bubbleinfo.com

Countrywide came through – they dropped eight properties on my head since yesterday.

While I get those going, here’s a comment from a reader who just left this a few posts back:

Another anecdote for the soup:

My sisters’ are service managers for WaMu’s debt collections joint out in Santa Clarita and they both tell me that WaMU is still in the process of a huge ramp-up in response to the avalanche of people unable to pay their mortgages on-time.

BUT they are hiring more debt collectors in order to help facilitate the lengthening of the average foreclosure process.

When troubled borrowers are tapped out and their late mortgage payments start turning into no mortage payments, collectors hit them will all the possible options, of course, – refis, loan mods, post-dated checks – anything to get that promise to pay. But when borrowers say they STILL can’t pay, agents transfer them immediately to the "loss mitigation" department that pushes them towards the short-sales option. Nothing worng with that, per se, but it’s interesting to note that once a short sale process is started, that same department, understaffed and usually unwilling to accept real losses on the property, can offer little real help to the borrower, though all together it can add months to the foreclosure process. At this point, my sisters’ say, the loss mitigation department it’s just another internal mechanism to forestalling and prolonging the inevitable foreclosure process as WaMu is incapable and unwilling to process large numbers of foreclosure.

And so they do what their bosses want them to do. And they stem the tide.

I just posted this on Piggington:

Here is today’s count for SEH

69 active detached listings

31 are short sales
6 are bank-owned
4 are brand new

That leaves the 28 regular sellers with some stiff competition. First one out, wins!

It seems that every time a decent house lists in the low-$500,000s, the buyers go nuts. But any priced above that – it’s musical chairs.

Bank of America has cancelled their ‘papersaver’ program for jumbo loans, effective May 2nd.  It was one of the only places left where you could get ez-qual financing with 10% down.  After May 2nd, you will have to fully qualify for your jumbo loan, regardless of down payment.

They will still be doing conforming loans ($417,000 and under) on the papersaver program, and you can get a second on top of that as long as it is a smaller amount.  That means you’ll be limited to a combined loan amount of $833,900, and a minimum of 15% down payment.  That will cover a purchase price up to $981,058, above that and you’ll have to fully qualify no matter what program at Bank of America.

They have also changed their ‘doctor loan’ from 100% to 95% financing, up to a million dollars.

They are ‘suspending’ their 3yr/5yr/7yr programs too, due to the lack of buyers on the secondary market.  So they are left with the 30-year fixed rate loans, and FHAs.

There has been a lot of action over the last few weeks, and we really should see improved year-over-year sales numbers in the next month or two. But will we? Deals are going down harder than ever with buyers looking for any reason to blow out – can agents and sellers keep the buyers interested in closing?

In our purchase contracts the buyer has a 17-day inspection period, so the first three weeks below are already past their point of no return. If 95% of those close, we’ll see a 10% increase in year-over-year closings. That’s not a real big improvement considering prices have come down 5% to 20% in the last year, depending on your part of town.

The 2007 numbers below went pending during those weeks, and have all closed escrow already – 2008′s are still pending.

SD County Detached Pendings Count

We should see the April and May final sales numbers reflect an increase of at least 10% year-over-year, and if they don’t, we’ll know that keeping buyers in the game is tougher than ever.

There have been 38 Carlsbad houses close escrow this month (so far), and here are 13 that previously sold at the peak – between 2004 and 2007. I don’t think it matters which year was the official peak, because if asked, you can bet that these sellers will tell you that they bought at the peak, whichever year it was. Six percent total for commissions and closing costs were deducted to arrive at the NET amount, but no improvement or carrying costs were calculated (except on Cadencia, which did add 1,000sf, so I tacked on $200,000 for costs).

Carlsbad Same-House Sales, April 2008

For those who know the streets in Carlsbad, you may have recognized Follette – it is in the tract Serenata, where the Ummels live. That’s right, the lady who sued the realtor has a new comp – and it’s her same model at the same price she paid. Follette has a pool, and a slightly-obstructed golf course view, but hers had a nice southerly view too. If you are wondering how this deal got done, when she was whining about the low comps, Follette’s buyer paid cash.

