My neighbor just listed their home for $170K (Scottsdale, Peoria: credit rating, lawyer)

[dc1225]

Originally Posted by MotleyCrew

I am puzzled. What could the rich possibly do if their real estate tanked in the areas you mention? I guess they could ride out the storm better than most, but that is because they are rich. Are you saying that they have a secret weapon of some kind?

yeah, weapons of mass destruction, MONEY....money talks and bull$hit walks....alotta walkers on this board, alotta walkers in this world....not enough talkers!

[NewAndLonely]

Originally Posted by azjack

I do not need to do that. It is much simpler to check the county records online. I checked how much he paid for the house, how much he borrowed, whether he re-financed and borrowed more, and whether he had any recorded defaults. I did this before offering to rent the place in 2005, and I re-check this data every few months. So far, it all checks out.

But even without a recorded default, I would never rent from someone who owes $300K on a $150K house. The risk of his defaulting on his debt would be too high. Some people are not as careful and end up with a rental house in foreclosure.

And houses in Arizona are not cheap now. They are just not as ridiculously overpriced as two to three years ago. Don't you get it, every REO that closes guarantees even lower prices for that area? It is a race to the bottom. More REOs closing means even more underwater people. More underwater people means more walking away, which creates even more REOs. Massive deflation of house prices is the only way to "finish" this bust. And massive deflation does not mean just a 30 or 40 percent discount from the peak of a mania where liar loans were rampant and the NAR was preaching that the real estate boom will not bust.

I guess "cheap" has to do with where you are buying. I doubt there is a house of any kind for $150K in CA anywhere. What we sold for 1 million in CA (had a mortgage) can be bought here for that 150K.....AND the house here is much larger.

Anyway, that is off-topic, except as you'll see. My problem is that my soon-to-be-ex-husband insisted (threatened me, beat me, etc.) that we buy this house in CG, while we had a beautiful, PAID FOR, custom-built and unique house in the Sierra foothills in CA (it's sitting empty with few lookers because the market is just as bad there!!). It had been on the market for over a year with ONE LOOKER. (I truly believe he lost his mind.) So, we bought this house for $270K (YIKES!), and now hear we're lucky if we can get 210K and that is only because it has a pool. The newer news is that it won't bring that much. We had made a deal between us we wouldn't spend much more than 200K, then he just started adding new features to be added on as the house was built, and suddenly it was almost a 300K house! I tried to stop it, and did I ever pay for THAT! I was literally afraid for my life. As we're now divorcing, after he forced me to move here then decides he doesn't like being under an Order of Protection so sues me for divorce, we either have to sell the house or figure out some way for him to keep this piece of garbage, OR let it be foreclosed. But the first 2 options leave me having to pay for some of the loss, the 3rd trashes my excellent credit for 10 years. UNLESS: the judge gives me the CA house with the difference in equity as spousal support (I have disabilities and cannot work, and I have a 12-year old car while his truck is 2 years old, and I just sign a quit-claim on this one and let him ride out the storm while throwing away $1750 interest-only per month for ?? how long? That all has to be made equitable. Remember too, we didn't know anything about AZ real estate, he didn't research it, AND $270K seemed VERY low compared to CA.

I'm really scared by what is happening. This house is INTEREST-ONLY!!!!!, so it can't even be re-fied. We had everything so well planned out with enough money to retire and live until age 90-95, he retired at 59, then lost his mind and began doing things he'd NEVER done in 32 years.

I guess I'm just venting. I'm worried sick about what I'll live on after about 10-15 years, when my money runs out, and I won't be that old. And it's all because he just HAD to have THIS house on THIS lot IN CG (to the point of threatening my life if I wouldn't sign the papers.) Now I live here alone, he was here all of 8 days before he battered me and was removed on an Order of Protection (and is now playing some scary "games").

Anyone have any ideas? I hate the idea of foreclosing and losing the credit we each have and worked so hard to get so high for so long. But I'm beginning to think that might be the only thing to do. Just let them repossess it, rather than lose another 70-100K.

[Beena]

Are you seriously advising people to sell their homes now, or am I misreading you?

Advising people to sell now??? Here in Scottsdale??? Hell yes. I bought a home in Sept 2004 for 300k that was selling for over 500k in Sept 2005. There was nothing real about that 200k gain. Those same homes are now sitting at 400k and dropping.
Our area was not in the huge demand that we thought it was and people were not suddenly making twice the salary in 2005 that they were making in 2004. The price gains were all based on rampant speculation and I know countless investors who bought at the peak, at 500k, are stunned their house is now worth 380k, and are temporarily renting it out hoping that the 500k will come back before their interest only ARM resets. As those homes slowly turn into foreclosures the prices will drop even further. People are motivated by greed and fear. It is now fear's turn. And the pendulum will swing below the level of "affordability" in my opinion before it reaches equilibrium.

And we still have a long ways to go.

So sell now???? Hey, getting 380k in 2008 is better than getting 320k in 2009 or 2010.

