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Category Archive: ‘REO Inventory’

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

More on the GSE Shadow Inventory

Remember this from September?

The use of third parties to help Fannie Mae sell its REO properties is coming to an end.

Fannie Mae notified remaining vendors that the government-sponsored enterprise will transition all REO sales work completely to Fannie Mae’s in-house teams over the course of the next several months.

In the past, Fannie Mae used in-house sales teams and external vendors to dispose of REO properties.

“We have reduced our REO inventory from 162,489 properties at the start of 2011 to 109,266 as of June 30, 2012,” said an email from Fannie Mae to HousingWire. “With a reduced inventory of properties, Fannie Mae’s in-house teams now have sufficient capacity to manage our REO properties without the assistance of third party asset management providers.”

Fannie Mae said the third party vendors, firms such as Vendor Resource Management and 24 Asset Management were notified of the move with enough time to make any necessary adjustments.

Some aspects of REO sales will remain the same.

“We will continue to engage local real estate professionals to market our properties,” Fannie Mae said. “Fannie Mae’s goal is to help neighborhoods recover by selling as many properties as possible to owner occupants at competitive prices.”

They deliberately brought the REO operation in-house because of “reduced inventory”.  But now it’s revealed that in the same month, September, 2012, they had 8x that number which were 90 days late?

Keeping their current staff busy with a limited supply of REOs allows the defaulters to skate longer – how can Fannie keep processing the defaulters if they scaled back their REO operation?

This smells bad.

Letting deadbeats skate for months and years erodes what is left of the moral fiber of this country.

Posted by on Jun 1, 2013 in REO Inventory, Scams, Shadow Inventory | 3 comments

Distressed-Listings Decline 66%

Why would people list their home as a short-sale?

Because their lender is applying pressure to either make payments, short-sale, or be foreclosed. At least that is the old-fashioned way of banking.

It’s possible that, after months or years of delinquency, some might start making their payments again if they receive that magical loan-mod/principal reduction package. I just haven’t met anybody who has.

Maybe I’m a skeptic, but these stats make it appear that the banks aren’t applying much pressure – distressed listings are 1/3 of last year’s total:

NSDCC Detached-Home Listings, First Quarter

Listing Type 2012 2013
REO
56
20
Short-Sales
125
42
Regular
1,089
1,216
Totals
1,270
1,278

It might make sense for banks to be lenient in depressed areas where sales and prices are struggling, but around here we are starved for inventory. The policy is working so well that it may last a long time – the ultimate can-kicker!

San Diego County Filings

Meanwhile, another 85 new listings hit the MLS since our last reading, and we had 81 new pendings with a few cancelled/withdrawns – demand is raging:

Date NSDCC Active Listings Avg. LP $$/sf
Jan 14
649
$722/sf
Feb 4
667
$716/sf
Feb 10
679
$713/sf
Feb 25
678
$719/sf
March 6
727
$703/sf
March 11
744
$698/sf
March 16
746
$703/sf
March 23
755
$712/sf
March 31
752
$717/sf
April 5
780
$704/sf
April 11
780
$710/sf

This is the most important indicator to watch – if the active inventory starts to grow, it means buyers are backing off.

Posted by on Apr 11, 2013 in Inventory, REO Inventory, REOs for sale, Shadow Inventory, Strategic Defaults | 4 comments

REOs Winding Down

The counts of local bank-owned properties are not out in the open, and people are wondering - are there loads of REOs waiting to hit the market?

Here are the SD County REOs from the tax rolls, compared to April 8, 2008:

Lender 4/8/08 Today
Deutsche
1,066
49
US Bank
726
62
BofNY
561
37
WFB
502
44
HSBC
451
30
Citi
144
25
BofA/CW
117
108
JPM Chase
90
18
Totals
3,657
373

With a county population of 3 million people, there should be adequate demand to soak up the remainding REOs once they finally hit the market.

Posted by on Mar 29, 2013 in REO Counts, REO Inventory, Shadow Inventory | 2 comments

Not Foreclosing Update

Wouldn’t it make sense for banks to be unloading REOs when all we see are bidding wars everywhere?

Initially we thought that the drop-off in foreclosures was because banks were pushing people to short sale instead. With this being the last year of debt-tax exemptions, wouldn’t we be seeing a surge of new short-sale listings?

Nope, instead it appears that they have shut down the foreclosure machine:

San Diego County New Listings between Jan 1 and Feb 28:

Year SS Listings REO Listings
2010
3,106
1,427
2011
2,766
1,297
2012
2,402
919
2013
1,187
393

Defaulting homeowners are going to squat as long as possible because they really don’t want to move – besides, rents are high and their credit is shot.

For short sales to occur, banks have to threaten to foreclose in order to keep the pressure on, otherwise defaulters will just keeping living for free.

But both short-sales and REO listings have plummeted.

Pollyanna thinks that people are making their payments again, or that the foreclosure settlement caused enough loan-mods that the problems are solved. No way. Filings are down, and cancellations are up because that has become policy now.

