June 24 average daily rates in Orange County for 30-year fixed loans with one-point fee: Conforming up to 6.078%, Jumbo up to 7.446% and Conforming-Jumbo up to 7.208% (Note: conforming-jumbo rates are for loans from $417,000 to $729,750, while conforming is up to $417,000 -- both types are sold to GSEs. Jumbos here are $730,000 or higher and not sold to GSEs.)
Source: Newspaper Chart Services 
Banks offer 20% off foreclosed homes in O.C.
May 13th, 2008, 1:53 pm · 33 Comments · posted by Matt Padilla, Register Reporter and Blogger
ForeclosureRadar reports banks were willing to accept 21.5 percent less than what they were owed last month at homes sold during foreclosure auctions in Orange County. That’s a sea change from a year ago, when the average discount was 1.2 percent at trustee’s sales.
The discounts are not necessarily tied to what each home is worth or what it sold for last time. They represent what the bank will accept relative to the outstanding mortgage balance and any other costs, such as late fees.
“Essentially, there was no discounting a year ago in Orange County,” said Sean O’Toole, president of ForeclosureRadar. He said a rise in foreclosures and falling home prices are forcing banks to take losses on their loans.
Still, banks see the county’s housing market as stronger than the state as a whole. Statewide banks offered 25 percent off last month.
Even with such discounts experts say most homes offered at trustee’s sales revert back to the bank because investors were unwilling to pay even the minimum bid.
More interesting measures: O’Toole said 84 percent of properties sold in Orange County at trustee’s sales last month were offered at a discount and 34 percent were discounted 30 percent or more. A year ago only three properties out of 225 were discounted 30 percent or more.
And more foreclosures appear on the horizon.
Banks filed 1,660 foreclosure-sale notices in April in Orange County, more than double the 735 notices filed in March. That suggests foreclosures will reach new highs in May and June — a lender can auction a home 20 days after filing a notice of trustee’s sale.
O’Toole said housing sales are up and inventory is falling, but not fast enough to offset the rise in foreclosures.
“It is time for lenders to accept this reality, and start approving short sales rather than forcing more than two-thirds of troubled homeowners through the entire foreclosure process,” he said.
Short sales are when a bank agrees to let a homeowner sell his or her property for less than the debt owed. Some experts say short sales are bad for one’s credit profile, but not as bad as foreclosure.
Banks foreclosed on 1,133 properties in the county last month, up 49 percent from March and 364 percent from a year ago.
- O.C. distressed-home listings creep up
- Growth slows in O.C. distressed homes for sale
- Data tracker says O.C. foreclosure auctions likely to rise
- Foreclosure in O.C. sky
- Riding the foreclosure bus
- Is your neighborhood in foreclosure danger?
- Riding with a sheriff’s deputy on eviction day
May 13th, 2008 at 2:16 pm
Gee, looks like I’ve been right all along and the idiot bulls need to go climb in their holes in shame.
Things are bad and still getting worse and it won’t even begin to change until 2009 at the earliest just as I’ve been saying all along. Don’t listen to the morons.
May 13th, 2008 at 2:30 pm
well, at least we all know where current pricing now lies. several of us have been quoting the current market as 20% overpriced, which now appears to be spot-on. of course, permabulls will say this only applies to one ZIP in Santa Ana…
May 13th, 2008 at 2:32 pm
Let’s see where these are. Any guesses?
May 13th, 2008 at 2:35 pm
These must be very small properties as well. I showed data yesterday that most 3 and 4 bedroom properties in middle class towns are down 12%-14%. Any bank that doesn’t do the same level of research that I do is a joke.
May 13th, 2008 at 2:47 pm
Cash sales are tough and it absorbs a lot of your liquidity. The property would have to be significantly discounted to even start thinking about. The other issue is th servicers aren’t letting people know in advance the discount so it is harder to focus your research.
May 13th, 2008 at 3:07 pm
Note that’s 20% off what banks were OWED, which means, assuming 80-90% LTVs on the last purchase, those properties are being offered at 30-40% off peak prices. So much for a pricing bottom.
