patrick.net

Thanks for the info...

No seriously - that all sounds reasonably stated from a reasonable professional

Sounds good. One question - how does she know there is a huge pent up foreclosure inventory? Is this merely speculation based on several articles floating about or does she actually have access to what's coming on the market before it comes out? Thanks.

Sometimes I wonder how my short sale went through early last year, although there are loose ends that may be in contention as to how to settle the difference.

But the whole process was quick. From offer to close in less than two months

The easiest people to convince are those who want to be convinced...

FHA: The less a buyer invests on a down payment, the more likely that buyer is to default - fact - especially as prices continue to flag over the next year. What does it say that the general sentiment emerging in the consumer mindset is, 'you can always walk away.' This low-budget spirit doesn't bode well for either the housing market, or for the lowly taxpayer, never mind the social consequences; who wants to live in a neighborhood full of people who have nothing to lose and no stake in the community?

What really sucks is that the FHA is almost like a taxpayer subsidy to both the banks and the NAR. The public takes it on the hip again for these clowns and most people seem either indifferent or enthusiastic. This is a system designed to keep the American consumer spending money they don't have, while boosting bank's bottom lines with more taxpayer money.

From the WSJ in June:

Everyone knows how loose mortgage underwriting led to the go-go days of multitrillion-dollar subprime lending. What isn’t well known is that a parallel subprime market has emerged over the past year — all made possible by the Federal Housing Administration. This also won’t end happily for taxpayers or the housing market.

Last year, banks issued $180 billion of new mortgages insured by the FHA, which means they carry a 100 percent taxpayer guarantee. Many of these have the same characteristics as subprime loans: low down payment requirements, high-risk borrowers, and in many cases, shady mortgage originators. FHA now insures nearly 1 of every 3 new mortgages, up from 2 percent in 2006.

The FHA is almost certainly going to need a taxpayer bailout in the months ahead. The only debate is how much it will cost. By law, FHA must carry a 2 percent reserve (or a 50-to-1 leverage rate), and it is now 3 percent and falling. Some experts see bailout costs from $50 billion to $100 billion or more, depending on how long the recession lasts.

Regarding Agents Not submitting offers, I'm in a similar situation as we speak. I can't give the details at the present time, but suffice to say, there is now a lawyer involved.

The real question is, why is anyone buying right now?

Or shopping for that matter?

From what I have read, it's the 8k tax incentive and FHA subprime hysteria. But if an 8K window makes the difference between affording/assuming a mortgage and not affording/assuming, something is wrong.

My short sale bid turned into a foreclosed home, into a investor purchase, into the investor selling back to me.

How did this transpire, i found a house an contacted the listing agent directly and offered her to be my selling agent. An incentive for her to take my bid and for her to keep the commission.

It turns out she offered another name to be my sales agent for the house.
It turns out that sales agent was the actual owner that was being forclosed on.

She attempted to sell the her own house as a short sale and represent me as the sales agent.

Well the bank didn't buy it and thought there was a scam going on. So the house was foreclosed on.
My Bid was rejected.

Turns out she knew investors that were able to purchase the home from the bank within the same week it got foreclosed.

Now she was able to convince the investors to sell it back to me.

Now I'm in week 2 of escrow and ready to submit my documentation to underwriting.

What is the moral of the story.

You need a lot of luck for a short sale to go through.

Austinhousingbubble says

From the WSJ in June:

Everyone knows how loose mortgage underwriting led to the go-go days of multitrillion-dollar subprime lending. What isn’t well known is that a parallel subprime market has emerged over the past year — all made possible by the Federal Housing Administration. This also won’t end happily for taxpayers or the housing market.

Last year, banks issued $180 billion of new mortgages insured by the FHA, which means they carry a 100 percent taxpayer guarantee. Many of these have the same characteristics as subprime loans: low down payment requirements, high-risk borrowers, and in many cases, shady mortgage originators. FHA now insures nearly 1 of every 3 new mortgages, up from 2 percent in 2006.

The FHA is almost certainly going to need a taxpayer bailout in the months ahead. The only debate is how much it will cost. By law, FHA must carry a 2 percent reserve (or a 50-to-1 leverage rate), and it is now 3 percent and falling. Some experts see bailout costs from $50 billion to $100 billion or more, depending on how long the recession lasts.

