Archive for the 'Defaults & Foreclosures' Category
November 7th, 2009, 1:00 am by Mathew Padilla
The latest foreclosure figures from First American CoreLogic show a growing divergence in what’s happening to problematic mortgages in Orange County.
The ratio of bank-owned houses and condos, known as REO, against all outstanding first mortgages declined for the 13th straight month to just 0.26% in September — the lowest in 26 months. That sounds like a good thing for the housing market and economy.
But the number of bad loans in limbo continues to escalate.
In fact, the proportion of 90-day late loans has increased each month for more than three years (beginning in April 2006) and hit 6.96% in September.
The chart below shows REOs, 90-day lates, and properties with some kind of foreclosure filing. (Note: 90-day lates include the other two categories.)
 - click to enlarge
The chart reflects a number of trends. For one thing, more troubled properties are selling at auctions, known as trustee’s sales, and thus are not going back to the bank as REO.
Sam Khater, senior economist with First American CoreLogic, said in an email:
The reason REOs have declined is that flow of distressed properties into REO has been artificially restricted due to local, state and GSE foreclosure moratoria, loan modifications and servicer backlogs. This has led to a drop in the supply of REO properties, while at the same time sales (including REO sales) increased due to the artificially low rates and first-time homebuyer tax credits, which further depleted the supply of REOs. This dynamic has led to the rapid improvement in home prices over the last six to eight months.
However, the mortgage distress is high and rising as is evident by the 90+ day category, which means the pending supply is building up due to high levels of negative equity and rising unemployment. So we have a situation where at the back end (ie REOs) it appears as if it’s getting better, but it’s really a mirage as we know that the pending supply pipeline default (ie 90+ day DQs) is looming larger.
Yup, at some point, we should see more short sales and foreclosures. Maybe early next year?
More from this blog…
Posted in: Defaults & Foreclosures | 1 Comment »
November 5th, 2009, 12:00 pm by Marilyn Kalfus, real estate reporter
First, in foreclosure news this week:
Every week, homes throughout Orange County go to foreclosure auctions. The owners can be millions of dollars in debt,  or owe just a few thousand.
Often these homes revert to the lenders, who eventually put them back on the market. Sometimes the homes are bought by investors and resold.
Foreclosures affect more than the homeowners involved. They can impact entire neighborhoods. At the very least, they can affect nearby home sales.
All of these homes and addresses have been listed in the public notices, as required by law.
See Coto de Caza HERE.
See Huntington Beach HERE.
See Irvine HERE.
See Ladera Ranch HERE.
See Laguna Beach HERE.
See Laguna Niguel HERE.
See Rancho Santa Margarita HERE.
See Yorba Linda HERE.
To read about how these auctions work, CLICK HERE.
Trustee, trustor … what’s the difference? To see foreclosure terms and definitions CLICK HERE.
Top tips for buying investment properties CLICK HERE.
Note: There are foreclosures in other Orange County cities — including Orange and Anaheim — but so far we haven’t had enough available writers to regularly compile foreclosure information from them. We hope to add more cities in the future.
More from this blog…
For a map of real estate listings and foreclosures, click here
Posted in: Auctions • Defaults & Foreclosures • Uncategorized • distress | Post a Comment »
November 3rd, 2009, 3:15 pm by Jeff Collins
 click to enlarge 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 • dataquick | 16 Comments »
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:
 click to enlarge 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 »
October 29th, 2009, 11:59 am by Marilyn Kalfus, real estate reporter
First, in foreclosure news this week:
Every week, homes throughout Orange County go to foreclosure auctions. The owners can be millions of dollars in debt, or owe just a few thousand.
Often these homes revert to the lenders, who eventually put them back on the market. Sometimes the homes are bought by investors and resold.
Foreclosures affect more than the homeowners involved. They can impact entire neighborhoods. At the very least, they can affect nearby home sales.
All of these homes and addresses have been listed in the public notices, as required by law.
See Aliso Viejo HERE.
Huntington Beach HERE.
See Irvine HERE.
See Ladera Ranch HERE.
See Laguna Beach HERE.
See Laguna Hills HERE.
See Laguna Niguel HERE.
See Rancho Santa Margarita HERE.
See San Juan Capistrano HERE.
See Yorba Linda HERE.
To read about how these auctions work, CLICK HERE.