This inventory generally DOES NOT go into the local MLS, so anyone talking about “market demand” excluding these is excluding 40% (and increasing) of market sales.
The foreclosure tsunami is arriving.
May 13th, 2008 at 3:13 pm
Why would a homeowner ever do a short sale? It in no way shape or form benefits someone to have a short sale instead of foreclosure on a credit report - all it does is just waste the homeowners time and make other people money.
May 13th, 2008 at 3:26 pm
Any idea when the federal reserve dynamic mapping system will be updated to show how many arms are resetting, how many are late, etc. in certain cities? last time I checked, it was still on Dec. 2007
May 13th, 2008 at 4:01 pm
Interesting how the claims of 100% financing are thrown out the window when another point is needed.
May 13th, 2008 at 4:02 pm
These properties are almost always in MLS first.
May 13th, 2008 at 4:11 pm
“77% of all distressed properties are priced below $500,000 and 94% are priced below $750,000″
Close to 4 in 5 REOs are, likewise, small units bought with nothing down.
May 13th, 2008 at 4:24 pm
“Let’s see where these are. Any guesses?”
Why guess when all you have to do is look at the auction information. You will see that discounting is happening in many areas…including Aliso Viejo; Irvine; Laguna Niguel; even (gasp!) Newport.
In fact, a Newport place just went back to the bank last Wednesday…NTS amount of $1,185,569, opening bid of $886,000, no takers so it went back to the bank.
May 13th, 2008 at 4:31 pm
thoughtless wont concede she was wrong until theres
a solar eclipse and swarms of locusts hovering over
her tiny little head llooolll @ribsplitter
May 13th, 2008 at 4:40 pm
Thoughtless Says:
Let’s see where these are. Any guesses?
Well, today there were 8 homes that were foreclosed on in Anaheim and Santa Ana, in which there are 177k housing units (disclosure: they have a lower homeowner rate than most of OC). Now, there was one in Aliso, one in Laguna Niguel, two in Irvine, and two high end properties in Orange that were on, in which these cities have about 165k housing units, and a higher homeownership rate. Now do the math.
Once again, the mantra of the location of the foreclosures is a myth spewed by those stuck in planet “it doesn’t happen here”.
May 13th, 2008 at 5:58 pm
Even in nice areas there are foreclosures.
My wife and I just put a bid on a 3bd/2ba foreclosure in Fountain Valley. It went for $760K back in late ‘06 and sold a few days ago for ~$500K. That’s over 30% decline in a year and a half! Bank definitely took a bath on that one. Too bad we didn’t get it. We aren’t in any rush though and are just waiting for more REO’s to come on the market.
May 14th, 2008 at 3:47 am
What will prove the bottom callers, like sighburrdud and thoughtless wrong will be the April DataQuick foreclosure numbers, or as they like to call them DataSlow. I guess that would mean since they are slow in reporting sales, then they would be slow in reporting the foreclosure numbers. I mean, they complain about RealtyTrac and foreclosureradar, but they report when the numbers are filed, and DQ reports when they are recorded, which is the same delay they complain about from the sales numbers. It looks like the bulls are the ones that are slower than the data, and they are hypocrites for saying the sales data is slow.
The bottom is not here, and the foreclosure numbers from April will prove that, and the May numbers are starting to look like Gary Watts’ worst nightmare. Remember he said, that people looking for a foreclosure deal won’t happen. Well, go to the foreclosure auction to see 50% off of what is owed, and even more off what they bought it for.
May 14th, 2008 at 7:02 am
I agree that even in nice areas there are foreclosures!
Lots of those people are ex-mortgage people that are not able to pull 250k per year anymore, nor will they ever again.
May 14th, 2008 at 7:39 am
“Once again, the mantra of the location of the foreclosures is a myth spewed by those stuck in planet “it doesn’t happen here”
funny part is I predicted we’d get this argument and then 2 seconds later it happens. it’s like the people spewing this garbage don’t even pay attention that others are laughing at them, and then they go into the same song and dance routine anyway.
