See my reply to MSVJ.

A house which has gone through the process, NOD through to TS&D and then listed, not sold, now standing vacant. That's shadow inventory - yes? Properties that have gone through TS&D, secured and standing vacant - shadow inventory - yes? Those numbers are huge.

That may not be true in your market but it is true in my market. Of course, my market has a 16% unemployment rate which may have a little something to do with it.

The CAR numbers are confusing at best. Sales are up but those are REO sales, not traditional resale, Median prices are down, not up, not even holding their own.

So, when the bargains aren't there, the sales will come to a halt and there goes the recovery that I heard about on the radio today as I driving around taking photos for BPOs.

If you think the worst is behind us, I think you are sadly mistaken. Home buyers are funny people, if the numbers don't make sense, they don't buy. If they're afraid for their job, they don't buy. Investors don't buy if the numbers don't work either.

As to Ocwen, I'm happy that you belong to a number of MLSs. Pray tell, how does that help a property in my county if you're down south? Are you going to show the property, will you make my county's disclosures or will you do what Ocwen attempted to do? Call a local agent to show the house???? That would be lovely if the house were on lockbox (even if it isn't on MLS). Just for laughs I took a drive-by to look at the manufactured house that they wanted me to sit this week-end. Interestingly enough, NO lock box and NO sign. If you're going to tell me that you're going to sell a manufactured house in my area, sight unseen and expect the local agents to pick up the slack, again, you would be mistaken.

It was only a campaign slogan for the current president.....how could I have ever misinterpreted that one??....


That's fine--you can refer to all of those other people, but they really didn't have a hand in this mess. My point was that you can look at the Senate Banking Committee and point a HUGE finger at them. As senators, only their state can vote for them. So, the statement that I, or anybody else here, put them into office is completely incorrect. By definition, the vast majority of Americans had no say whatsoever in their being elected...

Also, the groundwork for this problem was not laid 8 years ago. It was laid decades ago as government got more involved with insuring homes and providing lending guidelines. Please show me where it is government's responsibility to handle that! As down payment percentages decrease, foreclosures and bad loans increase. Simple as that.


I'll definitely agree that it will get worse before it gets better. However, the solution is not to keep bailing people out. Let them fail. Failure is the best teacher in the world. Without failure, people will never progress and learn from their mistakes. What do you have then? Generation after generation of inept, ignorant people depending upon the government to feed them.

If you want to display compassion, let people pick up their own mess and force them to grow up. Until you do that, you are only enabling them to continue to make stupid and reckless decisions. Compassion and empathy does not mean you give people what they want, but what they need in order to be self-sufficient, grow, and learn.


Just because somebody bought a property with an ARM doesn't mean they weren't warned about the situation. Honestly, most of the people I'm seeing getting foreclosed on are not being foreclosed on because they specifically used an ARM. They're being foreclosed on because a loan officer told them they were approved for a $300,000 home so that's what they bought--no money down, seller paid the closing costs, etc. Then, they charged everything to fill up their new little home with gadgets, electronics, furniture, etc. Everything was great as they lived month-to-month until there was a slight hiccup in income, bills increased, etc. It didn't take much to put a lot of these homeowners into foreclosure. What's to blame? The ARM loan or poor planning?

You say you want people to look at themselves. Fine, have them look at themselves. If they do, they will see that they didn't fail because of an ARM (many others have them and are doing fine). They failed because of poor planning, greed, and a "give-it-to-me-now" attitude.

So now, of course, let's blame the greedy realtor who just wanted a commission. I'm sorry, but I'm hired to give advice, negotiate, and broker transactions. I'm not hired to be somebody's conscious. If they want to look at the risks and still proceed with the transaction, that's their decision. Stop blaming the realtor, the bank, the ARM, or anybody else. For God's sake, every buyer of an ARM had to sign a document acknowledging it was an ARM and it displayed a schedule of what their payments could go up to. To say people didn't know what they were getting into is naive. To blame it on the realtor is even worse.

My 2 cents.

NTB

No, Shadow Inventory is not listed (that is why it is "Shadow"). It is properties that have been foreclosed on but not on the MLS. Forgiving some that are in the pre-list phase after all there will always be a "float" of homes in pre-list.

The theory behind shadow inventory is that there is ton of foreclosed inventory the banks are about to give to agents and make us all rich. But there isn't.

If you redefine shadow inventory as all the homes in default and pre-foreclosure then the numbers are huge.. but until those get listed in some fashion they don't matter much.



I think sales are horrible and are capped out because of the lack of inventory on market here in So. Cal. We are still in historically low sales territory except for the outer areas that have enough inventory to match demand (though in So Cal all I hear about is the low inventory everywhere but the high end).



