Waiting to catch a wave? Surge of REO listings is unlikely.

NEW -> Contingent Buyer Assistance Program
[quote author="no_vaseline" date=1250122311][quote author="awgee" date=1250115264]Your collection issue is not tinfoil at all. I have considered it, but my guess is that the expense of sifting through all the owners to find any with assets on top of the expense of collecting may not be profitable.



Give us the tinfoil version. What have you got to lose? We already know something is loose up there.</blockquote>


Maybe later. I'm going to take a working daycation to SLO this afternoon.



But I'll tell you this - if I was in loss mitigation I would wait 3-5 years, and then start doing asset searches by the biggest loss first - and move down the chain till it was no longer cost effective. Then I'd move another 25%. I take a dogmatic approach to borrowers that they are sheep (because they are) and if the bank doesn't carry a credible threat of coming after you unless you file BK, then what's the downside to the borrower? Just do it again! And they will.



I haven't forgot about the coffee get together I'm hosting, I'm a little buried right now.</blockquote>


I disagree. Most of the banks will sell those rights. If you thought that banks caught abuse for kicking people out of their homes, imagine the publicity for seizing their assets years later. What asset(s) do you think will sound politically correct to go after?



Somebody who has a job like bail bondsman now, and expects threats and abuse, would be perfect for pursuing the deficiencies.
 
[quote author="MalibuRenter" date=1250394863][quote author="no_vaseline" date=1250122311][quote author="awgee" date=1250115264]Your collection issue is not tinfoil at all. I have considered it, but my guess is that the expense of sifting through all the owners to find any with assets on top of the expense of collecting may not be profitable.



Give us the tinfoil version. What have you got to lose? We already know something is loose up there.</blockquote>


Maybe later. I'm going to take a working daycation to SLO this afternoon.



But I'll tell you this - if I was in loss mitigation I would wait 3-5 years, and then start doing asset searches by the biggest loss first - and move down the chain till it was no longer cost effective. Then I'd move another 25%. I take a dogmatic approach to borrowers that they are sheep (because they are) and if the bank doesn't carry a credible threat of coming after you unless you file BK, then what's the downside to the borrower? Just do it again! And they will.



I haven't forgot about the coffee get together I'm hosting, I'm a little buried right now.</blockquote>


I disagree. Most of the banks will sell those rights. If you thought that banks caught abuse for kicking people out of their homes, imagine the publicity for seizing their assets years later. What asset(s) do you think will sound politically correct to go after?



Somebody who has a job like bail bondsman now, and expects threats and abuse, would be perfect for pursuing the deficiencies.</blockquote>


I should of clarified that as the most likely action. But certainly somebody will start going after these deadbeats sooner or later.
 
[quote author="no_vaseline" date=1250403144][quote author="MalibuRenter" date=1250394863][quote author="no_vaseline" date=1250122311][quote author="awgee" date=1250115264]Your collection issue is not tinfoil at all. I have considered it, but my guess is that the expense of sifting through all the owners to find any with assets on top of the expense of collecting may not be profitable.



Give us the tinfoil version. What have you got to lose? We already know something is loose up there.</blockquote>


Maybe later. I'm going to take a working daycation to SLO this afternoon.



But I'll tell you this - if I was in loss mitigation I would wait 3-5 years, and then start doing asset searches by the biggest loss first - and move down the chain till it was no longer cost effective. Then I'd move another 25%. I take a dogmatic approach to borrowers that they are sheep (because they are) and if the bank doesn't carry a credible threat of coming after you unless you file BK, then what's the downside to the borrower? Just do it again! And they will.



I haven't forgot about the coffee get together I'm hosting, I'm a little buried right now.</blockquote>


I disagree. Most of the banks will sell those rights. If you thought that banks caught abuse for kicking people out of their homes, imagine the publicity for seizing their assets years later. What asset(s) do you think will sound politically correct to go after?



Somebody who has a job like bail bondsman now, and expects threats and abuse, would be perfect for pursuing the deficiencies.</blockquote>


I should of clarified that as the most likely action. But certainly somebody will start going after these deadbeats sooner or later.</blockquote>
Just keep one thing in mind, California is a single action State...meaning you either take the property back or go after the borrower/guarantor. Even during the RTC days, most banks did not go after the guarantors on commercial real estate loans that went belly up and just took the property back. Also, it may be hard squeezing juice out of a stone.
 
[quote author="usctrojanman29" date=1250404185][quote author="no_vaseline" date=1250403144][quote author="MalibuRenter" date=1250394863][quote author="no_vaseline" date=1250122311][quote author="awgee" date=1250115264]Your collection issue is not tinfoil at all. I have considered it, but my guess is that the expense of sifting through all the owners to find any with assets on top of the expense of collecting may not be profitable.



