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Foreclosure Activity Declines Hurting Investors
April 2012
Source: ForeclosureRadar.com
April 2012 Foreclosure Starts declined across our coverage area wiping out the small gains in new foreclosure filings last month. In California, Notice of Default filings are down 69.8 percent from the peak in March 2009, and 15.8 percent from April 2011. Notice of Trustee Sale Filings, the start of Arizona’s foreclosure process, are down 59.4 percent from the peak in March 2009, and down 8.0 percent year-over-year.

Foreclosure Sales also declined, however, foreclosure investors purchased a record percentage of the limited inventory that was actually sold. Nevada investors purchased more than 50 percent of foreclosure sales for the first time at 50.7 percent. Arizona followed with 44.6 percent and California at 41.3 percent. The low number of sales, combined with record percent purchased on the courthouse steps left very little to become Bank Owned (REO). This further depletes the inventory of Bank Owned homes as REO sales continue to outpace the addition of new inventory.

Despite investors purchasing a higher percentage of foreclosure sales, margins have rapidly declined in recent months. In both Arizona and Nevada winning bids on the courthouse steps on average equal the current estimated value of those properties. In California the discount between market value and winning bid have on average declined to 12.3 percent. This leaves investors who intend to resell their purchases with record low profits after eviction, repairs, and closing costs.

LAW AGAINST SHORT SALE DEFICIENCIES EXPANDED
July 15, 2011
In a major victory for REALTORS®, Governor Brown signed into law today a C.A.R.-sponsored bill, Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or junior lienholder. Effective immediately for transactions closing escrow from this day forward, both senior and junior lienholders cannot require a borrower to owe or pay for a deficiency in a short sale. This law also prohibits any deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units. Any purported waiver of this rule shall be void and against public policy.
Although a lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval, the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale. A lender is also permitted under the new law to negotiate for a contribution from someone other than the borrower, such as other lenders, agents, relatives, and the like.
Exceptions to the new law include a lender seeking damages for a borrower’s fraud or waste; a borrower that is a corporation, LLC, limited partnership, or political subdivision of the state; a lien secured by a bond as specified; a public utility lien; and additional rules apply if a note is cross-collateralized by more than one property.

This law is fully set forth as Senate Bill 458 (Corbett) at www.leginfo.ca.gov.

West Coast Foreclosure Activity Slowed in February After January’s Spike
03/15/2011 DS News
Foreclosure activity last month slowed down along the West Coast, according to the foreclosure tracking firm ForeclosureRadar.
“Foreclosure filings dropped to low levels not seen in quite a while,” says Sean O’Toole, CEO and founder of the company. “We will likely see more sluggish foreclosure activity in the months ahead while lenders continue to work through lingering concerns over foreclosure documentation and deal with process changes.”

Investors’ foreclosure appetite grows, headaches arise
02/18/2011 Reuters
Investors are flocking to home foreclosure sales in California and other states where banks have rescheduled auctions postponed last year to fix loan servicing flaws.
On average, in California, investors are paying 25 percent below market value when winning the auction, versus a 15 percent premium bid of banks that take properties into their “real-estate owned,” or REO, portfolios, said Sean O’Toole, chief executive officer of ForeclosureRadar.com.
“In California, the average foreclosure is $150,000 upside down in the mortgage, so if the bank doesn’t drop the bid from the amount owed, there’s no chance the investor is going to purchase it,” O’Toole said.

West Coast Foreclosure Sales Climb to Pre-Robo-Signing Levels
02/15/2011 DS News
Foreclosure auction sales in states along the West Coast have bounced back to levels not seen since robo-signing moratoriums went into effect last fall, the California-based tracking firm ForeclosureRadar reported Tuesday.
“We have not seen this level of activity on the courthouse steps for months,” said Sean O’Toole, CEO and founder of ForeclosureRadar. “The increase in foreclosures is just in time to provide a fresh supply of entry level homes for the spring homebuying season.”

