You are going to have to wait about three weeks to see this banner headline in the RGJ. It takes that long for the Center for Regional Studies to compile and release their monthly reports. There will be a few quotes from Brian Kaiser and Kris Layman tempered with cautious optimism, and a polite rebuttal from your very own foreclosure czar. Here is how March ended up:
There were "only" 236 Trustee’s Deeds recorded for the month. This would represent the lowest number of hard foreclosures since May 2008 (June was a bit lower, but is was a clerical issue), and a 28% drop from February’s 303 foreclosures. Great news, right? Until you remember that Fannie, Freddie, FHA, and most major mortgage lenders had a foreclosure moratorium in place for the whole month. In fact, 44 of the foreclosures were FNMA loans. With an almost total shut-down on foreclosures by the major institutions, the rate only dropped 28%.
The figure I trust the most is the Notice of Sale totals. These properties have pretty much exhausted all avenues to cure the defaults and are headed to the courthouse steps at some point. What don’t become TDs on schedule do so by delaying the sale dates at the request of the banks, representing the "overhang" of pending foreclosures. While there was a "moratorium" on actual foreclosures, there wasn’t one on filing NOSs. March’s total of 513 was a new record, up 21% from February’s 424, and up 8.5% from the January number of 470, the previous record. In a fairly new twist, a few of the NOSs are on sales being forced by HOAs.
The gross Notice of Default numbers from the Recorder contain bank filings as well as HOA filings that are pushing beyond just lien status. Still, they show a trend. March saw 926 NODs up 7.5% from February’s record of 861, and up 22% from the previous record set in January. The TICOR numbers will be released in a week or so, and I believe they will confirm this upward trend. Remember, it takes at least 3 months of non-payment before a NOD is issued. Do you believe these numbers are anywhere near their peak, given the economic and unemployment news we have been getting over the last quarter?
In my opinion, there are very few homeowners that can be salvaged by the current government proposals. That leaves 2 options – let the banks foreclose on everyone and backstop their loses, or allow massive principal reductions for the current owners (and backstop the banks’ loses). We may have found Catch 23.
Reno Ignoramus
9:00 pm on the 31st, and you have the month’s numbers up. Quite impressive, Mike.
I believe that almost all cities in the country have observed the same decline in the March foreclosure numbers, no doubt because of the moratorium you referred to. Many other blogs across the country are also describing this temporary decline. No doubt the national media outlets of the realestateindustry will spin this big time. This will be an opportunity to see if the RGJ and the Center for Regional Studies will be balanced in their reporting, or if they will spin it in favor of the local realestateindustry. We shall see.
Twinburnere
It seems to me that there is a real morass of foreclosure moratoriums. Fannie anounced one a while ago, then Freddie, then some of the big lenders like Citi and BoA announced voluntary moratoriums, then FHA, then the governor called for one for 90 days (I don’t know how much good that did).
All of this is no more than the proverbial rearranging of the deck chairs on the Titanic. I agree with Mike that we are nowhere the peak in foreclosures. I work at a business in Reno that employs 36 people. Our boss is scrambling to avoid layoffs. At least 5 people (that I know of) are underwater on their house, and 3 of them have decided to stop paying the mortgage. They will live mortgage free until the sheriff comes to evict them. None of them has yet received a NOD.
BanteringBear
“At least 5 people (that I know of) are underwater on their house, and 3 of them have decided to stop paying the mortgage.”
While not too long I asked Diane if she had ever thought of just sending back the keys to her home, I was honestly wondering if she would consider it, not suggesting it. I think it says a lot about someone’s character, or lack thereof, when they still have a job and can afford to make their payments, but decide not to because they found out the hard way that real estate doesn’t go up indefinitely. It’s one thing to lose a house because you lost your job, but quite another to saddle the bank with your debt because your ill advised gamble didn’t work out like you had envisioned. Sickening.
inclinejj
I have noticed a lot of foreclosures are cancelling..My only reason for this is the foreclosure moratorium..I suspect being many of these people used stated income will go right back into foreclosure again..
