Kelly at the Voice of SD reviews the current market conditions in the San Diego real estate market at this link, here’s an excerpt:
There were 9,243 active homes and condos for sale on the Multiple Listing Service on Tuesday, according to Klinge. That number pales next to the number of distressed properties that have yet to be repossessed: 7,260 homes that have received at least one default notice and 10,221 that are headed for auction, according to Klinge. None of those nearly 17,500 properties have gone back to the bank yet.
But the threat of a flood of distressed properties hitting the market and driving prices down in one fell swoop has been just that — a threat — for years now. Klinge’s been monitoring the homes that hit the courthouse steps, and nearly as many auctions have been cancelled as have actually gone forward.
Here is Rich Toscano’s take on it, link here.
Bottom line? We’ve been knocking on a lot of doors, and it appears that the servicers are keeping the loan modders on the foreclosure rolls for now, and cancelling the trustee sale once the borrowers are well into permanent-mod status.
Good news everyone you no longer need to pay your mortgage.
JTR,
I’ve been tracking LA County numbers almost daily for some time now and it appears that a relatively consistent pattern has developed – every day, 85% of scheduled trustee sales get postponed, with the remaining 15% being split pretty evenly between cancellations (mostly sales, short sales and I assume modifications) and actual sales. I’d say about 8% cancel and about 7 % go to auction each day, regardless of the total number. Because those figures are well below the capacity that the trustee sales were showing they could handle before all this government monkey business, I have to assume that it is a deliberate pinching of the hose by the servicers (banks) to keep numbers at a steady, low flow. I haven’t done the math, but with what is pending and what is being added each month, at a 7% flow rate to auction, how long will this inventory take to liquidate? 2 years? 3?
Why aren’t the investors who own the RMBS pass through certificates that are backed by these loans suing the servicers to hurry up and foreclose?
Why aren’t the investors who own the RMBS pass through certificates that are backed by these loans suing the servicers to hurry up and foreclose?
And drive down house prices further so that the value of their securities falls even farther?
We had a choice, let asset values and unemployment fall until they hit their natural bottom and rebounded, or arrest them in mid crash and let them sit there a long time until recovery eventually catches back up to them. We chose less pain for a longer time rather than more pain for a shorter time. Take a nap.
Mrs Davis
I don’t remember being given any choice on the bailout. We didn’t choose anything.
Our gov’t did.
Mrs. Davis,
I’ll read the loan pooling and servicing agreements for some of these RMBS and the pass-through-certificate holders would do better by liquidating the nonperforming loans within the pool, even at values well below the loan principal, so the generic explanation for what the Obama administration and Geithner’s Treasury are trying to do explains why the servicing banks have a political incentive to breach their fiduciary obligations to the pass through certificate holders, but it fails to explain why those investors are not asserting their rights when doing so would be in their economic self interest.
By owners of the RMBS you mean you and me. Remember FNM, FRE, and FHA have well over 50% of all mortgages.
Information like this should make one thing clear. Even if you do not believe prices are going down they are not going to go up. If you need to buy make sure you choose the best place and be prepared to live there for a decade.
“Even if you do not believe prices are going down they are not going to go up.”………..
I beg to differ *keepitinflated*. As someone who has been out in the trenches, trying in vain to land a deal on a home, I can tell you that prices ARE going up!
I keep kicking myself for not pulling the trigger 9-12 months ago……when inventory was better and prices were LOWER.
Murf2222
A large number of properties get postponed each day here in Phoenix.
On my interview, the number I was told was that up to 2000 properties could be listed for the auction but most postpone, much of the remainder are priced too high to attract 3rd party bids (they go back to the bene), then maybe 50 to 100 are worth bidding on out of the original 2000 on the list.
It seems like just about every market has this problem. Too many homes need to be foreclosed but not enough staffing or will to liquidate them all at once.
Thus we’ll be in this situation (large overhang of properties) for years.
Keepitinflated,
Fannie and Freddie don’t own the RMBS, they gurantee the loan, and both of those GSEs have annouced that they will begin buying the nonperforming loans out of the RMBS pools, so yes, you and I will eat the cost of whatever becomes of those loans, but we won’t benefit from the improvement in the value of the securities that should occur from that action. But that is only for the GSE conforming loan RMBS, and the reality is that a shitload of private label, nonconforming RMBS are out there too, and the holders of those certificates (mutual funds, pension funds, investors, etc.) should be forcing the servicers of those pools to either liquidate the nonperforming assets or buy them out of the pool (if the pooling and servicing agreement provides for that option). And yet they’re not? WTF?
If you own a fixed income mutual fund, and you see it holding RMBS issued between 2005-2008 in its portfolio of assets, you should be on the horn to the fund managers telling them to get some balls and enforce their contractual rights against the servicers and originators.