8-14 The “Foreclosure Wave” – Now, a Tsunami of Sorts
*This report was first published as part of the Mortgage Pages research series on 8-13
- “The Foreclosure Wave” — Now a Tsunami of Sorts
- Housing Supply at Multi-Year Lows — Housing Supply at Multi-Year Highs
- Foreclosure Reservoir Continues to Fill
- CA & National Foreclosure Stats
Our mission is to provide our clients a significant edge. This is done by turning the daily, market-moving real estate and mortgage news flow and events into old news by the time it makes headlines. – Mark Hanson
The Foreclosure Wave” — Now a Tsunami of Sorts
Over the past two days, the popular foreclosure reporting firms released their monthly numbers and the takeaway was that the foreclosure crisis is getting worse. Indeed, the foreclosure crisis is worsening, but July’s actual foreclosure numbers do not pose much additional risk to the housing market because most of the worsening was seen in the pre-foreclosure pipeline (notice-of-default & notice-of-trustee sale). Based upon July’s results, the players that will feel most of the additional reported foreclosure pressure are the banks, mbs holders, insurers, and servicers.
On April 7th, I made the call for a “foreclosure-wave” to hit CA and other bubble states based upon our proprietary data — the trend was obvious. A CA wave did build from April to June with foreclosures going from less than 10k to over 22k. But in July it aborted because of gov’t interference through HAMP and the July 28th servicer cattle call — no servicer wanted to go DC with record foreclosures in their books for July.
The only caveat in my 4-7 foreclosure wave report was “there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium — this wave is so big I would not put it past them trying it?” Well, there ya go.
But despite CA foreclosures dropping m-o-m, the national foreclosure wave (red) that began a month later in May is still building with foreclosures up m-o-m. As other states start to feel the default and foreclosure heat, CA is not the swing state any longer.
Housing Supply at Multi-Year Lows at the Low-End
Housing Supply at Multi-Year Highs at the Mid-to-High End
Forecosure Reservoir Continues to Fill
Extreme Negative Equity
Because of the record number of properties in the foreclosure pipeline — and on a national level the actual foreclosures rising month-over-month — the housing market sits in a precarious position.
During the past Spring/Summer selling season we saw serious demand from first-timers and investors for low priced houses and now supply sits at multi-year lows. Organic supply is not coming onto the market the way it should because too many homeowners are too far upside down on their mortgage and short sales remain an arduous process.
In the mid-to-upper price bands, conditions are bad with a fraction of the buyers and mountains of supply. In addition, unlike the bubble year’s affordability through exotic loan leverage, most lower-end buyers can’t reach out of their affordability band into the higher priced markets. Instead they do without further isolating this market.
Yes, the servicers can continue to let these properties drip out while homeowners continue to default at a record pace each month. But that will only keep filling the reservoir until one day the dam breaks — it is already at critical levels. It is more likely that as the massive supply of pre-foreclosures in the reservoir continues to build, the number of properties that fall into the spillway increase naturally pushing foreclosures higher in tandem.
And a massive amount of foreclosure-ready supply is on tap as the first group of modifyees exit the HAMP trial-mod period within 30 to 60-days and monthly from then on out. At this point — before year end — either foreclosures will begin to flow hard again or the gov’t will come back in and change around the HAMP to prevent it. But the more they change the rules to allow people to stay in homes that they have no business being in, the more they will brand loan defaults and mortgage mods as mainstream turning good borrowers into bad borrowers who default on purpose.
The bottom line for July was that gov’t meddling did push down actual foreclosures in CA but pre-foreclosures (Notice-of-Defaults and Notice-of-Trustee Sales) remained above 2008 crisis levels. On a national basis, the foreclosure activity is so strong that actual foreclosures rose in spite of CA. The foreclosure reservoir is filling quickly, contains hundreds of thousands of foreclosure-ready properties, but the spillway is has a blockage for now.
With the tax credit still in place, mortgage rates still attractive, and first timers and investors slugging it out for a $150k house, there could not be a better time to foreclose and get houses onto the market. But don’t get too excited — ForeclosureRadar.com reported that in CA the average foreclosure was nearly $200k upside down on the mortgage.
