Wednesday, March 31, 2010

On that BofA increasing foreclosures rumor...

In case you haven't heard, Irvine Housing Blog said they were are at a conference on Friday when the "OREO Managing Executive for West Region" of BofA said they would be increasing the number of foreclosures a month from 7,500 to 45,000 (this wasn't just for California).

One of the data points pointing to this statement coming to fruition can be seen in my tracking of data from Recontrust the trustee that was acquired during the Countrywide deal. They handle many of the old Countrywide (now BofA) loans.

Here are the Notice of Trustee Sales:

Here are the foreclosures made on a rolling 30 day basis:

As you can see these numbers do seem to be spiking. We shall see if this trend continues.


Picosec said...

Recontrust Trustee Deeds in Alameda County:
Sep 09 - 55
Oct 09 - 53
Nov 09 - 38
Dec 09 - 79
Jan 10 - 33
Feb 10 - 54
Mar 10 - 73

Make of it what you will

HelloKitty said...

If I was going to guess WHY they would suddenly be in a rush to foreclose I would think because millions of homes sitting vacant/rotting for years is overwhelming thier OREO dept. Imagine having 1000 calls a day come in about unpaid hoa,vandalism, broken water pipes, theft, fire, flood, etc on all these homes. Then there is delinquent property tax, pools, a very very long list of headaches they never staffed up for...

Anonymous said...


You'd be wrong.

Pre trustee sale, the bank doesn't own the home, and chances are it isn't vacant. The deadbeat borrowers still own it, often living there for free or renting it out for money they pocket without paying the mortgage.

The reason for banks to FINALLY start foreclosing (i.e. filing notices of trustee sales (NTS) or holding trustee sales previously noticed but postponed repeated for the past year) is that most of these borrowers haven't made a payment in 18-24 months, have no hope or intention of catching up and the asset is not becoming more valuable. At the same time, the largest banks are hugely profitable and have reserved against losses already and can now easily book the actual mark to market loss without hurting themselves financially, and more importantly, they probably believe the fed will start raising the rate at which they can borrow money, which effectively makes it more costly to have nonperforming loans simply languishing on the books.

Somone at BofA propbably thinks it's better to be first to the exit in the case of a fire.

Picosec said...

In Alameda County Notices of Trustee Sale were up 15%-20% in March compared with the previous 5 months. Are you seeing similar in SoCal?

Jim the Realtor said...

I hope you don't mind me stealing your graph for this post:

Keep up the great work!


Effective Demand said...


I havent been graphing NTS from foreclosureradr just because I have been running out of time in the day but we will see the foreclosureradar report for march in 10-15 days or so for all the counties.


You are most welcome to use any graphics you wish.

Effective Demand said...

"Hearing from many servicers that ruthless defaults are now soaring. Working on a story -- DM if you have insight here, off the record. "

Anonymous said...

ED - I certainly hope servicers are not surprised by the soaring rate of ruthless/strategic defaults, since they have cooperated with the Obama administration in creating the mother of all moral hazards by rewarding defaults and punishing the responsible.

Anonymous said...

Try running past numbers on ForeclosureRadar for a variety of lenders/servicers, and even though there may be a current upswing, we're nowhere near the levels of trustee sales they were acheiving back in June, July and August of 2009. If they would just return to those levels, we could clear out the foreclosure inventory in the next 6-12 months, even with new NODs hitting the books every month.