The alledged and much ballyhooed "Shadow Inventory" has not surfaced here in Sonoma County, California. WHY? I recently interviewed Ivan Choi, current President of REOMAC, former Sr. VP for REO sales at Bank of American and now with Prospect Mortgage, Ivan stated we should be in a market with thousands of REO properties flooding our price points but we are NOT! Why--"Government Intervention" Ivan states.
He related how our real estate market, in its greatest decline since the "great depression", has massive government intervention with many attempts to halt this huge slide of home owners into foreclosure. The HAMP program and now the new HAFA program taking effect April 5th, are examples of why the great "shadow inventory" is NOT flooding the marketplace. Though modifications are hardly "sticky" with 60-70% default rates, lenders are allowing great latitude in foreclosing on these home owners and are allowing forbearance for thousands more.
If you wish to hear Ivan's complete interview which was conducted on the "Real Estate Hour", Sundays, 9 to 10am, PST, locally at 1350AM,KSRO or via the web at www.KSRO.com, please go to www.TheRealEstateHourBlog.com and click on the old fashioned radio icon in the upper left hand corner. Ivan's talk was done March 6th and runs for an hour. Other noteworthy observations by Ivan, the ending of the Federal Tax Credits and the Fed not buying Mortgage Backed Securities all have him a bit scared!! But go to the blog and listen in. I'm sure you'll find it very revealing.