"4 weeks and then all hell breaks loose"

[IrvineRenter_IHB]

A person who isn't lazy could have found this.

Do you see the contradiction in these two statements?

You have a very bad attitude.

Be nice. We are supposed to have fun here

 

[IrvineRenter_IHB]

Graphrix, you are both a poor debater and worse, a poor loser.

Name calling and strongly negative characterizations are not permitted.

 

[Mcdonna1980_IHB]

Don't threads like this just keep you glued to the computer screen? You know if you look away you'll come back to "zovall delete" and miss all the good stuff.

 

[graphrix_IHB]

Your pissant attitude doesn't change a thing. I posted 4-6 links. You had issues with all of them. I posted other data and it didn't print right....making one more thing you are wrong about. You have serious emotional issues.

Okay, you have "proven" three on my list are no longer REO, that still means there are 12 REOs unaccounted for. Lets just give you the benefit of the doubt, and I'll give you two more for a total of 5, and 10 for me. Mmmm... still looks like the majority of my list is REO, and that means 10 more REOs sitting there rotting on the banks books. Given that even though my list wasn't correct, the majority of it was. In voting, the majority wins, and in CA you need a 2/3rds majority, which I have. So... I win! I proved there were more REOs unaccounted for than the list Robert used. It means the months supply of inventory is higher than you say, and shows you should show some respect to people who do know what they are talking about. Just like I told Robert, you might learn something.

 

[RobertLarsen_IHB]

Do you know anyone living in a house years after they stopped paying or have you just heard it from a friend of a friend? And, if so, what percentage of foreclosed homes do you think that is? .1%? Either way, it's not a statistically significant percentage. I know of people being paid to vacate a bank owned property, not people living payment free for 2 years.

To just qualify for a short sale, a bank likes to see that you haven't paid your mortgage for 3+ months. And again, a short sale is an entirely different scenario than a foreclosure. Banks would love for every homeowner to be able to complete a short sale instead of a foreclosure, because it allows them to use TARP money. Why do you think banks are trying to persuade homeowners to complete a short sale rather than have it foreclosured. People can now get a new loan 18 months after completely a short sale. Plus, the banks will take off the missed mortgage payments from your credit report.

I have no doubt that there will be more REOs in the future, but only because there are more defaults, not because of the bank conspiracy.

Now answer my questions:

1) Why would a bank pay thousands of dollars to bribe an occupant to leave? The occupant is upkeeping the home, and paying for utilities. It's much better for a neighborhood to have people living in the homes, rather than have the homes vacant. They would be able to bypass mark-to-market accounting for the timebeing.

2) Did my analysis of 92656 not prove anything? If there is a huge surplus of REO inventory, not on the market, where is it? Why were all of my datapoints within 3.5 months? Where are the 12+ and 24+ month old REOs.

3) If the remaining 29 REOs not listed on the market are sold within the next 2 months, does this not further disprove the shadow inventory theory?

4) Why is cash still king in the bank owned market place? Loans would allow a bank to hold onto the property for another 30-45 days.

First, let us not exaggerate. No one said years.

I do know of three properties in which the previous owners kept living in the home after the home went back to the bank. The total time from payment stoppage to the occupants leaving was about 18 months, and in one of the properties the occupants are still there. This thread got me interested, so I checked it out on FR, which it was listed on previously, but it has vanished. It was not listed for sale the entire time it was, or is, REO. IrvineRealtor is currently checking for me to see if it is in escrow or what its possible status is.

3 REOs in two years is about 15% of the REO property in this neighborhood, just a guess. For giggles I will check on the current inventory of REO and see what the approx time from non-payment to listing for sale is.

I dunno, 3.5 months of inventory sounds like a lot to me when more is coming on line every month.

Or maybe one of you who has access can find out what happened to 6 Via Presea, 92679

On 05/08/2009, Bear Stearns Series 2006-Sd2 took over the trustee's deed from Quality Loan Service Corp.

And, it's not 3.5 months of inventory, it's just 29 properties. 3.5 months is just how old the oldest existing bank owned property in that area is.

Sorry about the 3.5 mistake. I gotta learn to read.

Please help me out here. It seems that means Bear Sterns is now the owner of the property? So it would still be REO. Interestingly, the previous owners are still living there. And it has not been listed for sale.

Yah, that was the interesting thing I was seeing with a few properties. They were just changing ownership from one bank to another. I saw a few properties that had been owned by 3,4, and even 5 banks. I'm not sure what's going on there.