Trustee, trustor … what’s the difference? To see foreclosure terms and definitions CLICK HERE.
Top tips for buying investment properties CLICK HERE.
Note: There are foreclosures in other Orange County cities — including Orange and Anaheim — but so far we haven’t had enough available writers to regularly compile foreclosure information from them. We hope to add more cities in the future.
More from this blog…
Posted in: Auctions • Defaults & Foreclosures • distress | Post a Comment »
October 28th, 2009, 12:00 pm 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?
Are more foreclosures and short sales coming?
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Posted in: Defaults & Foreclosures • Polls | 34 Comments »
October 26th, 2009, 1:04 pm by Mathew Padilla
| Area |
Neg. Equity |
Within 5% NE |
| OC/LA |
35.0% |
3.7% |
| CA |
42.0% |
3.7% |
| USA |
32.2% |
5.5% |
First American CoreLogic reports that 35% of mortgage holders in the Orange-Los Angeles area had zero or negative equity (paper profit), in their homes at the end of June.
Another 4% of mortgage holders had just 5% or less equity.
Correction: I had previously posted a chart showing homeowners with “Negative Equity” as separate from those within “5% of Negative Equity.” But a reader pointed out those categories were not mutually exclusive in the report, and I confirmed that with the analyst at First American. The 4% figure in the sentence above this correction and in the table is a mutually exclusive number — I separated the categories. (Don’t ask me why First Am sent out a report with Near Negative Equity containing owners with Negative Equity.)
Another interesting state: 21.9% of owners who live in their home in Orange County have no mortgage at all, according to the U.S. Census Bureau estimate for 2005 to 2007. Here’s a table showing owner-occupied homes with and without mortgages in OC, CA and USA:
| Area |
No Mortgage |
With Mortgage |
| OC |
21.9% |
78.1% |
| CA |
23.8% |
76.2% |
| USA |
31.8% |
68.2% |
Posted in: Defaults & Foreclosures | 9 Comments »
October 22nd, 2009, 12:00 pm by Marilyn Kalfus, real estate reporter
First, in foreclosure news this week:
Every week, homes throughout Orange County go to foreclosure auctions. The owners can be millions of dollars in debt, or owe just a few thousand.
Often these homes revert to the lenders, who eventually put them back on the market. Sometimes the homes are bought by investors and resold.
Foreclosures affect more than the homeowners involved. They can impact entire neighborhoods. At the very least, they can affect nearby home sales.
All of these homes and addresses have been listed in the public notices, as required by law.
See Huntington Beach HERE.
See Irvine HERE.
See Laguna Beach HERE.
See Laguna Niguel HERE.
See Mission Viejo HERE.
See Yorba Linda HERE.
To read about how these auctions work, CLICK HERE.
Trustee, trustor … what’s the difference? To see foreclosure terms and definitions CLICK HERE.
NEW! Top tips for buying investment properties CLICK HERE.
More from this blog…
Posted in: Auctions • Defaults & Foreclosures • distress | 2 Comments »
October 21st, 2009, 11:35 am by Mathew Padilla
Kate Berry, a reporter for American Banker, writes:
At the mortgage industry’s biggest gathering of the year, servicers went out of their way to lower expectations for the government’s loan modification program.
A common refrain was that many of the 500,000 borrowers who have begun trial modifications may not make the cut for a permanent modification because they have not submitted all of the required paperwork.
“Ninety-nine percent of the loan mod packages that get returned to servicers are either missing some of the documentation necessary or have errors in them,” Michael W. Young, the chairman of Cenlar, a Ewing, N.J., subservicer, and the vice chairman of the Mortgage Bankers Association, said at trade group’s convention in San Diego last week.
Similarly, Jerry McCoy, the vice president of business development for national servicing at Fannie Mae, called “borrower engagement” a major challenge for the Home Affordable Modification Program.
“There are still a great many borrowers that would qualify if they would just call back,” he said. “How do we improve pull-through rates?”
Much is at stake in the next two months. The Treasury Department is expected to report the results of the first trial modifications in early November and early December. If the pull-through rate is low, the industry may face another backlash. That may help explain why servicers are talking down expectations for the program now.
“The servicers are very concerned about performing under HAMP, but nobody knows what’s going to happen if the mods fail,” said Chris Sabbe, an executive vice president at Sterling Home Retention Services, a provider of loss-mitigation services in Altamonte Springs, Fla.
