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Another Liar
Old 08-02-2006, 10:17 PM   #1
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Another Liar

Just saw a for rent sign go up on a recently sold home in my area. Thought it was kind of wierd, since we are in an owner occupied neighborhood. I pulled a property profile and it follows the same path as many so called investors who are now on their way to the foreclosure auction. Anyway, here are the details.

Purchase Price 349,000 (market value)
lied to get 100% "owner occupied"financing.
subprime 2/28 80/20
that is 80% 1ST 2 years fixed at 7.8 with prepayment penalty. AFTER TWO YEARS IT GOES UP ABOUT 5%!
THE 2ND MORTGAGE WAS FOR THE REMAINDER OF THE PURCHASE PRICE.
PITI IS ABOUT 2900. THE RENTAL MARKET IS 1400 TOPS FOR THIS HOME. that is a negative as usual.

I can understand the many so called dumbass investors who purchased in summer of '05 at the peak of the bubble, but why on earth would people continue! I have been getting the foreclosure list now for 3 months and it is growing leaps and bounds. most are '05 subprime purchases- these are in foreclosure long before the 1st rate hike updward!! WOW! What if the market does'nt drop 10 to 20%, but drops 50-60%? What then Watson ? OOUUCH!
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Re: Another Liar
Old 08-03-2006, 06:42 AM   #2
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Re: Another Liar

Where do you get a foreclosure list?

I saw a study by Fannie Mae (I think) on 2003 and 2004 vintage subprime loans, jut about all of which were 2/28. After two years in the loan, 70% had refinanced. Of those that didn't refi, about half were in foreclosure, had lost their homes already, or were seriously delinquent. I would imagine that if RE prices aren't going up, less that 70% of the 2005-2006 vintage ones will be refi'd after two years.
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Re: Another Liar
Old 08-03-2006, 07:02 AM   #3
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Re: Another Liar

I have a friend that is a real estate agent.* She says there are over 1,500,000 houses on sale right now that the owner will be underwater (owe money) to sell their house.

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Re: Another Liar
Old 08-03-2006, 09:29 AM   #4
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Re: Another Liar

These investors gamblers are in way over their heads because they violated rule number one of real estate investing which is make money when you buy. That generally means your buying a property for at most 70 cents on the dollar. That may sound like a big discount but it is not. Considering the realtor fees, closing costs, reduced sales prices when you sell and you'll be lucky to break even if something else goes wrong. Not a pretty sight, sort of like watching a slow train wreck.
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Re: Another Liar
Old 08-03-2006, 09:35 AM   #5
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Re: Another Liar

Foreclosures are up in Bay Area. It's time people starting putting the crack pipe down and deal with reality. In the meantime, the true savvy real estate investor is chomping at the bit waiting for a price correction.

http://tinyurl.com/jexxc
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Re: Another Liar
Old 08-03-2006, 09:52 AM   #6
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Re: Another Liar

Quote:
It's time people starting putting the crack pipe down and deal with reality.
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Re: Another Liar
Old 08-03-2006, 10:03 AM   #7
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Re: Another Liar

Quote:
Originally Posted by cube_rat
* It's time people starting putting the crack pipe down and deal with reality.*
tHats reDiCalUs, i kIN fUnCsHiN jEs fInE. :P
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Re: Another Liar
Old 08-03-2006, 10:10 AM   #8
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Re: Another Liar

Quote:
Originally Posted by JPatrick
tHats reDiCalUs, i kIN fUnCsHiN jEs fInE. :P
This from a guy who thought relocating after retiring was a good idea.

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Re: Another Liar
Old 08-03-2006, 10:28 AM   #9
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Re: Another Liar

Will be a good time when it bursts if you got some spare change laying around.
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Re: Another Liar
Old 08-03-2006, 04:40 PM   #10
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Re: Another Liar

Yes Where do you get a forecloser list?

I noticed a large amount of people attempting to sell by owner. A way to reduce sell price while limiting loss.
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Re: Another Liar
Old 08-03-2006, 07:38 PM   #11
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Re: Another Liar

Quote:
Originally Posted by cube_rat
It's time people starting putting the crack pipe down and deal with reality.http://tinyurl.com/jexxc
Isn't this an oxymoron?
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Re: Another Liar
Old 08-03-2006, 09:22 PM   #12
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Re: Another Liar

Reality is overrated.
The problem of buying at a "discount" now is as mentioned how far will things drop ? We are also getting the scum of the earth answering the ads for the lease options. According to my bil.
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Re: Another Liar
Old 08-04-2006, 01:51 AM   #13
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Re: Another Liar

In Texas, the county has the foreclosure/auction lists. For example,

http://www.co.travis.tx.us/tax_asses.../tax_sales.asp
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Re: Another Liar
Old 08-05-2006, 06:16 AM   #14
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Re: Another Liar

lying about "owner occupied" is illegal and will be prosecuted. however, please do NOT quickly judge these people as "dumb", "gambler" and "stupid" because these are the people that i USED to laugh at and now, some of them got a couple million bucks worth of real estate assest in baltimore city and some in philadephia too. i have seens these "dumb" people paid more $20,000 for a place and now it appreciated around $160,000.00 yes, it's the truth.

so, my point is that only the future can tell who is "dumb" or not. when Google stocks first hit the market, i thought only "dumb" people pay over $100 for an "over price" stocks. look where it is today. Go figure.

enuff
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Re: Another Liar
Old 08-05-2006, 08:09 AM   #15
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Re: Another Liar

Anyone know where you can get foreclosure lists for N/E Florida?

