Thursday, May 14, 2009

New foreclosure wave predicted in Inland area


Really, are you sure,A realtor just told me there's never been a better time to buy....

From the PE.

A near record number of homes entered the first stage of the foreclosure process last month in Riverside and San Bernardino counties after mortgage industry foreclosure moratoriums were lifted.

The supply of bank-owned houses has shrunk from a year ago, sparking intense competition from investors and first-time buyers, who often find they must make offers on multiple houses to get one accepted.

But economists expect the number of bank repossessions to burgeon in coming months as a new influx of defaulted mortgages proceeds to foreclosure.

Christopher Thornberg, an economist with Beacon Economics in Los Angeles, said the slowdown in foreclosures while mortgage delinquencies increased "was a mirage. It wasn't real. At some point you have to foreclose."

According to a report released late Tuesday by RealtyTrac, an Irvine-based foreclosure monitoring company, notices of default, the first step in the foreclosure process, were issued for 6,019 homes in Riverside County last month. That was fewer than the 6,642 record in March but more than the 4,706 default notices recorded in April, 2008.

San Bernardino County recorded 4,661 notices of default last month, down from 5,336 a month earlier but sharply up from 3,759 a year earlier.

Meanwhile real estate agents complain about a shortage of foreclosed houses for sale because banks have stopped taking over homes and seem to be slow putting the ones they have on the market.

Riverside County last month had 1,519 bank repossessions, the final stage of foreclosure, down from 1,934 in March, and down from 2,598 homes repossessed in April 2008. There were 1,580 homes repossessed in San Bernardino County last month, up from 1,179 in March but fewer than the 1,845 homes repossessed the same month a year earlier.

"There is now a dip in (bank repossessed houses) similar to the dip in the notices of default in the third and fourth quarters of 2008. We expect a corresponding spike (in bank repossessions) probably in the third or fourth quarter of this year," said Daren Blomquist, a spokesman for RealtyTrac.

Pete Nyiri, owner of Corona-based Top Producers Realty, a high-volume broker of bank-owned Inland houses, said late last week he started getting more repossessed houses to sell. He said lenders and loan servicers "are telling us it is going to be back to where it was as far as numbers are concerned."

24 comments:

Homer said...

I agree, I got my foreclosed Temecula house in Jan '09, and after that the "listed" foreclosures seemed to have dropped off the radar.

But the dead lawns were still very apparent. Its gonna be a blood bath shortly. Thousands are gonna flood the streets (in Los Angeles too) with few buyers. Not many people were are smart as we were to wait for our moment.

Emotion got the best of people and they bought when the crowds said to buy, 2003-2007. Well, now its time for the smart money to enter the game.

In the next 12 months the "real deals" will hoit the market. tehy won;t hit Los Angeles for a little while. The foreclosure tide is moving westward towards the Pacific, but its at least a year of two behind Riverside Co.

WunderPit said...

Homer, we're due to close at the beginning of June in Corona. I agree that there may be more on the market soon that could drive prices down a few 10k, but it doesn't upset me at all. Prices are pretty realistic right now, we locked in a great rate, and we found a nice home that we're happy with.

Best of all, the lending standards have been tough, but once you are approved you have a great feeling that you can ACTUALLY afford it. The more people that buy in today's market, the more that we will fix our problems. Hopefully all of you readers get what you want soon. Good luck!

Tyrone said...

Not too surprising. I think most bloggers have been saying we have more than a few years of trouble ahead.

And rememember, this is no longer just about real estate. It's a very real and present monetary danger.

I love that I still have a good paying job to facilitate the gradual accumulation of insurance.

ojedalive said...

Congrats to both Homer and WunderPit on the new homes. My wife and I are hoping to be purchasing in the August to September time frame.

I'm trying to understand why Banks are sitting on some of the foreclosures here in Riverside and Corona.

1) Are they hoping that the market will go up and they can get more more later this year? Which will never happen.

2) Are they planning to spread the losses over a longer period to make their books look more stable?

3) Are they just not prepared to handle the volume (staffing, systems, etc)?

I just don't understand it. Certainly, in 2008 when prices were dropping much faster it would have made sense to get the property on the market ASAP to maximize the sales price. Prices have delcined this whole year and the same applies.

C.

WunderPit said...

ojedalive, one thing I do know is that it took FOREVER for a few REO's (not short sales) to come back with an answer. This is in contrary to what our agent said was the norm (around 72 hours on an REO). 14+ days to get an answer of "give us your highest & best" is just way too long on that type of property. Typical time should be around 72 hours or so. We had already moved on at that point...and glad we did :)

WunderPit said...

So maybe I am answering #3...

Oldtimer said...

I think most of the specuvestors defaulted in 2007 (maybe some held to 2008). People that had no business buying homes have also already defaulted.

What is left now are people that are losing jobs, and people that bought or levered up too high, and now want a market value mortgage (buy and bail).

Unfortunately, there are still lots of those people out there, but my guess is that their numbers will not match the specuvestors and suburban wannabes that defaulted en masse in 2008.

With the September change in CA law, the voluntary moratoriums that were adopted over the winter, and the coming change in CA law, monthly figures for foreclosures are unreliable in discerning trends.

Maybe there will be another big wave coming, but I wouldn't bet on it.

Rt.66 said...

