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Price rebound parallels foreclosure drop

November 3rd, 2009, 3:15 pm by Jeff Collins
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The percentage of sales involving homes that had been through foreclosure during the prior 12 months continued to fall in September, down to 25.1% of home resales, MDA DataQuick reported.

That’s foreclosures’ lowest share of resales since February 2008.

And while it’s not surprising to note that falling foreclosures are tied to this year’s price surge, it is interesting to see how closely two trends — median home prices and foreclosures’ share of resales — correlate. (See chart at right)

A comparison shows:

  • Foreclosures’ share of resales began to climb two years ago in O.C., rising from 6 percent in August 2007 to 46 percent last January.
  • The median home price here fell to $370,000 from $642,000 in that time, a 42 percent decline.
  • Foreclosures’ share of resales since have dropped steadily, corresponding to a 16 percent rebound in median home prices, which increased to $429,000 in September.

Forecasters have debated how an expected revival in the foreclosure rate will impact home prices next year.

Anil Puri, dean of Cal State Fullerton’s Mihaylo College of Business and Economics projected that 2010 home prices in O.C. will rise no more than 2 or 3 percent because of high joblessness and a possible increase in foreclosures.

But economist Mark Schniepp, author of the UCLA Orange County economic forecast, predicted that the next wave of foreclosures won’t be big enough to derail housing’s recovery.

More on distressed home sales:

Posted in: Defaults & Foreclosures • Distressed sales • | 16 Comments »

Foreclosures just 4% of homes for sale

November 3rd, 2009, 1:00 am by Jeff Collins

Aliso Viejo broker Steve Thomas of Altera Real Estate reports that it would take just 21 days to sell all the bank-owned homes in Orange County based on the current sales pace. And competition to buy those homes is so stiff that accepted offers are averaging 3% over the asking price, he said.

Fewer than one in 20 of the county’s 7,749 listings on Thursdays were repossessed homes taken by banks through foreclosure.

But short sales — homes selling for less than their debts — accounted for more than one in four O.C. listings, “a major player in today’s marketplace,” Thomas said. The chart below shows the long-term trend:

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In addition, Thomas reports:

  • There are currently only 314 foreclosed homes for sale in all of Orange County, a decrease of eight in the past two weeks.
  • There are currently 2,075 short sales on the market, a decrease of just one in the past two weeks. Short sales currently represent 27 percent of the listings.
  • The expected market time for short sales — the theoretical time to sell all the listings at the current sales pace — is 56 days, vs. nearly seven months a year ago.
  • Overall, the total number of distressed listings — foreclosures and short sales — was 2,389, or 30.8 percent of the total number of homes for sale.
  • That’s down just nine homes from two weeks ago, but way down from a year ago. At the end of October 2008, there were 5,801 distressed homes on the market, accounting for 43.8 percent of the total listings.

Here’s a look at various slices of the O.C. market as of last Thursday: total listings; distressed listings; and percentage of all listings that are distressed … Read the rest of this entry »

Posted in: Defaults & Foreclosures • Distressed sales | 27 Comments »

Foreclosures account for a fourth of home resales

September 19th, 2009, 1:00 am by Jeff Collins
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Just over one in four existing homes sold in Orange County last month had been through foreclosure some time in the past year, according to MDA DataQuick. That’s the smallest percentage of total home “resales” in 1.5 years.

It’s likely that most of those 685 homes were repossessed houses and condos being resold as “REOs,” or “real estate owned” by banks and other lenders. Others may be homes being resold by investors who picked up the homes at foreclosure auctions.

Previously foreclosed homes have accounted for a dwindling share of Orange County home sales since January, when almost one out of every two homes sold had been through foreclosure, DataQuick figures show.

The decrease mirrors a decline in homes going through foreclosure auctions and reentering the market, curtailed in part by public and private efforts to keep defaulting homeowners from losing their properties.

