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[quote author="CapitalismWorks" date=1251788274][quote author="RobertLarsen" date=1251787865][quote author="It?s a dry heat..." date=1251787195]After reading CapWorks excellent description, wouldn't this also make pre-FC (i.e. at least 90+ day NODS) more important to count?



I mean, (and correct me if I'm completely off base here) including only the foreclosed properties in the count as "shadow inventory" is like a shop saying that what's in stock is only on the shelves, and not counting the palettes and crates sitting in the loading dock, not yet unpacked. I agree that it's much less quantifiable, and that the CR guy was a bit reaching in trying to drum up his Shadow Inventory number. But nonetheless still worthwhile to consider.



edit: took too long to post. I guess the number can be quantified, at least roughly.</blockquote>


I was just trying point out that there is no huge backlog of REOs and that banks are not hoarding inventory for a later day. We are current when it comes to pre-foreclosure and foreclosure properties, not to say there will not be more in the future. But, there is no such stockpiling going on. The increasing number of delinquencies will not be enough to send the market spiralling down.



Here's a good article about it:

http://www.cnbc.com/id/32630317



As for the store analogy, if it's sitting on the loading docks, you can't buy it. What's in the store, is the standing inventory.</blockquote>


Except there is a cost of carry on that inventory on the docks, just like there is a cost of carry for non-performing loans on properties that are not being disposed of in the most expedited manner.



Your link goes a long way to supporting my argument that banks are using the HAMP/modification myth in order to delay foreclosures.



As for your questions.



1) Banks pay occupants of foreclosed homes to Not Destroy the Home upon exit. If a former homeowner can live rent free for a period of time then why would he trash his home. However, once it becomes apparent that the bank is planning on moving the property the incentives change. Simple enough, yes?



2) I do not contend with your REO/MLS listing observation. My point is that rate of homes reaching the REO/MLS phase is far slower than it should. See the article you linked.



3) See Above.



4) ?</blockquote>


<strong>1) Banks pay occupants of foreclosed homes to Not Destroy the Home upon exit. If a former homeowner can live rent free for a period of time then why would he trash his home. However, once it becomes apparent that the bank is planning on moving the property the incentives change. Simple enough, yes?</strong>

That's just not true.
 
Well... to be fair... I did say "years"... but I was being hyperbolic.



I actually have a neighbor how has been living in his house since he stopped paying last year. He moved out a month ago and his cousin moved in, the bank took it over sometime ago... and he's still living there.
 
Wow... what a fun thread this has become.



First, Robert, when I give you a bunch of data that you had asked for, I expect you would return the favor. So the properties that I had asked for you to give me the address on, need to be included in your numbers until I can cross reference them to see if they have been foreclosed on.



Second, don't expect me to give you any more data if you are going to half ass it when I told you, you need to not be lazy and go through it. Next time I have to do this for you I will send you a bill, and it won't be cheap.



Add 15 more REOs in Aliso that Robert didn't want to take the time to find. Please note that the dates highlighted in red are when the bank took them back that are over a year old.



http://i28.tinypic.com/tat0mh.jpg



So with the 9 Robert excludes but doesn't want for me to cross reference for some reason, and the 15 more that I found... you add in another 24 REOs sitting there rotting on the banks books. FYI, a lot of them seem to be FNMA and IndyCrap, gotta love tax dollars holding assets at mark to myth values.
 
How fortuitous!

One of the properties I have been watching, and previously featured on my blog, went back to the bank today and it appears to fit in with the gist of this thread. It took at least 20 months for the bank to foreclose on <a href="http://www.cotohousingblog.com/?p=4076">this property</a>, and probably longer.
 
Graphrix, I don't want to call you lazy, that would not be cool. However, your list is a joke. The property at 4 Berkshire closed escrow last year, on 11/10/2008. The property at 52 Las Flores closed escrow on 8/29/2009. The property at 131 Sandpiper was listed last year as an REO. Your list has Dogwood in both Aliso Viejo and Laguna Hills. What Robert put up was twice the effort and three times the value of what you added.
 
The property at 27 Dogwood, in Aliso Viejo (not Laguna Hills) closed escrow on 3/5/2009.
 
The property at 9 Dogwood closed escrow on 7/2/2008.



This one turned around in record time.
 
The property at 21 Cambria closed escrow on 3/3/2009. Your list is officially garbage.
 
[quote author="NewportSkipper" date=1251794584] The property at 4 Berkshire closed escrow last year, on 11/10/2008.</blockquote>


Where are you coming up with this?



