Here Comes The (foreclosure) Rain Again....Falling On Our Heads

By
Real Estate Appraiser with PahRoo Appraisal & Consultancy
http://actvra.in/kwd

Depending on what news you follow and what topics interest you, CNBC announced that Bank of America is increasing its foreclosure activity.  The release indicated that Bank of America is delivering more notices of default to borrowers in August, well over 200 percent more than in previous months. (A notice of default is the first stage of the foreclosure process in non-judicial foreclosure states, that is, where foreclosures do not go before a judge. The notice of default is usually sent when a borrower is 90 days or more overdue in payments, but that timeline has been extended significantly during this housing crisis, due to the so-called "robo-signing" processing scandal and the sheer volume of troubled loans, as noted in the CNBC article.)

Many things have contributed to this change in policy by Bank of America, but nonetheless, given this shift, the near-term future holds the likely prospect of further downward pressure on housing prices in already challenged markets as new foreclosures come raining down.  As those new foreclosures come raining on markets already saturated with distressed properties (short sales, foreclosures, bank-owned houses) and little to no change in the demand side of the equation...aka, there is no corresponding increase in buyers, the impact is on price.  So, while this is BAD news in the short term, it is exactly the medicine a doctor would order to cure a disease.  Namely, pass the proverbial kidney stone so you can get back to some sort of normal life.

What does that mean?  Well, it definitely means no recovery in 2012 and possibly (and maybe even likely) continued price erosion for the next couple years, which further translates into more homeowners being underwater.  The cycle goes on...much like the voluminous flooding we've seen ravage parts of our country this past summer.

The foreclosure rain is coming, might be time to take cover.

Michael Hobbs, PahRoo Appraisal & Consultancy

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Re-Bloggged 4 times:

Re-Blogged By Re-Blogged At
  1. Lenn Harley 10/01/2011 09:10 AM
  2. Dagny Eason 10/01/2011 10:19 PM
  3. Beverly Femia 10/02/2011 10:37 AM
  4. Kay Van Kampen 10/02/2011 01:50 PM
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Topic:
ActiveRain Community
Location:
Illinois
Groups:
Foreclosure Talk
Investors
Realtors®
REO
Short Sale Specialists & Pre-Foreclosure Education
Tags:
bank of america foreclosure
foreclosure rain

Comments 86 New Comment

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Rainer
28,345
Jayson Holland
Jay Holland
RE/MAX

Mike Cooper, (comment #2)  WTF? I say again...... WTF!?!?!?

......"a real estate insider" told you 7 million REOs are going to be put on the market in 2012? and that "doesnt include the new 2012 foreclosures"

WHAT!!!!???????

And then all you have to say is "Oy". Thats it? "Oy"?

If that statement were POSSIBLY true, (which it isnt) do you have any idea what that would do to our housing market?

How many properties do you think are on the market now in the entire USA?

According to RealtyTrac there are about 3.5million TOTAL homes for sale in the entire U.S. as of Oct 1st 2011.

According to NAR, we are on track to close about 5m homes this year.

The current "shadow inventory" which (depending on how you define it) is the number of bank owned homes that are not yet on the market is projected at 1.6m-1.8m properties, and the number of properties in the USA currently in some stage of the foreclosure process is 2.2m homes. Another 2.5m borrowers are 30-60 days behind.

The total number of actual foreclosures in 2010 was approx 1 million homes, so where are your 7 million REO properties going to come from?

I'm not picking on you personally, but if you are going to put something out there where hundreds (or thousands) of people can read it, you better be able to back it up. Or was it just a typo?

 

PS> Since I asked you for your sources, here are mine:

http://www.usatoday.com/money/economy/housing/story/2011-10-01/housing-shadow-inventory-foreclosed-repossessed/50618678/1

http://www.realtor.org/press_room/news_releases/2011/09/ehs_aug

http://www.realtytrac.com/trendcenter/

http://www.realestateabc.com/outlook.htm

 

 

 

October 18, 2011 05:40 PM
Anonymous #83
Anonymous
Las Vegas Foreclosures

I've heard so much about these robo-signing controversy, It's been a disgrace for the banks engage with this kind of scandal for the housing crisis. We sholud at least help the families in need, modifications of loans may be considered by the bank to atleast lessen famiklies in the streets..

November 24, 2011 01:13 PM
Rainmaker
180,581
Michael Hobbs
SRA, LEED GA, RAA
PahRoo Appraisal & Consultancy

Thank you Paddy.

Indeed, transparency would go a long way towards resolving the mysteries of foreclosure data.

November 24, 2011 04:34 PM
Rainmaker
124,583
Matt Robinson
Pensacola Real Estate (850) 292-4000
ERA Emerald Coast Realty

I hadn't seen a big increase in foreclosure activity in our area until the big settlement between the attorneys general and the banks, and since then it seems to have picked up big time.  And clients are now responding to our direct mail like never before...9 new short sale leads just last week alone.

March 10, 2012 09:08 AM
Rainmaker
180,581
Michael Hobbs
SRA, LEED GA, RAA
PahRoo Appraisal & Consultancy

Matt,

that is definitely the experience many others have had as well.

March 10, 2012 07:16 PM
Anonymous
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Rainmaker
180,581

Michael Hobbs

SRA, LEED GA, RAA
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