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REO Avalanche? List of Bank Owned Homes

Reblogger Lenn Harley

Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

December 28, 2009 07:41 PM

MASSIVE FORECLOSURE ON THE WAY IN 2010???

Loan modification has not offered the type or degree of market adjustment desired by the government, consumers or the financial industry.

Clearly, the only thing left is massive foreclosures. I expect 2010 is going to be ugly.

I hope I'm wrong.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~`

With the year winding down to a close and lenders in good holiday spirits not to foreclose, I wonder when we shall start to see the flood of bank owned homes hit the real estate market here in the San Fernando Valley.

I don't know the exact statistics, but my instincts tell me that the number of available bank owed homes for sale in the San Fernando Valley has fallen 50-75% since May 2009. What this is telling me is that banks are trying to keep home-owners in their home by attempting to extend the foreclosure deadline. Lenders want to give home-owner more time to attempt to modify their home loan. But in reality, most of these home-owners will probably not be able to save their home and will eventually default even on their modified loan.

Here are some interesting articles you should read:
Few borrowers helped by modified mortgages
Mortgage relief reaches fraction of homeowners

Who in their right mind would want to modify a home which has lost half it's value in just a few short years. Let's keep it real!!! Even if you drop the payment for an X numbers of years or a fixed loan, you still have to pay back the original borrowed amount. Yikes! I think it's going to take 10-15 years just to break even for these home-owners. Don't most home-owners sell and buy a home every 6 years?

In reality, most of these home-owners will eventually default on their home-loan extending this crisis for many more years than necessary. 2010 will be the year of the foreclosure wave. Once banks wake up and realize that modifying a loan for a home worth half it's value is not going to work, the only thing left is to foreclosure. Expect to see more bank failures or mergers coming soon.
Sincerely,

Richard M. Johnston, GRI, ABR, e-Pro
RE/MAX Grand Central
818-730-4128 Mobile
818-776-9386 Fax
DRE#01416699
http://www.homes.la

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Roy Kelley

Retired - Gaithersburg, MD

Thanks for sharing. Best wishes for continued success in the new year. Enjoy the holidays!

Dec 28, 2009 09:33 PM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

You too Roy. I'm in the final stages of planning my work schedule for 2010 and I'm exhausted already.

Dec 28, 2009 09:37 PM

Bill Gassett

RE/MAX Executive Realty - Hopkinton, MA

Metrowest Massachusetts Real Estate

I am sure that pockets of the country will have quite a few foreclosures. I know I am lucky given my area will not see that many.

Dec 28, 2009 11:03 PM

John Mulkey

TheHousingGuru.com - Waleska, GA

Housing Guru

Lenn - I believe we'll see many more foreclosures when lenders realize that no more help is coming from govt., when many of those "underwater" accept the reality of their situation, and when those whose incomes have fallen exhaust their remaining resources.The numbers will continue to vary widely around the country, but we'll all feel the impact.

I believe that the jobless rate is the most important aspect. Unless we begin creating jobs soon, the effects will be even more severe and lasting.

Dec 29, 2009 12:54 AM

Michael J. Gallo

Florida Luxury Realty - New Port Richey, FL

Florida Luxury Realty - Gulf Home Sales Team

Lenn, down here in the Sunshine State It has gotten about as ugly as it can get and I agree with you, the Uglyness Shal Continue for 2010. I am still waiting to hear of a Loan Modification that worked. Most of our "uderwater" folks have debt exceeding value by more than 50%. (in my area) I for one hope we never see stated, no doc, easy 100% loan products ever again.

Dec 29, 2009 01:07 AM

Paul S. Henderson, REALTOR®, CRS

Fathom Realty Washington LLC - Tacoma, WA

South Puget Sound Washington Agent/Broker!

Lenn, Rumor has it that the banks are holding back on foreclosures until after the first of the year, so as not to affect the 4th quarter earnings...

Must be nice to be able to manipulate the market like that...