[twixcookie]

It must be me...I cannot afford a home, but even if I could, I would not feel stable enough in this hire-fire-layoff world to buy a home.I even drive a used car I paid cash for.
Everyone else must feel pretty stable in their jobs to go out and purchase a home. Everywhere I have worked, your job is always threatened.
Jeesh

[UKFSChick]

Originally Posted by Beena

Are you seriously advising people to sell their homes now, or am I misreading you?

Advising people to sell now??? Here in Scottsdale??? Hell yes. I bought a home in Sept 2004 for 300k that was selling for over 500k in Sept 2005. There was nothing real about that 200k gain. Those same homes are now sitting at 400k and dropping.
Our area was not in the huge demand that we thought it was and people were not suddenly making twice the salary in 2005 that they were making in 2004. The price gains were all based on rampant speculation and I know countless investors who bought at the peak, at 500k, are stunned their house is now worth 380k, and are temporarily renting it out hoping that the 500k will come back before their interest only ARM resets. As those homes slowly turn into foreclosures the prices will drop even further. People are motivated by greed and fear. It is now fear's turn. And the pendulum will swing below the level of "affordability" in my opinion before it reaches equilibrium.

And we still have a long ways to go.

So sell now???? Hey, getting 380k in 2008 is better than getting 320k in 2009 or 2010.

I apologise, I did not realise your comments were specific to the Scottsdale market, I am not an expert in that area. I meant I would not advise a Casa Grande/ Maricopa/ Queen Creek owner to sell now. I personally see real estate as a long-term investment, and my view is that unless you have to sell in a declining market, you are better to hang on to it until the market improves - I would think that also applies to Scottsdale, but how big of a loss is a bearable loss is, I guess, up to the individual. If your $500k home is worth $320k in 2010...hang on some more.

The market does always improve eventually and people who have owned property long-term are on average in a far better financial position than long-term renters. Conservative types who borrow within their means and take fixed rate loans becasue they remember past crashes are generally not under the gun to sell. Markets go up and down...When prices are on the rise, people forget they will come down...When prices are declining, people forget they will go up again...

[altus2006]

Originally Posted by NewAndLonely

Anyone have any ideas? I hate the idea of foreclosing and losing the credit we each have and worked so hard to get so high for so long. But I'm beginning to think that might be the only thing to do. Just let them repossess it, rather than lose another 70-100K.

You need a lawyer ASAP.

altus2006

[altus2006]

Originally Posted by twixcookie

I Everywhere I have worked, your job is always threatened.
Jeesh

This statement is rather timely for the time we are in now. I agree with you that many people may be in jeopardy of losing their job. We have seen thousands of people laid off in many different job fields in the past few months.

Maybe this is why credit lending standards are much higher now. It is a rather uneasy time to think about purchasing a house, and buying now is not a necessity for anyone. Rent until you feel comfortable buying. And who says that you ever have to buy something?

I bet a lot of people now wish that they had just rented for awhile instead of buying and losing their savings.

altus2006

[NewAndLonely]

Originally Posted by NewAndLonely
Anyone have any ideas? I hate the idea of foreclosing and losing the credit we each have and worked so hard to get so high for so long. But I'm beginning to think that might be the only thing to do. Just let them repossess it, rather than lose another 70-100K.

Originally Posted by altus2006

You need a lawyer ASAP.

altus2006

Of course we each have divorce lawyers, mine is pushing to just let the house foreclose and to liquidate everything (the CA house, this house, some extra junk we have around, etc): BUT, I have disabilities, and as it stands, the money I'll get from the divorce will no longer last my lifetime as it would have had we only supported one household (stayed together, and done as planned so carefully with an investment broker for many years). So, I cannot afford to lose half of that 70-100K, unless I live out my cats' lives, then check out myself. WHAT could a lawyer do for me??? Or did you mean a divorce lawyer?

[altus2006]

Originally Posted by NewAndLonely

Of course we each have divorce lawyers, mine is pushing to just let the house foreclose and to liquidate everything (the CA house, this house, some extra junk we have around, etc): BUT, I have disabilities, and as it stands, the money I'll get from the divorce will no longer last my lifetime as it would have had we only supported one household (stayed together, and done as planned so carefully with an investment broker for many years). So, I cannot afford to lose half of that 70-100K, unless I live out my cats' lives, then check out myself. WHAT could a lawyer do for me??? Or did you mean a divorce lawyer?

The reason I posted for you to get a lawyer is that you are coming to a forum of people that you do not know to ask advice about a really bad situation in which you have found yourself. Your lawyer has offered you his opinion and you seem hesitant to take it, so I am not understanding what you expect to get from a bunch of people here less knowledgeable about your situation than your lawyer.

You made the comment, "Just let them repossess it, rather than lose another 70-100K." If that is true, then the advice that your lawyer has given makes a lot of sense. You could go and rent a small apartment for half of what that house payment is and live where you would like rather than be stuck in CG with no friends or family.

altus2006

[MotleyCrew]

These two homes I am watching across the street that went into foreclosure actually have a pulse now. We are getting new neighbors today!!!! The other home has had some showings, so we hope to have neighbors there soon.