Foreclosure Sales Rise Dramatically in Key States
02/15/2011 CNBC
Last week a foreclosure report from RealtyTrac showed the process was still completely skewed by the so-called “robo-signing” (faulty paperwork) issues at some of the nation’s largest mortgage servicers that were uncovered last fall. Another report today from ForeclosureRadar.com, which only tracks a few states out West, shows some important micro-moves that will have a big impact on the Spring housing market.

The Next Robo-Signing Crisis?
01/25/2011 CNBC
It’s the next big shoe to drop in the robo-signing foreclosure scandal. Call it part two.
We already know some banks halted foreclosure sales nationwide in October when it was discovered that servicers took short cuts, so-called “robo-signing” in the foreclosure sale process in judicial foreclosure states – about half the country.
Now it appears they may have done the same thing in a different part of the process, the Notice of Default, which takes place in the other half – i.e. the non-judicial states – this happens before the foreclosure sale.
Foreclosure Radar’s Sean O’Toole wasn’t ready to say the banks had cut off Notices of Defaults but did say, “given the issues raised, we certainly wouldn’t be surprised to see a slow down of foreclosure activity in non-judicial states.”

FBI looks into bid rigging at courthouse auctions
01/21/2011 San Fransciso Chronicle
Foreclosure auctions take place every weekday on the steps of courthouses throughout California. Now the FBI is investigating whether some real estate speculators are illegally rigging bids for these sales. “There have always been rumors of collusion at the courthouse steps,” said Sean O’Toole of ForeclosureRadar.com, a Discovery Bay company that provides detailed information on properties sold at the auctions.

Foreclosures getting more erratic out West: ForeclosureRadar
01/13/2011 HousingWire.com
As mortgage servicers grapple with unique foreclosure issues from state to state, the amount of filings varied just as widely in December. New data from ForeclosureRadar showed mixed foreclosure levels in the states out West for the month of December.

Nevada Foreclosure Sales, Filings Slow
12/20/2010 Las Vegas Review-Journal
Foreclosure activity slowed in November for the second straight month, and Nevada foreclosure sales have decreased 50 percent from two months ago, website ForeclosureRadar.com reported Tuesday.

Founder Featured in How I Made It
12/20/2010 Los Angeles Times
The founder of ForeclosureRadar learned from his father’s entrepreneurial example and found his opportunity in the real estate bust.

Foreclosure Scandal Impact: Sales Dry Up
11/29/2010 CNN Money.com
Big banks are having trouble restarting the foreclosure process after this fall’s “robo-signing” scandal, and the once booming market for foreclosed homes has been hit hard as a result.

Foreclosure Sales Plummet in Past Month
10/29/2010
http://www.kqed.org/a/californiamoney/R201010291557

Would A Foreclosure Moratorium Be “Very Damaging” To Homeowners?
10/14/2010
http://www.huffingtonpost.com/2010/10/14/foreclosure-moratorium-home-prices_n_762800.html

Lenders Putting Few Foreclosed Homes On the Market
09/14/2010
http://www.mercurynews.com/bay-area-news/ci_16073325?source=rss

Banks Playing ‘Foreclosure Roulette’ With Delinquent Homeowners
09/01/2010
http://www.huffingtonpost.com/2010/09/01/foreclosure-roulette-bank_n_699672.html

Foreclosure Roulette
08/30/2010
http://www.inman.com/opinion/guest-perspective/2010/08/31/foreclosure-roulette

Professional investors move into flipping foreclosed homes
08/20/2010
http://www.latimes.com/business/la-fi-homes-investors-20100820,0,7168785.story

What’s REALLY going on with banks and the government?
08/16/2010
http://blogs.sacbee.com/real_estate/archives/2010/08/is-this-whats-r.html

No New Foreclosure Wave in Sight for California: Report
08/13/2010
http://www.dsnews.com/articles/no-new-foreclosure-wave-in-sight-for-california-report-2010-08-13

Santa Clara County’s high-end houses hit in foreclosure crisis
08/12/2010
http://www.mercurynews.com/ci_15508205?source=most_viewed&nclick_check=1