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http://www.nytimes.com/2010/07/25/realestate/25cov.html
NO I'm not some self promoting borker, I'll tell you why it never pays to fall into a short sale "marketing" scam.
The case:
"buyer" = nimrod that buys into the bubble with 5% down, lost of rolexes, cars, vacations
"banker" = nimrod banker that lends nimrod buyer 95% of purchase price.
"buyer2" = the lemming buyer, who thinks "short" sale is the roads to riches
"the borker" = absofuckinglutely 0 to do with the deal, but still wants 6%
1) $1MM "home" purchase, $50K equity, $950K mortgage;
2) 1 yr later market for "home" at $900K
buyer decides walk away, stops paying mortgage but is still worried about his "credit'... calls banker and says i need out.
they do their obamie/geitner, program for 6 months... still can't work something out. They say let's do a "short" sale... market is now at $850K.
(if buyer/banker/borker believes the "market will be at $1.2MM in 2 yrs, buyer gets a heloc for $200K, funds mortgage payment for 2 yrs, bank is whole, buyer is whole=> the fact they are listing means ALL parties involved thinks market WILL BE LOWER)
So here is the "short sale" listed at $850K, simple no? NO you nimrods. buyer2, sees "short sale" and thinks I'm getting it below market... short sale means desperation, no? NO.
Buyer2 bids $800K, gotta get something off from mtk, if 0 discount why not just bid on mkt $850K units? Simple, no?
But lets' say you can get all 4 players into a closing. (these are the little bubble thoughts of each player)
1) Banker says, awesome, I'll get buyer2/buyer and borker to kick in something to get me to closer to par for my paper
2) Buyer says, awesome I'll get to walk from the mortgage for free, thank allah I don't have to declare bk!
3) Broker says awesome I'll get 6%!, that's on top of the 6% I got for selling this POS the first time around!
4) Buyer2 says I'm gonna get this for below "market."!
It'll NEVER EVER CLOSE.... that's why I NEVER EVER EVER BID ON A SHORT SALE. FORECLOSURE, where bank has written down the loan is the ONLY place you maybe (that's a big fking maybe this early on in the deflating cycle) able to get a bargain.... and when ALL the foreclosures start to wind down, foreclosures => de facto "mkt".... happy bidding on short sales, ya lemmings.
the initial buyer got all his money back by staying at their "home" payment free for 1-2 years. at $3K per month, they actually made money by not paying and going the "short sale" route. he knew that there was no way in hell that the bank would move their ass to get their money. capitalism at it's finest.
and multiply this by tens of thousands of potential transactions at major banks and guess what?
W67th: This was written about in the Sunday Times article. Pretty much how you desribed it, although nowhere near as colorful.
doesn't this remind you of some song? it must.
w67th: Your wife is a doctor? Good for you!
nopigsorshrimp: That's kosher,for me.
w67th: Why do you think that it annoys npsos., when you mention your vacation in Hawaii? You were there at a great time to go.
A yacht? Good for you!
A Porsche? Good for you!
Rolex is over-rated. They break.
hey shrimpie...what? forget to take your meds?
FALCOGOLD!!! There must have been a meds shortage, this weekend.
Is cat food Kosher?
Two answers>
1) Cats don't have kosher requirements and can eat anything. I asked and you can feed your dog bacon
2) Does not ksoher refer to the food and not who/what eats it. But animals and non-jews are not required
to keep kosher.
Truth, I did not read the full thread. I must have missed something.
W67: why won't a bank push to get a short sale through?
Riversider: Dogs love bacon!
Mine loves raw fruits and vegetables... long story.
banks hate short sales, even oddly when they make economic sense. they're hugely overburdened and don't want to concede the price fight. good piece about this the other day, I'll try and recall where I saw it.
yo falco, you've got mail.
nyc10023: I think the reason for that was also mentioned in the Times article. We already recycled it.
We have a dog who loves to sniff news-print. He gets doggie-high on it.
falcogold: Beware.
If there's a second lien involved there may be a conflict of interest in the bank accepting the short sale.
