can an expert take a look at this? lots of mortgage bankers are saying a wave of foreclosure is entering the market from sept 15. why were banks?

Asked by Animalfarm, Palo Alto, CA Fri Sep 4, 2009

holding till sep 15? any special reason for sep 15?

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Answers

30
Pacific Ocean, , Palo Alto, CA
Thu Sep 24, 2009
Mr. Mark Burn,

I do not intend to participate this thread. Just let you know, no matter who is right, what I saw is that both Steven and Allyson are more professional than you. Actually, of all realtors here, you might be worst in discussion.

Take care.
4 votes
Summer, Home Buyer, Sausalito, CA
Thu Sep 24, 2009
If anyone would like to read more facts:

Article (with full graphs and verified statistics) last week from San Francisco Chronicle: $30 billion home loan time bomb set for 2010
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/09/20/…

August 20th article from New York Times:
http://www.nytimes.com/2009/08/28/opinion/28fri1.html?_r=1&a…
Opening paragraph: "The foreclosure crisis will get much worse before it gets any better.That’s the only conclusion to draw from a recent survey by THE MORTGAGE BANKERS ASSOCIATION, which found that six million loans were either past due or in foreclosure in the second quarter of 2009, the highest level ever recorded by the group. Worse, loan defaults are not the only cause of foreclosures. In some areas, unpaid property taxes are provoking foreclosures, even for homeowners otherwise current on their payments."

Article today from WSJ: "U.S. existing-home sales slipped in August, as the housing market stumbled on its path to recovery."

http://online.wsj.com/article/SB125379520447237461.html?mod=…

Another article from 9/23 WSJ "The Foreclosure Crisis could drag on for Years"
http://blogs.wsj.com/developments/2009/09/23/the-foreclosure…
4 votes
Steven, Home Buyer, San Jose, CA
Sat Sep 19, 2009
Housing is on government life support. Gov backed entities (FHA, Fannie/Freddie) are guaranteering 85% of new mortgage, while the Fed buys 80% of mortgage backed securities. Oh, let's not forget the $8K tax credit/hand out. Just this Friday, FHA announced it can no longer maintain 2% cash reserves on its portfolio. I wonder how long before FHA needs a tax payer bakced cash infusion.

Anyone that thinks housing has "bottomed" is fooling themselves based on these numbers. Housing prices won't rise any time soon because the government will throttle back these programs if there is any sign of price increases. RIght now, housing would be dead w/o the gov, so these programs are put in place.
4 votes
Summer, Home Buyer, Sausalito, CA
Thu Sep 24, 2009
You seem like a very nice agent, Jes. I have nothing against you. :) I do take issue, however, with agents saying now is the time to buy and prices will only rise from here; an idea which is being soundly refuted by experts and economists everywhere, right now, over and over again.

Here are links to two great, recent interviews with real estate experts on Wall Street Journal online:

http://online.wsj.com/video/pm-report-homes-unsettle-street/…

And this great interview, not to be missed, on shadow inventory:
http://online.wsj.com/video/pm-report-homes-unsettle-street/…
3 votes
Summer, Home Buyer, Sausalito, CA
Thu Sep 24, 2009
Steven,

I'm all with you. I hate to say it, but I don't know how realtors can look themselves in the mirror after telling so many blatant lies. Don't believe a word they say. Shadow inventory is real, even the experts and the banks and the government and all the major newspapers are discussing it as the FACT that it is, and the banks will not be able to hold on to that much inventory for long enough to keep the prices from going down due to increased supply. Do you know how much it costs to do upkeep on all those empty houses?

