Under Water? Some Thoughts
If you bought a home in Aviano for more than $750K-$800K, there is concern aplenty as to what your options are for the future. Reading through the article I posted a couple of days ago has me thinking of the demographic of just who is walking away from their homes. It's the old people who are already in a comfortable place in life and don't really need to worry about their credit score. Younger folks have to think about that stuff. But the pinch on these types of homes is coming from all directions. Thanks to the government handling 90+% of the nations lending and currently of the mindset that we should penalize the most productive in our society and piss all over capitalism, there is virtually no lending for anything above $400K. A recent Mirador sale of $600K would make another Mirador owner say why bother? When that totally decked out Mirasol - to the tune of $1.2 million - went on the market for $477K over on Los Gatos, a Mirasol owner asked me on the front step why not buy it and walk away from his current high mortgage Mirasol. This is how wacked things are getting. Short sales and foreclosures ARE competition and the normal sale is screwed. The street value of your home is $300K less than what is owed so you call the bank and request a loan modification. Our dearest friends are in this position and would not get a return phone call from the lenders until they stopped making payments. They can pay the mortgage but would like to modify it because we all know the values are never going to return to the '05-'07 days. The hassle and pain they are going through to get some modification is large. The pain of going through a short sale in incredible. But these are the people that are trying to work it out. What if all the folks who are upside down just decide to quit paying? Deutsche Bank estimates that 75% of Phoenix will be in that position next year. Maybe they should try just a little harder to work with the folks that WANT to keep their home. So we have trouble getting a loan, government interference and bank apathy but wait to see what happens when interest rates hit 9%. Not even gonna be able to give that Mirador away because it is not the cost of the home, it is the cost of the financing. Oh, and if you think that will cut down on potential buyers what happens when unemployment hits 11-12%? Can't buy a home with no job anymore. Thanks to the community organizers that forced banks to lend to folks that could not buy in the interest of "fairness" and a no doc process to boot, lending restrictions, appraisors, the evil underwriters are now killing transactions right and left to make up for the past excess.
What are your options with your monster home at this point? Even if you go to work in an office in a big company not related to real estate, this affects you - your home is usually your biggest investment so you really should be concerned about what's happening down the street.
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