Anonymous_IHB
New member
<A href="http://www.foreclosuretruth.com/blog/sean/waiting-catch-wave-surge-reo-listings-unlikely">http://www.foreclosuretruth.com/blog/sean/waiting-catch-wave-surge-reo-listings-unlikely</A>
Waiting to catch a wave? Surge of REO listings is unlikely.
- Thread starter Anonymous_IHB
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awgee_IHB
New member
Makes sense and would seem to fit my own observations, but how long can the banks keep postponing the auctions? Indefinitely? The author says those waiting for a foreclosure wave will be waiting for a long time. That is very vague and he gives no evidence for the length of time being long or how long he means. He also does not approach the issue of what the banks will do with the NTSes if they do not go to auction. Does he think the auctions will be cancelled? Loan mods?
His analysis would seem to accurately speak to current conditions, but I do not think he assesses the future with any evidence.
His analysis would seem to accurately speak to current conditions, but I do not think he assesses the future with any evidence.
no_vaseline_IHB
New member
Nowhere in the article does it show that these borrowers are still defaulting in record numbers (they are) and it further ignores that anyone would DARE try to collect (they will).
bltserv_IHB
New member
I think the OP is drinking too much kool aid.
The front end of the forclosure market is just getting back in gear.
<img src="http://mortgage.freedomblogging.com/files/2009/08/foreclosure-filings-as-of-j.jpg" alt="" />
"Loan servicers and banks filed 2,166 notices of trustee?s sale ? warnings that a property was about to face a foreclosure auction ?the highest total in 11 months and up 35% from June and 2% from a year ago. Basically, auction notices have returned to highs of last summer".
In todays Register.
"Looking at statewide figures, banks and servicers filed 39,294 auction notices last month, a 31.6% increase over June and a 0.7 percent increase over the prior year. But here is an eye-catching fact: total oustanding auction notices ? minus those that have cancelled or sold ? rose to a record 124,874 last month, nearly double the levels reached during the foreclosure peak last year! That means a lot of properties are simply being delayed and delayed".
The front end of the forclosure market is just getting back in gear.
<img src="http://mortgage.freedomblogging.com/files/2009/08/foreclosure-filings-as-of-j.jpg" alt="" />
"Loan servicers and banks filed 2,166 notices of trustee?s sale ? warnings that a property was about to face a foreclosure auction ?the highest total in 11 months and up 35% from June and 2% from a year ago. Basically, auction notices have returned to highs of last summer".
In todays Register.
"Looking at statewide figures, banks and servicers filed 39,294 auction notices last month, a 31.6% increase over June and a 0.7 percent increase over the prior year. But here is an eye-catching fact: total oustanding auction notices ? minus those that have cancelled or sold ? rose to a record 124,874 last month, nearly double the levels reached during the foreclosure peak last year! That means a lot of properties are simply being delayed and delayed".
awgee_IHB
New member
Exactly, they are being delayed and delayed, and IMO, more are becoming short sales than before.
I do not think the author is ignoring the number of NTSes. He is remarking how few actual auctions there are relative to the number of NTSes, which is something I and a few others have noticed.
The ulimate question is "How far can the can be kicked down the road?" No matter if auctions are postponed, loans are modified, debt is socialized, etc, the piper will have to paid and someone will have to write off bad debt and either someone else will have to pay, either directly or through inflation.
I do not think the author is ignoring the number of NTSes. He is remarking how few actual auctions there are relative to the number of NTSes, which is something I and a few others have noticed.
The ulimate question is "How far can the can be kicked down the road?" No matter if auctions are postponed, loans are modified, debt is socialized, etc, the piper will have to paid and someone will have to write off bad debt and either someone else will have to pay, either directly or through inflation.
no_vaseline_IHB
New member
[quote author="awgee" date=1250112653]
The ulimate question is <strong>"How far can the can be kicked down the road?" </strong>No matter if auctions are postponed, loans are modified, debt is socialized, etc, the piper will have to paid and someone will have to write off bad debt and either someone else will have to pay, either directly or through inflation.</blockquote>
I don't agree with your question. The capacity for banks to dispose of foreclosures in a prompt fashion was dismantled somewhere around 1996 in the spirit of "streamlining" or some nonsense like that. This is the same point where banks shut down their in house appraisal department, and replaced them with ?outside appraisers? because it was too expensive to keep them in house otherwise - but that is simply another spoke of the same argument and I don't want to vier too far off topic.