Shame on you, realtors. You know better.
3 votes
Summer, Home Buyer, Sausalito, CA
Sat Sep 5, 2009
I'm sure the banks would love to "trickle" the homes out onto the market to keep supply low and costs high....but honestly, how long do you think that will last? Do they really want to pay for the upkeep of these homes, which mold from perpetually closed windows and doors, gutters filled with leaves in the fall, leaks that manifest in the winter and go untreated because no one is living in these houses....not to mention lawn care. The cost of keeping up these houses while waiting to slowly "trickle" them onto the market will add up, and the banks will eventually cry Uncle and release them.
3 votes
Steven, Home Buyer, San Jose, CA
Thu Sep 24, 2009
Summer - good stuff you reference. But I doubt any of the realtors here believe it. They will claim it is "useless aggregate data" from the rest of the country. Remember, Silicon Valley is SPECIAL. What applies to the rest of the country, doesn't apply here. This is God's Country (oops, that was suppose to refer to Marin county). Let's see what other funny things we hear from NAR and CAR (I notice that what NAR, CAR, and other realtors here say has little to do with reality and a lot to do with SALES):

How about this: http://online.wsj.com/article/SB124924069909799645.html

When the foreclosure crisis began two years ago, there were few signs the high-end market would suffer. "It's God's country," Leslie Appleton-Young, chief economist for the California Association of Realtors, told an audience of real-estate agents in 2007. "When is the 30% decline in Marin County's market going to happen? Not in my lifetime."

Home prices there have fallen by 21% from their 2006 peak, according to Zillow.com, a real-estate Web site. Ms. Appleton-Young now says there's "no doubt that the high-end housing prices have adjusted and will continue to adjust."

Or this from David Lereah: http://online.wsj.com/article/SB123152099299568447.html

Mr. Lereah, who says he left NAR voluntarily, says he was pressured by executives to issue optimistic forecasts -- then was left to shoulder the blame when things went sour. "I was there for seven years doing everything they wanted me to," he said, looking out his window to his tree-filled yard in this Washington suburb. Mr. Lereah now works at home, trying to rebuild his career and saddled with a sagging portfolio of real-estate investments.
2 votes
Steven, Home Buyer, San Jose, CA
Thu Sep 24, 2009
Allyson - if you read the WSJ article, even BofA said that "we are going to see a spike" ... so I'm not sure what you're trying to dispute here.
2 votes
Steven, Home Buyer, San Jose, CA
Tue Sep 22, 2009
From today's WSJ:

Delayed Foreclosures Stalk Market

...

As of July, mortgage companies hadn't begun the foreclosure process on 1.2 million loans that were at least 90 days past due, according to estimates prepared for The Wall Street Journal by LPS Applied Analytics, which collects and analyzes mortgage data. An additional 1.5 million seriously delinquent loans were somewhere in the foreclosure process, though the lender hadn't yet acquired the property.

...

For now, the delays have led to what is probably a temporary drop in the supply of bank-owned homes in California and other places where investors and first-time home buyers have been competing for bargains. In Orange County, Calif., the number of bank-owned homes listed for sale dropped to 322 in early September from 1,404 in November 2008, according to Altera Real Estate.

But the number of foreclosures is expected to increase in the fourth quarter as mortgage-servicing companies determine who is eligible for a loan modification and who isn't. "We are going to see a spike from now to the end of the year in foreclosures as we take people out of the running" for a loan modification or other alternatives, says a Bank of America Corp. spokeswoman. Foreclosure sales had dropped to "abnormally low" levels in response to government efforts to stem foreclosures, she adds.

...
2 votes
Steven, Home Buyer, San Jose, CA
Fri Sep 4, 2009
The rest of the year and early next year will be particular bad for housing because the first time buyer tax credit expires, just when a lot of these REO will hit the market. Also, FHA loans are in a bit of trouble (like I said a few months ago), so if FHA raises their down payment requirements, like they ought to, then even the low end of the market, which was being supported by these two government programs, could see a bit of a drop, say 10% at least.

Check out this article:

Wall Street Journal
SEPTEMBER 4, 2009 Loan Losses Spark Concern Over FHA

By NICK TIMIRAOS and DEBORAH SOLOMON
The Federal Housing Administration, hit by increasing mortgage-related losses, is in danger of seeing its reserves fall below the level demanded by Congress, according to government officials, in a development that could raise concerns about whether the agency needs a taxpayer bailout.

The rising losses at the FHA, part of the U.S. Department of Housing and Urban Development, come as the agency has rapidly increased its role in guaranteeing loans in an attempt to stabilize the housing market.

