Coto Housing Blog

The above photo has nothing to do with this post, at least not as far as we know, but some of our posts are generic and do not feature a property so there is no particular photo to go with them.

… 93 percent of option ARM borrowers decided to go with the negative amortization option otherwise known as the “minimum payment” option.

Yet one of the new findings in the report was that 78 percent of all outstanding option ARMs have yet to hit major recast points.  Given that 58 percent of option ARMs are here in California, this is a one state wrecking ball:

So deep are these loans in negative equity territory that not even HAMP can save them.

Thank goodness for Dr. Housing Bubble and his/her willingness to do all the reasearch neccessary for articles like, “Option ARMs Come Back into Center Stage: 350,000 Active Option ARMs with Over 200,000 in California.  78% of Option ARMs Have Yet to Hit Recast Dates“.

Just curious.  Is there anybody who thinks the upcoming recasting of Option ARMs will have little to no influence on home prices in the near future?  Please, state your opinion.  I promise that neither Delroy or I will write anything derogatory in response.  In fact, I will not even respond at all.  You have an open forum.

Our first experience with 26 Sawgrass was when it was listed for sale in the summer of either 2005 or 2006.  We took a look during an open house and asked the realtor/owner if they might be interested in leasing the property.  She looked at us in disdain.  I do not remember the exact conversation, but I remember the message, “If you are not going to buy, you can not afford to lease this property and I do not have time for you.”  I should be able to understand an attitude like that, right?  Who am I?  Definitely no one that a real estate agent should waste their time on, right?

The next experience we had with 26 Sawgrass in July of 2008 when it was listed for sale again by the same realtor/owner and we noticed the listing price was lowered by $1.oo.  Looking at the Redfin property history there had been 18 changes to the listing including price changes, delistings, and relistings until July of 2008.  Between July, 2008 and August, 2008, there were three more price changes and on August 8, 2008, the price was lowered $100.  Between August 8, 2008 and October 29, 2009 there were 23 more listing changes, including price changes, delistings, and relistings.  Some of the price changes are as follows:

August 15, 2008 – lowered by $10,000

August 22, 2008 – lowered by $100

September 5, 2008 – lowered by $400

September 20, 2008 – lowered by $4,500

September 30, 2008 – lowered by $4,900

November 10, 2008 – lowered by $10,000

November 19, 2008 – lowered by $15,000

November 21, 2008 – lowered by $100

December 11, 2008 – lowered by $900

December 26, 2008 – lowered by $24,000

January 4, 2009 – lowered by $25,1000 and listed for lease for $4,600

more price changes and delistings and relistings

We do not know if 26 Sawgrass is presently listed for sale, but it does not show up on Redfin.  What does show up is a NOTICE OF TRUSTEE SALE with an auction date of 11/30/09.  What shows up is the greed and arrogance pervasive during the bubble and stupidity that results in the denial of reality.  If the owner/realtor of 26 Sawgrass had priced this property realistically instead of playing stupid games with the price and listing, this property would not now be scheduled for foreclosure auction.  The original amount of the loan that the present owners used to finance the purchase of 26 Sawgrass in July of 2005 was for $854,000 and it was never refinanced or HELOCed.  This property would have easily sold for way more than $854,000 when it was listed in 2006, but the NTS is now showing $947,128 as owed.  Foreclosure was not an inevitability for 26 Sawgrass and is not the result of a falling real estate market.  In this case, it is a result of human frailties.

Oh yeah, the owner/realtor’s residence in Calabasas is also in foreclosure.

A Big Home on the Beach

“U. S. Will Push Mortgage Firms to Reduce More Loan Payments” from the New Youk Times by Peter S. Goodman

The Obama administration on Monday plans to announce a campaign to pressure mortgage companies to reduce payments for many more troubled homeowners, as evidence mounts that a $75 billion taxpayer-financed effort aimed at stemming foreclosures is foundering.

“The banks are not doing a good enough job,” Michael S. Barr, Treasury’s assistant secretary for financial institutions, said in an interview Friday. “Some of the firms ought to be embarrassed, and they will be.”

Some of the firms will be embarrassed?  Some banks will be embarrassed?  Because they turned down loans or loan mods?  Is Barr serious?  What planet is he living on?  As far as I can tell, it is the banks job to turn down loans.

Even as lenders have in recent months accelerated the pace at which they are reducing mortgage payments for borrowers, a vast majority of loans modified through the program remain in a trial stage lasting up to five months, and only a tiny fraction have been made permanent.

Mr. Barr said the government would try to use shame as a corrective, publicly naming those institutions that move too slowly to permanently lower mortgage payments. The Treasury Department also will wait until reductions are permanent before paying cash incentives that it promised to mortgage companies that lower loan payments.

Barr will try to use shame as a corrective?  He will publicly name those institutions that move too slowly?  And he thinks they will be embarrassed?  More like they will slap each other on the back in congratulations.  Are thieves and con men embarrassed by their crimes?  Especially when they get away with them?

“They’re not getting a penny from the federal government until they move forward,” Mr. Barr said.