I think they'd like to, but they can't because to do so now the CFO has to explain in the next conference call why they are doing it and nobody else is. "Everybody else is behind the curve" isn't an answer. "Amend, extend, and pretend?" Sure its a recipe for certain death <em>someday </em>, but it isn't a Kamikaze mission <em>today </em>. I never thought I'd ever see the day where somebody could stop paying and still live in the same property 12-18 months down the road, but that appears where we are.
I have some other thoughts on the subject, but when I read my own words I start to feel all strange in a sporting-the-tinfoil-hat-on-the-bus-to-crazytown kind of way so I just delete them. Not because I think I'm wrong, but because I'm afraid if I'm right. But here?s one just to prime the pump a little:
There is a popular notion out there that since banks haven?t went after folks who defaulted on recourse loans lately (they used to), they never will again, so it?s a costless put. Oh yeah? If you have positive net worth and you dump on the bank for $200K because you?re upside down on your house, I wouldn?t sleep real well at night. Somebody, somewhere is going to pick up these ?right to collect on shortfall? options and make your life real miserable ? and sooner than you might imagine. Crazy? It?s just the other side of the coin from what they are doing now. And nobody is arguing that they are going to eventually change what they are doing now.
The ulimate question is <strong>"How far can the can be kicked down the road?" </strong>No matter if auctions are postponed, loans are modified, debt is socialized, etc, the piper will have to paid and someone will have to write off bad debt and either someone else will have to pay, either directly or through inflation.</blockquote>
I don't agree with your question. The capacity for banks to dispose of foreclosures in a prompt fashion was dismantled somewhere around 1996 in the spirit of "streamlining" or some nonsense like that. This is the same point where banks shut down their in house appraisal department, and replaced them with ?outside appraisers? because it was too expensive to keep them in house otherwise - but that is simply another spoke of the same argument and I don't want to vier too far off topic.
I think they'd like to, but they can't because to do so now the CFO has to explain in the next conference call why they are doing it and nobody else is. "Everybody else is behind the curve" isn't an answer. "Amend, extend, and pretend?" Sure its a recipe for certain death <em>someday </em>, but it isn't a Kamikaze mission <em>today </em>. I never thought I'd ever see the day where somebody could stop paying and still live in the same property 12-18 months down the road, but that appears where we are.
I have some other thoughts on the subject, but when I read my own words I start to feel all strange in a sporting-the-tinfoil-hat-on-the-bus-to-crazytown kind of way so I just delete them. Not because I think I'm wrong, but because I'm afraid if I'm right. But here?s one just to prime the pump a little:
There is a popular notion out there that since banks haven?t went after folks who defaulted on recourse loans lately (they used to), they never will again, so it?s a costless put. Oh yeah? If you have positive net worth and you dump on the bank for $200K because you?re upside down on your house, I wouldn?t sleep real well at night. Somebody, somewhere is going to pick up these ?right to collect on shortfall? options and make your life real miserable ? and sooner than you might imagine. Crazy? It?s just the other side of the coin from what they are doing now. And nobody is arguing that they are going to eventually change what they are doing now.
awgee_IHB
New member
Your collection issue is not tinfoil at all. I have considered it, but my guess is that the expense of sifting through all the owners to find any with assets on top of the expense of collecting may not be profitable.
Give us the tinfoil version. What have you got to lose? We already know something is loose up there.
Give us the tinfoil version. What have you got to lose? We already know something is loose up there.
no_vaseline_IHB
New member
[quote author="awgee" date=1250115264]Your collection issue is not tinfoil at all. I have considered it, but my guess is that the expense of sifting through all the owners to find any with assets on top of the expense of collecting may not be profitable.
Give us the tinfoil version. What have you got to lose? We already know something is loose up there.</blockquote>
Maybe later. I'm going to take a working daycation to SLO this afternoon.
But I'll tell you this - if I was in loss mitigation I would wait 3-5 years, and then start doing asset searches by the biggest loss first - and move down the chain till it was no longer cost effective. Then I'd move another 25%. I take a dogmatic approach to borrowers that they are sheep (because they are) and if the bank doesn't carry a credible threat of coming after you unless you file BK, then what's the downside to the borrower? Just do it again! And they will.