It isn't clear how the rising losses may affect home buyers. Options for the agency could include politically unpalatable choices, such as asking for taxpayer funds to boost reserves or increasing the premiums borrowers pay for the insurance offered by the agency. Agency officials say if there is a shortfall, they don't have to do anything except report it to lawmakers. But some mortgage and housing analysts see trouble ahead. "They're probably going to need a bailout at some point because they're making loans in a riskier environment," says Edward Pinto, a mortgage-industry consultant and former chief credit officer at Fannie Mae. "...I've never seen an entity successfully outrun a situation like this."

The FHA insures private lenders against defaults on certain home mortgages, an inducement to make such loans. Insurance from the New Deal-era agency has enabled lending to buyers who can't make a big down payment or who want to refinance but have little equity. Most private lenders have sharply curtailed credit to those borrowers.

HUD Secretary Shaun Donovan said in June the FHA would be 'more than likely to stay out of a broader need for any taxpayer funding.'
In the past two years, the number of loans insured by the FHA has soared and its market share reached 23% in the second quarter, up from 2.7% in 2006, according to Inside Mortgage Finance. FHA-backed loans outstanding totaled $429 billion in fiscal 2008, a number projected to hit $627 billion this year.

Rising defaults have eaten through the FHA's cushion. Some 7.8% of FHA loans at the end of the second quarter were 90 days late or more, or in foreclosure, according to the Mortgage Bankers Association, a figure roughly equal to the national average for all loans. That is up from 5.4% a year ago.

Resulting FHA losses are offset by premiums paid by borrowers. Federal law says the FHA must maintain, after expected losses, reserves equal to at least 2% of the loans insured by the agency. The ratio last year was around 3%, down from 6.4% in 2007.

If its reserves fall short, the agency is obliged to notify Congress, which could spark a commotion over the extent to which the government is funding losses in the housing market. Some housing analysts have said losses might lead the FHA to pull back lending, which has helped boost flagging housing demand.

A senior official at HUD, which oversees the FHA, said there is "no risk" that the FHA would require money from Congress if the ratio falls below 2%. Asked about the agency's capital ratio, the official said a report detailing that number won't be completed until the FHA's fiscal year ends Sept. 30.

HUD Secretary Shaun Donovan said in June, "there's a better than even chance that we will stay above the two percent reserve threshold. That suggests, not just for the 2010 business, but overall for the portfolio, that we'll more than likely to stay out of a broader need for any taxpayer funding."

Some economists say the FHA's lending has been crucial to preventing a deeper bust in property. Thomas Lawler, an independent housing economist, said "the alternative could have been a complete meltdown of housing finance" that would have ultimately led to much larger losses. Critics have said the FHA, which has never had a chief risk officer, isn't able to manage such a large portfolio in an unstable market.

Policymakers have used the FHA to stabilize the housing market by pushing it to offer credit with far easier terms than that offered by most private lenders. For example, it will back loans with down payments as low as 3.5%.
2 votes
Steven, Home Buyer, San Jose, CA
Fri Sep 4, 2009
It is true that there were more notices of default (NOD) filed in 1st quarter of 2009 in CA than ever before. 2nd quarter NOD were worst than in 2008. NOD is first stage in the foreclosure process, and it takes 6-12 months before they become REO. So, yes, based on NOD, we would expect a spike in foreclosures entering the market right about now. I suggest you get a trial subscription to RealtyTrac to see for yourself. I can see the pipeline of NOD, NTS, REO already, even in "expensive" areas. In fact, I see "Bank Owned" properties being repossed back in June, finally now hitting the MLS. So, it does take a while. Granted, some of these NOD might be worked out through loan mods, but a lot of them will not.

Check this out:

http://www.dqnews.com/Articles/2009/News/California/CA-Forec…
2 votes
Steven, Home Buyer, San Jose, CA
Thu Sep 24, 2009
Allyson - you simply miss my point. Multiple offers DO NOT necessarily drive up prices. Example: market value based on previous comps for a home is $500K, isted for $400K, multiple offers drive over asking to $490K. See, here, no price increase. In fact, price falling. Make sense? Context means which particular house. Just because there are multiple offers, does not mean prices are increaseing. It's like saying, wow, temperature increased 20 degree today from yesterday, so it must be HOT. You have to tell me what the temperature was yesterday - it would have been 0 degrees yesterday.

