Friday, October 28, 2011

Irvine Housing Blog

Irvine Housing Blog

Link to Irvine Housing Blog

Mitt Romney: don’t stop foreclosures, let markets hit bottom

Posted: 28 Oct 2011 03:30 AM PDT

Mitt Romney is the first presidential candidate to demonstrate the courage to endorse the right policy for housing.

Irvine Home Address ... 67 HAVENWOOD Irvine, CA 92614
Resale Home Price ......  $444,900

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spilling the blood of matyrs abd slaves
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machinery of the cleansing

decay and degradation dwell amongst us
machinery of the cleansing
sepsism swells the flock obscene
machinery of the cleansing...

Angelcorpse -- Machinery of the Cleansing

Foreclosure is the machinery of the cleansing. Unfortunately, both lenders and loan owners are loath to take a bath, and politicians are too busy pandering for votes to do the right thing. Perhaps that is about to change.

I am neither left nor right in my political leanings. I am one of the moderate swing voters who votes for either party. I was annoyed by McCain's pandering to loan owners in the 2008 election, so he blew his slim chance at getting my vote (I was probably still too pissed at Bush to vote Republican.) So far, I have seen nothing by clueless pandering or outright avoidance of housing issues by any of the presidential hopefuls. Nothing Obama has done has impressed me so far either.

When I read today's featured article on Mitt Romney's comments, I was pleasantly surprised. He actually seems to display a grasp of the issue and is endorsing a politically unpopular policy. He wants to let markets work which means letting home prices fall.

Foreclosures: Don't slow them, Romney says

Foreclosures need to go forward so the housing market can begin to recovery, GOP presidential hopeful Romney says in Nevada. Nevada leads the nation with the highest rate of foreclosures.

By Kasie Hunt, Associated Press / October 20, 2011

Las Vegas: Mitt Romney came to the state with the highest foreclosure rate in the nation and said he wants to allow home foreclosures to "hit the bottom" to help the housing industry recover.

He picked the right place to make those statements. There are no successful market props working in Las Vegas. Prices have crashed, transaction volumes are high, and the market is bottoming as cashflow investors are moving in to clean up the debris. That's how markets are supposed to work.

In an interview published Tuesday ahead of presidential debate, Romney told Las Vegas Review Journal's editorial board that solving the foreclosure crisis would require letting banks proceed against homeowners who have defaulted on their mortgages. New investors could then rent out the homes until markets adjusted.

"As to what to do for the housing industry specifically and are there things that you can do to encourage housing: One is, don't try to stop the foreclosure process. Let it run its course and hit the bottom," Romney said.

Wow! Romney is right -- completely and totally right. I imagine the "give away free houses" movement on the left will freak out over these comments. Apparently, Mitt Romney either isn't listening to his advisors who want him to pander to loan owners, or he actually has the courage to say what needs to be done. I thought Ron Paul was the only politician with the bravery to do that.

Romney elaborated during the presidential debate Tuesday night. "The idea of the federal government running around and saying, 'We're going to give you some money for trading in your old car...or we're going to keep banks from foreclosing if you can't make your payments," Romney said, "The right course is to let markets work."

This is the first utterance from this campaign that got my attention. He is right on with his comments.

Nevada, where seven of the presidential candidates are debating, has the country's highest foreclosure rate and the nation's highest unemployment rate.

Democrats immediately criticized Romney as out of touch with middle class Americans, many of whom are struggling to hold on to their homes amid high unemployment.

I suppose Romney is out of touch with loan owners who are trying to hold on to the bank's home.

"Mitt Romney's message to Nevada homeowners struggling to pay their mortgage bills is simple: You're on your own, so step aside," President Barack Obama's reelection campaign spokesman, Ben LaBolt, said in a statement.

Yes, that's exactly what he's saying, and it's about time someone did.

"This is just one more indication that while he will bend over backwards to preserve tax breaks for large corporations and tax cuts for millionaires and billionaires, Mitt Romney won't lift a finger to restore economic security for the middle class."

No, it's an indication Romney doesn't want to give free houses to people who aren't making their payments.

