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Category Archive: ‘Foreclosures/REOs’

Doomer Report

This guy only sees negative in the real estate world.  He called me once trying to get me to bash the market, and when I refused, he hung up.  Even today he is still ranting:

http://www.marketwatch.com/story/this-house-market-is-falling-apart-2014-08-26

Real estate analyst Keith Jurow, author of the Capital Preservation Real Estate Report, is warning that the real estate market is not as strong as it seems.

Says Jurow: “I never bought into the idea that we had a recovery at all.” His research leads him to conclude that home prices will be heading lower.

His research? Because the Case-Shiller Index is still rising, just not as fast – that means prices will be heading lower?  There are plenty of reasons you could use to justify the doomer position (wars, unemployment, unaffordability, earthquakes, etc.), but smaller increases are a weak excuse.

He also thinks we will still have a surge of foreclosed properties to come, just because their are so many people delinquent.  But once you miss a few payments and ruin your credit, the delinquent homeowners might as well ride it out until they get the boot.

How are the San Diego foreclosures?

Some said they dropped off because of the Homeowners Bill of Rights, which was released two years ago and became law on January 1, 2013.   The bansk have had plenty of time to adjust – here’s how they are doing:

San Diego County Filings

San Diego County Trustee-Sale Results

It’s hard to believe that people just go back to making their payments, whether they get a loan mod or not.  The banks will wait until they can make money by foreclosing, which around the coastal markets, should be after another 10% appreciation or so.  Until then, why foreclose and lose money?

Posted by on Aug 27, 2014 in Foreclosures, Foreclosures/REOs, Jim's Take on the Market, No-Foreclosure as Banking Policy | 10 comments

SD Foreclosure Counts

The decline in foreclosures continues, but the pundits and media don’t really look into it much further.  Here is the best quote they could come up with in this article, linked below (hat tip to Stormin’):

“We have now registered two and a half years of continuous decreases in the number of homeowners who are in some stage of the foreclosure process. This consistent decline means fewer Americans are experiencing the distress of delinquency and default,” said Anand Nallathambi, president and CEO of CoreLogic.

http://dsnews.com/foreclosure-inventory-continues-decline-april/

The foreclosure notices and the number of properties actually foreclosed have dropped considerably in San Diego County.

San Diego County Filings

San Diego County Trustee-Sale Results

We have had 1,500 to 2,207 notices sent out per quarter over the last 12 months, but only 450-610 properties foreclosed per quarter.  The big gap makes you think that the banks/servicers are still throwing loan mods at anyone who wants one, and cancelling any notices soon thereafter.

Posted by on May 30, 2014 in Foreclosure Count, Foreclosures, Foreclosures/REOs, No-Foreclosure as Banking Policy | 1 comment

Selective Foreclosure

From RealtyTrac:

http://www.realtytrac.com/content/foreclosure-market-report/q1-2014-home-equity-and-underwater-report-8037

“The relatively high percentage of  foreclosures with equity is surprising to many because it would seem  homeowners with equity could easily avoid foreclosure by leveraging that equity by refinancing or with an equity sale of the home,” Blomquist  noted.

No surprise here.

With no pressure from anyone to foreclose on non-payers, mortgage servicers can be picky about who gets foreclosed.  It makes sense to foreclose where you can make a profit, and let the still-underwater folks ride the gravy train for another year or two.

Deadbeats don’t need to panic, it’s still quiet around SD County:

San Diego County Filings

Posted by on Apr 17, 2014 in Foreclosures/REOs, No-Foreclosure as Banking Policy, Short Sales, Short Selling | 3 comments

NSDCC Distressed Market – 2014

ben's smoking gunAfter seeing Bernanke holding the smoking gun on Monday (where he said that he told banks to not disrupt the economy with their REOs), did you give up hope getting a deal on a distressed sale?

If not, this might push you closer to believing.

Here is the mix of NSDCC detached listings this year:

REOs: 1

Short-sales: 10

Non-distressed: 825

REO listing agents, flippers, and short-sale scammers have to be scrambling.  Keep your head down!

Posted by on Mar 5, 2014 in Foreclosures/REOs, REO Inventory, Shadow Inventory, Short Sales, Short Selling | 0 comments

Bernanke Stopped the Flood

Having over eight years’ worth of blog posts means all types of kooky things happen regularly – usually regarding comments left on old stories.

Yesterday’s comment-du-jour went back to June, 2011, which caused me to read a few other comments of the day.

Reader LM left this:

Bernanke live press conf: We have told the banks to handle their REOs…..long pause………..in an economy-supportive way.

