Where did all the Foreclosures go?

My clients are always amazed when we first start searching for homes. They see the headlines in the media that there thousands of foreclosures on the market, now is the time to buy, make an offer, the banks are desparate....NOT.When we begin to put in offers and there are multiple offers on each home, and the offers are above list price and they lose out to an all cash buyer, then they see the big picture....it's not a buyer's market; it's a banker's market.If the media is right and there are so many foreclosures flooding the market, where are they? There are several answers.1. The Make Home Affordable Program was designed to keep homeowners in their homes while they work something out with their lender. The goal is to make homeowner's payments no more than 31% of their gross income. These homeowners are staying in their home while working with the lender...this takes time.2. The Moritorium - California is the Land of Never-Ending Moritoriums. The banks are under pressure from the Obama Administration to show a concerted effort to work out a loan reinstatement plan for the homeowner. The governor of California has extended the moritorium that was started by the Bush Administration in 2008.3. The banks are not releasing their inventory...we call it a Shadow Inventory, estimated to be in the hundreds of thousands. I have heard several different theories about this including: making their portfolios look good, not deflating the market anymore by releasing them all at once, to it's not their fault - the government is not letting them. Hey, the government did bail them out; who knows?I do know this, there is something in the works. I see banks get organized, coming up with plans, streamlining their process. I think 2010 is going to be a great year for real estate and buyers patience will finally pay off.
E-mail me when people leave their comments –

You need to be a member of REO Pro Network to add comments!

Join REO Pro Network

Comments

  • A bankers market! Lol! True!
  • Hi Larry, I think you just said what many are thinking but won't say about an administration they voted in. When I see reports about declining foreclosures and profits up for the banks, I have to laugh. Talk about creative accounting!

    Now that the banks are finally pushing short sales, and no one can charge upfront fees to negotiate, the lawyers have come up with a way to make money off the second liens. I don't understand the whole process, but it's bad news for agents, will make it more difficult to get a SS through if the homeowner has a second lien holder.
This reply was deleted.