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Foreclosures and Financing

TheAnk

By TheAnk
in Providence

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Bil Whistle-Stop

Bil

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I don't know for sure, but I bet that they were tax sale lots. RI Housing now has the right of first refusal on residential tax sales before speculators to prevent the Pat Conley Effect, and work with people to keep them from losing their property. Not 100% sure though...
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Jenkins Whistle-Stop

Jenkins

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Interesting (good) news. I expected us to be much higher on that list, especially if we're talking about foreclosures per number of households, because we're so small. Admittedly though, I don't completely understand their little chart. It's horribly labeled.
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Pseudo_Work Hamlet

Pseudo_Work

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It is a bad chart. The most important part is the number of foreclosures per 1k households, and Providence was much less than Worcester (1 per 549 households foreclosing in Providence versus 1 per 150 households in Worcester, for example).

But the scary news I read this week was the URI economist predicting another 15% decline in housing prices in RI through the end of '09. Yikes. I would theoretically be upside down on my mortgage at that point (if I had to sell... at gun point).

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Bil Whistle-Stop

Bil

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I don't know for sure, but I bet that they were tax sale lots. RI Housing now has the right of first refusal on residential tax sales before speculators to prevent the Pat Conley Effect, and work with people to keep them from losing their property. Not 100% sure though...
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Bil Whistle-Stop

Bil

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I was watching the Bloomberg financial channnel on Cox's digital channel 121 this morning where they said that by 2009 they think that nationally the number of forclousures should reach 1.8 bil. This year it stands at over 225,000. They see the trend comtinuining untill 2009.
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Jerry2 Hamlet

Jerry2

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It was very disturbing to see all the boarded up houses on my 1st trip back to Providence. Seeing that the country still has several cycles of adjustable rate mortgages coming due in the next 2 years, I am hoping that all the progress doesn't revert back to the housing situation that we had in the 80's.

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TheAnk Hamlet

TheAnk

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I think to Liam's point the speed on the front end drop will also mean increased (than normal) speed on the rebound... Housing has already dropped what, 20% give or take?? I don't think that the speed down means deeper down per se.. Maybe its the nature of the beast today with ARM rests increasing the velocity..

I think one of the greatest misconceptions portrayed in the media is that anyone with an ARM is "likely" to foreclose upon reset.. The people primed to foreclose are buyers at peak, fraud scam artists, predatory victims and generally greedy unscupulous people.

Now, leaving my personal beliefs aside that almost all people are inherently unscrupulous, most people who bought houses even with ARMS intended to live in them.. And they will take steps to keep them.. The foreclosers, are the rest.. Mix in a few honest people who have no avenues to make ends meet, but for the most part, lets be honest.. The people who get foreclosed sort of deserve it.. It just sucks it affects the rest of us through blight...

The government is clearly taking steps to ensure (whether this is good or bad is TBD) that housing finds a bottom through lowering rates and devaluing the dollar.. So how much longer can the downfall take?

It is my opinion that the public is generally wrong most of the time.. When everyone says one thing, its time to do the opposite.. I'd say we are just about at that point with housing.. If you can find a single person (real estate sales professionals excepted) who is bull on housing.. I'd be shocked.. So, that usually means a tipping point.. (On the flip side, no pun intended, when there are TV Shows called Flip This House that was also the tipping point on the high side..)

Who knows.. The one wild card is banks.. They alone hold the key to it all... how they react to their own poor practices will unfortunately indicate how things play out.. By shutting off financing to buyers, they are wittingly or unwittingly increasing their own exposure.. Obviously if things fall enough and it gets bad enough, the "drop off keys to bank scenario" could happen.. But honestly with such an active Fed I really don't think thats possible.. By active I mean, meddling, inflationed based Fed willing to spread the suffering to all people through inflation rather than just some..

Its kind of an interesting catch 22.. I just wish that it could happen in a vacuum instead of in our neighborhoods..

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Pseudo_Work Hamlet

Pseudo_Work

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For those of you who are still convinced that Providence is ground zero for the nation's foreclosure crisis, consider this article:

http://www.charlotte.com/109/story/401705.html

Is there any neighborhood in Rhode Island facing a 60% foreclosure rate? And this is the south - the cheap south, where theoretically it would be much more difficult for people to default.

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TheAnk Hamlet

TheAnk

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The foreclosures there are not based on just cost per se.. Its more about sprawl.. Up here in space restricted NE they can't REALLY overbuild.. There they can.. Its a different animal, less based on price than space, but of course price is a factor for sure..

I think the worst area I have seen, hate to say it is mine and the surrounding.. The second circle of PVD West, 1920s stock of smith hill oville valley etc.. But the saving grace is.. These areas already had rundown houses mixed in ANY WAYS.. So it is difficult to tell a recent foreclosure from an older run down house!!! :rofl:

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Bil Whistle-Stop

Bil

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I think to Liam's point the speed on the front end drop will also mean increased (than normal) speed on the rebound... Housing has already dropped what, 20% give or take?? I don't think that the speed down means deeper down per se.. Maybe its the nature of the beast today with ARM rests increasing the velocity..

...

It is my opinion that the public is generally wrong most of the time.. When everyone says one thing, its time to do the opposite.. I'd say we are just about at that point with housing.. If you can find a single person (real estate sales professionals excepted) who is bull on housing.. I'd be shocked.. So, that usually means a tipping point..

Who knows.. The one wild card is banks.. They alone hold the key to it all... how they react to their own poor practices will unfortunately indicate how things play out.. By shutting off financing to buyers, they are wittingly or unwittingly increasing their own exposure.. Obviously if things fall enough and it gets bad enough, the "drop off keys to bank scenario" could happen.. But honestly with such an active Fed I really don't think thats possible.. By active I mean, meddling, inflationed based Fed willing to spread the suffering to all people through inflation rather than just some..

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