Tuesday, April 22, 2008

STUNNING DEFAULT NOTICE STATISTICS!!! MUST READ!

You can read the article yourself. My job as a blogger is to give you a perspective as to how large this crap is.

First consider these two statements both from March 22, 2008:

1. Lending institutions sent homeowners 113,676 default notices during the January-to-March period (First quarter). See Exhibit A.

2. Per this morning's EXISTING home sales, the WEST region is selling at a speed of 940,000 homes a year. Or about 235,000 homes per quarter. See Exhibit B.


Both are HARD data, and NOT modeled/assumed in any way.

Let's further say that CA is roughly HALF the West Region in terms of sales, and therefore CA share of the 235,000 sales is about 117,000 home sales.

Do you see the connection, or possible issue that is about to force reality down the throat of most Californians?

CA have:
a. 113,676 default notices in Q1 2008.
b. 117,000 home sales in Q1 2008.


Default Notices are running at 97% of Home Sales in CA!!!!


================================
EXHIBIT A:
CALIFORNIA FORECLOSURES REACH HIGHEST LEVEL IN MORE THAN 15 YRS
2008-04-22 13:08 (New York)


Another Jump in California Foreclosure Activity

La Jolla, CA.----The number of California homes going into
foreclosure jumped last quarter to its highest level in more than 15
years, as the market continued to works its way through declining
home values and a pool of at-risk mortgages that were originated in
2005 and 2006, a real estate information service reported.
Lending institutions sent homeowners 113,676 default notices
during the January-to-March period. That was up by 39.4 percent from
81,550 the previous quarter, and up 143.1 percent from 46,760 for
first-quarter 2007, according to DataQuick Information Systems.
Last quarter's number of defaults was the highest in
DataQuick's statistics, which go back to 1992.

"The main factor behind this foreclosure surge remains the
decline in home values. Additionally, a lot of the 'loans-gone-wild'
activity happened in late 2005 and 2006 and that's working its way
through the system. The big 'if' right now is whether or not the
economy is in recession. If it is, the foreclosure problem could
spread beyond the current categories of dicey mortgages, and into
mainstream home loans," said Marshall Prentice, DataQuick's
president.

Exhibit B: Existing home sales data March 22, 2008

By Kristy Scheuble
April 22 (Bloomberg) -- Following is a regional breakdown of U.S.
existing home sales from the National Association of Realtors.
================================================================================
March Feb. Jan. Dec. Nov. Oct. Sept.
2008 2008 2008 2007 2007 2007 2007
================================================================================
---------Seasonally Adjusted Annual Rate (Millions)--------
Total sales 4.930 5.030 4.890 4.910 5.020 5.060 5.110
Northeast 0.910 0.890 0.800 0.840 0.890 0.920 0.910
Midwest 1.160 1.240 1.210 1.160 1.190 1.210 1.220
South 1.920 1.990 1.950 1.960 1.990 2.050 2.060
West 0.940 0.920 0.930 0.950 0.950 0.880 0.930
--------------------------------------------------------------------------------
Available for sale 4.058 4.018 4.160 3.974 4.217 4.433 4.370
Months supply 9.9 9.6 10.2 9.7 10.1 10.5
10.3

8 comments:

Jennifer said...

the NOD's are about 65-70% in CA.

http://mrmortgage.typepad.com/blog/march-ca-foreclosure-disa.html

Jennifer said...

NOD's are more than 65% of the total West region.

http://mrmortgage.typepad.com/blog/march-ca-foreclosure-disa.html

Jennifer said...

NOD's are at least 65% of all the activity in the Western region.

http://mrmortgage.typepad.com/blog/march-ca-foreclosure-disa.html

Jennifer said...

NOD's are at least 65% of all the activity in the Western region.

http://mrmortgage.typepad.com/blog/march-ca-foreclosure-disa.html

Jennifer said...

damnit dude - this is Mr Mortgage on my wife's puter.

MTGSPY said...

what happened here? :D

I looked at your blog and it seemed that you show 70k foreclosure, I have 113k foreclosure from the article cited which I tried compare with an approximation of 117k California existing home sales from Q1 2008.

Let me know if you think my # or sources are incorrect.

Jennifer said...

the article talked about notices of default, which are preforeclosures. Foreclosures are the 2nd step. Then, only 2-3% sell in foreclosure and the banks buy them back and sell them (REO).

So, in CA the notices of default last month were 42k and foreclosure auction notices (real foreclosures) were 27k. NOD's are cured only 25% of the time so 75% will turn into foreclosures down the road 2-3 months. Those turn into REO if not sold. In a nutshell, homes sold in CA for Mar were 20k - ish and NOD's and foreclosures were 70k.

MTGSPY said...

Thanks for the clarification, now we are in the same page. I will correct the blog to have NOD instead of foreclosure. I would venture a (safe) bet that the transfer rate is 100% and not 75%. Thanks again.