[RCCCB]

Originally Posted by olecapt

Nope. We are in the bottom. I have no crystal ball on how it will play out.

And I could well be wrong. Particularly if a significant increase in REOs does occur.

Median will eventually follow average...or they will both bounce around for a while...

I have never claimed to see what happens next. I think it is possible we could get a significant price increase. Or we could simply lay here for six months.

What I do think is that the 3 and 4% per month declines we have been dealing with have stopped. Some selected areas are heading up. Others continue down. And the downs are not where I would have expected them to be.

So this thing continues to teach humility. Whatever you are sure will happen does not.

No matter what, there will be a whole other wave of foreclosures from all the unemployment over the next bunch of months.
Tough times to come for a while.
If there is a big wave held back from the moratorium and another one from the unemployment, you may not see market stabilization for a LONG time.

[olecapt]

Originally Posted by RCCCB

No matter what, there will be a whole other wave of foreclosures from all the unemployment over the next bunch of months.
Tough times to come for a while.
If there is a big wave held back from the moratorium and another one from the unemployment, you may not see market stabilization for a LONG time.

And again real estate is pretty local...as was demonstrated by the havoc wrought on Las Vegas and Phoenix and a few other places.

I can't see Las Vegas getting hit a lot worse than the rest of the country simple because we were hit harder and earlier.

I refer to the coming wave of REOs as "the Emperor's new REOs". It may well be true that we simply are not refined enough to see them...but it is more likely that they don't exist.

[horseplayer]

Another lockbox on a neighbors unit. She paid 124,900, it is listed for 45K, and she is still listed as the owner. The listing doesn't say short sale, but it almost has to be. I did notice a group of buyers who came by about four hours later. It will be an interesting barometer for my January purchase, as my own comp (35K, on a smaller unit) is working against values.

[JohnG72]

Originally Posted by olecapt

And again real estate is pretty local...as was demonstrated by the havoc wrought on Las Vegas and Phoenix and a few other places.

I can't see Las Vegas getting hit a lot worse than the rest of the country simple because we were hit harder and earlier.

I refer to the coming wave of REOs as "the Emperor's new REOs". It may well be true that we simply are not refined enough to see them...but it is more likely that they don't exist.

I am curious as to why you basically ignore the increase in NOD and certain continued NOD's to come in the next to years due to the Option ARMS and Alt-A resets. Would these not eventually result in a new glut of available housing? Short of mass government intervention where principle is forgiven, this is happening and will continue with a peak in 2010-2012.

Your argument is consistently "there won't be more REO's". But I don't understand how you can make that argument with a whole slew of mortgages about to undergo these resets.

[tony soprano]

Originally Posted by JohnG72

Your argument is consistently "there won't be more REO's". But I don't understand how you can make that argument with a whole slew of mortgages about to undergo these resets.

Repeat it often enough and you'll start to believe it?

[olecapt]

Originally Posted by JohnG72

I am curious as to why you basically ignore the increase in NOD and certain continued NOD's to come in the next to years due to the Option ARMS and Alt-A resets. Would these not eventually result in a new glut of available housing? Short of mass government intervention where principle is forgiven, this is happening and will continue with a peak in 2010-2012.

Your argument is consistently "there won't be more REO's". But I don't understand how you can make that argument with a whole slew of mortgages about to undergo these resets.

What increase? I find the NOD numbers nonsensical. Tony likes them but that is Tony.

I certainly don't suggest there will be no more REOs...in fact REOs will go on through the next year or two or three as a manor force in the market place. I simply don't see any signs of a surge in REOs.

If we are going to have a surge in foreclosures it will be led by an increase in bank owned properties. Bank owned properties continue to drop.

Basically the lenders have to foreclose before they sell the REO. And they are not...

In general none of the purported resets occur until late this year and next. And their actual impact in Las Vegas is not easily projectible.

Please note that I do not oppose a continuation of the REO sales...or even an increase. I simply report that it is not occurring.

There are things I don't like about this market...like investors driving out the bottom tier of owner occupied. But other than that it is damn near a perfect RE Agent environment.

[tony soprano]

Originally Posted by olecapt

If we are going to have a surge in foreclosures it will be led by an increase in bank owned properties. Bank owned properties continue to drop.

Basically the lenders have to foreclose before they sell the REO. And they are not...

The banks have to foreclose before they own the properties, yet a surge in foreclosures will be led by an increase in bank owned properties. That's pure gold right there.

[Daddys///M3]

Some stats on Alt-A mortgage conditions in NV. Accurate (per the NY Fed) as of May 2009. Bear in mind that some of these stats actually overlap.

Credit Conditions in the United States - Federal Reserve Bank of New York

Alt-A loans in NV: 43,092
Non-owner occupied: 37.1% or 15,987
Owner occupied: 62.9% or 27,105
24.6 Alt-A loans per 1000 housing units
$266,509 average loan balance
Average loan age: 36 months
10,587 loans with subordinate financing (2nd liens)
9038 with high LTV at origination (not sure the criteria for high LTV by NY Fed standards)
13,389 interest only
6947 negative amortization
(The below stats only apply to owner occupied mortgages, for some reason that's how the Fed breaks it down)
43.5% (11,791) with at least one late payment in the last 12 months
62.3% (16,886) current on payments
6.2% (1681) 30-59 days past due
4.2% (1138)60-89 days past due
10.3% (2792) 90+ days past due
10% (2710) in foreclosure
7% (1897) in REO
18.6% (5041) originated in 2007
42.4% (11,493) originated in 2006
39% (10,571) originated in 2005 or earlier
74.5% (20,193) low or no documentation
Average combined loan to value of purchases: 91.24%
(The above bolded stats bear a certain significance in my opinion)

The way I see it, both sides of the argument can be right. There are clearly not 25,000 REO sitting on the banks books currently, and the current amount of REO and foreclosure proceedings (at least from the alt-a side of things) looks to be rather low. However, if you figure that most Alt-A were liar loans, originated in 2006 and 2007, and a very large percent of them were adjustable rate mortgages (I can't break them down by 3/1, 5/1, 7/1, or 10/1 but count on the majority of them being 5/1 due to the more attractive pricing at the time) the case can definitely be made (especially considering the high and growing unemployment numbers) for more foreclosures to take place and more REO inventory coming onto the market over the next few years. I see nothing to suggest that they will come onto the market at a pace of more than a couple of thousand per month if that (you would need to see every Alt-A loan both owner occupied and non-owner occupied to foreclose over the next 2 years to see even a 2000 a month foreclosure rate). The numbers just don't support it, at least not the massive Alt-A foreclosure wave. Defaults due to unemployment or just walking away are something else entirely, and that simply cannot be forecast.

I am currently looking for the conventional mortgage numbers but apparently the Fed only publishes this info for subprime and Alt-A mortgages.

[tony soprano]

DM3, now that's bringing the tech. I was looking for the prime loan data myself a couple of weeks ago and ran across the following article -

Prime loan default rates double - The Boston Globe

[Daddys///M3]

Originally Posted by tony soprano

DM3, now that's bringing the tech. I was looking for the prime loan data myself a couple of weeks ago and ran across the following article -

Prime loan default rates double - The Boston Globe

I wish I could find the total data broken down by state and whatnot like the Fed excel spreadsheet. I've looked on the Mortgage Bankers Association website, the OTS website, and the OCC website and just can't seem to find it. I don't know if they simply don't make the info public or if I just need to dig deeper. Someone has to keep those stats. If/when I find it I will be back with more info.