Comments on: Shadow Inventory – Confusion Reigns

By: Art Martin

Art Martin — Fri, 05 Feb 2010 23:33:36 +0000

OK there is not any shadow inventory of REO’s
What about the houses that he banks have not put into Forecloure where they are not even posting them so you do not have them on Foreclosureradar. This is what I call shadow inventory the banks do not want to list them on their
balance sheets so they go undetected from anybody. The people are still livinig in the house even though they have not made a payment in over a year. What do you call them.?
We have done short sales on them but we have to do searching to find them

By: Sean O'Toole

Sean O'Toole — Fri, 15 Jan 2010 04:31:25 +0000

Postponements are definitely frustrating right now. You point kind of gets to the core of the issue — banks are saying they are postponing due to loan mods, etc, but reality clearly seems to suggest otherwise if you pay attention. We know vacant homes aren’t postponing due to loan mods. We also know there are a lot more properties that are seriously delinquent or in foreclosure than HAMP reports for active mods. The argument that they don’t have capacity doesn’t wash either – they were foreclosing on twice as many at the peak in 2008, and they’ve had plenty of time to grow capacity. For my take on what is behind it see: http://www.foreclosuretruth.com/blog/sean/the-swell-is-huge-no-waves-in-sight/

And yes, lenders can only postpone due to “beneficiaries request” 3 times under CA statutes — but pretty easy for them to say they are postponing due to “mutual agreement”, doubtful any homeowner would argue it.

By: Jeffrey Rollins

Jeffrey Rollins — Thu, 14 Jan 2010 19:59:22 +0000

Sean, I purchase homes at the auction. Must say, you have done a great job with foreclosureradar, it is a great resource.
One thing that is just amazing us right now is that we are seeing dozens of VACANT homes being postponed everyday. Some are shortsales but many are not, these are abandoned properties…

Also another trend we are seeing is tied to Recontrust mainly. They are canceling many after being postponed. Canceling VACANT houses. Now they are going to have to start back at NOD…. This is just ridiculous. Also, from what I understand there is a 3 postponement rule, where the bene can only postpone 3 times without reason, then he must restart from NOD. Is this what is happening? Why Recontrust? which is a B of A subsidiary? What do you think about all this?

By: Sean O'Toole

Sean O'Toole — Mon, 11 Jan 2010 08:37:15 +0000

Obviously I’m not reporting what you want to hear as you seem stuck on clinging to the failed idea that there is something hidden in the shadows.

So let me repeat myself again (its good for keyword density after all):

1. There is no “shadow inventory” of bank owned homes. This is simple fact – we are prepared to review the roughly 500k CA foreclosures to date one-by-one to prove it.
2. There are still huge problems with negative equity, delinquencies, and postponing foreclosures… but they aren’t in the shadows. You can look up the foreclosures right here at ForeclosureRadar.com. And data is available on negative equity and delinquencies too.

As for what is really happening despite those stats you can read my take here: http://www.foreclosuretruth.com/blog/sean/the-swell-is-huge-no-waves-in-sight/

By: Art Martin

Art Martin — Mon, 11 Jan 2010 03:18:17 +0000

I fail to see your logic. Do you need to repeat yourself over an over because you do not believe your own statements?
Can’t you just refer to answer for the name and drop iit there.
I am a writer/author I would not waste my time repeating myself over and over again just to make a point.

The statistics we can see do not reveal what is really happening.
there are may banks which have styled themselves as business banks that did not get into the residential market at all who are about to go under with all the commercial paper they are holding. Here is another shadow inventory. Many investors who hold those properties have residential loans that are going under too. I do not buy your statements. Just like the prognosticators who were saying employment went down in December only to find that when the stats came out it went up.
Statistics do not tell the truth unless the people report them have all the facts. I feel you are reporting what people want to hear rather than what is true.

By: Sean O'Toole

Sean O'Toole — Mon, 11 Jan 2010 02:17:41 +0000

“If this is not shadow inventory what is it?”

Delinquencies. They aren’t lurking in the shadows as a number of organizations provide detailed reports on them. See: http://www.mortgagebankers.org/ResearchandForecasts/ProductsandSurveys/NationalDelinquencySurvey.htm

By: Art Martin

Art Martin — Mon, 11 Jan 2010 01:44:16 +0000

I have clients and friends who have been living in their homes for over 9 months to a year rent free. The banks haven’t foreclosed on them nor have they scheduled an auction date. they do not show up anywhere as preforeclosures because nothing has been filed by the banks. My suggestion is stay in your home as long as they are not taking any action to do anything.
If this is not shadow inventory what is it?
I have been following the foreclosure situation since 2003. I was on the side of buying into this crazy market and lost my tail. Now I am going to take advantage of it to make my money back. I am just puttying my website up now.

By: Sean O'Toole

Sean O'Toole — Fri, 08 Jan 2010 05:34:29 +0000

I truly believe we are seeing the delay because the FDIC doesn’t have sufficient funds to cover depositor losses should a major bank fail… and lets be clear some major banks would fail just from having to mark their underwater HELOC portfolios to market (or have them wiped out by foreclosing firsts). So we extend and pretend, and give the banks free money, so they can make big profits and begin to restore their balance sheets. In the mean time they trickle out foreclosures as otherwise everyone would just stop paying once they realized they can stay in their home for free. This approach may work, but it will take years.

By: Jay Cashwell

Jay Cashwell — Fri, 08 Jan 2010 04:13:16 +0000

I really would like to understand the causes for the huge delays of FCLR’s and PFCLR’s proceeding to the terminal state and likely loss.

By: Sean O'Toole

Sean O'Toole — Tue, 15 Dec 2009 07:55:26 +0000

I’m not selling anything, simply reporting the FACT that banks hold relatively little REO inventory, and essentially none that is hidden in the “shadows”.

Perhaps there are a few in your area, or perhaps the vacant homes you see aren’t bank owned. Regardless, there simply is not enough REO inventory to matter in the bigger picture.

And if you’ve read much here you know I don’t think the FACT that there is little REO inventory means we are out of the woods. We clearly still have far too many households that are upside down in their mortgage, non-paying, or in foreclosure to be even close to a healthy housing market. But let’s focus our attention on these very real problems, rather than continuing to talk about shadows that simply don’t exist.