Oldtimer

Where have you been? Google search "coming wave of foreclosures".

The subprime wave that is abating now is peanuts compared to the Option ARM and Alt-A resets coming. The important word is OPTION. Folks had teaser rates and the option of paying interest only or even skipping payments.

Add in the shadow inventory of subprime REOs the banks are sitting on and factor in that tons of even the best loans are eventually going to go foreclosure because.... who in their right mind will continue to pay on a house $200k-$500k underwater? Especially in an atmosphere of foreclosure forgiveness?

There is absolutely NO ONE with even the tiniest education on this issue that is betting against this coming wave. Why? Because its happening right now and gaining steam :>

Hey can someone tell me which foreclosure search program is used on that condo post?

Rob Dawg said...

Bankers choice 2009:

• Ignore delinquent homeowners who stopped paying on houses worth half what they owe.

• Mobilize dozens of staff from lawyers to service desks to bond coordinators and FMN coordinators to initiate a 6-8 month process of foreclosure and eviction that leaves them additionally liable for taxes and upkeep.

What would you do?

Christina said...

I am pretty sure X is using Realtytrac. Its free until you want to zoom in and get exact addresses.

ojedalive said...

The choice would never be to let people sit in the house and not pay.

1/2 a loaf is better than none.

Even 1/4 loaf is better than none.

And to let people sit and do nothing is absurd, because then everyone in the U.S. might as well sit and not pay if there is no consequence.

Tyrone said...

Interesting article/video with Howard Davidowitz. Better to be safe than sorry. His comments at the end on living standards are exactly what I've been thinking and telling people--they're comin' down, consumer-debtors!
"The bailout money is in the sewer and gone.""The Worst Is Yet to Come": If You're Not Petrified, You're Not Paying Attention

OSA said...

for those that closed, curios as to what deal you got?

WunderPit said...

OSA, there are no real "deals" right now, well, besides the homes that are half price from 2 years ago, which is pretty much everything. many people are buying. very competitive (at least where we are). we made MANY offers that were outbid.

ojedalive said...

Hey Wonderpit,

When you say you were outbid, can give an idea of the amount that people were outbidding you by? Are we talking $1 to $10 thousand or are we talking more. I'd like to know as my wife and I prepare to enter the market shortly to buy our home.

Part of what created the bubble was all these idiots that outbid offers by absurd amounts. Oh, they got the house, but now they can't pay their mortgage.

Rt.66 said...

Christina said...
I am pretty sure X is using Realtytrac. Its free until you want to zoom in and get exact addresses.

May 15, 2009 12:02 PM

I use RealtyTrac often and that picture is different. I'm always on the lookuot for more information sources, that's why I'd like to know what that is. From the lack of response maybe they think I'm some sort of copyright police? I'm not :)

golfer_X said...

It's a new site called Realquest. It's a beta site right now, they go live in June.

Rt.66 said...

ojedalive

Exxcellent point. Even now we have to deal with those crazy speculators. Low down payments provided by FNM and FRE are causing a situation similar to the bubble years.

What do these bidders care? If you can qualify for a 3.5% down and get $8k back on taxes then its pretty much no money down all over again. Throw in the fact that its become increasingly clear that stopping payment on mortgage is no big deal, or will actually net you a year and a half free in a nice house, and we have the stupidity thats happening now.

The smart money got decemated on the second leg down during GD1. Keep that in mind.

Rt.66 said...

Thanks X!

I knew I had not seen that before.

Great site. Long time reader/lurker here.

golfer_X said...

I don't think the "smart money" will get decimated this time. They are far too busy gaming the markets and making billions in the process. To me it seems like they are using J6P. either directly or through the government to bear the losses this time. Smart money isn't buying real estate. They are busy playing games on the stock market.

Rt.66 said...

golfer_X said...
I don't think the "smart money" will get decimated this time. They are far too busy gaming the markets and making billions in the process. To me it seems like they are using J6P. either directly or through the government to bear the losses this time. Smart money isn't buying real estate. They are busy playing games on the stock market.

May 16, 2009 10:00 AM

Good point. I guess better to say the small potatoes smart money will get decimated.

I agree the connected elite are playing a different game and using our $$ :(

WunderPit said...

ojeda,

it's hard to say how much you're outbid because the agents won't say. in fact, there was some game-playing going on where an agent would "give you their word" that if you sign off on a counter-offer, they would take that offer to the bank. guess what? nope. they sat on it for another weekend and tried to get a higher offer, and obviously they did. since most are shorts, they are still either in backup or pending. no way to find out how much they are actually selling for yet.

ojedalive said...

WonderPit,

I've heard similar stories. A few folks believe without a doubt now that they were duped. The listing agent kept telling them their were other bids, so they kept upping their bid. As they reflected on how it all went down, they are pretty certain there were never any counter bids. Just a dirty listing agent faker than a 3 dollar bill.

After all the horror stories, I'm not looking forward to all the unethical shananagans.

golfer_X said...

There's a lot of funny biz going on right now. Agents already have buyers lined up in many cases for REO homes they are listing. That way they double dip the commission. Homes have fallen 50% but if they work both ends of the commission they can make up for that fall in value.

Sure, some sales will go to lower offers if that offer is stronger. All cash offers have a serious advantage right now. Lenders will gravitate towards the offer that has the best chance of closing and usually that's an all cash offer.