The Moratoriums are good for PR but 50% will go back into Foreclosure
RenoGypsy
Or we could end up with banks walking away! This article in the NY Times is pretty interesting and a possible disturbing new development.
http://www.nytimes.com/2009/03/30/us/30walkaway.html?_r=1
CommercialLender
Gypsy,
I’ve now seen it all. Maybe we Americans are a bunch of whiners who collectively brought this upon ourselves? We now have people getting FREE houses by virtue of the banks giving up their liens, and the homeowner COMPLAINS.
What next? Am I to also pay thru my hard earned taxes their back liens caused by them allowing their own property to be vandalised and foreclosed while they had paying tenants?? Am I to forgive their debt-relief taxes due, too? That’s OK, I’ll just work harder like Boxer the horse in Animal Farm….
Phil
And Legends project grows in Sparks!
OK I am a bit off topic, but the RGJ article has me a bit mystified (maybe it is a April Fools joke)….
Does anyone think closing a Sparks Target store about two miles away and opening the one in Legends and getting a 75% tax break was wrong?
I wonder how long it will take to close the Best Buy in Spanish Springs? Anyone else think a Fry’s Electronics would have been better?
If I was driving down I80 I for sure would need to stop and visit a Target and a Best Buy!
BTW I actually do stop in at Fry’s when traveling through Sacramento.
This Legends projects sort of reminds me of the Nut Tree between Sacramento and SF, which failed. BTW, if not for the airport it would of failed a lot sooner.
And don’t get me started on the planed upper end resort/spa which is now troubled by financing. I guess a resort in front of a flooded gravel pit might be a tough sell.
Jazz is now opened and the food is rather bland. And we get to look forward to an Olive Garden? Better than nothing I guess.
Scheels is a bit unique but a bit on the pricey side. The carnival atmosphere is different, and when I go in there now most attractions beside the ferris wheel are empty.
Parking/traffic is just strange and annoying.
Do yourself a favor and go to Summit mall! Until Legends is finished it is not worth the visit and frankly embarrases me when an out of town guest wants to do something and goes there.
Maybe there will be time for Legends to become a better than Summit mall when filled up, but so far I am very disappointed and a bit worried about the city financial obligations.
Sully
Fry’s Electronics would be 100% improvement. As a matter of fact, there should be one here somewhere anyway.
Tom
Foreclosures aside, here is a fun thing for the week-end: Did you know that Neil Sedaka is coming to Harrah’s at the Lake, this Saturday night? Some oldies, some good chardonnay, pine trees instead of buildings to look at, and a walk along the lake shore on Saturday afternoon. Now isn’t that worth at least a hot dang! These are the things some of us boomers want to retire to your area for, and yes, a Fry’s electronics in the region would be nice. But I don’t think I would drive down the hill to Sparks, other than once a year for some ribs at their annual rib cook-off. 🙂
DonC
There are signs that the economy has hit bottom and is turning around. In fact I just saw a banner headline on Yahoo proclaiming this. Of course it could just be a temporary lull and, even if true, joblessness will continue so the downward pressure on housing will not evaporate.
While it seems likely that the downward numbers here are the result of moratoriums, the reason for foreclosures may have changed. The Boston Federal Reserve found that home owners who lost over 20% of the value of the purchase price of their houses are 14 times more likely to go into foreclosure than a borrower who has lost less. This compares rather unfavorably with sub-prime borrowers are only six times more likely to go into foreclosures than conventional borrowers.
In some ways this makes the problem more solvable because it becomes one of financing rather than income. It also suggests that declining foreclosures will arrest the downward spiral of foreclosures lowering prices, which in turn prevents people from financing or refinancing, which leads to yet more foreclosures.