It is important to always remember that when one person gets a ‘good deal’ on a house, orders of magnitude more are thrown into a negative-equity (or deeper negative equity) position exponentially increasing their likelihood of loan default. Loan default leads to foreclosure and another ‘good deal’ on a house and so on and so on.
CA & National Foreclosure Stats
Despite foreclosures falling, CA pre-foreclosures remained very strong. As a matter of fact, the number of foreclosure-eligible properties stuck in the pipeline has never been greater. Notice-of-Defaults at 45k in July remain above July 2008 crisis levels.
CA Notice-of-Trustee Sales also remain above 2008 crisis levels at near 40k. When you back out actual foreclosures from the counts below, there are a record number of foreclosure-ready properties in the pipe at this very moment in time.
Below is a chart of all three phases of the CA foreclosure market plus total activity (red). Other than actual foreclosures (yellow), all three charts show counts at or above peak 2008 crisis levels.
Below is the same chart but of national foreclosure activity. The same applies here — default and pre-foreclosure activity is remaining highly elevated at crisis levels, while foreclosures are sloshing around due to market meddling.
Lastly, this chart looks at CA foreclosure activity relative to total monthly house sales (green).
Foreclosure supply (yellow) has been artificially held back, which has allowed the low end of the real estate market to perform very well over the past several months. But the reservoir of foreclosures (blue + pink) is getting full and at some point the dam will crack and break.
With monthly new foreclosure pipeline supply greater than total sales – when the dam breaks — where does that leave Ma and Pa Organic seller and the builders…they can’t compete with foreclosure resales as it is now let alone when more supply hits.
With monthly Notices-of-Default averaging over 45k per month in CA, sales have to remain near their peak 2009 levels even through the slow months just to tread water – and this does not include organic supply (me selling a house to you and short sales).
As long as foreclosure and foreclosure pipeline housing supply makes up such a large percentage of total sales the housing market will never be on the mend because supply is effectively infinite.
Best Regards,
Mark Hanson
Mark@MHanson.com
-data from ForeclosureRadar.com, RealtyTrac, LoanPerformance, DataQuick
This document is for your private information only. In publishing research, Mark Hanson and M Hanson Advisors are not soliciting any action based upon it. Mark Hanson and M Hanson Advisors publications contain material based upon publicly available information, obtained from sources that we consider reliable. However, Mark Hanson and M Hanson Advisors does not represent that it is accurate and it should not be relied on as such. Opinions expressed are current opinions as of the date appearing on Mark Hanson and M Hanson Advisors publications only. Mark Hanson and M Hanson Advisors are not liable for any loss or damage resulting from the use of its product. Mark Hanson and M Hanson Advisors are Limited Liability Corp registered in CA.
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| Filed on: August, 14 2009 by markmti
Mark,
Thank you very much for your report and efforts in telling us the real story. We should all be very grateful. If and when my wife and I get a house in this God-forsaken state, I’ll have to buy you a beer perhaps at a small social…should you so be inclined to allow it.
Cheers.
So are the banks not foreclosing due to:
- A hope the market will rebound?
- A hope for more tax payer money?
- Or a desire to not show a loss?
Your guess is as good as mine.
It mind boggling. Without employment these homeowners cannot make the payments. So foreclose and let those who can pay the mortgage buy the homes.
Great work Mark!
[...] Mark Hanson discusses the above theory in “The Foreclosure Wave” — Now a Tsunami of Sorts. [...]
thank you, Mark. another great post. but I would never have found it, if Mish hadn’t referred to it! I kept checking the “Field Check Group” site, which doesn’t lead here. I assumed that you had been too busy to post . . . How will your faithful readers find you??
[...] Mark Hanson discusses the above theory in “The Foreclosure Wave” — Now a Tsunami of Sorts. [...]