I could'nt agree more with this piece. In my opinion, FHA is going to be the next Sub-Prime. Basically the Fed is buying up MBS (1 trillion worth) to inject liquidity in the Mortgage market. These MBS are just toxic assets and my estimate would be that the losses would be a minimum of 10% to the Fed when these securities mature. So that would be a 100 Billion loss, which I would think would be spread over a period of 10 yrs. The liquidity being injected by this Fed purchase is also being used to perpetuate risky lending and would most probably result in a loss of another 100 Billion over the same 10 yr period.

This illustrates my misgivings about the darker side of cheap money/debt

http://washingtonindependent.com/50130/why-you-should-care-that-your-neighbor-took-out-a-toxic-mortgage

The only thing that will surely stop this madness is if people just quit buying. Anyone who does in this atmosphere is the biggest fool.

Short attention spans, cognitive dissonance and cheap money (meaning much higher prices, neatly designed to keep you in over your head and to keep property tax revenues high) combine to make logical, skeptical thinking seem obsolete.

Teddybearneil says

Austinhousingbubble says

From the WSJ in June:
Everyone knows how loose mortgage underwriting led to the go-go days of multitrillion-dollar subprime lending. What isn’t well known is that a parallel subprime market has emerged over the past year — all made possible by the Federal Housing Administration. This also won’t end happily for taxpayers or the housing market.
Last year, banks issued $180 billion of new mortgages insured by the FHA, which means they carry a 100 percent taxpayer guarantee. Many of these have the same characteristics as subprime loans: low down payment requirements, high-risk borrowers, and in many cases, shady mortgage originators. FHA now insures nearly 1 of every 3 new mortgages, up from 2 percent in 2006.
The FHA is almost certainly going to need a taxpayer bailout in the months ahead. The only debate is how much it will cost. By law, FHA must carry a 2 percent reserve (or a 50-to-1 leverage rate), and it is now 3 percent and falling. Some experts see bailout costs from $50 billion to $100 billion or more, depending on how long the recession lasts.

I could’nt agree more with this piece. In my opinion, FHA is going to be the next Sub-Prime. Basically the Fed is buying up MBS (1 trillion worth) to inject liquidity in the Mortgage market. These MBS are just toxic assets and my estimate would be that the losses would be a minimum of 10% to the Fed when these securities mature. So that would be a 100 Billion loss, which I would think would be spread over a period of 10 yrs. The liquidity being injected by this Fed purchase is also being used to perpetuate risky lending and would most probably result in a loss of another 100 Billion over the same 10 yr period.

I was just revisiting this blog and had to update my assessment. I recently saw a video on CNBC.com of Diana Olick interviewing the FHA Boss. I have to admit now that my assessment of the FHA is not the same as it was before. Apparently the average credit score of the new borrowers is 690 as compared to a historic average of 630 that the FHA had before they expanded their lending activity. To me this alone should insure the FHA against major defaults. Given that the FHA's loans or even the MBS that the Fed has been buying for that matter actually have a better borrower quality with lower home prices would be a major factor. So, I now think that the FHA lending expansion and the Fed purchase of 1.45 Trillion worth of MBS should be winners hands down and a great investment tactic!! I was hearing the boss of Auto Nation speak on the C4C program and apparently the average credit score of the C4C customer was 730! I am like wow! Although I am totally against any kind of bailout or handout by the government, I am now in the camp that believes that the C4C was a great program simply because it benefited the good people (citizens who pay on time). Similarly from a totally negative opinion on the Homeowner credit of 8K, which also I believe benefited the good people because lending standards have been tightened and documented income is a must, so it is no longer possible for the speculators to get in!! I have always been a believer that a 20% down payment should never be a pre-requisite to getting a loan, especially where we apply the Rent vs Own logic!! If the Rent vs Buy logic works for the documented income and credit score is above average, then they are good borrowers!!

I'm requesting advice on reasonable closing costs. I was high bidder on a bank owned home in Florida. The real estate agent is trying to get me to go with her mortgage broker. The good faith estimate is on a loan amount of $132,000. Are the following fees in the good faith estimate reasonable?:

810 Processing fee $695.00

812 Broker fee $650.00
Admin fee $595.00

1101 Closing/Escrow Fee $250.00

Thanks