As I Was Saying

Flippers fuel foreclosures

Flippers and other speculators investing in single-family homes helped drive up prices in many hot housing markets during the boom. Now they're contributing heavily to mortgage delinquencies in several of those markets.

Defaults in non-owner occupied houses are driving defaults in four of the states with the fastest rising default rates in the nation, according to a report released Thursday by the Mortgage Bankers Association.

"Defaults are on the rise in most parts of the country, but...it is not always the case of a homeowner losing his or her home," Doug Duncan, the MBA's chief economist, said in a statement, "but [it's] often the case of an investor gambling on a continued increase in home values and losing that gamble."

Several sun-belt states were magnets for real estate speculators during the home-price boom. Coastal California led the early charge, but as prices there raced ahead of affordability, many investors abandoned those markets for Central Valley cities as well as Las Vegas, Phoenix and other Arizona towns.

As of June 30, in Nevada, 32 percent of all prime mortgages in default and 24 percent of subprime defaults were on non-owner occupied properties, according to the MBA. The numbers for Arizona were 26 percent prime and 18 percent subprime. In California, they were 21 percent and 15 percent respectively.

The default rates in Florida for non-owner occupied homes were 25 percent for prime loans and 14 percent for subprime ones.

In the rest of the nation, non-owners accounted for just 13 percent of prime loan defaults and 11 percent of subprime.

Now you have someone much more 'portant than moi to 'splain this one. It's good to be validated even when it is 5 or 6 years after the fact.

Granted it's a moot point now that el Jefe Bush has done a complete 360 and decided to bail them out. Apparently even the Shrub came to realize that rich people losing money would be the end of the Republican party.

Countrywide is happy, Beazer Homes is happy, Wall Street is happy and even most of our Democratic leadership is happy. The fact that this bailout likely will not save any actual low-income families (check...only qualified borrowers will receive assistance, I'll leave it to you to figure out who and what will determine who is qualified, it shouldn't be too difficult) will be glossed over and maybe, just maybe, a few people who truly need to help will be allowed to reap some benefit. After all we'll be needing one or two token families to interview on CNN.

I'm not even terribly upset over this one, why should I be when I won't be the one crying because I can't afford a house two years down the road.

Oh, and Georgie....thanks for the chump change today.