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O.C. late mortgage rate rises faster than Calif., U.S.
October 12th, 2009, 1:00 am · 67 Comments · posted by Jon Lansner
| Slice | CA | OC | US |
|---|---|---|---|
| 90+ Day Delinquency | 9.84% | 6.85% | 7.10% |
| 1 yr. ch. | +67% | +77% | +70% |
| Foreclosure Rate | 3.54% | 2.50% | 2.86% |
| 1 yr. ch. | +60% | +58% | +73% |
| REO Rate | 0.92% | 0.34% | 0.53% |
| 1 yr. ch. | -50% | -66% | -34% |
First American Corelogic reports that as of August, 6.85% of mortgage borrowers in Orange County were 90 days or more delinquent on their loans.
The rate has increased 77% in a year (see chart at right) and is showing faster growth than the state or nation.
Also, FAC notes …
- O.C. “foreclosure rate” — share of active loans with a foreclosure filing but not yet seized by bank — rose, too, by 58% to 2.5%. Generally, loans in this category are a subset of the 90-day lates.
- The O.C. “REO” rate — percentage of loans offered at auction but returned to the lender — fell in the past year by 66%.
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Not too much of a surprise - OC has many posers who think they are rich b/c they barely make a house payment and a lease payment on a European car.
And I am sure this will fuel the RE boom for the coming year….
You hit the nail on the head. These posers all had their day in the sun and now its time to face the music.
Well Since the boom years they all talk big, walk tall, and now they own all.
Is only a status-modus-vivendum.
30 years of living in Illussions from Free-Enterprise, All the way to “Ownership-Society”.
First time I see an Unhappy “Movie- Ending”
Matt, does the blogging software have a translation feature?
Wow….that says tomes about you. If you pull your head out of the sand you can read the screen better. Just FYI….
What does it say about me? I really have no idea what he was trying to say. Please translate if you understand.
Ok look….one time, and hopefully from this you might be able to understand that we who see the data are honestly more adept at understanding this and maybe more realistic and honest.
“Well Since the boom years they all talk big, walk tall, and now they own all.
Is only a status-modus-vivendum.”
The thing is he is saying here is that people were rolling like the roaring 20’s prior to the GP and not unlike now where people were living well above their means. However, after all the dust settles they are no where near opulent. The term is a Latin term and common with the writings of John Gray - it means a practical compromise in most basic terms.
“30 years of living in Illussions from Free-Enterprise, All the way to “Ownership-Society”.”
What he is talking about here is the fact that there has been nothing but bubble economies propping up inflated returns since 1980, and in the end he talks about GWB statement about an ownership society, which is laughable and should be called a debtors society. However, to understand this statement you have to not swallow the MSM nonsense and understand the matrix of the failed economics that were Straussian in terms to the last 30 years.
“First time I see an Unhappy “Movie- Ending””
What he is saying here is that this fantasy of what is been sold to the American people as what is the norm is a fantasy or a movie for a better term. Unfortunately, we were sold a lie and that this movie ending was in fact a nightmare and people thought this was going to be all wine and roses however it ended with debt and depression.
Ok, that is the last time I connect the dots.
Amazing how Patricio can determine that from that! Today my dog licked its butt, scratched and took a crap. Translation you freak of a hack?
…and the green shoots keep sprouting up everywhere…LOL
I’m sure it will be 10% in no time
Agreed, 10% is easily achievable.
numbnuts all ‘o ya’… numbnuts..
A bunch of mean and sad commenters. Why do you hate your fellow man so much? And you’re a Christian right… What a surprise there.
We only hate the greedy men who caused all this mess to begin with especially realitors!
Bill,
Nice try, greed is a sin last I checked with the lord. Nail yourself to the cross.
“The O.C. “REO” rate — percentage of loans offered at auction but returned to the lender — fell in the past year by 66%” This was caused by an increase in short sales. All servicers, banks, and investors are finally realizing a short sale makes more sense than to foreclose as the cost of a foreclosure just in legal fees and paperwork is over $50K.
Lou Pacific
Real Estate and Mortgage Company Consultant
Serving the Industry and OC for over 30 years.
