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Whatever happened to investigative reporting? 

Today’s story on cnbc.com about rising delinquencies includes the same lightweight quotes from another ivory-tower guy, and if you just read the headline it sounds like the sky is falling again. In the text it says that the second-quarter delinquency rate increased 0.12% from the previous quarter, but is still down 1.41% from the same period a year ago. 0.12% – that’s it?

They never bother with two important points:

1.  The servicers tell you that you need to go delinquent if you want to loan-mod or short-sell.

2.  The servicers may be carefully regulating the flow of who gets reported as delinquent.

If the policy is to keep kicking the can down the road, it doesn’t matter why or how many people go delinquent, because the servicers can just drip them out as needed.  But it would be nice if the MSM can look into it a little further than just including this opinion (not fact) from the article:

The data suggest that persistently high U.S. unemployment rate is making it harder for people to keep up on their mortgage payments, and offer a grim outlook for a housing sector.

“Mortgage loans that are one payment, or 30 days, past due are very much driven by changes in the labor market, and the increase in these delinquencies clearly reflects the deterioration we saw in the labor market during the second quarter,” Brinkmann said.

We need that guy from Yahoo Sports to cover housing!

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Are delinquencies turning into SFR defaults around North San Diego County’s Coastal region?  On a quarterly basis, it looks like more of the same – they are foreclosing on roughly one SFR per day between Carlsbad and La Jolla:

Here’s how it looks on a monthly graph:

We got excited in 1Q11 thinking that the servicers were increasing the foreclosure rate, only to be disappointed in 2Q11. It looks too uniform and regulated to me.

ocerenter noted two posts ago – could the foreclosure crisis be turning a corner?

I join in his skepticism, due to the numerous ways the data can be manipulated – primarily, we’ll never know how many defaulters are not being foreclosed.  The bankers can just let people live for free if they want, and the public won’t know.

In San Diego County, there are more REOs and short-sale closings, than properties being foreclosed (based on MLS vs foreclosureradar stats):

If anything, the liquidation flow indicates that the bankers have become better at managing the pipeline – as long as they keep it around 1,000 properties per month. At least they are providing some inventory!

But what about the shadow inventory? Will the underwater folks provide an unmanageable event for servicers in the future? Not as long as selling about 1,000 properties per month is acceptable to the bankers and investors. Defaulters will just have to wait in line!

In trying to keep my promise to post only NSDCC-related data, here’s a national article from G-S, with NSDCC relevance at the bottom. Hat tip to Aztec for sending this along:

As of 1Q, the number of seriously delinquent federally backed loans surpassed the number held by banks and private label securitizations and now accounts for the majority of seriously delinquent mortgages (seriously delinquent mortgages comprise loans in the foreclosure process as well as loans that are 90-plus days delinquent but not yet in foreclosure).

This shift is due to the persistently elevated level of seriously delinquent loans among Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA), in contrast with private-label and bank-held loans, where serious delinquencies peaked in 2009 and have declined significantly since.

The chart below shows the number of seriously delinquent mortgages backed by federal entities and the total mortgage market; the right axis shows seriously delinquent loans as a share of the total.

The federal share of REO property is also rising.

Read the rest of this entry »

Here are the recent foreclosure stats for San Diego County. 

It appears that the banks/servicers have found a steady rut for their foreclosure production:

It’s hard to believe that NODs are down 15%. 

It’s doubtful that they’ll deviate from the plan if it is working?  They declare that they are doing more short sales in order to help people avoid foreclosure, and the government gets off their back. 

Meanwhile, how’s that free-rent program?

These numbers look too uniform, yet nobody questions them – instead, more psycho-babble from a variety of casual observers.  From sddt.com:

Foreclosure activity held steady in May, as the most prominent factor in today’s housing market appears to have settled into a comfortable monthly level.

Banks foreclosed on 1,125 homes last month, according to data provided by the San Diego County Assessor’s Office, virtually unchanged from April, when there were 1,121.  It marks three straight months, and four of five this year, with the monthly total of trustee deeds — the final step in the foreclosure process — coming within 50 of 1,100.

Last month’s total is also in line with May 2010, when banks foreclosed 1,148 homes, or 2 percent more than this May.

Notices of default (NODs) — the first step in the foreclosure process, registering that a borrower is in arrears of payment — also showed little change.  May saw 1,647 borrowers receive NODs, a mere 1.4 percent increase from the 1,624 in April, and an 8.3 percent decrease from the 1,798 in the year-ago month.

Read the rest of this entry »

The only value of this data below is trying to predict how home buyers and sellers will interpret it.

Because the accuracy is suspect. For example, the ‘homes in foreclosure process’ for San Diego is more than 20% higher than the 12,561 properties shown to be in default by foreclosureradar.com. But you could also wonder about the +7.5% increase in prices too.

Sellers are happy to ignore any bad news, but how about the buyers? Does the frustration cause buyers to settle after months or years, or do they get more determined? I think there is a little of both – in my experience the buyers are holding out more for the best quality, but once they find it, they’re willing to add a little extra mustard to the price if that’s what it takes to get it over with!

The media perpetuates the idea that more foreclosures means lower prices (whether it’s true or not). But with buyers squeezing for better quality, we’ll probably continue to see the best-quality homes getting bid up, and the inferior homes getting beat down.