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Saturday, August 08, 2009

NODs Increasing, Foreclosures Decreasing

by Calculated Risk on 8/08/2009 08:10:00 AM

This is a common story in many areas ... the following information is from San Diego.

San Diego real estate broker Edgewood121 attended a presentation this week by San Diego County Assessor / Recorder / County Clerk David Butler on NODs and foreclosures in the county. The following is a handout from the presentation:

San Diego NODs and Foreclosures Click on document for larger image in new window.

Acording to Edgewood121, Butler said that San Diego county is "expecting a wave of foreclosures in the near future and they are gearing up for it". (quoting Edgewood121 paraphrasing Butler). Butler thinks the banks are holding back, probably because of the various government programs.

Edgewood121 was left with the impression that "it is [only] a matter of time before more properties become available." And that the only reason prices appear to have stabilized "is because of the artificial choking-off of inventory, thereby creating urgency and multiple-offer scenarios."

Clearly the banks are hoping that the modification programs will reduce the number of foreclosures. However most mods just capitalize missed payments and fees (so the banks can pretend they are still whole), and reduce interest rates for a few years (so the homeowner can pretend they still own something of value). Extend and pretend.

Really these underwater "homeowners" are more renters than owners, and many will still have negative equity when the interest rate increases again. Perhaps we should call the modification programs Single Family Public Housing.