by Jim the Realtor | Aug 10, 2012 | Foreclosures/REOs |
They don’t ask why foreclosures are declining – did they just stop foreclosing? From NMN:
Home prices are rising again due to the slowdown in REO sales and a decline in the shadow inventory of seriously delinquent loans hanging over the housing market, according to experts.
“House prices are improving as the share of distressed sales recedes,” according to a new analysis from the Wells Fargo Securities Economics Group.
In its latest ‘Housing Chartbook’ Wells notes that distressed sales have declined to 25% of all sales in June from 35% in January. During the same period, REO sales fell to 13% of all transactions and short sales rose to 12%.
“In the coming year, we could continue to see an uptick in short sales, while foreclosures stall,” the WFS economists say.
Meanwhile, the shadow inventory is slowly improving and new serious delinquency starts are falling, according to CoreLogic chief economist Mark Fleming.
“The decline in shadow inventory is a potential indicator of a brighter future in housing,” he says in the latest CoreLogic ‘MarketPulse’ report.
Nonperforming loans moving out of the shadow inventory and through the foreclosure process are “particularly damaging to prices, especially when they end in REO sales,” Fleming said. “CoreLogic’s research shows that falling REO sales strongly correlate to price appreciation.”
Since there is no visible excess of homes on the market now, Fleming says it’s possible the housing market will avoid another slide in home prices this fall and winter.
“Housing markets may well avoid another Sisyphean slide this fall because of a better balance of inventory, declining REO sale shares, and a slowly declining foreclosure inventory,” he said.
The CoreLogic house price index shows values rose 1.3% from May to June. Prices are up 2.5% from June 2011. Excluding distressed sales, values rose 3.2% from a year ago.
by Jim the Realtor | Jul 12, 2012 | Foreclosures/REOs, Market Conditions |
From HW:
Foreclosure sales dropped dramatically in three states last month, suggesting some state legislation is stalling the natural cycle of the market, ForeclosureRadar said Thursday.
The new Homeowner Bill of Rights in California is expected to have a huge impact on housing supply in the state, the research firm said. The report said foreclosure sales fell 13.4% in California in June from May and 48.8% from year-ago levels.
Foreclosures riddled these markets after the housing bust, but now ForeclosureRadar is worried about legislation that could stall the overall market recovery. The report covers Arizona, California, Nevada, Oregon and Washington.
“California Gov. Jerry Brown signed into law the Homeowner Bill of Rights, an anti-foreclosure package which naively thinks that slowing foreclosures will benefit homeowners and the economy by leaving those owners stuck in their prison of debt,” said Sean O’Toole, founder and CEO of ForeclosureRadar.
“We’ve long said negative equity, not foreclosures, (is) the problem,” O’Toole said. “Fortunately this bill was watered down significantly from its original form, so we don’t expect it will have the same impact that we’ve seen from more aggressive legislation in Nevada.”
O’Toole said that foreclosures in California “have already plummeted, and that the real housing crisis in now a lack of homes available for sale.”
Home sales in the Western markets remain generally low and stalls in foreclosure sales will further reduce inventory levels, ForeclosureRadar said.
O’Toole said banks in California are now taking 272 days to resell properties at auction. With this in mind, he says real estate agents, investors and homebuyers will discover reduced inventory levels next year.
by Jim the Realtor | Jul 9, 2012 | Foreclosure Count, Foreclosures/REOs, Shadow Inventory
From sddt.com:
Trustee deeds in San Diego County are down almost 60 percent from June 2011, and one local expert said that’s “really pretty amazing.”
Trustee deeds — the final step in the foreclosure process, transferring ownership from the delinquent borrower back to the lender or to a third party — were filed on 527 properties in June, 3.3 percent less than in May and 59 percent less than June 2011, according to the San Diego County Assessor’s Office.
Notices of default (NOD) — which initiate the foreclosure process by registering that a borrower is in arrears of payment — rose 3.2 percent from May to June, and 2.9 percent from June 2011 to June 2012.
Alan Nevin, principal at The London Group, said the county is headed toward normalcy in the foreclosure numbers, with one footnote: short sales are taking their spot.
