Wednesday, July 30th, 2008 at 3:43 PM
REO Counts Dropping (?)
We’ve been following the same four realtors who specialize in selling REOs for a year now. The industry has always had the reputation of loading up the same agents who are experienced in selling REOs, rather than spreading them around. So it’s hard to explain why these counts are dropping like they are. The agents were checked individually, and the counts were evenly distributed, so nobody retired to screw up the numbers. I guess the backlog is paralyzing all involved?
Here is the history:
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
May 13 – 418 Actives/298 Pendings = 1.40
June 10 – 344 Actives/288 Pendings = 1.19
June 27 – 261 Actives/261 Pendings = 1.00
July 30 – 169 Actives/195 Pendings = 0.87
Wouldn’t you think that if the REOs were selling so well, (which they are) the banks would push to get more of them on the market?
Posted on Wednesday, July 30th, 2008 at 3:43 PM in Foreclosure Agents | 12 Comments » | 
Email
| 
Print
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
Maybe they’re selling as well as they are *because* there aren’t more of them on the market…?
GeneK | July 30th, 2008 at 4:33 pmIf the banks would handle the sale of a home like most of us would (that is use common sense), they could get more money and get er done quicker. The Banks are not your friend.
Big Wave | July 30th, 2008 at 5:04 pmWhy would the banks sell today if they can dump it in a month or two at 87% of unrealistic appraisal?
AlexSD | July 30th, 2008 at 5:27 pmThree thoughts:
1.) If REOs are 40% of the market in some places, they are market makers. The banks will individually try to limit supply to keep prices up, but since they cannot collude to set supply (like OPEC), they are probably still sending out more homes than they want to send.
2.) They may also be considering demand. There will be some saturation as initial investors are satisfied.
3.) This may have something to do with how banks are doing accounting, trying to stay alive. Held on their books, they can pretend that the homes are worth what they were purchased for, or at least some fictional number. Once sold, they are what they are worth.
Rational expectations | July 30th, 2008 at 5:37 pmjim,
arizonadude | July 30th, 2008 at 5:39 pmWhy do the banks list with such a low number of agents?Why don’t they have several agents?
So Jim, do you think there are so many properties in the pipeline that the servicers are starting to pool properties for bulk wholesale purposes? Any way to find out if CWH is starting to do this?
Kingside | July 30th, 2008 at 5:57 pmDidn’t many banks recently extend the time before they issue NOD’s?
It definitely seems like the banks are holding back, and the only reason for that would be to help their balance sheets.
They’ll hold back as long as they can, but the skeletons will come out of the closet anyway.
E-Leven | July 30th, 2008 at 6:16 pmDo I have this right?…
Currently, the GSEs can lend $697.5k in SD. This is important, since Jumbo financing from other sources is drying up.
Next year, under the new housing bill just passed by W, the threshold for SD will be 115% of the median or $625k, whichever is lower. The thing is that the 115% if MUCH LOWER. Current median is about $390k in SD. 115% of this is $448.5k, or about $25k less!!! Am I missing something? Won’t this KILL the market in better middle class areas? When does this go into effect?
Rational expectations | July 30th, 2008 at 8:42 pmI am wondering if some of the paralysis is from some of the REO sales going back to NOD-NOT-REO. What may also be paralyzing the banks is the rate of NODs-NOT that are occurring. They may be working through the pile at a furious rate, but the pile is still growing! They don’t list them because it will make it look to ‘investors’ that they may get a future purchase cheaper?
I also wonder if some of the loan modifications took some of the potential NODs out of the stream and for how long.
NOTE: I know of one case where the person has not been paying for a while and no NOD. I’ll see if I can discretely find out if the NOD has appeared yet. They were going to try to strong-arm the bank into lowering the outstanding balance even though they can pay the current mortgage. They got caught in an expensive mortgage by their greed.
ucodegen | July 31st, 2008 at 1:56 amhttp://www.sdlookup.com/Property-2ADC2248-525_S_Vine_St_Escondido_CA_92025
Jim… thank God you don’t work the Escondido market. This fine REO property could be in your listing inventory.
JMS | July 31st, 2008 at 6:10 pmPersonally, I think they are playing the game of 1) Let’s not flood the market to keep inventory as low as possible and 2) Let cry poor me and claim we are going to go under so that the government will give us some free money. That will help increase the CEO bonues and keep the Shareholder dividends flowing.
ierealestate | July 31st, 2008 at 10:13 pmThe best I can figure:
Arnie’s New Deal giving tenants 60 days instead of 30 might be delaying some.
REO listing agents and bankers went on vacation with all the dough they’re making.
All the easiest REOs were brought to market and blown out, now the tough ones are being worked on (those with tenant issues, big repairs needed, tough to price, those with too much competition)
The cheap ones are being cast aside for not being worth the trouble.
Jim the Realtor | August 1st, 2008 at 1:00 am