San Diego County Filings

San Diego County Trustee-Sale Results

Posted by on Feb 28, 2013 in Fraud, Market Conditions, REO Counts, REO Inventory, Short Sales | 1 comment

No Short-Sale Surge (Yet)

With the tax exemption of debt-relief expiring at the end of the year, we keep thinking that there will be a surge of short-sale listings coming to market.

Not only is there NOT a surge of short-sale listings, there’s not a surge of ANY listings, relatively.

Here are the total new listings that came on the market in SD County between March 1st – 15th:

Year New Listings LP $/sf
2009
2,438
$269/sf
2010
2,918
$274/sf
2011
2,734
$258/sf
2012
2,262
$262/sf

Posted by on Mar 23, 2012 in Inventory, Market Conditions, REO Counts, REO Inventory, Short Sales, Thinking of Buying?, Thinking of Selling? | 3 comments

REO Sales to Peak Someday

REO sales will peak when the banks decide to peak them.  From HW:

The sale of properties repossessed through foreclosure may not peak until 2013, keeping home prices from a meaningful recovery for some time, analysts estimated Monday.

Nearly half of the more than 552,000 REO properties liquidated in the first half of 2011 were held by private banks. In the years ahead, the government — including the Department of Housing and Urban Development, Fannie Mae and Freddie Mac — will begin taking a majority of the activity.

In 2013, REO sales could reach 1.48 million properties, according to estimates from Bank of America Merrill Lynch analysts, a 10% increase from projected amount in 2012.

“We do not expect to see anywhere near the downward pressure on home prices that we had back in 2008, since the expected percent changes in liquidation volumes are so much smaller,” BofAML analysts said. “But home prices are starting from a negative point, so the implication is that home prices will continue to decline as the foreclosures transition through the pipeline.”

Most of the projected increase will come as the government begins to unload its backlog. The government-sponsored enterprises and HUD, analysts estimate, will liquidate roughly 595,000 properties in 2013 alone.

Total REO liquidations wouldn’t drop below 1 million until 2015, according to BofAML.

The Obama administration began work last month developing new strategies for selling this mass of properties, which may involve renting more of them. The Federal Housing Finance Agency is also working on a way to refinance more underwater borrowers to entice them from walking away.

“I would essentially rent the house back to those who are living in them now,” said Susan Woodward, an economist with Sand Hill Econometrics. “I don’t think it makes a lot of sense to push 4 million people out of their homes when they’re victims of a slower economy they had nothing to do with.”

Other analysts were skeptical of anyone who could predict accurately what the GSEs or Washington would do, especially after the elections in 2012.

“Do they really think that the government under any administration would let 500,000 homes hit the mark and crash prices all over again, six years after the first crash?” said Scott Sambucci, chief analyst at Altos Research.

He said even if unemployment improved by a full percentage point or two — which he said would be a stretch — the market would still struggle to meet such a supply influx.

“It would crash the market, so no, it’ll never happen,” Sambucci said.

Daren Blomquist at RealtyTrac, which monitors foreclosure filings across the country, said the sale of REO is on track to reach 825,000 by the end of 2011.

“We do expect the REOs to pick back up in 2012 as lenders push through some of the foreclosures delayed by processing and paperwork issues,” Blomquist said, adding the inventory needed to be sold could reach well into the millions.

Read More

Posted by on Oct 18, 2011 in Bailout, Foreclosures/REOs, Psycho-babble, REO Inventory, REOs Coming to Market | 2 comments

San Diego Foreclosure Report

From Sean at www.foreclosureradar.com:

Five major lenders made announcements last week that they would be suspending certain foreclosure activities in various states. These lenders included Ally (GMAC), JPMorgan Chase, Bank of America, Litton and PNC.

While this report is primarily focused on September foreclosure activity, it is important to note that we have yet to see any impact to foreclosure sales within our coverage area through Friday, October 8, 2010 by these lenders.

“We regularly see lenders make minor mistakes in foreclosure filings” says Sean O’Toole, CEO and Founder of ForeclosureRadar.com. “But the reality is that far more homeowners are behind on their mortgage payments than are even in foreclosure. The clear problem in the housing market today is not foreclosures, but negative equity; and as long as the focus remains on the symptom rather than the disease we will see little progress towards real solutions and this crisis will drag on for years to come.”

View all California stats by county, city or ZIP:

http://www.foreclosureradar.com/california-foreclosures

View the San Diego County stats by city or zip code: 

http://www.foreclosureradar.com/california/san-diego-county-foreclosures

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The properties getting foreclosed in SD County - mostly the older, cheaper homes:

SD County Defaults by Year Built

SD County Defaults by Est. Value

Posted by on Oct 12, 2010 in Foreclosures/REOs, Graphs of Market Indicators, REO Inventory | 16 comments

SD Foreclosures Next 12 Months

These days, every time you read the news you’ll see another expert talking about the shadow inventory coming home to roost.  Depending on the guesser, there will be somewhere between 3 million and 8 million homes that get foreclosed in America over the next 1-10 years.  Can we narrow that down a bit?

