Foreclosures hit wealthier areas hardest

[mvccd1000]

From the Arizona Republic:

http://www.azcentral.com/news/articles/1122foreclosures1122.html

The Valley's growing foreclosure problem is hitting the upper and middle class the hardest.

Metro Phoenix homes in neighborhoods where prices range from $400,000 to $450,000 now have the highest foreclosure rate.

Almost 90 out of every 10,000 homes in that price range are in foreclosure, which is more than double the rate for homes costing below $200,000, according to an Arizona Republic analysis of data from the Information Market. Homes in areas in the $200,000-to-$250,000 range have the second-highest foreclosure rate, with 63 out of every 10,000 homes in foreclosure.

.......

"The two groups of homeowners hit the hardest now are investors and those who overextended themselves," said Jay Butler, director of realty studies at Arizona State University's Morrison School. "That's why more people in higher-end neighborhoods are struggling now."

Also, there are more loan programs to help lower-income homeowners, while fewer lenders are eager to make loans above $417,000. Mortgage giants Fannie Mae and Freddie Mac are restricted to mainly investing in loans below $417,000.

"Often, people with lower incomes are better prepared to survive tough times and look for help," Butler said.

[demnan]

1. Very interesting

People with lower incomes are actually seen as having the better coping mechanism to survive. You know I went through the boom time wondering how friends and co-workers could afford these expensive properties they had when I only had a very small condo out in the suburbs. I just figured they had money stashed away or were better at saving than I was. Now I see what happens when people overextend, as a good friend of mine has done buying a couple of properties and having a second mortgage put out on her condo.

[WinkyDink]

2. It's a cryin' shame, ain't it? I guess that's less to buy from Nieman-Marcus this Christmas.

[zabet]

3. This is telling..

"The two groups of homeowners hit the hardest now are investors and those who overextended themselves,"

Greed got the investors in their mess, those who overextended themselves were
either victims of predatory lending or trying to live beyond their means. (excepting
of course those people whose medical expenses have broken them)

"Often, people with lower incomes are better prepared to survive tough times and look for help,"

That is because they are used to getting by.


This was on my local news. If you are facing a mortgage crisis, before
you lose your home, check out www.995hope.org, the
site for home ownership preservation.

From their site...
"Worried About Foreclosure?
If you feel like you may be in danger of facing foreclosure, the time to call 888-995-HOPE is now - Homeowner's HOPE™, a counseling service provided by the Homeownership Preservation Foundation, can work with you to find a solution. The sooner you call, the sooner you can regain your peace of mind. Remember, you're not alone. Millions of people across the United States have trouble with their mortgage every year. Since 2002, our counselors have provided advice and education to more than 100,000 homeowners.

edit to add: This is a free service

[dysfunctional press]

4. these generally aren't people losing their homes...

"The two groups of homeowners hit the hardest now are investors and those who overextended themselves,"...

in areas like phoenix. miami, las vegas- the biggest share of the foreclosures are coming down on speculators who were trying to "flip that house" for big fast money. mostly what they lose is their 20% down-payment and their credit-rating.

[blondeatlast]

6. As a Phoenix resident, I see it happen. In our area, investors

swept down in our neighborhood and now the homes have been for sale for months, some going on to a year. They are losing money by the bucketful. In an area of 150 homes, at least eight are for sale by investors. The families are staying put.

My heart DOESN'T bleed for the investors, nary a drop.

[bluerum]

5. Yes - it is of course good to be poor. Those lucky poor people. Thank

goodness there will be someone around to bail out the unfortunate pampered rich when their Porsches are repossessed (a dilettante's worst nightmare).

[cgrindley]

7. but these aren't upper middle class people...

some of these are middle middle and lower middle class people with zero down payment interest only ARMs facing the apocalypse they brought on themselves by purchasing disgusting McMansions. Frankly, they deserve it.

[Kolesar]

8. Slavic Village in Cleveland, Ohio is getting "Katrina-ed"

More than half the homes are in foreclosure. People have been murdered defending the neighborhood from gangs of looters. Homes are being ripped apart with the appliances, plumbing and wiring ripped from the walls. What is going to be left is "about a third of the homes" with the remaining homeowners who cannot afford to sell in a plunging real estate market. There is no budget to demolish the worst-ravaged homes.

