Thanks for the comments. Good stuff. Foreclosed homes are usually in pretty bad shape by the time the lender gets possession. They’d do themselves and the market a big favor by spending a few thousand bucks on a “skin job” before putting them back on the market.

If I were you, I wouldn’t be in any hurry to buy, especially in the I.E. right now. With the continued onslaught of foreclosures and buyers making their normal summer - winter slow-down, I expect prices to take another step down over the next five months. The rising cost of gas plus the abundance of REOs makes the Inland Empire especially vulnerable.

December’s almost always the best month to buy, although mid November might be better this year (banks want to get REOs off their books by year-end, builders too).

Save up a down, get pre-approved (not just pre-qualified), buy your Christmas gifts & address the cards now, & start looking 11/1 and writing low-ball offers 11/15. Unless it looks like we’ve got another year to go at that time.

1. That would do more to stimulate the economy because new home owners spend more money remodeling than the present owners.

2. Helps correct the prices by buying down the mortgage totals.

3. Doesn’t reward the people who made bad choices.

4. Could also keep the mortgage companies responsible for a portion of the write-down to give them some responsibility without shutting down the economy.

Now, I will admit I’m in the buying market right now and that
fairy tale scenario would be in my interest, but I still think that’s
a better solution.
Plus, after looking at over 35 homes this weekend I can honestly say the people getting foreclosed on are mostly out of place, they don’t take care of the properties, the “improvements” they do make are just ridiculous, i.e. put up a wall in the living room so somebody can sleep there & the places are just disgusting & filthy.
I saw several 2400 s.f. single family homes in pre-foreclosure with 2+ families living in them.

Those people need to go back to the apartments until they are really ready to buy a home.
That way the property management companies can follow them around with a mop & broom. These people have collectively made me an HOA advocate, something I really never thought I’d be.

Thanks for your input.

You’re right about neg am being a gamble too many homeowners never should have taken. Many of them really didn’t understand the gamble–probably didn’t want to–and trusted their lender or Realtor too much.

There’s no doubt the marketing was deceptive–and still is. I remember ads touting “rates as low as 1.9% fixed payment.” I think the ads deliberately tried to give the impression the interest rate was fixed for a long time, when it was the payment that was fixed, often only for a year or two, while the low “teaser” start rate moved up after a month or two, hence the massive negative amortization.

There are plenty of sad stories out there, but it’s only logical to assist borrowers who could legitimately qualify and make the payments under a modified loan. And the motive is to keep the whole economy from collapse.

The phrase “negative amortization” leapt out at me in your article. I’m sure she was no flipper, speculator, etc, but she made a big gamble with a loan like that and is going to be, and deserves to get burned.

As a taxpayer, I’m not interested in helping out people who made bets like this. I appreciate your honest thoughts at any rate.