Yeah.  Right.  Dude, who do you think owns the Federal Reserve?  Literally owns the stock?  I’ll give you a hint.  It ain’t you and me and it ain’t the federal government.

Last month, an oversight panel created by Congress reported that fewer than 2,000 of the 500,000 loan modifications then in progress had become permanent under Making Home Affordable. When the Treasury releases new numbers next month, it is expected to report a disappointingly small number of permanent loan modifications, with estimates in the tens of thousands out of the more than 650,000 borrowers now in the program.

Let me give you a clue Mr. Barr.  FORECLOSURES ARE THE SOLUTION.  GOVERNMENT IS THE PROBLEM.  So far the government has spent $75 billion on this program, and maybe 50,000 loans have been permanently modified?  That comes out to $1,500,000 per loan modification.  You think I am exaggerating?  Do the math. And the federal government has spent hundreds of billions on bank bailouts.  And the Federal Reserve has bought trillions of agency debt, toxic mortgage related assets, and treasuries to finance bailouts, swaps, and who knows what else.   The government could have paid off every mortgage in the United States for half of what it is spending on solving the “foreclosure problem”.   I guess they think paying off everyone’s mortgage would be a moral hazard.

26 Sawgrass – The trustee sale is scheduled for 11/30/09.  The notice of default recorded on 7/01/09 for $40,250.  This is the first scheduled trustee sale.

20 Dartmouth – The trustee sale has been postponed until 11/30/09.  The notice of trustee sale recorded on 9/04/09 with an amount owed of $910,110.   This appears to be the 2nd postponement.

15 Flagstone has been postponed to 11/30/09.  The notice of default recorded on 3/27/09 for $44,675.  There have been 2 postponements.

8 Brumby was postponed to 11/30/09.  The notice of default recorded on 3/25/09 for $53,969.  There have been 2 postponements.

31902 VIA FAISAN -  The trustee sale has been postponed until 11/30/09.  The NOD recorded on 04/27/09 for $41,337.  This appears to be the first postponed auction for this property.

23551 Avenida La Caza # 129 – The trustee sale is scheduled for 11/30/09.  This appears to be the first scheduled trustee sale.

98 VIA CANDELARIA – The trustee sale has been postponed until 12/01/09.  The NOD amount is $19,050 and it recorded on 3/10/09.  There have been at least 14 postponements.  That is 14 for those of you who are counting.

31862 Via Patito The trustee sale has been postponed until 12/01/09.  The notice of default recorded on 3/27/09 for $48,382.  There have been 7 postponements.

39 Creek View – The trustee sale has been postponed until 12/02/09.  The NOD amount is $3,854, recorded on 12/24/08, and was filed by the CZ Master Association, but the NTS was filed for $289,792 which is more than the amount of the first mortgage indicating that the NTS is not from the CZ Master Association.  There have been at least 3 postponements.

49 Charleston – The trustee sale has been postponed until 12/02/09.  The NOD recorded on 2/24/09 for $19,671 and there have been 8 postponements.

35 Via Candelaria – The trustee sale has been postponed until 12/03/09.  The NOD recorded on 04/14/09 for $10,606.  There have been 5 postponements.

1 Rockrose Court – The trustee sale is scheduled for 12/03/09, and the estimated debt is $950,059.  This appears to be the first scheduled trustee sale.

108 Dornach Way -  The trustee sale has been postponed until 12/04/09.   A notice of default recorded on 6/19/08  for $15,427 on a mortgage, but the notice of trustee sale appears to be  filed by the CZ Master Association.  There have been 12 postponements.

22 Water Lily Way – The trustee sale is scheduled for 12/04/09.  The NOD recorded on 7/13/09 for $33,963.  The first scheduled auction date was 11/04/09, so it would be reasonable to assume that the auction has been postponed once.

15 Williamsburg Lane – The trustee sale has been postponed until 12/04/09.  The NOD recorded on 5/20/09 for $12,020.  There have been 4 postponements.

114 Vela Court – The trustee sale has been postponed until 12/04/09.  The amount on the NOD is $5,269 and was filed by the CZ Master Association and the NTS appears to also be from the CZ Master Association.  There was also a recorded NOD filed by the first mortgage holder for $153,706, and it may have been canceled.  There have been 4 postponements.

18 RUNNING BROOK DR – There are two NTSes recorded on 18 Running Brook Dr.   There have been 7 postponements of the trustee sale from the CZ Master Association until 12/04/09, and one postponement of the trustee sale from the first mortgage holder until 12/10/09.

1 Laurelgate -  A few weeks ago, Foreclosure Radar showed 1 Laurelgate as going to auction with the winning bidder being the filer of the notice of trustee sale.  But, Priority posting is showing a scheduled auction date of 12/04/09 for the same notice of trustee sale.  I dunno.  I would guess someone is making a mistake.

Nice View

The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery.

Nearly 10.7 million households had negative equity in their homes in the third quarter, according to First American CoreLogic, a real-estate information company based in Santa Ana, Calif.

These so-called underwater mortgages pose a roadblock to a housing recovery because the properties are more likely to fall into bank foreclosure and get dumped into an already saturated market. Economists from J.P. Morgan Chase & Co. said Monday they didn’t expect U.S. home prices to hit bottom until early 2011, citing the prospect of oversupply.