“The foreclosure rate is really pretty amazing,” Nevin said. “If you go back to normal times, there were about 200 to 250 foreclosures. We are almost back to normalcy. There’s one footnote – the lenders are pressing the route of short sales instead of foreclosures because they lose less money.”
The county will wait a couple years to reach normal numbers again, Nevin said.
“We’re not out of the woods yet,” he said, because about 35 percent of sale closings are distressed properties. The number of short sales is going down, Nevin said, and will continue to as the underwater borrowers from 2005 to 2007 work through the system.
Nevin said he doesn’t follow notices of default because they “rarely” make it through the whole process to foreclosure.
The flow of transactions can be managed by the lenders and there’s still a “fair amount” of bank-owned properties, but the number can be manipulated, said Norm Miller, a professor at the Burnham-Moores Center for Real Estate at the University of San Diego.
“I think what’s going on is that the banks and lending institutions have become more proficient over the last year. They are able to go ahead and foreclose on properties and write off their losses,” Miller said. “The rate of foreclosures is going down – that’s not new, it has been going on for a while. There are [fewer] defaults and [fewer] foreclosures out there and that’s good.”
Miller said it wouldn’t surprise him if NODs stayed in the 1,200 to 1,600 range for the next several months and the county may reach “long-term equilibrium normal” in one-and-a-half to two years.
San Diego is better positioned than other parts of the country because the county did not over-build, said Nevin, and ran out of product in 2006.
“We’re not seeing any new production so the market will heal itself much faster than other places,” Nevin said. “The only thing stopping a massive surge in home buying in the county of re-sales is a lack of confidence in the economy.”
If the national economy saw job growth of a quarter million jobs three months in a row, Nevin said that could bring up the confidence level.
“Eighty thousand to 90,000 jobs every month doesn’t get anybody excited,” he said.
He expects the foreclosure numbers to stay down and “hover” around the area where they are now “and that’s fine,” he said.
CR had a similar post today about the Phoenix market:
http://www.calculatedriskblog.com/2012/07/phoenix-housing-sharp-decline-in.html
by Jim the Realtor | Jul 2, 2012 | Foreclosures/REOs, Strategic Defaults |
Hat tip to T&W for sending this along, from dsnews.com:
After conducting a survey with current and former clients, YouWalkAway.com reported that lenders are taking longer before beginning the foreclosure process. The agency surveyed underwater homeowners it has or is working with and found that from January to June of this year, respondents who received a foreclosure start notice were 11 months behind on their payment.
Last year, it took an average of 9 months of nonpayment before the foreclosure process started.
Receipt of a Notice of Default, Foreclosure Complaint, and Notice of Trustee’s Sale all counted as foreclosure starts for the survey.
In 2010 and 2009, the average number of months before foreclosure began was 7, and in 2008, it was 4 months.
According to the foreclosure agency, the data indicates lenders are now only beginning to attend to delinquencies from the first and second quarter of 2011. This means strategic defaulters have been given a longer time period in which they could reside in their home rent free before the foreclosure process begins.
In the first and second quarter of 2012, properties averaged 16 months of delinquency before getting foreclosed on. Based on the survey results and other data, YouWalkAway.com said this reflects an increase in the number of months a borrower is delinquent before foreclosure starts are filed and foreclosures are completed. This implies lenders and servicers are processing older foreclosures and homes that have been in default for over a year.
Jon Maddux, CEO of YouWalkAway.com, questions if this delay on the lender’s part is intentional.
“Waiting so long to even begin the foreclosure process is detrimental on a personal, local, and national level. It affects the borrower, their credit and financials, their neighborhoods, the housing market and economy in general,” said Maddux.
With the lengthening not only at the start of the foreclosure process, but also at the end, Maddux said it could suggest lenders are beginning to address the backlog that was created during the robo-signing debacle, but it may be too soon to tell the actual rate of of foreclosure filings in 2012.
“Once this shadow inventory hits the market, housing prices may lower and create a new wave of strategic defaults and foreclosures,” said Maddux.
by Jim the Realtor | Jul 2, 2012 | Foreclosure Count, Foreclosures/REOs, Thinking of Buying? |
Could a recent uptick in foreclosure filings mean more REO inventory later this year?
