Flippers still in the market????

What is your point? Are you wishing that real estate always makes sense, and that there is rhyme and reason to every transaction and every consideration? Or are you simply trying to impress with your powers of observation?

its a sensitive topic..... some people are significantly exposed to the lovely stick built home a 'stroll [quarter mile] to the beach' ... that could be worth x___M or could be worth x____K.

it's anybodies guess. excess liquidity (1% Federal Funds rate we enjoyed for months 3 years ago) can work both ways.

What is your point? Are you wishing that real estate always makes sense, and that there is rhyme and reason to every transaction and every consideration? Or are you simply trying to impress with your powers of observation?

Maybe that this information is interesting to those watching the SoWal real estate market?

Flippers may be getting ready to exit shortly.

This article from the Denver post today.




Zero-down lenders folding
High-risk loans go bad; subprime firms go under
By Aldo Svaldi
Denver Post Staff Writer
Article Last Updated: 02/20/2007 06:17:56 AM MST


Brian and Selah Davenport were two days away from closing on a townhouse in Parker when their mortgage broker called on Valentine's Day.

Their lender, Las Vegas-based Silver State Financial Services, one of the country's bigger subprime lenders, had ceased operations. That forced the couple, who were looking for a zero- down loan, to scramble to find another lender and save the purchase.

"I didn't know a lender could shut down all of a sudden and there would be nothing for you as a consumer," said Selah, who hopes to close Friday.

About two dozen of the largest subprime mortgage lenders across the country - some with offices and customers in Denver - have gone under or stopped making loans since December, according to the Mortgage Lender "Implode-O-Meter," a new website tracking closures in the subprime lending industry.

The site tracks only large lenders, so there are probably far more closures.

"You're seeing 40 or 50 (subprime companies) a day throughout the country going down in one form or another. I expect that to continue throughout the year," Angelo Mozilo, chief executive of Countrywide Financial, told investors in a recent conference call.

That means it has become tougher for homeowners in Colorado and other states who are accustomed to zero-down mortgages and easy approvals to get loans.

Subprime or alternative lenders provide loans with slightly higher interest rates, usually 2 to 3 percentage points above prime rates, to borrowers with lower credit scores.

They also make loans that conventional lenders consider too risky, such as interest-only and no-money-down loans without proof of income.

The failure of so many subprime lenders is symptomatic of a larger trend - Wall Street's loss of appetite for risk. With so many mortgages going bad, investment banks have quit backing subprimes and are actually kicking bad loans back to originating lenders, forcing some of them to close up shop.

Mostly small operators

Colorado isn't a significant hub for the subprime mortgage industry, with mostly small operators.

But when subprime lender Sebring Capital Partners of Carrollton, Texas, closed in December, 50 workers in Arapahoe County lost their jobs. With Silver State's closure, an estimated 800 workers nationally - most in its headquarters state of Nevada - were displaced.

Subprime loans accounted for 18 percent of all home mortgages in Colorado, compared with 13.6 percent of all home mortgages in the U.S., according to the Mortgage Bankers Association.

At the end of the third quarter, nearly 13 percent of all subprime mortgages in the U.S. and 10.4 percent of subprime mortgages in Colorado were delinquent, according to the association.

That compares with only 2.5 percent of prime mortgages nationally and 1.85 percent of prime mortgages in Colorado.

"You are starting to see the repercussions of bad decisions," said Mike Thomas, managing partner with mortgage provider Hyperion Capital Group in Aurora. "These lenders are having to eat these loans that they made on 100 percent financings."

So far, subprime mortgages remain available, but the solvent lenders still serving the market are setting aside large loss reserves and warning mortgage brokers that stricter loan-qualification guidelines are on the way.

"Their underwriting criteria are tightening and their price is going up," said Chris Holbert, president of the Colorado Mortgage Lenders Association.

One of the first products expected to disappear are zero- down mortgages, known as 80-20s, made without verification of income to borrowers with impaired credit ratings.

