Wednesday, February 20, 2008

Multiple Burns From Sacramento Housing Market's "Record-Breaking Collapse"

From CBS 13:

This is a new and troubling twist on what's becoming a record-breaking collapse in the housing market. Melanie Brown's family leased this home in Lincoln, after trying to short sell their own place to avoid defaulting on their subprime mortgage...So she says it came as a surprise when she learned now this house they were leasing in Lincoln was on the market for a short sale of it's own.
And she discovered her family isn't alone. "We looked down the block and there's two-other homes with the same for sale sign, the same realtor listed."...These three-homes were bought by a group of bay area investors a year ago. Those investors have apparently decided to short sell them, or walk away if they can't.
[R]ealtors, mortgage brokers and property managers say they're seeing families like the Browns getting burned two, and even three-times by the collapsing market."
From the Sacramento Bee:
The FBI is investigating a suspected "foreclosure rescue" fraud that may have cost as many as 256 homeowners title to their property and stripped them of their equity. The alleged scam includes at least seven Sacramento homeowners and 61 statewide, and the probe is based in the Sacramento FBI office, according to court documents, interviews and an Internal Revenue Service search warrant obtained by The Bee.
The Sacramento FBI office is working the case as it continues to sort through 2,000 reports of suspected mortgage fraud from 2007 – a fourfold increase over the 500 similar reports in 2005.
From the Sacramento Bee:
The state budget deficit has increased to about $16 billion, primarily due to continuing problems in the housing market and high energy prices, according to an independent budget analysis released Wednesday.
Gov. Arnold Schwarzenegger on Tuesday ordered additional cuts across the state bureaucracy that will slow down state hiring and nonessential service contracts – a move he said could save the cash-strapped state $100 million by June 30.

The governor ordered all agency secretaries and department directors to immediately begin reducing their current budgets by 1.5 percent by cutting nonessential services and activities. The order, which takes effect immediately, directs secretaries and directors to find savings, whether it's on personnel, travel or equipment.
From the Inman News Blog:
Inman News contacted the City of Stockton/San Joaquin County Animal Shelter to find out if the shelter has seen an increase in pets and if there may be a link to foreclosures....

A police staffer at the shelter directed the call to Connie Cochran, Stockton's public information officer, who said that the city is no longer researching "foreclosure-related issues for the media ... because we've spent so much time. We feel our time is better spent addressing issues within our community."
Maybe foreclosures have created a real problem there for the animal shelter, and maybe they haven't. The city wouldn't tell us. Foreclosure, Cochran continued, "really is a national crisis. We don't own it." The city apparently isn't owning up to it, either.


SacramentoCrash said...

What did I say about the deficit a while back?

mechanico said...

Think this will start happening?

alba said...

Anything that allows the banks to maintain their assets as "mark to market" is a crime. Unbundle them already! Negative ammortization? No way. Folks should just walk.

Jacob said...

Not sure how the debt warrant would help anyone (except the banks that would keep that amount on the books as tho it could actually be collected).

Lets say you bought a home for $500k, now lets say you even put $100k down, whatever. Now it is worth $300k so you are $100k behind. So the bank lets you pay back the $300k and the other $100k you owe gets filed somewhere else.

So you owe $300k on a home worth $300k, you still can't sell cause of the $100k warrant right? And you definitely can't refinance with 100% LTV so you are still stuck.

If you can't afford the home, just walk and start living within your means...

The market will correct itself no matter what anyone does so just let it happen. Get out of the way and if you are already on the ride get off ASAP.