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P.O. Box 20069, Riverside, CA 92516
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NODs and NOTS continue to stunt California real estate recovery
By Kelli Galippo • Sep 24th, 2010 • Category: real estate newsflash
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Notice of Defaults (NODs) recorded in August 2010 throughout California totaled 31,120. That is:
- a 17% increase from July 2010 (26,671); and
- a 16% decrease from August 2009 (37,061).
Notice of Trustee’s Sales (NOTS) recorded in August 2010 totaled 30,726, marking:
- a 3% increase from July 2010 (29,920); and
- a 10% decrease from August 2009 (34,224).
first tuesday take: The total number of NODs for July and August (57,791) remains alarmingly high compared to the manageable numbers posted in the stable period of the late 1990s, a time we can look forward to no earlier than 2014. [For more information regarding quarterly NODs and NOTS, see the July 2010 first tuesday market chart, NODs and Trustee’s Deeds: Grim signs of real estate’s present condition.]
NOD recording volume is at the moment trending higher, but lower than the abysmal number of NODs recorded in 2009 (around 120,000 quarterly). However, loan delinquencies indicate the trend for recorded NODs will turn further upward and do so significantly. In reality, NODs must increase for the next 12 months or more to clear out the delinquencies that are continuing to rise.
The government has launched yet another foreclosure prevention program to address underwater homeowners, called a “Short-Refi,” the “short” standing for loan balance reduction — generally called a “cramdown” or “strip-away”. It is based solely on voluntary lender reduction of principal balances for homeowners who are current on their payments. The intended goal was to keep owners in their homes and houses out of the real estate owned REO inventory.
In practice, no lender reduces a loan balance if the owner is faithfully making payments. Decidedly, the refi program leaves the delinquent masses of California homeowners with little promise outside of foreclosure. [For more information regarding the Short Refi program, see the September 2010 first tuesday article, FHA 'Short-Refi' Program debt relief for underwater homeowners.]
Defaulting homeowners will find diminishing voluntary respite from lenders until bankruptcy judges are given back their authority to reduce principal loan balances. The availability of judicially-ordered cramdowns will encourage lenders to immediately cure their negative equity problems themselves. Until then, lenders will continue delaying foreclosure and leaving thousands of Californians burdened by underwater properties and insolvent.
Agents and brokers need to continue advising homeowners about their most financially prudent housing option: whether it be a refinance if the homeowner has an equity or a strategic default in a negative equity situation. [For more information regarding strategic default and refinancing, see the July 2010 first tuesday article, Owners add cash instead of cashing out and the September 2010 first tuesday article, The LTV tipping point: when negative equity owners are most likely to strategically default.]
Re: “California Foreclosures” from Foreclosure Radar
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Copyright © 2012 by the first tuesday Journal Online - firsttuesdayjournal.com;
P.O. Box 20069, Riverside, CA 92516
Readers are encouraged to reproduce and/or distribute this article.
Copyright © 2012 by first tuesday Realty Publications, Inc. Readers are encouraged to reprint or distribute this information with credit given to the first tuesday Journal Online — P.O. Box 20069, Riverside, CA 92516.
Kelli Galippo is lead editor for the The §1031 Reinvestment Plan and Tax Benefits of Ownership books.
Email this author | All posts by Kelli Galippo
i spoke with joe and everyone is talking about the foreclosures speeding up.
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Why would banks work with homeowners when our government pads their pockets!
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Where can I find the list of banks that are currently willing to negotiate better terms . I WAS TOLD OUT OF THE 7 MAJOR BANKS, 3 are in a no negotiation( ie Wells Fargo) and 3 are in a willing to negotiate ( Bank of America)?
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Where can I find a list of attorneys ready to take on the banks in a class action lawsuit. Homeowners are being held hostage to the “tap dancing” BS of the banks while the banks are getting fatter and more in control of the working class tax payer. Nothing will change until the banks are regulated and have to account to the highest court, the people! Home owners spend and contribute, while homeless do not. Where is our so called representatives in Congress and what have they done to secure JOBS that would help us keep our homes? This is a turn over voting year and all they want is our votes for their individual causes & padded egos. America for sale, CHEAP!!! Who will our children and grandchildren work for?
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Homeowners who through the fault of their OWN are unable to make payments and are in danger of losing their homes to foreclosure !! The smart and eduacted ones chose not to spend more than they could afford !!!!
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Homeowners who through the fault of their OWN are unable to make payments and are in danger of losing their homes to foreclosure !! The smart and eduacted ones chose not to spend more than they could afford !!!!
Its not smart, Its actually called COMMON SENSE.
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“The people” are not a court, they are a mob. The mob pacifiers offered loans to the mob that the mob could not afford. Banks had to compete with the mob pacifiers Fannie and Freddie. The mob continues to blame everyone else for their mistakes . . . and continues to look to mob pacifiers for a solution. Both Democratics and Republicans are guilty in this one . . . But NOT ONE fiscal conservative.
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