Posted by: The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

47 responses to “Poll: Homeowners: at your current rate of payment, how long until you pay off your mortgage?”

  1. Jonness

    So far, most of us are already mortgage free. However, I might not remain in this group for long. I’ll probably take out a cheap mortgage within a year or so. It probably makes more sense to borrow cheap money than paying cash. The money can be invested into something else that pays more than 4% over the course of the next 30 years.

    I’ve been seeing bank-owned properties selling recently that were foreclosed on, never listed, and later sold. The last one I saw was originally funded by BAC/Countrywide. The new owner put 20% down and was funded by a different lender.

    Do the banks have some sort of off-market sales system in place where people can buy these homes without using the MLS? The homes seem to be selling for under market value, and sometimes, the people end up out-and-out stealing them.

    Rate this comment: Thumb up 0

  2. Kary L. Krismer

    RE: Jonness @ 1 – Some banks will give a tenant first shot.

    Rate this comment: Thumb up 0

  3. Scotsman

    Sold and moved or paid off in 3 years or less- waiting for more data.

    Rate this comment: Thumb up 0

  4. T. Y. Lee

    Since I haven’t even started paying my mortgage yet (I’m set to close on my first house May 30th), I obviously have a long ways to go before my house is paid off.

    Rate this comment: Thumb up 0

  5. David Losh

    RE: Jonness @ 1

    I have seen a lot of houses that have been, or needed to be gutted.

    There was a day, not that long ago, like before WaMU was taken over, that you could talk with the bank directly to buy a house in the foreclosure process. There were only a few agents in the Seattle area who worked in the preforeclosure, and bank owned property market place. That changed for a few years when anything would sell in 2006,2007.

    Now, of course, every agent is a short sale, REO, foreclosure expert so it’s hard to tell what is going on.

    But yes, you are correct, I was in a house today that I was vulturing, and saw that some one has bought it, and has it gutted. It never came up on the MLS, and I never saw a sign of any kind. Only the workers were there today, but they said the owner is there most days after 11AM, so Ill ask.

    Rate this comment: Thumb up 0

  6. ray pepper

    Pay off your Mortgage? Who is still paying their Mortgage? Those Notes are LOST in the abyss of Mers Scandal : http://www.youtube.com/watch?v=sa5Id1w-x-s

    Close to 70 million homes now….!!….It will get so ugly this decade and watch for INCENTIVES GALORE to continue for Homeowners who stop paying, live for free, and force the banks hands at litigation…up to 35k to short sale at BAC now…Up to 20k at Wells Fargo…

    Wait till the masses find out what their upside neighbor is getting..The ANGER will be toxic on any hopes of a recovery in housing for so many more years that Buyers better be VERY cautious buying into this FRENZY we have going on here…Check back in 2015!

    Rate this comment: Thumb up 0

  7. Kary L. Krismer

    By ray pepper @ 6:

    Pay off your Mortgage? Who is still paying their Mortgage? Those Notes are LOST in the abyss of Mers Scandal

    One of the worst things about the robosigning issue is people acting as if a lost note cannot be enforced.

    Assume for example a building full of $1,000,000,000 in notes burned down, taking all the notes with it. As long as that could be shown to have occurred, and that the note was in the building at the time of the loss, the note could be enforced.

    The issue of lost notes in mortgages is just to ensure that the right party is foreclosing, not to show that there is a right to foreclose.

    Rate this comment: Thumb up 0

  8. softwarengineer

    RE: Jonness @ 1

    I Paid Off My $82K Mortgage 3 Years Ago

    To get the 4% $450/mo of Net Pay interest the principle loan was costing me would take about $500K in the bank at today’s zombie near 0% interest rates. My home is a much better bank interest rate to hold long term cash than a bank. Get debt free and stay debt free. Besides, what investment is better than bank home loan interest rate takes now-a-days on your net pay?

