Prices Offered Up to 50% Off During D.R. Horton's 'UnAuction' Sale - February 16 and 23 Only!
That's right ladies and gentlemen. Follow the above link to the DR Horton press release.
These homes are in Kern,
- Adelanto
- Victorville
- Temecula
- Desert
The sale includes homes in 23 neighborhoods. If you were planning to buy a similar home to the one you live in now, and walk away from your current home, plan faster. But if you can't cover all the bases that fast, don't despair. There will be more sales.
So this means that, in at least 23 neighborhoods spanning all of
I hate the term “jingle mail”. It is horrible. It is a noun that is forced to be a verb. But I do know that any term I coin cannot be any worse. So secure in that knowledge, I hereby coin the term “Arb-hood”, which is short for Arbitrage Neighborhood. An arbitrage opportunity is one where a person can buy an asset and immediately sell it for more than he paid. In this case, an Arb-hood is a neighborhood where people can buy new homes for much less than they owe on their current homes, and can therefore walk away for a profit. This is made possible by plummeting prices and developer desperation (PPDD - I'm coining acronyms too.)
If you live in an Arb-hood, you should look into buying a new home, and walking away from your old one. Have a lawyer go over your existing loan docs to make sure the lender cannot come after you for anything but the house. If everything looks good, and you make the move, you should save a ton on your mortgage.
9 comments:
Hey man I decided to take a look at your blog after your post on Housing Panic. So far so good. Keep up the work!
RayNLA
Oh... by the way I started working on a Blog myself. Please take a look and tell me what you think.
retailcrash.blogspot.com
Thanks,
RayNLA
I ASked the bankrate blogger about this and here is what he said:
--------------
The problem with playing musical houses is that it's against federal
law. I'm not saying that someone playing the game will be prosecuted.
They probably won't. Hardly anyone is prosecuted for mortgage fraud
unless it's to extract cash. People playing musical houses aren't trying
to extract cash; they're just trying to get a better deal on a house.
It's still illegal.
Here's why it's illegal: If you're applying for a mortgage, and you plan
to default on your current mortgage, that is a material fact that you
are legally obligated to disclose when you apply. Withholding a material
fact is deception, and it's just as illegal as lying on the loan
application.
If an applicant *did* disclose the fact that he or she planned to
default on the current mortgage, the application would be denied. So no
one would be able to successfully argue that the deception made no
difference.
Holden Lewis
Reporter
Bankrate.com
(561) 630-2400 x11338
11760 U.S. Highway 1
North Palm Beach, FL 33408
Read Mortgage Matters, the blog about mortgages and real estate:
http://www.bankrate.com/mortgagematters/
Russ Dog,
Thanks for the research. That is great. I will chew that one over, and will do a post on it soon.
I assume Holden Lewis is the guy you talked to?
Thanks,
Keith
Dr. Russ writes:
Could I ask a mortgage question about he opportunities to buy at distressed prices? Ideas rehashed from the CBS news special house of cards about borowers thinking about walking away from severely underwater mortgages...
I was fascinated by seeing recent talk by "calculated risk" (is it a"bubble blog"?) of the game contemplated by people walking away from mortgages. After walking away from a mortgage your credit is trash, ad I guess most of these unfortunate people move into apts. But I'd like to ask- what if you move into a less expensive house that you bought shortly before you stopped paying the mortgage on your expensive underwater house? Could a national game of Musical houses may be next?
That's where you walk away from one overpriced house after you buy and move into a foreclosed (or REO) property nearby for a lot less $$. Then your neighbor can move into your foreclosed house doing the same thing, and so on .
When the music stops playing everyone who actually wants to live there has moved a short distance into a probably comparable house at a fraction of their former house price / payment.
In the past apparently opportunities arose to do this in 'mill towns' or 'company towns' when a major negative employment event occurred causing housing prices & demand to drop. and occur they did! Within the span of a few years everyone shuffled into similar houses at a fraction of the previous price.
If you have a job, plan on staying, and are not generally dependent on credit scores to finance cars, etc. then it may be worth the potentially enormous savings if you have a large non-recourse underwater mortgage. I guess you have to purchase the second home (at like 50% off) with a good down payment (cash) prior to walking from the first. I don't know how this can be pulled off (the details) but it has happened so i'm told. Like a game of musical chairs.
Anybody know if there will be opportunity for home-debtors to do this again in steeply-depressed priced markets? (040% declines) I have excellent credit and a good down payment! But my house has declined in value tremendously due to foreclosures in the neighborhood.
Thanks, Dr. Russ the rocket scientist
that was the qn i emailed him
I looked at one of the Arb-Hoods out of curiosity--the Palm Desert properties.
The "community" backs right up to I-10 and the railway. Very nice. Looking at the google maps sat photo, it appears that either its right in the middle of a trailer park, or they've razed the trailer park to build these "homes".
They're a bargain at 180k.
Of course, just three miles away you can get a standalone house on a golf course for 225k.
These "50%" off deals are auctions. The 50% price is the "starting bid." The original house price is a bit overpriced for the neighborhood and type of housing. So the final sales price is likely to be about the same as the prevailing market.
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