My, my looks like now the upper middle are getting their clocks
cleaned. First it was the the so called "trailer trash" they got
their ***** burned--kinda like the folks that did after the passing of
NAFTA. Now, it's on the move up the totom pole. Imagine that!!
Upper middle class, enjoy your Cuban cigars and BMWs while you
can...Your time is coming--very, very soon.
I warned everyone about this **** nearly two years ago. Guess what?
It is now knocking on your front door inviting itself in.
Looking at the garbage that had the nerve to run for office, the time
is drawing near where we should give serious consideration about
outsourcing the office of the President. Not to mention congress as
well.
In Detroit and Southern California, foreclosure op****tunists are going
after cheap homes in downtrodden neighborhoods, which are selling in
the five-figure range.
But there are plenty of million dollar-plus homes out there, in good
neighborhoods, which have fallen into foreclosure as the result of
shoddy lending practices, speculative buyers and homeowners walking
away from a negative equity situation.
Using RealtyTrac and REOTrans, two companies that track the
foreclosure market, Forbes.com looked for million dollar-plus homes in
elite neighborhoods around the country that were in any stage of
foreclosure or in a real-estate owned (REO) situation, where the bank
was trying to sell off the delinquent loan.
Many of those in the high-end foreclosure market were traditionally
good borrowers with strong credit scores, unlike the profile of the
typical subprime borrower. Still, the same gaffes occurred on the
lending approval side, as people were given excessively high loans,
based on the presumption that housing prices would continue upward.
"There were people with $100,000 incomes getting million-dollar
loans," says Wendell Cox, founder of Demographia, a St. Louis-based
demographics and housing research company.
Foreclosures have always been present in the top end of the market,
but what best accounts for the increase are negative equity
situations. For homes around the million-dollar mark, especially those
derided as McMansions, it's a case of the home no longer matching the
value of the loan. Many of the million dollar-plus homes listed as
foreclosures and REOs were built in the last five years and are now
worth significantly less than the inflated prices the owners
originally paid. But it's not necessarily that buyers didn't put down
enough money or had a piggyback loan; the owners may have owed more on
the house than it was worth, sinking them into a negative equity
situation.
One example: a 5,000-square-foot, four-bedroom, three-and-a-half
bathroom home in Annandale, Va., just outside Wa****ngton, D.C. The
house was built in 2004 and the previous owners paid $1.4 million for
it in early 2006, according to Fairfax County records. Unfortunately,
this was at the tail end of housing price increases nationwide.
According to the home's appraised value, it had a $140,000 drop in
equity since 2006, but based on what the bank is now asking, the home
has declined in value by $300,000. Even at the price of $1.06 million,
it's been on the market for almost two months. Prices on foreclosures
in the D.C. suburbs still have some distance to fall before they're in
line with market conditions, says Cullen Watson, a real estate
attorney and broker based in Wa****ngton D.C.
Banks are often reluctant to list foreclosures for less than the
loan's outstanding value because they don't want to take a loss. In
addition, they're usually paying a brokerage firm to list the house,
as banks aren't in the business of owning and selling property.
Brokerages take foreclosed home listings on a case-by-case basis.
Firms and agents don't generally specialize in top end foreclosures;
they specialize in the top-end market. Despite the previous owners not
being able to, or not wanting to, make payments, there's nothing wrong
with the houses. The best way to find such homes is through Web sites
like RealtyTrac.com and REOtrans.com.
But foreclosures are not all bad news for the high-end real estate
market. Nelson Gonzalez, a broker with Esslinger-Wooten-Maxwell,
specializing in Miami Beach, says that the rash of foreclosures in
Florida, which has the second-highest foreclosure rate in the country,
has driven interest from out-of-town and foreign buyers looking to
snag a deal. "They think that every house in Florida is in
foreclosure," he says. "The offers we're getting are fairly decent,
but the sellers are not coming down yet."
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