The shadow inventory that is hardest to count are the borrowers who are not making their payments, but aren’t on the foreclosure rolls yet.  LPS came out with this chart (below), so let’s use their numbers and envision what would happen if banks/servicers change course, and ramp up the foreclosure machine:

The chart shows 17,800 defaults (today the NOD and NOT count is 14,435 on foreclosureradar), and 34,200 properties in San Diego County that are at least 90-days late, for a total of 52,000.  

How would it look in your area if EVERY ONE of these were foreclosed in next 12 months?

To estimate the total number of defaulters plus 90-day late borrowers for each area, let’s use the multiplier formula here: 17,800 x 2.92 = 52,000.

Let’s multiply 3x the current defaults in each area/zip code:

Area or Zip Code NODs/NOTs x 3 # of Homes 1 REO per # homes Foreclosed since 1/1/07
Spring Valley
783
9,368
12
1,777
West RB 92127
378
7,140
19
506
Chula Vista
3,051
59,529
20
6,675
Otay Mesa
825

17,197
21
1,807
Encanto
780
17,869
23
1,675
Escondido
1,605
44,964
28
3,934
El Cajon
1,068
35,173
33
2,652
Oceanside
1,698
59,498
35
3,962
RP 92129
348
15,109
43
487
Scripps Rch
222
10,521
47
288
Carmel Valley
237
11,304
48
291
Carlsbad
672
33,717
50
987
RSF
63
3,517
56
71
Cardiff
78
4,544
58
58
Encinitas
303
19,138
63
305
Solana Bch
81
6,072
75
102
La Jolla
246
19,529
79
257
PB/MB 92109
261
26,105
100
285
Del Mar
66
6,714
102
78

If servicers crack down and foreclose on every 90-day late property, we’ll see one flipper or REO listing on virtually every block in areas like Spring Valley. But with all the foreclosure activity over the last few years, would it bother buyers to see 1 out of 40 or 50 homes getting foreclosed? I don’t think so, and this is probably the worst-case scenario over the next year.  The current SD default list is split 65% SFRs, and 35% condos/others, so spread it around as you visualize what might happen in your area over the next 12-18 months. 

In areas like Carmel Valley, where we’re estimating 237 SFRs and condos on the NOD/NOT/90-day list, it would bring relief to buyers starved for well-priced inventory.  We know some defaulters will get their loan mod or be short-sold, but if not, and 15-20 foreclosures per month came on the market, it wouldn’t overwhelm the market - 71 homes sold there last month.  Hopefully, it might scare some of the elective sellers back to the sidelines, to be replaced by bank-owned inventory.

In Carlsbad, if you divide the current NOD/NOT/90-day list by 12, it would mean roughly 56 REO or flipper listings per month, and 124 sold there in August.

We’ve expected that we’d be in a heavy bank-inventory environment by now, yet the ‘delay-and-pray’ strategy has been employed instead. If 30% to 50% of the for-sale inventory was well-priced bank deals (flippers are retail-plus) it could boost sales.  If servicers insist on the extend-and-pretend strategy, sales are going to slow down, unless elective sellers get more realistic.

Servicers, please foreclose on every defaulter in the next 12 months – homebuyers would appreciate the well-priced inventory!

Posted by on Sep 21, 2010 in Foreclosure Count, Foreclosures/REOs, Monthly Sales Count, North County Coastal, REO Counts, REO Inventory, REOs, Thinking of Buying? | 29 comments

Pre-Approved Short Sales

Sean and the folks at Foreclosureradar.com are very gracious in providing their data, though I don’t like this – fewer trustee sales, and more cancellations.

If the trend continues, we’ll have fewer REO listings, which are typically well-priced and vacant, and instead have more short-sales and loan modifications:

San Diego County Trustee-Sale Results

The bulk of the defaulting mortgages are from refinancings, which are full-recourse.  Are the lenders/servicers gearing up for The Big Collection?

Maybe not, and perhaps the opposite.  They could be anticipating HAFA, the latest foreclosure-avoidance device that encourages lenders and servicers to approve short sales, and deeds-in-lieu of foreclosure.  HAFA begins April 5th.

HAFA directs the servicers to pre-approve the short sale, prior to listing the home for sale. 

Once approved, the homeowner gets four months to sell the house, stalling any foreclosure proceedings, and then gets $1,500 for moving expenses.  It also looks like the homeowner get released from all liability too. 

Here are more details on HAFA, from Inside Mortgage Finance:

Read More

Posted by on Jan 28, 2010 in Buying at Trustee Sale, Foreclosures/REOs, Market Conditions, REO Inventory, REOs Coming to Market, Thinking of Buying?, Thinking of Selling? | 20 comments