BOA to increase foreclosure rate from 7500 per mo. to 45000 per mo.

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Submitted by Arraya on March 30, 2010 - 2:01pm

http://www.irvinehousingblog.com/blog/co...

A 600% increase in foreclosures
I attended a local Building Industry Association conference on Friday 26 March 2010. The west coast manager of real estate owned, Senior Vice President Ken Gaitan, stated that Bank of America, which currently forecloses on 7,500 homes a month nationally, will increase that number to 45,000 homes per month by December of 2010.

After his surprising statement, two questioners from the audience asked questions to verify the numbers.

Bank of America is projecting a 600% increase in its already large number of monthly foreclosures.

Submitted by sdrealtor on March 30, 2010 - 3:10pm.

Lets get that party started! With inventory as constrained as it is that could almost double the number of REO listings in our market. We need them and this market would swallow them all whole.

Submitted by AN on March 30, 2010 - 3:16pm.

Cool, so this time next year, we should finally see the tsunami.

Submitted by jpinpb on March 30, 2010 - 3:24pm.

Hmmm. Maybe I shouldn't sign any escrow papers just yet.

Submitted by Nor-LA-SD-guy on March 30, 2010 - 3:30pm.

hmmm Tsunami, you will excuse me if I don't hold my breath,

Though I think I would be nervous if I was one of those living rent free, spinning the chamber at the beginning of every month wondering when the notice is going to come.

Submitted by briansd1 on March 30, 2010 - 3:55pm.

AN wrote:
Cool, so this time next year, we should finally see the tsunami.

Tsunami was hyperbole. I believe the term became part of the vernacular since the tsunami in Asia.

We all know that's not how real estate works. There is no singular event that will wipe out values in on sweep.

Economic decay happens slowly and that's what is happening in real estate. Inflation is also masking the price drops.

But if you sum up all the economic ripples that affected real estate since 2006, and the ripples that have yet to reach us, they would add up to tsunami if they all hit at once.

That's why I maintain that patience is key.

Submitted by SD Realtor on March 30, 2010 - 3:52pm.

I will believe it when I see it but we will be at the trustee sales with cash in hand.

Submitted by sdrealtor on March 30, 2010 - 3:57pm.

Even if it happens all it will do is help fill unmet demand. BOA has what 10% to 20% of the market. If the increase 6 times that would only double what is on the market. This market could easily handle 3 to 4 times the REO inventory we have seen if not more.

Submitted by briansd1 on March 30, 2010 - 3:57pm.

SD Realtor wrote:
I will believe it when I see it but we will be at the trustee sales with cash in hand.

In the mean time, there's no reason to not profit personally when you see the opportunity.

I've partnered with my bro and some friends who live in Florida, one who's a building contractor, to flip houses.

Submitted by AN on March 30, 2010 - 4:08pm.

briansd1 wrote:

Tsunami was hyperbole. I believe the term became part of the vernacular since the tsunami in Asia.

We all know that's not how real estate works. There is no singular event that will wipe out values in on sweep.

Economic decay happens slowly and that's what is happening in real estate. Inflation is also masking the price drops.

But if you sum up all the economic ripples that affected real estate since 2006, and the ripples that have yet to reach us, they would add up to tsunami if they all hit at once.

That's why I maintain that patience is key.


Maybe you should read back at all the tsunami warning over the last 2 years. Some say we should see one this year due to the option ARM loans. Take that tsunami w/ this BofA news and I'm expecting to see a wipe out of both comes true.

Sorry, but inflation is a good thing if you're locked into today's loan at today's $ value and today's interest. FYI, price drop of 50%+ in some are is hardly what I'd call a slow decay.

Submitted by briansd1 on March 30, 2010 - 4:14pm.

AN wrote:
FYI, price drop of 50%+ in some are is hardly what I'd call a slow decay.

Does that qualify as tsunami then?

The 50% drop is significant but it didn't happen in one day caused by a singular event as a tsunami would wipe out everything in one sweep. That's why I'm saying that Tsunami is just a figure of speech.

The metaphor doesn't quite work. But it's illustrative nonetheless if you take a long view of real estate.

Submitted by AN on March 30, 2010 - 4:19pm.

briansd1 wrote:

Does that qualify as tsunami then?

The 50% drop is significant but it didn't happen in one day caused by a singular event as a tsunami would wipe out everything in one sweep. That's why I'm saying that Tsunami is just a figure of speech.

The metaphor doesn't quite work. But it's illustrative nonetheless if you take a long view of real estate.


Yes, in those areas, the tsunami hit and it hit hard. Many say the others will see similar tsunami soon. I'm still waiting. If you want to buy in those hard hit areas, you're lucky that the tsunami got there. But this next tsunami was supposed to hit everywhere else and continue to pound the already hard hit areas.

Submitted by Arraya on March 30, 2010 - 5:12pm.

Actually, the tsunami talk started about a year ago because that's when the shadow bottleneck started and has been growing ever since.

Putting your hands over your ears and yelling "la la la it's not real"... does not make it go away. It is still unrecognized downward pressure. Up to about 10 million mortgages nation wide. Now, I know SDs deep pockets can withstand what ever comes it's way. But some other areas may not fare so well.