Or just a fake-out to keep the short sales moving?
At least we can say that there’s been no waiting for us at Bank of America. They listed 1848 Kerisiano for $519,000 just 10 days after the former owner vacated. For us, this is the second BofA REO in a row that they turned around within two weeks of gaining occupancy, so hopefully that’s a sign of things to come (?).
But the three-year foreclosure trend has been a fairly steady downward slope – through 1Q12:
by Jim the Realtor | Jun 29, 2012 | Foreclosures/REOs, Market Conditions |
From HW:
Real estate activity in Phoenix is one giant contradiction with home prices growing at a time when new foreclosures are entering the market, the W.P. Carey School of Business at Arizona State University said in a report.
Home prices in Phoenix rose 32.4% over last year in May with the median single-family home price growing from $111,000 in May 2011 to $147,000 in the most recent ASU report.
Real estate valuation firm Pro Teck Valuation Services claims Phoenix exemplifies a market that has overshot its bottom. Pro Teck CEO Tom O’Grady suggests Phoenix-area homes are selling below their replacement costs, giving investors large yields.
Buying activity is picking up and generating new activity, and it’s occurring even as new foreclosures trickle into the market.
Generally, new foreclosures push prices downward, but foreclosures in Phoenix grew 18% in May having little to no impact on rising values.
The ASU study suggests that while new foreclosures are worrisome, they are having little effect on housing demand, especially with supply levels remaining low and prices causing competitive bids on desirable properties.
Single-family listings in the Phoenix-area inventory fell to 8,550, ASU said.
“The amount of overall sales activity is down, due to the short supply,” the ASU report explained.”The number of single-family home sales fell 5.8% compared to last May.”
Pro Tech describes the contradiction in Phoenix as one in which multiple factors are playing off each other at once. In other words, home prices eventually plummeted low enough to spark new buying activity. That factor combined with falling inventory levels led to year-over-year price increases. While new foreclosures are coming back online, ASU researchers do not expect prices to plummet.
“The Phoenix market recovery shows many positive leading indicators including the number of active listings in Maricopa County down 39.4% from a year ago, months of remaining housing inventory down to 2.5 months and foreclosure sales down 50.4%,” said O’Grady with Pro Teck. “In many areas of the Phoenix market, we are seeing nearly every ZIP code classified as strong or good, according to our most recent Market Condition scoring system.”
by Jim the Realtor | Jun 23, 2012 | Foreclosures/REOs |
Hat tip to DOB for sending this in, from telegram.com:
As David vs. Goliath struggles go, they don’t get much more lopsided than a lone muscle-car enthusiast going up against a mega-bank with more than $2 trillion in assets.
But that’s exactly what Aaron Dahrooge of Worcester has been doing for three months now in an effort to get back his beloved 1973 Dodge Challenger.
The distinctive muscle car, which is painted “plum crazy” purple and has a burly V-8 engine with a chrome air scoop popping up through the hood, was taken from the garage of his deceased mother’s home in Burncoat in late March.
Bank of America has vital information, but won’t tell him, Mr. Dahrooge claims.
His mother, April Dahrooge, died last year. Her mortgage lender, Bank of America Corp., had an ongoing foreclosure proceeding against the house at the time of her death. The foreclosure proceeding has not been completed, according to city property tax and state land records.
Mr. Dahrooge said he stored the Challenger in the garage of his mother’s house over the winter as he typically did because he was the executor of her estate.
In late March, Mr. Dahrooge went to the house at 78 Uncatena Ave. with his teenage son to retrieve the purple Challenger, which he had found years before rusting in a field and fully restored into an attention-grabbing hot rod.
When he pulled into the driveway, he immediately noticed the garage door had been padlocked from the outside.
“I thought that was weird, so I went around to the back to look through the window and saw the car was gone. My heart just dropped,” Mr. Dahrooge recalled.
(more…)
by Jim the Realtor | Jun 15, 2012 | Foreclosures, Foreclosures/REOs, Market Conditions |
Diana is finally coming around to believe what we’ve been saying all along. From cnbc.com:
After months of declines, the foreclosure numbers are going up again. Foreclosure starts, the first phase of the process, rose 9 percent in May month-to-month, the first increase in over two years, according to a new report from RealtyTrac.