Give us the tinfoil version. What have you got to lose? We already know something is loose up there.</blockquote>


Maybe later. I'm going to take a working daycation to SLO this afternoon.



But I'll tell you this - if I was in loss mitigation I would wait 3-5 years, and then start doing asset searches by the biggest loss first - and move down the chain till it was no longer cost effective. Then I'd move another 25%. I take a dogmatic approach to borrowers that they are sheep (because they are) and if the bank doesn't carry a credible threat of coming after you unless you file BK, then what's the downside to the borrower? Just do it again! And they will.



I haven't forgot about the coffee get together I'm hosting, I'm a little buried right now.</blockquote>


I disagree. Most of the banks will sell those rights. If you thought that banks caught abuse for kicking people out of their homes, imagine the publicity for seizing their assets years later. What asset(s) do you think will sound politically correct to go after?



Somebody who has a job like bail bondsman now, and expects threats and abuse, would be perfect for pursuing the deficiencies.</blockquote>


I should of clarified that as the most likely action. But certainly somebody will start going after these deadbeats sooner or later.</blockquote>
Just keep one thing in mind, California is a single action State...meaning you either take the property back or go after the borrower/guarantor. Even during the RTC days, most banks did not go after the guarantors on commercial real estate loans that went belly up and just took the property back. Also, it may be hard squeezing juice out of a stone.</blockquote>
And I would guess that it would very expensive, (time consuming), to figure out which stones have any juice.
 
[quote author="usctrojanman29" date=1250404185][





Just keep one thing in mind, California is a single action State...meaning you either take the property back or go after the borrower/guarantor. Even during the RTC days, most banks did not go after the guarantors on commercial real estate loans that went belly up and just took the property back. Also, it may be hard squeezing juice out of a stone.</blockquote>




This assumes that most of the deadbeats didn't refi or heloc. which removes them from the realm of "purchase money loans"





My impression from IR's reporting is that >90% of the deadbeats did one or both of those things.



In addition, all of the 2nds can go after the deadbeats if the 1sts are the ones who foreclose.
 
[quote author="IrvineRenter" date=1250321310]I find it interesting that we are debating about something that should be a verifiable fact. It isn't like we are debating religion; there either is a large number of REO coming or there isn't. The fact that there is not much accurate data coming from the banks strongly implies there are a huge number of homes coming soon.</blockquote>


I agree.



There should be a publicly available list, or an ability to make such a list, of the number of bank owned properties in an area, the number of those currently on the market, and the number of those not, and then compare that number to the number of houses currently in default but not yet foreclosed. There has to be a press release or newspaper article or trade paper article with some sort of data of this sort. The only person I've seen who's actually tried to break this down was Jim the Realtor, and his conclusion was that there were very few properties in San Deigo County that were bank owned but not on the market, about 10% of the number that were currently in default but not yet foreclosed upon. (And, of course, there are legitimate reasons that some bank owned properties are not for sale-they are in the process of being prepped for sale but not yet on the MLS, there are legal complications, the property is extremely poor shape or otherwise difficult to sell, etc.). Now, maybe Orange County is special and some way fundamentally different than San Deigo County. I doubt it, but I suppose it's possible. Maybe JtR is wrong. I dunno.



In any case, I have nothing new to add. Maybe I'm wrong. But, realistically, it doesn't matter even if I am. It doesn't look like there will ever be a flood of foreclosures, merely a trickle-for whatever reason.
 
[quote author="Geotpf" date=1250523439][quote author="IrvineRenter" date=1250321310]I find it interesting that we are debating about something that should be a verifiable fact. It isn't like we are debating religion; there either is a large number of REO coming or there isn't. The fact that there is not much accurate data coming from the banks strongly implies there are a huge number of homes coming soon.</blockquote>


I agree.

<strong>

There should be a publicly available list, or an ability to make such a list, of the number of bank owned properties in an area, the number of those currently on the market, and the number of those not, and then compare that number to the number of houses currently in default but not yet foreclosed. There has to be a press release or newspaper article or trade paper article with some sort of data of this sort. The only person I've seen who's actually tried to break this down was Jim the Realtor</strong>, and his conclusion was that there were very few properties in San Deigo County that were bank owned but not on the market, about 10% of the number that were currently in default but not yet foreclosed upon. (And, of course, there are legitimate reasons that some bank owned properties are not for sale-they are in the process of being prepped for sale but not yet on the MLS, there are legal complications, the property is extremely poor shape or otherwise difficult to sell, etc.). Now, maybe Orange County is special and some way fundamentally different than San Deigo County. I doubt it, but I suppose it's possible. Maybe JtR is wrong. I dunno.



