cameron2003 said:Bay area prices drop again, but mainly due to unavailability of jumbo loans and severe drops inland. True bay area market holding up well compared to rest of country due to resilient local economy, such as international high tech sales.

Cameron,

Not as if you have any credibility left, but how is the "true bay area holding up well?" From the article:

Bay Area 8,317 4,898 -41.1% $639,000 $536,000 -16.10%

Bay area down 2.2% in ONE MONTH! Not sure what data you're looking at.. Keep in mind that you're constantly referencing a real estate backed site, hence they spin it as it's "just a jumbo loan issue." Keep in mind that ANYONE can get a loan, you just have to make the necessary downpayment in order to get the loan. Problem is, people don't have the money. Guess what? That means people can't afford them which means lower prices. They should've said "jumbo loans are no longer available to anyone with a pulse with a low downpayment."

Article said:Last month's median price would have been closer to $597,000 if the availability of jumbo home loans had remained stable. A year ago jumbo loans, mortgages above $417,000, accounted for 62.2 percent of all Bay Area home loans. Last month they were 29.8 percent.

LOL. I love that first sentence. I'm glad they KNOW prices would have stayed flat if irresponsible lending would've continued. There's a reason jumbo loans come with a much higher interest rate and downpayment now.. because they're more risky. Risk is now being priced accordingly and hence these loans are drying up without the cash for a downpayment. That's like me saying, "well we wouldn't be having a recession IF the US found a huge oilfield under the entire US." Reality is that jumbo loans are harder to qualify for and I don't see that changing.

cameron2003 said:

Take another look. Like I said, the true bay area, which I consider to be silicon valley, is the higher priced areas. They are down only single digits.

Perhaps this should be listed in the Hot Deals forum!

cameron2003 said:How is this a real estate backed site? This site sells data. They have no agenda. They completely rip other real estate markets.

Take another look. Like I said, the true bay area, which I consider to be silicon valley, is the higher priced areas. They are down only single digits. The inland areas are getting ripped by 20% and more.

As far as jumbo loans, this data was from the time when jumbo loans were being recalibrated to conforming. People were just waiting if they could.

Perhaps I jumped the gun in calling it a "real estate backed site," but its "analysis" of "home prices would've been fine if it weren't for jumbo loans" is clearly spinning the news to imply that prices are not in fact overpriced, but "it's a liquidity problem." That seems to be the popular spin these days.

Also, I'm looking at all the data, and sorry, but this "real estate is local" cliche is getting pretty damn old. What is the "true bay area" called? Sorry, but I don't see "true bay area" or "silicon valley" in the chart they have. This article references the whole bay area, as the "Bay Area." Now yes, there may in fact be specific PARTS of the bay area which are doing better than others, but saying that the entire area isn't the "true bay area" is laughable. Seems like folks are going to whatever lengths possible to justify to themselves that "my area won't drop." That's sad.

What do you mean recalibrated to conforming? Sorry, I'm not too familiar w/ the recent changes to jumbo loans. Based off of what I've been seeing/reading from folks, demand for jumbo loans has shrinked considerably due to tightened reqs and larger downpayments.

Dealguy123 said:cameron2003 said:How is this a real estate backed site? This site sells data. They have no agenda. They completely rip other real estate markets.

Take another look. Like I said, the true bay area, which I consider to be silicon valley, is the higher priced areas. They are down only single digits. The inland areas are getting ripped by 20% and more.

As far as jumbo loans, this data was from the time when jumbo loans were being recalibrated to conforming. People were just waiting if they could.

Perhaps I jumped the gun in calling it a "real estate backed site," but its "analysis" of "home prices would've been fine if it weren't for jumbo loans" is clearly spinning the news to imply that prices are not in fact overpriced, but "it's a liquidity problem." That seems to be the popular spin these days.

Also, I'm looking at all the data, and sorry, but this "real estate is local" cliche is getting pretty damn old. What is the "true bay area" called? Sorry, but I don't see "true bay area" or "silicon valley" in the chart they have. This article references the whole bay area, as the "Bay Area." Now yes, there may in fact be specific PARTS of the bay area which are doing better than others, but saying that the entire area isn't the "true bay area" is laughable. Seems like folks are going to whatever lengths possible to justify to themselves that "my area won't drop." That's sad.

What do you mean recalibrated to conforming? Sorry, I'm not too familiar w/ the recent changes to jumbo loans. Based off of what I've been seeing/reading from folks, demand for jumbo loans has shrinked considerably due to tightened reqs and larger downpayments.

I've been posting all along that places like Stockton suck, and places like Marin are holding steady or even still going up. Its common knowledge that the high end places are doing fine and the low end places are not. Look at San Francisco County, it up a little bit even. Call it what ever you want, true bay area, silicon valley, PARTS, whatever. The point is some places are doing fine, and others are sucking wind. Real estate IS local. I guess I will have to post more stories about silicon valley, the economy here, and the various real estate markets, cuz looks like people need some reminders.

