SD Foreclosures KUSI News Lead Story

[admin]

Just saw the KUSI 10PM news and the increased foreclosure notices in SD county were a lead story. I think they said notices were up 98% June year over year. The most significant aspect of this story, to me, was that negative real estate news is finally getting prime air time in the mainstream media.

Of course they always have to interview some so called “real estate economist” who is just a paid representative of the industry. This guy doesn’t think the news is alarming and encourages people to continue buying real estate. The story claims that historically very few notices actually end up in foreclusure. One reason is that the owner often sells to avoid the foreclosure. However, in today’s environment, good luck selling your property without a loss.

[an]

I agree with you, the most important thing about these news segments is that it’s finally making prime time news. To me, it’s one of the key thing that will change public psychology. Psychology was what pushed it to this level and psychology will be what take it down to where it should be.

[ocrenter]

in 2005 only 11% of all notice of defaults went to trustee’s sales, there’s been a gradual increase here in 2006 from 10.6% in January 2006 to roughly 18% in April/May 2006. This means as of May 2006, the percentage change in the total number of trustee’s sales is a staggering 232% compared to the same time period in 2005.

Link

[Bugs]

Here’s a quote from the article in today’s Union-Tribune:

“This is an important trend to watch, but doesn’t strike us as ominous,” DataQuick President Marshall Prentice said in a news release. “The increase was a statistical certainty, because the number of defaults had fallen to such extreme lows. We would have to see defaults roughly double from today’s level before they would begin to impact home values much.”

As the number of NODs increases, so will the percentage of foreclosures rise among those NODs. Once again, it’s not the raw numbers that matter so much as it is the trend. The trend was going in one direction and now it has reversed course.

[zk]

“We would have to see defaults roughly double from today’s level before they would begin to impact home values much.”

Interesting. I hope somebody shows him his own quote when defaults double from today’s level and asks him about it then. I’d like to hear his comments then.

[Steve Beebo]

I’m sure that NODs will at least double in the next 12 months, but keep in mind that the total # of NODs is about 1/4 of what it was in the mid 1990’s – so they would have to quadruple from todays’ level to match. Will they quadruple from now to 2008? I would guess probably so –

[Anonymous]

I wouldn’t be surprised if NODs double or even quadruple in the next 12 months. I see this thing unravelling sooner than many think. More importantly, the percentage of NODs that are actually foreclosed will most certainly be higher than the historical average of 7% that they mention in the UT article. The climate is much different now than 1996 with so many mortgages of the ARM variety. The ARM resets should begin in to have a major impact in the next year. Addidionally, MLS inventory is already higher than in 1996 and growing making it very difficult to unload your property.

[no_such_reality]

NODs nearing historical average

hmm, statewide, NODs are are 21K per quarter. Historical average is 32K/quarter. Peak in ’96 was 59K.

We went from 12K to 20K in one year as the market turned. The peak of 59K was at the end of the last bust cycle after 6 years of falling prices. If I was in Vegas, I’d wager we’ll beat the 59K Q1 of 2007.

LA Times Article on quarterly defaults Thurday, link

[Bugs]

It is the rate of change that is so alarming to me.

[speaker]

Let us also not forget that this time these defaults are more than likely going out to homeowners that have no equity in their home. They have no equity either because they put no money down or they re-fied.

“End of line.”

[Anonymous]

Exactly. That’s why I am sure the percentage of notices that actually go to foreclosure will be much higher than 7%.

[ybc]

Two interesting measures will be quarterly default notice as % of inventory and as % of quarterly sales for exsiting home. I assume that unless the lender and the default homeowner work out an alternate payment solution, otherwise the solution is always the sale of the house – either by the owner or by the bank. So I see default notices represent a pipeline of potential “urgent” sales coming on the market, then the above two percentages can be a leading indicator. I wouldn’t be surprised if these numbers have positive correlations to subsequent price changes. Anyone knows where to find the data needed to make the calculation?

Also, do you know if these default notices are “One-time” only, or do home owners in default get them in a couple of months in a row? How does the process work?

[rankandfile]

Are there any good resources to check on Notices of Default?

[powayseller]

foreclosure.com

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