Even recent bargain hunters have been hit: 11% of borrowers who took out mortgages in 2009 already owe more than their home’s value.

My favorite part of this article, “One in Four Homeowners is Underwater“, is the following:

Many borrowers are so deeply under water that they can’t take advantage of lower rates and refinance their mortgage. “We’re declining hundreds of loans each month,” said Steve Walsh, a mortgage broker in Scottsdale, Ariz. “The only way we will make headway is if we allow for a streamlined refinance where the appraisal is irrelevant.”

Yeah, let us make appraisals irrelevant.  That is the solution.  And while we are at it, let borrowers obtain loans without documenting their income.  And let banks mark their assets to fantasy.  Oh, wait!  We already tried no-doc loans, and banks are no longer held to mark to market accounting.  I know.  Howz about if the underwater and insolvent home owners are allowed to write a monthly check for whatever amount they want and the bank has to treat the check as a full payment?  Why not?  The banks are allowed to pretend and lie.  Why should not the borrowers be allowed the same?

A query?  How many realtors who are proclaiming the bottom is in, are buying property?

32002 Via Buho – The trustee sale has been postponed until 12/14/09.  The NOD recorded on 11/19/08 with an amount of $32,572.  There have been 9 postponements.

31832 VIA COYOTE – The trustee sale has been postponed until 1/06/10.  The NOD recorded on 06/23/08 for $15,728.  There have been 6 postponements and a short sale is pending.

5 HEATHERWOOD – The trustee sale has been postponed until 12/08/09.  There are two NODs, both of which were filed by lenders and not the CZ Master Association.  The NOD associated with the present NTS recorded on 11/18/08 for $21,300 and was filed by the 2nd mortgage holder.  The second NOD recorded on 4/27/09 for $20,012 and was filed by the 1st mortgage holder.  This was the second postponement of the trustee sale.

12 LONE WOLF – The trustee sale has been postponed until 01/08/10.  The NOD recorded on 03/16/09 for $39,372.  There have been 5 postponements.

19 Raleigh Court – The trustee sale has been canceled.

5 Sausalito Drive – The trustee sale has been postponed until 12/10/09.  The NOD recorded on 1/16/09 with an amount of $32,243.  There have been 5 postponements.

4 ROCKROSE CT – The trustee sale has been postponed until 1/07/10.  The notice of default recorded on 3/27/09 for $14,890.  There have been 4 postponements.

18 RUNNING BROOK DR – There are two NTSes recorded on 18 Running Brook Dr.   There have been 7 postponements of the trustee sale from the CZ Master Association until 12/04/09, and one postponement of the trustee sale from the first mortgage holder until 12/10/09.

3 Corn Flower – The trustee sale has been postponed until 1/04/10.  The NOD recorded on 6/26/09  for $34,393.  This appears to the second postponement.

24 Meritage – The trustee sale has been postponed until 12/10/09 with an estimated debt amount of $8,209.86.  The trustee sale has been postponed twice.

108 Dornach Way -  The trustee sale has been postponed until 12/04/09.   A notice of default recorded on 6/19/08  for $15,427 on a mortgage, but the notice of trustee sale appears to be  filed by the CZ Master Association.  There have been 12 postponements.

… we’re at the point one of every six dollars of consumption are from goverment, meaning you only need to “earn” 5/6ths of your spending power.

The true stealth stimulus plan in America is letting so many of its people live “rent free” as they sit in defaulted homes not making a mortgage payment. This “cost savings” allows them to shop and spend, and otherwise support the American consumption society.

…

We saw just last week that more homes in the US were in deliquency or foreclosure, than there are for sale – about 9.6% in delinquency and 4.5% in foreclosure.

…

At a monthly payment of $1250 that is a monthly “stimulus” to the economy due to “not paying a mortgage” of $13.1 Billion. Annualized that is just under $160 Billion a year of “stimulus” to the US economy via deadbeats …

With the changes in accounting rules earlier in 2009 that allow “mark to myth” rather than mark to market, there is little incentive for banks to foreclose quickly, so instead of the pre2007 timeline to kick people out of foreclosed homes there are many anecdotal stories of people living “rent free” for 14, 16 months (if not longer).

There is more in a eye opening article, “America’s Stealth Stimulus Plan: Allowing its Home ‘Owners’ to be Deadbeats” on Zero Hedge.

This is evidence that there is no free lunch.  This stealth stimulus will cost the taxpayers.  How do you feel about paying your neighbor’s mortgage for them?  At least I am asking.  The government is forcing you to pay without even asking.

6 Vela Court

I will bet you dollars to donuts that the commission for listing a REO is less than a regular listing commission.  Why else would the listing agents care so little about the photos they include in the listing description?  Does anybody breathing in the last five years seriously think that “decorator glass block” is an attractive sales point in 2009?

Anyways, it appears the bank smartened up quickly and realized that listing 6 Vela Court at approximately the same price that it did NOT sell for at foreclosure auction may not be the best plan.  The asking price has been lowered to $900,000.