Dealguy123 said:sailmaster1955 said:however, think of it this way... he might mean this...

if everyone just stopped paying their second mortgage the second mortgage holder wouldn’t likely start the foreclosure proceedings because first taxes, then first mortgage holder will get paid, leaving nothing left for the second mortgage holder based on his real numbers of what homes are selling for at auction.

Does anyone know how the second mortgage foreclosure process works? Can the second lien holder even start foreclosure proceedings without the first lien holder's permission?

If the answer is no, then yes the 2nd mortgages are next to worthless and if you already have bad credit what is the incentive to pay it? Of course not everyone will stop paying them so they are not worthless in that sense, but as for as collateral value they are indeed worthless.

Bravo sailmaster, that's exactly his point. The first mortgage gets dibs on everything FIRST. IF (and this is a damn big IF) anything is leftover, the second mortgage creditor gets dibs. I was too lazy/busy to explain it at the time.

Anyway, to answer your question, YES, the 2nd mortgage holder can actually start the foreclosure process. The problem here is that if the 2nd mortgage creditor starts the foreclosure process, the 1st mortgage has to be paid off IN FULL, and THEN the 2nd mortgage creditor gets paid off. In a declining market, well you see that this just leaves the 2nd mortgage creditor with nothing, and essentially they have zero collateral in the whole deal. From what I've read online (not sure how accurate they are but seems plausible), banks tend to recover 50-60% of the loan amount after the foreclosure process and re-selling the house, which means 2nd mortgages are probably next to worthless in post-boom areas.

It's funny, because Mark has been in the biz and making commentary all over the place (and was on cnn recently). He's hardly blowing smoke up everyone's @ss.

EDIT: HELOC's are in the same position as 2nd's.. so let's not forget about how a lot of them are near worthless. They're in line behind the 1st mortgage as well.

OMG, He's on CNN. He must know what his talking about, Jim cramer is on tv all the time, even has his own show. We all know that 'As seen on Tv' means its A-OK, 100% accurate.

No his stametment is invlaid, because it implys that 100% of mortages will be foreclosed upon. A statment thats as idiotic as the people that claimed housing will always get up.

mikef07 said:Guess things in Detroit are not too good.
House for $100. Yes $100. Although you have to pay back taxes on it which are around $3200.

6BR 3000sf

Location... Location... Well, you know...

cameron2003 said:
I've been posting all along that places like Stockton suck, and places like Marin are holding steady or even still going up.


The Marin Independent Journal reports from California. “The median price of a single-family home last month was $862,500, down from $965,000 a year earlier


cameron2003 said:
Its common knowledge that the high end places are doing fine and the low end places are not. Look at San Francisco County, it up a little bit even. Call it what ever you want, true bay area, silicon valley, PARTS, whatever.

The Mercury News. “The Silicon Valley housing market got walloped in March, as median prices fell sharply and sales hit record lows for the month.”

SF city/county had a median high of 835K, last month was 755K, though there tends to be lots of variability since only about 500 homes sell per month.

Dealguy123 said:
Anyway, to answer your question, YES, the 2nd mortgage holder can actually start the foreclosure process. The problem here is that if the 2nd mortgage creditor starts the foreclosure process, the 1st mortgage has to be paid off IN FULL, and THEN the 2nd mortgage creditor gets paid off. In a declining market, well you see that this just leaves the 2nd mortgage creditor with nothing, and essentially they have zero collateral in the whole deal. From what I've read online (not sure how accurate they are but seems plausible), banks tend to recover 50-60% of the loan amount after the foreclosure process and re-selling the house, which means 2nd mortgages are probably next to worthless in post-boom areas.
I think you'd be hard-pressed to find a 2nd position lender who bothers to foreclose...even in good economic times. Well, unless there was a LOT of equity. Even then, most will just wait for the eventual sale of the property, quietly adding interest and fees along the way.

All of the small $10-50k HELOC's/loans, taken out to bring people up to 80%+LTV, are worth pennies on the dollar, at best.

No lender is going to waste $3k in attorney's fees, to foreclose on a $25k 2nd that's not backed by equity that can be recovered at auction.

Besides, an 80% LTV represents a best-case LTV scenario. In this market environment, you'll need to slash 25% off the property's value, to reach a realistic auction sale price, should foreclosure become necessary. That wipes out the 2nd, and eats into the 1st. Add attorney's fees, property upkeep, taxes, etc., and it's easy to see why the 1st position notes are trading well below value.

For decades, a big part of our economy has surrounded homeownership, and the equity built over time. Get the family addicted to the homeownership idea, lend them just enough to make them slaves to the house, and then slowly bleed them for the next 30 years Problem is, that don't work so well when property values fall. Now what?

mikef07 said:Guess things in Detroit are not too good.
House for $100. Yes $100. Although you have to pay back taxes on it which are around $3200.

6BR 3000sf

Awesome. I think I'll wait for a price drop though, I was really looking for something under 3 cents per square foot.

mikef07 said:Guess things in Detroit are not too good.
House for $100. Yes $100. Although you have to pay back taxes on it which are around $3200.

6BR 3000sf

actually it reads $3200 PLUS taxes and water. No telling how much it actually would cost. The $3200 probably covers closing costs and realtor fees.