Tighter loan standards should mean the borrowers who buy homes going forward will be less likely to default.

In the shorter term, a large block of potential buyers could be out of the market, further dampening a metro-Denver market struggling with long sales times and a large inventory of unsold homes.

The pain could be just beginning. The Center for Responsible Lending estimates that one out of five subprime loans made nationally in 2005 and 2006 will result in the borrowers losing their homes.

Forced out of business

Tim McDonald, who oversees subprime lending for a 10-state region on behalf of Wells Fargo, one of the nation's largest mortgage lenders, said most in the industry understood a day of reckoning was coming.

But what has surprised him is how quickly some of the more reckless lenders have been forced out of business.

"What is going to happen is that 25 percent to 30 percent of the subprime market is gone," he said. "The survivors will vie for what is left."

Borrowers who took out riskier adjustable-rate and option ARM loans on spoken assurances that they could easily refinance in a year or two also need to be careful. That's because many of the mortgage brokers and lenders who made those promises may not be around.

Maybe that this information is interesting to those watching the SoWal real estate market?

It's interesting to me. I really enjoy reading it.

It's interesting to me. I really enjoy reading it.

I don't know if the real estate info is always enjoyable reading, but it is necessary reading if you live here, don'tcha think?;-) No matter what the tone-

I don't know if the real estate info is always enjoyable reading, but it is necessary reading if you live here, don'tcha think?;-) No matter what the tone-

Shoot! By reading the posts here I pick up all sorts of interesting things to talk about while I?m warming a bar stool at Caf? 30A or some other establishment at the beach.😀

What is your point? Are you wishing that real estate always makes sense, and that there is rhyme and reason to every transaction and every consideration? Or are you simply trying to impress with your powers of observation? :bow:

Genius, and totally called for. Down with the observations and commentary. Long live Castro! ;-)

Please provide us with a link to your blog. 😀

Bye bye flippers...don't let the flies bite you in the backside when you leave. 😀

Bye bye flippers...don't let the flies bite you in the backside when you leave. 😀

And while we're at it.....can we also do away with those hokie "husband and wife, back-to-back, arms folded on chest, bleached teeth smiling, sprayed-on-tan" photos on the Realtor's ads?

Thank You.

Or the ads where the realtor (tm) is driving somewhere in their classic convertable?

I think there's room in the market for flippers as they used to be defined- the people who bought out and out trashed fixer-uppers (ie. not just some place needing a few cosmetic tweaks) and rennovated them back into something nice.

They're an entirely different breed than those people who expect to get a 20% return on buying a home just because it's six months later, not because they've done anything to improve the home or neighborhood.

And while we're at it.....can we also do away with those hokie "husband and wife, back-to-back, arms folded on chest, bleached teeth smiling, sprayed-on-tan" photos on the Realtor's ads?

Thank You.

Yes, please! I would add a couple of other things about big boats and tuxedos, with shirt untucked, but I think I will refrain. :rolling:

Or the ads where the realtor (tm) is driving somewhere in their classic convertable?

Now what is wrong with a Realtor driving somewhere in a Classic Convertible?:idontno::blush:

And while we're at it.....can we also do away with those hokie "husband and wife, back-to-back, arms folded on chest, bleached teeth smiling, sprayed-on-tan" photos on the Realtor's ads?

Thank You.

I have a spray-on tan on my teeth, and my skin is bleached white. Is that ok?

Yes, please! I would add a couple of other things about big boats and tuxedos, with shirt untucked, but I think I will refrain. :rolling:

I really like the ones with the ladies all dressed up with their high heels laying in the sand.

Kids and pets cool with you?

Kids and pets cool with you?

Fine by me. It shows that we, too, have families and hearts, unless the kids and pets are borrowed. ;-)

Is there a place where they rent out kids? I may get in trouble if I start randomly taking pictures of myself with children.

Actualy if you really do want to rent-a-kid, the film comission over on Okaloosa Island can probably set you up. I know they've done a bit of networking for companies looking for local catalog models in the past.