Great Calculator for considering foreclosure

[DeadManCrawling]

This is worth looking at for some:

http://payorgo.com/

It is basic, but covers enough ground to merit consideration. Some numbers that should be included (insurance, HOA, utilities, etc.) are not included, but it is a good starting point for anyone considering strategic default or letting a house go.

Other factors certainly come into play, some subjective, but I think this is worth sharing, for anyone who was not already aware of it.

best,

-dmc

[DeadManCrawling]

Here is my result:

I Should Walk Away Unless I Think My House Will Be Worth At Least $624,204.00 In 7 Years

This Means That My House Must Increase In Value An Average Of 17.65% Per Year for 7 Years

No chance of that. I already knew the answer, of course, and moved out last month. Potentially good start point for people who are undecided, though. As noted above, there are other factors to consider, too.

[Justpoor]

Thanks Deadman. My house would need to increase 25% per year over the next three years! I'm walking, yes indeed I'm walkin.....

[bulletproof77]

I did mine and I'm still laughing ! My house would need to increase +45-50% EACH YEAR for the next 7 years in order for it to make economic sense for me to stay...And we all know that just isn't happening here in the dead zone of Southern California !! Stopped paying and moved a long time ago. Best decision I ever made...BofA..."TAKE THIS HOUSE-PLEASE"

[OweTooMuch]

What is a realistic value for yearly increase for the Inland Empire area of Southern California? I understand there may still be a decrease for the next year or two but if we were able to recover what would be a good figure to use? I am -116,000 in negative equity and just wonder will it ever recover or should I just go? It is a very hard question to answer.

[DeadManCrawling]

The IE, in my opinion, is not as likely to recover any time soon. Too many houses, too few people. High unemployment. Though you have fallen, as an area, about 40%, I think it will drop further in 2010.

http://www.scag.ca.gov/Housing/pdfs/trends/Housing-Market-Outlook-2009-10.pdf

Seems to agree.

Unfortunately, I think the IE may lag the rest of the SoCal area when a recovery is in full force, due to the above factors. I would be surprised to see more than 2-3% average growth starting in 2011. Of course, I am no expert, but experts themselves don't know what is coming next, either.

So many houses, just like here in Florida. We see entire neighborhoods that were at 500k 4 years ago now sitting in foreclosure, taken over by drug dealers and other criminals. One such neighborhood has around 400 homes. A newspaper reporter was able to find less than ten actually occupied by anyone. Many were investment properties owned by LLC's that have since folded. No one even knows who owns them, and they are a serious drag on county funds and law enforcement.

Since they are all held by MERS, tracking down the supposed lender is very difficult.

[OweTooMuch]

Hi DeadManCrawling - Thank you for the very informative PDF posting. You seem to be a wealth of information. It does not seem that the places I would like to live have dropped rents yet (will need to if buying is cheaper right now) in relation to housing. To rent a comparable house I would be paying close to the amount of my 1st mortgage, however, it would be in a nicer area. However, $110,000 negative equity is not something that is going to be recouped if ever. I worry though that renting after a BK may be a challenge.

[BKInLA]

My house only needs to increase by 3.6% per year for the next 7 years in order for me to stay. I think I'm going to stay.

[jade73]

I Should Walk Away Unless I Think My House Will Be Worth At Least $106,468.00 In 30 Years
This Means That My House Must Increase In Value An Average Of 0.75% Per Year for 30 Years.

[DeadManCrawling]

Jade, I am curious.

You plan to be in your house when January 2040 arrives? Most people would not be able to say that, and my hat is off to you if that is really your plan and capability. I DO hope that nothing changes your mind in the next 30 years. If more people thought that way, this mortgage mess would never have happened.

Best,

-dmc

[jade73]

Well it was just a number. I did plan on staying here forever when I signed the papers but the way my luck is going, who knows. We have been here 4 years paying out the guru in interest and havent refinanced yet so 26 more years would have probably been more like it

[justbroke]

Since they are all held by MERS, tracking down the supposed lender is very difficult.

MERS actually has a service for this at (https://www.mers-servicerid.org/sis/). When I search by Borrower Name, SSN and property Zip Code, it shows my mortgages and the correct servicer. Then you can contact the servicer to ask who owns it.

[DeadManCrawling]

Well, what I really meant was this:

They contact MERS, get the name of the servicer, and then demand payment, but the two usually point at someone else and deny liability or simply refuse to pay. Very strange things. Local newspaper here did a report on the prevalence of payments being lost in this fashion. Presumably, the county and local governments will get paid at closing, if there ever is one, but for now, the budgets are really hit hard.

[justbroke]

They contact MERS, get the name of the service, and then demand payment, but the two usually point at someone else and deny liability or simply refuse to pay.

I agree. I think this whole mess is a combination of the "principle" of MERS (and electronic registration in general) and Pooling and Servicing agreements. I bet a State's Attorney General or a Municipality's City Attorney or County Attorney could force the issue by looking at the pooling and servicing agreements and then force the servicer to pay.

From what I have learned, it's the servicer who ends up paying deficient taxes. In some cases, it might be best for them to wait until after a tax certificate is issued, and just before the tax certificate is exchanged for a tax deed. In that interim period, the debtor/owner may actually redeem the certificate. Perhaps this is the strategy.

[momisery]

Thanks great tool... but there were other factors for us... In the past our area has grown only about 3% so our area was not hard hit like CA or AZ. However, we lost 13 or 18% of our home value. So at our growth rate factor it may not gain its value for a long time. We could rent for about 300.00 less per month, so we would be money ahead. Then add in the repairs. We bought a fairly new home, built in 2004. The water heater valve had to be repaired last year, we have replace both gerger caniters in the toilets 2 years ago, and they are not working right again already. In the bedroom sometimes the break flips. So, we have to go out and turn it on. At first I thought it was something in that room so we checked all our electric stuff. Then I bought a 5 dollar little light thing you plug into the wall sockets. If I plug this in to a specific socket all the power comes back on after we flip the breaker, but it will not come on until I do that. We have replaced a couple light fixtures because the builder speicals burned our bulbs out in 6 months time, and the carpet it not holding up at all. They did not set up drains very good under the homes here and many people have had to install subpumps in their crawl spaces. So, home ownership repairs have to be factored in, and shoddy workmanship and builder cheapness has cost all of us a lot. If you pay 150 a square foot for a small home, and 115 for a larger home then you should at least get the same better quality fixtures. Here you do not, you get lower grade everything. Our kitchen faucet set so low you could not get a pan under it. The huge boom in home building I am afraid also set us up with some pretty bad homes in some areas. That needs to be considered in... jmho.