GET IT????
1 vote
Steven, Home Buyer, San Jose, CA
Thu Sep 24, 2009
Allyson - I don't know what multiple offers has to do with rising or falling prices. Multiple offers just means the list price was below market value. Home prices could be falling 30% year over year, yet if somone lists a house 20% below "market", it would certainly fetch multiple offers. I really dislike hearing about multiple offers as if it's some sort of important metric. Throwing around that term, without the context of the particular house and it's value relative to the market has no meaning. It's like watching a Going Out of Business sale, and then saying, "wow, that store must be doing really well!"
1 vote
Norman Aless…, Agent, San Jose, CA
Thu Sep 24, 2009
Mynewhome,
It is always interesting to me that NO ONE on this post said " Buy Now" yet you insist on bashing realtors. The fact of the matter is home prices in the Bay area have risen and that almost ALL low end homes have multiple offers on them. It is now almost Oct and there is no "flood" of REO's as many of us have predicted. So you make of this FACT what you want, it is up to you when you decide to buy, but please stop with the FALSE DATA that anyone on this post said "Buy Now", you buy when you are ready.
Regards,
Allyson
408-705-6578
allyson@homesbyallyson.com
1 vote
Terri Vellios, Agent, Campbell, CA
Sun Sep 27, 2009
I have a PDF I'd be willing to email if you are interested in the sales trend for the last two years in Palo Alto.

There was a foreclosure moratorium put in place to slow down the market. That was to end recently.

As for a wave of foreclosures I have access to data showing notices of default and pre-foreclosure status, so if I chose to compile data from that, I could. But that doesn't mean that the homeowner will get to the point of short selling or going to foreclosure. They may be working on loan modifications or it may be a temporary situation. The reality is we are still seeing more homes in distressed. If Banks were to release all these foreclosures in a wave it would be like shooting themselves in the foot, competing with lower priced homes. It makes better sense for the banks to try to work with the borrower, and if need be, release the homes slowly into the market. But then again, banks don't have a history of doing "what is smart".

To respond to multiple offers, it is the auction mentality...buyers bid on low priced homes and then they compete, after being beat out of offers they become competitive, not only financially, but emotionally. This drives the price up, and that is what determines market value. What a buyer is willing to pay and what it closes at. When talking about statistics one must understand the bench mark and what the statistics are. For example, prices are up? Ok, from yesterday, 2 months, 2 years? Neighborhood and area should not be "lumped" into one comment that is the all knowing Oz answer.

It is always good advice to consider the source of the information and their motivation for providing that information. Newspapers sell on hype, Realtors and agents depend on a healthy market, as do lenders. But just because they may have a monetary interest doesn't mean that the information is incorrect.
Web Reference:  http://www.terrivellios.com
0 votes
Jesse Sierra, Agent, Pomona, CA
Thu Sep 24, 2009
@Summer

House prices will continue to drop, but if the home buyer is going to live in for the next 10 to 20 years, it should appreciate. It's a cycle, when the next housing bubble comes around (history repeats its self) the homeowner will sell in time and rent for 2 years and buy another home cash. =/.

I have clients that bought over a year and a half and they are still happy with their home.
I don't have a crystal ball but told them that the house prices will continue to drop, houses around their neighborhood are $40k less now. I keep in touch with them on a bi-monthly basis, they are not investors, they are homeowners and trusted me.

And, believe it or not (you are going to hate me) it's a good time to buy. In San Bernardino County, there is not enough REO's or Pre-foreclosures (short sales) for homebuyers or investors.
It's a buying frenzy and that's the way the banks want to keep it.
It's all about business, if you notice on my answers I try to direct distressed home owners to http://www.hud.gov to get some info on avoiding foreclosure and not trying to sell their home as a short sale.

