Foreclosures Sales, REO Inventories Increase Along West Coast: Report
Original Post Date: October 18, 2010
By: Carrie Bay
ForeclosureRadar has released its September market report, and the company’s data shows that both foreclosure sales and inventories of bank-owned properties are on the rise throughout the West Coast states of Arizona, California, Nevada, Oregon, and Washington.
Five major mortgage servicers have announced that are suspending certain foreclosure activities in various states. These companies included Ally (GMAC), JPMorgan Chase, Bank of America, Litton Loan Servicing, and PNC Financial.
ForeclosureRadar says that its latest report is primarily focused on September foreclosure activity, and pointed out that the company’s analysts have yet to see any impact to foreclosure sales from the announced suspensions within its coverage area.
“We regularly see lenders make minor mistakes in foreclosure filings” said Sean O’Toole, CEO and founder of ForeclosureRadar. “But the reality is that far more homeowners are behind on their mortgage payments than are even in foreclosure.”
O’Toole continued, “The clear problem in the housing market today is not foreclosures, but negative equity; and as long as the focus remains on the symptom rather than the disease we will see little progress towards real solutions and this crisis will drag on for years to come.”
In Arizona, REO inventories have been steadily rising for the last year. According to ForeclosureRadar, the state’s bank-owned supply has jumped again – up 4.3 percent from August to September, and 67.9 percent year-over-year. The company says this can partially be explained by an increase in foreclosure sales that went back to the bank and a slowing of REO sales since the expiration of the federal tax credit. Notice of Trustee Sale filings dropped in Arizona for the second month in a row.
ForeclosureRadar reports that in California, the number of foreclosures sold to third parties, typically investors, declined 15.6 percent in September, most likely because the time it takes foreclosure investors to flip the property has lengthened from 95 to 137 days over the past year. The Golden State’s total REO inventory increased by 5.3 percent last month as REO resales slowed.
Nevada’s foreclosure sales jumped dramatically in September, increasing by 39.2 percent from August. The number of foreclosure sales purchased by third parties was essentially flat, while the majority went back to the bank, leading to an 8.0 percent increase in the state’s inventory of REO properties. Nevada foreclosures filings were mixed with Notices of Default down 8.8 percent and Notices of Trustee Sale up 6.5 percent in September.
Foreclosure sales continue to climb in Oregon, up 18.5 percent from August and 88.9 percent from the prior year to a record 967 sales. The vast majority of these sales, 94.3 percent, failed to receive a bid from a third party and went back to the bank as REO inventory, according to ForeclosureRadar.
A record 2,007 properties were foreclosed on in September in Washington, up 19.0 percent from August, and 55.2 percent from the prior year. Just 7.3 percent of foreclosures sales were purchased by third parties, with the remaining swelling REO supplies by 10.9 percent.
ForeclosureRadar tracks every foreclosure in the five West Coast states included in its coverage area and provides daily auction updates.