    Rate this comment: Thumb up 0

  9. Julie Lyda, RE/MAX Northwest Realtors

    RE: Jonness @ 1

    I would expect that those homes are the ones that sell at the trustee’s sale.

    I’ve represented BOA in some REO properties and they would not consider an offer on a property until it was listed in the MLS.

    All Fannie Mae properties must be listed by a real estate agent, and you must have a real estate agent prepare your purchase and sale agreement before submitting it on-line. I believe the same with HUD.

    Rate this comment: Thumb up 0

  10. jws

    As a recent first time home buyer with a 4.0% 30 year fixed loan I plan on taking the FULL 30 years to pay it off. After taking the mortgage interest deduction into consideration, the 4% rate is actually closer to 3.5% for me.

    The extra money I have each month is better off going into higher yielding investments than paying down the mortgage early in my opinion. Whether that’s a high quality corporate bond fund, the S&P 500 Index or something else, being able to earn more than 3.5% a year over a 30 year time frame should be relatively easy to accomplish, especially if the money is in a retirement account with preferential tax treatment.

    Rate this comment: Thumb up 0

  11. shelbyton

    Since we just bought a house last month 25+ years for us. At 3.875 I see no rush to pay it off early, of course we most likely will never refinance either.

    Rate this comment: Thumb up 0

  12. ray pepper

    RE: Kary L. Krismer @ 7

    Big Difference Kary with your above scenario…FRAUD was committed and proving ANYTHING at this point in/re to proper ownership is becoming increasingly difficult.

    Watch and Learn as the years play out.. The EDUCATED upside down homeowners who bought during the Bubble are quickly getting educated, day by day, just how fortunate they truly are!

    Rate this comment: Thumb up 0

  13. Kary L. Krismer

    By ray pepper @ 11:

    RE: Kary L. Krismer @ 7 – Big Difference Kary with your above scenario…FRAUD was committed and proving ANYTHING at this point in/re to proper ownership is becoming increasingly difficult.

    Has Pegasus hijacked your account? Throwing around the fraud term when it isn’t applicable? ;-)

    But in any case that would not be a difference. Prior to a foreclosure being initiated, there would be almost no possibility of any fraud having been committed. Just having improper or deficient documentation is not fraud.

    And again, my point was that your advice to stop paying a mortgage based on the fact that MERS exists and that might somehow make it difficult to locate a note, well that is really bad advice.

    Rate this comment: Thumb up 0

  14. ray pepper

    RE: Kary L. Krismer @ 12

    Did I tell people to not pay their mortgage? Millions are NOT….But, many more millions are….However, if you are upside down, you are in a MUCH BETTER scenario then you think. Each day that goes by your financial situation is improving on so many levels…

    Rate this comment: Thumb up 0

  15. Blurtman

    RE: ray pepper @ 6 – Yes, you are correct. This is the slippery slope of injustice, perpetrated to bebefit the banksters. Your neighbor, whose home is the same model as yours, receives a $100k principal reduction on his mortgage. You must however keep paying the original +$100k mortgage on the same exact property.

    Rate this comment: Thumb up 0

  16. ray pepper

    RE: Kary L. Krismer @ 12

    Kary, please explain: Throwing around the fraud term when it isn’t applicable? ;-)

    Then please explain how this is NOT fraud: “That’s not what we have here,” in/re to fraudulent foreclosures.. “What we have here is lying under oath. And this seems to have been an industry-wide practice, where the companies encouraged this and required it of their employees — to commit deliberate fraud on the court in case after case after case..

    http://thinkprogress.org/economy/2012/02/09/421865/foreclosure-fraud-settlement-numbers/

    Kary…..I think its an appropriate time now for this directed at YOU…..You just don’t know what you don’t know…”

    Rate this comment: Thumb up 0

  17. Blurtman

    RE: Kary L. Krismer @ 13 – As I understand it, the notes were never transferred to the MBS trusts, and so there are at least tax penalties that must be applied. Further, as many MBS are empty boxes which we now own, the value of the MBS had been misrepresented. As at least one BAC executive has testified that management was aware of the lack of transfers, the value of the MBS were purposely misrepresented, and so this is pretty clear fraud. But not to worry, there is a two-tiered justice system in the USA, so this will continue to be swept under the rug.