How much of this is strategic defualt? I know personally of three families not paying their mortgage in hopes for a loan mod. Some of them are even 60 days late or more. They still have the same job (maybe less income), fixed rates, etc. I think this is really a bigger problem than is being exposed in the media.
60 days late? There are people out there who are more than 3 years late. Talk about a personal bailout.
The bloodshed isn’t nearly over. With real incomes dropping by 8%”see buraue labor stats” and baby boomers coming into retirements, and the younger generation declining, not a convergence for growth in home prices. Not to mention, the next shoe to drop. Commercial Properties.
The retiring boomers I know are buying second homes or investment props.
Your just too hurdy turdy for the rest of us.
Why is that Tom? Because I don’t support your agenda?
Then you know boomers who make up a very small portion of the population. Most boomers do not do what you state and instead unload their primary residence to downsize, at least that is what actual data says.
Please post that data.
Your so full of crap it comes through your posts.
The fact is that boomers are retiring every day, and so far there hasn’t been some mass exodus from real estate. They like owning homes, so much so that they are loading up on second homes and investment properties. You’ve provided no argument to the contrary, which tells me you have nothing to bring, so instead all you’ve done is hurl insults at me… twice. I think you’re a little bitter.
Just as you ask, please post that data. Your posts never contain any data, just you opinion. Have fun trying to get your loan mod…
I didn’t claim to have hard data. That was SC2’s claim. Unfortunately, they wouldn’t give me a loan mod because my payments are about 17% DTI.
That’s what I figured, even though you started your sentence with, “The fact is…” The fact seems to be that nobody on here has any real data. I personally know my parents who are boomers that sold at the peak and moved to Oregon and several of their boomer friends who also sold, moved out of state, and retired early. But, that’s all anecdotal and is about as conclusive as your statement. So, as usual asking for real data on this blog is like asking for the truth from a used car salesman. Better to find a more reliable source.
I am truly sorry to hear about your loan mod, though. Unlike this blog, that is real and I hope things work out for the best.
I would love to see some data on this, but maybe only the census is in position to gather it. I don’t think enough boomers are selling to have an impact on prices.
Also, I don’t need a loan mod, but I decided to respond to your facetious well wishing.
You posted on one of Matt’s earlier articles that you were trying to get one and couldn’t, which I’m sure is why you have such an interest in prices going back up. Facetious or not and DTI of 17% or not, owing more than a property is worth has to hurt. But I’m sure you’ll be fine.
The question was not whether boomers selling would have an impact on prices. The original comment was that the economy was weak and included that boomers were retiring. Your rebuttal was that these boomers were buying properties in their retirement, which there is no data anywhere to suggest and goes against all common sense. This lack of being able to follow a conversation logically or critcally is what runs rampant on this blog and makes everyone sound so idiotic.
If you make a point, back it up. If you rebut a point, back it up. Take a critical reasoning class if you can’t do that without the many falacies you rely on. There are many community colleges that probably offer the class. That way you’ll be giving back to the community both financially and intellectually.
I’m not trying for a loan mod, but I’ve made comments in the past that I wished I could get one, not due to hardship but because they are a good deal.
You say: “The question was not whether boomers selling would have an impact on prices.”
The original post says: “and baby boomers coming into retirements… not a convergence for growth in HOME PRICES.”
Maybe you should be teaching the class at OCC. LOL…
Do a google search - there are tons of stories about the trend of baby boomers selling primary houses earlier and downsizing. You can read it for yourself. I gave you the DQ data, do something on your own for once.
SC2-
You can google “baby boomers second home” and find just as many articles. Besides, I taught you to find PPSF data on Redfin, so you should be thanking me.
Again, nowhere in your post do you site anything that proves your point or disproves the point of the parent post. Is it really that difficult for you to concisely argue a point or provide any kind of supporting data?
I’ll tell you what, I’ll teach the class at OCC if you take the class. Based on your postings I can foresee that you won’t be passing it. Your points are about as valid as Mulli saying in an earlier post that the economy was better than everyone on this blog thinks because the Brea Mall was packed the day he went. Brilliant!
