Will drop in foreclosures stick?

November 18th, 2008, 5:00 pm · 4 Comments · posted by Mathew Padilla

Monthly foreclosure totals dropped in September and again in October, according to DataQuick. (See my previous post on the trend HERE.)

Mark Boud, head of Real Estate Economics in Irvine, said the decline is due to several factors, including banks getting more serious about modifying loans to help borrowers avoid foreclosure. Major banks JPMorgan, Citigroup and Bank of America along with subsidiary Countrywide have each announced plans to help hundreds of thousand of borrowers.

And some financially strapped homeowners are fighting to hold on and see if government officials agree on a bailout for homeowners, Boud said. Interestingly, Boud said struggling homeowners along the coast are likely fighting the hardest to keep their properties, since they have the biggest potential upside from any government bailout.

But foreclosures will soon rebound if Orange County’s economy continues to shed jobs, he said. Boud sees elevated job losses through the middle of next year.

“2009 is going to be a rough year,” Boud said.

Do you agree?

What's ahead for foreclosures?

And in other news….

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OCAppraiser says:

November 18, 2008 at 6:53 pm

“People on the coasts stand to gain the most from a bailout.”

That should say it all. Aint no bailout coming to that young couple who borrowed 700k to buy in Laguna Niguel, with a toxic mortgage.
I hear about these people “holding out” for the bailout.
After all the numbers are crunched and rules are debated, the bailout will come, but not in the form most think.
Yes, REO and distressed home inventory will increase sharply AFTER it is concluded that there will be no bailout en mas, which is what most people are hoping for. There will be a selection process, in which it will be determined that those folks needing the most help are not the ones making 150k per year, trying to “hold” onto that 1.5M ocean view in Dana Point.
Its all setting up to be quite interesting.

1- No bailout for upper crust (this should be obvious)
2- Alt-A pending implosion (felt most in the 500-900k price point)
3- Job losses coming, and not just for retail guys. Office guys too.
4- Dare I say higher rates? This one is a toss up. Depends if the Feds want to act as banker and take a loss on all loans by offering 3% fixed rates, while “the market” prices the risk at 7%.

Things are real hard to guage when the rules seem to keep changing.

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Dina says:

November 19, 2008 at 5:56 am

OCAppraser, so people who knowingly did not make enough money to buy a hame should be bailed out?

Would this include the hordes of illegal immigrants who bought homes in Santa Ana and San Juan Capistrano? You think they should be helped?

November 19, 2008 at 9:27 am

I dont think anyone, short of a single income earner, who qualified “legally” for the loan, but now cant pay due to medical reasons should get help.
All I am saying is that when the Feds sit down and chop up the regions, and chop those up into zip codes, they will also be looking at “product” and “curcumstance”.
I wish the Govt stayed out of all this and just let the market decide if our Country should go into severe recession. But its quite obvious that they want to give some help, or at least make it seem like they are helping.
I just dont think they are going to bail-out a 2 income household who is underwater on an 850k house, over little old ladies and single moms in Santa Ana, San Juan, Lake Forest, RSM, GG, Anaheim-and the list goes on. The people who will get the REAL bailout (The reduction of principle and new low fixed rate) will be at the lower end of the price spectrum (sub 200k).
The higher end folks will get the loan mod that says they have to pay it all back later with ballon payment or 40yr term extension. Those guys are the one’s that are “bailing” from their houses, and will do so in droves if they dont get offered the “REAL” bailout.
Again, this is just a theory of mine. But then again, I started with just a “theory” in 2003.

fcprop says:

November 19, 2008 at 9:37 am

I think you will see an onslaught of NOD’s after the first year, I would think alot of homeowners are going to try and stick it out till the first year. Then, they will re-evaluate their financial situation. Majority will realize they are upside down and house poor. Not to mention, a bleak job market!

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