Have a goodnight,

Jes Sierra, B.Sc.
Realtor®
0 votes
Jesse Sierra, Agent, Pomona, CA
Thu Sep 24, 2009
@Allyson
I am erasing my comment and my apologies to Animalfarm for getting these email replies.
No harm done, my daughter took over the PS3, oh well.

Jes Sierra, B.Sc.
Realtor®
0 votes
Norman Aless…, Agent, San Jose, CA
Thu Sep 24, 2009
Sorry Jes :( you are right I am not as tech savy as some I did not understand what that symbol ment.
I don't know about Chino but here reo's are NOT listed 10 to 20 % below market, more like 5% ( only short sales are doing the 10-20%. Steves scenario is not happening in our market now it was early in the year, but not now.
So I repeat he does not have a point in this market place now.

I appologize again for the false accusation, and I hope you forgive me.
I know, I know, we are off subject, but I had to say this, have fun with your PS3 :)
Allyson
0 votes
Mark Burns, , Cupertino, CA
Thu Sep 24, 2009
Steven,

Your purpose here is to warn others?

Or is it to pick on Allyson; someone you think you can push a few buttons with?

As far as I can tell, Allyson has had her license for quite a long time and has a good track record in selling Silicon Valley Real Estate. That's quite a feat in an industry that typically has 25%+ turnover per year because of the competitiveness and drudgery of the job. I sure hope she doesn't come to your place of work and tell you how to flip burgers.

Yes, there will be more foreclosures. Yes, buyers are bidding up properties. Yes, some are priced under-market and would naturally cause this to happen. But only under one condition you fail to recognize: That buyers feel confident in buying homes.

And frankly, you are wrong. I won't go into detail because you're undeserving of that much time and attention. Suffice it to say that properties in most of the Valley have shown stability in value this year despite the maelstrom surrounding us statewide and nationwide. What areas show the most strength: Campbell, Santa Clara, Cupertino, Sunnyvale, Los Altos, Saratoga, Palo Alto, Mountain View, and a lot of areas of San Jose as well. They're off their peaks of the last 24 months but they aren't continuing the nosedive you are secretly hoping for.

If the sky was continuing to fall, no one would be buying houses, period. For the past 8 months, Silicon Valley (Santa Clara County) has averaged 200 closings per week. A higher number than last year. That's houses and townhouses and condos. Why would all of these people be buying homes if values were going to continue to fall? Or there was a broad based belief that the market is going downhill? Are you saying that all of these homebuyers are stupid and uninformed?

Have you bought a house and the value went below what you paid? Are you waiting for the perfect moment to strike and just like hanging out on Trulia and harassing pleasant and helpful people like Allyson?

I'm sure there is an 'anger management for remorseful homebuyers' chat room somewhere on Yahoo. You might look into it. Allyson is a professional and you think it's fun giving her a hard time because she's a nice person. Take your personal frutrations with society elsewhere.

Mark Burns, Realtor
Coldwell Banker Elite - Top 2% Worldwide
President - PRDS, Contracts and Forms for Silicon Valley Real Estate 2008, 2009
Chair - Region 9, California Association of Realtors Board of Directors
President - Silicon Valley Association of Realtors 2007
DRE #00896552 licensed since 1985

PS It's fun being anonymous and obnoxious to people on the web. Tell us who you are, where you work, and where you live. Let's have an even playing field.
Web Reference:  http://www.markburns.com
0 votes
Norman Aless…, Agent, San Jose, CA
Thu Sep 24, 2009
Steven,
I get your point, but YOU fail to understand that home prices are RISING which means in the actual scenario that appraisal value is 500k the home is listed at 475k the multiple offers drive the price up to 550k and over and that is what it sells for even if it does not appraise at that price it is still bought at that price. Steven this is actual I kid you not, I have to caution my buyers about over biding on the homes based on the comps because of this. As far as an authoritative source? How About the actual market place and the number of new Reo listing. Not some article from someone who has no actual experience in this market.
You give me a break, I don't just listen to what I want to here, even from my friend I LOOK at what is going on and ACTUAL statistics, like how many new BPO's are being done. how many new reo listing are coming on the market ( there are some but not a flood). One more point you can disagree with me, but stop being antagonistic, it makes you look petty.

