When The Frenzy Busted Loose

by | Apr 6, 2021 | 2021, 2xREO, Bidding Wars, Bubbleinfo TV, Foreclosures/REOs, Frenzy, REOs

The real estate market was boisterous in last half of 2020, which made it easy to predict that once we got past the election and into the new year we’d probably see the Greatest Real Estate Frenzy Ever.

Let’s use February 22nd as the day the frenzy really kicked in.

It was the day that this home was listed for sale, after a troubled past:

2005: $679,000 Sold (vacant lot)

2007: $550,000 Sold (vacant lot)

2008: $2,000,000 borrowed from WaMu

2009: House built

2015: $2,137,500 WaMu/Chase FORECLOSED

2016: $1,930,000 Sold

2018: $2,875,000 listed for sale for the next 18 months

2019: $2,044,000 Borrowed in January

2019: $2,225,000 last list price before FORECLOSED

2019: $1,540,000 sold at trustee sale 12/27/2019

2021: $2,595,000 listed for sale

2021: $2,840,000 sold 4/6/2021

Timing is everything!

Forbearance Report

by | Jan 27, 2021 | 2021, Foreclosure Count, Foreclosures, Foreclosures/REOs, Loan Mods, REOs, REOs Coming to Market

Thanks to KCM for providing this report:

According to the latest report from Black Knight, Inc., a well-respected provider of data and analytics for mortgage companies, 6.48 million households have entered a forbearance plan as a result of financial concerns brought on by the COVID-19 pandemic.

Here’s where these homeowners stand right now:

  • 2,543,000 (39%) are current on their payments and have left the program.
  • 625,000 (9%) have paid off their mortgages.
  • 434,000 (7%) have negotiated a repayment plan and have left the program.
  • 2,254,000 (35%) have extended their original forbearance plan.
  • 512,000 (8%) are still in their original forbearance plan.
  • 116,000 (2%) have left the program and are still behind on payments.

This shows that of the almost 3.72 million homeowners who have left the program, only 116,000 (2%) exited while they were still behind on their payments. There are still 2.77 million borrowers in a forbearance program. No one knows for sure how many of those will become foreclosures. There are, however, three major reasons why most experts believe there will not be a tsunami of foreclosures as we saw during the housing crash over a decade ago:

  1. Almost 30% of borrowers in forbearance are still current on their mortgage payments.
  2. Banks likely don’t want to repeat the mistakes of 2008-2012 when they put large numbers of foreclosures on their books. This time, many will instead negotiate a modification plan with the borrower, which will enable households to maintain ownership of the home.
  3. With the significant equity homeowners have today, most can sell their home, rather than get foreclosed.

Will there be foreclosures coming to the market? Yes. There are hundreds of thousands of foreclosures in this country each year. People experience economic hardships, and in some cases, are not able to meet their mortgage obligations.

Here’s the breakdown of new foreclosures over the last three years, prior to the pandemic:

  • 2017: 314,220
  • 2018: 279,040
  • 2019: 277,520

Through the first three quarters of 2020 (the latest data available), there were only 114,780 new foreclosures. If 10% of those currently in forbearance go to foreclosure, 275,000 foreclosures would be added to the market in 2021. That would be an average year as the numbers above show.

Link to KCM Article

SB 1079

by | Nov 10, 2020 | Auctions, Bubbleinfo TV, Foreclosures, Foreclosures/REOs, Jim's Take on the Market, REOs, Why You Should List With Jim, Zillow | 6 comments

Hat tip to Susie who sent in this article about a law recently passed in California:

The new rules apply to one- to four-unit properties sold at foreclosure auctions. If an investor wins one of those homes at auction, then people who want to live in it, as well as nonprofit organizations and government entities, get 45 days to submit competing offers.

If the home is a rental, the tenants living there could win by matching the investor’s offer. Other would-be buyers must offer more than the investor.

Known as SB 1079, the law takes effect Jan. 1, 2021.

State Sen. Nancy Skinner (D-Berkeley), the bill’s author, said her goal was to make it easier for individuals and affordable-housing groups to compete with investors.

“Homeownership is the primary way people have to build up generational wealth,” she said. “When we have rules that give advantage to a corporation, then that dream is just not available.”

The manager of the foreclosure auction is required to maintain a website that details the highest bid at the auction and how to submit competing offers.

Link to LAT article

I don’t know how many amateurs will be paying more than investors for homes sight unseen, and without proper title searches for additional liens.  But there will be a few!

It was the last paragraph that was the most intriguing.

The State of California has institutionalized transparency!

Making the highest bid known to the public could revolutionize our business. Can you imagine if Zillow ran a website that openly tracked the offers on their homes for sale – buyers would love the transparency!  Then every brokerage would be pressured into doing the same, and boom – no more agent shenanigans!

Are you thinking of selling?

Transparency can help ignite a bidding war, and get buyers to bid up the price because it becomes more about winning, then getting a deal.  It’s how I handle my listings – let’s talk about how I can help you!

Here’s the classic courthouse-steps example of how auctions help to drive up the price:

An Old Favorite REO

by | Jul 21, 2020 | Bubbleinfo TV, Jim's Take on the Market, REOs

Wells Fargo foreclosed on this house in 2009 when the former owner owed about $1,066,000.

They sold it for $705,000 in July, 2009, which was $61,500 over list price! The same buyers still own it.

The latest sale of one of these models was in 2016 when the house two doors down sold for $961,000:

This video has had 18,000+ views!

Global Financial Meltdown

by | Mar 22, 2020 | About the author, Bailout, Foreclosures, Fraud, Jim's Take on the Market, REOs, Scams, Train Wrecks, Walkaways

A viewer’s comment on YouTube led me to this terrific inside view of the 2008 financial crisis, and the resulting impact on the world. It rightly blames the entire fiasco on the Tan Man, who pitched his mortgages to Wall Street based on the yields generated if borrowers made their full-interest payments, when in reality, only a much smaller minimum monthly payment was all that was due.

It’s eerie to watch today as our financial markets are in question again:

I make a quick comment in at the 2:38-minute mark, standing in front of the most-expensive REO listing we received in the era – a 2,900sf house in downtown Carlsbad that sold for $603,000 in December, 2009.  It’s still owned by those buyers! The realtor.com estimate today is $973,900.

Pin It on Pinterest