Tag Archives: shadow inventory

REO sales may not peak until 2013


Foreclosure Sign, Mortgage Crisis

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REO sales may not peak until 2013.

This is a frightening article from HousingWire, not recommended for all audiences…

They run some estimated numbers of potential foreclosures throughout 2012 and 2013.  Their estimates are staggering to say the least.  This year, nationally speaking, the banks liquidated approx 525,000 properties.  In 2013 they are expecting as many as 1.48 million foreclosures and liquidating roughly 595,000 properties.

It is difficult to say what impact our region will feel from this yet as these are only estimates and these estimates have been all over the map…

 

In 2013, REO sales could reach 1.48 million properties, according to estimates from Bank of America Merrill Lynch analysts, a 10% increase from projected amount in 2012.

…Most of the projected increase will come as the government begins to unload its backlog. The government-sponsored enterprises and HUD, analysts estimate, will liquidate roughly 595,000 properties in 2013 alone.

We have moved well beyond the early days of the subprime mess.  We are now dealing with traditional mortgages with owners in trouble because of job loss and underemployment.

The only way out of this mess is to turn the economy around.

* on a related subject.  If you find yourself as one of the many households facing foreclosure from job loss or whatever reason – there are some resources out there for you.

A Foreclosure Clinic will be held at 6:30 p.m. Thursday, Oct. 27 at the Savage Library.

Read more: Savage Pacer – Foreclosure Employment is No 1 factor

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RealtyTrac: Foreclosures on Slow Burn, August 2011


RealtyTrac released this news this evening.  There was no mention of Minnesota in the report, however we are still running middle of the pack in their foreclosure heat map.

The report talks about how foreclosure activity has been slowly declining but they are expecting it to pick back up as banks will want to move the next wave through the system.

“U.S. foreclosure activity has been mired down  since October of last year, when the robo-signing controversy sparked a flurry  of investigations into lender foreclosure procedures and paperwork,” said James  Saccacio, chief executive officer of RealtyTrac. “While foreclosure activity in  September and the third quarter continued to register well below levels from a  year ago, there is evidence that this temporary downward trend is about to  change direction, with foreclosure activity slowly beginning to ramp back up.

“Third quarter foreclosure activity increased  marginally from the previous quarter, breaking a trend of three consecutive  quarterly decreases that started in the fourth quarter of 2010,” Saccacio  continued. “This marginal increase in overall foreclosure activity was fueled  by a 14 percent jump in new default notices, indicating that lenders are  cautiously throwing more wood into the foreclosure fireplace after spending months  trying to clear the chimney of sloppily filed foreclosures.”

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RealtyTrac Foreclosure Heat Index Map

RealtyTrac Foreclosure Heat Index Map Minnesota

RealtyTrac Foreclosure Activity Counts

Hennepin County has 973 foreclosures according to RealtyTrac, they break that down further with the housing units to foreclosure ratio of 1 in every 520 housing units.  (quick math in my head 1 / 520 = .19% ?  is that right?  )I really wish we had a historical perspective on the foreclosure rate as a benchmark…

Still trying get a grasp on this phantom “Shadow Inventory” and what kind of numbers we are looking at for the Twin Cities…

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CoreLogic’s report shows decline in Shadow Inventory


This is great news.  CoreLogic tracks the “Shadow Inventory” levels.  The Shadow Inventory are the potential homes to hit the market due to foreclosures and is tracked by delinquency rates, so it is a moving target and difficult to track accurately.

These are of course National figures, and we are still unsure how much of this will impact our market.  I have been speculating that we have been purging a lot of our shadow inventory through Short Sales in our marketplace because of our Judicial Foreclosure process in Minnesota.  I am still trying to come up with reliable shadow inventory figures for our local marketplace.

The nation’s residential shadow inventory as of July declined slightly to 1.6 million units, representing a supply of five months, according to a report from CoreLogic.

That’s down from 1.9 million units, a supply of six months, from a year ago, and follows a decline from April when shadow inventory stood at 1.7 million units.

