Mortgage Times

[RubHer Yellow Ducky]

Originally Posted by Steve - SanJose

Foreclosure activity in Bay area is still low, but some parts of the country must be getting hit hard.

MIAMI / FT. LAUDERDALE

[Adam in CO]

The foreclosure market in the Denver metro area has slowed some, but is still a definite hot spot. At least it's not Detroit.

I would not want to comment on the real estate market, as that is not really what I know and study. I can say that it is still a buyer's market and that most of our clients looking to exercise a "buy low, sell high" investing principal have been investors or landlords. The changes in the finance realm should increase the rental market, too.

It's a good time to be the financier.

[bparker]

Yea i know it depends on the area in which you live... as in Texas was recently listed on the on top10 realestate hotspotes in places Dallas, Auston and Houston made the top 10 list...

I hope we dont see a down turn here as we have alwasy pretty much escaped the others that have occured in the past..

[mikejr]

I specialize in marketing foreclosures in the western PA area and the foreclosure rate keeps climbing. We've gotten the attention from investors from all over the country buying up the foreclosures in the area. In general foreclosures are up all over the country.

From what we can see the high foreclosure rates are due to very liberal lending guidelines on the prime and subprime origination market. Normally the foreclosures (f/c) are in the bad neighborhood and in the low value properties. In the past 12 months we've seen more high end homes coming into f/c and onto the market.

Many of the high end f/c are interest only and ARM loan products which tend to have increasing payments.

I've seen people getting loans to buy houses that couldnt afford to buy a stick of gum on time. These same people never make a single payment and go into f/c in months.

Sure there are other reasons for f/c that include job layoffs, declining values in the area, death or illness of a spouse etc... but in my opinion its the lenders themselves that are to blame for lending money to people that dont have the ability to repay it. I've seen origination appraisals that appraised a home worth $30K at nearly $100K just to make the loan work.

We've seen loans with silent 2nd mortgages that fraudulently induce the primary lender into the loan thinking they have an 80% LTV when in fact they are in a 100% LTV position since that 2nd mortgage is never recorded and is bogus.

This commentary is not meant to attack anyone in the lending industry, but merely my observation of the state of the f/c industry in the US.

That's a few of the worst case scenarios for sure.

[Adam in CO]

I'm sorry, I fell out of my chair, hit my head, and have been unconscious for some time. It appears that we're actually having logical dialogue on the Elcova site.

I think that fraudulent lending, or even irresponsible lending (brokers, lenders, title companies, everyone) has led a major piece of the foreclosure market in the US. I see a few clients from time to time that have been victimized and stuck two or three or even five years later when someone finally tells them to call me. In fact, I am testifying Monday to the Colorado House Business Affairs Commitee with a client who was defrauded by the broker, lender and title company on his transaction. You would not believe how many people allowed this type of predatroy lending to go on. With a senior citizen, no less. It ended up costing him his house, his borrowing power, and a ton of dough. Senate Bill 249 focuses on a very blanket-like regulation over most involved parties. The state has also been very big on appraisal fraud and the FBI has opened a separate mortgage fraud office in Denver.

Denver, however, is also truly struggling with a real estate depression. The real estate in this metropolitan area has been very predictable to big public works projects. Our last great boom was when they announced our big highway development project with commuter trains called T-Rex. It has been completed and fully operational since November. Before that we build this great, big, shiny new airport to the tune of seventy-ga-jillion dollars or something ridiculous. It is a beatiful facility, and the real esate was HOT.

All we need is for someone to build us a fancy new something, and we're golden!

[mikejr]

Yup appears we're having a logical intelligent conversation on here.

It is amazing the things we've seen, and i've talked to appraisers that have flat out told me, we get pressure from the lender to make the deals work....ie....fudge the appraisal to make the loan.

Some of the worst are the deal that involve mobile homes, in the past quarter, I have had two foreclosures that were double wide mobile homes but on the origination appraisal they said they were single family detached with FULL foundations. Both of these were on piers with skirting around the base.

It appears to me that the sub-prime industry is the worst for fraud and fudging things. We've had broker's call us and ask us to "doctor" up the price in the multi-list so they could get their deals to work. When I told them it was fraud, they had the balls to tell me....oh we do this all the time...its ok...no one gets hurt. My response was fraud is fraud no matter how you try to spin it or sugar coat it.

I am a licensed individual and make a very good living at what I do, aint no way i am going to risk it over a commission on a deal.

What do you do Adam that you are testifying?