For at least the last six months or so, a lot of people were talking about a “new wave” of foreclosures threatening to smother the U.S. housing market in gloom once again.
The reasoning was that because of the “robo-signing” scandal, and the subsequent foreclosure freezes, a huge number of foreclosures had been put on pause, and that the banks would eventually have to deal with their delinquent borrowers, and foreclosures would re-start in a big way.
According to data released this week by LPS Applied Analytics and CoreLogic, the waters are still relatively calm: no big waves on the horizon just yet.
LPS’s March “Mortgage Monitor” report shows that while foreclosure inventory remains near-historic highs, and newly started foreclosures are up 8.1% on a monthly basis, they’re still 31.1% below where they were in March 2011. Delinquencies are down 8.8%. The number of borrowers who are either in foreclosure, or 90 days behind on their mortgage payments is down, too, by 6.7%.
CoreLogic’s monthly foreclosure report, released Tuesday, has similar results.
March of this year saw 69,000 completed foreclosures, compared with 85,000 in March 2011, CoreLogic said. Delinquency rates remain unchanged, at their lowest levels since July 2009, in the thick of the financial crisis. And in some of the most troubled markets for foreclosures in the past, like Nevada, Arizona and California, delinquency rates are actually improving, a promising sign for the stability of those markets.
“What we’re seeing so far in the data, it doesn’t amount to a flood. There are regional bursts of activity here and there, but not that wave of foreclosures that people were expecting,” said Herb Blecher, senior vice president at LPS Applied Analytics.
CoreLogic, a leading provider of information, analytics and business services, today released its National Foreclosure Report for January, which provides monthly data on completed foreclosures, foreclosure inventory and 90+ delinquency rates.
There were 69,000 completed foreclosures in January 2012, compared to 80,000 in January 2011, and 65,000 in December 2011.
The number of completed foreclosures for the previous twelve months was 860,128. From the start of the financial crisis in September 2008, there have been approximately 3.3 million completed foreclosures.
“We are encouraged by the noticeable progress we are seeing over the last several months in the mortgage industry,” said Anand Nallathambi, chief executive officer of CoreLogic. “During the last several years the industry has faced enormous challenges working through difficult and complex issues. We are hopeful that these recent improvements are early signals of revitalization in the mortgage market.”
Approximately 1.4 million homes, or 3.3 percent of all homes with a mortgage, were in the foreclosure inventory as of January 2012 compared to 1.5 million, or 3.6 percent, in January 2011 and 1.4 million, or 3.4 percent, in December 2011.
CR noted here this morning that national foreclosure filings are increasing, making it 6.08 million loans delinquent or in foreclosure in January.
Sure enough, the San Diego County foreclosure filings are on the rise too:
You can’t blame the HARP 2.0 refinance program, because it requires that borrowers have been current over the last six months.
It’s just more people pushing the banks to do something to end their free-rent package, otherwise they’ll ride forever. See this story about people who haven’t paid for five years!
The mainstream media loves pushing bad news, and the 1%-ers are the latest trendy target.
Marin County has approximately 81,186 single-family homes, according to the latest census. The guy in this video makes it sound like the sky is falling, but didn’t include the numbers, so here they are:
Marin County Foreclosures, Jan-Feb:
2011: 98 att & det foreclosed (8 were valued over $1M)
2012: 83 att & det foreclosed (14 were valued over $1M)
I wish there were additional foreclosures, because we could use more of the better-priced inventory. But around here, the number of foreclosures have dropped considerably, while sales are stable:
Here are the local NSDCC-detached numbers, Jan-Feb:
2011: 75 SFRs foreclosed (17 were valued over $1M)
2012: 48 SFRs foreclosed (15 were valued over $1M)
Hat tip to Bob for sending this in from American Banker:
ORLANDO, Fla. — Banks unloading real-estate-owned properties face some tough choices, such as whether to auction off homes or sell them to investors, and whether to fix them up first. But whatever they decide, the real challenge is to avoid dragging down property values from their already-depressed 25% to 30% discounts.
Finding the best price is “an art, not a science,” said Matt Sylvia, a Bank of America senior vice president and REO production executive, speaking on a panel at a Mortgage Bankers Association servicing conference here Wednesday.
There are 2.2 million properties currently in foreclosure and another 1.8 million borrowers who, 90 days or more delinquent on their mortgages, might be soon, according to Lender Processing Services. Reducing this backlog of foreclosures is crucial to reviving the housing market and thus the economy, which in turn should help homeowners current on their mortgage payments stay current.
Still, it’s a fine line; to lower that inventory, banks still have to dispose of their REO homes. Selling short of the best price possible, just to move a property, does little to lift values or help the economy overall.