You guys have such ire for the extremists on the other side that say the sky is falling, but you are just as bad and prove yourself to be just as illogical when you spew nonsense just to make the other side seem wrong. Congratualtions, you’ve succeeded in making this blog even more bereft of intelligence.
Linguweenie-
I have ire for extremists on BOTH sides. Providing anecdotal evidence to back up a point is something everybody on this blog does. It’s something that you do as well. You’ve never posted any hard data, but plenty of opinion.
Actually, Liar Bone-head…I have never stated that my opinions are anything other than opinion. Lumping yourself in with everyone else that uses stupidity to back up their points is another brilliant position to take. Congratulations again, you’ve just confirmed that you every bit as stupid as everyone you mock. I’d like to see you post just one example of my use of anecdotal evidence as fact, but again I’m sure I’ll be disappointed as you have never been able to come up with any factual data for anything. But, since you’re trying to be funny now (and I stress trying) keep up the chatter so I can continue to slap my Linguweenie all over your face. Pucker up buttercup…
“Congratulations again, you’ve just confirmed that you every bit as stupid as everyone you mock.”
I think you just called yourself stupid.
—–
Since you are demanding evidence, here it is after a 2 second google search:
“Nearly 28% of homes bought last year were for investment purposes, and an additional 12% were vacation homes, the figures show. Most of the buyers were baby boomers in their top earning years, looking toward retirement and hoping to build wealth or find a more desirable place to live.”
http://www.usatoday.com/money/economy/housing/2006-04-04-real-estate-usat_x.htm
—
I’m waiting for your next barage of baseless attacks and poor excuses.
“I think…”
That statement is comical in itself. Your interpretation of that sentence shows just how little you are capable of thought.
Your interpretation of the article you linked to confirms it completely. Did you actually read the article? It specifically states that the purchases were by boomers in their peak earning years, not retirement. You have again proven that you are unable to even remember what the original point was.
The only thing your “evidence” supports is that you can’t comprehend what you read. The only base I have for my “attacks” are your own posts and unfortunately for you that’s all that’s needed. You criticize Tom M for being bitter and hurling insults at you when you do the same as soon as someone points out your inability to logically discuss an issue. No excuses needed on my end.
Now you will probably go back to name calling since that’s a little more your speed. I look forward to your next circular argument and ad hominem attack. Either that or I can go watch a toddler reach into his diaper and smear his poo on the wall since that would have about the same substance as your posts. Have fun finding more articles to regurgitate.
Yep, just as I expected. Nothing but excuses and attacks from you.
The original point was: “The retiring boomers I know are buying second homes or investment props.”
In response to your foul-mouthed attacks, I posted an article backing up that trend.
It’s clear that you have no comeback on the issue, and really it’s not the issue you’re interested in. You’re more focused on trying to tear me down. Unfortunately for you, there’s nothing you can do to ruin my credibility. This is a blog ya moron.
Yep, just as I expected…making stupid erroneous statements without any examples or data to back it up. Why don’t you point out one excuse? Actually, just looking up the definition of “excuse” would probably be a good place for you to start. If your ego is so fragile that you can’t take the same criticism you dish out you should seek therapy. They can probably prescribe you something to make you feel better about your inadequacies.
“The original point was: “The RETIRING boomers I know are buying second homes or investment props.”
In response to your foul-mouthed attacks, I posted an article backing up that trend.”
No, you posted an article stating that 49 year old boomers in the peak of their careers were buying investment and vacation properties. That doesn’t support your argument at all. In fact, it would support the parent poster’s argument that retiree’s are less likely to buy investment and vacation properties because 40% are the aforementioned non-retirees and 25% are FHA, which we know are not retirees. But, I’m sure you will just restate that your post supports your “theory” of the multitude of your retiree friends that are buying up all the properties in the U.S. The more you post the more you prove that you can’t understand what you read, so keep posting and maybe someone can draw some pictures for you.
