Money in Foreclosures?
- Thread starter ForexPro
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From a Bloomberg article:
-- Joe Lents hasn't made a payment on his $1.5 million mortgage since 2002.
That's when Washington Mutual Inc. first tried to foreclose on his home in Boca Raton, Florida. The Seattle-based lender failed to prove that it owned Lents's mortgage note and dropped attempts to take his house. Subsequent efforts to foreclose have stalled because no one has produced the paperwork.
``If you're going to take my house away from me, you better own the note,'' said Lents, 63, the former chief executive officer of a now-defunct voice recognition software company.
Judges in at least five states have stopped foreclosure proceedings because the banks that pool mortgages into securities and the companies that collect monthly payments haven't been able to prove they own the mortgages. The confusion is another headache for U.S. Treasury Secretary Henry Paulson as he revises rules for packaging mortgages into securities.
``I think it's going to become pretty hairy,'' said Josh Rosner, managing director at the New York-based investment research firm Graham Fisher & Co. ``Regulators appear to have ignored this, given the size and scope of the problem.''
-- Joe Lents hasn't made a payment on his $1.5 million mortgage since 2002.
That's when Washington Mutual Inc. first tried to foreclose on his home in Boca Raton, Florida. The Seattle-based lender failed to prove that it owned Lents's mortgage note and dropped attempts to take his house. Subsequent efforts to foreclose have stalled because no one has produced the paperwork.
``If you're going to take my house away from me, you better own the note,'' said Lents, 63, the former chief executive officer of a now-defunct voice recognition software company.
Judges in at least five states have stopped foreclosure proceedings because the banks that pool mortgages into securities and the companies that collect monthly payments haven't been able to prove they own the mortgages. The confusion is another headache for U.S. Treasury Secretary Henry Paulson as he revises rules for packaging mortgages into securities.
``I think it's going to become pretty hairy,'' said Josh Rosner, managing director at the New York-based investment research firm Graham Fisher & Co. ``Regulators appear to have ignored this, given the size and scope of the problem.''
Here is an interesting article that talks about that:
http://www.frontlinethoughts.com/pdf/mwo032808.pdf
http://www.frontlinethoughts.com/gateway.asp
There is too much supply still. Prices have to come down. I am in Jacksonville Beach/Ponte Vedra Beach where they are not still building condos and homes. However there are a few developers who either tried to renovate an old apartment complex or build from scratch who cant sell their inventory. I know one who filed for bankruptcy so thats in the courts hands. I do believe others will have to file for bankruptcy and get the courts protection. I am no lawyer but this whole real estate mess will lead to court room action. I only buy homes between 100-200k in developed areas where there is no over building. I look at rents, and market them as investment income. For example you buy 100k condo in an area where rents are 1000 a month. 12,000 a year in rent income/100,000 purchase price= 12% return. You do have to subtract 5 grand or so for association fees and taxes but its still a better yeild than a treasury. And if inflation in the US keeps rising the cost to rebuild that same condo will be more than you paid for it. Thats how I evaluate if its a good buy or not. If you want any links to what is on the REO market here I can send you or anyone an email of the MLS listings.
Taxes go towards Fire, Police, Schools. Owner pays taxes. Our millage rate here is 16. 100,000 is about 1600 in taxes. I had no idea taxes are different if you are not a resident. I have to check up on that one, for my own knowledge.
I used to be self-employed as a computer consultant, and my ability to qualify for conventional financing was impaired. Now my only source of income is daytrading, and I assumed getting a mortgage was out of the question. What I am finding is that with a good down payment (at least 20%) and a good credit score, I can probably qualify for a 'stated income' loan. These days, cash is king!