REO Phantom Inventory

[Steve Metz]

http://mrmortgage.ml-implode.com/2008/05/13/84/


Going to the local courthouses once a week I have been doing my own market analysis here is south Georgia and was comming up with very similar numbers. Not quite as bad as CA but still not very good. Funny no one wants to believe me when I tell them the wave is comming.

 

[Lloyd Bonafide]

In my neighborhood of about 200 homes, there are about 4 bank REOs on the market, but there are around 8 other homes where the lender has posted a notice of default more than 90 days ago, (some as long ago as a year ago), but there has been no trustees sale date set. These 8 homes are all short sales, (although a couple are not even listed for sale).

In California a lender can post a notice of default when the borrower is 90 days late, and the trustees sale or foreclosure sale can occur 90 days after that.

So most of the lenders are not foreclosing as soon as they could, and they have apparently decided that they are better off letting the owner sell in a short sale, rather than add to their REO inventory.

 

[Randolph Kinney]

It is nasty here in San Diego county. And it is going from terrible to worse. REO and short sales are the drip drip drip on the market. These are followed by price reductions to move the properties. Normal sellers either cut their prices or their listing sits for more than 180 days and $100,000 over the last sold property.