In any case, I have nothing new to add. Maybe I'm wrong. But, realistically, it doesn't matter even if I am. It doesn't look like there will ever be a flood of foreclosures, merely a trickle-for whatever reason.</blockquote>


You can not be serious!? The data is publicly available... Are you too lazy to find it yourself? You can find the REO sales here on the forums, you can find the DQ REOs on the OCR, and the currently NTS data at the OCR. <a href="http://mortgage.freedomblogging.com/">Do you not read Matt Padilla's blog</a>? Because you can find a lot of what you are asking for there. It can be easily broken down. It is simple math. You even asked to take the REO sales and subtract them from the actual trustee sales of the banks... I did that for you. What more proof do you need? It is right in front your face... Why do you continue to ignore it?



Do you not read what I post? Or do you not understand how capital ratios work (IHO gets it, and he is one stubborn mofo)? Do you not understand why JPM/Chase is backlogged from hell because of their multiple mergers, and that they will eventually get it together and start to catch up? Do you not understand that 09 is just like 93, and that in 95 and 96 there was a steady flow of foreclosures, unlike 93 much like now?



Nevermind... I don't know why I bother. You want to see it your way, because it is in your best interest. You just bought a home, and you have a natural bias. Like I said, I am on top of the foreclosures for reasons other than posting them here on IHB, and maybe you missed <a href="http://www.irvinehousingblog.com/blog/comments/orangetip-el-camino-real-irvine/#comments">my comment about 8 Orangetip on the main blog</a> proving this.
 
Now Mish has this: <a href="http://globaleconomicanalysis.blogspot.com/2009/08/brace-for-wave-of-foreclosures-dam-is.html">Brace for a Wave of Foreclosures, the Dam is About to Break</a>.



http://i32.tinypic.com/2eftici.png

<blockquote>

Mark notes <em>"Foreclosure supply (yellow) has been artificially held back, which has allowed the low end of the real estate market to perform very well over the past several months. But the reservoir of foreclosures (blue + pink) is getting full and at some point the dam will crack and break."</em>



Six Reasons the Dam Will Break Sooner Rather Than Later



* The number of people underwater in their mortgages is high and rising fast.

* The reported nationwide unemployment figure is 9.4% with the real unemployment above 16% and rising.

* Wages are falling.

* The jobs market will suffer losses for another year.

* Notices of Default and Trustee Sales are high and rising.

* Social attitudes towards walking away and bankruptcy have changed.





In light of the above, those expecting a rebound in home prices and consumer sales, and/or a sharp V-shaped recovery are in Fantasyland.</blockquote>


Be sure to check out the <a href="http://mhanson.com/archives/96">report from Mark Hanson cited by Mish</a>. I dunno, I could be wrong, but damn... it sure seems like a lot of other people who have been right the last four years, like I have, are saying the same thing as me. Anyone want to start a pool?
 
[quote author="graphrix" date=1250527669] {snip}



Be sure to check out the <a href="http://mhanson.com/archives/96">report from Mark Hanson cited by Mish</a>. I dunno, I could be wrong, but damn... it sure seems like a lot of other people who have been right the last four years, like I have, are saying the same thing as me. Anyone want to start a pool?</blockquote>


Dude, you keep this up and I'm going to have to ask trrenter to loan my old avatar to you. ;)



For those who don't get the joke:



<img src="http://imgs.xkcd.com/comics/duty_calls.png" alt="" />
 
[quote author="graphrix" date=1250527669]Now Mish has this: <a href="http://globaleconomicanalysis.blogspot.com/2009/08/brace-for-wave-of-foreclosures-dam-is.html">Brace for a Wave of Foreclosures, the Dam is About to Break</a>.



http://i32.tinypic.com/2eftici.png

<blockquote>

Mark notes <em>"Foreclosure supply (yellow) has been artificially held back, which has allowed the low end of the real estate market to perform very well over the past several months. But the reservoir of foreclosures (blue + pink) is getting full and at some point the dam will crack and break."</em>



Six Reasons the Dam Will Break Sooner Rather Than Later



* The number of people underwater in their mortgages is high and rising fast.

* The reported nationwide unemployment figure is 9.4% with the real unemployment above 16% and rising.

* Wages are falling.

* The jobs market will suffer losses for another year.

* Notices of Default and Trustee Sales are high and rising.

