WatchHere we are in our 5th year of the real estate crash and the banks are still accumulating foreclosures, extending and pretending, hoarding cash, getting low interest government loans, reinvesting those (our) dollars in government treasuries and making record profits. Meanwhile, prices trickle down and the waiting game goes on for those wanting to buy in good areas. In past real estate busts, we would have worked through most of the excess inventory by now and the bottom would be close.
Will the government ever force the banks hand and make them "mark to market", or does the charade continue on forever?
www.westsideremeltdown.blogspot.com
www.santamonicameltdownthe90402.blogspot.com
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Los Angeles, CA
You talk as if the foreclosures and strategic defaults have ended. They have slowed, but are nowhere near an end. And as prices continue to fall, strategic default from home debtors that used 3.5% down loans will grow by leaps and bounds. Since the 3.5% down loans comprise the majority of non cash purchases in LA County at the moment, even at high prices, you can expect strategic defaults in a non recourse state like CA to continue for a number of years.
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I predicted to my friends 3 years ago we will have "Permanently High Foreclosure Rates".
This is just the way it is. As Dodgerjohn says - a very very high # of 3.5% loans will FAIL.
Normal life events (other than strategic default) will be the normal foreclosure driver: Change jobs, get divorced, get married, have another baby, become unenployed, retire, decide to move to different/better/cheaper area and you MUST FORECLOSE since it takes 7.25% to sell a home but you only put 3.5% down payment! (6% commish +escrow costs)
3.5% DP loans are predatory lending ! How are they not? Its not as bad as predatory student loans (120k phychology degree and no way to ever pay it back and cannot discharge in BK. If you cant find a job they say get masters, then no job get phd, then no job they will say soft economy get 2nd degree in teaching etc. lol) Anyway its all the feds preying upon us, printing money from no where and trick people to pay them, using us to fund their pensions, etc. Anyway this is a negative attitude I guess its called 'a modern economy'
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PockyClipsNow says
...and I predicted in 2006 to all my friends and family home owners that this is the peak and nobody would believe me. They still still don't get why I am still renting. Talk about being so naive about ones finances. At least 2 of them bought again in 2008 and 2010.
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Yes people hated me too for predicting the crash. Its not like I came up with idea myself - Patrick.net and the 'rise of the bubble blogs' was really a phenom. But you had to be smart and have an open mind and not 'believe what you want to believe'.
Now tell me where gold prices will go Patrick.net!! lol
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bubblesitter says
You really have to check out El Bee's Long Beach housing blog. Strewn with condemnations of 2008 knifecatchers.....
http://longbeachhousingblog.blogspot.com/?ref=drhousingbubble.blogspot.com