@nyc10023.. politically, the ppl who made the "mortgages" are still in charge... a discount from par just highlights what a nimrod they were for approving the mortgage. It is only when they transfer the assets to their "asset recovery" dept does anything get done.... but even then the asset recovery guys don't want the colleagues in the mortgage origination dept look bad... so they'll try to get as much back and get all emotional about it.
The only "true" bargains are had when new mgmt makes the decision to sell the entire portfolio of mortgages to a vulture fund at 50% or even 10% of par will the "new" owners of the paper have any incentive to run thru the short sales or even do the foreclosures and play hard ball withe ALL involved.. .till then short sales in nyc is like the ONE BIG MARKETING SCAM THAT SCREAMS "CALLING ALL LEMMING BUYERS!"
w67th: zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz !!!
oooo.... I likes "npos" abbreviation, nice nice...
npos, I lovez getting on this board and telling ppl their inconsistencies and hypocrisy and if they bought anywhere in the 2004-2010 period, they are lemmingzzzzzz... threading water till the tide gets back in.. .some will thread for a long time and be "okay" and others will drown, like the 233 ppl in Russia who kicked back a few vodkas and then went swimming to cool off this summer..
but MORE importantly, aboutready said a very insightful stmt... most nycers are "house rich, life poor." The fact I have a sailboat, $1MM in bank, can bench 275lbs and squat 585lbs, travel as much and as frequently as my wife and I like, have 2 nannies, two porsches, including a 997TT, (sorry sold my rolex collection, just one IWC) and kicking back like a rock star....while all the time RENTING and seeing the 3bdrm CPW apt come floating to my liking... makez me FKing L M A O....
And for riverssider who thinks renters "can't afford" it, I think that moniker should be reserved for the 700+ short sales happening in nyc, as per article, the 20MM in US that are being forced to sell and 11K units listed for sale on SE (minus the ones selling their 2bdrm to buy a 4bdrm cpw)... m'okay.. dork.
Actually, most NYCers feel like they pay too much rent, and that they're "life poor". You are very lucky, W67 to be able to afford your life, irregardless of RE purchase.
most people over consume housing, rental or purchase. it's more common with purchasing, I think, because the temptation to get the nicest place possible is greater with owning.
but yes, anyone who is comfortable, not stretched and has such options should consider themselves lucky, at least to some extent.
1) yacht - wish I had one, but would also need crew because all that menial labor would get tiresome after the novelty wears off
2) Porsche - gotta learn stick shift first
3) Rolex - look silly on my ultra-skinny wrists
4) Complaint about the system being against him - yeah
5) doctor wife - I have many doctor friends whom I bombard with health-related emails
6) vacation in Hawaii - they should resurrect the Concorde, all too far from NYC
Kind of begs the question, what % of your monthly/yearly income "should" go to housing to be considered comfortable or "life rich"? I imagine the number varies for different people/family situations.
Very lucky, AR. Not to open the whole karma/luck/fate thing again.
Depends on job situation, savings, inheritance (for a few).
IMO, given stable-ish jobs, no more than 25% of net (after maxing retirement savings).
nyc10023... let's put things in perspective. The mother who killed her 4 children (even she didn't have the heart to slit the throat of the 2yo) and herself had "money" problems... a significant part of which was her housing, which were in fact pumped up to ridiculousness by the bubble... manhattan was ground zero of this bubble. Now I am left to wonder is she wouldn't have killed her children if she just was a single mother w/ a rebellious 14yo boy and not someone who had to split a gyro for 4 children as their dinner and almost evicted 2 from a bubble based rents...
The manhattanites trying to move their rent-o-meters up and down several hundred dollars for 1) walk up 2)borker fees 3) doorman 4) closeness to trains 5) the "right" school district 6) proximity to fairways... I drop not a tear. Go live in LIC if you think you are forced to being life poor and housing rich....
I can't imagine the despair of a parent to kill their own and the fear of the younger daughter watching her older sister being killed by her mother haunts me. Hey julialarge/riversider... rejoice 5 less ppl on the welfare rolls, but the billions of $ for banks/gm/unions... thatz.. "capitalism" right?
fking idiots.
yeah, let that one die, 10023.
bjw, obviously, but today's bankruptcy rates, foreclosures and delinquencies would indicate that many didn't make the right decisions, no? not just a question of comfort. I realize many were blindsided by unemployment, but I think it's also hard to deny that our hgtv-fueled overconsumption led a fair number of people to make choices that became uncomfortable, sometimes from the day of closing.
it's not something altogether new, but with the assistance of horrible lending standards even more than usual bought too much house. and many also elect to pay very large percentages of their take-home pay on rent.
