Home prices ready to drop again!!!!

Home prices ready to drop again!!!!

Subprime debt's new threat to housing
Home prices are being beaten down as bondholders unload foreclosed houses at discounts to what banks are asking for comparable properties.

[Related content: real estate, recession, housing, subprime, mortgage]
By The Wall Street Journal
The housing market is facing new downward pressure as holders of subprime-mortgage bonds flood the market with foreclosed homes at prices that are much lower than where many banks are willing to sell.

While nationwide figures are scarce, a review of thousands of foreclosures in the Atlanta area shows that trusts managing pools of securitized mortgages sold six times as many properties as banks during the six months ended March 31. And homes dumped by subprime bondholders sold for thousands of dollars less on average than bank-owned properties, the data show.

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Experts say this is a bad omen for residential real-estate prices and homeowners trying to sell or refinance, because the fire sales, many to cover soured subprime loans, put downward pressure on the value of nearby homes. All of this undermines federal efforts to stabilize the housing market and revive the broader economy.

"While the banks are trying frantically to get loans off their books, they face the problem of large shadow inventories of housing being dumped on the market, which would depress prices further," said Anthony Sanders, real-estate finance professor at George Mason University in Fairfax, Va.

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In the Atlanta area, hit hard by foreclosures and declining home values in the past two years, mortgage-backed securitization entities completed 6,260 foreclosures in last year's fourth quarter and the first quarter of 2009, according to data compiled by Data Intelligence., a Marietta, Ga., real-estate analytics firm, which reviewed the records for The Wall Street Journal. That was more than double the 2,737 foreclosures by banks in the same period.

Of those foreclosures, securitization entities sold 2,963 homes during the same period for an average of 62% of the original loan amount. Banks unloaded just 442 of the homes they foreclosed upon, with an average selling price of 69% of the original loan amount.

There still is much more inventory that mortgage-servicing firms are racing to sell for securitization trusts. Such entities tend to sell in bulk so that they can cut losses, finding it more cost-efficient to move homes through foreclosure and subsequent sale than to try to restructure the mortgages with the borrowers.

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A lifeline for struggling homeowners?

Rep. Barney Frank has introduced a controversial bill called the 'TARP for Main Street Act of 2009' that allocates $2 billion to prevent foreclosures.Securitization trusts also realize that potential buyers won't step in unless the price is attractive.

"You have to haircut that in a big way," said Christopher Marinac, managing principal at FIG Partners, a bank-research firm in Atlanta.

According to Karen Weaver, global head of securitization research at Deutsche Bank AG, the steepest losses are on subprime loans, where lenders generally are recovering just 26% of the original loan amount.



Thanks for sharing the article and the information. it appears more great deals are on the way. Good luck with all your future deals. Belieev and Achieve! Smiling - Joe


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Thanks for sharing this!
Did it say where to find these sub-prime mortgage holders? I wonder, do they only sell in bulk? Interesting. Keep bringing us info as you find it.

Thanks again,



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More info on declining home sales!!

Expect More Home Price Declines Almost Everywhere
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By Nick Timiraos
Nearly 85% of the country’s housing markets are facing an increased risk of home price declines over the next two years, and prices are likely to slide in half of the largest 50 U.S. markets through the beginning of 2011, according to a report from mortgage insurer PMI Group Inc. (Read full report.)

Rising unemployment is accelerating foreclosures and home price declines in a diverse group of markets that are likely to spread the reach of housing pain beyond the hardest hit four states–California, Nevada, Florida and Arizona.

Outside of the Sunbelt, the markets that showed the greatest risk of future price declines included Bend, Ore.; Winchester, Va.; Honolulu and Atlantic City, N.J. “Probabilities of lower house prices in two years have risen significantly in MSAs as diverse as Kennewick, Wash., and Kokomo, Ind.,” the report says. The report doesn’t estimate the severity of those price declines.

Among the nation’s 50 largest housing markets, 28 are now in the highest risk category with at least a 75% of price declines. The probability of declines over the next two years rose to 92% in Nassau County, N.Y., in the first quarter of 2009, up from 78% at the end of 2008. The mortgage insurer pegged an 88% probability for declines in the New York City area, up from 68% in the fourth quarter.

The risk of future declines declined in just five of the top 50 markets, including Houston, St. Louis, and Pittsburgh. Overall, risk scores declined in just 57 (or 15%) of all 381 housing markets tracked by PMI.

We should all be able to

We should all be able to succeed with the tools dean has given us.
GO out there and get it done!!!!
With Rina and Anita and the DG admins to answer a question when your stuck,there is no way you cannot get something done. obsticals are just learning curves. You hit them ,figure out how to get around them and remember it for the next time.

loving it

Haha we have definitely not seem the bottom of the barrel here in Atlanta. New listings are popping up on MLS every week which means WHAT lenders have to either drop their prices on inventory already on market or sit even longer on it. Some listings (areas) investors just don't want. There are good listings out there; lenders need to stop being stubborn and drop their Listing prices b/c obviously we investors are smarter. We're not willing or are we going to pay these ridiculous prices they're wanting for dwelling that have to be totally rehabbed in order for someone to be able to occupy them.

Investors also can't price their rental properties extraordinary high because of all the competition nearby rentals.


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