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Are more foreclosures and short sales coming?
October 28th, 2009, 12:00 pm · 34 Comments · posted by Mathew Padilla
ForeclosureRadar.com reports banks seized 429 houses and condos, which became bank-owned or REO properties, in September in Orange County, a 12% decline from August.
Also, buyers grabbed 277 properties at trustee’s sales (the same auctions where properties reverted to banks as REO) — that total was down 2% from August. And trustee’s sale cancellations fell to 672.
The graph below shows fewer properties becoming REO over the past three months, while properties sold to investors have been increasing or flat. Cancellations dipped the past two months after spiking in July. (The chart tracks new REOs, properties sold to investors, and canceled sales from July ‘07 to September ‘09):
- click to enlarge
One question the chart raises is what will investors do with these foreclosures? I have seen some foreclosures put up quickly for resale, but not all. (Note: the blog Effective Demand earlier did a similar chart — minus cancellations — by running numbers on ForeclosureRadar and not waiting for an official report.)
Now look at a chart (below) with pre-foreclosure filings. Notices of default, which initiate the foreclosure process, totaled 2,309 in September, a slight increase from August. Lenders have filed more than 2,000 NODS every month since December 2008. That suggests foreclosures should be higher — but, of course, government programs and pressure on lenders to do loan workouts have stalled the foreclosure process. I hear there will be more short sales in the future — when a lender agrees to accept less than debt owed on a property — but short sales are complicated and can take months to complete.
The chart below also shows notices of trustee’s sale (a warning a property will be offered at auction) and those have have totaled more than 1,500 a month for the seven months ending in September.
- click to enlarge
The latter chart suggests there is still a lot of distress in Orange County housing that will hit the for-sale market eventually as short sales or foreclosures as Obama’s loan modification program fails to help as many borrowers as hoped.
What do you think?
More from this blog…
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- Loan-aid lawyer surrenders license after sex with minor
- Real estate groups call for extension of bigger loans
- 1-in-3 mortgage holders are ‘underwater’
- Will the appraisal ‘fix’ be scrapped?
- Bank failure No. 106
- Readers debate paying off their mortgages
- These homes are about to be foreclosed
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IS THE POPE CATHOLIC?
Is a bear Catholic?
Does the pope hibernate in winter?
Does a bear poop in the woods?
Does a turtle jump………………..
Poop Happens…
Does it really matter?
Try 7 million more
Wha? We’re talking about Orange County here - not nationally
Let me see:
1. Lowest interest rate available; but yet, mortgage applications drop
2. Increased # of new building permits; but yet, new home sales drop
3. 2000+ NOD’s/month & 1500+ Trustee’s sales since Dec 08; but yet, REO’s are around 500
Folks, the pressure is building up more and more despite all of the government efforts to deflate it. I guess there will always be a need for responsible people to pick up the pieces after this round of housing bubble busted.
More Black Swans In Store For The US Economy
http://www.businessinsider.com/more-black-swans-in-store-for-the-us-economy-2009-10
r u stupid do not beleive the govts. propaganda. obama is trying to bankrupt our financial system. someone , anyone need to stop him at all costs. he needs to be stopped.he is fundamentally destroying the free market. he must be removed from power.
OMG ! OH NOES!!!
Go sell crazy somewhere else we are all full here - and I am glad you woke up from your 8 year slumber Rip.
I do not agree with everything Obama is doing, but a quick review of history shows Bush created the problem.
