Two thirds of current foreclosures not listed

[30ashopper]

RealtyTrac, the online marketer of foreclosed properties, recently discovered that it has far more foreclosed properties listed in its database, which the company compiles using courthouse records, than there are listed in the multiple listing services (MLS) maintained by real estate agents.

RealtyTrac looked at listings in four states, California, Maryland, Florida and Wisconsin, and found that they contained only a third of the foreclosures it has in its database.

The scope of the problem isn't clear, but it could be huge considering that RealtyTrac has a total of 1.5 million bank-owned properties on its site.
"Many properties that should be listed on the MLS are not listed on the MLS," said Lawrence Yun, chief economist for the National Association of Realtors (NAR).

The National Association of Realtors calculates official housing inventory statistics using data from the multiple listing services. By that measure, there were 4.2 million existing homes for sale in November, an 11.2-month supply at the current sales pace, up from a 10.3-month supply in October.

But now it seems quite possible that these figures, which are already at record highs, are underestimating the situation. And if that's the case, it could take much longer for the housing market recovery than analysts currently expect.

Flood of foreclosures: It's worse than you think - Jan. 23, 2009

I wonder if we'll see inventory levels start to rise again?

 

[AAbsolute]

The best bulk asset transfers are done without the MLS. Why would two parties who are in the business of dealing in property pay a middleman if they feel completely confident in their business? Banks and their best customers are conducting quite a bit of business without the MLS.

 

[Bobby J]

Flood of foreclosures: It's worse than you think - Jan. 23, 2009

I wonder if we'll see inventory levels start to rise again?

These foreclosures are sweet deals for the buyers right now. They eliminate all the pain of the short sales. I hope that all these foreclosures will make short sales so 2008! It seems that the foreclosures do not last long on the market. One of the only things the banks have done correct is price these things to sell!

 

[DuneAHH]

These foreclosures are sweet deals for the buyers right now. They eliminate all the pain of the short sales. I hope that all these foreclosures will make short sales so 2008! It seems that the foreclosures do not last long on the market. One of the only things the banks have done correct is price these things to sell!

It's a baffling curiosity to me...

Why are banks STUCK on going through all the time & expense of thousands upon thousands of foreclosures, only to REWRITE new loans at a fraction of the original amount that they originally foreclosed on?

Wouldn't it be less costly and more expeditiously productive for the banks to immediately attempt offering some similar degree of principle loan reduction to the original defaulting mortgage holder (who if given the opportunity, may be quite capable of making good on their payments if the loan amount was lower?). It just seems that banking "solutions" are stuck in an old chicken-game-rut, in grave need of an industry driven facelift.

I'm probably just being stupid & short sighted... so I hope somebody can enlighten me.

 

[Bobby J]

It's a baffling curiosity to me...

Why are banks STUCK on going through all the time & expense of thousands upon thousands of foreclosures, only to REWRITE new loans at a fraction of the original amount that they originally foreclosed on?

Wouldn't it be less costly and more expeditiously productive for the banks to immediately attempt offering some similar degree of principle loan reduction to the original defaulting mortgage holder (who if given the opportunity, may be quite capable of making good on their payments if the loan amount was lower?). It just seems that banking "solutions" are stuck in an old chicken-game-rut, in grave need of an industry driven facelift.

I'm probably just being stupid & short sighted... so I hope somebody can enlighten me.

Wait! That makes sense! Have you lost your mind. This is not supposed to make sense! They are right where they belong. Taking 8 months to answer on a short sale, the market drops another 30% and they wonder what is going on? It is one of the most baffling things I have ever been involved with.
One could explain the complexity to a class of school children and they would come back with a better plan to get through this.

 

[Miss Critter]

It's a baffling curiosity to me...

Why are banks STUCK on going through all the time & expense of thousands upon thousands of foreclosures, only to REWRITE new loans at a fraction of the original amount that they originally foreclosed on?

Wouldn't it be less costly and more expeditiously productive for the banks to immediately attempt offering some similar degree of principle loan reduction to the original defaulting mortgage holder (who if given the opportunity, may be quite capable of making good on their payments if the loan amount was lower?). It just seems that banking "solutions" are stuck in an old chicken-game-rut, in grave need of an industry driven facelift.

I'm probably just being stupid & short sighted... so I hope somebody can enlighten me.

If you are stupid and short-sighted, then so am I. I've thought the same thing many times.

Is their current response due to the nature of existing banking laws? If so, can something be done expeditiously to allow them to re-work existing loans and stop the foreclosure tsunami?

 

[scooterbug44]

I don't understand it either - but most banking/loan/real estate regs and practices are WAY over my head or illogical IMO.

Frankly, the fact that I still don't understand the intricacies of the mortgage process makes me understand why it's such a cluster and how so many ended up with mortgages they don't comprehend.

Fewer strange rules & loopholes, plainer language, and a massive increase in accountability are needed!

 

[traderx]

John Steinbeck explained it well.

The squatting tenant men nodded and wondered and drew figures in the dust, and yes, they knew, God knows. If the dust only wouldn?t fly. If the top would only stay on the soil, it might not be so bad.

The owner men went on leading to their point: You know the land?s getting poorer. You know what cotton does to the land; robs it, sucks all the blood out of it.

The squatters nodded they knew, God knew. If they could only rotate the crops they might pump blood back into the land.

Well, it?s too late. And the owner men explained the workings and the thinkings of the monster that was stronger than they were. A man can hold land if he can just eat and pay taxes; he can do that.

Yes, he can do that until his crops fail one day and he has to borrow money from the bank.

But you see, a bank or a company can?t do that, because those creatures don?t breathe air, don?t eat side-meat. They breathe profits; they eat the interest on money. If they don?t get it, they die the way you die without air, without side- meat. It is a sad thing, but it is so. It is just so.

 

[Bobby J]

True Story:

Home owner in over his head with a mortgage of $575,000. He tries to work with bank about reducing his loan so he can hold on. Home owner had excellent credit during this time. The bank agrees to reduce note $200 per month. HO decides to short sale because they still could not make it work. Due to radical reduction in his pay he still could not make numbers work. First offer on home is $399,000. After many months buyer gets fed up and walks. Next offer is $325,000. I think one can tell the direction of the offers to come. Once again This buyer gets fed up and walks. Mean time the foreclosure clock is ticking and the two different departments do not work hand in hand... Homeowner receives foreclosure papers and decides he is fed up and done. He lets the home foreclose with a short sale offer in hand and with the bank. The home forecloses and gets listed for $299,000. Sits on the market and finally goes under contract for the new reduced price of $270,000.

The moral of the story: Don't even begin to try to understand it. The system is broken and we are in for a long ride. The positive side: Sure wish I was a buyer because the banks will and are doing everything in their power to lower the market. I don't believe that is the intent but just look at the outcome. Another note, many of the foreclosures are listed with out of town agents using out of town title companies. The above home did not even have the correct picture. It had a home 3 blocks away pictured. Also the sq. footage was 1000 sq. feet off!

 

[scooterbug44]

And I bet the bank that lost over $300k on that transaction alone is either charging its customers out the wazoo for services to make it up or asking for a bailout! :angry:

Seriously, I get better service from my hometown bank when I question a $5 transaction on my credit card than most people are getting for transactions worth hundreds of thousands!