There you are! and I thought your MIA…
The reason the dam has not broken is because of the idiots who can’t figure out how to search “foreclosures” or how to operate a RealtyTrac search. They continue to bid up the few houses the banks leak onto the market like retarded lemmings. We suffered these fools during the bubble and now we continue to suffer these fools. Until their cannon-fodder ranks deplete we will continue to suffer them; then we will all share in paying for their stupidity.
Nice work. Just found you again from Mish’s link. I just want to say that I used to think that owner’s who walked were bailing on their responsibility, but the more research I have done the more it seems the banks have set people up and robbed us all. It’s a business decision and I encourage everone to look at it as such.
[...] Mark Hanson discusses the above theory in “The Foreclosure Wave” — Now a Tsunami of Sorts. [...]
[...] Mark Hanson discusses the above theory in “The Foreclosure Wave” – Now a Tsunami of Sorts. [...]
Joan, are you saying that it is possible to buy foreclosed houses that are not listed in the MLS? I understand that there are auctions out there, is this what you are referring to? I’d love to be able to buy at auction but am not willing to stomachs that kind of risk and uncertainty for my primary residence. Or are you talking about another way of buying forclosed houses? Count me as one of the retarded Lemmings. So please let me in on the secret.
Doug, it is of course possible to buy foreclosed homes that are not listed on the MLS…hell, the vast majority of forecloseed homes/REOs aren’t on the MLS – there’s no doubt about that.
I would highly recommend you use realtytrac.com – you don’t even need to pay for the service, simply enter your target zip code, and the site will report exactly how many pre-foreclosures, notice of trustee sales (auctions), and actual foreclosures/REOs there are in that zip code. You will have to pay for the service to get the exact details and addresses of the properties including amount behind – loan amount – bank/mortgagee and direct contact information etc. It is VERY much worth it if you are ready to start shopping.
If you have a good contact at your bank and it’s a major mortgage lender/servicer in your target area, you can ask them directly for a list of REOs in areas you are interested in.
Google maps also added a new feature where you can search maps for real estate for sale. Once you select “Real Estate” from the drop down field, a new set of options will pop up to the left of the map including one to limit the search returns to “foreclosures” only. This will grab the aggregate entries from sites like realtytrac and others including many with the exact addresses, amounts owed, transaction histories etc. Then just drill down in the map to the exact neighborhood(s) you are interested in and you will see plenty of entries. But note that you will not get the exact addresses in many cases.
Doug… sure, there’s several ways to buy foreclosd properties before auction and there are courses a plenty to learn how. I think more to the point the article is saying only a fool would buy in a market such as it is.
Foreclosures backed up because the Courts can’t process them fast enough, the Banks holding properties off the market hoping the market will go up and they’ll recoup some of their money, the Banks to the point of not even transferring the foreclosed properties into their own names to avoid paying property tax’s and maintenance on them and there’s the legal issues of the massive fraud the Banksters not only committed but sanctioned when creating these loans in the first place (think TILA, HOEPA, RESPA, FTC, FDCPA violations, all these and more are counterclaimable)and also the massive fraud they are now perpetuating in foreclosing on properties when the don’t have a legal right to do so (think MSFraud.org and http://www.livinglies.com).
Just what I need, buy a house only to have the EX owner raise legal issues and keep the property tied up in an already overfull Court system for another, say, 5 years?
And of course, before I forget, now you’re gonna have to actually read all those loan documents before signing because, since the countersuits have been initiated and the Banksters, in many cases have lost, the Mortgage Loan doc’s will be completely revamped. After all, when an Ex Federal Reserve Chairman goes on Yahoo News and says half of all the mortgages in existance in the US right now aren’t worth the paper they’re written on, people listen!
But if you just like throwing your money down the tube, there’s houses in Cape Coral that’re cheap, but they’re also full of noxious Chineese drywall! Bon Apetite!
The only problem with this analysis is that it tells us nothing of when, or even “if” the wave will hit.
My father’s firm negotiated a deal to purchase 700 or so units of “phantom inventory” for all cash. Big hedge fund bought them for pennies on the $$ is going to hold them rent them out for a while and then sell them over the next 10-15 years.
