Step 4...Make a Searching and Fearless Inventory of Possessions,and Sell Them on Ebay
Buyers in trouble are having a hard time selling out of foreclosure...
"California-based distressed property investment advisory firm ForeclosureS.com reported today that foreclosure activity in western housing markets is on the increase as high-risk adjustable rate loans begin to reset to fully amortized payment schedules."
'"In California, we recorded 28,550 notices of default and foreclosures in the first quarter of 2006, and 9,222 new defaults in April," said Ms. McGee. She went on to say that, because coastal markets had been badly overheated for more than five years, more homebuyers used so-called exotic mortgages in order to qualify for more and more expensive homes."
"ForeclosureS.com president Alexis McGee said that a combination of rising interest rates, flattening price appreciation, and growing inventories of unsold homes were putting more households in financial distress and making it more difficult for troubled homeowners to sell their way out of foreclosure."
'"In San Diego for example," said Ms. McGee, "in recent years more than half of home purchases were financed with interest only adjustable rate loans or option ARMS with very low teaser rates. According to a recent study by Dr. Christopher Cagan of First American real estate solutions, someone paying $800 per month on an option ARM could see their payment jump to $3000 per month. That's likely to result in default."'
In Sonoma County 69% of the loans last year were risky loan products, with a huge portion of them being negative amortization products... how is that going to work out? Let me tell you... it won't be good.
See Marinite's post over at the Marin Real Estate Bubble site for more informaiton on just what Wall Street thinks of all this ridiculousness.
and still the stupidity continues...
"Does the American home buyer need a 50-year mortgage?"
"Maybe not, but it's clear Statewide Bancorp of Rancho Cucamonga thinks Californians do.
The bank began offering 50-year mortgages in late March, primarily as an alternative to the interest-only and so-called exotic loans that many Californians have been taking out to pay for their high-priced houses."
"The 50-year mortgages are limited to California residents, and while there is some interest in them, Anthony Hseih, president of LendingTree.com, doesn't think they will take over the market."
'"There are lots of other mortgages available these days that can help buyers deal with higher home prices," Hseih said, including the 40-year mortgage, which has been around for many years."
"Considering that the typical American moves every seven years, why would anyone need a 50-year loan, or even a 40- or 30-year mortgage?"
"When we take out a mortgage, we think of it in a monthly payment rather than the life of the loan," Hsieh said. "Longer-term loans reduce monthly interest rates, and that's what people are looking at."
"Even people in their 70s who are buying houses are applying for 30-year fixed loans for that reason, he said."
"One of the big events in a family's life used to be the day they paid off the mortgage and owned the house free and clear," Hseih said. "But these longer-term mortgages and the fact that it is simple, cheap and quick to refinance means that the life of these mortgages is continually extended."
"Longer-term mortgages are more likely to be found in markets where housing prices are high, such as California, Las Vegas, and New York City."
"There has been growing concern that interest-only and exotic mortgages are being concentrated in these high-price areas, and that rising short-term rates will double monthly mortgage payments and result in more foreclosures."