16 replies to this topic

[traderpaul]

Forecloser is a three months delayed statistic.....We had that while this market was going up.....Imagine what it will do with a down market?.....How many people read their contracts?.....All they know is the amount needed per month.....

[OEXCHAOS]

IT, I had a 4/1 variable pitched to me two months ago, by a reputable bank and an ethical banker. It was not at all clear to me that my rate was almost guaranteed to go up in year 4, unless rates dropped significantly. I only discovered that the rate was a teaser (it seemed about reasonable on it's face) doing rather in depth analysis of the product. Now, I'm VERY thorough and distrustful of any credit agreement, and I'm pretty well educated and reasonably bright. I was nearly fooled into picking a loan that would not behave the way I thought and which would be inferior to a fixed rate product, longer term. What about most folks, who are less savvy and less attentive and probably more trusting generally? I think that a lot of these folks WERE mislead, either purposefully or inadvertently. BTW, these lenders state very clearly that your rate "could go up or down". They just don't explain that the initial rate is NOT set on the same terms as the later re-set and that the rate will jump even if interest rates fall a bit. So, most are probably thinking that they in fine shape in their loans when they ought to have been assiduously shopping a fixed rate. I'm pretty sure that if someone in the INVESTMENT industry was that cute, the NASD and SEC would be turning them into a fine paste. Mark

[Rogerdodger]

Has anyone ever seen the lady who signs her mortgage papers and leaves with a monkey on her back?
That's a great one.

I think that a lot of these folks WERE mislead, either purposefully or inadvertently.

I disagree. Some maybe. But...
I also think that way too many people are WILLFULLY STUPID and BLIND to reality.
WILLFULLY I said.
Look at how many broke people constantly buy new cars before ever paying off the old ones.
They don't care that they are upside down and with each trade go further into debt.

YE HAW! They got another new car!
And now they can get 70 Months of new car payments.

Edited by Rogerdodger, 24 August 2007 - 10:16 AM.

[beta]

I live just north of Detroit and this area continues to suffer as a result of the woes of the domestic automotive industry. Frankly, there is no relief in site. Unemployment is over 7%, and much higher if you count the people who have been unemployed so long that they have fallen off the list. Typical homes in the metropolitan area have fallen as much as 20-25% from their highs. I hear about investors coming in for bargains within the city limits of Detroit. I would not recommend that to anyone who is not very familiar with the area. Although there are a few neighborhoods within the city that are fairly nice, for the most part I wouldn't take the majority of the homes on for free. Fwiw, the Detroit metropolitan area is actually very nice and should not be confused with the city of Detroit, which imo is everything you hear about it.

Mike

Hi Mike,

I grew up in Bloomfield Hills, MI and know the area you are describing well. Totally agree w/ your long-term investment outlook for this region esp inner city Detroit. Only thing that surprises me is how well areas such as Birmingham and Orchard Lake are still holding up, given the demise of the auto industry.

Would much prefer to buy lake property in upper Michigan. Spent last week on vacation in the pristine woods near Houghton Lake. Gorgeous scenery, very safe. People dont even bother to lock their cabins at night. Foreign tourism seems to be booming in areas such as Mackinac Island and Traverse City, where I saw lots of Euro vacationers.

BTW, I think Da Cheif hails from Da Troit, too (explains his homeboy accent).

Edited by beta, 24 August 2007 - 10:13 AM.

[OEXCHAOS]

[kjt71]

I would much rather look at delinquencies, rather than foreclosures. A foreclosure is a trailing statistic. Not all states are the same, but at least where I live, a foreclosure takes about a year to work its way through the system after a delinquency. People who were over their heads last year around this time are now showing up as foreclosures....this is after trying to sell, extract more equity, do a short sale, etc.

[Rogerdodger]

You're quick.