The Foreclosure Report – June 2012

By July 12, 2012Foreclosure

Foreclosure Inventory Continues to Decline

June 2012 Foreclosure Sales were significantly down in the three largest foreclosure states in our coverage area.  California Foreclosure Sales were down 13.4 percent over last month, and down 48.8 percent vs. June 2011.  Arizona Foreclosure Sales were down 18.5 percent over last month, and down 42.1 percent vs. June 2011.  Nevada Foreclosure Sales were down 14.6 percent over last month, and down 72.1 percent vs. June 2011 driven by the new regulation that took effect in October 2011.  In addition, Foreclosure Filings are flat to down in all states in our coverage area, both on a month over month basis and vs. previous year.  Arizona Notice of Sales were down 27.7 percent over last month, Nevada Notice of Defaults were down 22.7 percent over last month, and California Notice of Defaults were basically flat, being down 0.9 percent over last month.

We already have significantly low home sales in the market today, and with the declining level of Foreclosure Sales the inventory will continue to decrease.   In California, banks take on average 272 days to resell properties they take back at auction, thus, Realtors, investors, and homebuyers should brace themselves for significantly less inventory in next years’ selling season.

Sean’s Take —

“Today California Governor Jerry Brown signed into law the Homeowner Bill of Rights, an anti-foreclosure package which naively thinks that slowing foreclosures will benefit homeowners and the economy by leaving those owners stuck in their prison of debt. We’ve long said negative equity, not foreclosures, are the problem, and this bill, like almost all government efforts to date, does nothing to truly help underwater borrowers. Fortunately this bill was watered down significantly from its original form, so we don’t expect it will have the same impact that we’ve seen from more aggressive legislation in Nevada.” stated Sean O’Toole, Founder & CEO of ForeclosureRadar. “Additionally any impact on foreclosures sales, or REO resales, is more than a year a way based on current foreclosure timeframes. The most ironic part of this bills passage is that foreclosures have already plummeted, and that the real housing crisis in now a lack of homes available for sale. Next spring, we expect there will be half as many REO’s available for sale in California, significantly impacting overall home sales and hurting homebuyers, investors, real estate related services and the economy.”

Foreclosure Statistics – June 2012:

Arizona (Notice of Trustee Sale filings):
Foreclosure Starts: 5,236 (-27.7%)
Foreclosure Sales: 2,998 (-18.6%)
Time to Foreclose: 141 days (+12.8%)

California (Notice of Default filings):
Foreclosure Starts: 20,293 (-0.9%)
Foreclosure Sales: 7,030 (-13.4%)
Time to Foreclose: 309 days (+13.2%)

Nevada (Notice of Default filings):
Foreclosure Starts: 1,265 (-22.7%)
Foreclosure Sales: 861 (-14.6%)
Time to Foreclose: 468 days (+0.9%)

Oregon (Notice of Default filings):
Foreclosure Starts: 1,164 (-12.9%)
Foreclosure Sales: 458 (+38.4%)
Time to Foreclose: 143 days (-3.4%)

Washington (Notice of Trustee Sale filings):
Foreclosure Starts: 2,010 (+2.1%)
Foreclosure Sales: 1,026 (+48.1%)
Time to Foreclose: 100 days (+1.0%)

CLICK HERE for our complete June 2012 Foreclosure Report

12 Comments

  • Tom says:

    Sean,

    Although the new law might not be good for your business, or for home buyers and investors, it certainly is good for property owners/squatters trying to get some payback against the loan industry and Wall Street. Those folk are stuffing lots of Benjamins under their mattresses, LOL.

    • Tom – that’s hysterical. Just know that this bill is actually good for our business as it ensures that foreclosures will be with us for many more years than I originally expected. We joke internally that it is a job security bill. 😉
      Even though it wouldn’t necessarily be good for our business, there is nothing more that I’d like to see than real solutions that would actually get us back to a healthy housing market as quickly as possible. This isn’t it.

      • Laura says:

        One of the homes we are tracking was purchased in 1998 for $282K and now has almost $1M dollars owed against it. This is a prime example of the refi orgy some of these a-holes have been up to. I hope we can afford to buy it.

        Tom- While some of us have been paying multiple rents trying to get back into the market, many live frees have been buying and bailing. Laws are just suggestions now for many, especially the TBTF (aka TBTJail). All the players are to blame.
        *Buyers
        *REIC
        *Fed Regulators
        *Banks
        *WS – (Derivatives, CDS, Insurers, etc…)
        *Appraisers
        OK, we are where we are. This is feeling worse than the Japanese experience from what I have read… Will we reach equalibrium in our lifetimes (I’m 54)? I lean towards NO.

    • CeeGee says:

      No they’re not. They’re blowing the $$ just like they blew the cash-out refi $$ – on stupid, depreciating consumer trinkets and consumption. So next time you’re out at a restaurant, look around. Wonder how many are enjoying a nice meal out because they aren’t paying a mtg (or prop taxes, or HOA, or insurance).

      Yes, Tom, how funny… and how very noble.

      There’s no free lunch ultimately. Many people are subsidizing the “free ride” of a few. The irony is that many of those being subsidized were the most irresponsible & imprudent.

      Bloomberg ran an article recently trying to quantify (what I’ve been calling for several years the “shadow stimulus) the amount of annual consumer spending could be attributed to all the people living in homes without paying the usual mtg, taxes, HOA, insurance. Their estimate? $50B / yr!

      If you are a renter, 1st time homebuyer, homeowner who didn’t delusionally overpay or greedily max out cash-out refi, or simply a US taxpayer… you should be livid!