Senate Majority Leader Harry Reid of Nevada also went after Romney. "Nevada has the highest foreclosure rate in America, and it has for almost three years. And here's what Mitt Romney said: He would just let them hit rock bottom," Reid said during a press conference in the U.S. Capitol. "I don't know what's more graphic than that, in how we have different views of what the world should be like than our Republican friends."

These bozos may cause me to vote Republican in the next election. I haven't done that for a federal office since 2002. The bottom line is that Democrats are wrong, and they are endorsing the wrong populist pandering policies.

But the home foreclosure issue has been almost entirely absent from the GOP presidential race. While it was mentioned during the presidential debate Tuesday, and Romney addressed it as part of a larger answer, the candidates quickly started talking about bank bailouts instead.

Romney has just scored points with me. My personal view is that he will likely win the nomination but lose the election. Too bad, if he keeps making economic sense, I may vote for him.

Apparently, I am not the only one impressed with what Mitt Romney said:

Romney's Finest Hour

He speaks the truth about housing and foreclosures.

A friend of ours quipped recently that Mitt Romney could do his Presidential candidacy a lot of good if he took even a single position that is unpopular in the polls. Well, we can report that he has done that on housing policy, that he's being pummeled for it, and that it may be his finest campaign hour.

They just couldn't afford it

Today's featured property was sold on 7/30/2004 for the ridiculous price of $619,000. The loaners used a 433,300 first mortgage, a $123,800 second mortgage, and a $61,900 down payment. On 8/22/2006 they obtained a $125,000 HELOC and got access to their down payment plus a little spending money. There is no way to tell if they took out the money.

With no further mortgage equity withdrawals, they still couldn't make the payments on the first mortgage, and the property was foreclosed on in early September. Perhaps it was unemployment, or perhaps they just couldn't afford it to begin with.

This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707 

Irvine House Address ...  67 HAVENWOOD Irvine, CA 92614
Resale House Price ......  $444,900

Beds:  3
Baths:  2
Sq. Ft.:  1578
Property Type: Residential, Condominium
Style: Two Level
Year Built:  1980
Community:  Woodbridge
County:  Orange
MLS#:  U11004456
Source:  SoCalMLS
Status:  Active
On Redfin:  2 days
This home offers three bedrooms, two and a half bathrooms, two car garage and rear patio area with brick accents. Living room boasts wood-type flooring, conversation-area with a cozy fireplace. Kitchen has plenty of storage, ceramic tile flooring, granite countertop and stainless steel appliances. The property requires some cosmetic touches such as new carpet and fresh paint, perfect opportunity to put your personal touch on your new home. 
Proprietary IHB commentary and analysis 

Resale Home Price ......  $444,900
House Purchase Price … $619,000
House Purchase Date .... 7/30/2004

Net Gain (Loss) .......... ($200,794)
Percent Change .......... -32.4%
Annual Appreciation … -4.5%

Cost of Home Ownership
$444,900 .......... Asking Price
$15,572 .......... 3.5% Down FHA Financing
4.18% ............... Mortgage Interest Rate
$429,328 .......... 30-Year Mortgage
$132,425 .......... Income Requirement 

$2,094 .......... Monthly Mortgage Payment 
$386 .......... Property Tax (@1.04%)
$0 .......... Special Taxes and Levies (Mello Roos)
$93 .......... Homeowners Insurance (@ 0.25%)
$494 .......... Private Mortgage Insurance
$354 .......... Homeowners Association Fees
$3,421 .......... Monthly Cash Outlays

-$329 .......... Tax Savings (% of Interest and Property Tax)
-$599 .......... Equity Hidden in Payment (Amortization)
$23 .......... Lost Income to Down Payment (net of taxes)
$76 .......... Maintenance and Replacement Reserves
$2,592 .......... Monthly Cost of Ownership 

Cash Acquisition Demands
$4,449 .......... Furnishing and Move In @1%
$4,449 .......... Closing Costs @1%
$4,293 ............ Interest Points @1% of Loan
$15,572 .......... Down Payment
$28,763 .......... Total Cash Costs
$39,700 ............ Emergency Cash Reserves
$68,463 .......... Total Savings Needed

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