is going on at ground level. It isn't pretty.
What you are referencing is more mortgage fraud that just investors walking away. This was pretty common in many of the "up and coming" areas. You have buyer and seller in cohoots along with fraudulent appraiser to get inflated home value.
You also have owners who used inflated appraisal values (sometimes not fraudulent) to pull out equity and then default once they have taken money out of the property.
Then you have people like myself who put 20% down who have lost equity but yet continue to pay our mortgage on time and generate rental income from our properties. I have lost equity on paper but I continue to pay down my principal balance and will not be foreclosing.
Not all investors are bad. Many people such as myself honor our debts and though I am not happy about what has happened to my equity position, I will continue to honor my debt. I believe there are many people out there who feel the same way and will continue to pay so long as they are able.
I really do believe that much of the housing meltdown was caused by CRA, Fannie Mae and other govt entities that creating artificial demand and subsequently higher home prices which we are now starting to reel back from.
I don't care if you are black, white or purple. If you have bad credit (min is now 500 for loans thru govt agencies) and historically do not pay your bills and do not have a good paying job, you do not deserve to be a homeowner.
Also, when everyone is able to buy it forces prices up, just as low mortgages are artificially propping up our housing market now. If rates were allow to rise you would see housing prices fall much further faster.
Ultimately, it is all about supply and demand. If you create demand, even artificially, it will drive up prices, and ultimately make housing less affordable for everyone else.
Webber,
I studied in Spain for a semester when I was in college and have spent most of my life in Indianapolis area, a few years in St. Louis and now Chicago. I have been out of the block.
I agree with you that it all starts at the home. When parents are involved and raise their kids right, the doors are opened. When parents are not involved and the kids are free to join gangs and not taught right from wrong you have problems which are prevalent on the south and west sides of Chicago (and now south suburban, west suburban and a few areas north and west - Carpentersville, Elgin, Waukegan, etc) in many of the poorer, gang-infested neighborhoods.
Whenever there are financially hard times like this, you always start hearing one larger group of people try to blame another group of people who they see as leaching on society for the mess that all groups are equally in, and share equal responsibility for. African americans always seem to make a good target for the blame. No one in the chicagoland area is currently happy with there home values at this point. This goes for, whites, hispanics, african americans, and asian home owners alike. No, african americans did not cause this problem. As I said before, ridiculous home value inflation caused this problem not african americans buying homes. Home values in lower class and working class areas have been hit especially hard around the board, and I don't think race even comes into play there. Home prices in all areas have lost considerable value and are back to hovering around there year 2000 home prices from over 10 years ago. This goes for all mature established areas that haven't seen huge population increases, middle class and affluent areas that don't have many african americans living there, and middle class and aflfuent areas with large numbers of african americans alike. For example hinsdale's recent median home sales prices are around $490,000, which is roughly what it was in 2000 at $489,900. There are very few african americans living in hinsdale. Northbrooks recent median home prices are just under $350,000 which is roughly what it was in 2000 at $353,100. Northbrook has less than 1 percent of african americans living there. This goes for most established middle class and affluent suburbs. The newer suburbs with large increases in population and number on homes in the area, current median home prices are only higher than 2000 because many of the homes in the area did not exist in 2000. Not because the home values for homeowners have actually gone up since then. The same can be said for areas with large numbers of teardowns.
Last edited by allen2323; 10-13-2010 at 11:24 AM..
Alot of areas are back to 2000 values, regardless of race. I agree with this.
However, some of the harder hit areas are below 2000 values, particularly on the south and west sides of Chicago. Up north and in affluent western burbs, not so much.
Alot of areas are back to 2000 values, regardless of race. I agree with this.
However, some of the harder hit areas are below 2000 values, particularly on the south and west sides of Chicago. Up north and in affluent western burbs, not so much.
As I said, home values in more working class areas have been hit especially hard around the board, and I don't think race even comes into play there. Homeowners in those areas have taken the brunt of the job loses and loss of primary income because of the economic slow down. In these same working class areas the poverty rates have also skyrocketed in the past few years. As for the the lower class areas in the city that already had extremely high poverty rates to begin with, they were rife with mortgage fraud like you said yesterday, and I can agree with that. It wasn't so much the mostly elderly, lower class, owner occupied homeowners who live there artificially inflating the property values. It was investor in the area getting home equity loans on there rental properties based on inflated values, flipping the rental properties to other investors at inflated prices, and then walking away from the mortgages after they received the proceeds.
Last edited by allen2323; 10-13-2010 at 12:15 PM..
Regardless of our differences in opinions regarding the south side you make good points.
For the areas rife with mortgage fraud there is no real gauge for how much home prices have declined since fraudulent values were done in 2006/2007. Areas like Garfield Park never were really worth $300K for 2-flats that you can now purchase for $50K. My guess is they may have been worth $100K in their heyday, but due to mortgage fraud and other inflated values, people were buying them for $200K thinking they got a good deal.
In Humboldt Park to lesser extent we are seeing the same thing. I bought a place for $360K in 2006 that was probably never worth more than $300K (looking back of course). Due to inflated appraisals and fraud, values were pushed to over $400K. I had an appraisal done in Feb 08 that showed value of $380K, but even then I knew that was not realistic.
The way I look at it, I got suckered out of $60K, but more than that the time and energy it takes to manage a property in a low-income area. I do not think I would buy such a property today even at a firesale price due to the time and effort needed to manage the tenants and the building.
I would look to buy a deal in better area but even then I would be very cautious this time around as I have learned alot.
Regardless of our conversations, I would have been much better off buying single family rental home in Homewood/Flossmor. Better renters and probably less depreciation of my investment.
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Allen
