Foreclosure News & Blues

Hard to escape someone talking about the sad state of the housing market and the burgeoning growth in foreclosure activity. Because there are only two really local TV stations in the Chico area and both of them carrying exactly the same "news", when the ignoramuses there decide to do a hatchet job on someone or something it's difficult for viewers to peel back the veil of deception concealing whatever it is these folks really have on their minds. Their recent two day investigative report was far from an honest portrayal of events, and the family they used to demonstrate the results of predatory and rapacious real estate and mortgage lending was not the victim they present themselves to be. Since this family agreed to be interviewed publicly I'm assuming it's ok to demonstrate, from public records, the actual sequence of events which led to their apparent inability to make the payment on their current loans. Portrayed as helpless first time home buyers and a victim, as Paul Harvey used to say, now the rest of the story. They bought their home in May, 2004, almost three years ago, and have presumably accumulated three years worth of home owner experience.. They were really well taken care of at purchase and acquired a loan with Wells Fargo at 5.4%, a very nice loan indeed. Seven months later almost to the day they decided to turn their home into an ATM machine and traded the good loan for a variable rate with a different lender, and increased their debt by %28,000. Remember these people portrayed as first time home buyers are now and have been home owners for a while. In September, 2006 they went back to the ATM machine for a Home Equity Line of Credit for an additional $36,000. Now they have been home owners for approximately 28 months, certainly no longer novices, and by no stretch of the imagination the helpless victims as first time home buyers that channels 12 & 24 have tried to paint them. There is a great deal of hard news out there about the housing market and the increase in foreclosures, and about some of the abuses of the industry. It is also the case that many of the foreclosure problems are the result of speculative purchases gone wrong (flipping), and the misguided attempts by many home owners to treat their home as a cash cow rather than a place to live. Probably if the TV stations could arrange to pay the news staff something above the start rate at Burger King the quality of the news would improve. In case this is seen as advocating a raise for the current staff, it's not. They're not worth the current pay. The hope would be that more money would attract someone with ability, and the ability to distinguish between honesty and deception.
My favorite appraiser tells me Chico is considered Golden. Prices are obviously sliding somewhat but in comparison with the Redding market and the Yuba City area, we're in great shape. Our Orland and Chico offices are both busy and we thank you for that, but Orland properties are still not responding to the need to reduce prices. If owners don't change their thinking they will have their homes for a while. Developers in Orland have been and are reducing prices and making concessions to spur sales. Gas prices only add to the problem for that market since it adds significantly to the cost of living if employment is in Chico.
Please be careful where you get your housing news. The local TV is less than worthless, the newspapers not much better. We've posted some links in the past to specialty sites that can keep you informed, Google is a good place to start. If we can help we will, or if you just want to chat about the state of things, call us, or drop by. We're friendly folk.
As Always,
Thanks for visiting.

Call this one UNTITLED

My last blog drew a bit of criticism from one of my own agents, describing it as negative in my depiction of our Orland office performance. I am sorry, but not for the depiction. Could have been left unsaid of course, but if I don't talk about what's happening, and honestly, then why do I write, and why would you read? Happily, both Chico and Orland are seeing a nice flow of activity now. Home prices are declining, and are likely to decline further. The realization of this fact of the marketplace has not influenced many would-be sellers to drop asking prices into realistic range. The web hits we are getting on our site and partner sites for our listed properties number in the thousands in some cases, and yet no offers are forthcoming on many of them. In our business that simply points to a disconnect between seller expectation and the reality of the buying marketplace. Our job is marketing, and as humbly as possible I'll state that we're as good as it gets. If we put property before an interested audience and nothing happens, the problem does not lie with us. Possibly the best view of the current housing situation and its enormous impact across the whole economy appears in this article http://www.pimco.com/LeftNav/Global+Markets/Global+Credit+Perspectives/2007/U.S.+Credit+Perspectives-+5-2007.htm Be advised it is long, but well worth the time to at least scan it. No doubt my own troops and probably some others will accuse me of introducing negative information into this blog, but I feel knowledge confers power and our ability to serve professionally is enhanced by having a knowledgeable client. That, we hope, is you.
Just before leaving let me note that we are doing everything in our power to reach the people with loans that are about to become troublesome to offer our services in converting to safer loan vehicles. We have a quality stable of lenders we use, and those who know us for our intense client focus know that we will provide the best for the least.

As usual, thanks for visiting.