Add Strategic Defaults to the List of Factors Weighing on the Housing Market
Research using a massive sample of 24 million individual credit files has found that homeowners with high scores when they apply for a loan are 50% more likely to “strategically default” — abruptly and intentionally pull the plug and abandon the mortgage — compared with lower-scoring borrowers.
Among researchers’ findings are these eye-openers:
* The number of strategic defaults is far beyond most industry estimates — 588,000 nationwide during 2008, more than double the total in 2007. They represented 18% of all serious delinquencies that extended for more than 60 days in last year’s fourth quarter.
* Strategic defaulters often go straight from perfect payment histories to no mortgage payments at all. This is in stark contrast with most financially distressed borrowers, who try to keep paying on their mortgage even after they’ve fallen behind on other accounts.
* Strategic defaults are heavily concentrated in negative-equity markets where home values zoomed during the boom and have cratered since 2006. In California last year, the number of strategic defaults was 68 times higher than it was in 2005. In Florida it was 46 times higher. In most other parts of the country, defaults were about nine times higher in 2008 than in 2005.
Definitely recommended reading.
The East Bay REO Lists Return
You asked for it & we’re bringing it back. Starting today, we’re going to begin publishing our weekly East Bay REO lists again. These lists are taken directly from the MLS and compiled into an Excel spreadsheet for you to download and sort through.
The catch
To get the freshest lists of East Bay REO’s, you’ll need to be on our private MEBA mailing list. We’ll still publish the list from the previous week here on MEBA, BUT if you want the freshest list, you should join our mailing list. We’ll never spam you or send you emails full of worthless information and you’ll always be privy to the latest & greatest info from us. Plus you can always unsubscribe, no questions asked.
In the meantime, here’s the East Bay REO list from 09.09.09
Bank of America and Wells Fargo Say Loan Mod Efforts Improving, but Frank Says It’s Not Good Enough
The latest loan mod report card is in and it looks that B of A and Wells are heading up the rear of the class.
From Carolyn Said’s article in SFGate.
Also worth noting is that:
Rep. Barney Frank, D-Mass., chairman of the House Financial Service Committee, said he was disappointed with the program’s slow pace. According to news reports, he threatened to revive legislation that would allow bankruptcy judges to reduce principal balances on home loans, an idea fiercely opposed by the industry.
Oakland Foreclosure Prevention Workshops
If you’re behind in payments, or think you might be headed in that direction, the NID Housing Counseling Agency is putting on a series of foreclosure prevention workshops in Oakland.
The workshops are being held every Wednesday 5:00pm – 7:00pm and every 1st and 3rd Saturday from 10:00am – 3:00pm at 3560 Grand Avenue in Oakland.
Here’s a link to their flyer for more info [pdf]
[h/t Empire Realty Blog]
Adapting MEBA to Address the Groundswell of Potential Foreclosures
The chart, which has data up to June 2009, shows that while banks are holding fewer foreclosures on their books REOs, the ratio of mortgages with some type of foreclosure filing and the ratio of mortgages 90 days late have been steadily increasing.
via Housing recovery hinges on foreclosure peak – Mortgage Insider – OCRegister.com.
Since we’re fielding more and more inquiries from folks that either already behind in the mortgages, or are about fall behind, we’re going to be adding a ‘foreclosure relief‘ section to MyEastBayAgent where we’ll be providing resources to those who find themselves in that situation.
Glen’s East Bay Housing Market Statistics for September ‘09
- In some areas (San Pablo, Richmond, etc), the average sales price is exceeding the average list price.
- Inventory is the lowest I’ve seen since I started tracking inventory in July, 2005.
- Multiple offers are again the norm for well priced properties in desirable areas.
- REOs are becoming less of a factor, accounting for only 15% of the active listings, while accounting for 47% of the sales in the past 4 months.
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