So just like that, 700 units of inventory went “poof” never hitting the mls, but nevertheless sold. My father said this is common, and a number of similar funds are doing the same thing. How common is this? How many are slipping away and we are none the wiser for it?
Hi J Allen,
While bulk reo sales do happen they are a pee hole in a snow bank. The banks and servicers just wont sell. Why would they sell to your fathers firm for pennies when they can sell through a realtor for 100 cents. Bulk REO was hot a year ago and now very few pools go off if any. It is mostly the junk $3k houses in Detroit, which do not matter anyway. In CA, AZ, NV etc my guess is less than 2% of all foreclosures are bulked. Mostly condo complexes and the like. Not SFRs. I do a substantial amount of work with investors like your fathers firm. Most have turned to buying defaulted whole loan notes because reo is just not around.
Mark – thanks for responding. If thats the case, I again have to ask, when, if ever is the floodgates opening? I remember back when you were posting youtube videos. At the time, you breathlessly described a process you dubbed “the quickening” where a mountain of REO would be dumped on the markets in short order.
That was a year ago. So far, nothing has happened. Sorry to doubt you publicly, but ive been so frustrated with this thing. Its just that after call after call of “its coming” “its coming” one has a tendency not to believe the message after a while.
There are many ways to buy distressed housing. Do you always try to con someone else into doing your due diligence? I’ve done 30, that’s right thirty courses in how to buy distressd properties. So I know it out there. Go do your homeowork.
No John I dont always try to “con someone into doing my due dilligence” – I am asking questions of someone who OFFERS to provide information for free! What a great service IMHO.
The reason this all matters has to do with prices. If the banks dump en masse, prices crater and you totally overpaid for the 30 REOs you bought. If the banks dribble them out – little by little for the next 5,6,7,8 years, – prices flatten and you got a great deal.
Thats the issue for me. I dont want to buy a distressed property. I just want to buy a home and have some confidence I am not going to lose my shirt because the REO tsunami just broke.
At the same time, I dont want to wait for years on end for an REO tsunami that may never come.
Mark,
I hope you wont move your blog around too often. I was left wondering on the Field check group website as to what happened to you
Fantastic information. Keep it up!
JohnR,
Could you mention the best of the 30 courses you bought for buying distressed properties?
Thanks!
You are kidding me right J Allen…the floodgates opened, foreclosures reached an all time high and the fed and state govts stepped in with a dozen moratoriums and mortgage mod initiatives that kept the supply off the market kicking the can down the road even further.
As of July there have never been more foreclosures in process. The past 4 months have been a mess due to the Obama HAMP programs and servicers gearing up. On July 28th he called all the servicers to DC for a come to god meeting — nobody wanted to go being number 1 in foreclosures for the month.
Already in Aug we see foreclosures back on track to beat June’s numbers and June was the highest since Sept 2008.
The wave is right in front of your eyes. Perhaps you have another definition of wave. Anything over 20k actual foreclosures in CA per month and the market will have serious trouble — for that matter 10-15k will keep pressure on the market during the slow selling seasons.
In June there were 22,500 and July 17,300. In Aug my best guess is between 23k and 25k. Note that only 19,900 foreclosure related resales went off in July — so essentially we have an equal amount of supply and demand meaning there is little demand for everyone else including Ma and Pa and the builders.
Mark – I am not kidding. I could care less about the amount of REO out there if it doesnt get released. Here on the consumer/MLS level, we are literally starving for decent quality inventory. Hence, prices in areas like Boston & DC where I am looking are only stagnate and some areas are seeing bidding wars.
So maybe the REO gets 2-3X bigger – ok great – are they going to open the floodgates and release it, driving down prices, or will they just dribble it out, 2-3-5 years or longer to maintain price stability?
Bottom line is this, and I think I speak for alot of us here. You have a long and loyal line of followers who are relying on your info to affect our decision to hold off purchasing – particularly, because a “tsunami” in inventory is coming. So can you give us an idea of when its coming – something we can hang our hats on?
I assume the answer is no because I am asking you something that really no one knows. However, when will it end?