The neighborhood is a hundred year relic of modest homes near the mills. There are not too many jobs there anymore--certainly not the high paying jobs.

The big city, the anchor of our region, is going to lose thousands more in population and have one more seriously blighted neighborhood. Slavic Village used to have a certain charm. Not any more.

And all of that because a pro-banking, Republican, Ohio government overturned laws the city passed to protect mortgage-buying consumers. There were other factors, but that was the major factor in the last few years that led to this crisis.

This stuff keeps me up nights.

[blondeatlast]

10. It's almost a forecast of what is to come unless things turn around.

Are they worried about losing the tax base at least? Or are they hoping/planning on demolishing a vital part of local history?

Stuff like this makes me want to cry.

[OzarkDem]

15. They're trying to save it

and ultimately they probably will, but it will be very expensive.

[blondeatlast]

16. Please update us occasionally if you would.

I'm just a big fan of urban renewal. I've seen what it's accomplished in Phoenix and am very supportive of it.

Thanks.

[OzarkDem]

14. I hope it can be saved

its such a great neighborhood, but I recall the Dems trying to fight with the Ohio General Assembly to stop the predatory lending practices.

GOP did their best to destroy Dem strongholds in this state. Impoverish and destabilize Dem neighborhoods then steal their right to vote. I hope they end up in jail.

[Kolesar]

21. Yes, let's find our compassion and optimism

OHio has basically been run by the best nominees the gop could put up from the small cities in Ohio. They stuck it to the urban areas. Overruling lending laws, gas well laws, and gun laws.

Just a quick note

[goddess40]

9. their the 36% of idiots that thought they were in the top 1% or would be soon

I heard about a study on AirAmerica that found the 18% of Americans thought that they were in the top 1% and another 18% thought they'd be there soon.

[1932]

11. Middle class are the people with money. So, if you want to shift a lot of wealth in America,

you have to do it off the backs of the middle class.

[Boomer]

12. And this is a surpise to the buyers?

At some level people have to be responsible for their own actions. I could have been approved for a mortgage for a house that cost a good $40-50,000 more than the one I actually purchased. But I knew that the monthly mortgage payment would be too tight, leaving me no room for unexpected expenses or a change in job situation. I bought a much more modest house that would still suit my needs, and compromised in location to get the most bang for my buck.

I have compassion and sympathy for anyone who loses their home due to devastating medical expenses or the loss of a partner/breadwinner, but none for someone who overextended themselves out of sheer greed and/or vanity. If you buy a house that costs twice the median rate for housing, and can't keep up with the ARM or rising energy costs (like we couldn't see that one coming), you're a fool.

[MADem]

13. One of the "best houses" in my neighborhood is up for sale

And I think they're in a "We GOTTA sell NOW" mode, to avoid foreclosure. It's a great price they're asking for the place, in normal times.

This used to be a nice neighborhood many decades ago, now it's a Yuppie-Snobby-Fancy neighborhood. We don't fit, but fuck it--we ain't moving. The joint is paid for, and we have too much crap to think about moving!

[mainer]

17. sounds like a good time to buy a house in Phoenix!

if you happen to be in the market for one.

[mvccd1000]

20. I think you're right.

I believe a lot of Canadians have the same thoughts. :)

[Reno.Muse]

18. Interesting because you had "middle" income people in high end homes/loans

that were actually inflated homes prices.

[City Lights]

19. I have friends in one of the Phoenix burbs who can't sell their house.

It's been on the market for about 18 months. They started out around $850,000 and are now at $725,000. They've already moved into their custom home, so it's sitting empty. While they're waiting for a buyer, they're paying two rather large mortgages. I was kind of shocked when they told me they bought a lot and were going to build a huge house because the housing market was already starting to sour. I'd be :scared: in my boots if I were them.

[FarCenter]

22. Was foreclosure covered in the course in making big money with nothing down?

I missed out and never ordered the course in how to make big money in real estate by buying houses with no money down.

Perhaps they left out the chapter on what happens when prices go down?

[Kolesar]

25. bittersweet

Fair comment, though! :hi:

[notadmblnd]

23. poor people are already used to scrimping and saving

and still going without. Yes, this is going to be much harder on those who thought it would never happen to them.

[sarcasmo]

24. The Wealthy get no sympathy from me.