We’ve already reviewed the default/disclosure April numbers for San Diego County, but there are addtional voices of concern about the future of local foreclosures. Roger Showley of the Union-Tribune spoke with analyst Andrew LaPage of MDA Dataquick recently for some thoughts on the April numbers. LaPage commented, “We’ve been talking for a year now how a growing amount of distress will be handled outside the formal disclosure process mainly through short sales (homes sold for less than the mortgage balance) and to some extent loan modifications and other methods.”
He also commented that the short-term trend has been uneven, “If you look at quarters, the general trend has been less going into the formal foreclosure process. We know short-sales are up significantly, as are loan modifications, and some would argue there have not been nearly enough loan modifications, but there are more than there were a couple of years back.”
Showley also spoke with Sean O’Toole, founder and CEO of ForeclosureRadar.com who acknowledged that there is still a large amount of inventory in the pipeline and at the current pace, it’s going to take years work through it.
All real estate, like politics, is local. Although the foreclosure numbers for San Diego were looking better in April, nationally the news wasn’t so good. Dan Levy of Bloomberg News recently gave us the numbers, and foreclosures (nationally) climbed to a record level in April.
Executive VP Rick Sharga of RealtyTrac was quoted, “Right now it appears that banks are focusing on processing the loans already in foreclosure, and slowing down the initiation of new foreclosure proceedings as a way of managing inventory levels. We’ll probably see this trend continue for a while.”
On a related story, Alan Zibel of the AP reported recently that mortgage defaults have spiked, mostly due to the bad economic situation regarding employment (or the lack thereof). Quoting, “More than 10% of homeowners had missed at least one mortgage payment in the January-March period…”
Inman News reported that for the first time since January, foreclosure filings declined on a month-to-month basis in April. Inman based this on a report from the data company ForeclosureRadar.
Quoted from the Inman article, “‘The steady rise in cancellations leads us to believe that loan modifications and short sales are gaining traction’, said Sean O’Toole, found and CEO of ForeclosureRadar.com, in a statement.” He did add this, “‘I’d caution, however, that cancellations also occur due to filing errors and extended postponements, which require the notice of trustee sale to be refiled. In fact, 14.6 percent of new notice of trustee filings in April were on previously canceled foreclosures.'”
Jen Lebron Kuhney of The Daily Transcript recently reported the San Diego County foreclosure numbers for April, and they were up for the third month in a row. Notice of defaults were down 5%.
Kuhney reported that in the first four months of 2010, there were 4930 trustee deeds filed. That was a 9 percent increase over the first four months of 2009.
While USD professor of economics Alan Gin didn’t think that this number is significant, real estate broker Matt Battiata is concerned and still maintains that a backlog of foreclosures have yet to hit the market, which could cause another housing downturn in San Diego County. Gin said he wasn’t concerned with the April foreclosure numbers, but was concerned that stability in the market could be threatened by higher interest rates.
Alex Viega of the Associated Press reported that RealtyTrac Inc. recently released stats on foreclosures, in the first three months of this year they jumped 35% from the first quarter of 2009.
Rick Sharga, who is a senior vice-president for RealtyTrac, said the US is on pace this year to have more than 1 million foreclosures. “We’re finally seeing the banks start to process the inventory that has been in foreclosure, but delayed in processing.” He went on to add, “We expect the pace to accelerate as the year goes on.”
Viega went on to say that Nevada, Arizona, Florida and California had the highest foreclosure rates (Nevada being number one). California had the biggest share of total US foreclosures at 23%.
Jen Lebron Kuhney of The Daily Transcript reported recently on the March foreclosure stats for San Diego County. The bad news is that filings were up from February, but were down from March of ’09.
According to Kuhney, 2,491 notices of default and 1,288 trustee deeds were filed in the county recorder’s office in March. Trustee deeds were up 13% from February while notice of defaults were up 6%.
Quoting from the article, “While the number of foreclosure filings are at historically high levels, there have been almost a third fewer filings in the first quarter of 2010 than there were in 2009 and a quarter fewer filings than 2008.”
Michael Lea of USD thought there was a potential of the numbers to start rising to the point that there will be a year-over-year increase because there are still a large number of loans out there that are in serious default.
Diana Olick of CNBC reported this morning that housing inventories jumped 9.5 percent from January to February.
Quoting NAR,” ‘The inventory increase, one of the strongest from January to February, is discomforting, and it could pressure prices to decline later on,’ admits Lawrence Yun, chief economist for the National Association of Realtors.”
Diana Olick thinks the reason for the jump is probably attibuted to more distressed homes coming on the market, as opposed to a slew of step up buyers putting their homes on the market for the spring selling season.
This would be the same line of thinking that Jen Lebron Kuhney reported on earlier this month when the foreclosure/NOD filings in San Diego County for February were released She had reported a spike in defaults. When asked what he thought of the numbers, Alan Gin of USD said we would have to wait for a few months to see if this was a trend.
In an interview with Matt Battiata of Battiata Real Estate Group, Mr. Battiata remarked, “I think they’re (foreclosures) just backed up,” adding “But foreclosures are going to be back at a feverish pace this year.”
This goes along with what I’ve been saying for the last two and a half years regarding the resetting of the ARMs in 2010 and 2011, a high number of foreclosures will continue into 2012.
On the bright side? We’re a lot closer to the end of this than the beginning.