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FRED
03-04-07, 06:35 PM
Editor's Note: The following is a report by iTulip contributor Sean O'Toole of proprietary timely and accurate foreclosure data only available in graphical form on iTulip.com. Sean's company will launch the data service shortly, available to investors, hedge funds, and government agencies on a subscription basis.

http://www.itulip.com/forums/../images/exclamation_mark.gifFebruary 2007 Foreclosure Data Alert - March 5, 2007Number of foreclosed homes returned to lenders at auction continue to rise

by Sean O'Toole

Our previous report on January 12, 2007 (http://www.itulip.com/forums/showthread.php?t=817) showed that for Q3’06, California foreclosures were up 111.8% from Q3’05 and 28.3% from the prior quarter. Despite this strong upward trend, most articles invariably followed up this data with a statement such as: Foreclosures are still at historically low levels, and the effect on today’s market is negligible.

The source of these articles is DataQuick. When DataQuick says "historically low levels," they also disclose that they’ve only been tracking foreclosures since 1992, a key fact that many folks who use DataQuick's data don't know is very important. The reason that the start date of comparable foreclosure data for the last cycle is so important is that about two years after the last housing cycle bottom, foreclosures were already declining. If housing were indeed in the process of "bottoming out" now, as many forecast, then foreclosures should be starting to decline. Instead, as we reported last month, they continue to rise rapidly. Note the DataQuick data also show that foreclosures peaked in Q1’96, which correlates reasonable well with the bottom for the housing market. If that pattern of foreclosures repeats, then a bottoming of this housing cycle may not occur before 2010.

February's data support our theory that DataQuick’s data spans a period of time that began during a period of increased foreclosure levels in the last cycle. As a result, we don’t have a clear picture of comparable foreclosure rates for the housing cycle period we are in currently compared to the last cycle, so no one can say whether current levels are "historically low" or not. Even if they are, that may well be a sign of a market peak rather than a bottom, implying further market volatility rather than market stability as usually inferred from the data.

Here is some new data for California that you won't see soon anywhere but here on iTulip.

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Enlarge (Number of Properties) (http://www.itulip.com/video/prtl030407P.swf)


The number of foreclosures that lenders are taking back in California has increased from an average of 32 a day in August 2006, to 205 a day in February 2007. In dollars that’s an increase from an average of $13.3M per day to $83M per day in seven months.

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Enlarge (Value of Loans) (http://www.itulip.com/video/prtl030407V.swf)



A total of $1.5 billion of loan value was returned lenders in February versus $425 million in Sept. 2006.

These data do not support the idea that the market has "bottomed out (http://www.msnbc.msn.com/id/16812267/)." Rather, the market is in the early stages of decline.


You heard it here first.

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Cut and paste embed for bloggers: Properties
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Cut and paste embed for bloggers: Loan Value
<object height="500" width="700"><embed src="http://www.itulip.com/video/prtl030407V.swf" type="application/x-shockwave-flash" wmode="transparent" height="500" width="700"></object>

miju
03-05-07, 09:03 AM
Please continue to track these figures.
However you are talking about 1.5 billions loan value returned to the lenders. it is smaller than 0.1 % of the outstanding total value of home mortgage... What impact ?
regards

FRED
03-05-07, 09:32 AM
Please continue to track these figures.
However you are talking about 1.5 billions loan value returned to the lenders. it is smaller than 0.1 % of the outstanding total value of home mortgage... What impact ?
regards

These data are for now only for California, not the whole U.S.

Percentage returned to lender versus sold (http://www.itulip.com/video/prtl030407vssales.swf)

As a percentage of homes sold, homes returned to lender have increased from around 1% to approx. 11% from Aug. 2006 to Feb. 2007. The number sold data are based on the latest report issued by U.S. Census Bureau and the Department of Housing Urban Development, Manufacturing and Construction Division, DECEMBER 27, 2006. Jan. and Feb. 2007 houses sold numbers are estimates.

grapejelly
03-05-07, 09:48 AM
also not included are the far greater number of workouts that are done without being reported. Short-pays are one example. I read a report that 1 out of 5 homes for sale in Sacramento is a short-pay.

Another are new loans quietly replacing the old loan.

The percentage of homes in these categories is far higher than those that are returned to lenders.

SeanO
03-06-07, 02:42 AM
miju - In addition to Fred's comment I would add that 90% of these loans were originated in 2005 and 2006. So they are certainly having a bigger impact on lenders than if they were as spread out as nicely as you presume.

grapejelly - Yes, short-sales will be a significant market for a while. Definitely a great new source of business for Realtors. All these properties going back to the bank will also be listed with Realtors. I know of a couple of Realtors that specialize in bank listings that have in the area of 100 listings each. That's over $1M in commissions each. And those listings are still pouring in.

If you've read America's Bubble Economy you'll know there is a silver lining in every cloud for those who are prepared.

Sapiens
04-17-07, 12:44 PM
Foreclosures, default notices hit 10-year high
Sluggish sales, rising adjustable mortgages blamed for 802% increase from previous year in homes lost

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/04/17/BUGCQP9MBO1.DTL


Homes lost to foreclosures in California shot up to 11,033 in the first quarter, an 81.5 percent climb from 6,078 in the previous quarter, according to DataQuick Information Systems. Foreclosures rocketed 802.1 percent from 1,223 in the first quarter last year but remained below the 1996 peak of 15,418.

Statewide, lenders sent 46,760 notices of default to homeowners in the first quarter. That marked a 23.1 percent jump from the previous quarter and a 148 percent jump from a year ago in the same period. Notices of default mark the first stage in the foreclosure process.