I have no need to tear you down, you do fine by yourself. Just keep arguing yourself in a circle and I’ll watch you like a dog chasing his tail. Ruin your credibility? HAHAHA…like there is any credibility to ruin. Go back to your desk-jockey job as a mortgage broker or other low-level bank employee and leave the analysis to someone who can do more than get there boss’s coffee. I think I hear him wringing your little bell. Go monkey, he likes cream and sugar.
You still haven’t provided any evidence to support your point. Reply back when you can argue the topic. Oh, and include some data please.
Everything you posted was an excuse.
Poor guy, just have to get the last word in even if it shows your idocy. Oh well, round and round and round you go. You can go ahead and copy and paste your reply now since it’s obvious you have nothing new to say.
heres Obamas change that he promised– freakin liar
http://www.pbs.org/moyers/journal/10092009/watch.html
Why the surprise? Our government is encouraging loan delinquencies. Everybody wants a free ride….
One of my neighbors had his loan modified. Of course, our government never told him to return his brand new GMC SUV that he bought last year. That must be nice. He gets to keep his new GMC and at the same time received lower mortgage payments.
Life is good for him! He didn’t have to sacrifice much of anything. It was given to him on a platter….
Yours truly,
Obama
Just imagine how his neighbors feel - they continue to pay their mortgage and property tax like good little soldiers, while this guy gets a free ride. That should make everybody mad, but especially other home debtors who don’t have modifications, pay more for the same thing, and don’t get a free ride…. Home debtors like shockg, etc. like to hate renters, but their hate should be directed to other home debtors who get free rides on their mortgages while people like shockg do what they are told and pay the original, full amount… These are the same home debtors who get foreclosed on and drag down property values in surrounding areas, but shockg, trs, etc. don’t understand that….
It is exactly that sort of behavior that is driving delinquency rates higher. The high delinquency rates are starting to feed on themselves, as borrowers learn there are very few short term impacts of missing mortgage payments. Some people are living rent free for years. this will only encourage more people to skip payments.
It will not end well.
Unless your neighbor got a principle reduction, those lower mortgage payments just mean he’s now in debt for 40 years. You have higher payments, but you’ll own your home decades before he does, and probably end up paying less in interest over the long run.
Now, if he DID get a principle reduction, feel free to rage away, but keep politics out of it. Let’s not forget who sign the “bank bailout” in the first place.
OC is hotbed for FRAUD. Just as the subprime market created this bubble, we’re seeing deja vu with loan deliquencies.
The “Players” know how to milk the system. The worst thing is that our government endorses it….!!
It’s a bad thing but it’s also oppotunities for people like to work and solve some problems we are facing and at the same time making a lot of money. I am going to, how about you?
I could see why this cause frustration among renter, and no wonder loser like SC2 get more bitter:
Renter: no payment for 1 month: warning, 2 months: strong words, 3 months ? YOU ARE OUT !!!.
Home owner: no payment for 1 months: nothing, 2 months: bank beg you to pay, 3 - 9 months: nothing, 10th month: you mortgage payment get cut by 1/2 - 1/3, cheaper than rent.
So nobody have any need to sale. Poor souls keep tracking NOD on foreclosure-rada or similar sites, thinking one day they can gob up the house for cheap. Reality is, that map now simply show people who will get their loan mod & mortgage reduced.
It’s not a seller market, not a buyer market. It is a NO-SELLER market. Get used to it.
Enjoy while your neighbor home debtor gets bailed out and you continue to pay the regular amount. In Chinese, Chinglish, or English, you are a fool. As a renter, with my low costs, it really doesn’t affect me, except it drives down your home value, and I can buy at an even bigger discount!!! Loveeeeeeeeeeeeeeeeeeeeeeee it (as you say in your broken Chinglish).
SC2, you have to admit that tsao has a point. And hell yeah, I’m pissed, precisely because he’s correct on the fact that irresponsible owners are getting a free ride, while people paying their mortgages or rent like you and I are getting crap. I despise any politician or anyone pushing bail outs for these people through modification or PR.
Sure, but for the small amount of rent we pay, and the ability to buy at even more discounted prices as these games continue on, I am only mad (like everybody), whereas if I boght a place recently, I’d be really, really pissed knowing my neighbor was getting a modification or bail out whereas I got none and had to pay a full mortgage each month or take risks that there woudl be more trouble.
