Folks have been wondering about what details could be culled from the foreclosure list. We’ll give the benefit of the doubt and omit those on the NOD list – they might be able to save themselves, or get a loan mod.
Let’s just look at the 100 SFRs valued between $685,000 and $1,250,000 in Carlsbad, 92009 and 92011 that have received their notice of trustee sale, or have met their fate on the steps of the county court house:
What’s the mix of Defaulted Purchase Loans vs. Refinances? If you refi’d your way into trouble, and wound up over-encumbered, that’s one thing. How many people either never saw the downturn coming, or or were hit by a hardship after purchasing?
|Purchase Loans||Refinance Loans|
How Many were Neg-ams? Tabulated by counting those who must have only made the minimum payment, and whose loan balance increased substantially, as noted on the NOTS. The cutoff was simple – if the amount on the notice of trustee sale was more than 10%, it was called a neg-am:
|Neg-Am/Option ARMs||No-Neg Loans|
Conservative vs. Riskier? Breakdown of above – How did folks use the neg-am loan as an affordability product?
|Purch No-Neg||Refi No-Neg||Purch Neg-Ams||Refi Neg-Ams|
Skin vs. No Skin in Game? How many used at least a 10% down payment when they purchased?
|At Least 10% Down Pmt||Less Than 10% Down|
What Year was the Mortgage Originated? How long are people able/willing to endure?
How Quick are Banks Processing? How many months have gone, or went by since the first notice of trustee sale was recorded?
|1 mo||2 mo||3 mo||4 mo||5 mo||6 mo||7+ mo|
Auction List/Bank-Owned/3rd Party?
|Auction List||Bank-Owneds||Sold to Third Parties|
Trying to Sell? Five of the REOs just closed, and the other is pending (there are no active REO listings currently). The 3rd parties jump right on it, of the four: two are ACT, one PEND, and one SOLD:
|Auction List on the MLS||REOs on the MLS||3rd Parties on the MLS|
Shadow Inventory? The reverse of above. Once a property gets on the auction list, how much chance is there that they’ll be saved? If not saved, how many properties on the list are heading for market?
|Auction List/REOs/3rd Party Properties Not on MLS|
The 75 properties will probably roll onto the open market spread over the next 2-4 months, and get plenty of attention. The REOs that have already sold closed for $99,000 over list, $91,000 over list, $20,000 over list, list price, and $10,000 under list price.
Will the short-term market get overwhelmed with REOs and short sales, or just get dripped to death? Either way, I think there will be buyers – it’s just a matter of price!