Specifically, DataQuick reported:

  • 25.8 percent of homes resold in August had been through foreclosure in the past year.
  • That’s the smallest proportion of foreclosure resales since February 2008.
  • August had the third highest number of non-foreclosure sales since January 2008: 1,972. Only June and July had more: 2,047 non-foreclosures sold in June; 2,299 sold in July.
  • Foreclosed homes’ share of local sales have declined every month since January. According to DataQuick, 46 percent of January’s resales were foreclosures — more than 800 homes at a time when total sales were lower than they are now.
  • The O.C. trend mirrors what’s happening in Southern California as a whole. DataQuick reported that foreclosures accounted for 38.8 percent of August resales, down from 56.7 percent in February.

Related news:

Posted in: Credit Crunch • Defaults & Foreclosures • Subprime news | 20 Comments »

Title insurance requests jump 9%, firm reports

July 30th, 2009, 5:00 pm by Jeff Collins

first-american-hqwebSanta Ana-based First American Corp. reported today that requests for title insurance policies increased 9 percent in the second quarter of the year, but that payments per policy fell.

The change reflects the housing market overall, which saw home sales soar this year as prices dropped.

Net income for the title insurance and real estate information company, meanwhile, was more than three times greater than in the second quarter of 2008.

Specifically, First American reported:

  • The firm received 438,100 requests for title insurance policies in the second quarter of 2009.
  • That compares to 401,200 such requests in the second quarter of 2008, or a 9 percent increase.
  • The average amount received per policy was $1,302, down 18 percent from the year before.
  • Overall, title insurance revenues fell 16 percent to $935.3 million, due mainly to the reduced amount received per policy.
  • Net income totaled 70.3 million in the second quarter of 2009, which was 3.5 times greater than the year before. Net income in the second quarter of 2008 totaled $19.6 million.
  • Total revenue in the quarter fell 9 percent to $1.5 billion.

Said First American Chairman and CEO Parker Kennedy:

“First American showed meaningful revenue and earnings improvement led by continued enhancement in the performance of our title insurance business and steady growth in our Information Solutions Group. The company continues to build its capital base and is making progress on the split of our Financial Services and Information Solutions businesses, which we expect to occur during the first half of 2010.”

More from this blog…

Posted in: Company Watch • First American • • | Post a Comment »

Foreclosures drop to 29% of resales

July 17th, 2009, 12:00 pm by Jeff Collins
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DataQuick reports that Orange County foreclosures made up just 29% of all home resales in June, the lowest percentage in more than a year, as banks fall behind in bringing delinquent loans to foreclosure and demand rises for discounted foreclosures.

DataQuick measures the percentage of homes sold that had been through a foreclosure in the previous 12 months. Most of those likely are bank-owned homes.

Foreclosure’s share of home resales peaked at 46% in January, according to DataQuick, and has been falling since (see chart). The percentage of foreclosed homes selling last month was the lowest since April 2008, when foreclosures made up 27% of resales.

One reason is there are fewer foreclosures on the market. Aliso Viejo broker Steve Thomas has reported that there were 374 foreclosures for sale in Orange County last week, just 4.2% of all homes on the market. First American CoreLogic data from May showed while the ratio of foreclosures to all loans dipped, the ratio of mortgages at least 90 days late but without a notice of default jumped to 6.3% in May, from 4.6% in April and 4% a year ago.

Foreclosure specialist Tom Moon of Huntington Beach reported that his own inventory of bank-owned homes for sale has declined to around 200 homes, down from nearly 400 earlier.

Moon has not filled four vacancies on his staff since the decline hit. In addition, his brokerage purchased a scanner to digitize records as a way to keep staff busy during the slow period.

Banks are bringing fewer foreclosed homes to market for a variety of reasons. More loan modifications are reducing the number of homes for sale. And  more people are buying at home auctions, known as trustee’s sales, because banks now are offering large discounts (60% off at a recent foreclosure auction)  — something they didn’t do when the bubble first burst.

In addition, banks simply are overwhelmed by the shear size of the backlog of homes in default or foreclosure.

Related news …

Posted in: Defaults & Foreclosures • Distressed sales • • | 18 Comments »

Foreclosures account for 34% of May home resales

June 22nd, 2009, 3:00 am by Jeff Collins
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Recently foreclosed homes, most of them likely being sold by lenders, are taking up a decreasing portion of Orange County real estate transactions, DataQuick’s latest figures show.

