OC house prices are relatively payment affordable, but nothing is available to buy

 ANAHEIM HILLS, NEWS
May 102012
 
OC house prices are relatively payment affordable, but nothing is available to buy

For those planning on a long term of ownership, interest rates below 4% have made payment affordability the best its been in years, perhaps ever. The prices still seem ridiculously inflated, but record low interest rates make borrowing such large sums possible. Those low rates even drive the cost of ownership below the cost of comparable rentals, in some markets substantially below. It should be no surprise that many of the bubble-era communities and the less desirable older communities have prices well below rental parity. The less desirable communities always have a slight discount to rental parity, so when mortgage [Read More...]

8.7 years to clear Orange County distressed inventory at stable liquidation rate

 FULLERTON, NEWS
Apr 302012
 
8.7 years to clear Orange County distressed inventory at stable liquidation rate

Lenders are withholding inventory across the Southwestern United States in hopes of creating a shortage of supply to reverse the downward spiral in home prices. Lenders constantly try to balance two competing forces. First, lenders need to get their money back. Dead money tied up in non-performing assets does not contribute positively to their bottom line. Further, this money also cannot be used to fund ongoing operations. This puts enormous pressure on lenders to liquidate and put their capital toward a productive use. On the other hand, if they liquidate too quickly, house prices go down which reduces the amount [Read More...]

Foreclosures are NOT hurting America’s children

 NEWS, YORBA LINDA
Apr 242012
 
Foreclosures are NOT hurting America's children

As the crash in house prices continues the number of families displaced from their homes increases due to foreclosure, short sales, and strategic default. Since the foreclosures generally lead to an involuntary property eviction, many former loan owners are upset by the consequences for defaulting on their mortgage. Rather than accept the consequences for their mistakes, many who involuntarily vacated their houses portray themselves as victims deserving of special dispensation. Pandering politicians, mostly from the political left, have lobbied for increased loan modifications, foreclosure remediation, principal reduction, and other misguided policies to prevent those who defaulted on their mortgages from [Read More...]

Where are the high-end foreclosures?

 IRVINE, NEWS
Apr 212012
 
Where are the high-end foreclosures?

Lenders have been slowing their acquisition of new REO since February. In fact, the decline in REO going back to the bank has been rather dramatic. CA – Foreclosure Outcomes Banks are also dramatically slowing the rate at which they put REO on the MLS. As a result inventories all over California have been declining. Banks are obviously planning to withhold inventory until the market bottoms. Expect to see a low-volume rally as the few qualified buyers are forced to pay higher prices. As a result, the kool aid is flowing again…. One thing notably absent from the few foreclosures [Read More...]

B of A’s foreclosure push is hitting the MLS

 NEWS, RANCHO SANTA MARGARITA
Mar 192012
 
B of A's foreclosure push is hitting the MLS

Last fall I documented Desperate for cash: BofA cuts 30,000 jobs, ramps up foreclosures and Bank of America foreclosure notices increase 116%, spring 2012 rally doomed. It’s spring now, and although current bank inventory on the MLS is low, the pipeline of foreclosures is still quite large, and now properties B of A began foreclosing on last fall are already coming to market (see today’s featured property). It has begun. Home repossessions set to jump in 2012 By Jon Prior Analysts expect between 900,000 and 1 million homes will move from delinquency into REO in 2012, back to levels seen [Read More...]

Housing bust losers portray themselves as victims and heroes

 MISSION VIEJO, NEWS
Feb 272012
 
Housing bust losers portray themselves as victims and heroes

Many people bought during the housing bubble because they wanted a home for their families. They stayed within reasonable debt-to-income guidelines and used fixed rate mortgages. Unfortunately, the prudent were small in number, and most of them have obtained loan modifications to make their super-sized debts manageable. Many other people bought during the housing bubble because they saw their house as an investment, or worse a cash cow they could milk periodically to supplement their spending. These people saw rising house prices as a way to cash in on the American dream. They believed their houses would go up in [Read More...]

Foreclosures rising in wake of bank settlement deal

 NEWS, TUSTIN
Feb 222012
 
Foreclosures rising in wake of bank settlement deal

Last fall the major banks all increased their foreclosure activities. Some banks may feel they are strong enough to take the necessary write downs, and B of A appears to be desperate for cash. Perhaps in anticipation of the Robo-signer settlement deal or perhaps out of a desire to clear out the shadow inventory, for whatever the reason, lenders are increasing foreclosure rates everywhere. Foreclosures on the Rise Again Published: Thursday, 16 Feb 2012 | 12:04 AM ET By: Diana Olick CNBC Real Estate Reporter After a year-long reprieve from rising foreclosures, the numbers are going up again. One in [Read More...]

Foreclosure settlement and bulk sales will dramatically increase foreclosure rates

 NEWS, RANCHO SANTA MARGARITA
Feb 142012
 
Foreclosure settlement and bulk sales will dramatically increase foreclosure rates

The newly announced foreclosure settlement deal should dramatically increase foreclosure rates because banks no longer have to worry about lawsuits over their foreclosure practices. Further, with impending sales of bulk portfolios to private equity groups, banks will be able to dispose of the REO once they acquire it at auction. With the two biggest impediments to foreclosure removed, banks have no reason to permit delinquent mortgage squatters to continue receiving free housing. Let the foreclosures begin. Foreclosure Deal to Spur New Wave of U.S. Home Seizures, Help Heal Market By Prashant Gopal and John Gittelsohn — Feb 9, 2012 9:01 [Read More...]