W67: Bad example. Even if her rent were zero, she'd probably have money problems with 4 kids. Do the math, she had #1 when she was 15. Her extended family didn't seem too involved. Can't blame it on the RE bubble. Blame the lack of a system that gives a 15-yo pg girl real options.
not really.... we are all interconnected... we are a rich country, if she had a stable livable rent let's say circa 1970's, doubt she would've off her family (IMHO)... the bubble housing/rents came knocking on her door 2x recently... as an immigrant youngster I definitely remember what if feels to have absolute money fears in the household.... you know not enough food to go around the dinner table kinda crap... the fact she lives within a 20 minute limo ride from $30MM apt boxes.... makes me flmao.. in a kinda sad way...
Free bkfast and lunch at all NYC publics. In addition, free lunch throughout the summer at designated areas for kids. No questions asked.
W67: From what I see on the net, she had pretty low subsidized rent. Unpleasant to not be able to provide a roof over your family's heads, but I don't think she was a victim of the RE bubble. More like victim of the public education system, blablabla. If she was both housed and sheltered with free food, yeah, tragedy wouldn't have happened. Are you cool with life-long, no questions asked, basic food & shelter provided as long as the system lets you have a 30m box?
great 2x meals a day.. why don't you limit your kids meal to 2x a day... call me at 10 pm when your kids can't go to sleep bc they are hungry. vs. rich house/poor life in manhattan...
and I'm not saying NYC RE bubble was 100% at fault, but let's say the fact a successful person such as yourself is bemoaning the cost of living in NYC should really be a reflection of the housing bubble in all its faults more than some bubble to be re-pumped like all the "owners" and borkers would like... just saying...
gotta go..
"bjw, obviously, but today's bankruptcy rates, foreclosures and delinquencies would indicate that many didn't make the right decisions, no? not just a question of comfort. I realize many were blindsided by unemployment, but I think it's also hard to deny that our hgtv-fueled overconsumption led a fair number of people to make choices that became uncomfortable, sometimes from the day of closing."
Obviously, I agree with all that. I should have said "comfort factoring in reasonable amounts of risk." Which is obviously something many people across the country did not do. I would hope that improves for the next generation.
w67th, you're painting with too broad a brush - there are those among us who have bought in that large timeframe and are quite comfortable, and perhaps younger than yourself, to boot. Probably not as good with grammar though.
http://www.calculatedriskblog.com/2010/07/survey-shows-house-prices-falling-in.html
Average prices tumbled by 6.8% for move-in ready foreclosed properties, 6.3% for short sales, and 4.6% for non-distressed properties.
...
“Buyers just plan on deducting the $8,000 off what they are going to offer now. So, now prices are dropping to compensate for the credit not being available,” stated an agent located in Ohio.
...
“Contracts signed in June will be closing in July and August,” explained [Thomas Popik, research director for Campbell Surveys]. “That’s why we know prices for closed transactions will continue their decline. But this won’t be reflected in the publicly-released price indexes until October or November.”
can someone define "life poor" so i can keep up? is it some kind of spiritual black hole or just not livin' life large??
uwsmom, you do so make me laugh. to me life poor is compromising, just to have whatever, to the extent that other priorities are compromised, and in this instance I'm talking housing. obviously people find other ways to be life poor.
generally life large. but it can be a spiritual black hole, I guess.
uwsmom, that's hilarious. It can be hard to tell, but I think there are some telltale signs for the "life poors" - such as calling strangers on the internet "morons" and such, not to mention creating numerous geographically confusing screen names for internet websites.
Life poor is relative. As in, one could afford not to worry about the cost of takeout coffee if one didn't have such an (unnecessarily) large mortgage/rent.
life poor = latte effect
that can't be right? actually, sounds about perfect.
night all ;)