Countrywide/BAC REOs Fall to Feb. 2007 Levels
The Countrywide Foreclosure Blog reports that there are currently 5,959 foreclosed homes being offered for sale on the Bank of America/Countrywide website, down from the peak of 21,500 in November 2008, and back to levels of February 2007 (see chart above, click to enlarge).Below are charts for the individual states that had some of the worst foreclosure problems (AZ, CA, FL and NV), showing significantly reduced levels of lender-owned (REO) properties in October 2009. In all four states (AZ, CA, FL and NV), the REO levels are at two-year lows.
Comment: Although these foreclosure data are for just one mortgage company, Countrywide was (or still is) the largest mortgage company in the U.S. and it financed 20% of home mortgages in 2006, so this reduction of foreclosed homes for sale by Countrywide to early 2007 levels provides evidence that the real estate market has recovered significantly from the fall 2008 peak in REOs. Previous CD posts have presented evidence that the real estate markets in Florida, California and elsewhere have exhibited ongoing sales gains in recent months, increases in median home prices, and reductions in inventory levels. And with 30-year mortgage rates falling to 4.87%, all of the ingredients are in place for a continued real estate recovery, along with a general economic rebound.
6 Comments:
I don't know if it's true, but I have heard that many banks are holing off on foreclosures and that there could be quite a wave dropping in the future. If it is true this is the worst quarter for that to happen in.
There may not be any correlation between the actual number of REOs and the number that are being offered for sale on their website. Many banks are holding back properties from the market right now so verification needs to be done as to how many properties are in an REO status along with original loan amounts and current values. Further, if you add in the value of the commercial REOs, the picture is much worse, and deteriorating further.
What the numbers aren't telling you, at least in Florida, is that many homes that have gone into foreclosure actually had buyers willing to pay a higher price for the home as a short sale. These potential buyers walked away from the short sale because the banks took too long to make up their minds to approve the short sale. I know of cases where the buyers waited eight months and the banks still did not have an answer. The potential buyers then wait and pick up the home in foreclosure for even a lesser price.
Another reason for this, besides the comments that have already been posted, is that many home buyers have been purchasing foreclosed homes instead of normal/non-distressed homes. I know that at least in MI the inventory of foreclosures has dropped due to your typical home buyer or speculator.
I suspect it would be trickier data to obtain (because you might have to go through deeds & tax records), but why not do a chart showing the number of lender-owned properties period (not just the number of REO properties listed for sale)?
REO by itself is meaningless. REO properties offered plus seriously delinquent loans(where or not in foreclosure) is the only way to know if things are getting better or worse. CWHL/BOA and other servicers are just not processing foreclosures but if the payments are't getting made the pain is still out there and will get worse before it gets better.
In most cases it is in the best interest of servicers not to start or complete foreclosures. Another gig for servicers is to modify the balance higher and call the loan paid so servicers can recoup advances while the borrower pays nothing. The loan is now called current with no hope for investors to get paid. How is this going to solve anything?
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