I haven't forgot about the coffee get together I'm hosting, I'm a little buried right now.
Give us the tinfoil version. What have you got to lose? We already know something is loose up there.</blockquote>
Maybe later. I'm going to take a working daycation to SLO this afternoon.
But I'll tell you this - if I was in loss mitigation I would wait 3-5 years, and then start doing asset searches by the biggest loss first - and move down the chain till it was no longer cost effective. Then I'd move another 25%. I take a dogmatic approach to borrowers that they are sheep (because they are) and if the bank doesn't carry a credible threat of coming after you unless you file BK, then what's the downside to the borrower? Just do it again! And they will.
I haven't forgot about the coffee get together I'm hosting, I'm a little buried right now.
Geotpf_IHB
New member
I think more loan mods will go through than most people think will. Looks like short sales might start to actually occur in large numbers too. I think part of the delay is a delay in hiring and training enough people to process everything.
If I was a bank, I would approve almost all loan mods proposed with the following terms-interest rate stays the same, amount owed stays the same, time period until the loan is due goes to 40, 50, or even 99 years. Their payment is lowered, but the total amount of money I get would actually increase (over a longer period of time, of course). Plus, there's minimal moral hazard there. It's a win/win, IMHO. Beats trying to sell a property for much less than I'm owed (and paying all the expenses involved in doing so).
If I was a bank, I would approve almost all loan mods proposed with the following terms-interest rate stays the same, amount owed stays the same, time period until the loan is due goes to 40, 50, or even 99 years. Their payment is lowered, but the total amount of money I get would actually increase (over a longer period of time, of course). Plus, there's minimal moral hazard there. It's a win/win, IMHO. Beats trying to sell a property for much less than I'm owed (and paying all the expenses involved in doing so).
no_vaseline_IHB
New member
[quote author="Geotpf" date=1250123012]I think more loan mods will go through than most people think will. Looks like short sales might start to actually occur in large numbers too. I think part of the delay is a delay in hiring and training enough people to process everything.</blockquote>
I don't. The moral hazard precident alone is enough to disagree, but who am I to disagree with the Washington Post?
<a href="http://www.calculatedriskblog.com/2009/07/wapo-foreclosures-frequently-best.html">http://www.calculatedriskblog.com/2009/07/wapo-foreclosures-frequently-best.html</a>
It's almost never in the banks economic interest to do a cram down.
<blockquote>If I was a bank, I would approve almost all loan mods proposed with the following terms-interest rate stays the same, amount owed stays the same, time period until the loan is due goes to 40, 50, or even 99 years. Their payment is lowered, but the total amount of money I get would actually increase (over a longer period of time, of course). Plus, there's minimal moral hazard there. It's a win/win, IMHO. Beats trying to sell a property for much less than I'm owed (and paying all the expenses involved in doing so). </blockquote>
Ah. The old "amend and pretend" gambit. You left off "SEND" as in "send in the keys". <a href="http://www.calculatedriskblog.com/2009/07/cnbc-interview-with-bryan-marsal-ceo-of.html">See what my hero Bryan Marsal has to say about "amend, pretend, and SEND."</a>
I'm off to SLO to attend a Farmers Market and have dinner with my Mom and Dad.
I don't. The moral hazard precident alone is enough to disagree, but who am I to disagree with the Washington Post?
<a href="http://www.calculatedriskblog.com/2009/07/wapo-foreclosures-frequently-best.html">http://www.calculatedriskblog.com/2009/07/wapo-foreclosures-frequently-best.html</a>
It's almost never in the banks economic interest to do a cram down.