Hi, Mark and J Allen,
I guess J Allen means when the huge phantom inventory hit the market. As you mentioned in your TV interview and blog, banks are just holding foreclosed houses, without letting them into market, so the inventory looks artificially low and price “stabilized”.
My question is how long banks are able to hold the phantom inventory in their hand? Also do you have some clue, why banks do this?
Somebody told me, in diamond industry they hold back majority of the supply for at least half century, so to keep the price of diamond artificially high. Of course,different from diamond, house get rotten, lawn need maintenance, property tax need paid.
How long can banks afford the lost? 1 year, 5 years or 20 years? (of course, using tax payer’s bailout money, forever).
Thank
Norman
Hi, J Allen,
Just after I submit my comment, I saw yours.
I am right in term of understanding your question, I think
Norman
I expect 2x what we are seeing right now or over 30k per month by year end. But keep in mind, in all of CA only 40k houses will sell. The highest this year was in June with 44k. That is a tsunami. Again, more supply by far comes from Ma and Pay homeowner. They are the ones that really get hurt. How it will play out is that the low end of the market will wobble around up or down 10% from here. By the mid to upper end tiers will compress by 25 to 50% from here making it so a $1 million house is really the home of a millionaire — everything else will fall in the middle somewhere. Mid to high end props will also fall 50-70% from peak levels before all this is said and done.
Below is an excerpt from yesterday’s report
Supply is Everywhere – You Just Can’t Buy It…Yet
In reality supply is everywhere you just can’t buy it…yet. Once again, for those builders that can quickly put out low to low-mid priced product and still make money, the market is there. But the obvious risk is that a supply dam breaks because MLS listed housing supply is only the tip of the iceberg.
With respect to hidden pipeline supply and its effects on housing, a breaking supply dam could be significant.
Hidden Supply
- Foreclosures – REO (not listed – shadow inventory): Servicers hold a large amount of props that they have not released yet for a variety of reasons…none of the reasons are demand related, however. In CA shadow inventory is not much of a problem but RealtyTrac suggests that some 60% of all foreclosures have yet to see the light of the MLS.
- Foreclosure Pipeline: Notice-of-Defaults and Notice-of-Trustee Sales are averaging higher monthly counts than during the crisis stage of 2008. Yet, foreclosures are well off their highs. A certain percentage of this foreclosure pipeline risk will hit, perhaps a lot at one or perhaps over time. In CA there have never been more unfinished foreclosures in the pipeline as right now.
- Short Sales: Millions of homeowners are underwater. Many will chose the loan mod route, many will simply default, but a certain percentage will opt for a short sale. These are not nearly as seasonal as traditional sales and can come at any time. The decision to sell short comes when a savvy homeowner realizes that they are in a hopeless negative-equity position and a mod is not the answer — the only way to de-lever permanently is to get rid of the house regardless of the credit rating consequences.
- Pent-Up Supply: House prices fell so fast in the past 24 months that millions who had their properties listed for sale — or that wanted to sell in the near-term — had their strike price taken out before they could blink an eye. They ended up chasing the market down and ultimately pulling their listing when they realized that the house would not sell for what they owe, less sales commissions and the down payment/security deposit for the new house. If house prices were to meaningfully up-tick, these sellers would come out of the woodwork grateful that they were finally able to sell. Pent-up supply could be the largest form of hidden supply.
J Allen,
I know your question and I’ve posed similar issues elsewhere on other blogs.
As far as supply, yes banks are holding because they can. My simplistic understanding is that the big banks act as service provides, collect the funds from the homeowner and then pay principal, interest or super preferred amounts to different investors. They are also responsible for foreclosing should the debt become uncollectible. No matter what the banks say, they or their affiliates are largely the “investors” along with the fed.
As long as monetary policy allows banks to borrow at ridiculously low rates, the banks can borrow for nothing and pay themselves (hoping that at some point in time prices rise and they can dump this stuff).