So want Obama out and Bush back? Yah, that will help…
You, dear Walter, are sadly mistaken. This started way back in 1977 with Carter, in the Community Reinvestment Act. It was amplified by Clinton. Along with this, was the development of the mortgage backed securities and collateralized debt obigations in the 1990’s. Loans were bundled together (subprime, Alt-A, and prime) and sold off on Wall Street around the world. The problem was the ratings given to these “bundles”. People thought they were buying a safe place to put their money along with getting a very good return on their money. The “ratings” were a lie. If the many 1,000’s of loans had not been sold off on Wall Street, and the money funneled back to do the “cycle” all over again, the crisis would not have developed. The vast majority of people in the world had no idea of what they were fooling with. Bush had nothing to do with it. Congress had more to do with it, especially Barney Frank. If he had his way, the crisis would be even worse. But Congress was ignorant of the MBS and CDO debacle. This isn’t over with yet. Alt-A loans still have to reset. People who bought more than 1 year ago with a conventional loan and 10-15 % down payment are typically upside down(depending on where they bought in the U.S.) and the FHA loans are definitely in deep doo-doo. I heard recently that 30% of the FHA loans are 30 days late in their payments, or in default. You can say that Bush created the problem, but that is a blatant lie, in my opinion.
if the unemployment keep rise up and the answer will be YES
Does a Catholic bear poop in the woods?
WOW,
The banks have complete control of the housing market. This is going to end very, very badly.
What, no option for “No, the economy is doing GREAT and housing prices are going up!”???
Sorry guys. I think we’ve been outgunned, outlobbied by NAR. Special interest groups will stuff your pol’s pockets with enough money to not let this happen.
There is not enough money to not let this happen. Only enough to slow it down Japan style.
i work for a bank and numbers are threw the roof bat man!!!!!!!
no-no more forclosures, everything is under control.
You know if you look at the number of properties with loans originated between 2005 and 2007 by zip code it will give you an idea of how many upside down properties with a high probability of default there are. These years had very lax lending standards.
Then the answer to the pole question becomes more obvious for each city.
I just wonder if policy makers are really looking at this type of data or focusing on the magic fairy dust statistics being created by active market manipulation.
I expect there to be a lot more but a lot more short sales rather than foreclosures. The banks are improving the process.
Realtor friend just sent me an article that short sales are taking longer and not getting approved.
This came from the OAR newsletter. Be sure your clients buying short sales know what kind of response time they can expect at best.
‘The bank is holding my (short sale) clients hostage’
Banks are backing away from short sales, forcing sellers to pay extra at closing or demanding a promissory note for the amount due. One-third of borrowers owe more on their mortgages than their properties are worth, according First American CoreLogic.
When their situations were really tough, most banks preferred short sales because they were their best opportunity to get the most money back. But with an improving economy and because the losses on many of these properties have already been written off the books, banks are increasingly reluctant to negotiate a short sale.
Today, banks demand 9.5 weeks to respond to a short-sale request, compared to 4.5 weeks a year ago, according to research firm Campbell Communications. Their reluctance is frequently stymieing sales and frustrating real estate practitioners.
“It drives me up a wall,” says Robert G. Hertzog of Summit Home Consultants in Phoenix. “(The bank is) holding my client hostage
Are more foreclosure coming. Well here is a fun link to get an idea.
http://maps.google.com/maps?f=q&hl=en&q=orange+county%2C+ca&mrt=realestate&utm_campaign=en&utm_medium=lp&utm_source=en-ha-na-us-gns-trs&submit.x=0&submit.y=0&submit=Get+real+estate+listings
If things get much worse around here, we are letting one of our homes go after working 30 years plus, our jobs are disappearing and the professionals are folding. Where in the world can i hang my shingle and make a decent living any more. Thanks to all of you driving foreign cars……our nation has been sold out of under us.
Give me a break. Crappy cars, too many models, unions and piss poor management drove Detroit down the toilet. Don’t put this on smart consumers.
shhhhh… i am a loan officer, the tsunami is coming folks
…while properties sold to investors have been increasing or FLAT…(I add decrease)
….One question the chart raises is what will investors do with these foreclosures?….
Does any one else sees a problem once investors looses interest in the housing market and stops buying more properties?
What will happen when existing investors starts dumping these properties if their business decision does not pay off as they wanted?
….and our beloved govt. pulls out money from the financial sector. Merry times ahead for housing….Do I sense banks begging for cash from consumers?