Got House?
Chuck Ponzi June 14th, 2006
Not for long for many Californians. An interesting news report from CBS 13 informs us that there are 2500 foreclosures currently in California with 84,760 additional homes in pre-foreclosure. Considering that the economy is still in a growth mode, this will definitely be difficult to explain any other way than lax lending.
I highly recommend watching the newsreel. It is short and interesting to see what the MSM is saying about the reason for foreclosures.
The next question is, who gets blamed?
Pre-forclosure is a big term. I big jump at this point is to be expected. A decline going forward is also in the cards. Let me explain. 60 days (Apr 10-Jun 10) after property taxes are due the 58 Counties report arrears. In the next several months those are corrected. I know of no one who ever misses a second tax date by accident; the penalties are huge. Many that “miss” are corrected as escrow closes. Some unknowable number of the above circumstances are settled in subsequent reporting periods. In these frothy times pre-foreclosures are not a reliable indicator. The foreclosures are the important number and so far they are still bouncing along at historic lows. That will change but not today.
[OT minor nit: I was forced to type in "yqbwnmlp" displayed in a very difficult font in order to post. Is spam so much of a problem?]
Robert Coté said…
Is spam so much of a problem?
Does a bear poop in the woods?
In the next several months those are corrected. I know of no one who ever misses a second tax date by accident; the penalties are huge. Many that “miss” are corrected as escrow closes. Some unknowable number of the above circumstances are settled in subsequent reporting periods. In these frothy times pre-foreclosures are not a reliable indicator.
No, but it doesn’t make a good story.
I may be misinformed, but I was under the impression that California law states that foreclosure proceedings cannot progress from a tax lein until after 2 years of tax delinquency (unless you are talking about special Melloroos leins which can begin pre-foreclosure in 150 days after delinquency and can actually foreclose after 180 days under the accelerated foreclosure exemption) This is because melloroos are bonds, not “taxes” and are treated like most other lein holders. The vast majority of foreclosures come from lenders prior to tax entities ever becoming involved. So, while there is a lagging indicator there, it may not be that pronounced, in my opinion.
No, not all of the 85K will proceed to foreclosure, but that’s a daunting number.
Always the same story. When they make money they are the smartest people on the planet, when they lose it’s always duh, I dudn’t no wut I wuz gettin’ myself into, I wuz dupered.
I’ve heard that about 1% of properties in preforeclosure typically go into foreclosure. Does anybody have data showing what the actual percentages were for the LA area in say 1988, 1991, 1995 and 2000?
This is a great article about a tax that I was totally unaware of. That is bad since I am in the mortgage industry. What a RIDICULOUS tax!