Truth about real estate foreclosures

See how the banks are manipulating the foreclosure market. You can use this information to buy foreclosures by timing your purchase.
December 8, 2008
Look at my video ' Real Estate market bottom' to see how to tell the bottom.
See also video "make more money on sale of house "
It is now apparent that there is a detailed plan to take money away from investors by conning them to buy foreclosures, and have the entire market deflate. Go to
http://www.financialsense.com/editorials/reality/2005/0403.html
You will notice this is a 2005 article.

May 23, 2008. The existing home sales came out today with an average loss of $1500 per month for the median US Home price over the last year. Most people have no conception how this is impacting their lives. If you had $200,000 in equity last year, you just lost 7% of your equity. In California, it was probably more. If you had sold your house last year and moved into a rental, you would have zero cost for living in the rental. If you had moved into 2 specific real estate purchases, you could have increased your capital and retained your mortgage deduction. You would actually be further ahead.
Losses in home equity will accelerate for the next year. If you become underwater in your present equity, you could be stuck in your present property for many years or have to come up with substantial separation money to preserve your credit rating.
The foreclosure bailout proposed by the congress is just window dressing in order to forestall a panic. What is going to happen is that this will only delay the panic, not forestall it. If you read the fine print, the lender has to agree to provisions of the bill. How likely is that?
What you see happening in the market today is that 25% of the sales are due to sale of foreclosed homes. Because of the banks holding back inventory, there are at least 4 bids for every sale.This will change shortly.
The subprime loans that are supposed to reset this summer,means that the house are really going to be back on the market by June 2009. The logic goes like this. The notice of reset for August 2008 have already gone out. In August , the owner of the subprime loan is going to do his/her best to make the payments. He will get a 2 or 3 job in some cases. Maybe his wife will too. In any case, the owner uses up his savings and cannot make the payments. This takes 2 months, on average.
The owner realizes it is impossible to continue and finally stops making the payment. His savings are exhausted, and now he has to acquire money to be able to move.He needs the mortgage payment to restore his savings, so he can move. Minimum average move is going to cost $5000 or more.
The lender now starts the foreclosure process. Sometimes the lender takes more than 6 months to prosecute the foreclosure.
Then there is another month or 2 in which to prepare the property for sale.

So, let's see how this all adds up. 2 + 6 + 2 = 10. 10 months from August 2008 is June 2009.
So the majority of the resets will not even hit the market until June 2009. And the average length of time to sell this property will be 11 months, if not longer. So the minimum time for the market to hit the bottom will be after May 2010.
The average price decline, here in California, will be more than $2000 per month. If you invest in property today, you will lose almost all of your equity.

What no says today, is that the property that has an equity line of credit will also reset to a higher interest rate once the property falls below 110% of the initial loan amount. This is a huge overhang to the market, and could make these loans now subject to default.Who knows where this will end?
Based on this scenario, what is the best way to make money in real estate today?
Sell any real estate that you have, even into today's declining market. Then wait for the turn in the market to buy back, better than ever. That time is more than 2 years away.
July 27, 2008 update:
As I write this, the senate just passed the foreclosure help bill. The immediate effect is to raise the interest rates on homes. Why? Because the lenders will now have to calculate how they are going to get a reasonable return on their money that they lend. They now have to include the cost of taking a writedown on their loan if the buyer defaults. The net effect of higher rates means that the price of the house has to go down if the buyer cannot increase his payment. In Stockton Calif., 1 house in 25 is now in foreclosure.

Category:

Education

Tags:

• buy
• sell
• foreclosure
• California
• real
• inflation
• estate
• credit
• inventories
• business

[michaelcweir]

God has allowed this situation to come about because He wants us to understand him better. there is no sharper contrast between Good, then Evil. God is sometimes known as the great Permitter. He alows us to make great mistakes, in order that we then can make a great correction. God is neither a Mister or a Mistress, but a Mystery.

[cowboycarl04]

fascinating video. I have a question, what would happen if there was a gradual, then sharp increase in the interest rate starting this fall?

I'm not familiar with the economic ramifications.

[michaelcweir]

Thank you for your timely question.Higher rates are coming, mainly due to fall in dollar's value. Most of US treasuries are owned by foreign banks and countries. The only way the US gov't can sustain it's current deficit is by foreigner's continuing to buy bonds. When they (the foreigner's) see the value dropping, they will still buy, but with the loss of the dollar built in (ie. higher rates). This is all part of God's plan -see Red Horseman and Real Rapture videos.

[SCTV]

lets face it, international (EU) hedge fonds investors no nothing of the true value of a US house. they only go by the dictated market value , backed by a artificially created contingent of housing values. It is common practices amounts bank to back their own value on the market and to their share own holders by holding back worthless overrated values.

Selling loans without value guaranty and overpriced is their business and all were basically making money that now has to be printed.

[michaelcweir]

I have been waiting for events to show you how right you are. However for every crisis there is a fantastic opportunity. God has directed me to make money on the stock market. You can find your own opportunity in this crisis.

[michaelcweir]

June 1, 2008

A further update. The liquidity crisis that brought down Bear Stearns and affected the bond market, has now spread to the Libor rates. Instead of being 500 billion dollars , as with Bear Stearns, Libor rates are connected to 150 Trillion dollars worth of positions. Adjustable rate mortgages, credit cards, corporate debt, auto loans, etc, etc, are connected with Libor. Falling demand with rising interest rates foretell home prices falling below 40% of peak. Hang on|

[BlueTransAm83]

The humans only concern is their little piece of property, their kids soccer day, movie night out, and making sure that stays the same, or they get more. No matter how many that have to suffer to maintain that. So were F’ed

[realbiz007]

its a tough market out there this site really helped me as realtor..... myepicbiz com

[ouivalerie]

@407buddy Hello: I want to know specifically how you arrived at the conclusion. They want a lot of people to be thrown out, to sort out who they can get money from that's left with any reserves. It's kind of useless, many people only say they are out of money and have a hidden asset plan where if they aren't gaining anymore they bail and they have enough reserves to make it the remaining expected 30 years to live. They want the people that paid too much to be pushed out and blamed also.

[watchyourstepson]

you guys are all nuts, there are plenty of resources for the whole world and everyone to survive just fine. Value is built into it just like the real estate market.

I have got news, it is bottoming out. Seeing how it is a year since your trueth post. I beleive you guys beleive what you think is truth; however, the truth is not in you, it is in the game. Big money longterm in low prices. There is blood in the streets, now go get some land!

[johnnyblueshoez]

grapes of wrath GRAPES OF WRATH

[SCTV]

I'd drop dead if I had your faith, your facing future unpaid oil imports next followed by inflation, a breakdown of welfare and food supply problems due to transportation problems!

You should start to stock up and prepare for an upcoming war! this crash is the beachmark about how much wealth is globally possible. The US/EU sky is the limit dream has just been overtaken by reality. check the oil supply the US needs to import that explains everything!

[OmarThePug]

I'm glad your telling the truth, and I will share your video(s). While I'm not a religious man...clearly we see how unfettered greed can so motivate people that they care not about the consequences.