Monday, March 30, 2009

Foreclosure moratorium ends March 31st

The beginning of this selling season has been marked by a distinct lack of the usual seasonal spring uptick in supply. I've attributed that to the number of foreclosure moratoriums from July 2008 forward.

Fannie & Freddie, with most major servicers following suit, have had a moratorium on since the Administration announced their plan. This is set to end tomorrow night.

There of course could be another moratorium announced, though the drumbeat for that hasn't been loud. And there is the extra days added for Notice of Defaults added for certain cases in the last California budget. But I think we should start seeing the additional supply hit the market by mid-May. I think this would be a good thing for the market as homes going under contract have been brisk and it is a good chance to liquidate inventory while rates are low and the tax credit is in effect.

One way you could check if foreclosures are happening is by clicking on the 3 links on the right hand side under links of the trustee sale posting companies (one requires a free signup). Put in your favorite city and watch the daily foreclosures. For the cities I've been following it has been unusual to have more than 1 or 2 foreclosures, if any at all, except for the most distressed areas. If that starts climbing to a consistent 2-5 a day that will indicate the servicers are starting to get their hands back on houses and those will eventually show up on the MLS.


Anonymous said...

Do you have links for the trustee companies, so I can do as you say?

Effective Demand said...


Here are the three links from the right hand side of my webpage:

These are trustee sale posting companies. They are not all inclusive and there are more trustee sales out there than represented by the above 3 companies. But its a good sample for what is going on.

Anonymous said...

Hi Effective:

I'd like some clarification on what these sites actually do. They are not auction houses right?

I found a property of interest in Glendale from one of the sites that is due to go on sale on 4/6 but it says NO BID AVAILABLE.

I'm not sure what I'm supposed to do if I'm interested in such property but it would be interesting to check it out.

Effective Demand said...


These are trustee sale posting sites they are hired to get the public notices of trustee sales out.

A trustee sale is the house title reverting from the trustee to the beneficiary. In other words the house is being foreclosed on when that sale happens on the court house steps.

You usually won't see a bid until the morning of the auction. And many times the auction is delayed.

The whens and hows of buying a home at the courthouse steps are complicated. Its an all cash affair (there are ways of the getting the cash through hard money lenders) and you have to evict the previous owners. And there can be title issues. Definitely you would have to do your research about buying on the courthouse steps.

But after being foreclosed on and going through the servicers processes the homes are brought onto the market on the MLS. So if it goes back to the beneficiary on the 6th you should expect to see the home on the MLS sometime in the future. I'd drive by the property and look for a sign or a note on the door for the contact information for the agent assigned the property if it does get foreclosed on. You can probably get a preview while the servicer is going through their valuation process.