The source where we get the counts for the “San Diego County REOs” showed that the number of homes foreclosed on over the last three weeks has dropped. The foreclosure process in California takes a minimum of 111 days, so it could be attributed to a holiday lull, or a break in the ARM resets.

What about the NODs and notice of trustee sales – are they slowing down?

Here are the posted counts from the last four weeks – they are accumulated from the preceding week or two, so these probably go back to the end of February and beginning of March. There are 4 to 5 addresses listed per page – to make it easier I took the page counts and multiplied by 4.5, so these are rough numbers;

It looks like we had a lull in the action around the end of March that resulted in low counts in the April 2nd and April 8th readings of NODs and REOs, but things are ramping up again. We did see a radical increase over the last few months, so the banks must be completely overwhelmed, and struggling to keep the process moving.

This graph below shows the counts of NODs and trustee deeds, (the number of trustee sales) from Ward Hanigan’s site. You can check out his site here: Link to Foreclosure Forum stats

In anticipation of another fourth-quarter bulk purchase attempt, let’s keep an eye on those REOs that might work as a rental property.  The first six are in Oceanside, and the last is in a decent part of Vista.  ‘BTB’ is the ‘back to beneficiary’ price, the amount that was the likely opening bid at the trustee sale.

642 Ann St.

3 br/2 ba 1,074 sf

$170,000  SP 2/2000

$348,705  BTB 2/08

$199,900 LP 3/08

10 days on market

YB:1970  6,000 sf lot

Based on this one, you can say we’re almost back to 2000 prices.  With 20% down payment you should be able to break-even the first day, the rents should be around $1,200 or higher.  Yes it’s an edgy part of town, so pick your spots carefully.

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560 Arthur

4 br/2 ba 1,604 sf

$450,000  SP 11/06

$121,000  BTB 3/08

$207,000 LP 4/08

1 day on market

YB:1971   6,300 sf lot

Needs TLC but a 4 br should get around $1,500 per month for rent.

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757 Via Callado

4 br/2 ba,  1,411 sf

$316,500  SP 9/03

$370,000  BTB 12/07

$214,900 LP 1/08

101 days on market

YB: 1973  6,600 sf lot

The original list price was $269,900 in January, so the bank is moving on this one.  it would break-even with 20% down around $150,000 to $170,000.

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5136 Omar

3 br/2 ba, 1,210 sf

$324,000  SP 10/03

$274,050  BTB 2/08

$224,900 LP 4/08

13 days on market

YB: 1986  8,800 sf lot

Nice yard and on a culdesac, but these were cheaply made with some of that presswood siding.

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5139 Barry St.

4 br/2 ba  1,279 sf

$455,000  SP 10/04

$444,085  BTB 1/08

$234,900 LP 4/08

YB: 1986  6,200 sf lot

2 days on market

Fannie Mae foreclosed on this one – I guess they haven’t got the memo that lenders should reduce their opening bid at the trustee sale to see if they can dump them there. Most of the foreclosures I’ve seen by Fannie have had a high BTB number.

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2559 Marjo

3 br/2 ba 1,332 sf

$480,000  SP 4/05

$304,383  BTB 1/08

$369,000 LP 1/08

YB: 1979  9,174 sf lot

74 days on market

This doesn’t seem like that great of a deal, but I don’t remember seeing remarks like this before: “Call for details on workable pricing WELL BELOW LIST PRICE with 4% to agent”.

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1144 Shadow Mountain

3 br/1.5 ba  1,221 sf

$525,000  SP 9/05

$281,705  BTB 4/08

$309,900 LP 4/08

1 day on market

YB:1986  16,000 sf lot

This would be better for an owner-occupant.  It has a big lot on a culdesac in a pretty good part of Vista, but I might be biased – I went to Shadow Mountain High School.  Yes, the same HS that Curt Schilling and Mike Bibby attended.

