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FHA's mortgage delinquencies soar

By tovarichpeter   Follow   Mon, 9 Jul 2012, 1:52pm   911 views   12 comments
In South San Francisco CA 94080   Watch (0)   Share   Quote   Permalink   Like   Dislike  

http://money.cnn.com/2012/07/09/real_estate/housing-delinquencies/index.htm

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1. Call it Crazy Follow Befriend 249 threads 2,915 comments

   1   3:39pm Mon 9 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   What a surprise..... Not..... FHA loan with 3.5% down payment, there's no skin in the game.. Hell, it's the best scam ever... close on the house, move in, don't pay your mortgage for a few months and you get your 3.5% down payment back.. Now squat in the house for a year or two without paying until you get kicked out... talk about a great return on the initial investment!!

2. BayArea Follow Befriend (3) 54 threads 379 comments Oakland, CA

   2   6:03pm Mon 9 Jul 2012   Share   Quote   Permalink   Like   Dislike   I don't believe it. Everyone knows that once you put down 3.5%, it's simply too much investment to just walk away, lol. On a serious note, being underwater isn't just for the folks who bought during the peak. There is no shortage of people underwater who have loans originating in 2009 and even 2010...

3. E-man Follow Befriend (31) 34 threads 2,612 comments San Jose, CA Premium

   3   10:55pm Mon 9 Jul 2012   Share   Quote   Permalink   Like   Dislike   This is old news. Can you post something new?

4. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

   4   7:58am Tue 10 Jul 2012   Share   Quote   Permalink   Like   Dislike   tovarichpeter says FHA's mortgage delinquencies soar Hmm. That's weird.

5. Call it Crazy Follow Befriend 249 threads 2,915 comments

   5   2:30pm Tue 10 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   BayArea says On a serious note, being underwater isn't just for the folks who bought during the peak. There is no shortage of people underwater who have loans originating in 2009 and even 2010... Very true... I've mentioned this in other threads but I sold my house last November, the guy who bought it got a 3.5% FHA loan... he was underwater even before his moving van showed up with his furniture....

6. BayArea Follow Befriend (3) 54 threads 379 comments Oakland, CA

   6   10:08am Wed 11 Jul 2012   Share   Quote   Permalink   Like   Dislike   Call it Crazy says he was underwater even before his moving van showed up with his furniture.... What city and what gives you confidence that this is true in such a short time between offer and close?

7. Goran_K Follow Befriend (4) 26 threads 1,566 comments Laguna Beach, CA Premium

   7   11:41am Wed 11 Jul 2012   Share   Quote   Permalink   Like   Dislike   Probably because the transaction cost to move out of the house (should they have to) are around 6%. I'd say that's underwater on a 3.5% down payment.

8. BayArea Follow Befriend (3) 54 threads 379 comments Oakland, CA

   8   1:29pm Wed 11 Jul 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says Probably because the transaction cost to move out of the house (should they have to) are around 6%. I'd say that's underwater on a 3.5% down payment. I hear you, but that would say that every house purchased must have 6% equity right away to avoid being in the red. Everyone who purchases a home is in the same boat.

9. Call it Crazy Follow Befriend 249 threads 2,915 comments

   9   7:31pm Wed 11 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   BayArea says Goran_K says Probably because the transaction cost to move out of the house (should they have to) are around 6%. I'd say that's underwater on a 3.5% down payment. I hear you, but that would say that every house purchased must have 6% equity right away to avoid being in the red. Only if you paid top dollar for the house would you be underwater right away. If you were a savvy buyer and paid at least 10% below the market value or below local comps you would not be underwater immediately.

10. Call it Crazy Follow Befriend 249 threads 2,915 comments

    10   7:34pm Wed 11 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   Goran_K says Probably because the transaction cost to move out of the house (should they have to) are around 6%. I'd say that's underwater on a 3.5% down payment. Exactly, plus add in that the neighborhood was losing about 1% per month in value, so from contract to close, he lost another couple of points..

11. Call it Crazy Follow Befriend 249 threads 2,915 comments

    11   7:43pm Wed 11 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   BayArea says I hear you, but that would say that every house purchased must have 6% equity right away to avoid being in the red. Actually, the true number needed to not be in the red is approximately 15%. You are "functionally" underwater if you don't have at least 14% - 15% equity. Here's the math, for a typical seller you need 6% for commissions, 2% closing costs and then to buy your next house, minimum 3.5% down payment and 3% closing costs. Total approximate 15%. BTW, almost 50% of home owners in the country today are "functionally" underwater...

12. errc Follow Befriend (7) 30 threads 1,267 comments 31 male Premium

    12   9:21pm Wed 11 Jul 2012   Share   Quote   Permalink   Like   Dislike   BayArea says Goran_K says Probably because the transaction cost to move out of the house (should they have to) are around 6%. I'd say that's underwater on a 3.5% down payment. I hear you, but that would say that every house purchased must have 6% equity right away to avoid being in the red. Everyone who purchases a home is in the same boat. Yes, they are