DonC
Tom, since you’ve gone a little bit OT, I wanted to mention to you that my wife met a couple of people (from a group of women executives, some of whom are retired) who have bought houses in Genoa. It’s apparently a small town south of Reno. They had looked in Incline but decided it was too crowded and too cold. From what she gathered there is a Whole Foods and some restaurants. My guess is that they have some fairly large spreads. If you haven’t looked there you might want to check it out.
Tom
Thanks, Don, we looked. Appreciate the suggestion.
Sully
Don, apparently you are not very familiar with Reno area. Genoa is a “small town” (thats doing it a big favor) located about 2 miles from Minden/Gardnerville. It has almost all the stores that the bigger cities have – even has indoor plumbing.
lukywnr
All the Palladio listings have disappeared from the MLS. What’s going on?
DonC
Tom – You’re welcome. I thought you might have looked but you never know. I had never heard of Genoa before.
Sully – That would be an affirmative.
Martin
I got in the mail today a flier from Nevada Federal Credit Union telling me they have money to loan. ARMS available. Interest only, and stated documentation available.
At least they didn’t say nothing down.
Jersee
Neil Sedaka. Man, is he still alive?
billddrummer
To Phil and Sully,
As an employee at the Spanish Springs Best Buy, I was a bit apprehensive about the new store opening, but our sales have remained good, and the total sales from both stores exceeded what the single store was reporting–which is the reason the company elected to open a second one.
The I80 store opening was moved several times, and opened just at the end of the 2009 fiscal year. With the company cutting its capital budget and store opening plans by 50% in fiscal 2010, Best Buy wanted to include that new store in its FYE 2009 store counts.
(If you recall, I posted on this some time back, and the store was originally slated to open before Christmas 2008–but that was before the recession took the sharp downturn we saw in August and September. Then the store was put on hold [even though the building was complete] until April or May of 2009. When the capital budget for 2010 was announced, the company elected to move up the opening.)
Fry’s would be a welcome addition to the consumer electronics landscape. With Good Guys, CompUSA, Circuit City and Dell retail stores gone, there’s not a lot of consumer choice. I personally like consumer choice and competition, because it makes us better competitors. Complacency is the one thing that Best Buy must combat; otherwise, it will fall away as well.
OT–I’m still not sure what the Legends store mix is going to be, and whether it ultimately will produce enough revenue to pay for itself. Just an opinion, not based on anything but perception.
billddrummer
Also, Genoa was the first town in Nevada, founded by Mormon settlers on their way to Utah. Later it became a Pony Express stop for riders who changed horses after traversing the desert. After proceeding up Daggett Pass to South Tahoe, they changed again at the white house on the left side of Highway 50 in Stateline (now owned by the Park Cattle Co).
Richard Stabile Bergen County Real Estate
oreclosures should continue to hit a peak as the final phase of this markets decline smashes all equity and makes it highly unlikely the borrowers are going to pay their mortgages for property that is severely under water with debt, compared to value. Until the market is stabilized by all the programs that are in place and the under water loans are cleared out, we will continue to see the foreclosures rain. What a nice mess they got us into. It almost seems self generating till it unwinds so many millions of homes. As prices have fallen, it has affected homeowners who were not toxic on there mortgages, but got caught in a toxic mess around them. Declines of over 50% would do in most homeowner’s equity. Those areas that went up on no money down frenzy are surely in a bind.
Stinky Scheels
Small Rant on Scheels and Legends,
These bad tax deals stink! PUN INTENDED. Has anyone noticed that the Scheels parking lot always smells like sewer? Ick
J
CommercialLender
No surprise here:
http://online.wsj.com/article/SB123975395670518941.html#mod=rss_whats_news_us_business
But the WSJ reports that since the foreclosure moratorium has been lifted, foreclosures across the land are once again skyrocketing.
billddrummer
To CommercialLender,
I saw the same article, and just this morning got a list of TS from a local title company. 218 auctions filed from mid-March to mid-April.
Looks like the auctioneers will be busy this summer.