<a href="http://www.redfin.com/CA/Aliso-Viejo/4-Berkshire-92656/home/4872343">http://www.redfin.com/CA/Aliso-Viejo/4-Berkshire-92656/home/4872343</a>



Property History

Date Event Price Appreciation Source

Aug 18, 2008 Sold $576,000 -8.1%/yr Public Records

Jul 28, 2005 Sold $745,000 21.2%/yr Public Records

Sep 27, 2002 Sold $432,000 14.5%/yr Public Records

Dec 30, 1997 Sold $227,500 -- Public Records



<a href="http://www.zillow.com/homedetails/4-Berkshire-Aliso-Viejo-CA-92656/25550528_zpid/">http://www.zillow.com/homedetails/4-Berkshire-Aliso-Viejo-CA-92656/25550528_zpid/</a>



Last sale and tax info

Sold 08/18/2008: $576,000

2008 Property Tax: $8,339



I swear you are making this up!
 
[quote author="RobertLarsen" date=1251788287][quote author="awgee" date=1251787659][quote author="RobertLarsen" date=1251786724]Do you know anyone living in a house years after they stopped paying or have you just heard it from a friend of a friend? And, if so, what percentage of foreclosed homes do you think that is? .1%? Either way, it's not a statistically significant percentage. I know of people being paid to vacate a bank owned property, not people living payment free for 2 years.



To just qualify for a short sale, a bank likes to see that you haven't paid your mortgage for 3+ months. And again, a short sale is an entirely different scenario than a foreclosure. Banks would love for every homeowner to be able to complete a short sale instead of a foreclosure, because it allows them to use TARP money. Why do you think banks are trying to persuade homeowners to complete a short sale rather than have it foreclosured. People can now get a new loan 18 months after completely a short sale. Plus, the banks will take off the missed mortgage payments from your credit report.



I have no doubt that there will be more REOs in the future, but only because there are more defaults, not because of the bank conspiracy.



Now answer my questions:



1) Why would a bank pay thousands of dollars to bribe an occupant to leave? The occupant is upkeeping the home, and paying for utilities. It's much better for a neighborhood to have people living in the homes, rather than have the homes vacant. They would be able to bypass mark-to-market accounting for the timebeing.



2) Did my analysis of 92656 not prove anything? If there is a huge surplus of REO inventory, not on the market, where is it? Why were all of my datapoints within 3.5 months? Where are the 12+ and 24+ month old REOs.



3) If the remaining 29 REOs not listed on the market are sold within the next 2 months, does this not further disprove the shadow inventory theory?



4) Why is cash still king in the bank owned market place? Loans would allow a bank to hold onto the property for another 30-45 days.</blockquote>
First, let us not exaggerate. No one said years.

I do know of three properties in which the previous owners kept living in the home after the home went back to the bank. The total time from payment stoppage to the occupants leaving was about 18 months, and in one of the properties the occupants are still there. This thread got me interested, so I checked it out on FR, which it was listed on previously, but it has vanished. It was not listed for sale the entire time it was, or is, REO. IrvineRealtor is currently checking for me to see if it is in escrow or what its possible status is.



3 REOs in two years is about 15% of the REO property in this neighborhood, just a guess. For giggles I will check on the current inventory of REO and see what the approx time from non-payment to listing for sale is.



I dunno, 3.5 months of inventory sounds like a lot to me when more is coming on line every month.



Or maybe one of you who has access can find out what happened to 6 Via Presea, 92679</blockquote>


On 05/08/2009, Bear Stearns Series 2006-Sd2 took over the trustee's deed from Quality Loan Service Corp.



And, it's not 3.5 months of inventory, it's just 29 properties. 3.5 months is just how old the oldest existing bank owned property in that area is.</blockquote>
Sorry about the 3.5 mistake. I gotta learn to read.

Please help me out here. It seems that means Bear Sterns is now the owner of the property? So it would still be REO. Interestingly, the previous owners are still living there. And it has not been listed for sale.
 
[quote author="NewportSkipper" date=1251794584]Graphrix, I don't want to call you lazy, that would not be cool. However, your list is a joke. The property at 4 Berkshire closed escrow last year, on 11/10/2008. </blockquote>


Doesn't show up in county records as closed. Still REO.



<blockquote>The property at 52 Las Flores closed escrow on 8/29/2009. </blockquote>


Try reading first, then learn how to count. I listed more than 15 properties. And... if you look carefully it says SOLD in capital letters by 52 Las Flores.



<blockquote>The property at 131 Sandpiper was listed last year as an REO.</blockquote>


Doesn't show up in county records as closed. Still REO.



<blockquote>Your list has Dogwood in both Aliso Viejo and Laguna Hills. What Robert put up was twice the effort and three times the value of what you added.</blockquote>


Long before Aliso existed the zip code was part of Laguna Hills. Much like many houses in Ladera still show Mission Viejo as the city in the zip code of 92694. So WTF is your point? That you didn't know that? That you can't see that the zip code is clear as f'ing day as 92656?



Thanks for not providing anything useful, again you add zero, nada, nothing but hot air. Now go kick rocks on the 5 freeway by yourself.
 
