Yesterday Sean saw these NSDCC January numbers posted here:
REO resales on MLS: 21
Short sales on MLS: 14
Trustee sales, REO: 32
Trustee sales, bought by 3rd party: 18
Trustee sales, cancelled: 56
and he asked about the cancelled trustee sales – how do they break down?
I ran each of the addresses through the MLS and foreclosureradar, and was surprised to see that NONE of the 56 have re-started the foreclosure process, at least not yet.
Here is the breakdown:
MLS short sales: 19
MLS sale, not short: 1
MLS active listing: 2
Cured for now: 34
Total: 56
The short sales closed over the last three months, that’s why the 14 and 19 don’t jive – the servicers are slow to mark them cancelled.
I think we can assume that the ‘cured for now’ category, those cancelled defaulters who were never on the MLS, are the loan modifications. Some folks may be bringing in money to cure their default, but I’d guess those amount to less than 10% of the total.
If the real estate machine is handling 56 defaulters per month, and 50 trustee sales happen successfully per month, we’ll be treading water for the next decade or two. There are 389 SFRs on the NOD list, and 532 on the auction list.
Bank of America and Wachovia are both rolling out their new and improved short-sale processing packages, and it looks like they are hoping to close short sales within 60 days. We’ll have more on them as they develop.
With the HAFA plan directing servicers to pre-approve short sales, we might see improved timing, but nowhere do I see anyone stopping the graft and corruption that dominates the SS process. There are no rules, regualtions, or laws to guide listing agents on how to handle a short-sale listing, and when left to their own devices, they seem to have great difficulty with handling them honestly and ethically.
It’ll be another frustrating year!
No Help in Sight, More Homeowners Walk Away
by David Streitfeld
Monday, February 1, 2010
provided by
The New York Times
In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040.
“People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?”
After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration’s loan modificationplan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing.
New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying.
http://finance.yahoo.com/loans/article/108746/no-help-in-sight-more-homeowners-walk-away?mod=loans-home&sec=topStories&pos=4&asset=&ccode=
What about PMI insurance getting into the mix?
http://missshortsaleexpert.com/blog/235/pmi-a-big-time-short-sale-deal-killer-update/
Jim, you are correct that the SS process is a den of inequity. I’m as disgusted as you are.
The reason the big players are getting onboard SS is probably more basic than you suggest. They’ve finally discovered that the old saying “time heals all wounds” has become “time wounds all heels.” Remember a few years ago when we were saying “sell now if you need to sell over the next 5 years?” They finally listened to us.
Question:
Are buyers willing to pay an ‘organic seller’ premium? Given two similar properties, how much is it worth so avoid the painful SS process? 5%, 10%, nothing?
I got lucky with a pre-approved vacant SS last year that closed in a month, but certainly would have been willing to pay a little more to avoid it altogether.
I know when I was looking for a house last spring, I avoided short sales altogether and just looked at REOs (I didn’t even look at any organic sales, mainly because there basically weren’t any in my price range and location). But REO inventory was much larger and short sales were slower and less likely to close then.
I have a co-worker who had tried to get a loan mod from his lender, good ‘ole Indymac. They have repeatedly denied him as he has not missed a payment. Here is a guy who could make payments and they don’t want to help. He doesn’t want to short sell, just wants to refi to a reasonable loan and stay. So they finally stopped paying Feb 1. as they were told to miss payment to qualify to modify. Rumor has it Indymac averages 3 months only to foreclose he was told. I told him I did not think that would be possible with the backlog in the system. Working class America is in a world of hurt. This is going to be a mess!
According to doughboy’s comment…
1. Deadbeat buys house and promises to pay X for Y amount of years
2. Deadbeat decides that they don’t want to pay X anymore
3. Deadbeat demands the bank that lent them money change the terms or they won’t pay any longer
4. Deadbeat hold true to their threat and stops making payments
As the final proof to show how much class they have the deadbeat claims that they’re the victim of an evil lender that gave them money to live out their dreams.
* Lets put this in another context. What if the deadbeat in this case was a renter that felt they no longer had to pay the agreed rental amount and wanted to renegotiate the terms. The landlord says no and the renter stops paying their monthly rent. Who is the victim here?
Dawg,
We should take a lender poll, like the one you did on which builder would go bankrupt first.
Which will be the first lender or servicer to bolt for the exits?
I think it might be J.P. Morgan, between Chase and WaMu they are loaded with crap, and the way they are dumping on price at the trustee sales makes me think they might know something (?).
You go, shadash~!
Once again, you nailed it, shadash!
The only “victims” of lenders are the ones whose lenders changed the terms of their agreements after they were signed by cutting and pasting different terms onto the documents. That’s fraud, and should definitely be prosecuted.
Everybody else signed onto these loans, **knowing** what they were signing. READ THE DOCUMENTS!!!! If people don’t read their mortgage documents, then they are victims of their own stupidity.
JTR, you da bomb!
Once we get into March and April and beyond, it’ll be interesting to see if SS holds at 1/3 of cancelled NTS, and if so, whather the SS skew to the high end, with mods skewing below the $729k HAMP limit.
I can’t figure out why on some properties JPM dumps it for 55 cents on the dollar, but on others they go way higher.
I wouldn’t consider my co worker and his wife deadbeats, just two late twenty something working class folks who signed onto a couple hundred page finely printed document that some bubble gum chewing fake nailed escrow lady just breezed through with 2 pens on the table for each to sign so she could get it over with and not miss her hair appt! To top it off…This guy is a Charger fan too! A die hard one, tough year for him!
Anonymous,
Life is tough, but it’s tougher when you’re stupid.
– John Wayne
Caveat Emptor used to mean something. But in defense of the home owner, they are allowed to walk away. That is the agreement. It is unfortunate the banks get to change the rules at will – ‘legally’ by legislation. Business is way to screw people under the guise of law.