50% of all mortages will be underwater by 2011

[Housebroken13]

See this news story that came out today:

About half of U.S. mortgages seen underwater by 2011 - Yahoo! News

[AzGryffindor]

I'm not so sure about that. My boss has been trying to buy a home here in AZ for the past 6 months. He has placed multiple offers on multiple homes only to lose out to what seems like groups of investors that are paying cash to make them into rentals and then flip later.

My brother and nephew went through similar scenarios when recently buying their homes.

Of course, the banks dragging their feet when it comes to short sales and the omission of listing of foreclosures into the market isn't helping matters either. There were an estimated 30k homes in AZ that are foreclosed but not on the market as the banks are taking "selective writeoffs" to improve (on paper only), their bottom line.

[Moe Bedard]

The banks have a huge shadow inventory and are doing this supply and demand thing on purpose. Clever bankers!! This is marketing 101 folks..

[Chased around and around]

72% of all loans in CA with a purchase date of 2006 and later are underwater. 58% of these loans of course were 80/20 like mine.

1,588,000 foreclsures this year so far US, 4 million expected by the end of this year per Realty Trac.

Wait til next year, commercial real estate is next, 1.8 trillion ARMs will be adjusting and with the high unemployment rates business are closing up. I am sure we will see TARP #2 by the end of next year...

[AzGryffindor]

I'd call it more akin to "Creative Accounting" and it should be frowned upon by the FDIC, Fed Treas, SEC, etc.... It's nothing more than creating false numbers.

[Chased around and around]

Originally Posted by AzGryffindor

My boss has been trying to buy a home here in AZ for the past 6 months. He has placed multiple offers on multiple homes only to lose out to what seems like groups of investors that are paying cash to make them into rentals and then flip later.

Same here, all condo/townhomes are being scooped up and made into rentals. A co-worker has put in 20 offers in the last 3 months and was outbid on everyone.

Right now where I live rentals are everywhere and the first time in my life I am seeing renters bargaining for the rent. A few places near my work apartments are offering $1500.00 to move in with a 1 year lease...

[AzGryffindor]

Originally Posted by Chased around and around

72% of all loans in CA with a purchase date of 2006 and later are underwater. 58% of these loans of course were 80/20 like mine.

1,588,000 foreclsures this year so far US, 4 million expected by the end of this year per Realty Trac.

Wait til next year, commercial real estate is next, 1.8 trillion ARMs will be adjusting and with the high unemployment rates business are closing up. I am sure we will see TARP #2 by the end of next year...

Many homes had become so overvalued it was ridiculous. It was very apparent out here in AZ. When tract homes started selling in bad neighborhoods for $450k those that have lived here for a while knew that those were completely bloated prices. Where they got people were those who had moved here from different states where the real estate prices were normally much higher. The poor people thought they were getting great deals, when in reality they were getting ripped off - first by the builders and then secondly by the banks with bad loans.

I can definitely see commercial RE being the next big one to fall. Many small businesses are struggling to stay afloat. Many large businesses are struggling to make a profit. In both cases, storefronts (mini-mall spaces), will become vacant and the owner will be without income to help pay for the mortgage. If enough of the businesses leave then it's likely going to go back to the bank.

I really doubt we'll see another TARP program anytime soon. It was the previous administration that created that program. The current administration did not bail out the auto manufacturers and suggested that BK was the better alternative (and it appears it was). Perhaps this is the route they intend to keep on when it comes to rescue programs?