For example, though the mortgage industry defeated bankruptcy cramdown legislation in April, there is a sense it would be revived if modification efforts fail.
“I think there is still a concern that bankruptcy cramdown is going to be revisited,” said Michael Waldron, a partner at the law firm Patton Boggs LLP. “No one takes comfort that it won’t be raised again and will be attached to the failure of these efforts.”
I took the above from National Mortgage News.
In this case, cramdown refers to giving a bankruptcy judge power to change the terms of a mortgage, such as by lowering the debt owed to current market value. Cramdowns could help eliminate the risk of another credit fiasco and keep some homeowners in their homes.
More from this blog…
Posted in: Bailout Buzz • Cramdowns • Defaults & Foreclosures • loan mods | 25 Comments »
October 20th, 2009, 9:22 am by Mathew Padilla
Investors bought 278, or 39%, of the 718 houses and condos sold at auctions, known as trustee’s sales, in Orange County last month, reports ForeclosureRadar.com.
The ratio of properties not going back to the bank has been steadily increasing as lenders and loan servicers offer bigger discounts on auctioned properties. I have seen discounts as high as 60% off debt owed on a first mortgage (the discount to current market value is usually much less) and the norm seems to be around 30% off of debt owed.
The blog Effective Demand has charted the trend of foreclosures going to banks, called Beneficiary, or investors, called 3rd Party (total properties sold to third parties in red):
 - click to enlarge
Note: Effective Demand did the chart running its own analysis on ForeclosureRadar, and its numbers may vary slightly from those officially published by the Web site.
The big question is what will investors do with these properties? I have seen some flipped almost immediately. But investors may rent out other properties and wait for a market rebound.
More from this blog…
Posted in: Auctions • Defaults & Foreclosures | 22 Comments »
October 19th, 2009, 12:18 pm by Mathew Padilla
Steve Thomas at Altera Real Estate in Aliso Viejo reports that the number of O.C. distressed properties (homes listed by agents as foreclosures or short sales) increased last week for the first time since November 2008. The chart below shows the long-term trend:
 - click to enlarge
More facts:
- The number of foreclosures and short sales increased by 52, now totaling 2,398, returning to early September 2009 numbers.
- 30.3% of the active inventory is distressed compared to 42.9% last year.
- There are currently 2,076 short sales on the active market, and they represent 26% of the active listing inventory.
- Yet there are currently only 322 foreclosures for sale in all of Orange County, an increase of two in the past two weeks.
- Foreclosures represent just 4% of the active listing market.
“Foreclosures are hot and are, on average, selling for 4% above their asking prices,” Thomas writes.
For overall sales and pricing data, check out Lansner on Real Estate.
Here’s a look at various slices of the O.C. market as of last Thursday: total inventory listings; distressed property listings; and the share distressed listings have of total inventory supply on a percentage basis in each niche …
| Slice |
All inventory |
Distressed |
Share |
| By price … |
|
|
|
| • O.C. $0-$250k |
1,134 |
590 |
52% |
| • O.C. $250-$500k |
1,994 |
1,054 |
53% |
| • O.C. $500k-$750k |
1,577 |
433 |
27% |
| • O.C. $750k-$1m |
943 |
176 |
19% |
| • O.C. $1m-$1.5m |
808 |
90 |
11% |
| • O.C. $1.5m-$2m |
468 |
29 |
6% |
| • O.C. $2m-4m |
698 |
26 |
4% |
| • O.C. $4m+ |
380 |
5 |
1% |
| All O.C. |
7,923 |
2,398 |
30% |
| • Attached |
2,896 |
1,120 |
39% |
| • Detached |
5,016 |
1,269 |
25% |
| County high share |
|
|
|
| • Anaheim |
316 |
209 |
66% |
| • Santa Ana |
479 |
306 |
64% |
| • Rancho Santa Marg. |
102 |
64 |
63% |
| • La Habra |
107 |
67 |
63% |
| • Aliso Viejo |
106 |
64 |
60% |
| • Buena Park |
108 |
60 |
56% |
| • Garden Grove |
176 |
96 |
55% |
| County low share … |
|
|
|
| • Seal Beach |
252 |
6 |
2% |
| • Corona Del Mar |
195 |
6 |
3% |
| • Laguna Woods |
365 |
22 |
6% |
| • Laguna Beach |
371 |
25 |
7% |
| • Newport Coast |
158 |
13 |
8% |
More from this blog…
Posted in: Defaults & Foreclosures • Distressed sales | 21 Comments »
October 15th, 2009, 10:41 am by Marilyn Kalfus, real estate reporter
First, in foreclosure news this week:
Every week, homes throughout Orange County go to foreclosure auctions. The owners can be millions of dollars in debt, or owe just a few thousand.
