I’m growing quite bored with the Lake Geneva foreclosure market. It’s becoming increasingly predictable and I find myself unenthusiastic as a result. The foreclosure trouble that continues to plague the national market remains in check as it pertains to the Lake Geneva vacation home scene. It’s no secret that foreclosures tallies remain high nationwide, and if someone could please explain to me how Realtors in high foreclosure markets continue to push these units on people and are actually seeing price increases, I’m all ears. I look at the foreclosure statistics in states like Michigan, Florida, Nevada, and even Illinois, and feel extremely grateful that my vacation destination of choice has been spared from any significant damage.
That’s not to say that Lake Geneva has avoided foreclosure issues, nor do I mean to imply that associations and condominiums haven’t been effected by foreclosures. In fact, several associations and condominiums have seen fairly dramatic price drops that can be tied directly to foreclosures and the ensuing REO sales. Prices at Abbey Hill in Fontana are down around 30% from the market highs, and I’d lay most of that price drop at the feet of two or three foreclosures that have subsequently sold and driven prices downward as a result. Associations like Country Club Estates, Indian Hills, and Cedar Point Park have had foreclosure issues, but never have the foreclosures amounted to anything more than a slow trickle of a property here and a property there. In order to have a significantly adverse effect on the market there would have to be simultaneous handfuls of foreclosures. A foreclosure every three months in a large association won’t drive prices downward quickly, but it certainly puts pressure on the existing inventory to reduce prices.
I searched Lis Pendens filings this morning, and found that the trends continue as they have for the past 24 months. I didn’t see anything brewing on the lakefront, and I didn’t see much in terms of lake access homes either. Cedar Point Park still has one or two in the works, as does Country Club Estates. I’m also seeing a potential foreclosure in Williams Bay’s Summer Haven association for the first time in a long time. Geneva National has a few ongoing foreclosures, but as of this check today, Abbey Springs appears to be the stronger association. Timeshares at the Grand Geneva are in trouble, as are units at Lake Lawn Lodge. Remember, timeshares are best left to Carlton Sheet’s followers and ebay.
It’s important to remember that not all Lis Pendens filings lead to foreclosure. The way these ridiculous loan modification programs work is that the borrower has to actually be in default before their loan can be considered for modification. It’s a vicious cycle, and why no one calls out Obama for this simple minded, market damaging scheme is beyond me. Follow me. In order to qualify for a loan modification, you have to stop paying your mortgage. Once you stop paying your mortgage, the penalties and interest accrue, which combine to put you into an even deeper financial hole. Then the loan modification process takes 6-12 months or longer, and all the while you’re holding out hope that this magical loan modification will solve all of your financial woes. Once the bank chokes through Obama’s regulations, they either deny you the modification, or reduce your payment by $180 a month (hypothetical figure). Either way, you’re pretty much cooked because you stopped paying the mortgage months ago, and now there’s no way to dig out of the hole that Obama helped you dig. Saving $180 per month on your mortgage isn’t going to mean a thing when you’re now faced with $15,000 in back payments and penalties, so foreclosure ultimately results anyway. And this is what the “best and the brightest” came up with?
Let’s just be thankful that the foreclosure mess hasn’t reeked havoc on the Lake Geneva vacation home market, and let’s be even more thankful that November elections are less than six months away.