patrick.net

Too early to call for that kind of data. Best bet would be credit bureau data if that can be had somehow.

Unlikely to happen. Those who walked away can't really get a loan.

Short sale is as bad as a foreclosure when it comes to getting a loan. So unless they can pay cash, they won't be able to finance... unless they go through some government program where they only put down 2%. Otherwise they would need to have a huge down-payment, which they probably did not save. Since to get into that situation they had to be frivolous with money in the first place.

Typically 7-9 years thats how it works. It doesn't mean they will come back to the market, they might still remember the pain and stay out of it.

What if these buyers put down a 40-50% downpayment? Would that diminish the negativity of a foreclosure?

burritos says

What if these buyers put down a 40-50% downpayment? Would that diminish the negativity of a foreclosure?

no, old banking rule was 67%. However prices are still ballooned in many areas it is unlikely for people to have that. Besides noone is going to give away that much cash for something that isn't worth even half of the sale price.

IMO The theme of Government propped housing Market will never go away until the system eats itself or repeats the crazy stuff again. (i don't believe what's in the news today it's all BS, the data, the numbers, all BS rigged BS!!!!)

2006 was the peak for housing. it's never coming back unless it's just a repeat of the ponzi craziness. ( never underestimate this ponzi system's drive to make a buck!)

So The 2011 theme for me is Want less, live with less in less using less. (save haha)

of coarse it seems to me the Va jay jay wants more, newer, better, bigger. heck just a different color alot of the times.

things the Va jay jay says (overheard by me last few months)

"I want the new Mini Van that my girlfriends drive" ( wants and needs your car works fine you're losing your house because it's $200K underwater and you and hubby are currently under employed.)

"I want to live in the country on a bunch of land not here." ( you live in one of the best towns in CA and in one of the best hoods (west side Santa Cruz) in a $500k (was $900K) 3/2 bought by your father in law, you don't work. you have a dream life, and still :-( (wants and needs people)

"I want another kid",.... good god really you have two! what do you say to that? (wants and needs,..no!)

IMO a man would live in a cardboard box , or a hole dug into the ground. he could get by driving his first car from high school and most likely wear the same jeans too,... just imagine if the Va jay jay was cool with that!
that would be a cool life! wanting nothing and having everything!

Just say'n

EightBall says

however, some would call them the scum of the earth and others would call them genius.

I'm leaning toward thinking it's Genius lately. ;-)

UCC won't let you record credit issues past 7 years.

Thinking about walking away from your albatross chip designer?

If I were running a bank, the only thing I would care about is if the borrower is likely to pay the loan back, and if they don't if there is adequate recourse. I wouldn't care in the slightest if they did a "strategic default".

I'd be a fool to turn down somebody with a good stable income that brings a large down payment.

ChrisLA says

Short sale is as bad as a foreclosure when it comes to getting a loan.

I know someone that did a short sale (after liquidating the "equity") in 2007 and bought in 2009. Of course, he is once again underwater. I'm sure he got a sweet FHA loan at the taxpayers' expense.

MarkInSF says

if they don’t if there is adequate recourse

Adequate recourse? Look at the number of strategic defaults and tell me that the pain they're going to face for being deadbeats comes anywhere close to the benefit of ditching the house..

klarek says

Adequate recourse? Look at the number of strategic defaults and tell me that the pain they’re going to face for being deadbeats comes anywhere close to the benefit of ditching the house..

In those cases, the lender obviously did not have adequate recourse.

If somebody comes to me with 20% down to buy a home that is fairly priced - not bubble priced, the odds of me losing money are very slim, even if they did walk away from their last home.

MarkInSF says

In those cases, the lender obviously did not have adequate recourse.

Hamstrung by the state, not much they can do about that. States that are pro-deadbeat when it comes to houses (non-recourse) also tend to not be right-to-work states. Makes sense.

klarek says

Hamstrung by the state, not much they can do about that. States that are pro-deadbeat when it comes to houses (non-recourse) also tend to not be right-to-work states. Makes sense.

Hamstrung by their stupidity, more like. The state didn't make them give no down payment loans. Or negative amortization loans.

klarek says

States that are pro-deadbeat when it comes to houses (non-recourse)

I'm not quite sure why you're against no-recourse loans. Most commercial real estate, in every state, is non-recourse by the fact of it being owned by a corporate entity. As is all corporate debt. Lenders in these situations never have recourse beyond legal claim to the collateral (the building in commercial real estate, the assets of the company with a corporate loan).

Better to do a buy and bail. (reverse of walk away, squat, wait for sheriff....you buy THEN default on old home before credit is wrecked). Of course consult attorney first...

I'm certain they will, if they don't already. Wouldn't the "shadow inventory" necessitate that these homes need to be sold? The banks know the difference between credit criminals and the victims of their stupid financial "instruments".

I can see the commercials already in my head, "Bank of America knows that the recent recession has caused....that's why we here at Bank of America.....".

And there will be wailing and gnashing of teeth when those who walked (but had otherwise perfect credit, and continued to pay their OTHER bills on time) get "the same deal as those who didn't".

CL says

The banks know the difference between credit criminals and the victims of their stupid financial “instruments”.

Exactly.

I predict you'll be complaining about its fairness when they do exactly that.

They will lend, but they'll also jack up the rates require down payment of his left nut, and request every financial anal probing there is before approving.

Hahaha. I don't care. The banks are into usury....they need consumers to borrow, borrow, borrow, and people like me represent future dollars to them.

They will forget, of course they will. They won't reject future profits because they screwed up before.

CL says

Hahaha. I don’t care. The banks are into usury….they need consumers to borrow, borrow, borrow, and people like me represent future dollars to them.
They will forget, of course they will. They won’t reject future profits because they screwed up before.

....because banks know risk is not on them...it is on tax payer....that can change if people revolt against government bailout of banks, until then people like you will always be there in the home buying equation(no offense particularly to your situation)

MarkInSF says

I’m not quite sure why you’re against no-recourse loans.

It gives deadbeats a free pass and it's govt impeding on risk management. In fact, it increases risk, as is evidenced by the large numbers of people strategically defaulting.

CL says

I’m certain they will, if they don’t already. Wouldn’t the “shadow inventory” necessitate that these homes need to be sold? The banks know the difference between credit criminals and the victims of their stupid financial “instruments”.

They give you $750k, and you think you're a victim. You plan to stiff them, but think they're going to feel compelled to give you another massive loan to clear their books. You sir are quite the self-pitying, self-serving delight!

CL says

And there will be wailing and gnashing of teeth when those who walked (but had otherwise perfect credit, and continued to pay their OTHER bills on time) get “the same deal as those who didn’t”.

Keep hoping that happens. Deadbeats that strategically default are a tiny portion of the overall populace. You can go rent in Shitville the rest of your life and nobody would ever notice or care.

CL says

Hahaha. I don’t care. The banks are into usury….they need consumers to borrow, borrow, borrow, and people like me represent future dollars to them.
They will forget, of course they will. They won’t reject future profits because they screwed up before.

Given your history of screwing them out of hundreds of thousands of dollars, they most certainly WILL reject people like you. If they're going to ding somebody for missing a $100 credit card payment, you can bet they're going to brand strategic defaulters as "never loan money to this p.o.s. deadbeat" to minimize risk.

Mr.Fantastic says

People like CL are basically a big drag on the economy.

They're a poison to society. Learned deadbeats.

klarek says

It gives deadbeats a free pass and it’s govt impeding on risk management. In fact, it increases risk, as is evidenced by the large numbers of people strategically defaulting

Not really. It should cause banks to stop giving loans when houses are overpriced and stop bubbles from forming.