* Social attitudes towards walking away and bankruptcy have changed.





In light of the above, those expecting a rebound in home prices and consumer sales, and/or a sharp V-shaped recovery are in Fantasyland.</blockquote>


Be sure to check out the <a href="http://mhanson.com/archives/96">report from Mark Hanson cited by Mish</a>. I dunno, I could be wrong, but damn... it sure seems like a lot of other people who have been right the last four years, like I have, are saying the same thing as me. Anyone want to start a pool?</blockquote>


Doesn't that chart prove my argument? If you add the current state of the blue and pink lines (people who have had NODs and NOTSs but have not actually had a foreclosure auction), you get about 100,000 houses. The number of REOs is only 15,000. If half of them are on the market (reasonable), you get about 8,000, which is the number you've mentioned. But 100,000 is much bigger than 8,000. I was saying the number of bank owned properties was about 10% of the number of people in default; 8,000 in 8% of 100,000, the same range.



Here's a chart from Padilla's blog you linked to:



<img src="http://mortgage.freedomblogging.com/files/2009/08/wave.gif" alt="" />



Again, see how small the green bar (bank owned properties) is compared to the total of the blue bar (people in default).
 
[quote author="no_vaseline" date=1250554911]That's the most scary bearish chart I've ever seen in like, ever!



Things can't stop crashing till that chart improves.</blockquote>


The only bar on that chart that actually matters is the green bar-bank owned properties-which is dropping. The number of people in default, or even foreclosure-in-process is irrelevant, if most of them get loan mods. Foreclosure-in-process is people who have a trustee sale date scheduled, but the auction hasn't actually happened yet. As has been reported many times, a lot of trustee sales are poseponed, sometimes multiple times, as a loan mod (or a short sale) is being processed.
 
[quote author="Geotpf" date=1250566308][quote author="no_vaseline" date=1250554911]That's the most scary bearish chart I've ever seen in like, ever!



Things can't stop crashing till that chart improves.</blockquote>


The only bar on that chart that actually matters is the green bar-bank owned properties-which is dropping. The number of people in default, or even foreclosure-in-process is irrelevant, if most of them get loan mods. Foreclosure-in-process is people who have a trustee sale date scheduled, but the auction hasn't actually happened yet. As has been reported many times, a lot of trustee sales are poseponed, sometimes multiple times, as a loan mod (or a short sale) is being processed.</blockquote>


The other stages do matter as well as they will also lead to a sale:



<a href="http://www.fieldcheckgroup.com/2009/05/26/5-25-ca-home-sales-more-buyers-and-sellers-needed-now/">Organic Sales Dead for Past 18-Months</a>



I would guess that what you are saying is true for the NOD stage (good % get loan mods) but I would guess that if they reach that second stage, they are more likely to be in the distressed sale category. Even though it doesn't become bank owned does not mean that a sale with a big drop did not happen.
 
[quote author="Geotpf" date=1250566308][quote author="no_vaseline" date=1250554911]That's the most scary bearish chart I've ever seen in like, ever!



Things can't stop crashing till that chart improves.</blockquote>


The only bar on that chart that actually matters is the green bar-bank owned properties-which is dropping. The number of people in default, or even foreclosure-in-process is irrelevant, if most of them get loan mods. Foreclosure-in-process is people who have a trustee sale date scheduled, but the auction hasn't actually happened yet. As has been reported many times, a lot of trustee sales are poseponed, sometimes multiple times, as a loan mod (or a short sale) is being processed.</blockquote>


In my experience, 0% to 5% get loan mods. More are going to short sale, and short sales contribute to market decrease as much as REO sales. What do you base your "most of them get loan mods" on?
 
[quote author="Geotpf" date=1250566308]

The only bar on that chart that actually matters is the green bar-bank owned properties-which is dropping. The number of people in default, or even foreclosure-in-process is irrelevant, if most of them get loan mods.</blockquote>
How will they get these loan mods?



Let's assume most of those "blue-bar" people can't afford their loans which is why they aren't paying it. So how will they qualify for a loan mod? More exotic financing? If those "blue-bar" people could qualify for a loan mod, don't you think it would have happened already?



I think you have it backwards... we should worry about the blue and orange bars because the disparity between them and the green bars is unsettling.
 
[quote author="awgee" date=1250568809][quote author="Geotpf" date=1250566308][quote author="no_vaseline" date=1250554911]That's the most scary bearish chart I've ever seen in like, ever!



