I am frequently asked, “Where have all the foreclosures gone?” and run into people still expecting vast loads of this “shadow inventory” to hit the market. I thought I would share some timely information on the foreclosure market. Thank you to Roger Cruzen for these excerpts from C.A.R Magazine June/July 2012.
Federal officials hailed it as a major step toward stabilizing the nation’s housing and mortgage markets by thawing out a foreclosure process that has been in a state of suspended animation since late 2010. That’s when federal and state officials began investigating allegations that the five largest mortgage banks were automatically signing foreclosure-related legal documents without actually reviewing them- a process brilliantly branded as “robo-signing” by plaintiffs’ attorneys seeking to demonize banks.
While it is still too early to measure the full impact of February’s landmark $25 billion robo-multi-state settlement with Bank of America, JPMorgan Chase, Wells Fargo, Citi-group and Ally Financial (formerly GMAC)- $18 billion of which has been earmarked to help Californians-REALTORS(R) and industry observers already are weighing in. So are politicians. In California,k the settlement has spawned the “Homeowner Bill of Rights,” a seven-bill legislative package proposed by Attorney General Kamala D. Harris that pledges to further protect homeowners from unfair and illegal bank practices and help consumers and communities recover from the state’s extended economic crisis.
With a settlement in place, some observers predict tha banks might finally dump their long-rumored “shadow inventory” of distressed properties on the market in a tsunami-like wave. That’s not happened so far, and it’s not likely in the future.
“Distressed” sales, which have regularly accounted for more than half of California home sales, fell to 48.9 percent in February and 44.6 percent in March, according to C.A.R figures., Foreclosures starts, meanwhile, fell to newer-record levels. WIth fewer new foreclosures, REALTORS (R) can expect fewer completed distressed-home sales. In March, REO inventory plunged by 33.1 percent compared with March of 2011, while short sale inventory dropped by 21 percent over the same period.
“It makes sense looking at the raw numbers that there would be a wave of foreclosures after the robo- signing settlement says Sean O’Toole founder and CEO Of ForeclosureRadar.com. “But it doesn’t make sense given the political backdrop that has been in place since September of 2008, and we really think that’s the overriding factor here.”
If you, or someone you know is upside down on their property and is having trouble staying on top of payments, I can help them avoid foreclosure by doing a short sale. Please contact me for more information.