The foreclosure floodgates have been lifted

The number of NODs recorded in late 2008 fell as the government-mandated foreclosure moratoriums took hold.

Riverside County is the record-setting county in California for NOD recordings and trustee’s sales, and this April, recordings of NODs were nearly 50% greater than in April 2008. San Bernardino County’s number of NOD recordings for April is 1/5^th less than Riverside County and up only 20% over recordings in April 2008.

first tuesday take: The second wave of REO inventory at the MLS level is coming and in much bigger numbers than in 2008. Refis and mods have temporarily delayed the inevitable foreclosures, and over 50% of the mods will re-default before the foreclosure process comes to its logical conclusion—in spite of government intervention.

A “combination” has developed of newly foreclosed homes and the shadow inventory of REO properties not yet on the market from past foreclosures. The result: in the third and fourth quarters of 2009 the MLS resale market will see a spike in the number of MLS sales. Great for agents needing twice as many deals to make the same money as just three years ago.

With the ever-lower prices this influx of REOs will bring, expect a further crushing of the new-home market. But never fear, the builders have the ear of state legislators, who are—for some undisclosed reason—eager to subsidize new construction to add to the massive inventory of vacant new and resale homes by tripling the tax credit blessing the builders are “preying” for.

Re: “New foreclosure wave predicted in Inland area” from The Press Enterprise