<blockquote>If I was a bank, I would approve almost all loan mods proposed with the following terms-interest rate stays the same, amount owed stays the same, time period until the loan is due goes to 40, 50, or even 99 years. Their payment is lowered, but the total amount of money I get would actually increase (over a longer period of time, of course). Plus, there's minimal moral hazard there. It's a win/win, IMHO. Beats trying to sell a property for much less than I'm owed (and paying all the expenses involved in doing so). </blockquote>
Ah. The old "amend and pretend" gambit. You left off "SEND" as in "send in the keys". <a href="http://www.calculatedriskblog.com/2009/07/cnbc-interview-with-bryan-marsal-ceo-of.html">See what my hero Bryan Marsal has to say about "amend, pretend, and SEND."</a>
I'm off to SLO to attend a Farmers Market and have dinner with my Mom and Dad.
freedomCM_IHB
New member
but the loan mods fail at a hugely high rate! then they just have to spend more money taking the house back later.
of course, kick the can...
of course, kick the can...
freedomCM_IHB
New member
I also agree that the impact of all the walking away is going to hit people hard.
The NYT had an article last week (link?..) describing how many employers were running credit reports on potential hires. No need to hire anyone with a dinged report so long as the UE rate is so high. and it is going to be high for a long while. So all those mortgage lenders looking for accounting jobs? not going to happen.
And then there is what no-vas was saying about selling debt...Just remember how hard the credit card companies go after a few hundred dollars, or sell it for pennies to barracudas
The NYT had an article last week (link?..) describing how many employers were running credit reports on potential hires. No need to hire anyone with a dinged report so long as the UE rate is so high. and it is going to be high for a long while. So all those mortgage lenders looking for accounting jobs? not going to happen.
And then there is what no-vas was saying about selling debt...Just remember how hard the credit card companies go after a few hundred dollars, or sell it for pennies to barracudas
graphrix_IHB
New member
I dunno... if the first 8 business days of August are any indication of how the entire month will be for foreclosures... then in August we should see a big increase.
Plus, as a trader, there is a flaw in his methodology in using linear movement in his chart:
https://s3.amazonaws.com/MiscPublic/Paulson-Foreclosure-Trends.jpg
1. I would smooth out the sold before and after data points, there is too much noise there. Do a moving average at least.
2. I would shift the NTS back 90-120 days, since that is roughly, and I mean roughly how long a NTS turns into a sold property. While this would help show the current divergence of the last six months, it would show a much better correlation from the previous six months.
4. I would take a linear line of sold throughout the entire chart to compare to the linear line of NTSs.
5. I would take a linear line from the bottom of sold numbers to where it is now. Just visualizing what it would look like in my head, it is clear the trend is headed up.
In conclusion, Sean makes a great point and a chart that seems to prove it, but it could use some improvements. So if you shift the NTSs back 90-120 days, use linear trend lines from beginning to end and from bottom points, and smooth out the sold data with a MA, I would be willing to bet it paints a much different picture.
Plus, as a trader, there is a flaw in his methodology in using linear movement in his chart:
https://s3.amazonaws.com/MiscPublic/Paulson-Foreclosure-Trends.jpg
1. I would smooth out the sold before and after data points, there is too much noise there. Do a moving average at least.
2. I would shift the NTS back 90-120 days, since that is roughly, and I mean roughly how long a NTS turns into a sold property. While this would help show the current divergence of the last six months, it would show a much better correlation from the previous six months.
4. I would take a linear line of sold throughout the entire chart to compare to the linear line of NTSs.
5. I would take a linear line from the bottom of sold numbers to where it is now. Just visualizing what it would look like in my head, it is clear the trend is headed up.
In conclusion, Sean makes a great point and a chart that seems to prove it, but it could use some improvements. So if you shift the NTSs back 90-120 days, use linear trend lines from beginning to end and from bottom points, and smooth out the sold data with a MA, I would be willing to bet it paints a much different picture.
Geotpf_IHB
New member
[quote author="no_vaseline" date=1250125474][quote author="Geotpf" date=1250123012]I think more loan mods will go through than most people think will. Looks like short sales might start to actually occur in large numbers too. I think part of the delay is a delay in hiring and training enough people to process everything.</blockquote>
I don't. The moral hazard precident alone is enough to disagree, but who am I to disagree with the Washington Post?
<a href="http://www.calculatedriskblog.com/2009/07/wapo-foreclosures-frequently-best.html">http://www.calculatedriskblog.com/2009/07/wapo-foreclosures-frequently-best.html</a>
It's almost never in the banks economic interest to do a cram down.