Regards,
Allyson
0 votes
Norman Aless…, Agent, San Jose, CA
Thu Sep 24, 2009
Steven,
Multiple offers drive prices up, that is the reason I put it out there. Home prices on the low to middle end in Santa clara county have risen because of this. All home prices are based on supply and demand, since there is more demand the prices have gone up. I gave you the context All low to middle priced homes I have written offers on have ALL had multiple offers driving prices higher. Read the indexes, the only areas I have not seen a rise in is the high end.
As far as reading articles, that may be well and good, but I am going on what is REALLY happening in the market not what people say. The dispute is that the market is going to be flooded with REO's before the end of the year and I just don't see that happening.
Regards,
Allyson
0 votes
Mynewhome, Home Buyer, 94546
Thu Sep 24, 2009
It's always interesting to see how agents say "Right now is the time to buy" every single month during this entire recession. We all have to make our living somehow, I guess.
0 votes
Jesse Sierra, Agent, Pomona, CA
Wed Sep 23, 2009
Hi Animalfarm,
It's not going to happen, it's all about supply and demand. If there is a flood of foreclosed homes, the banks or investors will not get higher offers on foreclosed properties as the buying frenzy continues.

Best Regards,

Jes Sierra, B.Sc.
Realtor®
0 votes
Grace Hanamo…, Agent, Cupertino, CA
Sat Sep 19, 2009
Steve O.

That was an excellent blog and worthy of review by everyone. "Mark to Market" and "Mark to Model" are both accounting practices that SEC (as well as the AICPA) has long debated in its financial reporting. For some time now, the rumors of changes to Mark to Model and Mark to Market rules have alternately sent the stock market up and/or down. This topic is so critical to money and cash flow models that it cannot be underemphasized in its importance in both lending and asset control/dissemination. Of course, it's also complicated and much like a balancing act, these models plus the artificial and contrived controls put into place by the government all affect the market.

At present, the government is currently debating yet another incentive program--this time to increase the home buyer credit to $15,000 in 2010, remove limitations to the credit, and expand its availability from first time buyers to ALL buyers of homes. If we thought "buy and bail" practices were bad this year, such contrivances are likely only to increase the number of homeowners who take advantage of government handouts while also increasing distressed properties held by banks. We'll have to see how it all turns out.

However, fabulous blog. Good points and an excellent explanation.

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
0 votes
Steven Ornel…, Agent, Fremont, CA
Sat Sep 19, 2009
Hi Animalfarm,

As I wrote in my blog post last week concerning REO Shadow Inventory:
http://www.trulia.com/blog/steve_ornellas_mba_re_mastersgri/…

"...the one thing that should not be blamed for the REO build-up is California’s 90-day foreclosure moratorium, which took effect on June 15th of this year and just recently ended September 15th of 2009 (also the one-year anniversary of the Lehman Bros. bank failure that kicked off the “Credit Crisis”). Personally, I saw this latest moratorium as political posturing since lenders / loan servicers that already had a “comprehensive and systematic” loan modification program in place were EXEMPT FROM THE LAW. Take a look at who is exempt - most all of the largest Loan Servicers in the Nation."

