Why did Auction Properties decline this month?

[George Roddy, Jr.]

Today I received this question:

Hi George,
>
> The number of struck properties dropped by a bunch this month. I was
> wondering what your take is on this is.
> For example, a year ago, 44% of the total were struck to lender or
> third party. The percentage has been running pretty consistently at
> 35% to 40% for months. This past month, only 23%. What do you think
> would be the cause?
>
> thanks a lot for your response,
>
> Tommy

[George Roddy, Jr.]

Tommy,

The reason for the lower percentage of foreclosure properties is directly tied to the Obama Housing Relief program.

There are several big groups (Fannie / Freddie) that have put a moratorium on all foreclosures until the end of March. A lot of banks are waiting to see what happens and how the money is going to be distributed for "loan modifications and refinance opportunities".

Not to be blunt, but this "wait and see" philosophy will only delay the inevitable. There was a printed report from the Mortgage Bankers Association that had the harsh realities of the workout programs. This report stated the following: "65% of all loan modifications are currently in a delinquent status".

This stat is the telling sign of what will eventually happen with most loan modifications.

Bottom line, foreclosure postings will decrease in the short term (3-6 months), but will gradually increase back to the numbers we have seen in the past 6 months.


George