Mr Mortgage: June CA Foreclosure Report…Conditions Arguably Worsen

Posted on July 15th, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research

It’s that time of the month again, folks! The June monthly CA foreclosure report is ready, data courtesy of Foreclosure RadarIt was another record month, which, when speaking of foreclosures, is not a good thing. However, in a couple of areas we see some ‘leveling-off’.

‘Leveling-off’ is considered to be positive by many, but sometimes that’s not really the case. For example, if retail sales ‘level-off’ going into December, it is not a good thing because sales should accelerate in the Holiday’s. This is analogous to what happened in the foreclosure arena in June. Although numbers seem to be leveling off, the situation is continuing to worsen according to the way I see the data.

 (YouTube version of this post here http://www.youtube.com/watch?v=VNo6n_Z7z1c )

One thing is for sure, this report confirms what I have said for months, that the REO market is now ‘the real estate market’ and the banks are ‘the market makers’. For the first time in history, the seller controls the price and not the buyer, which is responsible for pile-driving prices throughout the state and nation. CONTINUED…

For a second straight month, CA lenders took back over $10Bn ($10.2B) in properties from the foreclosure auctions throughout the state. Last month banks took back $10.4B. If the banks are lucky and sell the properties for 60 cents on the dollar of the NEW appraised value, which could be as little as 30-40% of the value at the time they initially lent on the property, then this could represent another $6B+ in losses for the nation’s largest lenders in one state for one month. In case you were wondering, CA represents roughly 30% of the total foreclosure count and 45% of the total foreclosure volume of the entire nation.

Just think how many second mortgages were completely wiped out.  In bubble states, when a first mortgage is foreclosed upon and there is a second mortgage in place, typically the second mortgage is totally wiped out. 

Let’s break it down.

1. Notices of Default (NOD), the first step in the CA foreclosure process when borrowers go down 90-days in payments, were down just 1.5% to 42,151 filings from 43,011 last month. This is also an 88.8% increase from a year ago. These are from people who first began missing payments in Feb and March. But is this small drop a positive? For the reasons listed below, I think the drop should have been much more substantial. 

First, in January through early March, there was a mini refi-boom, as rates fell sharply. If not for that, the NOD count could have been much worse. Since then, rates are up sharply and mortgage application volume has been consistently falling. This means more people may be missing payments due to the lack of financing options, which will lead to an increase in NOD’s over the next few months from these already historically high levels.

Second, beginning around January we began seeing a fairly significant decrease and leveling-off in subprime defaults and subsequent increase in Alt-A and Prime defaults. In addiiton, we are in an ‘in between’ period where the bulk of the 2/28 ARMs reset and we are awaiting the bulk of the 3/27 ARMs. This transition may have caused a temporary decrease in NOD’s. The disturbing part about this is that the Alt-A and Prime universes individually dwarf the subprime universe. If Alt-A and Prime defaults continue to increase at the rate we have seen for the past 4-5 months, once the seasonal effects of the summer selling season subside, that could spell trouble.

Third, mortgage modifications are really kicking into high gear thanks to companies like Green Credit Solutions who have soup to nuts solutions for private private sector workouts. Check them out. This could have also helped to reduce NOD’s.

Last but not least, the summer selling season brings ‘hope’ to sellers.  Nearly every listing you see lately says ‘potential short sale’. Seasonality factors likely kept NOD’s down a bit, as people kept themselves below the 90-day late threshold for the summer in order to try to sell the home during the busy time of year. Come September, if this segment’s homes do not sell, NOD’s could spike going into year-end.

I imagine the NOD counts would have been much higher if not for the reasons listed above.  These various and unique circumstances have masked the underlying problem and come September and the end of the selling season, the market could get hit hard as it did last Sept, which was the beginning of the 30% median home price fall in CA over the past 12-months.  

The vast majority of NOD’s are first mortgages because second mortgage holders quit filing NOD’s months ago, due to values falling to levels that make it futile. If you are a second mortgage holder and there is no value in the property, there is no reason to foreclose because the first mortgage holder gets it all. For this reason, second mortgage loan defaults are soaring and the loans are essentially worthless. Borrowers know that lenders have to use more traditional means of collection and are not paying on their second mortgage. A second mortgage lender is usually completely wiped out when a home goes into foreclosure. This problem will not go away.

Roughly 75% of  NOD’s make it all the way through the foreclosure auction stage and end up on banks’ balance sheets. This number is continuing to rise as fewer people chose to cure their default due to having no equity in the property. About 25% of NOD’s are cured by various means by the time auction hits. If you combine the past 3 months’ NOD’s the total is 128,654. At a 25% cure rate, 96,491 homes will be auctioned and most taken back by banks from Oct through Dec, which are historically poor sales months. There is little chance buyers will swarm at this time of year. 

2. Notice of Trustee Sales (NTS ) were at an all-time record high of 35,544 new filings from 34,564, representing a 3.6% increase over last month’s record. This is huge. This means much fewer people are curing their NOD’s than in the past. The June NTS figure is primarily from NOD’s 3-4 months prior, as the NTS can be filed 90-days after the NOD.  However, due to the back log, the average time it took a lender last month to file the NTS was 105-days. Lenders can take a home to auction 21-days following the NTS.

In February, NOD’s were 37,078 so the percentage that made it from NOD to NTS was 93.22%. This is a new record by a long shot. If you go back a year, many more were able to cure their default by refinancing, borrowing money, selling their home etc.  For the record, June 2008 NTS were up 216% over June 2007. 

3. Total homes that went to auction actually decreased 4.8% to a total of 24,286 properties. Of these, 23,526 or 96.8% received no bid higher than the lenders opening bid and became lender owned (REO). This number is lower than expected and can be explained by either a) banks delaying foreclosure auctions longer than the typical 21-35 days, which has been the typical time frame in the past several months, b) short-sale approvals taking so long it has stretched out the final leg of the foreclosure process, or c) one or more large banks imposing a moratorium on certain foreclosures because they already own so many and 96.8% come back to them from auction.

This last point is only speculation on my part and it will require more research, but we saw Countrywide put off foreclosing in Dec 2007, and Jan 7th was the largest single foreclosure day ever in the state of CA due to Countrywide. I assume they did this to make their Q4 and full-year 2007 look better.

Or d) banks have simply reached the maximum they can process and the time it takes to go from NTS to actual foreclosure auction has has become very protracted. 

One thing to note that will make bubblevision happy: Sales to 3rd parties at auctions continued to increase, up 9.8% from the prior month, and lowering the percent of properties returned to the lender to 96.8%, the lowest it has been since last October. Last month is was 98%. Puh-lease! 

4. Discounts at auction were at a record. 87% of all homes were discounted at an average of 31% at the opening bid. Last month, 80% of all homes were discounted an average of 30%. Nearly 25% were discounted by 50% OR MORE!Opening bids exceeded 40% in the largest subprime areas such as Sacramento, San Joaquin, Stanislaus and Merced. Remember, most first mortgages were at an original 80% loan-to-value or less, so the actual discount from the original sales price or appraised value is much less.

For those of you who live and die by the monthly existing and new home sales report, remember that in most cases, bank REO sales are counted in the existing sales number. Therefore, when you see ‘home sale rising’ be careful to read between the lines. Although ‘total sales’ may have increased last month, so did foreclosure sales, which means ‘organic’ sales actually decreased. I cover this concept in my Monthly Home Sales Report. As a matter of fact, Data Quick reported that 38% of last month’s total CA existing home sales were from the foreclosure stocks. I refer to this as shadow inventory.

With so much new foreclosure inventory entering the system and discounts getting deeper each month, there should continue to be more bank REO sales of existing homes in the future, making it seem as the housing crisis is ‘leveling off’ or improving. This is the primary problem with so many analysts’ positive housing predictions.

But, how can you truly judge sales and inventory numbers when the banks are taking back close to as many homes at auction as sell each month? Remember, the ‘month’s supply’ number is calculated using ‘listed’ inventory and a very small percentage of bank REO inventory is listed. The amount of ‘non-listed’ bank REO, or shadow inventory, is staggering. In my most recent May CA Home Sales Report, I have a chart that identifies the actual inventory burn rate and calculates a more accurate month’s supply figure.

What is most frightening is how quickly values are dropping as a result of the shadow inventory. With as much bank REO inventory selling for as deep of discounts as we are seeing, it is forcing an immediate and swift mark-to-market change in values of entire neighborhoods all over the state. We have never seen a real estate market in which one seller (banks) controls so much inventory and has the ability to sell it for whatever it takes to move it quickly.

If a few of these REO homes sell at 20%-30% below the most recent comparable sales within a mile radius of your home, your value will be negatively impacted. Very quickly, America’s real estate is being marked-to-market by the bank’s shadow inventory, accelerating a natural process that should take years. This causes even greater numbers of home owners to go into a negative equity position, causing even more loan defaults. It is a vicious cycle that has never been seen before.  -Best, Mr Mortgage

Before you go, please be sure to subscribe my blog email or RSS feed on the home page. Then, you will be updated quickly and I promise that I will continue to provide research nobody else does. Make sure you go to Foreclosure Radar for your FREE CA monthly foreclosure report.

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The Pay Option Implosion – Subprime’s Big Brother

Look OUt! Here Comes the Alt-A Implosion

Mr Mortgage on Mortgage Modifications – You May Qualify!

Mr Mortgage onMortgage Modifications Part 2 – BEING FORWARD THINKING! 

 

About Foreclosure Radar

ForeclosureRadar.com is the only place where you’ll find complete up-to-date information on every foreclosure opportunity available in California, including exclusive daily updates on every auction. And we’re the only foreclosure service that provides a comprehensive set of professional tools for Realtors® and Investors to find, evaluate, and track the best foreclosure opportunities.

 

46 Responses to “Mr Mortgage: June CA Foreclosure Report…Conditions Arguably Worsen”

  1. No youtube version of this?

  2. It’s very tough to figure out from the aggregate data whether we’re in that “bridge” period from subprime to Alt-A/Option ARM mess or whether this is more of a plateau effect.

    However, I think that focusing on change can make us lose sight of the bigger picture. These numbers, if you saw them in isolation from the May numbers, would lead to the conclusion that it’s bad out there. I think that’s enough. In the end, does it REALLY matter if it’s bad but SLIGHTLY better, bad but SLIGHTLY worse, or bad but the same?

  3. Where does one get a listing for all the REOs (shadow inventory)? Is there a defined process to purchase these properties like making a direct offer through a broker to the bank?

  4. Mr. Mortgage,
    As I read all the awesome info you put out and the comments of everyone on your blog, do you have any advice to give the first time home buyer right now? It definitely seems like a huge gamble to buy this year. Any comments?
    Thank you!
    J

  5. OK. I’m starting to think that now is a great time to start a real estate empire by buying housing at auctions since they are greatly discounting them. If it is possible to buy a property, finance most of it, and renting it at or below market rates and it is cash flow positive then you have a great business. I don’t think rental prices are going down. I vaguely recall that rents are going up slightly across the US.

    Is this obviously stupid or just can’t be done (numbers don’t add up so don’t try)?

  6. So are you telling me it is ok to bid
    200,000$ on an REO property currently listed at 400,000 and the bank will seriously consider it?

  7. trying ton upload video now. Running into probelems.

  8. Compa – on bulk REO deals yes. For individual home buying at 50% of new appr value maybe tough until such time they have to discount that much to sell it. But yes, I have seen individual REO sell for 50% below the appr value and the nearest comps in CA.

  9. Milt- when value do hit bottom they will not bounce right up. You likely will have a long time while they bounce along bottom + or – 5-10% of the bottom. All that time there would be deals to be had. I dont think we are even close to a bottom but you are right, at some point in the future it will be time to build.

  10. whatthink…no way to know man. I can get the homes going back but cant see what had been sold etc.

  11. Thanks Mr Mortgage. This means we have another month of 25k foreclosures in November or December.

    But this is just the current ‘normal’ operating environment, where real live banks deal with mortgage defaults using the standard foreclosure process. However, I believe this period is coming to an end. In six months to a year, foreclosure sales will not dominate the environment any longer.

    I think the next period will be dominated by big bank failures. This is just now starting, with IndyMac being the first. Alt-A and Pick-A-Pay loans, construction loans, and credit card defaults will be the next wave, and the resulting capital write-downs will bring down a bunch more.

    Banks will not be able to replenish their capital in the way they have done this past year. That is because bank stock prices have fallen too far for equity sales, and nobody is going to buy any preferred, so what’s left? The banks who did Bad Things will go down, and the hedge funds will be the ones sticking in the knife.

    So who resolves all that shadow inventory once the banks are owned by the FDIC? A new resolution trust company, a la the S&L crisis. If you think banks owning houses is bad news, imagine what the government will do once they get them? They will end up selling formerly bank owned inventory for the loose change under your sofa cushions.

    And they will sell other bank assets for pennies also. The strong banks, the ones who didn’t do bad things, will be able to pick up selected bits and pieces of the fallen.

    Depressing to think about, but the story hangs together for me.

    Dave Fairtex

  12. actually Dave if you take each months NOD’s and multiply by 75% (this percenatge is increasing due to more people not wanting to cure) you can get what will come 4-5 months out due to time line exagerations.

    So, 42k NOD’s in June x 75% = 31k foreclosures in Oct/Nov
    43k NOD’s in May x 75% = 31,750 foreclosures in Sept/Oct
    44k NOD’s in Apr x 75% = 32,500 foreclosures in Aug/Sept

    95-98% of these will go back to the bank if the numbers hold true.

    Banks may just stop foreclosures who knows.

  13. Yes I think I was using the old rate of 60% not 75% to get the 24k number. Any way you slice it, its no time to be buying a house. Why buy now when you can wait 6 months and get it for cheaper? Even the rent-covers-your-mortgage argument doesn’t hold up, since this stuff will not be fixed in six months, so its not like anyone needs to panic and buy today.

    The only argument I could see for buying today is, banks might not be loaning money six months from now the way they are today.

  14. I wonder how many owners have not made a payment in months but banks still have not Foreclosed or even sent out a NOD. I personally know 3 people who haven’t made payments for over 6 months (1 of them 13 months) and have yet to receive a letter.

  15. Mark,

    I love your info, keep it coming. Hope you do a June report video.

    I regularly point my housing bubble blog visitors in your direction. Amazingly the major realty firm of the Los Angeles beach cities area has yet to acknowledge any problematic downturn, saying only that sellers are undergoing “psychological adjustment.”

    I collect listing data and sale data very frequently for my city (Redondo Beach) so as to maintain a database, and I see new construction now marked down almost 40% from when it was first listed in 2006. Of course in the listings they don’t say the property has been on the market for nearly 2 years. More of that high end Taj Majal construction appears to be going to auction.

    And from what you’re telling me, I’m really only seeing a part of the story as there are foreclosures not even showing up in the listings.

    Cheers,
    Susan

  16. Looks like we can get Japanese style deflation mentality in the housing market to where it is “Why buy now, it will be cheaper later”.

    Would be nice to have a graph of the shadow inventory build/listed property (Hint Hint). Even if the NOD’s level off, the shadow build could continue rising.

    This will give everyone what they really want to know anyway, which is when is the best time to get wet.

  17. I only came across this blog a few weeks ago, so I apologize if these points have been brought up before.

    In the past month I’ve seen a number of REOs in my neighborhood sell, which had been sitting for months. And you mention that the number of sales in CA have increased.

    I think what’s happening is that a lot of people that were ready to buy last year, when the mortgage market exploded, have held out. So, now that there’s so much talk by agents that the bottom is there and that we’re leveling off, they’re ‘all’ buying. Everybody’s jumping on it and now we suddenly see ‘good’ (not considering shadow inventory) sales again and everybody thinks it’s going to get better from now on. BUT that may be the combined numbers of buyers from the last 10 months, who all buy in 1 or 2 months. So, once they’re out of the market, we won’t have that kind of ‘glut’ of buyers every month. So, there might be a spike for a month or 2, but it won’t continue like that.