[quote author="NewportSkipper" date=1251795187]The property at 27 Dogwood, in Aliso Viejo (not Laguna Hills) closed escrow on 3/5/2009.</blockquote>


Wow! I missed one... that is 1 property out of 15, ONE. Again... see the zip code.
 
[quote author="NewportSkipper" date=1251795776]The property at 9 Dogwood closed escrow on 7/2/2008.



This one turned around in record time.</blockquote>


Doesn't show up in county records. Still REO.
 
[quote author="NewportSkipper" date=1251796115]The property at 21 Cambria closed escrow on 3/3/2009. Your list is officially garbage.</blockquote>


Doesn't show up in county records as closed. Still REO. You... are full of garbage.
 
According to Redfin, there are 130 properties listed for sale in Coto de Caza.

According to Foreclosure Radar, there are 5 REO not listed for sale, in escrow, accepting back up offers, or on hold, do not show.

According to Foreclosure Radar, there are 28 properties with NTSes not listed for sale, etc.

According to Foreclosure Radar, there are 43 properties with NODs distinct from those with NTSes that are not listed for sale, etc.

I dunno it that is shadow inventory or what, but it is 76 properties in some stage of foreclosure, most of which will come to market in a neighborhood which presently has 130 listings.

I guess there are some who would say that will not cause prices to fall.

But so far, foreclosures have been a large influence in declining home prices, and it sure looks to me like they will continue to be a large influence in declining home prices.

I have looked through the loans on quite a few homes in Coto and there is an inordinately large number of loans set to reset and recast in 2010 and 2011, on homes that were purchased in 2005 and 2006. Ya wanna guess if those homes are already upside down? Ya think the situation is gonna improve by 2010 and 2011? Well, I guess everybody is entitled to their opinion. As they are also entitled to live in denial.
 
[quote author="RobertLarsen" date=1251788555][quote author="CapitalismWorks" date=1251788274][quote author="RobertLarsen" date=1251787865][quote author="It?s a dry heat..." date=1251787195]After reading CapWorks excellent description, wouldn't this also make pre-FC (i.e. at least 90+ day NODS) more important to count?



I mean, (and correct me if I'm completely off base here) including only the foreclosed properties in the count as "shadow inventory" is like a shop saying that what's in stock is only on the shelves, and not counting the palettes and crates sitting in the loading dock, not yet unpacked. I agree that it's much less quantifiable, and that the CR guy was a bit reaching in trying to drum up his Shadow Inventory number. But nonetheless still worthwhile to consider.



edit: took too long to post. I guess the number can be quantified, at least roughly.</blockquote>


I was just trying point out that there is no huge backlog of REOs and that banks are not hoarding inventory for a later day. We are current when it comes to pre-foreclosure and foreclosure properties, not to say there will not be more in the future. But, there is no such stockpiling going on. The increasing number of delinquencies will not be enough to send the market spiralling down.



Here's a good article about it:

http://www.cnbc.com/id/32630317



As for the store analogy, if it's sitting on the loading docks, you can't buy it. What's in the store, is the standing inventory.</blockquote>


Except there is a cost of carry on that inventory on the docks, just like there is a cost of carry for non-performing loans on properties that are not being disposed of in the most expedited manner.



Your link goes a long way to supporting my argument that banks are using the HAMP/modification myth in order to delay foreclosures.



As for your questions.



1) Banks pay occupants of foreclosed homes to Not Destroy the Home upon exit. If a former homeowner can live rent free for a period of time then why would he trash his home. However, once it becomes apparent that the bank is planning on moving the property the incentives change. Simple enough, yes?



2) I do not contend with your REO/MLS listing observation. My point is that rate of homes reaching the REO/MLS phase is far slower than it should. See the article you linked.



3) See Above.



4) ?</blockquote>
<strong>1) Banks pay occupants of foreclosed homes to Not Destroy the Home upon exit. If a former homeowner can live rent free for a period of time then why would he trash his home. However, once it becomes apparent that the bank is planning on moving the property the incentives change. Simple enough, yes?</strong>

That's just not true.</blockquote>


Try Googling. The practice is known as Cash for Keys. I would have thought that a real estate pro would have been familiar with this practice, or at the very least astute enough to look it up before confirming another hole in his "expertise".



Here is one of the nearly 3 MILLION Hits on Google.



http://cbs13.com/local/cash.for.keys.2.651785.html
 
[quote author="CapitalismWorks" date=1251799458]Try Googling. The practice is known as Cash for Keys. I would have thought that a real estate pro would have been familiar with this practice, or at the very least astute enough to look it up before confirming another hole in his "expertise".



Here is one of the nearly 3 MILLION Hits on Google.



http://cbs13.com/local/cash.for.keys.2.651785.html</blockquote>


The appropriate term is "agreement to vacate" and <a href="http://www.foreclosureforum.com/forms/agreement_to_vacate.pdf">here is the PDF form</a> in case anyone needs it.
 
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