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Here’s a video of a trustee sale on the court house steps in downtown San Diego (by Richard).

Two comments:

1. There are still plenty of bidders showing up at the steps, but how many are buying? There were 474 trustee sales scheduled today in San Diego County of all property types, all locations – and there were only ten 3rd-party purchases at the court house on Broadway:

2. Five weeks ago I submitted a $600,000 offer to the listing agent of this property, when it was listed as a short sale for $649,000.  The agent refused to submit it to the bank, because he and the sellers thought it was too low (and it sold for 10% less today).  If there are any lenders out there watching, this is what’s happening every day.

The association of realtors needs to enact short-sale procedures for realtors, before the banks do it (and cut us out altogether!).

This sounded like a big move:

Eric Friedman is leaving his post as senior vice president of default servicing for OneWest Bank, formerly IndyMac, and will become president of PREO, an online marketplace for REO and short sales.  Friedman, who held leadership roles with Fannie Mae and Countrywide, told REO Insider that his last day at OneWest is Aug. 13, and a search for replacement has begun. He has spent 20 years in the mortgage banking industry.

“PREO brings lenders, Realtors, homeowners and buyers together to turn distressed property back into family homes,” Friedman said.

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Is PREO just another website that combines foreclosure activity with MLS listings?

No, none of the properties checked were listed for sale, but all were on foreclosureradar.com’s NOD or NOT lists.  Most of them have IndyMac loans on them, and their bid prices are different than the amount owed – and usually well under!  It sounded like they have partnered with the lenders to offer these properties to the public, but not sure if it’s a glorified short-sale, or an actual open bidding process before, during, or after the trustee sale.

The website also mentions that it ”encourages defaulting borrowers to allow an inspection and interior photographs in exchange for the promise to relocate within 30 days after a bid is accepted.”

This could be the wave of the future – a website designed and run by insiders to liquidate properties directly to the public.  If the opening-bid amounts are legit, and buyers can get a peek inside the house prior to bidding, it could take off. 

They are realtor-friendly too, put my name down when registering:

www.preo.us.com

The foreclosure tours are winding down – I’m glad I didn’t get a bus!

Short sales have to be the best device for those determined to kick the can down the road – the processing delays are already legendary, and many end up in the black hole of goo.  

IF the servicer gets pressured about making a decision, they can resort to ‘the big start-over’, and sell the loan to another entity.

Eric Wolff of the North County Times touches on it here, and below you can see how the closed short sales have been increasing this year:

After the vaunted ARM-reset chart, the Great Recession, unemployment through the roof, and state and local governments as broke as ever, many thought (including JtR) that by now we’d be in a bank-directed-sales environment only, with nothing but REOs and short sales.

But with the REO listings dwindling, the regular sales are enjoying a healthy resurgence - May and June regular sales were as high as they have been in a year:

If the banks’ intention is to make the liquidation of property as excruciating as possible in order to drag it out for years, they have found the magic formula - spit out a few trustee sales, and direct their defaulting borrowers to loiter around the short-sale bin.  This might take a while?

From HW, though it may sound somewhat familar:

Lenders are canceling more foreclosure sales in California than ever before, and new financial and political demand for short sales could be the culprit.

Lenders canceled nearly 22,000 California foreclosure sales in June, driven mostly by JPMorgan Chase. It’s a 27% increase from May, a 153% growth from a year ago, and an all-time high, according to ForeclosureRadar.com, which tracks foreclosures in the state.

Foreclosure sales can be canceled for successful loan modifications, short sales, a legal requirement, or even a filing error. In terms of strategy, a spokesperson for JPMorgan Chase said the bank has not made any policy shifts to cancel more foreclosure sales.

According to ForeclosureRadar, a certain number of the cancellations can be attributed to pending modifications and short sales, but homeowners and real estate agents have complained to the company of sales that were canceled without either.  “We have seen a shift over the last couple of months where homeowners want this process to be over and they want to start to rebuild,” said a spokesperson for ForeclosureRadar.

Researchers at the company received varying answers as to why the cancellations are up. The best answer came from one unnamed REO professional. According to the source, the Home Affordable Foreclosure Alternatives (HAFA) program had the most to do with the cancellations. The Treasury Department launched HAFA in April to provide incentives to servicers for conducting short sales and deeds-in-lieu of foreclosure to homeowners who fail the Treasury’s Home Affordable Modification Program (HAMP).

“Now that servicers have systems in place to administer the program they are removing delinquent loans from the foreclosure pipeline to allow a reasonable short sale time period,” the source told ForeclosureRadar. “Predictably (also my opinion) the period would be expiring just after the November elections so there would be less political blowback as those properties that don’t conclude with a successful short sale are taken to foreclosure and ultimately, REO.”

After foreclosure activity dropped across the board in May, new foreclosure notices increased 6.7% in June, and notices of trustee sale jumped 21%. In fact, notices of trustee sales have outnumbered preliminary notices of default for the past four months. The gap really widened in June, when there were almost 9,000 more notices of trustee sale.

But this trend could become the norm as banks have to restart more foreclosures than they initiate.

“Historically it is very unusual to have more Notice of Trustee Sale filings than Notices of Default” says Sean O’Toole, founder and CEO of ForeclosureRadar. “But with skyrocketing cancellations and the possibility of failing loan modifications, this will be increasingly common, as lenders are only required to file a Notice of Trustee Sale to restart the foreclosure process.”

Lenders pushed 23% fewer properties into REO status in June and 46% less than a year ago. The amount of properties that have received a notice of default but have not yet been scheduled for sale increased 8.8% in June, but further along the foreclosure pipline, inventory remains constricted. The amount properties scheduled for sale dropped 1%, and REO inventory declined 4.8% in June.

We’ve seen the number of actual trustee sales dwindle down to the ridiculous – yesterday there was only one NSDCC house that met it’s fate on the court house steps, but it was a doozy! 

This was the first oceanfront house in La Jolla to be foreclosed this year, a 3,049 square footer in Bird Rock.  You are supposed to leave the cliff alone here, but doesn’t it looks irresistible to create a little walkway down to the surf?

The former owners paid $5.455 million in June, 2006, and yesterday it sold on the court house steps to a third-party for $3,248,500!  A flipper?  Owner-occupier?

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We’re still waiting on another in La Jolla that was foreclosed in April.  This 8,200 square footer was purchased for $6.8 million in August, 2007, and financed with a $7.2 million mortgage from Temecula Valley Bank – cash back at closing?

The opening bid was $4.8 million – but no takers on the ‘steps, so it went back to bene.

Back in the day (late-1980s) we used to do open house in this neighborhood, hoping to land a million-dollar sale (the developer had built a spec house while selling the lots separately).  Now look at it! 

osidebuyer wants a report on the lower-tier homes.

In Oceanside the cheapie SFR foreclosures have dried up, and there’s been an incremental YOY increase in $/sf pricing, with the lowest up about 15%, with those over $400,000 being flat.

Here are the first half detached sales counts by price range, and their average $/sf:

What used to buy a house in O-side two years ago, now gets you a condo with a $318/mo HOA fee: