The Treasury just released some news that they were pumping $40 billion into the foreclosure/loan modification/refi market. The details are ambiguous as best.
$40 billion is nothing. Below are real-time foreclosure stats for CA. Remember, CA is 35% of all defaults and foreclosures by count and 45% by dollar volume. While its nice to see this topic addressed $40 billion is not much considering int he state of CA, total Notice-of-Defaults and actual Foreclosures are averaging about $28 to $30 billion per month. This means on a national level, roughly $70 billion. Given this $40 billion makes for a nice headline but in the grand scheme of things, means very little. -Best Mr Mortgage
Below is actual CA Foreclosures that went bank to the banks as REO monthly. This is the last stage of foreclosure. CA has been averaging over $10bb actual foreclosures per month over the past 6-months. The image to the left by dollar volume and the right by count. The Sept drop is an anomaly in that SB 1137 brought down numbers and they will rebound once lenders get back in full compliance.
Below is real-time CA Notice-of-Defaults that went bank to the banks as REO monthly. This is the first stage of foreclosure after a borrower has missed three to four payments. CA has been averaging nearly $19bb in mortgage defaults per month over the past 6-months. The image to the left by dollar volume and the right by count. The Sept drop is an anomaly in that SB 1137 brought down numbers and they will rebound once lenders get back in full compliance.
When analyzing the data below and seeing that Notice-of-Defaults have dropped slightly, don’t get too giddy. What you see up until the peak is essentially the ‘Subprime Implosion’ only. However, in the past 6-months Subprime defaults are off about 35% because the 2/28 reset peak has passed. Why aren’t defaults off more? Exactly…higher paper grades, although just starting their ‘implosion’, have already filled the Subprime default void because each universe is so much larger than Subprime. At Field Check Group, I can track all defaults and foreclosures by bank and a variety of other factors and it is amazing to see how the subprime train has jumped the tracks and now headed full speed into disaster.
Real-time foreclosure data courtesy Field Check Group, Real Estate & Finance.
By Lukanyo Mnyanda and Wes Goodman
(Corrects direction of yield in fourth paragraph.)
Oct. 23 (Bloomberg) — Treasuries fell, pushing two-year yields up from near the highest level since March, on speculation the government will announce two record auctions for next week to help fund its $700 billion bailout of banks.
Notes also dropped as U.S. stock market futures rose and cash injections by central banks showed signs of thawing the freeze in money markets, reducing the allure of the safest government assets. The U.S. may say today it will sell a record amount of notes next week to meet “unprecedented financing needs,” Wrightson ICAP LLC, an economic advisory firm, said.
“The market is focusing on supply and this is something that’s going to keep yields higher than they would be otherwise,” said Niels From, chief analyst in Copenhagen at Nordea Bank AB, Scandinavia’s biggest lender. “We’ve already seen a sharp rally in Treasuries and the market is taking a bit of a pause.”
Continued in link above…
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