Mr Mortgage- Non-Mainstream Mar Existing Home Sales Rpt

[mourito49]

We recently sold our home on the east coast and moved to Fl. Have been concerned about the foreclosure rate in the area but our realtor has only given us seller to buyer sales comps even after pressing her about foreclosures. Thank you for enlightening us about the continuing decline and all of your helpful information regarding foreclosure stats. We do want to buy but want to be informed and prepared. We lost over 250,000.00on our other home by the way (all cash down).

[harley1932]

I will do what I can. You have the best approach of anyone I have seen. You understand the situation in a comprehensive manner, put the numbers to it in a clean, easy to understand way, and you have a good voice to back you up. You are going somewhere!

[harley1932]

Mr. Mortgage you need your own radio show!!! You could give a lot more detail to the picture than someone like Dave (I don't know THAT much) Ramsey.

[markmti]

hook me up Harley!

[markmti]

the banks are all doing something different but from what I am hearing they are releasing a very small percentatge each month - much less than they are taking back. For example in the state of CA last month there weer 27k new and existing home sold. 38.4% were REO. BUT, there were 43k notices od default of which 80% will go to foreclosure within 3-5months AND 28k foreclosure auction notices of which 90% go to auction and 97.7% go back to the bank. The REO on adds up to about a little over 10k.

[markmti]

No - at foreclosre auctions the bank gets house back but no 'real estate broker' is involved. has to be a realtor involved to count. Anyway, only 2.5% sell at auction. The rest go back to be sold later at deep discounts by the banks.

[fleck321]

hi mark,

i don't understand why only 2.5% of homes are sold at foreclosure auctions? are the other 97.5% of homes' starting bids higher than the value of the home? If so, why don't the banks lower the starting bids so that the homes move instead of taking them back and then selling them for even less down the road? Are the banks just hoping, praying that the market will bounce back so they can get even on their REOs? Maybe they just don't want to take the loss. Thanks for your insights!

[bdc03]

Yes. If they start selling them for less it drives all of the properties down. Which would be a chain reaction from hell.

[markmti]

no, its just foreclosure auctions 1) are usually attended only by professionals and require large cash up front. 2) professionals are scared shitless 3) discounts are not great enough, as lenders do not get aggressive at the beginning typically pricing to cover their loan amount in most cases.

Once the lenders buys it back at the auction after it doesn't sell, then it opens it up to real estate brokers and auction aggregators to drill down on a better market value.

[fleck321]

thank you my friend for enlightening me. i hope you're doing well.

[fleck321]

mr. mortgage, when you say that in CA we are still overvalued by 20-50% in most MSA's, do you mean that some homes can still drop 50% or that a 750K home can fall to 500K (therefore 50% overvalued). was it possible you meant some homes can drop another 50% vs. being 50% overvalued? thanks for your insights!

[fleck321]

mr. mortgage, are the banks with high reo inventory currently blowing them out aggressively using estate brokers and auction aggregators or are they pacing themselves? whatever they're doing, the case schiller index is in freefall. do you know what the max y over y loss could end up being for the top 10 metro cities? 17%? 20%? 25%?

[dbish147258]

Mr. Mortgage, You talk about how, if a realtor sells a bank-owned home, it counts in the existing home sales number. Is it not also true that the very action of a bank bidding the loan amount in the foreclosure auction and walking away with the house also counts as a existing home sale - with absolutely no evidence or organic demand?

In my county (Shasta County, CA) this amounted to about 40% of "exisitng" home sales.

Thansk for all your work.

[rcmtgs]

one by one? we'll be thru by 2035? all your neighbors have moved by then to an ALF or to the island of their choice, oh i forgot global warming, let me correct that...to their mountaintop of their choice of country, stealing your neighbors solar panels and selling everything they get their hands on, on of course Ebay! I prefer Amazon and Craigslist but usually anything GOOD for the country doesn't stay in business.

Is socialism the fourth party or the GOP? I think I'm independent this year.

[markmti]

this was from comments on another video...banks are already doing this one by one. But it s their REo inv that is the rreal killer to vals

FYI, I heard Fremont went to 4% on nego, my Mom heard on news Wells went to 4% on nego, but heard today someone got their 7.75 went to 7%, going to suggest he nego better. I don't think it's fair if your scores have always been low to go to 4% but hey if you can get it go for it! My Mom who has perfect credit & 5.75 from Nov '07 refi wants 4% now too. lol

[fleck321]

loan balances to 85% and 4% interest for 30 yrs? who's paying for this? we're heading toward socialism. govt owns the homes, bernanke flying around the US in his helicopter collecting mortgage payments. i know you think odds are slim as i do. pres. obama wouldn't go for this, right? if this were to ever occur, 10 yr bond yields would take off imo.

[markmti]

of course there is no way to do 4% abd 85% value but that is about what it would take to stop the 3rd through 9th inning which are still to come. CA is ugly. We have no loans. This summer will be devastation for the CA housing market. Given rates, programs, average incomes vs avg home prices, we are still overvalued by 20-50% in most MSA's.