Oops.  We he was GOING to say was “we have told the banks not to flood the market with REOs.”

Here is the link to the actual speech, with Bernanke’s quote on the last page:

http://www.zerohedge.com/article/full-transcript-ben-bernankes-i-have-no-idea-why-economy-will-get-better-it-will-speech-and-

Let’s look back at the foreclosure history beginning in 2011. Sure enough, LM called it – foreclosures in California dropped off the table:

CA Trustee-Sale Results

Thanks Uncle Ben – and rots of ruck to you!

Posted by on Mar 3, 2014 in Foreclosures/REOs, Jim's Take on the Market, No-Foreclosure as Banking Policy | 3 comments

Foreclosure Notices Rise?

The hedgies got fired up this week over RealtyTrac’s report of California foreclosures rising 57% last month – the post is featured at the top of their front page, and has great comments: www.zerohedge.com.

At first glance, it would support my theory that banks deliberately turned off the foreclosure machine, and have merely started it up again:

Foreclosureradar.com’s California graph shows the same Y-O-Y increase:

CA Foreclosure Filings

But the CA Homeowners’ Bill of Rights had just been implemented in January, 2013, causing a drop in notices issued while servicers made adjustments. Last month’s number of California foreclosure notices is similar to every month since January 2013.

For locals, here are the San Diego County notices:

San Diego County Filings

It’s likely that the banks/servicers have thrown every defaulter into some sort of loan modification – or if they didn’t fit, just let them lie. With a casual handling of defaulters, expect that borrowers will drift in and out of the foreclosure process as they enjoy a pay-if-you-feel-like-it policy.

Expect the foreclosure-notice data to be jumbled from now on, and not indictative of much really. What counts is the number of people actually getting foreclosed – here are the San Diego results of trustee sales for the last three years:

San Diego County Trustee-Sale Results

The number of properties actually foreclosed has dropped off the table in the last 12 months – in 4Q13 we averaged 150 foreclosed homes per month in a county of 3 million people. We will survive that – heck, in the previous fourth quarter (4Q12) we had triple the number of foreclosed properties, and the market took off in a frenzy!

Posted by on Feb 15, 2014 in CA Homeowners Bill of Rights, Foreclosures/REOs, No-Foreclosure as Banking Policy | 2 comments

Mozilo’s Errant Email = Free Rent Forever?

Remember Dan Bailey?  Here is a follow-up from latimes.com:

angeloDaniel A. Bailey Jr. isn’t your average homeowner. He hasn’t paid his  mortgage in more than five years, and has no plans to start now.

His stance stems from a bizarre incident that thrust Bailey into the news in  2008, when he suddenly became a public relations liability for embattled home  lender Countrywide  Financial of Calabasas.

Bailey had blanketed Countrywide with emails begging for a mortgage  modification. The reply came from none other than Angelo Mozilo, Countrywide’s  chief executive, who accidentally hit “reply” instead of “forward” on a note  meant for colleagues. In the misfired missive, Mozilo called Bailey’s letter a  “disgusting” and “unbelievable” example of the form letters then inundating the  lender from borrowers saying they couldn’t pay.

The email:

“This is unbelievable. Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the internet. Disgusting.”–Countrywide Financial founder, chairman and chief executive Angelo Mozilo

Bailey insists that Bank of America is obligated to honor an agreement that  Countrywide’s damage-control squad struck to silence him — a verbal deal he says  entitles him to live for free in the two-bedroom, 938-square-foot bungalow he’s  called home for 21 years.

Bailey, a struggling photographer, said he struck his deal with a Countrywide  executive he knew as Ms. Morgan. She told him he could stop paying his mortgage,  but only if he signed off on a loan modification within 24 hours and kept quiet  about Mozilo and his errant email.

Read the full article here:

http://www.latimes.com/business/realestate/la-fi-live-for-free-20131214,0,4150658.story#ixzz2nTDr1qf6

The whole story from 2008, including the form letter Bailey used from loansafe.org, an internet coaching service for troubled  borrowers:

http://www.foxbusiness.com/markets/2008/05/22/countrywides-mozilo-calls-borrowers-plea-disgusting/

Posted by on Dec 14, 2013 in Foreclosures, Foreclosures/REOs | 2 comments

Faster Foreclosures = Better Rebound

From the latimes.com – an excerpt:

Pro Teck Valuation Services, a national appraisal firm in Waltham, Mass.,  recently completed research in 30 major metropolitan areas that dramatically  illustrates the point. All of the fastest-rebounding markets in October — those  with strong sales, price increases and low inventories of unsold houses — were  located in so-called nonjudicial states, where foreclosures can proceed without  the intervention of courts.

