DISTRESSED INVENTORY CONTINUES ITS SLIDE
Distressed inventory is the number of homes with an active notice of foreclosure along with any bank held property. These properties have been declining rapidly since last May. Simple math and logic show this to be true but others counter with complex math factoring together a Massive Backlog of Shadow Inventory, Robo-signings, and the ever popular Bank Conspiracies. It seems these folks want to keep the drama alive, perhaps hoping for a made-for-TV docudrama! Here are some facts:
Since January 1, 2007 Maricopa County has seen 165,385 home foreclosures, a numbing number in anybody’s book. One of the main reasons we believe we’re heading into the home stretch is how far we’ve come. The news articles talk about the same decline in distressed inventory previously mentioned, only they attribute the decline to massive processing delays. These same articles talk about how foreclosures rose through last summer and then began their decline in September when the robo-signings scandal broke. Information Market numbers tell a slightly different story of a short-lived Bank of America moratorium in November and December briefly lowering foreclosures. In January foreclosure numbers picked back up resuming their steady and consistent flow. In May, Maricopa County saw 4,206 homes sold at auction with 1 in 3 being purchased by investors, leaving only 2,800 reverting to the lender. So, at the end of the day while our detractors have similar numbers, their explanation as to where we are and where we’re headed is completely different. Since January 1, 2007, Maricopa County has seen 165,385 homes removed from the “bad mortgage” file leading loan delinquencies to their inevitable decline.
Jay Brinkman, the chief economist of the Mortgage Bankers Association, states, "Of particular importance is that the drop in the percentage of loans 90 days or more past due was driven by improving numbers for loans originated between 2005 and 2007. These are the loans that drove the mortgage market collapse and now represent about 31% of loans outstanding, but 65% of the loans seriously delinquent. Given that loans originated during this period are now past the point where loans normally default, and that loans originated since then generally have better credit quality, mortgage performance should continue to improve.”
So there you have it, folks. As soon as our local papers and news networks figure out that they can’t headline their reports with the negative foreclosure crisis drama, we may actually begin to hear positive news from the media. Until then, please call us for any information you would like for your neighborhood! The numbers don’t lie!
And Happy New Year to all!