Often these homes revert to the lenders, who eventually put them back on the market. Sometimes the homes are bought by investors and resold.
Foreclosures affect more than the homeowners involved. They can impact entire neighborhoods. At the very least, they can affect nearby home sales.
All of these homes and addresses have been listed in the public notices, as required by law.
See Huntington Beach HERE.
See Irvine HERE.
See Ladera Ranch HERE.
See Laguna Beach HERE.
See Laguna Niguel HERE.
See Mission Viejo HERE.
See Yorba Linda HERE.
To read about how these auctions work, CLICK HERE.
Trustee, trustor … what’s the difference? To see foreclosure terms and definitions CLICK HERE.
NEW! Top tips for buying investment properties CLICK HERE.
More from this blog…
Posted in: Auctions • Defaults & Foreclosures • Uncategorized • distress | 11 Comments »
October 15th, 2009, 7:50 am by Mathew Padilla
Amherst Securities Group said it expects relatively few trial loan modifications to be successful under the Obama administration’s Making Home Affordable Modification Program, reports real estate news Web site Housing Wire. Here’s more:
Additionally, it’s taking longer for bad mortgages to move from last payment to liquidation, and the pace varies by servicer: “The trial modification period essentially holds the loan in a suspended state for 90 days, making it difficult to assess what is happening with modifications,” the report said, resulting in relatively little cash reaching investors.
Nationwide there are roughly 500,000 loans in trial modifications — it’s unknown how many are in Orange County.
Since HAMP was announced in spring, loans at least 90-days late in the county have been increasing, while the ratio of REOs — loans foreclosed but still held by the lender or original investors — has been declining. Here’s a chart courtesy of First American CoreLogic showing the categories as ratios of all outstanding first mortgages in Orange County. (Foreclosure filings are loans with a notice of default and some also with an auction notice.)
 - click to enlarge
If the 90-day rise is due to banks and servicers getting folks into trial mods or seeing if they qualify for trial mods, we could see a spike in foreclosures in coming months.
I recently read the trial period has been extended to five months from three months.
Regular blog reader Liar Loan posted this comment on a previous post:
Essentially, Obama’s mods are no income, no documentation during the trial phase. They don’t require documentation until right before the mod is finalized, so the borrower could be in the program for 3-5 months before they have to prove anything. That’s why even though 500,000 trial plans have been started, don’t expect that many mods to close. The fallout rate will be very high for banks that qualified borrowers on stated income. BofA has gotten a lot of heat for not getting more borrowers on trial plans, but they were being smart by requiring full income documentation before a borrower could start a plan with them.
My view is that HAMP is putting a floor on home prices now, but will drag out the time it takes for the market to recover.
More from this blog…
Posted in: Bad debt • Bailout Buzz • Defaults & Foreclosures | 9 Comments »
October 14th, 2009, 7:08 am by Mathew Padilla
Here’s a quote from John Courson, president of the Mortgage Bankers Association:
“You can’t modify someone if they don’t have income or a job. We have to be realistic going forward. If we are going to play a numbers game, we are going to see a smaller percentage of borrowers in default able to be modified. It’s an unfortunate and difficult fact we are going to have to face.”
The quote comes from the Denver Business Journal, and I first saw it on economics blog Calculated Risk, which points out maybe the industry should not have made NINJA loans — or loans to folks who did not verify income, job or assets.
Anyway, Courson says the complexity of the paperwork required to modify a loan, rising unemployment and depressed home prices all mean many folks will lose their homes in coming months.
The MBA wants to create a think tank of folks working on the dud-loan problem. But Courson may also be preparing the public for more foreclosures.
Read more from this blog on:
FORECLOSURES | MORTGAGE ANSWERS | MORTGAGE RATES | POLLS | DISTRESSED SALES | AUCTIONS
Posted in: Bad debt • Bailout Buzz • Defaults & Foreclosures | 41 Comments »
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