    Another point is that in the past many people that sold a house were upgrading, buying another house. With so many of today’s sales being REOs, those previous owners are not buying another house, but will be renting. So, that also makes it pretty unlikely that we can see any kind of sales numbers that have been there in past years.

    Just some thoughts

  18. I think Dave Fairtek has a good point when he says:

    The only argument I could see for buying today is, banks might not be loaning money six months from now the way they are today.

    Banks (and everyone else) are curtailing their lending drastically and at an accelerating rate.

    Tony

  19. Bottomiing is going to be a function of the numbers. Does a property cash flow with a given amount down. Does the CF meet your required rate of return? What is the cap rate desired by the investor in question.

    To Michela’s point on forclosed home owners not buying a new home, but rather renting. This will push rents up! Rents moving up will go hand and hand with RE values stabilizing or beginning to turn. Any investment is a function of discounted cash flows, real estate investing is no difference.

  20. HousingRealist,
    The values in NorCA are completely out of wack compared to the rental market. Yes, rents are going up, but there’s a long way to go for anybody to buy for cash flow. I don’t expect that to happen in the SF Bay area, unless it’s an hour or so inland. So, the sales that are out there are not done by investors (unless they’re hoping for flip), but by actual owner occupants.

    I’m a real estate investor, who relocated here a year ago. have owned my own homes for 20 years and still own properties in Atlanta. But I’m happy to rent and have no intention to buy anything to live in. I can rent a house a lot cheaper than what my mortgage payments would be on a great deal. And I don’t have any money tied up. I don’t mind tying funds up when it’s short term, but not for anything long term. Have better use for it.

  21. Bay Area, is unique. Sacramento, different story! Values are just beginning to get to levels where you can cash flow. I don’t know that SF will ever cash flow with little down. People will over pay to be there. SF is more lifestyle, and emotional decision rather than investment. Not to metion rent control makes it even more difficult in many places throughout the bay area.

  22. Yes Japan “absaloutaly”. An American deflation à la japaneese. But there is fly in the ointment here.
    Big big big inflationnary pressure almost everywhere.
    And oh oh oh! yes, stagnant revenues and stagnant employement. Nice.

    Just what the doctor ordered for an economic crisis. Big french bank Natixis going down in flames this morning. Europe is now in bubble implosion mode.

    It’s a shame that they don’t have Freddie and Fannie. Ah well they have the british and spanish banks and the french banks too. They are all crashing anyways.

  23. The SEC is really runned by a bunch of bastards. Why are they suddenly so preoccupied by the shorts in banking stocks ? Strange. Naked shorting has been going on along for times immemorial in the gold and mining sector. Nobody said anything. But when it comes to protecting the bloodsuckers and the criminals in banking, you have to harass the shorts. The shorts should sue the SEC and the US government.

  24. Marc Authier

    The SEC is starting to sound like a Penny Stock CEO screaming Naked Shorts! Scary thought when we realize that this is now what government has been reduced to. Most of these penny stock CEO’s eventually end up in the clinker and perhaps they should. Wasn’t it the SEC that pulled the uptic rule mid last year?

    Uptic Rule
    A former rule established by the SEC that requires that every short sale transaction be entered at a price that is higher than the price of the previous trade. This rule was introduced in the Securities Exchange Act of 1934 as Rule 10a-1. The uptick rule prevents short sellers from adding to the downward momentum when the price of an asset is already experiencing sharp declines. The SEC eliminated the rule on July 6, 2007

    The SEC has now become a propagandist government mouthpiece rather than the regulatory body that they were designed to be. Everybody heard the SEC when they came out Sunday evening with the anti rumor position. Everybody heard them Monday when they repeated it. Monday PM they had to repeat it again, which is an admission that they had lost all control.

    The normal course of events though, is when a CEO starts blaming the shorts, the stock eventually ends up going to zero or just a smidgen above. I expect then, that this rule will hold true for Fannie and Freddie.

  25. […] Mr Mortgage: June CA Foreclosure Report…Conditions Arguably Worsen […]

  26. With WFC coming out with decent results today, can you give an update on your prior youtube presentation on WFC. IS there a chance with a bank such as WFC, that we are overly pessemistic?

