Sean O Toole Forclosure Radar 5 12 11

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California Forclosure Market - Update & Opportunities by Sean O\'Toole

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Sean O Toole Forclosure Radar 5 12 11

  1. 1. CA Foreclosure MarketUpdate & Opportunities Sean O’Toole Founder/CEO ForeclosureRadar.comMay 12, 2011 1
  2. 2. Market Update & Opportunities• The Foreclosure Funnel• Have we turned the corner?• What to expect ahead• Opportunities• ForeclosureRadar 2
  3. 3. The CA Foreclosure Funnel• 8.6 Million Homes• 6.8 Million Mortgages• 2.2 Million Underwater• 650 Thousand Delinquent• 230 Thousand in Foreclosure• 113 Thousand Bank Owned• 20 Thousand Distressed SalesSources: ForeclosureRadar, CoreLogic, LPS, DataQuick 3
  4. 4. The CA Foreclosure Funnel• 8.6 Million Homes• 6.8 Million Mortgages• 2.2 Million Underwater• 650 Thousand Delinquent 1 Million / 20 Thousand• 230 Thousand in Foreclosure = 50 Months• 113 Thousand Bank Owned• 20 Thousand Distressed SalesSources: ForeclosureRadar, CoreLogic, LPS, DataQuick 4
  5. 5. The CA Foreclosure FunnelPrimarily Single Family Residential 5
  6. 6. Have we turned the corner? )%"!#$ !!"#$%Delinquencies Dropping !!"+$% !+")+$%Foreclosures Stable to Down )!"!#$ *"&$% !+"+$% *",+$% *"(+$% *"+$% ("!#$ &"#$% /012345036$#$789:;$ )"*$% <=>0?1=@5>0$A3B036=>C$#$ "!#$ <=>0?1=@5>0$/0DE516@$#$ )"!$% <=>0?1=@5>0@$:=1F$#$ ("$% &"!#$ #"($% "($% %"!#$ !"&$% !"#$% !"!#$ *)+%!!,$ *%+%!!,$ *-+%!!,$ *&+%!!,$ *)+%!!($ *%+%!!($ *-+%!!($ *&+%!!($ *)+%!!.$ *%+%!!.$ *-+%!!.$ *&+%!!.$ *)+%!)!$ *%+%!)!$ *-+%!)!$ *&+%!)!$ 6
  7. 7. Have we turned the corner? Starts Sales 7
  8. 8. Have we turned the corner? )%"!#$ !!"#$%Consensus for Double Dip in 2011 !!"+$% ? !+")+$%Headwinds Abound )!"!#$ *"&$% !+"+$% *",+$% *"(+$% - Pressure on Fannie/Freddie *"+$% - FHA Premium Increases ("!#$ &"#$% - Pressure on Jumbo Loan Limits - Pressure on Down Payments /012345036$#$789:;$ )"*$% <=>0?1=@5>0$A3B036=>C$#$ "!#$ <=>0?1=@5>0$/0DE516@$#$ - Housing stimulus unlikely )"!$% <=>0?1=@5>0@$:=1F$#$ - Demand pulled forward last year &"!#$ ("$% with tax credits #"($% - Unemployment remains high "($% %"!#$ !"&$% - Economy continues to struggle !"#$%Delinquency Declines less than Exits !"!#$ *)+%!!,$ *%+%!!,$ *-+%!!,$ *&+%!!,$ *)+%!!($ *%+%!!($ *-+%!!($ *&+%!!($ *)+%!!.$ *%+%!!.$ *-+%!!.$ *&+%!!.$ *)+%!)!$ *%+%!)!$ *-+%!)!$ *&+%!)!$ 8
  9. 9. Have we turned the corner? Yes or No? 9
  10. 10. Foreclosure Intervention Everything Changed September 2008 • Mark-to-Model • FDIC Crippled • Servicer & Investor Interests Not Aligned • Fed rescues home lending !"#$%&(&)*+,-$*./+,.&0,1*+,&2&(3,+&4,56,78,+9&:;;<& %!!!!"#,!!" $!!!!"#!!!" #!!!!" !!!!!",!!" &!!!!"!!!" %!!!!" $!!!!" ,!!" #!!!!" !" !" ((!&" )()(!&" %(#*(!&" *(#+(!&" #(#%(!&" )(#%(!*" %(#$(!*" *(##(!*" #(#(!*" )(#(!" %(*(!" 10
  11. 11. Foreclosure Intervention Time to Foreclose Still Rising! Over 2500 Countrywide loans with NOD from 2008 going to auction now Average Days Delinquent 398 Average Days to Foreclose 312 ---------------------------------------------- Total -- Nearly 2 years!!!! 710 and still rising 11
  12. 12. Where are we headed?• While increases are possible we won’t see “wave” of REO’s or short sales - though we certainly should• Foreclosure & shadow inventory “problem” will continue for years... we’ll muddle through as banks trickle inventory out• Greatest weakness likely in higher priced homes and areas• Primary risk to home values in CA is further tightening of lending standards NOT foreclosures 12
  13. 13. Where are we headed? e om IncLending is the !"+&&%&&&!! !"$&%&&&!! d Credit !"**&%&&&!! Stateprimary driver !"*&&%&&&!! Crisis !".%&&&!! lyof home prices !")*&%&&&!! On st tion !"-%&&&!! !")&&%&&&!! In tere y Op !"(*&%&&&!! Pa !",%&&&!! !"(&&%&&&!! !"*&%&&&!! Return to !"+%&&&!! !"&&%&&&!! te D rops Traditional !"*%&&&!! !"$*&%&&&!! Ra Lending !")%&&&!! !"$&&%&&&!! !"*&%&&&!! !"(%&&&!! !"#!!!! !"/*&%&&&0! !"%&&&!! !"/$&&%&&&0! !"$%&&&!! Payments Flat !"/$*&%&&&0! !"/&&%&&&0! !"#!!!! &&&! &&$! &&! &&(! &&)! &&*! &&+! &&,! &&-! 123456! 78936! 7:;562<! =62<! 13
  14. 14. Where are we headed?• The borrower’s income, employment and credit determine risk of default• But area incomes, economic outlook and direction of lending standards determine risk of loss 14
  15. 15. Where are we headed?• Leaders will have to choose: –Maintain Home Values –Let Markets Correct & Take Losses 15
  16. 16. Opportunities - Trustee Sale Buyers Investors Spending ~$900M / month Average Hold Time 156 Days Roughly $4.1 Billion Invested Now $$$ 16
  17. 17. Opportunities - Trustee Sale Buyers Majority still go back to the bank 17
  18. 18. Opportunities - Trustee Sale Buyers• Finding Buyers: 18
  19. 19. Opportunities - Trustee Sale Buyers• Majority of auction investors flip• Margins are getting thin for investors –Idea: Help real estate brokers buy listings• Lobby to improve trustee sale process & increase opportunity –Idea: Require early opening bids –Idea: Require smaller upfront payment Arizona requires opening bids to be posted 1 day prior to auction, and buying only requires $10k deposit Result: More investor purchases! 19
  20. 20. Introduction to ForeclosureRadar®• MLS like system for Foreclosures• Tracks every Foreclosure in California –Public Record Notices • Notice of Default and Notice of Trustee Sale –Daily Auction Results • Current status on each foreclosure • Includes new REO’s weeks before other services• Deep search capabilities• Tracking and analysis built-in• Lead generation & Marketing for Realtors
  21. 21. How to Get StartedFREE 3 Day Trial$49.95/Mo.Visit: www.ForeclosureRadar.comor email: support@foreclosureradar.com 21

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