    So if a servicer is foreclosing for an MBS investor, and the MBS was never assigned the note, although the MBS investor believes the mortgage is in the MBS, on what basis does the investor have to right to have the servicer foreclose?

    Imagine if it is reported to a repo company by BAC that you have fallen behind in your car payments, and that your loan never was held by the BAC, and the repo company as an agent of BAC repossesses your car. Is the fact that your are behind in your car payments make everyhting OK?

    Rate this comment: Thumb up 0

  18. ray pepper

    RE: Blurtman @ 15

    Yes, Blurtman and this exact scenario as you described will wreak havoc for at least a decade on housing…..so careful treading Buyers in the years ahead….

    Upside down homeowners are being educated more and more each day and they will NOT sit by much longer and let their home foreclose nor will they accept 3000 to short sale their home..The stakes will be raised HEAVILY and millions will soon realize how truly fortunate they are…BTW, even after these homes foreclose these people are simply NOT LEAVING their homes…Don’t believe me….??

    Watch and Learn..

    Rate this comment: Thumb up 0

  19. Kary L. Krismer

    By ray pepper @ 6:

    Pay off your Mortgage? Who is still paying their Mortgage? Those Notes are LOST in the abyss of Mers Scandal

    Not sure what the implication of this statement is, other than to not pay your mortgage.

    Rate this comment: Thumb up 0

  20. Kary L. Krismer

    By ray pepper @ 16:

    RE: Kary L. Krismer @ 12

    Kary, please explain: Throwing around the fraud term when it isn�t applicable? ;-)

    Then please explain how this is NOT fraud: “That’s not what we have here,” in/re to fraudulent foreclosures.. “What we have here is lying under oath. And this seems to have been an industry-wide practice, where the companies encouraged this and required it of their employees â�� to commit deliberate fraud on the court in case after case after case.

    Read what I wrote. I said prior to foreclosure there would be little chance of fraud. I would add though that a lot of what is described as fraud in the foreclosure process is not actually fraud.

    Rate this comment: Thumb up 0

  21. ray pepper

    RE: Kary L. Krismer @ 19

    See Kary…that is the error in your way…You ALWAYS IMPLY…..But, you never read.

    In the mind of Kary the distortion between fact of what is written, and then what you are thinking, can cause unfactual blog statements..

    Rate this comment: Thumb up 0

  22. Kary L. Krismer

    By Blurtman @ 17:

    RE: Kary L. Krismer @ 13 – As I understand it, the notes were never transferred to the MBS trusts, and so there are at least tax penalties that must be applied. Further, as many MBS are empty boxes which we now own, the value of the MBS had been misrepresented. As at least one BAC executive has testified that management was aware of the lack of transfers, the value of the MBS were purposely misrepresented, and so this is pretty clear frau

    Even assuming those claims are true, that does not describe fraud as to the property owner, which is what we’re discussing.

    Rate this comment: Thumb up 0

  23. Kary L. Krismer

    By ray pepper @ 21:

    RE: Kary L. Krismer @ 19

    See Kary…that is the error in your way…You ALWAYS IMPLY…..But, you never read.

    I’m sorry. Please explain what you meant in your statement which has only one logical implication. Perhaps I’m overlooking something. But to know that you would have to expalin yourself rather than attack what I am saying.

    I think your defensiveness indicates you’ve been caught. Prove me wrong by saying what you meant.

    Rate this comment: Thumb up 0

  24. Kary L. Krismer

    By Blurtman @ 17:

    So if a servicer is foreclosing for an MBS investor, and the MBS was never assigned the note, although the MBS investor believes the mortgage is in the MBS, on what basis does the investor have to right to have the servicer foreclose?

