California foreclosure sales and notice of default (NOD) filings fell slightly in the second quarter of 2014 (Q2 2014). However, the number of real estate owned (REO) resales rose.
REO resales rise slightly
Roughly 7,000 REO resales took place in Q2 2014. REO resales were up about 7% from the prior quarter. However, the REO resales taking place last quarter still amounted to only half the REO resales which took place one year ago. 6% of all California resales were REOs in Q2 2014, down from 12% one year ago. At foreclosure sales, individuals (mainly speculators), rather than foreclosing lenders or the government, bought 41% of homes sold, down from 54% last year. The third-party high-bidder situation indicates speculators remain somewhat optimistic about a future rise in real estate resale pricing. However, the optimism is waning.
NODs lowest since 2005
In Q2 2014, California NOD recordings totaled just over 17,500. This is down from 25,700 NODs one year earlier, making it the lowest number of NODs recorded in a single quarter since Q4 2005. NOD volume peaked at 135,431 NODs recorded in Q1 2009. In California, an average of nine months pass between an NOD recording and the foreclosure sale, indicated by a trustee’s deed.
Foreclosures decline
Foreclosure sales recorded in Q1 2014 totaled roughly 7,400, down from 9,800 foreclosure sales recorded a year earlier. The number of foreclosure sales is still higher than before the recession, though it’s almost back to historical norms. Are foreclosures finally recovered for good? Not quite. Expect foreclosures to rise again when mortgage rates begin to increase significantly, likely in 2015. Among California’s largest counties, the greatest one-year drops in foreclosure sales took place in San Francisco (-58%), Riverside (-30%) and Orange (-36%) counties.
Short sales: lenders’ Plan B
Roughly 6,700 short sales closed in Q2 2014. Short sales comprised only 6% of California resale activity, down from 14% a year earlier. Short sales are lenders’ preferred alternative to foreclosure, though until this past quarter short sales actually eclipsed the number of foreclosure sales. Lenders go with this “Plan B” to avoid both taking on additional REO property and potential government settlements.
What’s in store?
Although steadily decreasing, foreclosures are going to remain higher than average due to negative equity. Negative equity still plagues roughly 850,000 California homes. Today’s continuing downward trend in NODs is going to be countered by a drop off in home prices (and increased mortgage delinquencies) later in 2014. Many of California’s vastly underwater homeowners won’t reach positive equity soon enough to dismiss the idea of a strategic default or short sale. Eventually, increasing numbers of these homeowners will walk away, frustrated by the conduct of their mortgage lender, rising interest rates and flattening prices. Re: California foreclosure starts lowest since 2005 from DataQuick
THE BIG PICTURE
When assessing real estate markets, we all know the key word is “local.” What holds true for Riverside might not be true for Beverly Hills. What is happening in Miami has little to do with what is happening in Dallas.
But, nevertheless, the overarching national and international economy and financial situation and the national and international political situation have great bearing on what happens in ALL local markets. The unemployment rate is a case in point. Obamacare is a case in point. How something happening overseas spooks Wall Street is a case in point.
So, one must keep a careful eye on national and international events to see what is “coming down the road” to effect local markets and local life.
Currently, there is an international plot underway to purposely stir up trouble in the Middle East. The Western created ISIS is busily at work trying to foment a Sunni v. Shea regional war there, and Saudi Arabia has massed 30,000 troops on its border with Iraq. Our CIA is pumping funds and guns into the rebel forces in Syria trying to overthrow Assad, while it terrorizes and slaughters Christians in that country (which Assad has always protected).
Actions initiated in the West caused the overthrow of an elected leader in Ukraine, who has now been replaced by a billionaire of the same ethnicity as the criminal Russian oligarchs arrested by Vladimir Putin in his country, and which billionaire shows little concern for human life.
Those actions by the West were meant to pull Ukraine into NATO, a direct slap in the face of Russia, whose leader is opposed to the New World Order paradigm, of which the EU was supposed to be a precursor. Germany is now having second thoughts about its alignments and seems to be pulling away from NATO and Europe and may align itself with BRICS instead.
