Another year in the Real estate market in Nevada County saw a drop of 11 percent in home prices from December 09 to December 10.
In December 2009, the median price of homes in Nevada County for sale was $339,900 and there were 1009 listing for sale. In December 2010 the median price of homes was $303,500 or a difference of -$36,400. In December 2010 there were 1,026 listings and 81 homes sold in that month.
Foreclosures seems to have slowed down somewhat, which may be due to the problems which the banks and Wall Street created during the height of the housing bubble. As you may or may not know, most of the problems were created when banks started lowering their lending standards. They allowed stated income loans (now known as liar loans) and negative amortization loans, where the buyer could pay any amount of the loan that they wanted to. Of course in a couple of years the terms changed and the home owner could not possibly make payments on their mortgage.
The banks then sold the mortgages to Wall Street, who packaged them into bonds. The rating companies gave these bonds a rating based on the overall FICO score, not knowing what kind of mortgages they were giving a high credit rating to. In other words, the bond may consist of 25 percent or more of subprime loans, but have an overall FICO high enough to call the bond triple A. Included in these loans there might be loans to clients with good credit ratings but have a loan that was bound to fail such as the negative amortization loans.
In order to get FICO scores by Wall Street, loans were made to recent immigrants who might have been here for only a few years but because they made their payments on t
All of these bonds became worthless when the home owners started defaulting. Wall Street’s haste to create these bonds and sell them worldwide resulted in sloppy book keeping and the mortgage notes in many cases became lost.
Thus we have the “robo signing” or more illegal works by our illustrious banks. This has created a brief slowing down of foreclosures and I think that maybe the banks are concerned about all of the mortgage bonds they created and in some cases still hold.
By John J. O’Dell
Real Estate Broker
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