 

[RobertLarsen_IHB]

The property at 21 Cambria closed escrow on 3/3/2009. Your list is officially garbage.

Doesn't show up in county records as closed. Still REO. You... are full of garbage.

Shows up as a bank owned sale on my title search. Closed escrow on 3/3/2009.

 

[RobertLarsen_IHB]

After reading CapWorks excellent description, wouldn't this also make pre-FC (i.e. at least 90+ day NODS) more important to count?

I mean, (and correct me if I'm completely off base here) including only the foreclosed properties in the count as "shadow inventory" is like a shop saying that what's in stock is only on the shelves, and not counting the palettes and crates sitting in the loading dock, not yet unpacked. I agree that it's much less quantifiable, and that the CR guy was a bit reaching in trying to drum up his Shadow Inventory number. But nonetheless still worthwhile to consider.

edit: took too long to post. I guess the number can be quantified, at least roughly.

I was just trying point out that there is no huge backlog of REOs and that banks are not hoarding inventory for a later day. We are current when it comes to pre-foreclosure and foreclosure properties, not to say there will not be more in the future. But, there is no such stockpiling going on. The increasing number of delinquencies will not be enough to send the market spiralling down.

Here's a good article about it:

http://www.cnbc.com/id/32630317

As for the store analogy, if it's sitting on the loading docks, you can't buy it. What's in the store, is the standing inventory.

Except there is a cost of carry on that inventory on the docks, just like there is a cost of carry for non-performing loans on properties that are not being disposed of in the most expedited manner.

Your link goes a long way to supporting my argument that banks are using the HAMP/modification myth in order to delay foreclosures.

As for your questions.

1) Banks pay occupants of foreclosed homes to Not Destroy the Home upon exit. If a former homeowner can live rent free for a period of time then why would he trash his home. However, once it becomes apparent that the bank is planning on moving the property the incentives change. Simple enough, yes?

2) I do not contend with your REO/MLS listing observation. My point is that rate of homes reaching the REO/MLS phase is far slower than it should. See the article you linked.

3) See Above.

4) ?

1) Banks pay occupants of foreclosed homes to Not Destroy the Home upon exit. If a former homeowner can live rent free for a period of time then why would he trash his home. However, once it becomes apparent that the bank is planning on moving the property the incentives change. Simple enough, yes?

That's just not true.

Try Googling. The practice is known as Cash for Keys. I would have thought that a real estate pro would have been familiar with this practice, or at the very least astute enough to look it up before confirming another hole in his "expertise".

Here is one of the nearly 3 MILLION Hits on Google.

http://cbs13.com/local/cash.for.keys.2.651785.html

Maybe you should recognize the order of importance in the link you provided. "Occupants get out within 30 days." This is the main reason for the cash. Of course they would not pay the occupant if they left in 30 days, and on the 30th day they burnt down the place. Try not to have selective reading when quoting text.

And furthermore, why try to get personal with the "real estate pro" and "expertise" comments? I did not come to this forum to prove my expertise or gain business. I just started learning CSS, html, and blogging and I really wanted to join the active internet community and promote my blog. Are you just "trolling"?

 

[RobertLarsen_IHB]

Your pissant attitude doesn't change a thing. I posted 4-6 links. You had issues with all of them. I posted other data and it didn't print right....making one more thing you are wrong about. You have serious emotional issues.

No need to get heated up. Most people here will respect your opinion if you stay calm and relaxed and just post factual analysis. Even if they don't agree with you, you can have some good conversations. I know it's frustrating, but even graphix lightens up (a little) after awhile.

 

[graphrix_IHB]

Your pissant attitude doesn't change a thing. I posted 4-6 links. You had issues with all of them. I posted other data and it didn't print right....making one more thing you are wrong about. You have serious emotional issues.

No need to get heated up. Most people here will respect your opinion if you stay calm and relaxed and just post factual analysis. Even if they don't agree with you, you can have some good conversations. I know it's frustrating, but even graphix lightens up (a little) after awhile.

I'm really beginning to like Robert now. He is a good kid. I love that he is willing to have a debate about stats, stats that he posts. Even if he missed a few...

 

[CapitalismWorks_IHB]

RL, when someone who knows better says something isn't truw I find it obnoxious. I figured someone in RE would know. Since you appear to have been unaware of the practice of cash for keys, well I am surprised. More importantly, when you say something I posted "isn't true" you had better damn well be able to disprove the statement.

As I pointed out there are 2.9 MILLION hits on Google. Just read a few.