Dec 29, 2009 01:19 AM

Chris Ann Cleland

Long and Foster Real Estate - Gainesville, VA

Associate Broker, Bristow, VA

Lenn: The way I've heard our VAR attorney Lem Marshall describe it, banks do not intentionally hold back REO from the market when they have a ton. There is a limit to the number they can carry and still lend money to buyers. I certainly believe that there could be more coming, but what in the world makes people think that banks want to hold on to this stuff? It's a non-producing asset.

Dec 29, 2009 02:21 AM

Cherise Selley

Selley Group Real Estate, LLC - Colorado Springs, CO

Colorado Springs Realtor

Lenn...I so hope you're wrong...But I think many are hanging on by a thread...Colorado Springs might see a slight increase in foreclosures but buyer activity is up...

Dec 29, 2009 02:42 AM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

I don't believe that banks have been holding off on foreclosures either except for a few days around XMas which they do for public relations.

What I believe is that, once the public and the banks understand and/or admit that loan modification is a farce, the foreclosures will simply proceed apace with consumers giving up on upside down homes and lenders clearing their books.

Dec 29, 2009 02:52 AM

Steve Loynd

Alpine Lakes Real Estate Inc., - Lincoln, NH

800-926-5653, White Mountains NH

Lenn, There will be pockets of real estate (regionally) affected by the 3,5 & 7 year adjustable rates...that will be coming due in 2010. We haven't seen the end of the foreclosures...but hopefully not so much in my market.

Dec 29, 2009 03:08 AM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

Steve. I suspect that your market is not going to be as affected as many. Areas with lots of new contruction were hit hardest. The Atlantic northeast is not that much of a new home market.

You should be O.K.

Dec 29, 2009 03:56 AM

Marzena Melby

Coldwell Banker Burnet Realty - Richfield, MN

Realtor, Twin Cities Minnesota Real Estate

Lenn,

Like you said to Steve, country is divided into many markets and they all are at various stages. Luckily, we have a little more stable emplyment in Minnesota, and the market has been rebounding for the last 5 months. Let's hope it continues.

Dec 29, 2009 05:14 AM

Jim Crawford

Long & Foster - Fredericksburg, VA

Jim Crawford Broker Associate Fredericksburg VA

Lenn when you look at some of these numbers it is almost unbelievable. In Atlanta we've taken a hard hit, but no where in comparison to other places around the country. However we still have more than our fair share in foreclosures. I beleive the last foreclsoure numbers that came out we were up another 10%.

Dec 29, 2009 03:12 PM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

Jim. In just the past week, I have spoken with 4 government transferees who are relocating to the DC area and would love to buy a home here but are stuck, stuck, stuck with homes in Las Vegas, Southern CA, GA and Michigan that they have no hope of selling or qualifying for a home with both properties. With their equity wiped out, they can't get credit for rental income and now can't qualify for a home here.

That's four renters who would love to be buying a home here.

Dec 29, 2009 08:24 PM

Linda Davis

RE/MAX Home Team - Gales Ferry, CT

My assistant has done over 500 BPO's in Southeastern CT for one lender and she is just one of several they use. Yet, we have seen very few foreclosures. I think it is just a matter of time.

Dec 30, 2009 10:23 AM

Kent Anderson

Coldwell Banker Resort Realty, Sandpoint, Idaho - Sandpoint, ID

from Schweitzer to the Lake

Hey Lenn - The foreclosure list in North Idaho is frightening. What is really surprising is to see who is walking away from their homes...people we thought were forever insulated from foreclosure and/or bancruptcy. The economy is taking no prisoners.

Having said that, have a HAPPY NEW YEAR!

Dec 30, 2009 10:40 AM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

Linda. Agree. I don't want to be negative but, if the only relief for those home owners for which you're doing BPOs is the government programs, expect an avalanche of foreclosures.

Kent. Frightening is the only word to describe the continuing foreclosure mess.

Dec 30, 2009 09:48 PM

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