    Imagine if it is reported to a repo company by BAC that you have fallen behind in your car payments, and that your loan never was held by the BAC, and the repo company as an agent of BAC repossesses your car. Is the fact that your are behind in your car payments make everyhting OK?

    My response in post 20 would also apply to this.

    Rate this comment: Thumb up 0

  25. Blurtman

    RE: Kary L. Krismer @ 22 – How would you then describe the case where a mortgage servicer representing the MBS investor forelcoses on a property whose mortgage the MBS does not own?

    Rate this comment: Thumb up 0

  26. ray pepper

    RE: Kary L. Krismer @ 24

    lets analyze this Kary: Pay off your Mortgage? Who is still paying their Mortgage? Those Notes are LOST in the abyss of Mers Scandal

    A direct question as to who is STILL paying their mortgage….

    The topic on hand was “How long till u pay off your Mortgage?”

    With so many millions NOT paying their mortgage its a fair question to ask…….”Who IS still paying their Mortgage?”

    not sure why you read so much into this..

    Rate this comment: Thumb up 0

  27. Blurtman

    RE: ray pepper @ 18 – Incidentally, money for the principle reductions is coming from us, the taxpayer, via the US Treasury.

    Treasury to pay investors triple for HAMP principal reductions
    http://www.housingwire.com/news/treasury-pay-investors-triple-hamp-principal-reductions

    This lead balloon was floated by Obama early on in his first (and hopefully last) term.

    Rob McKenna – thanks a lot.

    Rate this comment: Thumb up 0

  28. Kary L. Krismer

    By Blurtman @ 25:

    RE: Kary L. Krismer @ 22 – How would you then describe the case where a mortgage servicer representing the MBS investor forelcoses on a property whose mortgage the MBS does not own?

    It’s a mistake. It may or may not be fraud. To be fraud they would need to know that they didn’t own it and proceed anyway. And not just know that the documentation isn’t in order, unless perhaps the error should let them know there probably is a problem. They would have to know that they either don’t own it, or likely don’t own it.

    Rate this comment: Thumb up 0

  29. Kary L. Krismer

    By ray pepper @ 26:

    RE: Kary L. Krismer @ 24

    lets analyze this Kary: Pay off your Mortgage? Who is still paying their Mortgage? Those Notes are LOST in the abyss of Mers Scandal

    A direct question as to who is STILL paying their mortgage….

    The topic on hand was “How long till u pay off your Mortgage?”

    With so many millions NOT paying their mortgage its a fair question to ask…….”Who IS still paying their Mortgage?”

    What does MERS have to do with that at all? You were making a clear implication by raising MERS. Otherwise your MERS statement would be totally unnecessary.

    You didn’t just ask who is not paying their mortgage, or how many are not.

    Rate this comment: Thumb up 0

  30. Blurtman

    RE: Kary L. Krismer @ 28 – The Enron defense. Where is Fastow again?

    Rate this comment: Thumb up 0

  31. Kary L. Krismer

    RE: Blurtman @ 30 – Not sure how that connects, but knowledge has always been an element of fraud. Sometimes it’s presumed, but I don’t see that here.

    Rate this comment: Thumb up 0

  32. Blurtman

    RE: Kary L. Krismer @ 31 – I will send you a few links later to prove that there was knowledge. But do you recall back in the day, reading the WSJ and the cartoons that described how MBS were created? They had folks ponying up the money to invest in these thing before the mortgages had even been identifed that were to be rolled into the MBS. I sure don’t invest in stocks that way. I am told that marriages are arranged that way in certain cultures.

    Rate this comment: Thumb up 0

  33. David Losh

    The problem with you Ray is that you go from this State to others, and live in a part of the Puget Sound where prices are insane, so I can see where you are making good comments.