So yes, these games present even more opporunities for renters, and more trouble for current owners.
Tsao man is probably used to how they do business in China. Cut throat, get yours while you can and worry about the consequences later. I am only sadden that he will pass on this type of mentality to his children….
Except, lice man (Tsao), we pay 1/2 what it would cost to buy townhomes down the street that are essentially the same, while you continue to lose money on a depreciating asset. And we don’t pay property tax or any repairs, maintenance, HOA, insurance, etc.
So explain again why renting the past few yrs was a bad idea… Oh, you like losing 300k and having to work 5 yrs extra to make it up - real smart, you dumb slave.
You lost lots of money. We can buy anytime at a huge discount. I can see why you are frustrated and jealous that people made better financial decisions than you did, and you now hold a depreciating assett and are apparently very invested in housing and, as a result, losing a lot of money, whereas someone like me, whose rent costs are a fraction of buying, can buy your place at a discount at anytime.
Isn’t it time for you to be deported? Watch out…. Now eat some lice, poor man from China.
You keep saying you’ve “been renting for a few years” and have stated you sold at the top. Yet you complain about having to listen to cocktail-party chatter about housing profits. You have been caught in many lies and are fully-transparent. You did not own. You are not paying half of anything. You are a sad, viscous person - nothing more.
You must be hearing things. I never said I sold at the top. The only lies you hear are your own.
And, yet again, you respond to me despite your proclamation that you never would. LOL!!! Loser.
Maybe you need a Chinglish lesson like Tsao - I was comparing to those who bought at the peak a few yrs ago. You are truly clueless. What an idiot.
Put up 5k, and we can go to Vegas. Chicken.
Humm
Before buying my first house I paid 2-3k extra come tax time.
After buying house I got 5-6k back come tax time.
My property tax is $4k
My rent on 2k sq ft with a pool is 1450/month - fixed.
My house is 10 yrs old - so no maintenance to speak of.
Hummmmmmmmm
Hummm…
This is an excellent Rent vs. Buy argument that was posted on here a little while ago:
• $400,000 with 20% down is a $320,000 mortgage. National average rate for a 30 year mortgage this week is 5.27%.
Payment (principal and interest) = $1771 per month
Add on insurance (call it $200 a month) and property taxes (call it $30 per $1000 of assessed value which is ½ of market value or $500 a month.) BTW, that is MY tax rate here on the shores of Lake Michigan so it has a reasonable basis.
Principal and interest $1771 + insurance $200 + $500 taxes = $2471 a month.
Over a 30 year mortgage you will pay $320000 in principal and PLUS — sit down now - $317,566 in interest. That is a GRAND total of $637,566 for the purchase of the house – not including taxes (another $6000 or so a year or $180000 over 30 years), insurance (at least another $2400 a year or $72000.) And in the insurance and taxes, and that house over 30 years – not including maintenance – will cost you $889,566.
Almost forgot! Have to add in the ‘lost opportunity earnings’ from the downpayment of $80,000. If the $80000 had been put into tax-free muni bonds paying 4-5%, it would earn another $3600 a year or $108000 over 30 years; and if you had just reinvested that $3600 in munis, at the end of 30 years with compounding, you would have around.$299,000.
So the FINAL grand total for that house for 30 years is downpayment and lost earnings ($299,000) + principal $320000 + interest $317566 + taxes $180000 + insurance $72000. The real total is $1,188,566!!!! OUCH!!! That is a far cry from $400,000!
Okay will subtract the $15000 a year rent for 30 years from that $1,188,556. Feel better that the house will ‘only’ cost you an additional $738,556 + repairs and maintenance?
Renting may be expensive but owning can break the piggy bank.
• Pray tell how you think that tax deduction for interest paid will make up the difference between $400,000 (your 30 year price) and the real 30 year price of $889,000? Note: you ONLY get a tax deduction for INTEREST payments – not principal payments.