      Of course the same goes 100x about the Wall St, D.C., industry revolving door and ALL THOSE subsidies, but that goes without saying and isn’t the focus of this particular thread.

      But if you responsibly pay your bills monthly, keep this in mind when you come across smug moochers like Tom (who just finds it hilarious!) who buy a new toy or enjoy a night out on the town at your expense.

      Me? I get paid to evict people like Tom and process their former homes, so not a big deal to me.

      But it bugs me that so many decent, responsible people are being played by these smarmy, brazen, smug squatter assholes that even brag about it public forums.

  • AB 284 (The law that makes it harder for lenders to foreclose in Nevada) in Nevada has created an absolute mess in Las Vegas for buyers. Inventory has been disintegrated…

    Anything under $200K worth buying — Multiple offers in Days. I’m coming across homes listed for a day or two and dozens of offers coming in. Trying to buy homes for cash buyers — we have to offer more then list price in most cases to get the deal. It’s getting harder and harder to find good returns.

    On top of that, the banks know all about it. Just had Bank of America come back and wanted tens of thousands more then market value on a short sale I’m dealing with. Dealing with GMAC with something similar. Property only appraises for $115,000 and GMAC won’t budge for anything under $130K to approve the short sale. They don’t even care about having an appraisal showing it’s only worth $115K.

    First time home buyers that need an FHA loan — forget about it. They have no chance against the cash buying investors in buying anything decent for under $200,000.

    Current appraisals are a mess… I don’t even want to accept offers that need a loan because the prices are skyrocketing due to this horrible legislation and we are now having appraisal issues.

    Ironically… AB 284 has hurt First time home buyers the most in being able to buy something affordable while giving the people in the bad, inflated home loans a free ride for another year or two.

    Absolutely Nothing healthy about that when it comes to the economy because they will eventually be foreclosed on. (Basically… the can was just kicked down the road.)

    Nevada Legislatures that helped pass this bill screwed up BIG TIME and have done MUCH more harm then good in moving forward to a sustainable recovery.

    “The most ironic part of this bills passage is that foreclosures have already plummeted, and that the real housing crisis in now a lack of homes available for sale. Next spring, we expect there will be half as many REO’s available for sale in California, significantly impacting overall home sales and hurting homebuyers, investors, real estate related services and the economy.”

    Spot on statement Sean. And I can certainly tell you that the first time home buyer in Las Vegas that needs a loan has certainly been shafted as Las Vegas turns into one big rental community.

    We now have more rental homes available for lease then homes available for sale. First time I’ve ever seen that in over a decade of practicing real estate in Las Vegas.

  • Laura says:

    Paul
    THANK YOU for chiming in.

    Wells Fargo had a major fixer in a nice neighborhood (caveat- soil conditions) in So Ca. Get this, they are trying out a new business model and charging $12,000 for the honor of buying one of their REOs, and another $195 fee for being the winning the silent bid auction. You submit the offer on line. $12,000 is the highway robbery part. I almost lost my lunch! The home was in foreclosure 7 years, and they lived free, leaving a broken up mess in their wake.

    We’re a cash and close for a primary and are just sick to our stomachs that our integrity and perfect financial position has been lost in translation. The one bright spot that you spoke of is all the FHA future defaulters are out of the picture going forward.

    We have a Glaucoma issue and we need to get settled in a home (again/reg sale). I guess we’ll be getting a dose of NV’s reality next year. It’s already a bidding nightmare.

    Banksters/TPTB 10 Buyers 0

  • Laura says:

    Paul Said:
    “Absolutely Nothing healthy about that when it comes to the economy because they will eventually be foreclosed on. (Basically… the can was just kicked down the road.)”

    Here’s the scary stuff, Paul. I heard an interview with a Law Professor who said that they might just be able to legally screw the MBS investors holding the underwater mortgages with Eminent Domain, do a principal reduction, and then sell the new packages off to new investors. One would think that would be unconstitutional, but I guess if they tie it to blithe they could possible pull if off. So maybe there is an out for all these:
    1. Peak Bubble Buyers
    2. Serial Refi Orgy a-holes
    3. BK to postpone Foreclosure Auction -kicking the can

    If you have a medical issue, or are unemployed and haven’t been partying on the banks dough, you should be helped, depending on the circumstances. The rest of these people have gamed the system. You deserve a swift kick out on your arse.

    TPTB are masking the GDII

  • Alan says:

    Sean and others,
    How do you see the real estate market for the next year or two? Shouldn’t prices start to rise (maybe even greatly) in the next couple years with this low inventory? How do you see opportunities for investors?…because on one hand you said this lack of inventory will really hurt investors and the economy in the next year but also said the HBR will keep investors in business?

    • I believe we will see prices rise a little with tightening inventories, but not greatly. Prices will remain constrained by lending (can’t see us going back to pay option arms that allowed us to reach insane price levels last time), and by the desire of cash buyers to get a reasonable return on investment.

      To reconcile my statements, understand that it will “hurt” investors through lower volumes, and “help” through dragging out foreclosures (and related opportunities) for years to come.

  • John Gloria says:

    I am a transplant New Jersey person

    I bought several propeties at the Courthouse in New Jersey

    How does the sales work in Los Angeles County

    • Laura (So Ca) says:

      John
      The best teacher is going down to the courthouse and observing. One big caveat these days is the beneficiary bidding against you, once the other bidders are exhausted. Last time, the price on a home was pumped another $30K. Loss Mitigation Depts want recovery higher these days. 2+1s (or 2’s) cheap, SFHs, not such a bargain. Heavy Hitters will protect their turf.

  • Alan says:

    Awesome, thanks for your reply Sean!

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