<blockquote>If I was a bank, I would approve almost all loan mods proposed with the following terms-interest rate stays the same, amount owed stays the same, time period until the loan is due goes to 40, 50, or even 99 years. Their payment is lowered, but the total amount of money I get would actually increase (over a longer period of time, of course). Plus, there's minimal moral hazard there. It's a win/win, IMHO. Beats trying to sell a property for much less than I'm owed (and paying all the expenses involved in doing so). </blockquote>
Ah. The old "amend and pretend" gambit. You left off "SEND" as in "send in the keys". <a href="http://www.calculatedriskblog.com/2009/07/cnbc-interview-with-bryan-marsal-ceo-of.html">See what my hero Bryan Marsal has to say about "amend, pretend, and SEND."</a>
I'm off to SLO to attend a Farmers Market and have dinner with my Mom and Dad.</blockquote>
Of course a lot of loan mods fail. But that's only a problem if the market is still declining significantly-I believe it no longer is, in general. Also, a lot depends on how far the market has already fallen. Irvine hasn't fallen far, but lesser markets like Riverside have cratered. If the value of the house has dropped by 60% or more, as is typical in Riverside, it makes a lot of sense to attempt a loan mod instead of a foreclosure and REO sale. In Irvine, where prices haven't dropped as much, it makes more sense to foreclose.
I don't. The moral hazard precident alone is enough to disagree, but who am I to disagree with the Washington Post?
<a href="http://www.calculatedriskblog.com/2009/07/wapo-foreclosures-frequently-best.html">http://www.calculatedriskblog.com/2009/07/wapo-foreclosures-frequently-best.html</a>
It's almost never in the banks economic interest to do a cram down.
<blockquote>If I was a bank, I would approve almost all loan mods proposed with the following terms-interest rate stays the same, amount owed stays the same, time period until the loan is due goes to 40, 50, or even 99 years. Their payment is lowered, but the total amount of money I get would actually increase (over a longer period of time, of course). Plus, there's minimal moral hazard there. It's a win/win, IMHO. Beats trying to sell a property for much less than I'm owed (and paying all the expenses involved in doing so). </blockquote>
Ah. The old "amend and pretend" gambit. You left off "SEND" as in "send in the keys". <a href="http://www.calculatedriskblog.com/2009/07/cnbc-interview-with-bryan-marsal-ceo-of.html">See what my hero Bryan Marsal has to say about "amend, pretend, and SEND."</a>
I'm off to SLO to attend a Farmers Market and have dinner with my Mom and Dad.</blockquote>
Of course a lot of loan mods fail. But that's only a problem if the market is still declining significantly-I believe it no longer is, in general. Also, a lot depends on how far the market has already fallen. Irvine hasn't fallen far, but lesser markets like Riverside have cratered. If the value of the house has dropped by 60% or more, as is typical in Riverside, it makes a lot of sense to attempt a loan mod instead of a foreclosure and REO sale. In Irvine, where prices haven't dropped as much, it makes more sense to foreclose.
irvine_home_owner_IHB
New member
Everyone must have me on ignore.
I posted this back in April and no one responded:
<blockquote>
What does it cost the banks to just sit on those foreclosures? With all the TARP being thrown their way? can they just do it underwater style and hold until prices rebound?
Just wondering because I keep reading about all these houses that have been taken back but are not on the market? where o where have those foreclosures gone?
</blockquote>
Now everyone's talking about OREOs... and milk.
I posted this back in April and no one responded:
<blockquote>
What does it cost the banks to just sit on those foreclosures? With all the TARP being thrown their way? can they just do it underwater style and hold until prices rebound?
Just wondering because I keep reading about all these houses that have been taken back but are not on the market? where o where have those foreclosures gone?
</blockquote>
Now everyone's talking about OREOs... and milk.
Geotpf_IHB
New member
[quote author="irvine_home_owner" date=1250210086]Everyone must have me on ignore.
I posted this back in April and no one responded:
<blockquote>
What does it cost the banks to just sit on those foreclosures? With all the TARP being thrown their way? can they just do it underwater style and hold until prices rebound?
Just wondering because I keep reading about all these houses that have been taken back but are not on the market? where o where have those foreclosures gone?