    As an example I got a e-mail over the week end from an agent who is selling a condo, in Belfair, for $459K. $459K, in Belfair, it’s a condo. CONDO?!!!

    A buddy of mine was tweaking over spending $125K for a duplex in Belfair ten years ago. She, and her husband own five properties with a total of eight units in Belfair, and they paid less than $459K for the whole mess.

    She e-mailed me in 2009 to say she was a millionaire, and I said don’t give up your day job. It’s a frigging joke.

    The same as my buddy who sold his place in Bellevue in 1994? and bought two places in Henderson Nevada for $260K, and $280K. His place in Bellevue has sold twice for huge profits, and he is sitting in Henderson trying to sell either palce so he can get the f out of Henderson.

    It’s a weird wacky world out there.

    As far as MERS, yes you have to be able to produce the Note, and I don’t mean a copy. In the case of the building burning down, well yes, those Note holders need to prove in court they have a claim. I say one thing, you, as the Note holder say another, and in court the Note holder usually wins, because everybody knows the Note is somewhere. Well in this case the Note isn’t around any more, and if the Note holder is lucky they have a copy they can show.

    OK, let’s all go to court. I’m for sure going to court with my mortgages, how about you?

    Rate this comment: Thumb up 0

  34. Kary L. Krismer

    By Blurtman @ 32:

    RE: Kary L. Krismer @ 31 – I will send you a few links later to prove that there was knowledge. But do you recall back in the day, reading the WSJ and the cartoons that described how MBS were created? They had folks ponying up the money to invest in these thing before the mortgages had even been identifed that were to be rolled into the MBS. I sure don’t invest in stocks that way. I am told that marriages are arranged that way in certain cultures.

    We’re really taking two different subjects here. Fraud as to homeowners, where I’m saying that wouldn’t likely occur until there was a foreclosure started, if then. And then fraud as to the investor. There you can also have securities fraud, which has entirely different elements.

    Rate this comment: Thumb up 0

  35. wreckingbull

    I think the more interesting question is “If you could pay off your mortgage today (assuming a fixed, competitive rate), would you?”

    Rate this comment: Thumb up 0

  36. Blurtman

    RE: Kary L. Krismer @ 34 – Well, a simple, albeit widesrpead and ongoing mistake to you, fraud to others. There is a reason the mortgages are not being assigned, and believe it or not, it is related to money. Yes, banks can have it their way.

    Rate this comment: Thumb up 0

  37. ray pepper

    RE: David Losh @ 33

    You know David its a great time to be an Agent. Wrote up an offer today for 837k (17k over asking price) with one other offer that was supposed to be coming in. The Agent did not know for sure. Turned out 4 offers arrived and were up to 891k and my Buyer of course bailed…

    Thats not the EXCITING one though. My buddy bought a flip in Federal Way for 91k 3 months ago. He is in it 103k. Listed at 149k I believe on Friday. He called me all weekend telling me another and another offer kept rolling in. Result **8 Offers** and sold for 157k…

    Bernanke is turning the crank and the lemmings are flowing in. look at what is happening in Phoenix..WOW….

    Keeping the powder dry and just nibblin 1 or 2 a year now…Waves are crashing too hard on the Coast.

    btw..the Federal Way home is a crap box…

    Rate this comment: Thumb up 0

  38. Kary L. Krismer

    By ray pepper @ 37:

    Thats not the EXCITING one though. My buddy bought a flip in Federal Way for 91k 3 months ago. He is in it 103k. Listed at 149k I believe on Friday. He called me all weekend telling me another and another offer kept rolling in. Result **8 Offers** and sold for 157k…

    btw..the Federal Way home is a crap box…

    Crapbox. Gee, ya think?

    I hope your buddy knows to review carefully the financing proposals. Rhonda could probably give the information better than me about which types of loans would be problematic on a less than 6 month flip with a 50%+ increase in price.