In May, homes that had been foreclosed upon in the previous 12 months made up 34.2% of homes sold, excluding newly built home sales, DataQuick reported. That’s the lowest percentage since August.

Foreclosure’s share of the home resale market peaked in January at 46%.

Lenders repossessed more than 1,400 Orange County homes last August — the highest number of any month on record. The increase in resales of foreclosed homes followed, but began to subside in February.

One reason is likely that foreclosures fell in September and subsequent months amid a state law requiring banks to talk to delinquent borrowers at least 30 days before filing a notice of default, which starts the foreclosure process. The law impacts loans made in the final years of the housing boom.

And some agents specializing in selling bank-owned homes have speculated that lenders are withholding a large number of foreclosures from the resale market, making it likely that many more foreclosed homes will show up later. (For more on foreclosure trends, click HERE or HERE.)

In other news…

Posted in: Defaults & Foreclosures • dataquick • • | 1 Comment »

2006: State’s most toxic year for home loans

April 22nd, 2009, 2:21 pm by Jeff Collins

foreclosure-artSome defunct Orange County lenders accounted for the highest proportion of bad loans generated during one of the most notorius periods for bad-loan originations, DataQuick reported today.

In its latest report on defaults and foreclosures, the real estate data firm noted that the highest percentage of defaults occurred from August through November 2006 — a period DataQuick called “a particularly toxic period” for issuing home loans.

Nine percent of the loans issued during that period ended up in default, DataQuick said. Then, it added:

“The lending institutions with the highest default rates for loans originated in August to November 2006 include ResMAE Mortgage (69.9 percent of loans resulting in a default notice), Master Financial (64.6 percent) and Ownit Mortgage Solutions (63.6 percent).”

All three were Orange County subprime lenders before they bit the dust.

Other lenders’ default rates for loans originated in this period: IndyMac, 18.9 percent; World Savings, 8 percent; Countrywide, 7.7 percent; Washington Mutual, 6.3 percent; Wells Fargo, 3.4 percent; and Citibank and Bank of America, less than 1 percent apiece.

In addition, DataQuick reported:

  • Of the 3.7 million home loans made in 2004, less than 1 percent have since resulted in a lender filing a default notice.
  • Of the 3.7 million loans originated in 2005, 4.9 percent have triggered a default notice so far.
  • Of the 3 million in 2006, 8.5 percent have so far resulted in default.
  • Of the 2.1 million loans made in 2007, it’s 4.6 percent – “a percentage that’s likelyto rise significantly during the rest of this year.”

DataQuick said the figures suggest that 2006 was “a period where underwriting criteria were particularly lax.” It quoted company President John Walsh as saying:

“The nastiest batch of California home loans appears to have been made in mid- to late 2006, and the foreclosure process is working its way through those. Back then, different risk factors were getting piled on top of each other. Adjustable-rate mortgages can be good loans. So can low-down-payment loans, interest-only loans, stated-income loans, etc. But if you combine these elements into one loan, it’s toxic.”

The figures were part of a DataQuick news release reporting that both California and Orange County recorded a record number of default notices during the first three months of this year.

Statewide, 135,431 default notices were issued during the January-to-March period; O.C. accounted for 8,427 of those. Both figures were up 19 percent from the year before. For more on O.C. foreclosure and default figures in March, CLICK HERE!

To read the Register’s award-winning analysis of subprime lending, CLICK HERE!

Read more …

Posted in: Bad debt • Bank failures • Bank of America • Citigroup • Countrywide • Defaults & Foreclosures • IndyMac • Loan underwriting • Washington Mutual • dataquick • • • • • • • • • • • • • | 4 Comments »

O.C. home defaults hit record high

April 22nd, 2009, 1:02 pm by Jeff Collins
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DataQuick reported today that lenders filed a record number of default notices on outstanding Orange County home loans last month, signaling more distressed sales ahead in the local housing market.

Lenders recorded 3,485 notices of default, which usually occurs after a homeowner has missed three or more monthly mortgage payments. That’s the highest number in any month in records dating January 1992 (see chart).

That tops the previous record set in February by 743 defaults, and it’s nearly 41 percent higher than the March 2008 total.

NOD’s are the first step in a formal process leading to the sale of a home through foreclosure.

