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Buyers Back After Foreclosure

By Biff Baxter   Follow   Sun, 14 Oct 2012, 8:31pm   1,446 views   19 comments
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http://online.wsj.com/article/SB10000872396390444657804578052892032374094.html?source=Patrick.net

Millions of families lost their homes to foreclosure after the housing crash hit six years ago. Now, some of those families are back in the housing market. Call them the "boomerang" buyers. It is difficult to quantify the exact number of boomerang buyers, but real-estate agents, mortgage brokers and home builders all say a significant number of new buyers are families and individuals who went through foreclosure as recently as three years ago, the time period that buyers who defaulted on a mortgage must typically wait before becoming eligible for a mortgage backed by the Federal Housing Administration. On a...

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1. mell Follow Befriend (5) 47 threads 1,276 comments Premium

   1   8:54pm Sun 14 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   The definition of insanity is doing the same thing over and over again while expecting different results - welcome to the riverboat gamble ;)

2. Michael Cooke Follow Befriend 2 threads 61 comments

   2   9:22pm Sun 14 Oct 2012   Share   Quote   Permalink   Like (2)   Dislike (1)   How can anyone be allowed to leverage housing credit a second time after having a foreclosure on their credit history? That's insane.

3. HEY YOU Follow Befriend (4) 328 threads 913 comments

   3   10:11pm Sun 14 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Maybe the motto of commissioned land sales people,banks,govt.,etc. should be "We'll do anything to pump up housing".

4. E-man Follow Befriend (31) 34 threads 2,542 comments San Jose, CA Premium

   4   11:01pm Sun 14 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike (2)   Protected   If you take a minute to think about it, it totally makes sense why these people are buying again. Home prices dropped 33%-67% in some areas and interest rate got cut in half from the peak of the housing bubble. This explains why the housing affordability index is at record high. You should be happy for these individuals. I know I am. I have a tenant that loss his house in 2009. At the peak, his house was selling for $650k. He had a $600k mortgage at 6% interest rate. His PITI was over $4,200/month. In 2009, I bought his house for $215k and rented it back to him for $1,700/month. Fast forward 3 years, the same houses are selling for $330k-$350k. Even at 100% financing at 3.5% interest rate, his PITI is less than $2,000/month. Equivalent rent is $2,100-$2,200/month for this 3/2 house. It only takes a $70k salary to qualify for a $350k mortgage at 3.5%. I hope he an get back to his feet soon so he can buy another house.

5. Michael Cooke Follow Befriend 2 threads 61 comments

   5   11:14pm Sun 14 Oct 2012   Share   Quote   Permalink   Like (3)   Dislike (1)   E-man says You should be happy for these individuals. I know I am. No. This comes at the expense of the rest of us. They shouldn't be allowed free credit. This is wrong.

6. New Renter Follow Befriend (3) 13 threads 2,184 comments San Jose, CA Premium

   6   1:13am Mon 15 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Michael Cooke says E-man says You should be happy for these individuals. I know I am. No. This comes at the expense of the rest of us. They shouldn't be allowed free credit. This is wrong. Write your congressman and senator, better yet bribe them!

7. New Renter Follow Befriend (3) 13 threads 2,184 comments San Jose, CA Premium

   7   12:20am Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   War says E-man says , it totally makes sense why these people are buying again. Housing Demand (sales) are at 1997 levels and falling. Nobody is "buying" again. I beg to differ. There ARE sales happening in my area. Even as a housing bear I have to acknowledge this fact.

8. soopercommuter Follow Befriend 17 comments

   8   7:25am Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   Why compare anything to peak rates. The peak was an aberration. 1996 is probably more normal. So if sales are at 1996 levels then they are back to a more normal rate. At the peak everyone and their dogs were buying homes, that was not a normal rate. One of the factors keeping sales down is the lack of inventory. In my area any decent home gets 10 offers in the first week due to the lack of inventory. If there were more homes available there would be more sales. The house across the street from mine listed last Friday, and went pending Wed. There must have been 50 groups look at the home last weekend.

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

   9   7:42am Fri 19 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   New Renter says There ARE sales happening in my area. Even as a housing bear I have to acknowledge this fact. Does not change the fact that there will be more homes for sale as some are sold. Buy and sell will always be there. The concern here is lots of underwater owners who have not defaulted - tug of war between them and buyers/speculators in waiting.