Meanwhile our own nation is deploying 30,000 spy drones into the skies over our heads and dreams of 1 million. Drones can be easily armed, and many already are. Do any of you older folks remember the term “Fatherland” the Nazis used for the German Reich? Well, we now live in the “Homeland.”
Keep your eye on developments internationally, because if the world keeps shunning U.S. Treasuries because of U.S. political and military policies, not to mention our massive debt, then the sham purchase of $300 billion in U.S. treasuries that recently took place by tiny Belgium (headquarters of the EU) won’t be anywhere near enough to stop the hemorrhage.
The Fed handed $85 billion a month to the Cabal banks for over a year, and in return received securitized mortgage instruments, giving it over $1 trillion in holdings. That “pumping” continues to the tune of $45 billion a month. Soon the Fed will hold most all outstanding mortgages in America. What will it do with those?
When the world finally stops buying ANY U.S. debt, who will finance our government? The easy solution: Abolish the Fed Central Bank system completely. Ever wonder why our government has to “borrow” money and pay massive interest? Why can’t the Treasury just print money and use it to build roads and rail systems, etc. and owe no bank any interest?
The answer is that the toxic Central Bank System injected itself between the government and what Congress spends. When we finally rid ourselves of the Central Bank System, then we can resume our progress as a great nation. The mortgage market, Wall Street, precious metal prices, and much more are currently being manipulated by the big banking Cabal and most Americans now know it.
Remove that encircling Serpent of the Cabal banking system and free our nation from its grip to have a truly free financial market and unfettered housing market. Only then will we prosper as the great nation we were meant to be. Vladimir Putin and the BRICS Alliance of Nations are feverishly working to break the power of the Cabal Banking System. As a patriotic American, you should be doing the same.
This is ONLY the CALM before the STORM! The future does not take into consideration the amount of layoffs due to OBAMACARE and I just noticed in WYNCO this afternoon that the HEMET store is in the process of installing SELF CHECKOUTS because of the INCREASE IN MINIMUM WAGE! Before long, checkers well no longer be in stores because they will not be able to make a profit while holding the prices down! Primera Bread announced a couple of months ago that ALL of their stores will be AUTOMATED by 2016 in regards to check out. McDonalds announced that they are in the process of converting ALL of their restaurants to AUTOMATED CHECKOUT like they currently are in EUROPE!
I heard this afternoon noon on FOX NEWS that one of California “BRILLIANT” Democrats in Congress is proposing an NATIONAL BILL that will require employers to give employees on minimum wage, 24 hour notice if they are going to cut their scheduled hours the next day and if the employer doesn’t give notice, the employee is able to “KEEP” their pay with the cut hours!
These are all methods that thanks to OBAMA and his “CRONIES” will cause MASSIVE UNEMPLOYMENT in the ENFORCEABLE FUTURE! California currently has ONE OF THE HIGHEST UNEMPLOYMENT RATES in the COUNTRY and I read yesterday that in San Diego, a company with 450 employees is relocating FROM California’s San Diego to Dallas, Texas. Thereby causing another 450 people to lose their jobs! Thank you California and your ridiculous tax rate. Even Hollywood is having studios relocate out of state to cut taxes! According to Kiplinger Magazine, California has the 1oth worse tax rate in the country and the tax rate is still CLIMBING!
Foreclosures are not slowing down! Financial institutions are HOLDING BACK on their filings of Notice of Default. Drive down any major artery in Hemet and within a quarter of a mile you will find on average 5 to 7 houses that are vacant and abandoned that are waiting for the TRUSTEE’S SALE.
When talking about foreclosures and the economy, look at the total picture before falling for the media spin as to how strong the economy is. Wall Street Prognosticators are predicting the stock market will crash and it will make the crash of 1929 look timid by comparison. One prognosticator has predicted that the stock market will fall to 6,000 quite possibly by the end of this year! This is all due to what is going on with the current economy out of WASHINGTON D.C.! The U.S. Army is laying off over 45,000 soldiers over the next 3 years! This will make are Army the smallest that it has been since the end of WORLD WAR II !