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Shadow Inventory Theory
Iventory levels of homes for sale have been falling steadily all year with Orange County dipping to a level not seen since January 2006. In particular, REO, or bank-owned, listings have been diminishing and now represent just about four percent (4%) of total listings. With all the news about the increasing number of foreclosures (for more information see: http://www.csiragroup.com/blog/foreclosures-continue-to-increase), the fact that REO listings are declining seems illogical to many analysts.
Some people believe that there is a “shadow inventory” of homes, foreclosed on by banks, who are unwilling to list the properties to avoid a flood of distressed inventory into the market, thereby collapsing housing prices even further. (…)
Same Crooks, New Ploy
Subprime mortgage brokers have resurfaced in a new industry as “loan fixers,” allegedly assisting with loan modifications. Preying on past clients who fared poorly in the real estate market, in large part due to the exotic loans they were sold, these same brokers now see a fresh opportunity with the vast number of people sliding toward foreclosure.
By simply changing their sales pitch to: “You got a raw deal. Now we can help you out because we understand your lender,” these firms are obtaining up-front fees as high as $3,500, but rarely producing any results. Despite making promises of relief to homeowners desperate to keep their homes, for-profit loan modification firms often fail to deliver, according to a recent New York Times investigation. There are currently more than 650 complaints filed with California’s Better Business Bureau against just one company in Los Angeles, FedMod. (…)
SoCal Home Sales Rise, Prices Increase
Southern California home sales rose in June to the highest level in 30 months as the number of deals above $500,000 continued to climb. June’s sales gain, plus another rise in the region’s median sale price, indicate buyers responded to price cuts on mid- to high-end homes and found it easier to secure financing for pricier properties.
A total of 23,262 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties last month. That was up 12.0 percent from 20,775 in May and up 29.0 percent from 18,032 a year ago, according to DataQuick. (…)