Bellevue Real Estate » foreclosed homes

Distressed Inventory Report 4-9-11

George Thurtle — Wed, 13 Apr 2011 19:06:02 +0000

There is definitely a trend developing. There are very few foreclosed homes; just a net gain of one from the week before. But the number of homes posted with a Notice of Trustee Sale (NTS) is where all the action is and if you take a look at the numbers for West Bellevue you can see there was 10 new properties which went NTS but only a total increase of 4 homes. There is a LOT of churning in the Preforeclosure activity and it looks like lenders are gearing up and getting more proactive to make the short sales happen. Last year you can see the NTS homes pile up and then go to foreclosure; not this year. There is a couple of reasons for this. The conventional one is that lenders are preferring short sales to foreclosure because they do not need to prove ownership of the note in order to have the ability to foreclose. Faulty documentation as noted in a 60 Minutes Documentary is very problematic in the mortgage banking industry. Without proof of ownership of both the Note and Deed of Trust in Washington State the lender has no legal right to foreclose. Some borrowers are becoming savvy to this requirement and are taking advantage of it. Also second lien holders who get wiped out in foreclosure are being much more aggressive in challenging the ability of first lien lenders to foreclose. As a matter of fact there is a home in Lakemont with a Chase first that is having to settle out with a second lien lender because of their challenge regarding Chase’s ability to foreclose. This is being done after the fact after the foreclosure has happened. The result of these requirements is that it is much easier to “release” their interest in title than to prove ownership of the loan documents in order to acquire title through foreclosure. That is the explanation everyone is putting forward for the increased short sale activity.

There is another reason in my opinion and that is monetary. I know of no case where a lender has done better going to foreclosure than doing a short sale. In the early stages of this foreclosure mess the lenders thought they should be “tough” and often turned down short sales at “ridiculous” prices only to take the home back and 18 months to 24 months later finally sell and close the home and receive as much as 50% less. In the meantime they had the cost of ownership and their own internal administration needed to take care of the property etc. so when all was said and done they might have received much less than the net proposed on a short sale. I think this is the real reason. The top managements at these bank tend to be driven by money and see the law and other requirements as not really applying to them and that has not changed. That is why there was an initial movement by the lending community to go to Congress and actually propose legislation which relieved them of their legal obligations to show ownership of the loan. Paper work is something for the “little people”, i.e. the borrower. so expect more short sales but don’t count on the lenders to get those right. In general if you are the third buyer in after two failed attempts on a Chase short sale you will probably get it.

The spreadsheet is here: Bellevue Foreclosure Report 4-9-11

Distressed Inventory Report 4-2-11

George Thurtle — Sat, 09 Apr 2011 22:07:24 +0000

Well the trend of the amount of distressed inventory appearing to be peaking was broken this weak. This week the amount of distressed inventory jumped 15 homes from 311 to 326. However the most notable feature is that there were not many new foreclosed homes but a ton of homes that went Notice of Trustee Sale (NTS). If there was not the present higher sales volumes these numbers would be a lot higher. As an example in zip code 98004 there were 8 new NTS homes but the overall inventory went from 42 to 43. This means a lot of these homes are selling having or having their loans modified and I don’t see much of that happening. The other alternative for the NTS homes to be taken off of the list is foreclosure but those numbers do not appear to be spiking like the NTS numbers although it can take up to two weeks to record the Trustee’s Deed after a foreclosure. The other alternative is that more of these homes are being picked up at foreclosure. The Altos graphs show a small bump in median prices and I suspect we will see that bump level out or cycle on a bottom if the amount of the distressed inventory continues.

The spreadsheedt is here: Bellevue Foreclosure Report 4-2-11

Distressed Inventory Report 3-19-11

George Thurtle — Wed, 23 Mar 2011 19:28:44 +0000

The numbers finally ticked up a bit this week and there is more listed bank owned and short sale inventory coming to the market in the MLS. Other than West Bellevue the quality of the inventory is degrading and needs a lot work. Don’t expect to get that new bank home that was avaialble last year. In fact there are only two new bank owned homes available. One is in the Beaux Arts area in Bellevue and the otehr is in the Gelndale area and is listed by yours truly. The interesting thing when looking at the numbers in the amount of churning in the homes with Notice of Trustee Sale (NTS) is you will see four or five new homes in the NTS category but the increase in the over numbers in nil or only up one or two homes. At this point in time it looks like the market is consuming the distressed inventory at about the same rate it is being created.

The spreadsheet is here: Bellevue Foreclosure Report 3-19-11

Distressed Inventory Report 3-5-11

George Thurtle — Sat, 05 Mar 2011 19:44:59 +0000

An unexpected surprise this week. The overall inventory of distressed homes dropped from 317 to 307. I was expecting a mild increase. In addition like last week there was a lot of turn over in the distressed inventory. As an example in MLS Area 530 there were four new Notices of Trustee Sale (NTS) but the overall inventory for the NTS homes in that area declined from 80 to 74 homes. That is also including seven new NTS homes being added from the week before. As a result in two weeks 11 new NTS homes were added in the East Bellevue Area but there was a net reduction of 6 homes overall from 80 to 74. This means somehow 17 homes were absorbed either through a short sale, foreclosure or loan modification. Given the fact the foreclosure numbers are flat and not rising and I am not seeing inventory crossing over from NTS to bank owned then it appears that short sales and loan modifications must be removing this inventory.