</blockquote>
Now everyone's talking about OREOs... and milk.</blockquote>
As I've pointed out before, the banks have taken back very few properties that they haven't then turned around and sold as REOs. There's no shadow inventory there. The only shadow inventory, pre-shadow inventory as it were, is the houses where the homeowner is in default but the bank hasn't foreclosed. Maybe they are working out loan mods or short sales, maybe the banks don't want to take back the houses for accounting reasons. But that's what's happening-everybody's getting the year-of-free-rent program.
I posted this back in April and no one responded:
<blockquote>
What does it cost the banks to just sit on those foreclosures? With all the TARP being thrown their way? can they just do it underwater style and hold until prices rebound?
Just wondering because I keep reading about all these houses that have been taken back but are not on the market? where o where have those foreclosures gone?
</blockquote>
Now everyone's talking about OREOs... and milk.</blockquote>
As I've pointed out before, the banks have taken back very few properties that they haven't then turned around and sold as REOs. There's no shadow inventory there. The only shadow inventory, pre-shadow inventory as it were, is the houses where the homeowner is in default but the bank hasn't foreclosed. Maybe they are working out loan mods or short sales, maybe the banks don't want to take back the houses for accounting reasons. But that's what's happening-everybody's getting the year-of-free-rent program.
graphrix_IHB
New member
[quote author="Geotpf" date=1250213281][quote author="irvine_home_owner" date=1250210086]Everyone must have me on ignore.
I posted this back in April and no one responded:
<blockquote>
What does it cost the banks to just sit on those foreclosures? With all the TARP being thrown their way? can they just do it underwater style and hold until prices rebound?
Just wondering because I keep reading about all these houses that have been taken back but are not on the market? where o where have those foreclosures gone?
</blockquote>
Now everyone's talking about OREOs... and milk.</blockquote>
<strong>As I've pointed out before, the banks have taken back very few properties that they haven't then turned around and sold as REOs. There's no shadow inventory there.</strong> The only shadow inventory, pre-shadow inventory as it were, is the houses where the homeowner is in default but the bank hasn't foreclosed. Maybe they are working out loan mods or short sales, maybe the banks don't want to take back the houses for accounting reasons. But that's what's happening-everybody's getting the year-of-free-rent program.</blockquote>
And... as I have pointed out before your <strong>opinion</strong> of shadow inventory is totally and completely wrong. You have never once backed up your <strong>opinion</strong> with any statistical data, even after I showed you the math of the data that shows there are <strong>8000+</strong> REOs in OC that proves your <strong>opinion</strong> is just that, your <strong>opinion</strong>. Either start backing your <strong>opinion</strong> up with some actual data that proves it, or get used to me coming back with the factual data that shows you are <strong>totally and completely wrong</strong>.
There are several reasons why the banks aren't turning their REOs, and it isn't collusion to keep the market from crashing, it is because they do not have the capacity to handle it, or they risk having their capital ratios destroyed if they marked to market the REOs so they hold them at inflated values. Countrywide/BofA is inundated with REOs, but they are turning the low and high end in about 120 days, with the high end taking a little longer. This isn't always the case with them, but the majority of their REOs are turning in about that time. JPM/Chase is taking forever to turn properties, 6-8 months, and even longer for the high end (see 25 and 33 Ridgeview). Then you have banks with capital ratios issues like the regional banks and Citi. <a href="http://www.redfin.com/CA/Villa-Park/17832-Aberdeen-Ln-92861/home/4368527">Take this home in VP for example</a>. It took Citi 5 months to get it on the market at $625k, a price that is $26k too high and that is being nice. My friends offered $600k for this place when it was a short sale back in Nov/Dec, but Citi countered with $630k. I told them they should counter back with $580k because that is what they will be taking it back for in 3 months. I was amazed at my accuracy on that one, I say it was just dumb luck. Anyway, it just proves they are stubborn on price, and they don't want to cave in to lower offers because if they did it would kill their capital ratios. This really is a dead bank walking, and they have every incentive to keep from having to mark to market their RE portfolios, <a href="http://www.worldaffairscouncil.org/index.php?eid=2756">just like Raj, Sanjiv, and Marvin said</a>. Yes, not only did I attend that event, but had drinks with the three of them afterward. Then there is the FDIC, which is just now starting to dispose of the REOs they took on from IndyCrap, WAMU, and all the other banks.
