Monday, September 20, 2010

Why haven't banks dumped REO's onto the market yet?

The Wall Street Journal examines the expected flood of foreclosures that hasn't (yet) occurred:
For more than a year, housing analysts and investors—some with piles of cash waiting to pounce on distressed markets—have puzzled over a question: Where is the expected flood of bank-owned foreclosures, or REOs?

The number of properties in the foreclosure or delinquency pipeline has grown to record highs, yet volumes of bank-owned properties have fallen steadily over the past year.

What’s happening?
  • Some delinquent loans have “cured,” either naturally or through loan modifications. Even unsuccessful loan modifications have stretched out the amount of time that it takes to move a loan through the foreclosure process.
  • Banks are getting better about approving short sales, where a home is sold for less than the amount owed, even though the process is still far from seamless.
  • And even when a foreclosure happens, more investors are buying the properties from banks at courthouse auctions, which means that the property won’t show up as REO, even though it could ultimately hit the market.
So can we expect more foreclosures to move onto the market? Eventually, yes. ...

But Ivy Zelman, chief executive of Zelman & Associates, notes that “it’s not going to be a flood” ...

A more likely outcome is that foreclosures stay at elevated levels over a longer timeframe. That could stave off another crash in home prices, but it could lead to several years of no home-price appreciation.

16 comments:

  1. B...B...But....No....This cannot be...I have waited for YEARS for the long anticipated TSUUUUUUUUUUUUUUNAAAAAAAAAAAAAAAAAAAMIIIIIIIIII that Mr. Mortgage said was "just around the corner"!!!

    BWAHAHAHAHAHAHAHAHAHA!!!!!

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  2. The fact that there wasnt going to be a tsunami of REO was self evident back in late 2008. For a publication like the WSJ to only realize that now, in mid/late 2010, shows how delusional some of the MSM can be on this whole thing.

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  3. Mr. Mortgage was an idiot. In hindsight, I cant believe I ever fell for his dog & pony show...

    Anyone know whatever happened to him?

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  4. My guess is he is holed up in his place in chula vista - guarding his home from angry hordes of renters wondering where their "tsunami" went?

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  5. The new numbers are out, Arlington is -2.7 YOY! Please god make it stop!!!

    See idiots? It works both ways!

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  6. Once again, the subject matter had nothing do do with Arlington. Yet the doomers determination that Arlington (an area which none of them live and none of them care about) goes down the shitter is palpable.

    Your obsession is so noted!

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  7. I dont live in Arlington. I wasnt obsessed until every single post on this blog had a reply showing how Arlington is up up up!!!

    Yet when its down, Arlington numbers stop being posted? When someone posts those falling figures, they are the ones obsessed?

    You hypocrisy is so noted as well.

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  8. Arlington numbers havent been posted for months. Northern Virginia (which includes Arlington) yes, but Arlington, no.

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  9. I was just quoting the MRIS numbers from last week...what numbers havent been posted for months? Here are the ones from MRIS

    Arlington
    2009 sold:$ 114,943,613
    2010 sold:$ 113,527,319
    change sold YOY: - 1.23%
    2009 average price:$ 537,120
    2010 average price: $ 523,167
    change price YOY: - 2.60%

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  10. I drove on Russell Road in the Delray section of Alexandria today. I could not believe all of the for sale signs posted in the front yards along the road. And that is one of the "more desirable" areas to live?

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  11. Regarding the whole Arlington debate - FWIW, the more detailed condo/TH/SFH stats are out.

    https://www.nvar.com/LinkClick.aspx?fileticket=vuBCngB%2bhTA%3d&tabid=626&mid=1571

    Any downward trend on the headline number for ARL is likely a mix issue as the prices for condos, THs and SFHs are up YOY across the board.

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  12. HAHAHA

    So actual single homes must be REALLY DOWN!!

    We went from the standard comment of "Arlington is up up up! Please make it stop!!"

    To the current new standard comment of "Arlington CONDOS are up up up!! Please ignore ALL homes!"

    The immune areas are getting smaller and smaller, as usual.

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  13. Prices of U.S. single-family homes fell for a second straight month in July, the Federal Housing Finance Agency (FHFA) said on Wednesday.

    Where are all of those bloggers who said "once the tax credits expire, housing prices will resume their downward trend"? Guess what?

    YOU WERE RIGHT!!!!!

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  14. "We went from the standard comment of "Arlington is up up up! Please make it stop!!"

    To the current new standard comment of "Arlington CONDOS are up up up!! Please ignore ALL homes!"

    The immune areas are getting smaller and smaller, as usual."

    Try again retard. Had you actually scrolled down the link, you would see average prices in Arlington

    Condos +2% YOY
    Townhouses +4% YOY
    Single Family +2% YOY

    Ressa - thanks for the link. Oh, and anon...suck it...

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  15. I didnt even look at your link...I was looking at MRIS.

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  16. Incase you guys missed it...

    Here are the ones from MRIS

    Arlington
    2009 sold:$ 114,943,613
    2010 sold:$ 113,527,319
    change sold YOY: - 1.23%
    2009 average price:$ 537,120
    2010 average price: $ 523,167
    change price YOY: - 2.60%

    ReplyDelete