4 Years of Shadow Inventory; Where Are the REO's?; Going Direct to the Listing Agent
/via Housing Wire: Shadow Inventory Could Take Four Years to Clear: Morgan Stanley
The shadow inventory of homes with delinquent mortgages yet to move through the foreclosure process would take 47 months to clear at the current sales rate in the market, according to a newly-published housing finance report from Morgan Stanley
/via Allan Glass: May California Foreclosure Report – Where are the REO’s
In his stat filled post that’s defintiely worth checking out, Glass concludes that,
If you’re an investor and haven’t educated yourself on buying at trustee sales or are waiting for the REO’s to fall into you lap, you’ll likely keep waiting. If you’re a Realtor® still trying to figure out how to become an REO broker, you’re missing the boat.
/via bubbleinfo.com: More on RE Revolution
There’s some great info in this post from Jim Klinge, AKA JimtheRealtor(<-I highly recommended his YouTube channel), where he takes on a tough topic and shares his 'Thoughts About Going Direct to the Listing Agent‘ & nails it IMO.
Foreclosed homeowners could still owe; Existing-Home Sales Improve; Loan Mods Often Damage Credit Scores
In hopes of trying to balance my output with my input, I’m going to start summarizing what’s in some of my open tabs in my browser and sharing them with you. That way we can all be smarter 
/via Sacramento Business Journal: Foreclosed homeowners could owe ‘tens thousands of dollars’ to lenders.
You may not know it, but if you’ve refinanced from your original purchase loan and lose your home to foreclosure, you may be on the hook for the difference between the amount owed & the property’s value.
For example, if a homeowner has $200,000 outsanding for a refinanced mortgage and the lender forecloses on the house with the property valued at $150,000, the former homeowner could be liable for the remaining $50,000.
Senate Bill 1178 is trying to close that loophole.
/via REALTOR.org: Existing-Home Sales Continue to Improve in April
Lawrence Yun, NAR chief economist, said the gain was widely anticipated. “The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market,” he said. “For people who were on the sidelines, there’s been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low.”
/via SF Gate: Loan modifications often damage credit scores
Lots of good info in this article from Carolyn Said, but if you’re looking into a possible loan modification, there’s a list of tips in the article that you should be aware of…
- If you’re requesting a loan modification, here are some steps you can take to try to protect your credit:
- Try to stay current on payments while requesting a trial modification.
- Try to get a loan mod under the federal Home Affordable Modification Plan (HAMP), which has less impact on credit.
- Request that the lender not report your trial loan payments as partial payments.
- Make your trial payments on time.
- Homeowners who believe that servicers are not treating them fairly or complying with program guidelines can contact the HOPE Hotline at (888) 995-4673.
Keller Williams Berkeley's RED Day Project at the Chaparral House
Last Thursday the MEBA team, along with other members of our Keller Williams Berkeley office spent the day outside in the sun working at the Chaparral House in Berkeley. The outing was part of the second annual RED (Renew, Energize and Donate) Day, a Keller Williams service initiative dedicated to improving our local communities and it ended up being a lot of fun.
Here’s a video that I put together from our outing. If you look closely, you can see that it’s indeed true that you can take a REALTOR out of the office for a day, but that doesn’t mean that you can’t pry the phone from their head.
Foreclosure Activity Goes Down 9% in April *
while
“bank repossessions, or REOs, hit a record monthly high for the report even while default notices dropped substantially on a monthly and annual basis. We expect a similar pattern to continue for most of this year, with the overall numbers staying at a high level and ripples of activity hitting the various stages of the foreclosure process as lenders systematically work through the backlog of distressed properties.”
From RealtyTrac’s Latest Report
* Update: Just to clarify, I found it odd that the headline of the report was that foreclosure activity was down, while REOs are setting a record and tried to convey that semi-unsuccessfully. I apologize if this post comes across as misleading.
Strategic Defaults Hit the Mainstream Conversation
Last night 60 Minutes aired a report on Strategic Defaults and it definitely stirred up the conversation regarding the topic. Since home values are off 40-50% from their peak in parts of the East Bay, this is something that we’ve seen bubbling under the surface in the past few months and now it seems as if it’s about to hit the mainstream conversation.
In case you’re not familiar with the term…
A strategic default is the decision by a borrower to stop making payments (i.e. default) on a debt despite having the financial ability to make the payments.
This is particularly associated with residential and commercial mortgages, in which case it usually occurs after a substantial drop in the house’s price such that the debt owed is (considerably) greater than the value of the property — the property negative equity or “underwater” — and is expected to remain so for the foreseeable future, such as following the bursting of a real estate bubble. Such borrowers are called “walkaways.”
In case you missed it, here’s the segment:
Glen’s East Bay Housing Numbers (through April 2010)
April is done, the Federal Home Buying Tax Credit has finally expired and the latest edition of Glen’s East Bay Housing Numbers are in.
While there are no drastic changes to report, housing inventories in the East Bay have continued to climb and are up 54% since the beginning of the year. Even with that rise, we’re sitting at 2.6 months supply of homes for sale in the Contra Costa & Alameda counties. This is still well below normal inventory levels in the area and translates into fewer opportunities for buyers.
A flurry of activity prior to the expiring tax credit caused Pending sales to rise even faster, outpacing new listings coming onto the market by almost 2 to 1 over the last 30 days (592 vs 318). It will be interesting to see the effects of the expiring federal tax credit next month in the May report.
The Pending/Active ratio ticked upwards slightly from 1.28 last month, to 1.31 this month, which essentially means that we’re still in a moderate sellers market in the East Bay.
As for distressed sales, the percentage of REOs continue to drop, comprising only 15% of the active listings , down from 17% at the beginning of the year & 35% of the sales over the last 4 months, down from 37% at the beginning of the year.
The percentage of active & pending Short sale transactions also continues to drop. They currently comprise 28% of the active listings, down from 31% at the beginning of the year & 53% of the pendings, down from 59% at the beginning of the year. Closed Short sale transactions as a percentage of the total has increased from 17% at the beginning of the year to the current 20%
If you’re interested in talking more in depth about the East Bay housing market, feel free to call me directly 510-333-4460.
-Glen
Click here to download a copy of my East Bay housing numbers through April 2010
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