Best, Steve
0 votes
Norman Aless…, Agent, San Jose, CA
Sun Sep 6, 2009
Hi Summer & Steven,
You would think that was the case, It makes perfect sense, the banks should be dumping them in wholesale either on the market or in Auction, except that the Fed. Gov. does NOT want home prices dropping and neither do the banks. So the feds are lending money to the banks at next to nothing so that they can lend out money out with huge profit margins even with the loans in the 5% range. Hey I'm not bucking what you guys are saying, I'm just reporting what I see and hear. I think we might be impacted by the tax credit going away but FHA in bay area is not as much of an impact as you would think. First off most low end listing that are reo/short sale/fixer uppers have a tough time qualifying for FHA. Second some listings won't even look at FHA loans, they feel it's to much of a hassel, and now in Oct. the feds are throwing out all of the pre-qualed condo's that were FHA approved and they will have to be evaluated each time by the banks. This is a very big hassel and adds time to the transaction, that COULD help to slow the market down, but as with my buyers who are FHA we work somethiing out get back in the game.
The bottom line on the reo's is that the GOV. does not want the market to go lower so I believe they will do everything in their power to keep it stable. The banks have been hiding their toxic assets now going on 3 years and as long as they can keep doing that they will continue on the gravy train, some of them have the nerve to say they are now profitable. It's hard to believe but it fits all of what's happening in the market NOW.
I have never been this busy in Aug and the competition out there is very tough and I don't see the slow down.
Regards,
Allyson
408-705-6578
allyson@homesbyallyson.com
DRE# 01397256
0 votes
Robert Chome…, , San Diego, CA
Sat Sep 5, 2009
There has been speculation for at least 6 months now about this Tsunami "shadow inventory" hitting the market soon because of the foreclosure moratoriums back in late 2008 temporarily slowing them down. I don't think anybody knows for sure. But my guess is like other stated below, the banks won't flood the market b/c they probably learned their lesson in 2008. 2009 has seen a much more competitive multiple offer market b/c of low inventory throughout the state of CA.
Web Reference:  http://socalfhahomeloans.com
0 votes
Grace Hanamo…, Agent, Cupertino, CA
Fri Sep 4, 2009
Hello Animalfarm and thanks for the post.

I agree with Allyson and Mark, as I've heard this "rumor" several times now. My friend is a VP at B of A in the real estate department and he confirmed with me that they are not planning to "flood" any market with REOs. Banks are starting to learn two things from the past in this market:

1. Negotiating a short sale is far more economical to the bank than completing a foreclosure
2. Releasing foreclosure homes a little at a time, and requiring the listing agent to clean and make a home presentable before marketing (which takes time) yields far greater results in terms of pricing than does dumping unfinished or damaged homes on the market.

Also, I see that you are, perhaps, interested in the Palo Alto area. Unless the area you might be considering is the section of Palo Alto east of 101, you may find that REOs are not as plentiful as in other sections of Santa Clara County. Palo Alto, Los Altos, parts of Mountain and Sunnyvale, tend to have very low foreclosure rates because so many of the homes, if distressed, are sold short, or the homeowner finds a way to retain the property.

Work with your real estate professional to "stay on top" of ALL available listings in the market (not just foreclosures, but short sales and private home sales too) so that you if a great home comes up, you'll be poised to purchase the property.

Good luck!!

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
Sunnyvale, CA
co-Host: "Naked Real Estate" on http://www.blogtalkradio.com
0 votes
Norman Aless…, Agent, San Jose, CA
Fri Sep 4, 2009
Boy, I could not agree more with Mark. As far as I know Bof A which now owns Countywide has the biggest foreclosures in this area. I have kind of a pipe line to them and as far as they know they are NOT going to flood the market with REO's they plan on trickling them out because they are getting higher prices.
They could be wrong but I don't think so. There have been buyers and people in general on this web site and others WISHING this will happen, sorry to disappoint you and them, but I don't see this happening.
If you are planning on buying start now with your searchs and get your pre-approval letter to make sure you are comfortable with the payments and when a home come up that fits what you want, go for it.
I hope this helps, If you need assistance let me know.
Regards,
Allyson
408-705-6578
allyson@homesbyallyson.com
DRE# 01397256
0 votes
Mark Burns, , Cupertino, CA
Fri Sep 4, 2009
Panic, hysteria, the world is coming to an end!

What is it we're looking at?

What 'mortgage bankers' are your referring to? How much is 'lots?'

There are no 'waves' of foreclosures. That makes absolutely no sense. Think about it . . . Seriously.


Mark Burns, Realtor
Coldwell Banker Elite - Top 3% Worldwide
President - PRDS, Contracts and Forms for Residential Real Estate in Silicon Valley 2008, 2009
Chair - Region 9 California Association of Realtors 2009
President - Silicon Valley Association of Realtors 2007
DRE #00896552 licensed since 1985
Web Reference:  http://www.markburns.com
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