Declining REO Sales May Push Foreclosure Inventory Higher
Jul 31 2012, 9:07AM by Jann SwansonThe pace of foreclosure activity in the U.S. remained unchanged in June with 60,000 completed foreclosures, the same number as in May but 25 percent lower than the June 2011 total of 80,000. The number of pending foreclosures was also unchanged from May at 1.4 million homes or 3.4 percent of all homes with a mortgage and the year-over-year change was a single basis point decrease from 3.5 percent. There were 1.5 million homes in the inventory a year earlier. The foreclosure inventory represents the share of mortgages homes that are in some stage of foreclosure.
These figures were reported on Tuesday by CoreLogic in its National Foreclosure Report for June. The company said that there have now been approximately 3.7 million completed foreclosures since the financial crisis began in September 2008.
“While completed foreclosures and real-estate owned (REO) sales virtually offset each other over the past four months, producing static levels of foreclosure inventory for most of this year, they are beginning to diverge again,” Mark Fleming, chief economist for CoreLogic said. “Over the last two months REO sales declined while completed foreclosures leveled out. So we could see foreclosure inventory rising going forward.”
“The decline in the flow of completed foreclosures to pre-financial crisis levels is more welcome news pointing to an emerging housing market recovery,” according to Anand Nallathambi, CoreLogic’s president and CEO. “However, we believe even more can be done to reduce the inventory of foreclosures by decreasing the level of regulatory uncertainty and expanding alternatives to foreclosure.”
Yorba Linda Overview
| Median home price is $534,000. Based on a rental parity value of $630,000, this market is under valued. |
| Monthly payment affordability has been worsening over the last 2 month(s). Momentum suggests worsening affordability. |
| Resale prices on a $/SF basis increased from $250/SF to $253/SF. |
| Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. |
| Median rental rates increased $41 last month from $2,533 to $2,575. |
| Rents have been slowly rising for 12 month(s). Price momentum suggests slowly rising rents over the next three months. |
| Market rating = 6 |
Proprietary OC Housing News home purchase analysis 
5031 SIESTA Ln Yorba Linda, CA 92886
$610,000 …….. Asking Price
$349,000 ………. Purchase Price
10/4/1996 ………. Purchase Date
$261,000 ………. Gross Gain (Loss)
($27,920) ………… Commissions and Costs at 8%
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$233,080 ………. Net Gain (Loss)
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74.8% ………. Gross Percent Change
66.8% ………. Net Percent Change
3.6% ………… Annual Appreciation
Cost of Home Ownership
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$610,000 …….. Asking Price
$122,000 ………… 20% Down Conventional
3.70% …………. Mortgage Interest Rate
30 ……………… Number of Years
$488,000 …….. Mortgage
$113,317 ………. Income Requirement
$2,246 ………… Monthly Mortgage Payment
$529 ………… Property Tax at 1.04%
………… Mello Roos & Special Taxes
$153 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
………… Homeowners Association Fees
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$2,927 ………. Monthly Cash Outlays
($356) ………. Tax Savings
($742) ………. Equity Hidden in Payment
$149 ………….. Lost Income to Down Payment
$173 ………….. Maintenance and Replacement Reserves
============================================
$2,152 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$7,600 ………… Furnishing and Move In at 1% + $1,500
$7,600 ………… Closing Costs at 1% + $1,500
$4,880 ………… Interest Points
$122,000 ………… Down Payment
============================================
$142,080 ………. Total Cash Costs
$32,900 ………. Emergency Cash Reserves
============================================
$174,980 ………. Total Savings Needed
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599……
sales@ochousingnews.com…..
We're sorry, but it seems that we're having some problems loading MLS # I12091698 from our database. Please check back soon.
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$549,999 17962 YORBA LINDA Blvd |
0.07 miles 3 bd / 2 ba 2,000 Sq. Ft. |
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$699,000 17447 ROCKROSE Cir |
0.47 miles 4 bd / 2.5 ba 2,350 Sq. Ft. |
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$597,000 4610 VALLEY VIEW Ave #2 |
0.59 miles 4 bd / 3.5 ba 2,375 Sq. Ft. |
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$729,000 5401 OHIO St |
0.96 miles 4 bd / 2.75 ba 2,300 Sq. Ft. |
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$549,000 4172 North VALLEY VIEW Ave |
0.96 miles 4 bd / 2.75 ba 2,135 Sq. Ft. |
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$729,000 18672 BUENA VISTA Ave |
0.97 miles 4 bd / 2 ba 2,336 Sq. Ft. |
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$650,000 18782 LA CASITA Ave |
1.04 miles 3 bd / 2.25 ba 2,326 Sq. Ft. |
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$499,990 215 SARATOGA Ave |
1.11 miles 4 bd / 2.5 ba 2,358 Sq. Ft. |
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$899,900 5132 OHIO St |
1.12 miles 3 bd / 1.75 ba 2,157 Sq. Ft. |
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$799,000 16922 RANCHO Ln |
1.13 miles 4 bd / 2 ba 2,437 Sq. Ft. |
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DeMarco’s Opposition Stirs Up Principal Reduction Debate
In a long-running debate, Edward DeMarco, acting director of the Federal Housing Finance Agency, stated again this week that he does not support principal reductions and does not endorse their use at Fannie Mae and Freddie Mac.
After stating his position, he immediately faced criticism and opposition from a broad spectrum of individuals, especially throughout the government. However, DeMarco’s decision received a few words of praise as well.
Treasury Secretary Tim Geithner sent DeMarco a letter stating his concern at DeMarco’s “continued opposition to allowing Fannie Mae and Freddie Mac (GSEs) to use targeted principal reduction in their loan modification programs.”
Geithner’s letter stated bluntly, “I do not believe it is the best decision for the country.”
He pointed to the FHFA’s own analysis for evidence that principal reductions could save the GSEs as much as $3.6 billion and could save taxpayers up to $1 billion.
This evidence has led economist Paul Krugman criticize DeMarco’s aversion to the strategy, reducing DeMarco’s argument to “because he doesn’t feel like it.” Krugman also called into question whether DeMarco is fit for his role.
In a similarly candid statement Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities, told Reuters, “in unusual times, like the aftermath of the worst housing bubble implosion in decades with 30+% price declines, guess what? Write downs happen.”
In DeMarco’s letter to congress stating his position on the matter, he expresses concern regarding the “long-term consequences for mortgage credit availability.”
“Forgiving debt owed pursuant to a lawful, valid contract risks creating a longer-term view by investors that the mortgage contract is less secure than ever before,” DeMarco stated. This uncertainty would lead to “higher mortgage rates, a constriction in mortgage credit lending or both,” he said.
David H. Stevens, president of the Mortgage Bankers Association released a statement Tuesday expressing the trade group’s stance on the issue. ““FHFA has made the determination that the long term national costs of a widespread principal reduction program are unlikely to outweigh what may be a short-term gain for a few select borrowers in certain states,” he said.
“We agree that principal forbearance can help borrowers realize a payment reduction in a similar way as principal reduction. It is critical to implement solutions that help the American homeowner without incurring the negative long-term impact of making credit less available and more expensive,” he continued.
Sen. Bachus (R-Alabama) released a statement supporting DeMarco’s unwavering stance. He went so far as to say DeMarco “deserves praise for standing up for the best interests of the American people.”
“Everyone knows a job is the best foreclosure mitigation plan,” Bachus stated.
“Instead of more failed government programs, the President should work with us on bipartisan solutions that help create jobs and heal the housing market,” he added.