Lastly, the reason why I research these numbers and want to know them, has a lot more to do with just posting them on IHB to prove people like you wrong. These numbers are very important for me to know and how it could impact me. I share them with IHB not to just prove people wrong and prove my bearish standpoint, I share them with IHB because IHBers should understand what the facts are and what the actual data shows. I don't have to share this info, and one day the info I have will probably not be free.
I posted this back in April and no one responded:
<blockquote>
What does it cost the banks to just sit on those foreclosures? With all the TARP being thrown their way? can they just do it underwater style and hold until prices rebound?
Just wondering because I keep reading about all these houses that have been taken back but are not on the market? where o where have those foreclosures gone?
</blockquote>
Now everyone's talking about OREOs... and milk.</blockquote>
<strong>As I've pointed out before, the banks have taken back very few properties that they haven't then turned around and sold as REOs. There's no shadow inventory there.</strong> The only shadow inventory, pre-shadow inventory as it were, is the houses where the homeowner is in default but the bank hasn't foreclosed. Maybe they are working out loan mods or short sales, maybe the banks don't want to take back the houses for accounting reasons. But that's what's happening-everybody's getting the year-of-free-rent program.</blockquote>
And... as I have pointed out before your <strong>opinion</strong> of shadow inventory is totally and completely wrong. You have never once backed up your <strong>opinion</strong> with any statistical data, even after I showed you the math of the data that shows there are <strong>8000+</strong> REOs in OC that proves your <strong>opinion</strong> is just that, your <strong>opinion</strong>. Either start backing your <strong>opinion</strong> up with some actual data that proves it, or get used to me coming back with the factual data that shows you are <strong>totally and completely wrong</strong>.
There are several reasons why the banks aren't turning their REOs, and it isn't collusion to keep the market from crashing, it is because they do not have the capacity to handle it, or they risk having their capital ratios destroyed if they marked to market the REOs so they hold them at inflated values. Countrywide/BofA is inundated with REOs, but they are turning the low and high end in about 120 days, with the high end taking a little longer. This isn't always the case with them, but the majority of their REOs are turning in about that time. JPM/Chase is taking forever to turn properties, 6-8 months, and even longer for the high end (see 25 and 33 Ridgeview). Then you have banks with capital ratios issues like the regional banks and Citi. <a href="http://www.redfin.com/CA/Villa-Park/17832-Aberdeen-Ln-92861/home/4368527">Take this home in VP for example</a>. It took Citi 5 months to get it on the market at $625k, a price that is $26k too high and that is being nice. My friends offered $600k for this place when it was a short sale back in Nov/Dec, but Citi countered with $630k. I told them they should counter back with $580k because that is what they will be taking it back for in 3 months. I was amazed at my accuracy on that one, I say it was just dumb luck. Anyway, it just proves they are stubborn on price, and they don't want to cave in to lower offers because if they did it would kill their capital ratios. This really is a dead bank walking, and they have every incentive to keep from having to mark to market their RE portfolios, <a href="http://www.worldaffairscouncil.org/index.php?eid=2756">just like Raj, Sanjiv, and Marvin said</a>. Yes, not only did I attend that event, but had drinks with the three of them afterward. Then there is the FDIC, which is just now starting to dispose of the REOs they took on from IndyCrap, WAMU, and all the other banks.
Lastly, the reason why I research these numbers and want to know them, has a lot more to do with just posting them on IHB to prove people like you wrong. These numbers are very important for me to know and how it could impact me. I share them with IHB not to just prove people wrong and prove my bearish standpoint, I share them with IHB because IHBers should understand what the facts are and what the actual data shows. I don't have to share this info, and one day the info I have will probably not be free.
reason_IHB
New member
Haha! You know you can get Graphrix out of his hiding by posting an opinion with no statistic(s).
reason_IHB
New member
You know sometimes I read these postings and they kind of give me that "la-la land" feeling. Then Graphrix has to ruin it by giving me a dose of reality.
irvine_home_owner_IHB
New member
<blockquote>
... [lots of factual stuff graph posts that spins my head but owns people none the less] ...
</blockquote>
But my questions remains... when will these OREOs hit the market? I want something to eat with my organic milk!
... [lots of factual stuff graph posts that spins my head but owns people none the less] ...
</blockquote>
But my questions remains... when will these OREOs hit the market? I want something to eat with my organic milk!