Housing seems to have stabilized, but far from recouping losses. What will happen and I’m predicting early 2010–is that the Fed will be forced to start raising its rates again. I think all the Fed spending, cash for clunkers, etc. is going to cause positive GDP this quarter and the Feds will force the issue again next quarter to end 2009 2 quarters of positive GDP and officially done with the recession. Then they can cave in to demands from China and others to begin raising interest rates.
1/4 point OK, half point OK. Interest rates hit 2.5% and the you know what hits the fan.
Loan defaults are exceeding 6% and home mortgage defaults are very close to 9% (1 in every 11.1 or so homes is in default–not paying)
That home default rate is going to surpass 10% and I wouldn’t be surprised if it hits 15% with the alt arm recasts over the next year. Give me a break on loan mods. If you could get a loan mod, you got one already, any loan mods taking place right now are 3 month trials that will end in 90 days.
I’d say we see interest rates starting to rise significantly next spring. Banks may get the clue, panic and dump next summer. They would be smart to do so, but I think more likely, they act like dinosaurs and wait until interest rates really start rising towards the end of next year and start dumping in 2011.
If someone understands the ability of the feds to manipulate interest rates and how long they can keep these artificially low fed fund rates they can make a better guess than me. But the ability for the banks to hold off is directly tied to the fed fund rates. I think 2.5% is the point of no return for the banks.
I think you and all the readers know that the feds ability to loan at 0, put a gun to the head of the accountants and get rid of mark to market and absorb billions in toxic loans has road blocked the crisis.
But if you also read the news, you know the mid size and smaller banks are failing regularly (because they don’t own mortgage backed securities, they actually own the loans). You know commercial real estate defaults are rising as quickly as home mortgage loans and will be as bad a problem as the home mortgage market. Any savy real estate investor is going to go after the big guns and leave homes to the masses. You know the employment situation is not getting better, its just getting worse slower. you know any positive signs of recovery are artificially induced by government sponsored initiatives that cause delay. If you lived in California, you’d see how broke this state is. And you know that with decreased revenue, the feds are getting a smaller share of federal income tax revenue. Then you have wild cards–China, OPEC, North Korea, hurricanes, wild fires, earthquakes, floods. I really wish we were the federal government (need money, create it). But at some time, our worldwide trading partners aren’t going to support that at any more, everyone (especially the feds know it).
If you want to buy and don’t buy into the fact that reality says prices (especially at the mid-higher end of 800K-1.5M) are going to fall, then you should just find yourself a decent house, negotiate the best deal you can (get a low interest rate, because those will be gone soon), sit back and live your life in your home (not house, as I’ve been told). Its OK, you will not be as bad off as some, you will not buy at the bottom, as others, but you will be in the mean, so sleep soundly.
It seems like others are catching on too. Heres the blog of Sean OToole, the founder of Foreclosure radar.
In a word, the tsunami he earlier thought would come to pass is now seen as “unlikely”
http://www.foreclosuretruth.com/blog/sean/waiting-catch-wave-surge-reo-listings-unlikely
Alacat — we have already discussed this. Foreclosures in CA began to wave and then petered out in July. BUT read more of Sean O’toole’s report – “FORECLOSURES IN PROCESS HAVE NEVER BEEN GREATER.” That portends increased foreclosure activity unless you are blind. It is what is is. Sean reports what is here and now and does not speculate. That is his business. Its my job to take 2+1 and figure out when it will equal 4.
On another note, read the CEO of RealtyTrac’s report – they track this nationally. CA does not swing the foreclosure results nationally any longer.
http://www.realtytrac.com/ContentManagement/PressRelease.aspx?channelid=9&ItemID=7192
Can’t think of any one course in particular that really sticks out at the moment. I joined the local Real Estate Investor’s Club (REIA) and they had a library of those courses so I just started at the beginning and did my homework. But the best advice I can give at this moment is, if ya see something you’re really interested in, check it out, and I do mean completely check it out. Title search (learn to do your own), neighborhood and market trends (buying a house used to be an “investment”, nowadays it more resembles buying an “alligator” as a pet.
And keep in mind, we used to have a lot of pent up money supply from the old factory worker generation’s savings accounts, that isn’t there anymore (their pension funds got raided last year).