Or how the ‘tax deduction’ (deduction, not credit) will pay for the difference between $15000 in rent for 30 years ($450,000) and that $889,000 actual price for the house? That is a difference of over $14,633 a year!
The interest deduction (DEDUCTION – NOT ‘TAX CREDIT) is highly over-rated. On a $320,000 mortgage, the amount of interest paid in the 1st year is $16,756. Lets assume you are in the very top Federal income tax bracket which means your AGI (income after exemptions and deductions) is at OVER $357,000 for a married couple filing jointly and your top marginal tax rate is 35%. Home mortgage interest is an ITEMIZED deduction which means you have to come up with at least $10,300+ of itemized deductions for a married couple filing jointly. (BTW, ‘itemized deductions’ replace the standard deduction of $10,300 – you don’t get both.) Anyway, the value of that home interest deduction is the amount of interest paid x (times) the tax rate. The most – the very most – you could hope to save on the amount of federal taxes which you PAY is $16756 x .35 = $5864.
I would tend to think that your combined taxable income is NOT $357,000 so you won’t get to that amount. I would guess maybe in the 25-28% top marginal bracket for the 2 of you. Wow! $4440 saved on the amount you pay in Federal Income taxes. Congratulations. That plus another $4000 –5000 might pay to reshingle the roof or replace the furnace/AC.
You most assuredly will be coming up very short (like $10000) short if you think the tax deduction (Gross income – deduction) will make up the difference between the cost of the house and the cost of the apartment.
And speaking from several decades of experience, repairs and maintenance are expensive. Seems like no tradesman ever quotes any price that is less than $2000 to repair water lines, replace a water heater, replace a garage door opener, fix a bad electrical circuit, reroof the house (an every 15 or so year project), paint the house…….and then you want to maintain a pool to boot…..
SO if you really only want to spend $15,000 a year, then you can only afford around a $154,000 PITI (principal, interest, taxes and insurance.) Any tax savings will be eaten up from replacing the refrigerator, fixing plumbing leaks…….and in any event a once a year tax savings doesn’t do squat for the monthly cash flow to pay that mortgage unless you adjust your withholding so that you don’t pay the money in the first place and thus don’t get a refund.
Frustration is for losers. Good things come to those who wait.
______________________________________________________
HOUSING RISKS STILL LURK EVEN AS BUYERS RETUN
REUTERS
Postponed foreclosures have created a backlog that banks may have little alternative but to dump onto the market.
Foreclosures being processed surged nearly 80 percent in the second quarter from a year earlier to nearly 1 million. But completed foreclosures fell nearly 10 percent to 106,007, the OCC says.
Brokers in California bemoan what they say is just a delay in the inevitable pain of people losing their homes and the follow-on boom in sales of cheap properties, something for which there is no shortage of demand today.
Bruce Norris, president of property investment firm The Norris Group, said inventory levels are “completely artificial, completely baloney … The delinquency rate (in California) has exploded, but inventory levels have gone down. In many of these cases the banks have simply avoided foreclosure.”
Amherst Securities, a broker-dealer specializing in residential mortgage-backed securities, calculated a mountain of 7 million U.S. housing units is likely to end up on the market — equivalent to 135 percent of a normal year’s supply.
“It’s going to drip on the market,” said broker Fred Arnold in Stevenson Ranch, California. “We don’t have the state and federal government that will let the natural supply and demand market occur which is pushing the real estate problem into 2012.”
(Editing by William Schomberg and Philip Barbara)
Yep. Sorry Tsao - you lose again.
The scheme Tsao describes is real but that doesn’t make it either right or sustainable. Eventually it all changes. The longer it goes on the longer the pain continues. For those who aren’t home owners/debtors right now just find a nice place to rent for a while that you can be happy in. It’s going to be a couple years most likely before things shake out.
Sure, and when everybody does it, RE values drop like noone ever expected… So go ahead debtors - please stop paying. That would be a treat.
Some people have been living in these defaulted homes since Feb 2008. Guess whose paying that bill? We are and I’m the one paying my mortgage every month.
Obama is hurting our country. Debt, Debt, Debt. He doesn’t even listen to you. He just listens to his radical friends. Lets boot him out!!