May 14th, 2008 at 9:33 am
You “predict” because you know you have to somehow discredit what is a completely valid answer.
May 14th, 2008 at 1:12 pm
Hey Greg,
Was that the house on Poplar? We put a bid on that house as well. 350k with 150 cash down, close escrow in 10 days. They did call us back and asked us to up the bid. We said no. How do you know it went for 500k? There are a lot of houses in foreclosure or preforeclosure in FV.
May 14th, 2008 at 4:05 pm
The houses along Beachview in the gated community of Boardwalk (established in 2002), the last community on Goldenwest that intersects with PCH, have taken a hit the last few months. My agent did a BPO for a home with a view of the beach and prices there have dropped about 10% since the start of this year. Houses that originally listed for $1.85 million in 2/1/08 are now at $1.65 and still no takers. Add to that there may be an REO with a view and things look ugly for sellers this summer.
May 14th, 2008 at 6:38 pm
Shannon,
No it was on Los Alamos. Cross streets of Ward and Talbert. It’s still on the MLS but it’s sold.
May 14th, 2008 at 8:43 pm
Greg,
The house right by the park. Be happy, all the freeway pollution blows that way and the street is quite busy. I’ve been tracking FV for too long now but there will be plenty to choose from within the next year. Be patient. On a side note, my ex-realtors house is in foreclosure and they bought it years ago before the run up. Slow death by HELOC.
May 14th, 2008 at 11:11 pm
Here’s a recent article that shows how imprecisely, and inaccurately many NATIONAL BUBBLE “experts” skew figures in their irrelevant attempts to inform us, here in Orange County.
http://www.marketwatch.com/news/story/market-anomalies-skew-home-price-data/story.aspx?guid=%7BB242EC7A%2D7A08%2D49E4%2D8CB7%2DF0808F8EF52D%7D&dist=msr_2”
Hmm, pretty much what I’ve been stating for the past 4 months. There is only one source for accurate data about Orange County’s
May 15th, 2008 at 2:37 am
Oh… poor sighburrdud grasping for straws on the median price, and promoting his Quantum Economist buddy Steve “I have been wrong for the last 3 years, because my econometric model is broken” Thomas.
Hey, it looks like Steve and I have something in common. My prediction of foreclosures for OC back in August was wrong. I really underestimated how bad it would get. I estimated 2380 foreclosures, when there were actually 3840.
Yup, believe the “experts” like Steve Thomas, or you can believe the people who have been wrong, but only because they underestimated how bad it would get.
Now, if a housing bear has underestimated how bad it would get, then what does that say about the bulls?
May 15th, 2008 at 2:43 am
How could I forget, we will have 6000 foreclosures in the next six months. Remember, I underestimated last time, and if I am underestimating again, it could be a whole lot worse than 6000 and the margin of error of 30% would bring that up to 7800 foreclosures.
Who will have the better prediction, me or Steve Thomas? If Vegas had the odds, Steve would be a long shot.
May 15th, 2008 at 6:21 am
Thanks Shannon. We have plenty of time on our side. Ideally we’d like to be in Green Valley but that prospect probably won’t happen unless we buy a condo.
May 15th, 2008 at 9:05 am
Good morning Greg. I have worked at Cox Elementary, which is in the Green Valley track. Maybe you have kids there but there are other schools in FV that are much smaller, by about 300 kids and perform much better on the state mandated tests. Also, because of the high concentration of apartments, the students tend to be very transitionary. I now work at another school in FV and I see a big difference in student behavior. Just a little advice.
May 15th, 2008 at 9:28 am
My brother sold a duplex for 485K in late 2006. It’s now in the market for 250K and on the market for more than 2 months. I pity the guy who bought it but applaude my bro who offloaded it at right time.