Preventing the destruction of the property may not be the sole reason to offer cash for keys, but it is certainly an important reason.

BTW, coming here to promote your blog is seeking to drum up business. Using your real name, is seeking to drum up business. Don't try to play coy with your motives for being here. Your objective is to make money, and you are holding yourself out as a professional on this blog. If I question your knowledge and mention your occupation it is for these reasons.

If you want to avoid these types of comments, I suggest changing your screen name to something unknown. You could still learn about blogging and R/E without being held to the higher standard that should apply to R/E pros. Otherwise your background is fair game.

 

[Geotpf_IHB]

This jives with what I was thinking and arguing in the other thread, if I understand you correctly. You are basically saying that in that zip code, there are no bank owned properties that have been banked owned for more than three and a half months and are not listed on the MLS. There were no properties owned by the same bank for six months or a year, in that ZIP code. Is that correct? I think three months is a reasonable time to do all the things required to prep a propetry for sale.

That is, there's no shadow inventory-everything bank owned (in that ZIP code) is either on the market or has been owned by the bank for such a short time that it's likely that it will be on the market soon.

Now, there is a very large pre-shadow inventory (properties in default but that have not had an auction occur), of course. But once the bank actually takes a propetry back, it goes on the market fairly quickly.

Correct, with one addition; properties are also sold at auction on the courthouse steps. Homes that are scheduled for foreclosure auction never reach the MLS.

So is there just a major semantical disconnect here? I've been under the impression that the "Shadow Inventory" (as referenced in the threads here; NOT as defined by CR) included all of the houses which have received Notices of Default through to actual Foreclosure. From what you guys are saying, it sounds as if you're only counting stuff that has been taken back by the bank, I guess the last part of the process. Maybe I missed a part of the argument.

Now, if you're going to divide it up into "pre-Shadow" and then "Shadow," and if you're agreeing (Geotpf, at least) that there is a large "pre-Shadow" inventory, doesn't this, in the end, result in the same large downward pressure on prices? Particularly once the bulk of defaulted loans get processed?

I have to admit that I'm a "Shadow-Inventory" believer, although it's mostly on faith. I can't understand how, with all the defaulting and stuff going on, inventory in Irvine is so low (in the houses I'm looking at) given the carnage in other parts of CA. Not that I'm a conspiracy theorist, mind you - I just also have a firm belief in the incompetence and self-serving nature of the system. That being said, wouldn't the banks exert control over the process in deciding when they begin the foreclosure process? The process may itself proceed relatively quickly and uniformly once started, but it can only happen when the banks begin the process - acting as gatekeepers as you will.

Disclaimer- My knowledge on all this stuff is purely water cooler stuff. Stuff I hear on NPR, evening news, headlines on MSN or Yahoo, and the stuff I read here. It's mostly supposition with a light seasoning of talking out my ass. I don't know any insider bank/mortgage info, nor do I know anyone in the business. But I find this all terribly interesting... (at least until I buy a house).

The theory here is that a lot of pre-shadow inventory will get loan mods or approved short sales, and therefore never become bank owned. The loan mod programs are still warming up. The short sales affect prices somewhat, but the loan mods don't, at least not directly. Right now, the issue is a lack of supply, which is helping keeping prices steady.

In the other thread, graphix amoung others made the argument that there were lots of bank owned properties that the banks were sitting on and not selling (actual shadow inventory). I disagreed, but, since I'm a water-cooler guy like you and had little actual proof, I got shouted down.

 

[irvine_home_owner_IHB]

The theory here is that a lot of pre-shadow inventory will get loan mods or approved short sales, and therefore never become bank owned. The loan mod programs are still warming up.

What theory is this?

How will people who couldn't qualify for the loan in the first place, now qualify? Especially if they don't have a job? And they don't do loan mods for underwater properties.

"Loan mods preventing foreclosures" is worse than my FCB theory because FCBs don't use fundamental valuation, credit history or LTV ratios.

I've read more stories that say loan mods are not being done or even after being done get defaulted on again than loan mods being successful. Can you cite me some references where loan mods are actually working and that there will be many of them in the future that will prevent foreclosures?

Since we're both water cooler "experts"... I think this is a fair request.

 

[RobertLarsen_IHB]

The theory here is that a lot of pre-shadow inventory will get loan mods or approved short sales, and therefore never become bank owned. The loan mod programs are still warming up.

What theory is this?

How will people who couldn't qualify for the loan in the first place, now qualify? Especially if they don't have a job? And they don't do loan mods for underwater properties.

