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!
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!