I have been tracking Sonoma County foreclosures for several months. It seems that the trend since January has been a continuation of NODs and a reduction in NOTs. And it seems that many of the properties are being postponed indefinetly.? Any ideas what is going on? Is this normal?
I’ve been tracking Santa Barbara County - specifically Lompoc.? We’ve been seeing a pretty steady number of NOD’s for most of the year, and NTS filings have been going up a bit.? We’ve been seeing the vast majority of the sales get postponed, most of them multiple times.? Most of the ones that we’ve seen go to sale have been vacant or tenant occupied homes.
A few days after Paulson announced the concept of toxic asset relief funds the banks started holding back on sales. I believe the reason is that he made it clear - from the initial announcement - he was going to do everything he could to either get the bad loans off the banks books, or allow them to hold them on their balance sheets with inflated values (mark to model instead of mark to market). Keep in mind that only works for loans NOT homes, so banks are pretty incentivized to keep loans on their books and not take back homes.
On the other hand, lenders aren’t what they used to be, with many of the folks that we think of as lenders being just servicers now. And unlike lenders, servicers are better off getting the foreclosure done as they have to advance funds on these deals and they don’t get repaid until the property is sold.
In any case with millions now underwater, and given that being underwater is the number one reason for foreclosure, there will be plenty to come.