"Loan mods preventing foreclosures" is worse than my FCB theory because FCBs don't use fundamental valuation, credit history or LTV ratios.

I've read more stories that say loan mods are not being done or even after being done get defaulted on again than loan mods being successful. Can you cite me some references where loan mods are actually working and that there will be many of them in the future that will prevent foreclosures?

Since we're both water cooler "experts"... I think this is a fair request.

Gotta go to work! But, here's the most recent article I've seen on it. I'll try to find better cites later if needed.

"Foreclosure sales have been abnormally low since we learned of the pending implementation of the administration’s Making Home Affordable program. From that point, we delayed the initiation of foreclosure proceedings and sales for customers that may eligible for a loan modification under MHA. As a result of this policy, our foreclosure sales in recent months have been as little as half the normal pace we experienced before."

"Until a foreclosure is completed, Bank of America continues to exhaust every possible option to qualify customers for modification or other solutions."

http://www.cnbc.com/id/32630317

 

[NewportSkipper_IHB]

Graphrix, it's unfortunate that you can't admit the obvious fact that your data are corrupt. I didn't check all the addresses, just 6-8 and 75% of them were sold. That list changes nothing in my opinion. There is a two month supply of foreclosures on balance sheets at this juncture, maybe 2.5 months. Then again, the market might be able to absorb that amount in 1 month, since demand is there, but they won't get released that way.

 

[NewportSkipper_IHB]

Name calling and strongly negative characterizations are not permitted.

But calling someone a one-armed monkey is fine. Graphrix is by far the nastiest person I've ever encountered on the internet.

 

[no_vaseline_IHB]

The property at 21 Cambria closed escrow on 3/3/2009. Your list is officially garbage.

Doesn't show up in county records as closed. Still REO. You... are full of garbage.

Shows up as a bank owned sale on my title search. Closed escrow on 3/3/2009.

On edit: I found the records for the Cambria property:

http://www.redfin.com/CA/Aliso-Viejo/21-Cambria-Ln-92656/unit-50/home/5738467

But that doesn't explain the Berkshire property, which supposedly closed over 6 months ago.

http://www.irvinehousingblog.com/forums/viewthread/5788/P150/#125348

 

[no_vaseline_IHB]

Name calling and strongly negative characterizations are not permitted.

But calling someone a one-armed monkey is fine. Graphrix is by far the nastiest person I've ever encountered on the internet.

!

 

[irvine_home_owner_IHB]

The theory here is that a lot of pre-shadow inventory will get loan mods or approved short sales, and therefore never become bank owned. The loan mod programs are still warming up.

What theory is this?

How will people who couldn't qualify for the loan in the first place, now qualify? Especially if they don't have a job? And they don't do loan mods for underwater properties.

"Loan mods preventing foreclosures" is worse than my FCB theory because FCBs don't use fundamental valuation, credit history or LTV ratios.

I've read more stories that say loan mods are not being done or even after being done get defaulted on again than loan mods being successful. Can you cite me some references where loan mods are actually working and that there will be many of them in the future that will prevent foreclosures?

Since we're both water cooler "experts"... I think this is a fair request.

Gotta go to work! But, here's the most recent article I've seen on it. I'll try to find better cites later if needed.

"Foreclosure sales have been abnormally low since we learned of the pending implementation of the administration’s Making Home Affordable program. From that point, we delayed the initiation of foreclosure proceedings and sales for customers that may eligible for a loan modification under MHA. As a result of this policy, our foreclosure sales in recent months have been as little as half the normal pace we experienced before."

"Until a foreclosure is completed, Bank of America continues to exhaust every possible option to qualify customers for modification or other solutions."

http://www.cnbc.com/id/32630317

I read that post in the other thread too... but you left this part out:



While we have very strong loan modification programs now available, unfortunately, these foreclosure projections reflect the increasing number of customers who will not qualify for loan modification because they have suffered major life events servicers can’t solve...primarily unemployment and underemployment.



So even though BofA is trying to use loan mods as an excuse of why their foreclosure process is taking so long, they admit that their number of foreclosures will rise because people just don't qualify for the mods.