When did I ever suggest the worst is behind us? I never said such a thing. All I stated was that there is no large inventory of foreclosed homes ready to be unleashed on the market. There are recently foreclosed homes that will be coming on market but a large inventory of REOs that the banks are holding back on does not exist. And if it did exist it could be proven it exist but nobody has been able to do so, wouldn't that suggest it doesn't exist? We aren't trying to prove a negative, we are trying prove a positive.

Some good discussion here.

I happen to feel similarly to NTB. Let business run its course and the greasy politicians need to stop pandering to those who want something for nothing. As long as you throw a dime into the open palm of a begger, his hand will continue to be open. Many of the mortgagors (the overwhelming majority actually) have openly confessed that the haven't made a payment in 8-12 months and it's not because they couldnt... it's because they didnt want to. They feel they shouldn't have to because their house depreciated in value. How do you fix that??? certainly not by allowing them to stay and forcing the certificate holder to write down their principle... because thats what these filthy greasy politicians (Frank, Dodd, Waters, etc.) want to have happen

First, the banks flooded the market with inventory and drove prices down 50% to 70% (in my area). Now, they've taken it into a new direction.....will only release a few at a time with the hopes of driving prices back up........we are averaging 20 to 25 offers per REO. I find it ironic that all banks have adopted this policy.........I just love it when I drive by a "shadow", with grass and weeds two feet tall......might just as well as put out a sign and say "COME AND GET IT"........If they think they had problems in the past with theft, just give it a few more months.......common sense doesn't seem to work for these folks.

While out doing my exteriors, I keep an eye out for "shadows".....not hard to spot. I write the address down and check the records when I return to the office........over 90% are shadows.......bank has owned an average of 5 months.....some as long as a year......maybe they're working on bulk sales.

end of rant............

Unfortunately this is my suspicion as well

If they're working on bulk sales, they're handling it privately. The last FNMA bulk sale I was notified of was back last Nov/Dec. I haven't seen a GMAC one in a while, either. To my knowledge, BOA and their minions (Countrywide, Wilshire, etc) are not doing bulk sales--they just aren't completing their foreclosures on people. They've had an approximate 70% drop in foreclosures due to the attempts to work out short sales/loan mods (overwhelming majority of them are failing). As for Chase and Citi, I'm not sure about them. Once you get past those big banks/networks, there's really not many other national banks to be worried about.

IMHO the problem will get fixed when everyone works together to fix the problems instead of trying to fix blame.

I do not profess to knowing what the answers are but every moment spent trying to figure out who is responsible for it happening is a moment that could have been used in thoughtful consideration of how best to correct it. Then we can all move on.

It will be interesting to see how this will be taught in business schools in 20 years.

This is strange, and maybe some of you know this already, but I heard thru the grapevine that GMAC RESCAP has hired an asset company to actually have them manage their REO's as RENTALS? Sounds wierd, but that rumor is out there. I could be crazy in posting that, but that's what a reliable source has told me.

Northtx, you are right, the majors are no longer interested in bulk REO sales, they are losing less by loan mod, short sale, and even foreclosure. The bulk REO stuff out there now is mostly junk or wholesale bulk from a Seller who bought directly bulk from the bank, bulk Buyers are only expecting 70-80 cents to the dollar.

Okay so my wonderful CA people will understand this I think.

Banks are currently looking at what is happening in the riverside area due to the moritorium. Since april/may - Values actually have been rising. People (mostly investors) are overbidding listing price due to the lack of inventory available. This is opening clients eyes to the possibilities of keeping the reins on their inventory. I don't see them bulking up huge deals. I see them going to great efforts to trickle out the properties as slow as possible. They'll be looking for a snowball effect. If they start slow, by the time they start releasing more the value will be going up and they won't lose as much on the property.

My 2cents.

I agree about short sales being the wave coming in. It makes sense for the lender eliminating holding and property preservation costs. In California, so many people are upside down in their homes a move for them = foreclosure or short sale.

The flip side- the sellers have to "care" about their obligation to the bank and credit to want to go through the short sale process ( and understand it as well ), this often isn't the case.

MSVJ, I sold two properties in Riverside County in the past 2 months representing an investor. Though we didn't go over the asking price but we did come close to asking. You are right, I think banks are getting smart by not releasing too many at one time. What's interesting is we bought properties whereas the original buyers couldn't qualify for the loan, and I think we will see more of an increase on that situation. But as I look today, only 10 properties for consideration for investors in Temecula, whereas i remember it use to be 40-50 last fall.

If you read the Tenant Access thread it will be more clear as to what is going on. It appears that this is what several companies are planning on doing.

You jump to conclusions. Who maintains the property when its in eviction? Not the bank because they don't have possession yet.

My last REO was in eviction for 1.5 years after foreclosure.

To say that the banks are foreclosing, gaining access and not putting them to market to control flow is hogwash. That would be saying there is a conspiracy between all finacial institutions.