  27. Spot On Mr. MTG! It’s amazing there are still some re investors and alot of homesellers that don’t get it! Your main point about the bank reos setting the actual market price. These “sellers” are looking for the next sucker to come along and bail them out. They’ll be waiting a long time.

    Your other point about lenders offering discounted opening auction bids down to 50% of amount owed with few takers??? Shows the severity of the price declines/value of real estate as an investment vehicle today. Investors must be figuring even “lower” prices for that property as an reo!

    Why can’t the homeowner come in and pay 50% of what they owe at auction and get their house back!! Sounds like a cottage loan industry could be started doing this. That’s modification thru the back door!

    The big elephant in the room which you previously mentioned in other posts is the 20% down requirement which very few have for a conventional mtg. I guess FHA will become the main provider of loans. Whose got 20%?

    Mark Zandi recently said median home prices won’t return to 2006 levels until 2015!

    One other big point you mentioned: What we’ve seen so far is just the tip of the iceberg. All these other Atl-A and Option Arms have yet to default and become REOs. And their numbers dwarf Sub Prime. It’s gonna be a wild ride!

  28. Because most US investors are pigs. They are fundementally sick and demented. As for the banks these bloodsuckers control the media and the government. You really think that this type of vital information about the reo will be covered by Bloomberg and company.

  29. One reason for buying now is based on what your believe inflation is going to do over the next year or so. I you feel your dollars are going to be worth less than today, maybe a lot less, then there may be an argument for buying today, while they still have value. You may also have to buy because of tax reasons, or maybe you can buy for less than renting. Nevertheless, if you’re looking for a deal or a bottom point, its looking like 2011 to 2012 for an absolute bottom. If you can wait even a year before making your purchase you’re still better off than buying today.

  30. Good article and some very good points. Most important one is that when we hit bottom, we will be there for a while. When you hear people trying to generate fear that they are going to miss out because bottom has hit, that is pretty dumb.

    Truth is, we dont know where bottom is but we will know when we are looking at it. All can agree that the sale of real estate has hit bottom and in some areas has increased but that has nothing to do with inventory and sales price. Agents pretty much know what the market is at this point.

    We still need to face a lot of ugly. This winter, with the resetting Option ARMs is going to be very ugly. The market will be very slow and I think foreclosures will be double what they are.

    I think things will start to turn around when we hit an equillibriam of rents being the same as a mortgage payment and the availability of credit improves.

    One last point, here in Sacramento, any drop in inventory that is quoted fails to take into account the “I give up” factor. The process for a short sale is so painful and does not improve a persons credit that much that most homeowners and just walking away instead of worrying about it. When agents present a CMA that shows someone is 100k underwater and then they contact their lender and see how ridiculous the process is, they give up.

  31. I know the CSFB graph that had the reset schedules reflect option arms taking the reins over next year for resets, however do we know whether there has been an accleration in Pay Options going bad, even before they reset? What i mean by this, is, are we already seeing these loans go bad, and therfore next year may not be as bad as the graph would suggest.

  32. Not really if you listened to the complete bullshit coming out of Wells Fargo’s filthy CEO mouth.

  33. The Shills on Wall Street have pressured the FED & the Government to bail them out through:

    1) Interest Rate reductions since August 2007 = 5.50% to 2.00%. (remember low rates where the problem)
    2) MONSTER LIQUIDITY FOR THE BANKS = by letting the Banks post bad Mortgages for good treasuries.
    3) MONSTER LIQUIDITY FOR THE BROKERS = the FED is allowing MER & LEH, etc the same privilege as above.
    4) FED saves Counter Parties of Bear Stearns by staging a buy out by JP Morgan and backing some of it with our money.
    5) TREASURY on Thursday says FNMA & FHLMC are fine and then bails them out by cosigning onto 5 TRILLION in DEBT.
    6) President must get on tv Tuesday to tell us that we are dummies for not supporting the BAILOUT.
    7) Then the SEC uses MOB TACTICS to threaten short sellers.