May 15th, 2008 at 5:37 pm
Shannon,
Small world. No kids but I went to Cox when I was little tike (20 years ago!). After that it was on to Masuda and then FVHS. I grew up in Green Valley over by the north pool so it’s always felt like home.
Whereabout is the other school if you don’t mind me asking?
May 15th, 2008 at 8:33 pm
It might interest some people to look at what is going on today in Loudon County, VA, a community with a household median income of $99,371 and eerily similar to OC, on a smaller scale (but maybe they don’t have a Santa Ana.)
Loudon County is the subject of Washington Post’s aptly titled piece today ” Luxury Foreclosures: Growing Number of Affluent Homeowners Can No Longer Afford Their Mortgages”
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/14/AR2008051403698.html
In 2005, “Loudoun County briefly emerged as the wealthiest jurisdiction in the nation” according to Wikipedia.
Do you think people making a median $99K were thinking just last year that their’s was too nice and rich a county to be tainted by the real estate bust? “This time last year, I was happy” says a foreclosed homeowner in Loudon County …
“Who would have imagined that people would use this as an excuse to heavily leverage themselves?” said Lang, noting that higher-income people found ways to buy bigger, more expensive houses, endangering themselves just as lower-income, first-time buyers did. “And now they’re caught in the same way.”
I know, Loudon County is not comparable to OC but wait, what was the median household income in OC again???
I know the permabulls will say the median means nothing because it includes all the “not really OC” areas. But look:
http://www.ocregister.com/ocregister/money/article_1834748.php
In 2006
Newport Beach $103,068
MV - 93, 206
HB - 75,896
Irvine - 84,270
etc. etc.
The only difference seems to be that their bubble crash started in 2006, a bit earllier than here. Do you think some of those people in Loudon wish they had sold when prices were only down “12-14%” ??
May 17th, 2008 at 8:55 pm
Here’s MORE good news about Orange County real estate.
Here is a link to Steven Thomas’ latest market report:
http://www.ouragentspot.com/sthomas/MarketTime-May-15-08.pdf
I’m sure that Lansner & Padilla will have snippets of the report to write about, but this link includes the entire report, INCLUDING graphs & charts.
Thomas is doing this report every two or three weeks and has been SPOT ON, so far this year. NO one else have such an extensive report that focuses strictly on Orange County. Case/Schiller isn’t even close to relevant with their “Southern California metropolitan area report - one of 20 national areas that they’re “reporting” on
For the idiots who claim that Thomas is making this stuff up, look and the charts and graphs - they are extensive, complete, and accurate.
A few bozos here have attempted to ridicule, or minimalize these reports. Until they come up with something better, something more extensive, AND something MORE relevant, they should probably shut their stupid traps. ( The old saying applies: It is far better to keep your mouth shut, and keep people wondering if you’re really stupid, than to open your mouth and prove it to them.)
Stay cool this weekend.
May 17th, 2008 at 10:36 pm
Here are some good news “snippetts” from a lender friend of mine:
So you’ve heard a lot of mortgage ads on the radio this week. Some offer rates below 5.6 percent (“because we’re nice people too…”) while others “won’t bother” if your rate is above X, no matter if you need cash by the way. Some lenders talk about a “4.5% 30 year fixed refinance strategy” (false) and another one says “you can pay off your loan in 7 years without increasing your current monthly payment (kinda true. LL has this financing product by the way). During the good old days of 2004-2006 when homes sold in hours not months, we saw burped up into this industry the worst loan brokers ever. Sure, you could get a stated, stated 100% financing $1,000,000 loan for a person paid minimum wage, but was it the best for the client? Clearly not, since these loans funded by fly by night operators produced the price suppressed market we’re in today. These opportunists have begun to come back out with mailers, ads, and other gimmicks to again take advantage of your buyers and seller. They whisper fantastic tales of loan rates ultimately too good to be true. To quote The Who*…..“Don’t get fooled again”. Make sure your clients don’t chase rate, but get a program and payment they can live with in the house today, and the one you’re going to sell them when they want to move up.
