GATE Exam

Frank Patrick
http://www.asreos.com



REO Listing Trends: Record Foreclosures, Record Delinquincies
Copyright (c) 2009 Frank Patrick

Foreclosure Filings Rise 32% Year-to-Year

REO properties will continue to make up a large part of the
housing market for some time to come, judging by the latest
foreclosure and mortgage data.

In July, foreclosures were up 7% from June – and 32% from
July of 2008.  360,000 homes were in some stage of the
repossession process and on their way to becoming REO
listings.  That's one out of every 355 homes in America –
and it marked the third month out of the last five that a
new record was set.

While the usual states led the foreclosure numbers –
California, Nevada, Florida and Arizona – there were also
big jumps in states that hadn't been experiencing big
default rates – states like Oregon, Minnesota and Kansas.
Experts say that's because of the increasing effect of the
jobless numbers.

This brings us to mortgage delinquencies, which hit an
all-time high in the second quarter of this year.  The
number of mortgage holders who were behind 60 days or more
on their payments was up 65% from the second quarter of
2008.  Almost 6% of homeowners nationwide are having
trouble – with Nevada having an astounding 13% delinquency
rate.

The good news?  As we reported last month, REO home sales
are finally taking off – which means prices have hit the
point where investors are actually anxious to get in on the
available deals.   That trend really caught fire in July -
with California leading the way with REO sales, just as
they led the way nationwide with the initial housing crash.

To cite one dramatic example, Stockton, the city with the
highest foreclosure rate in the country, saw its home sales
double in the second quarter – and about 40% of those sales
were REO properties.  In some cases, there were actually
bidding wars on REO homes, according to DataQuick
Information Systems.

This is great news for REO agents and brokers – house
prices have finally fallen to a point where REO inventory
is beginning to move in a big way.  Ryan Ratcliff, an
economist at UCLA, believes that discounts of as much as 50
percent will continue well into 2010.

The other good news is that there's still plenty of REO
inventory to come.  Many foreclosure homes that haven't
been selling have actually been taken off the market and
put up for rent.  The result?  A lot of vacant rental
homes!  Those will undoubtedly be put back on the block –
and with buyers finally reentering the real estate market
in search of deals, they will finally have a shot at
selling.


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ASREOS is the first REO trade association founded by REO
experts, and it features advice from top REO agents, access
to an exclusive database of over 130 REO sellers, and
profiles of its members in an online searchable directory
of REO vendors that banks, lenders and asset managers can
utilize when looking for local agents to list and sell
their REO properties.  Find out more at
http://www.ASREOS.com .