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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: ClearSky who wrote (88274)	9/7/2007 11:20:39 AM
From: John Vosilla	Respond to of 306849

'I think cities and other agencies who sold the bonds will be torn between complying with their obligations and initiating foreclosure, but will need to move forward. Used to be the homeowner or lender would pay up quickly to avoid anything going to foreclosure, but I am not sure that the homeowners or the lenders will want to do that in this environment if there is no equity in the home. And bond payments are due usually every six month so there is no luxury of time in collecting these assessments. When delinquencies force everyone else's tax bills to go up as they can with some of these assessments like Mello-Roos, you're right, they will be calling their representatives. Scary. And all the property will be that much less attractive.' Total annual costs of property taxes and special assessments/bond issues total near 4% a year. If the owner doesn't pay for a few years when you add in accrued interest and penalties this can easily rise to 15-20%. This doesn't look good for the highly leveraged homeowner now way upside down or even the lender who will have to write off much more than even he thought on the back end. Also obviously a problem for the HOA which is usually subordinate to even the mortgage with the few homeowners remaining on solid financial footing having to front the bill for the entire community. Many ghost towns will be popping up the next year IMHO