* you know, the ones whose songs start each of the CSI shows… (the only current cultural reference most will recognize for a band that is as old at the Rolling Stones. But I digress)
Home Buyers, Start Your Engines. By Brett Arends, WSJ On Line. May 15, 2008
If you were thinking of buying a home, start looking. The latest data from the housing market shows that sellers, after months and years in denial, are finally giving in to reality and slashing prices. There is a distance still to go. There may even be a lot to go. But the process, long delayed, is now well underway. The National Association of Realtors on Tuesday released its long-awaited report on prices from the first quarter. The price drops were startling. In many of the former hot spots, from Florida to Nevada to the Californian “Inland Empire,” single-family home prices plunged by 20% to nearly 30% in a year.
Nationwide, the decline from the previous quarter was about 5%, says the NAR. And this, ultimately, is good news. We know prices have to fall. The sooner it happens, the quicker the market can clear. We may not be at that stage known on Wall Street as “capitulation,” but there is more than a whiff of it in the air. Far too many people in the real estate market have spent far too long insisting that denial is just a river in Egypt. They refused to accept there was a bubble on the way up, and refused to admit it even on the way back down. (There’s a few still out there: Last week I got an angry email from a broker who blamed the whole slump on “the media”.) It is simply remarkable how slow this bubble has been to deflate. That, bluntly, is part of the problem. As well…you can imagine what fantasies the sellers were clinging to. “Well, two years ago this home was worth half a million bucks.” The problem: So what? It doesn’t matter what prices were three or two years ago. We were in a bubble. Market psychologists call this “anchoring”, because people anchor their expectations to the past, and it’s a fallacy. Just five years ago, the same home sold for $270,000 and 10 years ago just $200,000. Are those relevant anchor points too? But sellers have at least returned to the bargaining table. If you are in the market for a home, it is time, cautiously, to take a look and, maybe, see if you can play, “Let’s Make A Deal.”
Some good news for a change….. but with important conditions.
Fannie Mae Scraps Declining Markets Policy By Robert Freedman for REALTOR® Magazine.
Fannie Mae will no longer require borrowers to put up an extra 5 percent down payment when purchasing homes in areas deemed “declining markets,” the country’s largest secondary mortgage market company said Friday. Fannie Mae had been hearing concerns from REALTORS® and others for months that its declining-markets policy was bad for the housing market because it discouraged consumers from buying homes in markets hardest-hit by foreclosures. Under the policy change, borrowers can get loans up to 95 percent loan-to-value, even in markets in which prices have been falling. Prior to the change, borrowers could only get loans up to 90 percent to give lenders a 5-percentage-point cushion to protect against possible price declines in the future. The new policy takes effect June First.
Anyone notice what is missing? High Cost Area Jumbo Conforming loans are not part of this policy change. From $1.00 to $417,000 you can get a 95% LTV loan. From $417,000 to $729,600 the maximum is 90%, but lenders will still hit those loans with a 5% reduction in maximum financing so a 90% max is really 85%. The good news is that 95% purchase loans can be had for prices up to $439,900. Anything over a $439,900 price where a buyer wants to put 5% to 10% down will have to close as an FHA purchase. Freddie Mac, Fannie Mae’s competitor in the mortgage market has had this policy in place for about 30 days already.
Rates below assume a 20% down fully documented purchase transaction with a clients FICO score at or above 700. Rate and terms as of 05/16/08 and are subject to change without notice. APR’s have not been calculated.
Conforming 30 Fixed $417,000 and below: 5.625 1.0 point
HCAJ Conforming 30 Fixed $417k to $729k 5.750 1.0 point
Jumbo 30 Fixed $417,000 to $2m 6.875 1.0 point
Standard FHA 30 Fixed $362,000 and below: 5.875 1.0 point
HCAJ FHA 30 Fixed $362k to $729k 6.125 1.0 point
Conforming 5/1 ARM $417,000 and below 4.875 1.0 point
HCAJ Conforming 5/1 ARM $417k to $2m 5.750 1.0 point
( End of report.)