The number of properties making it to the court house steps is on the rise – there has been a 50% increase roughly in SD County trustee-sales since the end of June (from 200 to 300). It’s still a pittance, however, compared to the 14,493 properties in default in San Diego County:
The SFR trustee sales in the North SD County Coastal region have been fairly steady however – no big spikes yet. There has been an average of seven SFRs foreclosed per week over the last 12 weeks (avg of 2 of 7 bought by third-parties), even though there are 608 on the NOD/NOT lists. Are servicers trying to squeak out every last loan mod they can find, or deliberately holding back?
North San Diego County Coastal Trustee-Sale Results, SFRs-only:
It appears that the servicers are managing the drip very carefully for the higher-end properties, but if there are any surges, you’ll see them here!
Notice of default filings in California rose for the fourth-straight month in August climbing another 16.6%, according to ForeclosureRadar, which also began issuing data on foreclosure rates in four more states and unveiled new search functions on its web site.
In California, foreclosures are down 16.3% from a year earlier, and fewer homeowners found foreclosure relief as cancellations fell 11.2% and 15.6% more homes were lost in foreclosure sales, the firm said.
“Real estate markets are local, not national, and like other real estate trends foreclosure trends vary a great deal by location” said Sean O’Toole, ForeclosureRadar founder and chief executive.
Fannie Mae wants out of its defaulted residential mortgage holdings as quickly as possible and is warning loan servicers not to stand in its way.
The government-sponsored enterprise notified servicers Tuesday that it will begin monitoring them to determine why there are delays in moving delinquent loans into foreclosure. If servicers cannot properly account for the holdups, it will perform on-site reviews and assess fees to give servicers “a financial incentive to comply with Fannie Mae policies and improve the overall quality of their performance.”
All year, the so-called shadow inventory of home loans that are delinquent but not yet in foreclosure has been growing. The buildup has been widely interpreted as a sign that banks and servicers are intentionally delaying foreclosures, in part to avoid taking losses on loans that they hold.
About 2.9 million homes have been repossessed by banks or are in the foreclosure process, according to Lender Processing Services. But 4.5 million borrowers are at least 30 days delinquent on their mortgage.
With the economic recovery stalled and housing prices expected to fall further, Fannie appears to be making the first move.
“This is a shot across the bow that servicers have to start paying attention,” said Kevin Kanouff, a founder of Statebridge Co., a Denver special servicer. “Now they’re going to put their feet to the fire and expect to move these loans along as opposed to throwing them in a program and just collecting the fees.”
Competition at the auctions is brutal, said Bruce Norris of Norris Group, a real estate investment firm in Riverside.
Norris unwittingly bought a house that was the site of a gruesome double murder. No one else bid — a rare occurrence that showed others knew the history — leaving Norris with less cash to bid for other houses. “It’s a very lonely place out there,” Norris said.
That’s only one of many risks in the foreclosure business. People who’ve lost their homes through foreclosure sometimes vent their anger by smashing walls, knocking over water heaters or ripping out toilets. “We’ve literally had people take $20,000 of cabinetry out and feel perfectly justified doing it,” Norris said.
We’re still using Derby Hill as a marker for pricing in Carmel Valley, and none have closed over $1.5 million this year (though one is pending, listed at $1.529 that sold in five days). Will this one sell? Would it dent the buyer enthusiasm? It’s not a great location, and could get shrugged off. EDIT: Postponed to 8/24/10.
Here’s a video of a trustee sale on the court house steps in downtown San Diego (by Richard).
Two comments:
1. There are still plenty of bidders showing up at the steps, but how many are buying? There were 474 trustee sales scheduled today in San Diego County of all property types, all locations – and there were only ten 3rd-party purchases at the court house on Broadway:
Result
#
Postponed
376
Cancelled
45
Back-to-Bene
40
3rd Party
13
Total
474
2. Five weeks ago I submitted a $600,000 offer to the listing agent of this property, when it was listed as a short sale for $649,000. The agent refused to submit it to the bank, because he and the sellers thought it was too low (and it sold for 10% less today). If there are any lenders out there watching, this is what’s happening every day.
The association of realtors needs to enact short-sale procedures for realtors, before the banks do it (and cut us out altogether!).
Eric Friedman is leaving his post as senior vice president of default servicing for OneWest Bank, formerly IndyMac, and will become president of PREO, an online marketplace for REO and short sales. Friedman, who held leadership roles with Fannie Mae and Countrywide, told REO Insider that his last day at OneWest is Aug. 13, and a search for replacement has begun. He has spent 20 years in the mortgage banking industry.
“PREO brings lenders, Realtors, homeowners and buyers together to turn distressed property back into family homes,” Friedman said.
Is PREO just another website that combines foreclosure activity with MLS listings?
No, none of the properties checked were listed for sale, but all were on foreclosureradar.com’s NOD or NOT lists. Most of them have IndyMac loans on them, and their bid prices are different than the amount owed – and usually well under! It sounded like they have partnered with the lenders to offer these properties to the public, but not sure if it’s a glorified short-sale, or an actual open bidding process before, during, or after the trustee sale.
The website also mentions that it “encourages defaulting borrowers to allow an inspection and interior photographs in exchange for the promise to relocate within 30 days after a bid is accepted.”
This could be the wave of the future – a website designed and run by insiders to liquidate properties directly to the public. If the opening-bid amounts are legit, and buyers can get a peek inside the house prior to bidding, it could take off.
They are realtor-friendly too, put my name down when registering:
Short sales have to be the best device for those determined to kick the can down the road – the processing delays are already legendary, and many end up in the black hole of goo.
IF the servicer gets pressured about making a decision, they can resort to ‘the big start-over’, and sell the loan to another entity.
Eric Wolff of the North County Times touches on it here, and below you can see how the closed short sales have been increasing this year:
After the vaunted ARM-reset chart, the Great Recession, unemployment through the roof, and state and local governments as broke as ever, many thought (including JtR) that by now we’d be in a bank-directed-sales environment only, with nothing but REOs and short sales.
But with the REO listings dwindling, the regular sales are enjoying a healthy resurgence – May and June regular sales were as high as they have been in a year:
If the banks’ intention is to make the liquidation of property as excruciating as possible in order to drag it out for years, they have found the magic formula – spit out a few trustee sales, and direct their defaulting borrowers to loiter around the short-sale bin. This might take a while?