Mark Paniccia, group vice president of REO at SunTrust Mortgage Inc., in Richmond, Va., said his bank has several tricks for making sure it gets the best prices for REOs. The bank has a policy of listing properties for a minimum of 10 days, which often leads to multiple offers and helps avoid “being ripped off on an REO sale.”
“We’re upfront with everyone that we won’t accept an offer until the property is on the MLS (Multiple Listing Service) for 10 days,” he said on the panel.
To ensure it is pricing properties correctly, SunTrust typically orders an appraisal, a broker price opinion from a listing agent and a second such opinion. It then takes an average of the three to determine the REO sale price. The bank also performs “flip checks,” and monitors REO sales for six months to reduce fraud.
Sylvia said B of A typically gets offers within the first 60 days of a property listing on two-thirds of the bank’s REOs. “It’s the other one-third that don’t get offers that are the problem,” he added.
Poor communication between banks’ default and REO departments can be a hindrance. Often an REO will be listed for less than the price the bank could have received on a short sale.
“I wish we had that all figured out,” Sylvia said. “This is an opportunity. We need to do a better job, and we’re pushing hard to close that gap.” Paniccia said SunTrust is working on “how to bring valuation from REO upstream” to the short-sale process.
Banks want foreclosed properties to look like other homes in the same neighborhood but they also have to factor in whether to make repairs. During a panel discussion here, Paniccia said it is hard to commit to repairs if the repairs are not going to result in a substantially higher purchase price.
“If it costs $100,000 in repairs to get $30,000 back, that’s a tough call because of my holding costs alone. I don’t know that we’re going to invest that.”
Banks currently only auction about 2% of REO properties, but at least it’s an option. Most properties that sell at auction are part of a bank’s held for investment portfolio and tend to have unique characteristics that set them apart from other homes, Paniccia said.
For its part, B of A is considering whether to sell properties to investors or rent them out, one of several strategies that could lead to a more orderly absorption of existing inventory. “We want to look at investors to help us move assets and turn them to rentals,” Sylvia says. “We haven’t done a lot. You’ll see more of that this year from us.”
Though private equity investors have expressed interest in buying REO properties in bulk, particularly from Fannie Mae and Freddie Mac, it is unclear how they would be able to manage property rentals nationwide.
“There isn’t a company today generating the value to manage hundreds of thousands of rentals,” said Alan Jaffa, chief executive of Safeguard Properties.
Are the local foreclosure filings starting to rise?
The San Diego County foreclosure activity is meandering along with some recent pick-up – at least it’s not going down! Whether it’s by short sales or foreclosures, please end the free-rent program!
Foreclosure activity in the U.S. in January declined 19% from a year earlier, according to a report by RealtyTrac of Irvine.
Despite the drop in foreclosure filings — from the default notice that begins the foreclosure process to the auction scheduling and the sale of the house — the foreclosure tracking company said in a release that foreclosures are primed to increase.
U.S. foreclosure filings edged up 3% in January as judicial foreclosure states began to see a thaw in delayed foreclosure activity, RealtyTrac said.
The Irvine,Calif.-based firm said foreclosure starts picked up for the first time since the fall 2010 robo-signing crisis in the states of Indiana, Illinois, Pennsylvania and Florida.
Nationwide, the firm reported 210,941 foreclosure filings in January, which includes default notices, scheduled auctions and bank repossessions. While that’s up 3% from the previous month, it’s still down 19% from January of last year.
By the end of January, one in every 624 housing units was in foreclosure, RealtyTrac said.
The warehouse-type older tract homes in SE Carlsbad are sitting patiently, hoping that the spring selling season might bring some love their way. The list would be longer if those who failed to sell last year would have trudged on, instead of renting:
The FHFA set off a firestorm of discussion in 2011 when it announced an REO-bulk sales initiative that aims to repair the hardest-hit housing markets by selling off bulk assets to investors who have the ability to turn those properties into rentals.
The FHFA, as conservator for the government-sponsored enterprises, says investors can now enter the pre-qualification process to establish whether they have the financial ability and property-management capacity to bid on transactions during the initial pilot phase of the program.
“This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities,” said FHFA acting director Edward DeMarco. “I am grateful for the collaborative effort by the many stakeholders including investors, nonprofit organizations, and state and local government officials, who have worked together on this Initiative.”
Investors who qualify will be able to purchase pools of foreclosed properties for the purpose of turning those homes into rentals.
The pre-qualification process will identify which investors have the expertise to manage the properties and the financial capacity to deal with the homes for a long period of time. Investors who participate have to sign agreements, promising to keep certain aspects of the deals confidential.
Investors who want to pre-qualify, can click here for information.
For at least the last six months or so, a lot of people were talking about a “new wave” of foreclosures threatening to smother the U.S. housing market in gloom once again.
