It's been a long time since I posted the updated historical charts for Folsom and El Dorado Hills. Please note that the unlabeled source reports the median price, while the MelissaData chart is the average. I believe the MD chart includes new home sales, while the other is primarily for resales.
The late fall is when the biggest price drops have occurred over the last couple years. It will be interesting to see if this trend holds true for the current year. With many tax credits expiring and a backlog of foreclosures, it is certainly possible.
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Also we'd expect the supply of "first time" buyers to dwindle a bit.
I've been following NODs, bankruptcies, etc. in EDH for awhile, which is where I live.
Recently noticed a neighbor is filing Chapt. 7 bankruptcy. In doing some prelim research, looks like Chap. 11 is repayment program but Chap. 7 is a liquidation and discharge of debts. What I can't sort out is if a home is an exempt debt and therefore the debt will get discharged so he'll get to keep it....or if it's a secured debt by the lien, will he eventually lose it (albeit in an "orderly" fashion)?
Interestingly, this neighbor was recently boasting about how much he loved his house, was going to ride out the housing bust, not really affected by the downturn in the market, etc. etc. Now I know why the cocky attitude. I'm just wondering if his cocky attitude is premature. His court date is in several weeks.
Sunshine, interesting question.
I am following one house in Folsom that has been on the foreclosure track for about a year, in that time they have filed for bankruptcy, which postpones the sale until everything is worked out. I am unaware of what type of bankruptcy has been filed.
There have been a few other homes that I have tracked through the process and all have taken more than a year and all have eventually gone back to the bank.
Not sure what happens when you don't have equity, but here are a couple of links on Chapter 7:
http://www.chs-law.com/2007/09/bankruptcy-and-california-homestead.html
http://www.rinnelaw.com/lawyer-attorney-1415727.html
Husmanen...thanks for the links. I think I'm starting to understand why bankruptcies for Chpt. 7 have skyrocketed in EDH.
Based on links you provided, I'm guessing my neighbor is probably going to homestead $50K in equity (even though he's married, he's filing "individual"). I read that as long as the debtor is current on mortgage payments, then they (Trustor or whatever they're called) won't foreclose the home because the sales proceeds won't cover the homestead amount and outstanding mortgage.
All credit card debt will get wiped out. And this guys debt on two new cars will get discharged but the lenders can repossess them...unless this guy "reaffirms" the debt (either under same terms or renegotiated terms).
Sheesh.....
PS: I guess I wouldn't be so put out by this guy's BK filing if not for his STILL holier-than-thou attitude. He needs to eat a slice of humble pie.
Wow, so let me get this straight...they get to keep the house, and most likely the new cars, and get rid of all their CC debt? Given those incentives, who wouldn't want to file for BK. They already have the main items you need good credit for (cars and house).
BT-
Yes, that's the scenario I'm piecing together. You follow EDH activity so I'm sure you've seen the huge uptick in both Chp. 7 & 13 filings (but 13 is for a ~5 year repayment program). I signed up for a free-trial when I saw my street name pop up on the BK listings.
I think it'll work this way for my neighbor because he has just enough equity to qualify for the homestead but he's also upside down and the two combined do not make sense to sell the house. If he had more equity, then the Trustor would sell the house to pay off other creditors and pay him his homestead too.
I'm also wondering if, as he's married yet filing as individual, his wife's credit will be preserved? So yes, keep the house, renegotiate the car debt, wipe out everything else and wife can still carry a credit card.
If anyone knows different, please enlighten me.
One of the bankruptcies that I have followed that was also a foreclosure did not have any equity and had quit paying for over a year.
The bank still took the house back, however I have no idea what was negotiated at the court. If I remember right the bank took the house back for in the low $500s and then it was sold in the high $300s.
There are other bankruptcies that are also foreclosure that I have followed but not so closely as the one above. Also, the climate has changes from a year ago. Not sure what is happening behind the scenes.
My guess it will still go back to the bank as they have not paid on their loan.
A bk filing "stays" all actions against the debtor, including foreclosure. A secured creditor (the lender on the house) may seek relief from the automatic stay, to foreclose on the house if the payments are not current. The homestead means nothing as it applies to the lender, because homestead only applies to equity in the property. By definition, equity comes after the lender(s) loans. So if the loan(s) are not current, the bk merely delays the foreclosure process while the lender seeks relief from the automatic stay. A chapter 11 or 13 can give rise to a situation where the lender is compelled to compromise the interest rate and allow repayment of past due payments over time at little or not interest. But in a 7, the debtor loses control over all of the assets in the bk estate, to the court appointed bk trustee. The trustee will dispose of all of the estate assets in an orderly fashion for the maximum benefit of all creditors. That is his/her job. However, the secured real property lenders still get paid first. With most homes underwater, there is no equity for a homestead exemption to attach to, and rarely equity for the benefit of other creditors.
The bk code exempts certain limited property from the bk estate, including tools of the trade, an automobile with modest equity, certain retirement accounts, etc. Rarely (absent fraud) does anyone come out of a 7 with lots of assets. An exception would be if the debtor had reason to believe he/she was going to come into a bunch of money, then the debtor could file chapter 7, discharge all the debts, come into the bunch of money, and be rich.
In my casual observations of bk filings in El Dorado Co over the past year (they are actually filed in Sacramento, but I am referring to EDC residents), the numbers have skyrocketed and mostly in the higher end neighborhoods. Don't know for sure what it all means ... just what I've observed.
Paul-
Thanks for the info.
I believe my neighbor is current on his payments, so I don't think he's even in foreclosure mode. That's why I'm thinking he's thinking/hoping/assuming (?) that he can save his house via the BK. In a way, yes, I hope he can save his house as I don't want a foreclosure a few doors down from me. But his arrogant attitude even with this hovering above his head is nauseating. He doesn't know that I know he's in BK.
And yes, I've noticed that BK's in EDH have skyrocketed recently. It seems like most of them are Chpt. 7 as opposed to 13. Why the sudden turn now to BK instead of just letting the bank foreclose? I mean, other than stopping the creditors from calling daily, what does a BK achieve in the long run? I don't get it.
Sunshine: Just a guess ... A foreclosure on a first doesn't prevent the lender on a non-purchase money second (ie., home equity loan to buy toys), from suing to collect. The only way to get rid of a nonpurchase money second (assuming it doesn't foreclose), is bk. And I am assuming that those same people could have mountains of other unsecured debt (credit cards, etc.) that only a bk could discharge.
Paul~
I think you got it right. I forgot they told me when they first moved in that they'd gotten a 2nd for 100K to put in swimming pool, landscaping, etc.
Now I'm seeing how they're thinking of saving their house: get CC and 2nd discharged and that will free up $ to afford mortgage on 1st and cars. To hear them talk, you'd think everything is just peachy.
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