As Wall Street patted themselves on the back over and over and over again by securitizing these loans (gimme a Bonus!) and then collecting the securities they’ve offered from those securities and then securitizing and reselling and re-pooling ad infinitum again and again (more BONUS’s!), you’d think these bright guys would be able to figure out that all those “profits” were in actuality only “paper profits” and not profits made in reality (except to those creating this Ponzi scheme). What I am trying to say is that no matter how much lipstick you put on this pig, it is my own personal opinion of the RE market that right now, the best strategy is to just stay away. And if you think that by having just bought at what you thought was the bottom (haven’t done your homework have ya?), for a low interest rate, not trying to make money, just trying to have a nice place to live, being morally correct and all that is going to be your salvation, then I direct your attention to Cape Coral Florida which is somewhere around #4 in the Nation for foreclosures and is a place where the City just announced they want to raise the property taxes by 85% just to keep basic services going.
Unrelated to the above, I see the Banks are now buying up the Tax Lien’s (thereby acquiring the properties for pennies on the dollar) of the tax delinquent properties foreclosed on. You know the old saying “the Banks don’t want your home”? Well do the math. If they can foreclose on a home after receiving just 2 years of payments, they’ve made over 800% on their money. You know the old saying that it costs the Banks to foreclose? Well, the defeciency judgements that they get AFTER the auctions pay for all of that AND, once you check the Bankruptcy Courts cases you’ll find many of the “Banks” have been caught over-inflating those deficiencies with bogus charges added to them. And if you’ll really do your homework you’ll find that the Bank’s Servicers (those actually doing the foreclosures (and I have to add that in many cases the Bank’s “Servicers” are not the proper and legal party to be doing these foreclosures in the 1st place but the Court’s don’t seem much to care( http://www.MSFraud.org for more on that issue (ck out their “Legal Library” for ton’s of caselaw))actually have more incentive NOT to stop a foreclosure but to perpetuate it because it allows them to tack on more and more and more fee’s.
More paper (talk is cheap!), less construction of things “humans” want or need, rampant fraud, rampant greed, falsification of documents, a swamped Court system who’s judges are receiving campaign funds from the the Banksters and a government that’s dumb enough to believe the Banksters & Wall Street Ponzi scheming thieves instead of the “proof” on the streets. We’re just not headed in a very good direction, and right now, trying to amass wealth is, in the end, only making yourself a target. Cause when they’ve run out of easy money, guess who’s next? Of course that’s just my opinion.
I just got a home. This is my new home, mhanson.com. I wish you Mark not to move again or at least forward your new address:)
Is anybody talking about the housing condition in NV? I’m all ears.
Mark,
Thank you very, very much for the continued postings in the blog. A little knowledge is dangerous, and some posts are just speculation without data. Really appreciate your expertise and continued commentary.
I’m watching the northern Nevada market. Just the other day, over 60 foreclosures hit Reno in one day. More than 25% of these were NOD’s based on no payments beginning in early 2008. Some of these debtowners have been living rent free for more than 18 months. Why have the banks waited so long before filing an NOD? Is it just to make the books look good? With no NOD, the banks can claim they are performing loans (and not get taken over by the FDIC). It’s the only theory I can come up with. Happy to hear comments from others (esp. with experience in the business).
How much “shadow-shadow” inventory might be out there?
[...] Mark Hanson discusses the above theory in “The Foreclosure Wave” — Now a Tsunami of Sorts. [...]
How can the stock market surge on false data from the Case Shiller news? Are they living in a dream world. So what if twice the buyer showed up. If the new pending supply is far greater than the new buyers we still have a huge housing crisis. All these tricks to hide the inventory so it is not on the MLS. Those poor buyers, as the data they see is so flawed. Oversupply is terrible for future prices.
How much shadow inventory ? Who knows… Jim Klinge (“jim the realtor”) in a recent blog comment said this,
“Dang it, I don’t have it on tape, but LY (Lawrence Yun) said that Fannie/Freddie officials have told him specifically that they are holding back properties from the open market.”