    Rate this comment: Thumb up 0

  39. David Losh

    RE: ray pepper @ 37

    I’m in business to make money, and I don’t see being a Real Estate agent as a way to make any money. It gets more brutal each year.

    I don’t see next year being better than this and this year was a step down from last year.

    What I see is this shift of either buying a flipper, or buying something you don’t exactly want so you can fix it yourself. The selection isn’t that great, and in my opinion many people are settling for what they can find.

    I was in a house last night where the two attorneys bought a house in the neighborhood they wanted, then tore the heck out of it to rebuild for about a $275K remodel, probably more. That is what I see.

    The second part about that is that I know of a half dozen people who would sell, could sell, but are waiting, now for next year, because of the “Feeding Frenzy” of this year.

    The whole Real Estate market place is a stupid mess. It’s more of a mess than I ever imagined.

    So I think you are right that the people who bought back in the bubble will need to make some deals that will surely come. Banks can’t clear the number of foreclosures that are in the pipeline.

    Even if you sell, and pay fees, what are you going to buy? It’s all lateral moves. It’s like a grid lock with no upside. Real Estate may well be a thing of the past, and only a box to hold your crap.

    Rate this comment: Thumb up 0

  40. Kary L. Krismer

    By wreckingbull @ 35:

    I think the more interesting question is “If you could pay off your mortgage today (assuming a fixed, competitive rate), would you?”

    That would really be more non-housing related. How much liquidity does the person want, and why?

    Rate this comment: Thumb up 0

  41. wreckingbull

    RE: Kary L. Krismer @ 40 I don’t think liquidity is the primary motivator behind the question. I’d say inflation expectations and asset diversification are the more interesting aspects.

    Rate this comment: Thumb up 0

  42. Mike

    Did a no closing cost 3.625% refi in September, moving from a 30yr (with ~27.75 yrs remaining) to a 15yr conventional fixed. So I’ve got 174 more payments left.

    It’s nice to see the principal balance falling by > $1000/mo and the interest being less than $800/mo. I plan on staying in the home for as long as I can; it’s a nice place.

    Rate this comment: Thumb up 0

  43. Kary L. Krismer

    RE: wreckingbull @ 41 – Okay, I can see those would be factors too.

    I was thinking liquidity because that’s what I always think about with car loans. There the interest is so insignificant that liquidity drives the decision more.

    I do, however, view a house loan as being a possible hedge against inflation, depending on your situation and type of inflation. So I can see your point.

    Rate this comment: Thumb up 0

  44. ray pepper

    RE: Kary L. Krismer @ 38

    oh yes Kary..hes been flipping properties since you have been in diapers. The 90 days hold is common knowledge to all flip investors and most Agents out there who are actually moving properties.

    Rate this comment: Thumb up 0

  45. David Losh

    RE: wreckingbull @ 41RE: Kary L. Krismer @ 40

    Liquidity is all you have. Even if you have inflation, true inflation, the equity you build will be eaten by the the increased cost of everything else. So, yes, in that way a house has become a lot like the purchase of a car, depending what you buy, and where.

    Rate this comment: Thumb up 0

  46. David Losh

    RE: ray pepper @ 44

    More guys I’ve met are doing owner financing with a cash out balloon.

    Rate this comment: Thumb up 0

  47. Kary L. Krismer

    By ray pepper @ 44:

    RE: Kary L. Krismer @ 38

    oh yes Kary..hes been flipping properties since you have been in diapers. The 90 days hold is common knowledge to all flip investors and most Agents out there who are actually moving properties.

    Some are six months.

    Rate this comment: Thumb up 0

Leave a Reply

Do you want a nifty avatar picture next to your name, instead of a photograph of Tim's dog? Just sign up with Gravatar, and make sure to use the same email address in the form below. It's that easy!

Please read the rules before posting a comment.

You have 5 comments remaining on this post.

Archives

Find us on Google+