“The steady improvement in the shadow inventory is a positive development for the housing market,” said Mark Fleming, chief economist for CoreLogic. “However, continued price declines, high levels of negative equity and a sluggish labor market will keep the shadow supply elevated for an extended period of time.”

Read Full Article from CoreLogic

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Minnesota’s Shadow Inventory, Foreclosures to hit the market


I have stated several times on my blog that I believe that Minnesota has cleared a lot of the Shadow Inventory by Short Sales.  Still trying to quantify that but finding it difficult to get good data.  Most of the data on the Shadow Inventory is speculative in nature,  by definition Shadow Inventory are homes that may be foreclosed upon.  So that can be speculative by Loan to Value ratios, 30 days late, 60 days or Default. Even at Default stage, a homeowner can still redeem.    Also, most of the data is National and not broken down by State, Region or City.

RealtyTrac has some interesting data that may be good news to our local market.

This shows Foreclosure Activity across the nation.  I would imagine you could lay the unemployment rates across this map and they would line pretty close to foreclosure activity…

Comparing Minnesota with Wisconsin; I picked Wisconsin because  the Packer fans need to be humbled…  We are also familiar with Wisconsin being neighbors as well as our populations are fairly comparable.  Wisconsin has a population of 5,686,986 and Minnesota 5,303,925. 

This one shows us that both Minnesota and Wisconsin have quite a bit of foreclosures.  These are “all foreclosures”. RealtyTrac categorizes foreclosures into 3 categories: Pre-Foreclosure, Auction, and REO.  Pre-Foreclosure would be notice of default, Auction would be Sheriff’s Sale, REO is the bank has taken it back.   This graph shows all three: (Blue=Minnesota, Packer Gold=Wisconsin)

THIS is what I think looks promising for our market.  This is the “Pre-Foreclosure” comparison.  ( Blue is Minnesota and Packer Gold is Wisconsin…)  This would be Default notices.

One possibility on this data, RealtyTrac doesn’t have data on Pre-Foreclosures in Minnesota!  hmmm….  I’ll choose to believe their data is accurate for now…

We also seem to be clearing our REO inventory a little better..  Maybe some one with some quick math skills can compare the populations to the REO inventory #’s and compare percentages…

So far, RealtyTrac seems to provide the best information on the local markets.  You can view their great data at RealtyTrac.com

We should be getting a national update soon for the 3rd Quarter Shadow Inventory from CoreLogic.

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10 Million more Mortgages set to default.


Wow, OMG, WTF, how many other 3 letter words could describe this?

I was reading this article from HousingWire and the numbers are staggering.  If these numbers prove to be accurate I will be eating my words that “I think we have weeded a lot of our shadow inventory by Short Sales“.  10 Million – that is only 200,000 more mortgage defaults per State!  (and I hardly think North and South Dakota will have that many mortgage defaults, that’s more than half their population!  Sorry Dakotan’s – couldn’t resist!)  Good thing we have managed to sell off that excess 10,000 in inventory over the last 3.5years, looks like we have another 60.5 years in inventory to sell off!

Thought I would pass this along.  I am a little skeptical of these figures because these are figures being used to “get Congress to act” and quite often that kind of stuff involves Hockey Stick charts and such.  I do know there is a big number in shadow inventory.  I have been reading numbers more in line with 1.5million to 2million in Shadow Inventory and no one seems to really pin-point a number just taking estimates based on late payments.  But 10 million, that is a BIG number!

Any opinions on this?  Do you believe these numbers are for real?  1 in 5 outstanding home loans?  That tells me that the unemployment and under-employment are far bigger problems than we are being told… 

Roughly 10.4 million mortgages, or one in five outstanding home loans in the U.S., will likely default if Congress refuses to implement new policy changes to prevent and sell more foreclosures, according to analyst Laurie Goodman fromAmherst Securities Group….

…”Many analysts looking at the housing problem mistakenly assume it is limited to loans that are currently non-performing (or 60-plus days past due). Such borrowers have a high probability of eventually losing their homes. However, the problem also includes loans with a compromised pay history; these are re-defaulting at a rapid rate,” Goodman told a Senate subcommittee Tuesday.

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