Submitted by briansd1 on March 30, 2010 - 5:17pm.

I think we need to come up with a better word than tsunami. A tsunami hits the coast the hardest then it weakens as the water moves inland.

The metaphor doesn't work.

Submitted by Nor-LA-SD-guy on March 30, 2010 - 5:26pm.

Avalanche ??

Anyway OK I will bite,

So let say this thing gets rolling, so What’s to stop the Local State Gov from suspending foreclosures???

I mean it's not like it would be something they haven’t done before

Submitted by AN on March 30, 2010 - 5:25pm.

I started searching for a house 2+ years ago and I remember hearing about tsunami back then. I was hoping it would hit so I can buy at a much more discounted price.

No one here is putting their hands over their ears. But yelling louder doesn't make the tsunami (or what ever Brian wants to call it) come. I'm still waiting for it to hit.

Submitted by AN on March 30, 2010 - 5:32pm.

briansd1 wrote:
I think we need to come up with a better word than tsunami. A tsunami hits the coast the hardest then it weakens as the water moves inland.

The metaphor doesn't work.


Sorry Brian, but the burden is on your to try and come up w/ a new metaphor and hope it'll stick. I don't know who came up w/ the tsunami metaphor but it stuck.

Submitted by sd_matt on March 30, 2010 - 10:37pm.

How bout a hose in a swimming pool?

Submitted by cabal on March 31, 2010 - 12:13am.

Proceeding with this action means a plan is in place and approved by TPTB. BofA won’t be allowed to flood the market with reos and pancake housing prices except in those areas where historical norms have been reached. More than likely the inventory will be transferred to holding entities and managed as rentals, introducing a few for sale when appropriate. No tsunami is coming except in areas that no one cares about like Detroit.

Submitted by Arraya on March 31, 2010 - 6:02am.

cabal wrote:
Proceeding with this action means a plan is in place and approved by TPTB. BofA won’t be allowed to flood the market with reos and pancake housing prices except in those areas where historical norms have been reached. More than likely the inventory will be transferred to holding entities and managed as rentals, introducing a few for sale when appropriate. No tsunami is coming except in areas that no one cares about like Detroit.

Translation: Don't worry the government controlled housing market will work great.

Submitted by scaredyclassic on March 31, 2010 - 6:19am.

empty houses are more offensive economically than houses with people int hem getting free rent.

why is the empty short sale house we offered so much money on in early december till vacant?

Submitted by no_such_reality on May 4, 2010 - 6:17pm.

Is this debunked yet?

Submitted by AN on May 4, 2010 - 6:35pm.

no_such_reality wrote:
Is this debunked yet?

Not yet. It's only May. We can call it debunked in 8 months if it doesn't materialized.

Submitted by Effective Demand on May 4, 2010 - 7:40pm.

no_such_reality wrote:
Is this debunked yet?

Some data points to follow:
http://effectivedemand.blogspot.com/2010...

http://www.bubbleinfo.com/2010/05/04/tip...

IMHO, it does seem to have some validity, I'm wondering if we will see another step up in volume or if that jump in April is the plateau.

Submitted by sdrealtor on May 4, 2010 - 8:01pm.

I dont know about foreclosures but BOA finally seems to be starting to get a handle on processing short sales. They have implemented systems that are dramatically reducing turn times. I think they have finally developed the capability to do this over a long time and effort rather than a decision at at any tipping point to do so.

Submitted by outtamojo on May 5, 2010 - 1:10pm.

JTR's blog has a blurb on this "Tip-Toe to the Exits?"
http://www.bubbleinfo.com/2010/05/04/tip...

"Hat tip to JimG for leaving this comment yesterday:

Really can’t say if this is a one day event or will be something more but LPS, who is a outsourcer of REOs for many banks just dropped 609 REOs in California today, all from Bank of America. Guess that means BAC has been sitting on foreclosed properties and who knows how many they have in their little piggy bank. About 40 of the 609 are in San Diego County today. Normal California daily assets for LPS is around 20-30 as a point of reference with 2 to 3 in San Diego County..."

Submitted by AN on May 5, 2010 - 1:18pm.

40/day = 14600/year. That would definitely make a big dent.

Submitted by sdrealtor on May 5, 2010 - 1:34pm.

In the comment section of that post it said it was a one day event and hasnt been repeated.

FWIW, we have been getting written deficiency releases from BOA for several months. They Equator system that they implemented also seems to be cutting processing times for short sales with them dramatically. It looks like a case of not having the capacity and developing it over time.

Submitted by no_such_reality on May 5, 2010 - 8:34pm.

What does that improved timeline look like?

Submitted by sdrealtor on May 5, 2010 - 8:55pm.

Approvals in 60 to 90 days and I have heard of others getting them faster. They used to be 180 days minimum

Submitted by no_such_reality on May 7, 2010 - 7:45pm.

I heard they're restarting the approval process from scratch if the prior approved buyer on the short sale bails out. Is that what you're seeing?

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