The deterioration of the housing market in California is stunning. If we look at the amount of distress in the state it would be hard to believe that the market is doing well yet some think the next boom is just around the next subdivided lot. Loans that were made at the peak of the bubble are now coming back to haunt the state in 2010. People forget that the bulk of the option ARM loans were made from 2004 to 2007. The problem goes beyond option ARMs, Alt-A, and even subprime loans. Many prime loans are now defaulting because homeowners are dealing with a weak economy. Today we are going to look at a vintage WaMu loan that is now finally heading back to the bank after two years of distress in Pasadena.
Before we examine today’s Real Home of Genius, let us take the market pulse of Pasadena California:
Every zip code in Pasadena has a significant amount of shadow inventory. For example, a zip code like 91103 supposedly only has 2.2 months of inventory if we only look at the MLS but add in the shadow data and that number balloons to over 19 months. That is the difference between a hot market and a market in major distress. Today’s home is in the 91103 zip code.
Today we salute you Pasadena with our Real Home of Genius Award.
This above home is one example of thousands of why the housing down turn will be prolonged. The above home has an interesting history to it. This home is a 4 bedrooms and 2 baths home listed at over 1,500 square feet. The first sign of distress occurred back in March of 2008 when the notice of default was first filed. So what this means, is the first missed payment must have occurred sometime in December of 2007 or January of 2008. In other words, this home has been struggling for 24 to 25 months and who really knows how many payments were coming in (this home has essentially tracked the recession). The mortgage note history shows us a disturbing trend:
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