NOD’s have surged following a moratorium caused by a new state law that required lenders to take additional steps to warn homeowners before recording a default.

The ultimate step of repossessing a home through foreclosure has diminished for the first time in three years, however.

DataQuick reported just 541 foreclosures in March, down 22.5 percent from the year before. That’s the first year-over-year decline in foreclosures since July 2005.

A news release from DataQuick reporting a similar decrease statewide attributed the decline to “a temporary foreclosure moratorium” by lenders.

Also, in the report: “2006: state’s most toxic year for home loans”

Read more …

Posted in: Defaults & Foreclosures • dataquick • • • | 25 Comments »

Foreclosures account for 4 out of 10 O.C. home resales

March 17th, 2009, 5:11 pm by Jeff Collins
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Foreclosure resales dipped slightly last month as a percentage of all housing resales in Orange County, though they remain elevated vs. 18 months ago.

DataQuick reported today that 41.5 percent of the pre-owned homes sold in February had been foreclosed upon sometime in the past year. The majority of those are believed to be “REOs,” or repossessed homes being resold by the lenders who seized them.

In January, foreclosures’ share of the resale market peaked at 46 percent in Orange County, up from 6 percent in August 2007.

Regionwide, foreclosures accounted for 56.4 percent of Southern California resales activity last month, DataQuick said.

The research firm reports that the large share of foreclosures skews overall price trends, making the price drop seem more dramatic than it is. Homes in the upper half of the market are barely selling, and hence are underrepresented, DataQuick said.

For example, home loan data show that the number of high-end sales financed by so-called “jumbo” loans has decreased, while lower-priced homes sold using Federal Housing Administration loans went up.

Homes sold with loans greater than $417,000 — the former “jumbo” loans — accounted for just 21.8 percent of Orange County home sales, down from almost 60 percent of sales before the credit crunch, according to DataQuick.

At the same time, FHA mortgages made up about 38 percent of all Southern California purchase loans in February, up from 6.4 percent a year ago.
Other housing stories …


… in the lending world …

… from South County …

… and Surf City:

Posted in: Defaults & Foreclosures • REO • Uncategorized • dataquick • • • • • | Post a Comment »

Credit bubble pushed Realtor forecasts off course

February 9th, 2009, 4:35 pm by Jeff Collins

Yun in Laguna Hills

Yun in Laguna Hills

National Association of Realtors’ chief economist Lawrence Yun told an Orange County crowd today that he failed to foresee the depth of the housing crash because he didn’t realize that the normal “checks and balances” in the mortgage system had gone out the window.

As a result, Yun said at the Orange County Association of Realtors headquarters today, he failed to foresee the colossal price drops that followed.

Five years ago, Yun said, he told people that homes are not like stocks. They’re tangible assets, made from brick and wood, and sudden price drops just won’t happen.

“In hindsight, I was wrong in that assessment, but my assessment was based on a check and balance system,” Yun said. Lenders traditionally held housing bubbles in check by making sure they only gave mortgages to qualified buyers.

But the checks and balances failed. Relying on the rating agencies that gave mortgage-backed securities AAA ratings, everyone from German mutual funds to Florida teachers pensions and the Chinese government flooded investment houses with cash to fund new mortgages, Yun said.

Tons of “unqualified people, people not emotionally ready” to buy a house became borrowers.

“What I found out was there was a credit market bubble that led to a housing market bubble. There was not check and balance in the system,” he said.

When the bubbles burst, home prices fell by as much as 45% in Stockton, he said. And even in the Midwest, which did not have a housing bubble, markets are suffering.

“Who would have thought a tangible asset would fall 45% in one year?” Yun asked.

More housing/mortgage-related news …

Posted in: Credit Crunch • Meltdown • Top posts • • • • • • | 27 Comments »

One million-dollar O.C. home faced foreclosure for every two sold

February 5th, 2009, 3:00 am by Jeff Collins

$1 million-plus listing in Laguna

DataQuick reported that 1,718 homes that had previously sold for $1 million or more either faced foreclosure last year or actually was seized by a bank.

By comparison, Orange County recorded 2,862 home sales of $1 million or more in 2008, the market research firm reported.

