Saturday, September 20, 2008

Foreclosure numbers will soon plummet

Wait for the news next month. The numbers of foreclosures will plummet to the lowest amount in many months. The media and the NAR/CAR will surely spin this for all it's worth. But is this a sign of recovery. Eh..NO, it's a sign that the new California law SB1137 has taken effect. This law makes in more difficult and time consuming for lenders and banks to foreclose. It requires them to contact each borrower in person and assess each ones financial situation and explore options to avoid foreclosure. This is already having the effect of cutting the number of daily transactions drasticly. One of the reasons the foreclosure numbers were probably so high last month was that the banks were sending out as many notices as possible before this law took effect.

However, this is only a temporary delay. Once the banks get the notices out the numbers will shoot back up. In fact there is likely to be a huge increase as all these backlogged foreclosures will hit the market at the same time. I'de look for the numbers to shoot back up at the end of the year, Nov/Dec time frame

2 comments:

Martin Burtin said...

Yeah, right before the law went to effect, NOD soared to almost double from the previous month. Now they've tapered off as the banks adjust their procedures to comply with the law's requirements. In short order they will figure out how to train their people and get their foreclosure machine kicked back into high-gear.

LMAO @ Realtards using this artificial lull as evidence of some kind of bottom or turn-around.

David said...

Thanks for this bit of info.