[quote=livinincali]I don’t think the banks that made loans back in 2005 and 2006 have much to foreclose on anymore. The only private loan I can think of during the bubble years that might not have defaulted yet is the 10 year Option ARM that Wachovia was offering (now it’s Wells). Most of the private sector bubble year loans were 5-7 option ARMs.
Most of the sales in the past 3-4 years are all cash investors (30-40%), FHA/VA (30-40)%, and then traditional 20% down loans (maybe 20ish%). Most of the recent defaults are FHA loans so if your going to see new foreclosure inventory that’s where it’s going to come from. I found this link which indicates 7K FHA loans in San Diego County that have been foreclosed already or are in some stage of foreclosure. Looks like around 300 so far in April.
Nice link, livinincali, although some of these REO’s may have already been sold (I haven’t checked any MLS aggregators to see). Not sure if they’re all FHA loans, however, as “FHA.com” is not a government agency website.
I perused all five zip codes in Chula Vista on the site and found 44 REOs (SFRs AND condos) with 25 of them currently listed from $91,900 to $704,900.
I also perused same in all three zip codes in El Cajon and found 45 REO’s with 36 currently listed from $67,900 to $599,900.
The large amount of NODs is predictable, but in recent years usually did not result in foreclosure.
What is shocking to me is the HUGE amount of bankruptcy filings (doesn’t say whether Chapter 7 or 13s) in both cities. The vast majority have to be personal (individual and joint) BK filings, because they emanate from SFRs and condos, most of them no doubt from the same addresses (we can’t see exact address, just street) which are currently in default. A lot of home”owners” behind in their payments use a BK filing as a delaying tactic in foreclosure, but in CA, this seldom buys them more than 2 months more occupancy and eff’s up their credit even more.
A spot check in cities all over the county will reveal whether this (BK) phenomenon is widespread or just confined to some cites or communities within the City or County of SD.
If these 44-45 foreclosures in each city I ran a list on are truly FHA (HUD) foreclosures, it is a sad testament to a how the current FHA “guidelines” are way too lax. If this is the case, then all these properties were likely purchased in the last four years. In Chula Vista, the list of 44 REOs reveals that 5 of them (SFRs) are clearly executive-type homes situated in move-up and “luxury” areas.
The FHA has absolutely no business whatsoever “guaranteeing” a mortgage for this type of purchase, IMO. That’s not what the FHA was put in place for. The FHA was formed to serve moderate income purchasers shopping for a roof over their heads, the vast majority being FTB’s buying starter homes and/or in underserved areas.
The current FHA loan “ceiling” of $697,500 for a one-family SFR in SD County is turning out to be a bad joke … as predicted by a few of us here over the years. The joke is on ALL taxpayers, all over the country.