In its latest report on 2008 million-dollar home sales, DataQuick found that 1,179 Orange County homes that had previously sold for seven figures received a notice of default in 2008, entering the first stage of the foreclosure process.

In addition, 539 O.C. homes that previously sold at $1 million or more were lost to foreclosure last year.

Orange County accounted for a third of the notices of default filed on million-dollar homes statewide, while one in five of California’s million-dollar abodes lost to foreclosure occurred here.

Related news …

In other real estate news …

Posted in: Defaults & Foreclosures • Top posts • • • • • | 17 Comments »

A call for 3% mortgages rates

January 30th, 2009, 11:00 am by Jeff Collins

Lennar Corp. Chief Investment Officer Emile Haddad told a business breakfast in Irvine Thursday that Fannie Mae and Freddie Mac should buy 30-year fixed-rate mortgages at prices that allow banks to offer consumers a 3% interest rate. He said doing that for six months would help stimulate homebuying and help stabilize the U.S. economy.

Under a plan backed by the home building industry, government-sponsored enterprises would provide 3% mortgages for six months, followed by 4% mortgages. The program also calls for homebuyers to get $20,000 in tax credits.

If you give people 3% home loans, Haddad said, “they buy. … We’ve tested it.”

But another speaker at yesterday’s business outlook breakfast, Andrew Policano, dean of the UC Irvine Paul Merage School of Business, said that was not a good idea. Policano said after the breakfast that 3% loans would be “underpriced,” while 4.5% mortgages — a plan backed by the National Association of Realtors — would be “more reasonable.”

“It’s really pretty much a pitch to subsidize one industry,” Policano said. “Would you take a 3% rate for a 30-year investment?”

But Haddad defended the idea, saying that the government agencies likely would make money on 3% loans because their cost of funds would be lower.

“The government is subsidizing a lot of industries to jump start the economy,” Haddad said. “This will help the consumer.”

In other news…

Posted in: Fannie & Freddie • Meltdown • Mortgage rates • • • • | 40 Comments »

Foreclosures make up smaller share of O.C. home sales

January 20th, 2009, 11:55 am by Jeff Collins
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Foreclosures were a smaller share of Orange County home sales last month than the month before, MDA DataQuick reported.

But because there were more sales last month than the month before, the actual number of foreclosed homes sold increased.

DataQuick reported that:

  • 43 percent of the 2,373 existing homes resold in December had been foreclosed upon in the previous 12 months. That amounts to just over 1,000 foreclosed homes.
  • 44.2 percent of the 1,940 existing homes that resold in November, or around 860 homes, had been foreclosed upon in the previous 12 months.

Numbers are up dramatically from a year ago. In December 2007, just 20 percent of the 1,300 resales, or 260 homes, had been foreclosed upon in the previous year, DataQuick reported. Foreclosures made up just 6 percent of resales in August 2007.

Meanwhile, foreclosed homes continued to be increasingly dominate elsewhere in the region, particularly in the Inland Empire, DataQuick reported.

Just under 70 percent of resales in Riverside and San Bernardino counties were foreclosure homes, DataQuick said.

Regionwide, foreclosures accounted for 55.7 percent of December’s resales activity, up from 54.7 percent in November, and up from 24.3 percent in December 2007.

More from DataQuick …

Posted in: Defaults & Foreclosures • dataquick • • | 9 Comments »

44% of O.C. home resales were foreclosures

December 16th, 2008, 2:09 pm by Jeff Collins
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Homes repossessed by lenders sometime in the past year make up an increasingly large share of existing home sales in Orange County, climbing to 44 percent of all home resales last month, DataQuick reported today.

That compares to 14 percent of the sales of existing homes in November 2007.

In Southern California, repossessed homes made up 55 percent of resales last month, DataQuick reported (Read more on that HERE).  Foreclosures have accounted for about half of all Southland resales during the past three months.

Riverside County had the highest proportion of repo resales: 70 percent. Next in line:

  • San Bernardino County at 68 percent,
  • San Diego County at 52 percent,
  • Ventura County at 48 percent,
  • Los Angeles County at 44 percent.

Read more …

Posted in: Defaults & Foreclosures • Meltdown | 5 Comments »

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