If the distressed inventory keeps being reduced along with the overall inventory then there will be a floor forming under this market in the next couple of weeks. However it usually takes three weeks to establish this trend. That is why I was surpsed this week is that we had 8 weeks of continuing increases in inventory and in addition I felt there was some inventory held back as banks cleaned up their foreclosure practices that this trend would continue at a somewhat slower rate or maybe level off but a drop was not expected.

The spreadsheet is here: Bellevue Foreclosure Report 3-5-11

Distressed Inventory Report 2-16-11

George Thurtle — Fri, 04 Mar 2011 16:41:50 +0000

Interesting numnbers this week. On the surface it looks like we were treading water with an overall increase of distressed inventory rising only one home from 316 to 317 but if you check the spreadsheet there was some action going. the 98005 zipcode saw a drop of bank owned homes of five homes with the week before having 22 bank owned homes of record in that zipcode now this week it has dropped five homes to 17 homes. If you check the ALTOS Stats you can see that pricintg appears to be stabilizing in the 98005 zipcode. However in the 98004 zipcode there were seven new notices of trustee sale posted (NTS). There is a lot of turning over of inventory going on. What you can’t see on the spreadsheet is there is a constant and much more rapid turn over of inventory than I have seen in the last couple of years where I would see the same houses each week. If there wasn’t this turn over then I think you would see this inventory continuing to climb and spiking like the oil prioces are now.

The listed bank owned inventory continues to decline and that is where I also see somewhat less turn over. However overall both of the bank owned and short sale inventory continues to degrade. In the East Bellevue zip codes otehr than a couple of homes most of it is very low end needing a lot of repair. As we have discussed before this inventory is very hard to sell. No one wants a 1970 split in Lake Hills that needs to be gutted and redone. These homes while they have come down in price need to come down much more to give someone an incentive to buy these and fix them up. This is the type of inventory that is dragging the market down now.

The spreadsheet is here: Bellevue Foreclosure Report 2-26-11

Distressed Inventory Report 2-19-11

George Thurtle — Wed, 23 Feb 2011 16:24:32 +0000

The numbers are continuing to move up. The Notice of Trustee Sale (NTS) notices are the ones taking the big jump with with South Belleuve having 8 new notices in one week. Haven’t seen activity like that since last summer. There is some churning going on with the NTS notices. In West Bellevue there were four new NTS notices but the amount of NTS inventory only jumped by one home. The sales appear strong as the bank owned inventory is changing but the sales are no longer keeping up with the new foreclosure activity. Also there appear to be some houses entering the market in these new foreclosures but most of the activity is at the lower end under $500,000. All except one new NTS in West Bellevue was a low end condo in an old converted apartment building. In general it takes about 90 days for a foreclosed home to enter the system. The amount of listed foreclosed and short sale homes do not yet refelct the increase in the overall numbers.

The spreadsheet is here: Bellevue Foreclosure Report 2-19-11

Distressed Inventory Report 2-12-11

George Thurtle — Fri, 18 Feb 2011 16:59:40 +0000

The numbers are still on the rise. In looking at the new inventory coming on there are more houses this week. Previously it was lower end condos. The number of listed short sales in South Bellevue took a jump this week and overall some of the new bank inventory is making it into the MLS. However the pricing on the new bank inventory seems pretty aggresive. If you have the time, patience and stand a lot of frustration your best opportunity still appears to be aged short sales.

The spreadsheet is here: Bellevue Foreclosure Report 2-12-11

Distressed Inventory Report 1-29-11

George Thurtle — Sun, 06 Feb 2011 02:27:23 +0000

Well it is finally happening the amount of distressed inventory is starting to increase but a slower rate than last year if look at spreadsheet. I thought it would have started ticking up sooner. Wgat you can’t see is what price ranges the distressed inventory is coming from and it is either very high or very low. Hardly any mid-range stuff. The amount of converted condos in Bellevue coming to market is remarkable. There are also some extremely high end homes. Most of the distressed new construction is sold so you won’t be seeing much of that except for a couplf of homes in East Bellevue.

The spreadsheet is here: Bellevue Foreclosure Report 1-29-11

Distressed Inventory Report 1-22-11

George Thurtle — Sat, 22 Jan 2011 17:00:31 +0000

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

Weekly Scorecard 1-17-11

George Thurtle — Sat, 22 Jan 2011 16:37:18 +0000

The inventory is staying flat and falling while the sales are remaining at a fair volume. Usually this time of year you start seeing inventories rise and then sale begin to rise any where from two weeks to a month later. This year the inventory does nopt seem to be coming on. My guess is that two factors have occurred that are influencing each other. The first is that the last two years has wrung a lot of distressed inventory out of the system. There is still more to come but it appears we are getting on the backside of it. The second issue is that prices have not moved up yet and as a result the “discretionary” sellers, those who sell based on opportunity and a forced distressed sale, do not see enough opportunity to participate in the market. The lack of new distressed inventory and low overall pricing appears discouraging “discretionary” sellers appears to be keeping a lid on inventory for now.

The spreadsheet is here: Weekly scorecard 1-17-11