Friday, October 12, 2007

Real Estate Tidbits

It's Friday, and I'm happy to be a renter! We just found a new rental property in Elk Grove since our current landlord has decided to sell his house. He had it listed for about 6 months before we rented it last year, but somehow he thinks things have turned around so he should be able to sell it for more this time...A few interesting (at least to me) things for today:

1) Elk Grove currently has 1596 homes on the market and an inventory of 14.7 months. However, what's more revealing of Elk Grove is that 49.2% of the homes listed in MLS are either a short sale or REO. 786 homes meet this criteria for Elk Grove!

2) I was talking to a pastor of our church the other day, and he told me one of the members came in for advice (the member is about 75 years old, retired, barely making it) on a housing situation. Apparently, this guy had owned a house for many years, and received a call from a lender saying his mortgage payments could be reduced by $600/month. The guy jumped on this since his fixed income wasn't getting any higher. Well, turns out the savings was only for 3 months, and now his payment has gone up to $4,000 a month, which is more than he makes for said month.

3) About a month ago, I wrote a post about a short sale I was involved in. I checked back with the sellers and they still haven't received a notice of default. 5 months of making no payments and they still haven't been served.

4) Came across what I'm going to call a bargain in real estate the other day in MLS. A 4400 sf home in Wilton at the Ranch was listed at $589,900 ($134/sf). The home was an REO and was purchased for $1.25M in June of 2006. 100% financing too. Bank took it back on 8/28/07 for $1,057,729. Not a bad day's work. It went pending within 6 hours of being listed too. Can't wait to see the sales price.

5) About a year and a half ago, I showed a client some condos in the Elk Grove area. The prices were $275,000 for their 3 bedroom model of 1168SF. Just saw the same condos in MLS listed at $165,000. Fortunately, the client waited and decided to rent.

6) Some friends I know decided in late 2005 that they had to have a house. They had bad credit, but they were convinced they had to buy now or forever be priced out (through a relative who happened to be an agent). They convinced the parents to get the loan fully in their name since the couple couldn't qualify on their own. I'm sure 99% of you know where this is going. Yep, the couple is filing BK and the parents are being foreclosed on as I write this and have to file BK too. The parents both had 800+ credit scores before this. Oh, they paid $445K for the house and they're now listed at $325K. And it was 100% financing with interest only payments.


Nothing like some cheery news to get the weekend started huh???

9 comments :

Rob Dawg said...

3) About a month ago, I wrote a post about a short sale I was involved in. I checked back with the sellers and they still haven't received a notice of default. 5 months of making no payments and they still haven't been served.

This worries me. 5 months of $4,000 and likely another 4 months before vacating. $36,000 is a nice break while these people get their act together and prepare to rent. The worry part is this I/O loan is on the lenders books as a fully amortized loan that is performing. How many of these are not being reported in the NODs?

Max said...

How many of these are not being reported in the NODs?

I wonder who their lender/servicer is?

AgentBubble said...

Wilshire.

wrong moves said...

"They convinced the parents to get the loan fully in their name since the couple couldn't qualify on their own."

What's that sound?.....

Researchers scrambling to write a thesis proving stupidit is in fact hereditary.

Max said...

Wilshire

Well, they seem to have a large REO portfolio. About 3300 nationwide and about 900 in California. At an average of $250K, that equates to around $825 million in REO.

All that on a servicing portfolio of $29 billion. So ~3% of the dollar value of their portfolio is REO. Not sure how that compares to the entire industry, but CFC has a $1.46 trillion servicing portfolio and only $2.6 billion in REO, or ~0.1%.

A lot of assumptions here, but this Wilshire Credit Corporation seems to be having a little trouble getting paid.

Bubble Sitter said...

AB, your comments should be required reading for everyone before they buy a home.

I continue to watch more train wrecks happening. Greater fools turning into FB's and now Super FB's who are buying portfolios at 3% capitalization rates, with negative cash flows using debt.

Bubble Sitter said...

Wilshire's REO portfolio web site is a nightmare to peruse. You would think they could at least give you some ways to sort by city and price. What a joke.

incessant_din said...

Wilshire seems to be trying to bail water as fast as possible. No reason to add another bucketfull to the bilge right now.

http://www.bubbleinfo.com/journal/2007/10/11/lets-make-a-deal.html#comment1039523

linda said...
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