SF Bay Area Real Estate Lawyer & Attorney : David Winton Law Firm : Mortgage, Appraisal : Marin County, Alameda, San Fransisco, California

A recent blog post by the Wall Street Journal includes a revealing and useful map on the delinquency, foreclosure, subprime and various other stats from metro areas around the country.   Find it here.   Actually, when I first looked at it, I thought it was California-only data, but that's probably because of the top 13 delinquency rates in the US, 6 of them--including 4 of the top 5 spots--are here in California. 

Against a national average of 3.86%, the winners are...

• Merced, California at 9.78%.
• Stockton, California at 8.73, and
• Riverside, California at 8.03.

This map is an interactive sort of thing, and there are other specific mortgage-related maps that you can play around with.  For instance, want to know which state's mortgage brokers made the most subprime loans during the "boom?"  It's there.  And...Yes.  California wins again.  29.4% of all real property secured loans made made in the state in 2006 were subprime-- "hard money" as the industry refers to them.  Here's a direct link.  What's really frightening is the dollar volume:  $155 billion. 

The only conclusion you can really reach in looking at this material is that it's a bloodbath, and it's worse in California--by a vast margin--than anywhere else in the country.

What I have to wonder is who was the genius who came up with the idea of speculating with $155 billion in junior deeds of trust in markets like Merced, Stocton and Riverside?  Where was the adult supervision?  Didn't anyone learn anything at all from the S&L crisis?  Or, the dot com fiasco? 

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Sure, why not. Bargains everywhere right?  Maybe.  I wouldn't say that buying foreclosures in this market qualifies as "contrarian investing" but...

At least do yourself a favor and spend some time learning the ropes first.   It's not--as its promoters would have us believe--like shooting fish in a barrel, especially now that investing in the declining market has become the new vogue.  Here's a blog post by Temecula California realtor article Kathy Neilsen on what to do and what not to do.  I wouldn't say it's the first,  last or only word, but it's a great start and a helpful perspective from a pro if you're thinking of  diving into this shark pond.

 

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A while back I wrote a piece on the advisability of "short sales," with a reference to TMG West and its principal Bill Gordon.   Wanting to stay current  on the subject I called Bill the other day to see how things in that segment of the market were going, and it turns out that the news isn't great.

Instead of getting easier, short sales seem to be getting more difficult to get done.  According to Bill's experience, some lenders (Ocwen Financial, for instance) are reported to have instituted policies halting them altogether, while still others, like Countrywide, have restricted the review process to the last few days before the completion of the foreclosure sale itself.

To me the most telling news of my phone conversation with Bill is that his company has stopped doing them altogether.  They're just too hard to get done and more often than not they wind up wasting everyone's time. 

For those who are unsure of what, exactly, a short sale is, just today there is an article in the Philadelphia Enquirer describing the process.  It doesn't say much as to whether these things make any sense, but it does give you some of the basic info. 

My own spin on whether they are worth the effort to even attempt is that it depends.   On who the lender is.  On what the difference between your loans and the value of the property.  On whether the property is a principal residence, second home or investment vehicle.  On what the rest of your financial condition looks like.  On whether you stand to gain anything or whether the risks outweigh the benefits.   

Be careful of short sale boosters.  But then that goes for anyone in this market who advocates a one size fits all remedy to a distressed real estate asset.  There is no single solution...except for a market turnaround. 

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For those scouring the Web for a good source of real estate blogs, check out the cleverly and stealthily named Directory of Real Estate Blogs.   It describes itself as  "A directory of real estate blogs and blog sites of industries affiliated with and serving the real estate industry."  The lists are organized by both topic (mortgages, sales, appraisal, insurance etc.) and by geographic concentration. 

Maybe after a few more weeks they'll add my blog to their list.  With several hundred blogs from around the country having made the cut, I'm feeling left out.  

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