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I still haven’t seen or heard of any bulk purchases happening yet, but it can’t be long now – if you hear of any, let us know!

Miller Time asked for some clarification on the REO format.

Below you see a snapshot of the REO lists found in the right-hand column under ‘San Diego County REOs’.  The original loan amount is listed, and the delinquent amounts  (circled in red and blue).  When you add those two amounts plus some administrative costs, you get the Minimum Bid listed below – at arrow.

But the Saleprice listed is substantially different – why?

The second entry shows a saleprice (circled in yellow) that is above what was owed, yet the bank was still the buyer.  That happens when the second mortgage holder is foreclosing – they must have thought there was enough equity that they were willing to pay off the first, and take the property back when no one else at the auction wanted to pay more than the $239,031. 

If the first lender is foreclosing, and ends up taking the property back, then the saleprice listed here is typically the same as the Opening Bid - and no bidders wanted it at that price.  It used to be that the minimum bids and the opening bids were close to the same amount.  But the lenders are getting aggressive at the courthouse steps, and many of the opening bids are WELL UNDER what’s owed, yet there still isn’t any takers on most of them, and they still revert to the beneficiary.

If the beneficiaries are seeing more trouble ahead, it seems natural that they would be unloading everything they could at the courthouse steps – where there are few concerns, if any, other than price.  The beneficiaries get cash immediately, they pay no closing costs or commissions, and they can dump dozens at a time – when there are bidders.  But they are doing a poor job of announcing the opening bids, and if they could get the word out earlier about what they are willing to take, they’d get more people showing up at the auctions.

For now, you are left to three websites; www.fidelityasap.com  http://www2.rppsales.com/   and www.priorityposting.com where you can find some of the opening bids.  But for those lenders that don’t publicize, you either have to call or literally go down to the courthouse to find out the bank is willing to do. 

How are the foreclosure agents doing?

Everybody wants to get a bank deal, and the banks keep unloading!

Jun 11 – 328 Actives/98 Pendings = 3.35

Aug 21 – 382 Actives/111 Pendings = 3.44

Sep 20 – 425 Actives/97 Pendings = 4.38

Nov 9 -  486 Actives/128 Pendings = 3.80

Nov 25 – 484 Actives/138 Pendings = 3.51

Dec 14 – 446 Actives/147 Pendings = 3.03

Jan 15 – 474 Actives/149 Pendings = 3.18

Feb 7 -   482 Actives/187 Pendings = 2.57

Mar 13 – 477 Actives/205 Pendings = 2.33

Apr 18 – 467 Actives/247 Pendings = 1.89

A ratio under 2.00 is very healthy – they are pricing them to sell!  The same four agents have closed 384 sales year-to-date, after closing a total of 763 in 2007. 

This year 11% of the closings have been over $500,000.  There were 18% above $500,000 in 2007.

Take a look at the ‘San Diego County REOs’ button in the right-hand column – it was updated today. The last three weeks totals have been less than half the size of recent weeks.

It was mentioned that the market has been red hot for a certain portion of homesellers. Can we quantify the lucky folks who are in the sliver?

Since the middle of November when we felt a inflection point in the market – the point where more sellers finally gave up hope of getting their dreamy wish price – a small portion of the market has been hopping.

Since the middle of November, 3,934 detached homes have gone pending and closed escrow in San Diego County.How many of those were red hot?

Detached Homes Closed that went pending since 11/15/07

Red hot listings are those that sell in the first two weeks – you get closer to list price, and more certainty in the deal actually closing. How hot are they? A survey of the first 554 listings to sell revealed the following:

146 of the 554, or 26%, sold for over list price (those on a range sold over top-end), and 59 of those closed for at least $10,000 over list price.

If you figure that many were financing a credit they received from the seller, only those that are at least $10,000 over list could be considered RED HOT.

There are going to be plenty that sell for top dollar once their price is reduced a month or two after hitting the market, and others who just get lucky. But generally speaking, the segment of the market that could be considered hot is around 10% of those selling in the first two weeks. Sellers, is your list price going to put you in that category?