75,230 Mortgage Default Notices
Over 75 thousand NODs were filed against California homeowners during the fourth quarter of 2008. The decline was caused by new state regulations requiring lenders to take added steps to try to keep troubled borrowers in their homes and lenders slowing down the process during the holidays.
The figure represented a 20.2 percent decrease from 94,240 the previous quarter and a 7.7 percent decrease from the 81,550 recorded in the fourth quarter of 2007.
"The bigger question is whether or not the housing market has hit a low and is dragging along bottom, or if the markets that so far have remained unaffected by the foreclosure problem are due for a fall," said John Walsh of DataQuick.
Foreclosure "Ghost Inventory" may be substantial. There is probably even more excess housing inventory gumming up the market than current statistics indicate, thanks to a wave of foreclosures that has yet to hit the market. Many foreclosed homes and other distressed properties that are now owned by banks have yet to be listed for sale. "[Excess] inventory is the biggest problem in housing these days, and it leads to lower housing prices, which leads to more foreclosures.," said Pat Newport, an analyst with IHS Global Insight
Online foreclosure sites are discovering that they have far more foreclosed properties listed in their databases than are listed in the multiple listing services (MLS) maintained by real estate agents. The MLS system may contain only a third of the foreclosures in the system.
"Many properties that should be listed on the MLS are not listed on the MLS," said Lawrence Yun, chief economist for the National Association of Realtors (NAR).
The NAR's latest statistics say that there is an 11 month supply of homes nationally, but now it seems quite possible that these figures, which are already at record highs, are underestimating the situation. Recovery in the housing market won't happen until the inventory of bank owned, foreclosures is significantly reduced.
System overload is helping to create the delay. Lenders seem ill prepared prepared to handle the sheer numbers of foreclosures that they have on their books. Banks took back about 860,000 in 2008 – more than twice the number in 2007.
In areas with high foreclosure inventory, banks may slow down the process of bringing more foreclosures on the market to keep from depressing home values even more. One thing we may see more of in east Contra Costa county is banks selling foreclosures in batches and auction sales.
Getting foreclosed properties in good repair is also challenging due to the volume of homes in disrepair.
Some are predicitng another 3 million foreclosures in 2009.
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One Comment
It looks to me the areas which have dropped precipitously have pick up strongly. Other areas are still lingering. In our area Bergen County New Jersey, we seem ready to start selling. There is financing again. We have not had a broad spectrum of loans for a while, now it has seemed to come back. I think this spring, with all the fed money coming in is going to catch people by surprise. Bergen County has only declined about 15% off the top, but we are in a fully developed area. There wasn’t any where near the new home building as So Cal, Nevada, Arizona and Florida.