[rcmtgs]

why don't we get rid of the rate sheets, everybody gets 4% no matter what, everybody will want to refi, slates will be scratched, everybody starts over, slows down the price deflation and banks just have to deal with it, that's their problem & brokers can't charge more than 1pt and everybody goes home happy, and as far as wall street and ceo's, they got theirs already.

[markmti]

4% interest only across the board may work. Still would have a value problem. Now, if they reapprasied every home in america, dropped the loan balances down to 85% and gave 4% interest only for 30-yrs or even 10-yrs problem solved overnight.

[rcmtgs]

perfect we have enough appraisers to do that...they are re-writing the rules right now, break it down for them, we need this solved like yesterday, take a % off values as of jun06 or something...so we can get on with it, an addendum will do fine...keep up the good work

[fleck321]

mr mortgage, what happened to your "mr. mortgage exposes lehman alt-a" video? did lehman's lawyers force you to remove it? if so, too bad.  thank you very much for telling it like it is. keep spreading the truth. godspeed!

[markmti]

the lehman vid is there...lehman update. The update is better anyway.

[TRANZAM313]

Thank You !! You are telling us what the Media will not let the public REALLY know whay's going on and how badly this will be affecting our home values. This whole MESS will blow-up very soon. I am getting ready with Leap Puts !! See you at the Ticker Forum !! I just Love your Blues Eyes !!

Oh, I am a girl.

[SweeperTube]

Thank you again for the info.

[soccersfunny]

no one got anything stripped away from them it was never theirs to begin with it was fake appreciation,helocs are the stupidest thing ever,the equity is yours when you sell,whats with this home a.t.m. crap??

[markmti]

Facts are the mega-appreciation should have never been there in the first place but it was. Now, the banks are doing their best to take it all away very fast. The banks are an economic wildcard in their selling of REO far below present market prices.

[Chato98]

IMO...helocs are not stupid if you had put 20% down on your house, like was typical in the past; and you wanted to ensure you had access to that cash in the future. The demise is due to bad loans by banks, not HELOCs. Gee...If you gave a house to folks with no documentation and bad credit, and they default...it doesn't really affect them, it affects the responsible homeowner. Personally, I'm taking all my equity out now; I will not suffer from institutional and indiviudal irrisponsibility.

[youstwo]

Great Info! Keep up the good work.

CHL

[laggalot]

Thank God that poeple like this exsist. If all we had was the BS News we would be doomed.

[Eldergurl]

Thank you! You help the uninformed get a sense of it all in a direct and understandable way.

[justjacqueline2004]

Really excellent break down in the "stats".However,how will this effect the market and WHAT is the best way of playing this?

[stinkypoon]

This will continue to drive prices down. HARD. The best way to play this is to sit back and watch it tank. Maybe when you see the year-over-year inventory receding it will be a sign that we're near the bottom, but that won't happen for a long time.

[soccersfunny]

good video,but I have to disagree with the one person getting a deal 50 people getting screwed comment,they overpaid simple as that,I meen should we try to prop up prices becasuse they were dumb enough to listen to their realtors??500k houses in compton was just a stupidity..now were going back to sanity.

[markmti]

what about those who have sat in thier homes for years and did nothing wrong, having $100k stripped away overnight due to the banks fire sale REO sales. Of course, these people benefitted on the upside but these REO fire sale wildcards are going to reduce values across America fast.

[bdrasin]

I think this is good; my partner and I make over 150k together and we still can't afford to buy a home where we live (SF Bay area). We don't want goofy financing hocus-pocus, we want home prices to drop to where the total cost of owning is within a stone's throw of renting an equivilent place. Prices still have to drop a long way for that to happen. In the long run, thats the only real fix.

[soccersfunny]

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[iam420king]

Well done, as always. Thanks for your time/effort to break it down.

[youstwo]

This is what you will NEVER hear on CNBC!

Good stuff - Thank you.

CHL

[brownsthenewwhite]

You're cool, dude.

[stormsailor1981]

great video hedgie, seems as if the government, the media, and j6p all want to ignore this information in the hopes it will go away.

but its coming down the tracks, and will smash the unprepared.

[eguillemyn]

fantastic, keep going!

[bluepikeman]

I thought the government / FHA increased the conforming requirements temporarially EG. higher than 417K?

[markmti]

they did but only for as few loan programs and the rates at no points for a 30-yr fixed is 7%...you need to earn a documented $175k per year to qualify WITH a 10%+ downpayment. Needless to say, very few people will use the program. I did a video on it. Check it out.

[RJHerber]

Can somone tell my why the stock market is as high as it is with all this crap going on? Unreal!

[onegsoul]

Really appreciate the info you're sharing, its very informative & more in sync with what I'm seeing vs what I hear on the news. Kudos, keep up the great work! Will be passing your website on to folks that I believe will understand & appreciate your efforts to educate us w/truth!