SWR
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Re: Another Liar
Old 08-05-2006, 04:28 PM   #16
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Re: Another Liar

Quote:
Originally Posted by Enuff2Eat
so, my point is that only the future can tell who is "dumb" or not.
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Ain't that the truth!
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Re: Another Liar
Old 08-05-2006, 05:02 PM   #17
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Re: Another Liar

Quote:
Originally Posted by Enuff2Eat
lying about "owner occupied" is illegal and will be prosecuted. however, please do NOT quickly judge these people as "dumb", "gambler" and "stupid" because these are the people that i USED to laugh at and now, some of them got a couple million bucks worth of real estate assest in baltimore city and some in philadephia too. i have seens these "dumb" people paid more $20,000 for a place and now it appreciated around $160,000.00 yes, it's the truth.

so, my point is that only the future can tell who is "dumb" or not. when Google stocks first hit the market, i thought only "dumb" people pay over $100 for an "over price" stocks. look where it is today. Go figure.

enuff
Do people really get prosecuted for lying to get an owner occupied loan? I'd be surprised.

What is dumb? If a guy takes his entire paycheck, including what he needs to buy food and pay rent, and buys lottery tickets instead, is that dumb? If one of the lottery tickets hits and he wins $100M, was it still a dumb thing to do? I'd say it was dumb regardless of the outcome. Same as buying property on the hope that the market will go up fast enought to cover you before the outrageous loan balloons.
You often don't have to wait for the future to spot "dumb." In fact, sometimes the outcome can mask "dumb."
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Re: Another Liar
Old 08-07-2006, 10:41 AM   #18
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Re: Another Liar

"dumb", "stupid" are all relatives term. it's all in the eyes of the beholder. My father-in law was a war hero. he was praised by the president and respect by all his soldier friends. he was always in "front" of the battle field and fought hard in everybattle. A lot of his soldier "friends" were very average, sometime "chicken" too and never go beyond the line of duty.

as a result, my fil was killed at the age of 29. left my wife and her brothers and sisters without a father figure since the age of 4.

go figure. was he "dumb" or "smart" or what. Alot of his "average" friends still alive today and hanging out with their wife and grandchildren. they talked about my fil like a hero whereas my wife is the one going home withOUT a father.

enuff

the point: only future can tell if u're made the right decision or not. No guts no glory. (may be)

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Re: Another Liar
Old 08-08-2006, 05:49 PM   #19
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Re: Another Liar

Quote:
Originally Posted by Arif
These investors gamblers are in way over their heads because they violated rule number one of real estate investing which is make money when you buy. That generally means your buying a property for at most 70 cents on the dollar. That may sound like a big discount but it is not. Considering the realtor fees, closing costs, reduced sales prices when you sell and you'll be lucky to break even if something else goes wrong. Not a pretty sight, sort of like watching a slow train wreck.
You're not taking into consideration the length of time that one will hold onto the property or the creation of equity. I've bought several properties over the years at market value, fixed them up, rented them for 2-6 years and sold them for great profits. You're certainly stacking the odds in your favor if you can buy below market value, but if one plans to hold onto the property for more than 2-3 years, plans to create equity with smart renovations, and can rent it out for even close to cost, one will usually make some really decent profit that the stock market just can't touch right now.
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Re: Another Liar
Old 08-08-2006, 08:37 PM   #20
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Re: Another Liar

Quote:
Do people really get prosecuted for lying to get an owner occupied loan? I'd be surprised.
Nope, but if interest rates get high enought that 5% mortgage may look better at 10% and the bank could call the loan due.

Quote:
You're not taking into consideration the length of time that one will hold onto the property or the creation of equity. I've bought several properties over the years at market value, fixed them up, rented them for 2-6 years and sold them for great profits. You're certainly stacking the odds in your favor if you can buy below market value, but if one plans to hold onto the property for more than 2-3 years, plans to create equity with smart renovations, and can rent it out for even close to cost, one will usually make some really decent profit that the stock market just can't touch right now.
Length of time doesn't matter if you pay below market. If I pay 70k for a house that is worth 100k how long do I have to hold on to it to perform better than someone whose paid 100k? You may have made money but the chances of you getting a negative return greatly increases with your strategy vs. mine where you make money when you buy the property. Also, spending more money doing smart renovations on a home that you paid market value is not the best way to buy real estate IMHO.
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