Distressed Inventory Report 1-22-11
The numbers continue to drop. Usually this time of year you will start seeing a rise in the amount of distressed inventory. some areas are seeing the amount of foreclosres increase for the new foreclosures but it is being offset by sales. In addition the Notice of Trustee Sale (NTS) appears to be declining. Again a lot of churning going on here. While there are more NTS coming on the overall numbers are dropping. This aligns with what I am seeing at the street level with the lenders working with short sellers to avoid foreclosure. Initially when this crisis started the lenders were in shell shick and would not process short sales or were adversarial to them and thought they were getting “screwed” and could better handle the properties. Well they found out that was not the case and locally I know of no home that a lender has sold for more as a foreclosure than the opportunity they had as a short sale. I can give you many examples in most cases there is a difference of between 15% to 20% for what a lender could obtain as a short sale versus a payoff. If you calculate that it cost a lender 10% just to touch the home as a foreclosure it means there losses are even more. These great business minds keep showing how smart they are but they will still get a bonus basically due to the largess of the Federal Governement giving them free money and generous loss share provisions provided to acquiring bancks like Chase and Wells.
The spreadsheet is here: Bellevue Foreclosure Report 1-22-11