    Then the LIARS hide behind GRANDMA and say see we are trying to keep her in her house.

    The LIARS are the ones that SOLD GRANDMA the LOAN.

    The LIARS then SOLD that LOAN to ANOTHER LIAR on WALL STREET.

    NO BAIL OUT for WALL STREET SHILLS = maybe next time you will read the FINE PRINT.

  34. And the liars are protected by the supreme liars and criminals; your “elected” representatives in “Con”gress, in the Senate and as President.

    The best strategy is removing your money from the banks, not in one month, not in one week. But NOW !
    Eternal Optimist you were 100% right !

    If you think that they won’t do like in Argentina, Turkey or in Russia when the crisis happens, you are dreaming. I saw the panic scenes yesterday at Indymac. I saw the same scenes in Turkey and Russia in 1998. After all the USA, is a country like any other country. So are your bankers and politicians.

    It would also be a good idea of getting your money out of the country before they at the SEC and the FED, impose also a currency exchange police.

  35. String in link below is recommended reading to add to the excellent blog of Mr Mortgage above. Can anyone answer the questions posed by myself (‘gdcox’) in my July 17th entry in on that link re whether the securitised mortgage servicing agents et all will ever push all their non-performing stock though the foreclosure process and to what extent are they not doing so now; causing a second shadow inventory.The latter is having no impact on the house market today (since the property with non-payment securitised mortgage is not on the market , not empty and not reported) but could do later; perhaps even years down the road. Graham Cox

    http://piggington.com/where_the_shadow_inventory_might_be_hiding#comment-83497

  36. While you are at it, why not a third shadow inventory ? The more I learn how bankers and all the stinking bunch work, the more I am disgusted. Everything is phoney. Shadow government statistics. Shadow banking system. Shadow inventory.

  37. […] Mr Mortgage: June CA Foreclosure Report…Conditions Arguably Worsen […]

  38. And Merill Lynch reports a huge loss of 4,95$. Wells Fargo management are liars.

  39. The info posted by Michaela contrasts with the most recent report from the NAHB:

    “Builders are reporting that traffic of prospective buyers has fallen off substantially in recent months,” said NAHB Chief Economist David Seiders. “Given the systematic deterioration of job markets, rising energy costs and sinking home values aggravated by the rising tide of foreclosures, many prospective buyers have simply returned to the sidelines until conditions improve,” he said.

    Of course they’re lobbying hard for a tax credit for homebuyers, so they may be inclined to exaggerate.

  40. Eh,

    to be honest, I don’t statistics and I’m just going by what I’m seeing and what I’m hearing. People around me all talk about this being the best time for a homebuyer to buy (of course, agents always say that), but I constantly have this discussion with homebuyers that are ready and looking. I try to tell them to wait, that we’ll have at least another few years for a decline, but they don’t believe me. And I’ve watched 5 house in my neighborhood, that had been sitting for months, sell in the past month. 2 months ago they all suddenly started getting a lot of traffic, from what I’ve seen.

    But then, there is not ONE market. There may be trends, but every neighborhood has the potential to move somewhat independantly from the surrounding due to various factors (whether it’s a special school or proximity to a mall or freeway or whatever). SOme neighborhoods may be more in demand due to those factors, then the one right next to it.

    Just my thoughts

  41. […] Mr Mortgage: June CA Foreclosure Report – Conditions Worsening […]

  42. […] Mr Mortgage: June CA Foreclosure Report – Conditions Worsening […]

  43. […] Mr Mortgage: June CA Foreclosure Report […]

  44. […] areas into more affluent suburban and urban areas. Please see my June CA Home Sales Report and June CA Foreclosure Report for more detail on […]

  45. […] Sales, while climbing ever so slightly over the past few months, are actually falling when you take out foreclosure-related sales, which made up some 42% of the entire CA home sales market last month. When stripping out foreclosure-related sales ‘organic’ sales for June were at a multi-decade low and not even at the pace of new foreclosures. Please see my June CA Home Sales Report and June CA Foreclosure Report . […]

  46. […] Mr Mortgage: June CA Foreclosure Report…Conditions Arguably Worsen […]

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