And I don't think a bank is going to come out and say "Yeah... we're delaying our foreclosure process because it's going to impact our capital ratios". Look at how those statements are phrased and you can sense there's no real sense of urgency from them to process foreclosures quickly. The comments in that article also come to the same conclusion that BofA isn't really being forthright in their statements. I know this is the Internet and we can't believe anything people say but here is one such comment:



I am Real Estate and Mortgage broker in Southern Ca; I believe that the statements that are being made by these institutions are inaccurate. I have knowledge of a BofA Countrywide asset manager who stated that in Southern Ca alone, they (the bank) was holding on to approximately 35,000 already foreclosed on properties that have not been released. Many of my counterparts that actively list REO properties have been extremely slow. Banks will attribute this to the 6 month 'moratorium', however many of the properties already foreclosed on prior to the moratorium are held in possession by these banks.



Now that number may be extreme but common sense just says there are way too many distressed properties as a result of the bubble out there... why are they not on the market? Does it make sense to you that inventory is so low when there are not that many qualified buyers out there? Where is everything going? Are all these people just underwater and not paying their mortgage and living rent free? It just does not compute.

 

[trrenter_IHB]

The theory here is that a lot of pre-shadow inventory will get loan mods or approved short sales, and therefore never become bank owned. The loan mod programs are still warming up.

What theory is this?

How will people who couldn't qualify for the loan in the first place, now qualify? Especially if they don't have a job? And they don't do loan mods for underwater properties.

"Loan mods preventing foreclosures" is worse than my FCB theory because FCBs don't use fundamental valuation, credit history or LTV ratios.

I've read more stories that say loan mods are not being done or even after being done get defaulted on again than loan mods being successful. Can you cite me some references where loan mods are actually working and that there will be many of them in the future that will prevent foreclosures?

Since we're both water cooler "experts"... I think this is a fair request.

Gotta go to work! But, here's the most recent article I've seen on it. I'll try to find better cites later if needed.

"Foreclosure sales have been abnormally low since we learned of the pending implementation of the administration’s Making Home Affordable program. From that point, we delayed the initiation of foreclosure proceedings and sales for customers that may eligible for a loan modification under MHA. As a result of this policy, our foreclosure sales in recent months have been as little as half the normal pace we experienced before."

"Until a foreclosure is completed, Bank of America continues to exhaust every possible option to qualify customers for modification or other solutions."

http://www.cnbc.com/id/32630317

I read that post in the other thread too... but you left this part out:



While we have very strong loan modification programs now available, unfortunately, these foreclosure projections reflect the increasing number of customers who will not qualify for loan modification because they have suffered major life events servicers can’t solve...primarily unemployment and underemployment.



So even though BofA is trying to use loan mods as an excuse of why their foreclosure process is taking so long, they admit that their number of foreclosures will rise because people just don't qualify for the mods.

And I don't think a bank is going to come out and say "Yeah... we're delaying our foreclosure process because it's going to impact our capital ratios". Look at how those statements are phrased and you can sense there's no real sense of urgency from them to process foreclosures quickly. The comments in that article also come to the same conclusion that BofA isn't really being forthright in their statements. I know this is the Internet and we can't believe anything people say but here is one such comment:



I am Real Estate and Mortgage broker in Southern Ca; I believe that the statements that are being made by these institutions are inaccurate. I have knowledge of a BofA Countrywide asset manager who stated that in Southern Ca alone, they (the bank) was holding on to approximately 35,000 already foreclosed on properties that have not been released. Many of my counterparts that actively list REO properties have been extremely slow. Banks will attribute this to the 6 month 'moratorium', however many of the properties already foreclosed on prior to the moratorium are held in possession by these banks.



Now that number may be extreme but common sense just says there are way too many distressed properties as a result of the bubble out there... why are they not on the market? Does it make sense to you that inventory is so low when there are not that many qualified buyers out there? Where is everything going? Are all these people just underwater and not paying their mortgage and living rent free? It just does not compute.

Yes people are living rent free.

Two people that work in my company are doing it now.

One has not paid a mortgage to indymac in 18 mos and has no intention of modifying his loan and actually rents out a room to someone.

The other, I don't know who holds his mortgage, has not paid a mortgage payment in 13 months.

I read somewhere that only 9% of troubled loans are actually being modified.

 

[irvine_home_owner_IHB]

Name calling and strongly negative characterizations are not permitted.

But calling someone a one-armed monkey is fine. Graphrix is by far the nastiest person I've ever encountered on the internet.

Let's be fair here... graph is cranky but you also contribute.

In the other thread about Tustin $150k properties... I was being very even-keeled with you but your responses were a bit hostile. I challenged you on several points and instead of responding, you countered with other arguments that did not pertain to the questions I asked you.

That type of behavior will usually be met with a bit of disdain as you are no longer trying to discuss but just trying to argue.