Things can't stop crashing till that chart improves.</blockquote>


The only bar on that chart that actually matters is the green bar-bank owned properties-which is dropping. The number of people in default, or even foreclosure-in-process is irrelevant, if most of them get loan mods. Foreclosure-in-process is people who have a trustee sale date scheduled, but the auction hasn't actually happened yet. As has been reported many times, a lot of trustee sales are poseponed, sometimes multiple times, as a loan mod (or a short sale) is being processed.</blockquote>


In my experience, 0% to 5% get loan mods. More are going to short sale, and short sales contribute to market decrease as much as REO sales. What do you base your "most of them get loan mods" on?</blockquote>


I believe there will be a flood of sorts coming-but of loan mods, not REO listings. Most of the banks are still ramping up their loan mod programs. This could explain why they keep kicking the can down the road by delaying the trustee auctions-they know they are going to give out a lot of loan mods, but are still getting the programs in place, so they haven't actually given out many-yet.



Now, you are right that short sales are also increasing, and, as those programs are getting mature, the percentage that get completed increases. A similar pattern will show itself amoungst loan mods, it's just that those programs are much newer than the short sale programs, so getting a loan mod is about as impossible right now as getting a short sale was a year ago.



Does anybody else have a decent explanation why the banks are starting default/foreclosure proceeding at a record pace, yet finishing them at a smaller and smaller level?
 
[quote author="Geotpf" date=1250570142]

Does anybody else have a decent explanation why the banks are starting default/foreclosure proceeding at a record pace, yet finishing them at a smaller and smaller level?</blockquote>


Same reason why a large percentage of would-be organic sellers are refusing to sell. They think that prices are going to go up and if they hold out they will be able to sell for more in the future than they can sell for now.
 
[quote author="Geotpf" date=1250570142][quote author="awgee" date=1250568809][quote author="Geotpf" date=1250566308][quote author="no_vaseline" date=1250554911]That's the most scary bearish chart I've ever seen in like, ever!



Things can't stop crashing till that chart improves.</blockquote>


The only bar on that chart that actually matters is the green bar-bank owned properties-which is dropping. The number of people in default, or even foreclosure-in-process is irrelevant, if most of them get loan mods. Foreclosure-in-process is people who have a trustee sale date scheduled, but the auction hasn't actually happened yet. As has been reported many times, a lot of trustee sales are poseponed, sometimes multiple times, as a loan mod (or a short sale) is being processed.</blockquote>


In my experience, 0% to 5% get loan mods. More are going to short sale, and short sales contribute to market decrease as much as REO sales. What do you base your "most of them get loan mods" on?</blockquote>


I believe there will be a flood of sorts coming-but of loan mods, not REO listings. Most of the banks are still ramping up their loan mod programs. This could explain why they keep kicking the can down the road by delaying the trustee auctions-they know they are going to give out a lot of loan mods, but are still getting the programs in place, so they haven't actually given out many-yet.



Now, you are right that short sales are also increasing, and, as those programs are getting mature, the percentage that get completed increases. A similar pattern will show itself amoungst loan mods, it's just that those programs are much newer than the short sale programs, so getting a loan mod is about as impossible right now as getting a short sale was a year ago.



Does anybody else have a decent explanation why the banks are starting default/foreclosure proceeding at a record pace, yet finishing them at a smaller and smaller level?</blockquote>


Yes, you believe.

Where do you get your information that banks are "ramping up" their loan mod programs?

Where do you get your information that they are going to give out a lot of loan mods?

Where do you get your information that they are still getting the programs in place?

And where do you get your information that loan mod programs are newer than short sale programs?



We have given you explanations, but you seem to ignore any actual facts and prefer your belief no matter how based in fantasy.
 
[quote author="awgee" date=1250578120]Yes, you believe.

Where do you get your information that banks are "ramping up" their loan mod programs?

Where do you get your information that they are going to give out a lot of loan mods?

Where do you get your information that they are still getting the programs in place?

And where do you get your information that loan mod programs are newer than short sale programs?



We have given you explanations, but you seem to ignore any actual facts and prefer your belief no matter how based in fantasy.</blockquote>


Blah... you don't need facts and statistics... if you believe strongly enough, then it will happen. Just ask Janet.
 
Geotpf - I may be able to help you out. What zip code do you live in?



There are 65 REOs, bank owned properties, not NTSes, but actual bank owned properties in the zip code 92501 according to Foreclosure Radar. Cross referencing the fr list with a list of homes for sale show that 9 of the 65 REOs are listed for sale.



If you tell me what zip you live in, I may be able to do the same for your zip if the list is not too large.







92501 is a random zip I chose in Riverside. Riverside is where Geotpf bought his house.
 
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