Adding fuel to the fire, the Amherst Securities Group released a report estimating that there’s a shadow inventory of 7 million homes that are either in foreclosure or destined to default. Amherst analyzed how often borrowers who miss one, two, or three payments on their mortgage are likely to recover, or eventually lose possession of their home. More often than not, borrowers who miss a payment on their home wind up losing it.
The “cure rate” for borrowers who are 90 or more days delinquent, for instance, is less than 1 percent. For borrowers who have missed two payments, it’s only 4.4 percent. And only 26.5 percent of borrowers who miss a single monthly payment eventually recover. The 7 million homes likely to reach foreclosure based on this analysis represent an additional 16 months of existing-home supply at current sales rates.
San Diego Numbers
And the number of defaults isn’t shrinking. Of the borrowers in San Diego County holding subprime loans, 38.31 percent were at least 60 days late on their mortgage payments as of the end of June, about the same as the delinquency level in March, according to First American CoreLogic.
But the category above subprime known as Alt-A — the higher-risk loans for good-credit borrowers — saw defaults increase between March and June. In that category, 27.18 percent of the borrowers were at least 60 days delinquent by the end of June, up from 25.41 percent in March.
And more prime borrowers are at least 60 days behind — 7.04 percent in June compared to 5.99 percent in March
So there is a logical way to get future inventory for SD.
“Cure rate” * # delinquent= Future inventory
Shadow is what does not show up in real inventory.