10. Call it Crazy Follow Befriend 228 threads 2,744 comments

    10   7:44am Fri 19 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   bubblesitter says The concern here is lots of underwater owners who have not defaulted - tug of war between them and buyers/speculators in waiting. How much longer do the underwater owners keep paying until they say screw it and default and just save their money??

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

    11   7:51am Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   Call it Crazy says How much longer do the underwater owners keep paying until they say screw it and default and just save their money?? Good question. Personally a know a quite a few people who have bought at the peak and still hold that mortgage - not defaulted yet. Interest rate uptick can solve most of this problem,but I have feeling Obama or Romney will not have guts to do that,hence the stand off continues.

12. Call it Crazy Follow Befriend 228 threads 2,744 comments

    12   8:10am Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   bubblesitter says Interest rate uptick can solve most of this problem,but I have feeling Obama or Romney will not have guts to do that,hence the stand off continues. Do you think that will really help?? Since most people buy "payments", not "houses", if the interest rate goes up, don't prices trend down? Or, these people will just look for cheaper houses that fit their "payment"? If housing prices have to come down in relation to higher rates to keep payments equal, won't that hurt the underwater folks??

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

    13   8:16am Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   Call it Crazy says If housing prices have to come down in relation to higher rates to keep payments equal, won't that hurt the underwater folks?? Yes. It will hurt underwater folks more,but the reality is that rates are still low enough as of now. I have to see that rate at 7% during my lifetime and I want to see how the housing market looks at the time.

14. soopercommuter Follow Befriend 17 comments

    14   6:08pm Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   War says 1996 demand=1996 prices. In other words, prices have a long way to fall. In the Inland Empire prices are back to 1992 levels. (they were higher in the early 90s than they were in the mid 90s). the difference is that in the early 90's interest rates were around 9% and now they are 3.5%. So the costs of owning are far less today than they were then. Maybe you just need to move to a cheaper area!

15. Goran_K Follow Befriend (4) 25 threads 1,516 comments Laguna Beach, CA Premium

    15   6:18pm Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Yeah, but then you would have to live in the IE, aka Smog Central.

16. soopercommuter Follow Befriend 17 comments

    16   6:22pm Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   bubblesitter says Call it Crazy says If housing prices have to come down in relation to higher rates to keep payments equal, won't that hurt the underwater folks?? Yes. It will hurt underwater folks more,but the reality is that rates are still low enough as of now. I have to see that rate at 7% during my lifetime and I want to see how the housing market looks at the time. This is an argument I hear often and honestly it makes sense to me too. However. I have looked into rates vs prices and I cannot find any relation between the two. Even in the mid 70's when rate shot up to 15% prices did not crash. Hell they didn't even come down in most areas. People just buy smaller cheaper homes. And when rates come down, they buy bigger more expensive homes. Anything can happen but based on past prices and rates I wouldn't bet on prices falling if rates rise.

17. soopercommuter Follow Befriend 17 comments

    17   6:27pm Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says Yeah, but then you would have to live in the IE, aka Smog Central. Well yea, there is plenty of smog in the summer. But in the winter it's clear as a bell most days and our smog blows towards LA. It doesn't seem to bother most of the 15 million people that live out here. The smog was here in the 70's 80's and 90s too.

18. B.A.C.A.H. Follow Befriend (6) 5 threads 2,359 comments

    18   3:49pm Sat 20 Oct 2012   Share   Quote   Permalink   Like   Dislike   Michael Cooke says How can anyone be allowed to leverage housing credit a second time after having a foreclosure on their credit history? Because of the deflation, chasing yield. There is no one else for the 1% to lend to.

19. JodyChunder Follow Befriend (3) 16 threads 1,357 comments Victorville, CA Premium

    19   9:09pm Sat 20 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   E-man says I hope he an get back to his feet soon so he can buy another house. Yes -- another David Bach fan! http://www.amazon.com/The-Automatic-Millionaire-Powerful-One-Step/dp/0767923820/ref=sr_1_3?ie=UTF8&qid=1350792301&sr=8-3&keywords=david+bach