Bad news, right? Only if you are the one losing your home.
For the overall housing market, this is exactly what needs to happen to return to health. For hungry investors, it means more opportunity.
There are still millions of delinquent loans which will never “cure,” and the sooner they get processed and sold, the better for home prices and home buyer confidence.
As the so-called, “shadow inventory” of distressed properties (seriously delinquent loans and bank owned homes yet unlisted) drops, down to 1.5 million units in the first three months of this year from 1.8 million a year ago, according to a new report from CoreLogic, the real inventory of potential homes for sale can stabilize and become a more dependable reading for buyers.
How do you believe existing supply numbers if you know there is far more lurking in the pipeline, but you have no idea when it will hit the market?
“The decline in the shadow inventory is a positive development because it removes some of the downward pressure on house prices,” said CoreLogic’s chief economist Mark Fleming.
We’re seeing that in Phoenix and parts of California, where home prices are finally beginning to rise again. Much of the new strength is due to heavy investor demand and a lack of distressed supply for them to buy. Given that backdrop, seeing a rise in foreclosure starts now is not so dire.
You don’t have to worry about a pile of rotting meat, if there is a hungry pack of wolves waiting in the wings to gobble it up. That’s why lenders are trying not to repossess properties, but instead do short sales (where the home is sold for less than the value of the mortgage) or let the homes go at auction.
“The lenders are pushing those pre-foreclosure sales. They recognize the demand from the investors. I would expect the numbers to continue to increase from a year ago,” says Daren Blomquist of RealtyTrac. “We do hear a lot about, not just in terms of the hedge funds, but individual buyers looking for foreclosures in their area are having to compete against many other buyers.”
Georgia, which last month gained the dubious distinction of holding the nation’s highest foreclosure rate, leapfrogging the usual suspects (CA, AZ, FL, NV), is a prime example. Investors who are running out of options in the sand states are turning their attention to the Georgia, where overall foreclosure activity and bank repossessions both jumped over 30 percent.
The faster the process, the faster these investors will eat up the inventory, and as in Arizona, the faster overall home prices will recover.
There are now new state laws, government bailouts and a $25 billion national mortgage servicing settlement designed to safeguard consumers and keep as many possible in their homes.
However, a sizeable portion of troubled loans will inevitably have to go to foreclosure, and the sooner the better, especially as investor demand to buy and rent these properties, often back to the original owner, is high.
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Though the spike in new filings around SD County was more of a blip:
by Jim the Realtor | May 14, 2012 | Foreclosures/REOs, Short Sales |
The shift from foreclosing to short-selling is having its challenges.
The banks and servicers are not foreclosing at the same pace, presumably to give defaulters a chance to work their way through the loan-mod waterfall.
Once a loan modification has been attempted and failed, the servicers can recommend that a borrower should short sell their home – but they can’t make them sell it, or even list it. All they can do is keep applying foreclosure pressure, so the borrower has no other choice.
But by letting their foot off the foreclosure gas pedal, it appears that the banks and servicers, with help from government intervention, have created a defaulter purgatory, and free-rent bonanza.
Both foreclosures and short sales are declining in San Diego County:
New short-sale listings in San Diego County:
January: 1,129
February: 904
March: 951
April: 839
May: 324
by Jim the Realtor | May 6, 2012 | Foreclosures/REOs |
At least there will be rules – from the utsandiego.com:
A set of proposed laws that aim to protect California homeowners from foreclosure abuses is working its way through the Legislature.
Two key pieces of legislation in that package, widely called the “Homeowner Bill of Rights,” are expected to face sharp criticism from the real estate and financial sectors as the proposals head to a special hearing on Thursday, housing experts say.
The idea behind the bills package is to stem unnecessary foreclosures, which have hit certain parts of California especially hard. San Diego County has not been able to avert distress. Since 2007, more than 63,000 trustee deeds, which signal a foreclosure, have been filed in the county.
The two most polarizing proposals of the bills package would push banks to assign one point of contact for property owners per troubled-loan case, and end dual tracking, a practice in which lenders start the foreclosure process even though a borrower has applied for a loan modification, among other things.
(more…)