Over 4,000 REO in OC, over 230 in Irvine

 ALISO VIEJO, NEWS
Jan 252012
 
Over 4,000 REO in OC, over 230 in Irvine

Many have speculated as to when the housing market will bottom. The short answer is, nobody knows, but there are some guideposts to watch out for. First, in order for house prices to bottom, they must be affordable. Sub-4% interest rates combined with falling prices have made houses affordable on a monthly payment basis. Second, supply and demand must rebalance and demand must outstrip supply for prices to go up. That criteria is more elusive. When the housing bubble popped in 2006, people began defaulting on their mortgages. A credit crunch ensued in 2007, and foreclosures began to mount. By [Read More...]

Foreclosures are coming with REO resales to follow

 NEWS, RANCHO SANTA MARGARITA
Jan 182012
 
Foreclosures are coming with REO resales to follow

Many loan owners quit paying their mortgages years ago. They enjoy a free ride while the banks wrestle with what to do with their bad loans. If the banks process their foreclosures, they must recognize the losses, and the resulting sales will find their way to the MLS. Typically, about one-third of all foreclosures go to third parties at auction. Even if lenders hold all their REO for better days, the third-party auction buyers will sell most of theirs. The result will be more homes on the MLS and lower prices. If the banks don’t process their foreclosures, they will [Read More...]

Surge in discounted REO expected next year

 NEWS
Dec 192011
 
Surge in discounted REO expected next year

Banks dramatically increased their scheduled foreclosure auctions in November 63% over October. They appear serious about clearing out shadow inventory and getting what capital they can out of the loans secured by houses occupied by delinquent mortgage squatters. Scheduled foreclosure auctions soar in California Banks set the clock for forced sales of more than 26,000 homes in the state in November, a 63% increase from October. Overall foreclosure notices nationwide fell last month. By Alejandro Lazo, Los Angeles Times — December 15, 2011 Banks in November scheduled more than 26,000 homes to be sold at California foreclosure auctions, a 63% [Read More...]

Delinquent mortgage squatting time sets new record

 IRVINE, NEWS
Dec 082011
 
Delinquent mortgage squatting time sets new record

Some lenders may be increasing the rate of foreclosures, but overall, the time it’s taking banks to foreclose is increasing. The foreclosure time now stands at a record 631 days. Foreclosures don’t take forever, but they certainly do take a very long time. Foreclosure used to be a deterrent to prevent borrowers from becoming delinquent on their loans. Now that the process takes so long, the prospect of two years of free housing is actually becoming an inducement for strategic default. Average Foreclosure Time Sets New Record Published: Thursday, 1 Dec 2011 — 9:30 AM ET By: Diana Olick CNBC [Read More...]

Banks will delay some foreclosures and evictions during the holidays

Dec 022011
 
Banks will delay some foreclosures and evictions during the holidays

Each year during the holidays, lenders are faced with the unenviable choice to allow more squatting or take away the family home at Christmas. With the bad public relations that go along with holiday foreclosures, most lenders hold off until the new year. Banks will hold off on some holiday foreclosures Andrew S. Ross, Chronicle Columnist Friday, November 25, 2011 Season of sharing, take 1. Got an e-mail from Wells Fargo responding to my column this week suggesting that banks consider a moratorium on home foreclosure activities, at least during the holiday season. “Wells Fargo is suspending eviction actions from [Read More...]

 December 2, 2011  IRVINE, NEWS Tagged with: ,  1 Response »

Mortgage bankers admit to many more years of foreclosure pain ahead

 IRVINE, NEWS
Nov 302011
 
Mortgage bankers admit to many more years of foreclosure pain ahead

The banks finally are getting serious about foreclosing on the delinquent mortgage squatters living in shadow inventory. Even though delinquencies are declining, they are still elevated well above historic norms, and they have been so high for so long that the banks have a huge backlog they must work through. Fewer mortgages going bad but foreclosures expected to increase The Mortgage Bankers Assn. says it could take three or four years to return to a normal pattern of delinquencies and foreclosures. November 18, 2011 –  By E. Scott Reckard, Los Angeles Times Fewer home loans are in trouble these days, [Read More...]

New families find the houses lost in foreclosure

 NEWS
Mar 042011
 
New families find the houses lost in foreclosure

People get caught up in their empathy with those losing their family homes to foreclosure. Its easy to get sucked in to the emotional stories of victimhood and believe that perhaps we should stop foreclosures. We all forget that the distressed debtor who rented money from the bank to occupy the house and appear on title will turn over the property to a new buyer who is not as indebted. This new buyer will be able to sustain ownership under stable, government-backed financing terms. Pain for Some Families Presents Possibilities for Others By Doug McKelway — Published February 24, 2011 [Read More...]

Foreclosure’s economic impact and the Great Recession

 NEWS
Feb 232011
 
Foreclosure’s economic impact and the Great Recession

Academic writing is the only endeavor that you can take common sense, mathematically measure it, statistically analyze it, pompously write about it, and still get it completely wrong. The academic article featured today attempts to take a common sense idea — foreclosures impact house prices and the economy — and try to find some relationships that may have predictive power. They failed. They failed because they didn’t properly identify causation. Correlation is not causation Have you heard the term post hoc ergo propter hoc? It means that just because something follows an event doesn’t mean the first event caused the other. The [Read More...]

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