All the worst-performing markets — where prices and sales have been less  robust and there are excessive numbers of houses available but unsold — were  located in judicial states, where post-default proceedings can stall foreclosure  completions for two to three years or even more in some cases.

Among the best-performing areas were California markets such as Los Angeles  and San Diego. California is a nonjudicial state. Among the worst performers  were Florida markets such as Tampa  and Fort Myers, as well as parts of Illinois and Wisconsin. All of these are  judicial states.

http://www.latimes.com/business/realestate/la-fi-harney-20131201,0,7128552.story#ixzz2mKE1HdIx

Posted by on Dec 2, 2013 in Foreclosures/REOs | 2 comments

IRS Gives Debt-Tax Relief

From the wsj.com:

Troubled homeowners who get a break from their mortgage lenders could face a hefty tax bill next year if a key provision expires at the end of the year, though state laws could determine which borrowers will have to write a check to Uncle Sam.

bboxerHomeowners who live in states where mortgages are non-recourse—that is, where they aren’t personally liable for the unpaid balance—may avoid the potential tax hit even if Congress doesn’t act, according to a letter sent by the Internal Revenue Service released by Sen. Barbara Boxer (D., Calif.) on Friday.

In the letter to Sen. Boxer, the IRS clarified that certain non-recourse debt forgiven by lenders wouldn’t typically be considered taxable income by the IRS. This means that for most California borrowers, the expiration of the tax provision may not have a meaningful effect.

“California homeowners have struggled through years of economic hardships during the Great Recession,” said Ms. Boxer in a statement Friday. “I am relieved that these families will not face a burdensome tax penalty just as they are trying to rebuild their lives with a short sale.”

In the letter, the IRS wrote that “if a property owner cannot be held personally liable for the difference between the loan balance and the sales price, we would consider the obligation a non-recourse obligation.” As a result, the owner would not have to count that forgiven debt as income.

Other states with laws that prevent lenders from seeking so-called “deficiency judgments” to recoup defaulted debts from borrowers would likely be in the same camp as California, the letter said.

Short sales have fallen sharply as a share of overall sales over the past year as the housing market has rebounded and fewer homeowners have found themselves underwater. In California, short sales accounted for around 12.6% of homes that were resold last month, down from 26.7% one year earlier, according to research firm DataQuick.

Read full article here:

http://blogs.wsj.com/developments/2013/11/15/why-california-homeowners-could-avoid-tax-forgiveness-hit/

Posted by on Nov 15, 2013 in Foreclosures/REOs, Short Sales, Short Selling | 1 comment

Debt-Relief Tax Exemption Expiring Again

Hat tip to daytrip for sending in this article from the latimes.com alerting us to the expiring The Mortgage Debt Relief Act of 2007, wrapped around the free cheese in the recent JP Morgan settlement:

http://www.latimes.com/business/hiltzik/la-fi-mh-homeowners-20131029,0,6953798.story#axzz2jD09ygWq

David Dayen spots a new blow for underwater homeowners that thus far has flown under the radar: the coming expiration of the Mortgage Forgiveness Debt Relief Act of 2007, scheduled for Dec. 31.

taxing refi proceedsThe act is a mouthful, but it’s been a crucial factor in helping countless families get out from under bad mortgages. Simply put, the act relieves homeowners from having to pay taxes on any loan forgiveness they receive in a mortgage restructuring. (The maximum exemption is $2 million for a couple.) The measure was originally set to expire last Dec. 31, but it was extended another year by the fiscal cliff deal.

The foreclosure crisis is ebbing, but the relief is still needed. Millions of families are still underwater and facing delinquency, default, and foreclosure. As Dayan notes, those who succeed in obtaining principal reductions will be getting a bill that’s almost certain to be unaffordable.

As an additional irony, the act’s expiration comes just as JPMorgan, one of the banks that contributed massively to the housing crisis, reaches a deal that gives it a tax break on its multibillion-dollar settlement of federal charges related to the disaster.

He suggests folding an extension of the homeowner relief act into the JPMorgan settlement, but the extension looks like something that would have to clear Congress all by its lonesome. What are the chances of that? Congress has a lot to do as the end of the year looms. Somehow the things that aren’t on its agenda are all needed to help the less advantaged of society — food stamp extensions and now mortgage relief. Come New Year’s Day, we’ll be asking once again: Who do the people on Capitol Hill work for?

Posted by on Oct 30, 2013 in Foreclosures/REOs, Loan Mods, Mortgage News, Principal Reductions, Short Selling | 6 comments